Kuok Oils and Grains Pte. Ltd. Vs. Tower International Pvt. Ltd. - Court Judgment

Excerpt:
civil - cause of action - order 7 rule 11 and order 10 of code of civil procedure, 1908 - application filed for rejection of admiralty suit instituted by respondent against applicant - rejection claimed on ground that no cause of action against applicant exist - respondent entered in contract with 'x' for supply of certain goods - applicant had only given work of sending cargo through vessel charted by him - applicant not responsible if goods received by respondent found less than what was agreed between it and 'x' - no cause of action arises against applicant - order 7 rule 11 provides that litigation which is meaningless should not be permitted to occupy time of court - admiralty suit filed against applicant dismissed. - - he has, therefore, submitted that there can be no cause of action against the applicant and the plaint on a meaningful reading clearly discloses no cause of action against the applicant. since the court has the power to act at the threshold the power must be exercised at the threshold itself in case the court is satisfied that it is a fit case for the exercise of such power and that exercise of such power is warranted under the relevant provisions of law. 1, the present applicant could not be permitted to raise the plea that the suit claim is satisfied and no relief can be granted against the applicant. precisely for this reason, the court rejects the plaint so far as the applicant is concerned.k.a. puj, j.1. the applicant who is original defendant no.2 in admiralty suit no. 3 of 2003 has filed this application for rejection of the plaint on the ground that the plaint does not disclose any cause of action against the applicant and that the plaintiff can have no cause of action against the applicant.2. it is the case of the original plaintiff, namely, tower international ltd. that they had purchased a quantity of 2000 mt of crude palm oil and 1000 mt of crude palm olein from new continent enterprises pte ltd., original defendant no.3 on cost and freight terms basis delivery at kandla under contract dated 11.12.2002 and 24.01.2003 respectively. payment was to be made by the original plaintiff to the original defendant no.3 by telegraphic transfer within 35 days from the date of bills of lading. according to the original plaintiff, the original defendant no.3 entered into an understanding with the applicant to send the cargo through original defendant no.1.3. it is also the case of the original plaintiff that they have received 44 mt short as the original defendant no.1 vessel had discharged 220 mt less than the total quantity of 15000 mt. according to the original plaintiff, as per their contract with original defendant no.3, they were supposed to get in all 2000 mt crude palm oil and 1000 mt crude palm olein. they have received 44 mt less which according to them is valued at rs.9,92,950.00 and hence, the suit for recovery of this loss was filed by them.4. it is on the basis of the aforesaid allegations and averments, the original plaintiff has filed the above suits against the applicant and sought certain relief against the applicant. it is the case of the original plaintiff that on being informed that the vessel was likely to sail away without discharging the cargo remaining on board and thus apprehending loss of cargo valued approximately at rs.9,92,950.00, they filed admiralty suit no. 3 of 2003 in this court seeking arrest of the vessel discharge of cargo remaining on board of vessel. the applicant, along with other cargo receivers were joined as defendants and the original plaintiff obtained an order of arrest of the vessel on 15.03.2003 from this court. this court has further clarified in the order dated 15.03.2003 that in the event of defendant and/or those interested in depositing in this court a sum of rs. 9,92,950/- and costs of rs. 25,000/- towards the satisfaction of the plaintiff's claim in the suit and/or furnishing security in the said sum of rs. 9,92,950/- with interest at the rate of 15% p.a. on the principal sum of rs. 9,92,950/- from the date of filing of the suit till payment/realization to the satisfaction of the registrar of this court as security towards the satisfaction of the plaintiff's claim in the suit, the said warrant of arrest shall not be executed against the defendant vessel m.t. asia v.2.5. the said order was modified on 26.03.2003 as after passing of the said order, the original plaintiff has received certain quantity of crude palm oil and palm olein and in that view of the matter, shortage of 44 mts has undergone a change and the shortage came to 20.274 mts in case of crude palm oil and 3.095 mts in case of palmolein and accordingly, the defendants and the persons interested in the defendant vessel m.t.asia v.2 has deposited in this court the demand draft bearing no. 172977 dated 25.03.2003 drawn on canara bank and issued in favour of the registrar, high court of gujarat, ahmedabad for a sum of rs.5,25,000/- and cost of rs. 25,000/- aggregating to a sum of rs. 5,50,000/- towards the satisfaction of the plaintiff's claim in the suit and the vessel was directed to be released and was permitted to sail away from kandla on completion of necessary formalities.6. mr. pratap, learned advocate appearing for mr. r.j. oza, learned advocate for the applicant has submitted that the sale contracts are admittedly between the original plaintiff and the defendant no.3. there is no privity of contract between the