CENTAX INDIA LTD Vs. VINMAR IMPEX INC

JUDGEMENT

(1.) This appeal arises out of an order passed on the 3rd Dec. 1985 by the Trial Court in an application for interlocutory order filed by the plaintiff-appellant herein. On or about 19th Nov. 1985 the suit was filed by the plaintiff-appellant against the defendants respondents praying for the following reliefs :-

(2.) According to the plaint, in April 1985 there was an agreement by and between the plaintiff-appellant and the defendant 1 through the defendant 2 for sale to the plaintiff of 100 M.T. of High Density Polythelene Powder (hereinafter referred to as HDPE) on certain terms and conditions. We should point out that though in the plaint and the petition it is stated by the plaintiff that it was agreed that the goods shall be of Grade 5202, this is disputed by the defendants-respondents according to whom 5202 was merely the marking but it was not a part of the agreement that the goods were to be of Grade 5202. The plaintiff states that accordingly the plaintiff opened a Letter of Credit in favour of the defendant 1 which was duly communicated to the defendant 1. The defendant 1 shipped from Singapore on board "Ganges Pioneer" 100 M.T. HDPE granules in four containers of 25 M.T. each covered by four Bills of Lading all dt. 30th May, 1985 and issued on behalf of the owners of the said vessel. According to the plaintiff the said vessel arrived at the Port of Calcutta on the 5th June, 1985 and discharged the goods covered by the said Bills of Lading. The complaint of the plaintiff is that for negotiating the said letter of credit, the defendant 1 was to send to the defendant 4, that is, the Allahabad Bank the original documents which included Bills of Lading etc. so that upon retirement of the documents the plaintiff could take delivery of the goods but that the defendant 1 did not send the same. It is alleged that the plaintiff could not take delivery of the goods because of non-furnishing of such original documents. It is alleged that the plaintiff had sold the goods on high seas basis to its customer and that it had agreed to hand over the documents to its customer by 12th June, 1985 for taking delivery of the goods but because of default on the part of the defendant 1, the plaintiff was unable to hand over the original documents and the plaintiffs customer cancelled the said order. It is alleged that on or about 21st June, 1985 the plaintiff received the advanced set of non-negotiable bills of Lading etc. from the defendant 1. It is stated that for the purpose of obtaining delivery orders it was necessary to surrender the original Bills of Lading to the defendant 3, i.e. the shipping company but that on or about 25 June, 1985 the defendant 1 instructed the defendant 3 the shipping company to release the said cargo by giving necessary delivery order to the plaintiff upon the plaintiffs furnishing bank guarantee in favour of the defendant 3 for release of the goods in lieu of the original negotiable Bills of Lading. It is stated that accordingly the plaintiff executed four several letters of indemnity in favour of the defendant 3 and that the defendant No. 4 (Bank) guaranteed the same in writing. In view of the nature of the arguments made before us, the actual language of the said instruments is very relevant and we shall set out hereunder one of such instruments :- Bank's Agreement For The Release Of Goods In Lieu Of Original Negotiable Bills Of Lading United States Lines Agency <FRM>JUDGEMENT_356_AIR(CAL)_1986Html1.htm</FRM>

(3.) It is alleged by the plaintiff appellant that pursuant thereto the defendant No. 3 sent delivery orders. It is stated that the plaintiff had to pay and incur in respect of the said cargo, demurrage and port charges, detention charges and other incidental expenses amounting to Rs. 1,98,294.80 paise. It is further stated that apart from the said the plaintiff had to pay Rs. 51,726.00 to Loknath Shipping and Clearing Agency, the clearing agent of the plaintiff, towards clearing, handling, port charges and local deliveries etc. It is alleged that the plaintiff obtained delivery of cargo on or about 1st July, 1985 at Kidderpore Docks whereupon on inspection it was found that the defendant 1, in gross violation of the agreement, has sent HDPE grade 5502 which was of much inferior quality of HDPE 5202 which the plaintiff had contracted for. Accordingly it was alleged that the defendant No. 1 committed a clear breach of contract by shipping inferior quality of cargo which was discovered by the plaintiff for the first time on or about 1st July, 1985. It is further alleged that the plaintiff had the said goods surveyed by Messrs Gillanders Arbuthnot and Co. Ltd and on inspection it was found that the goods delivered are HDPE grade 5502 and the said cargo was not in accordance with the invoice specification or specification mentioned in the advanced set of Bill of Lading. It is alleged that ultimately the said goods were sold in the months of September and October at a total price of Rs. 17,50,000.00. It is further alleged that the goods contracted for were not easily available in the market and the plaintiff was unable to purchase similar goods for its customers who had cancelled the order and thereby the plaintiff had suffered loss to the extent of Rs. 6,75,000.00 being the balance between the sum of Rs. 24,25,000/- which is claimed to be the sale price of the said 100 M.T. HDPE of 5202 specification the plaintiff would have realised on the basis of such high seas contract and the total sale price of Rs. 17,50,000.00 at which price it is alleged that the goods of 5502 specification have actually been sold. Accordingly the plaintiff was claiming a total sum of Rs.9,25,020.80 paise as alleged loss and damages referred by it being the sum total of Rs.1,98,294.80, Rs.51,726.00 and Rs.6,75,000.00 referred to above.