applicant and the original plaintiff. the original plaintiff may have cause of action against the defendant no.1 vessel, its master and owners and the original plaintiff has already obtained security from the original defendant no.1 in respect of its alleged claim by virtue of order dated 26.03.2003. there can be no cause of action against the applicant and the plaint disclosed no cause of action against the applicant. mr. pratap has taken me through the entire plaint of the suit filed by the original plaintiff and has submitted that except the averment made in para 2 of the plaint to the effect that the defendant no.3 entered into an understanding with the defendant no.2 to send the cargo through the defendant no.1 ship which is chartered by the defendant no.2, there is no other averment in the plaint and hence, no cause of action is disclosed against the applicant. in the plaint, the only relief sought against the applicant is that the applicant and the original defendant nos.1,3 & 4 jointly and severally pay over to the original plaintiff the cost and expenses of the vessel and the cost of the proceedings. the relief sought for in the plaint is absolutely absurd and in any event cannot be granted. on the fact of the plaint, it is clear that the allegations of the original plaintiff are that the goods were purchased by the original plaintiff from the original defendant no.3 under two sale contracts and that the original plaintiff has received 44 mts less than the quantity contracted for and thus, the original plaintiff claims to have cause of action against the original defendant no.3 and that if as a result of technical difficulties, the original defendant no.1 could not discharge the full cargo as a result of which the original plaintiff suffered a loss of 44 mt, the original plaintiff may have a cause of action against the original defendant no.1 for which the original plaintiff has already obtained an order of arrest of the original defendant no.1 vessel on 15.03.2003 and has also obtained security in respect of its claim from the owners of the original defendant no.1 vessel by further order dated 26.03.2003 and that no allegation is made in the plaint against the applicant and that nothing is stated in the plaint as to how the claim lies against the applicant. he has, therefore, submitted that there can be no cause of action against the applicant and the plaint on a meaningful reading clearly discloses no cause of action against the applicant. the whole purpose of conferment of powers under o.7 r.11 of the code of civil procedure is to ensure that a litigation which is meaningless and bound to prove abortive, should not be permitted to occupy the time of the court and must be terminated and brought to an end at the earliest. the plaint is, therefore, liable to be rejected against the applicant and the suit may be dismissed as against them. the applicant should not be put to the long and expensive process of trial and the burden of litigation when it is clear at the outset that original plaintiff have no cause of action against the applicant and the plaint discloses no cause of action whatsoever.7. in support of his submissions, mr. pratap has relied on the decision of the hon'ble supreme court in the case of azhar hussain v/s. rajiv gandhi 1986 (supp) supreme court cases 315. while dealing with the election petition, the hon'ble supreme court has observed as under:-'the court has power to reject an election petition summarily under the provisions of the cpc. the purpose of conferment of such power is to ensure that a litigation which is meaningless and bound to prove abortive should not be permitted to occupy the time of the court and the concerned litigants are relieved of the psychological burden of the litigation so as to be free to follow their ordinary pursuits and discharge their duties. there is greater reason why in a democratic set-up, in regard to a matter pertaining to an elected representative of the people which is likely to inhibit him in the discharge of his duties towards the nation, the controversy is set at rest at the earliest if the facts of the case and the law so warrant. since the court has the power to act at the threshold the power must be exercised at the threshold itself in case the court is satisfied that it is a fit case for the exercise of such power and that exercise of such power is warranted under the relevant provisions of law. it is therefore not possible to accept the contention that the powers to dismiss or reject an election petition or pass appropriate orders should not be exercised at the stage of final judgment after recording the evidence even if the facts of the case warrant exercise of such powers, at the threshold.'8. he has further relied on the decision of the hon'ble supreme court in the case of t. arivandandam v/s. t.v. satyapal and another - (1977) 4 supreme court cases 467 wherein it is held as under :-'the trial court must remember that if on a meaningful - no formal - reading of the plaint it is manifestly vexatious and meritless in the sense of not disclosing a clear right to sue, it should exercise its power under order vii, rule 11 c.p.c. taking care to see that the ground mentioned therein is fulfilled. if clever drafting has created the illusion of a cause of action, the court must nip it in the bud at the first hearing by examining the party searchingly under order x, c.p.c. an activist judge is the answer to irresponsible law suits. the trial courts would insist imperatively on examining the party at the first hearing so that bogus litigation can be shot down at the earliest stage.'9. on the basis of the aforesaid factual foundation and decided cases, mr. pratap has emphatically submitted that the plaint does not disclose any cause of action against the applicant and absolutely frivolous and vexatious relief was sought for in para 12-c of the plaint against the applicant and hence, the plaint is required to be rejected qua the applicant.10. mr. uday joshi, learned advocate appearing for the plaintiff for m/s. trivedi & gupta has submitted that the application moved by the applicant should not be entertained by this court as the trial is yet to take place and without leading the evidence and/or examining the respective contentions of the parties in the suit, the plaint cannot be rejected at the threshold qua the applicant is concerned. he has further submitted that in the bills of lading issued with regard to the consignments, it has been categorically mentioned as follows :-'the contract of carriage envisaged by this bill of lading is between the shipper, consignee and / or owner of the cargo and the owner or demise charterer of the vessel named herein to carry the cargo described above. it is understood and agreed that, other than the said ship owner of demised charterer, no person, firm or corporation or other legal entity whatsoever, is or shall be deemed to be liable with respect to the shipment as carrier, bailee or otherwise in contract or in tort. if however, it shall be adjudged that any other than the said ship owner or demised charterer is carried or bailee of the said shipment or under any responsibility with respect thereto, all limitations of exonerations, from liability and all defences provided by law or by the terms of the contract of carriage shall be available to such other.'he has, therefore, submitted that the bill of lading makes it clear that the applicant is not a stranger to the dispute and the liability with regard to shipment would also be on the applicant. in view of the aforesaid terms in the bills of lading, the present application filed by the applicant does not deserve to be allowed and it should be dismissed with cost.11. ms. paurami sheth, learned advocate appearing for the original defendant no.1 vessel has submitted that the amount was deposited in the court without prejudice to the rights and contentions of the defendant no.1 in the suit and hence, simply because the amount has been paid by the defendant no.1, the present applicant could not be permitted to raise the plea that the suit claim is satisfied and no relief can be granted against the applicant.12. as far as the plea regarding bills of lading issued with regard to the consignment raised by learned advocate for the original plaintiff mr. uday joshi is concerned, learned advocate for the applicant mr. pratap has strongly objected to the said plea on the ground that there is no reference with regard to the bills of lading in the entire plaint nor the copy of the bills of lading was produced along with the plaint. even otherwise, the original plaintiff has nowhere stated as to whether the applicant is a demised charterer and the applicant is liable to satisfy the claim of the original plaintiff on that count. in this connection, he has invited the attention of the court to the decision of the hon'ble supreme court in the case of epoch enterrepots v/s. m.v. won fu, (2003) 1 s.c.c. 305 wherein it is held as under:-'even assuming the agreement has in fact been entered into by the disponent owner, unless sufficient evidence is laid that the charter was by demise, whereby the possession and control of the vessel was given to the disponent owner, question of pursuing the cause of action against the vessel would not arise. needless to add that charter parties are of three kinds : (a) demise charter; (b) voyage charter; and (c) time charter. whereas in demise charter, the vessel is given to the charter who thereafter takes complete control of the vessel including manning the same, in both voyage charter and time charter, master and crew are engaged by the owner who act under the owner's instructions but under the charter's directions. simply put, voyage charter is making available the correspondingly is where the vessel is made available for carriage of cargo for a fixed period of time.'13. mr. pratap has, therefore, submitted that no such pleading is made in the entire plaint and for the first time in reply to the present application, the original plaintiff should not be permitted to raise such a contention.14. i have heard learned advocates appearing for the respective parties and i have gone through the plaint, documents attached therewith and the authorities relied on before me. after giving my anxious thoughts to the submissions made before me, i am of the view that the present application deserves to be allowed as the plaint does not disclose any cause of action against the present applicant. simply because the defendant no.3 entered into an understanding with the present applicant to send the cargo through the defendant no.1 vessel which is chartered by the present applicant, the original plaintiff cannot be permitted to raise any claim against the present applicant. there is no privity of contract between the applicant and the original plaintiff. goods were purchased by the original plaintiff from the original defendant no.3 and contracts were also executed between them only. if the plaintiff has received 44 mts less the quantity contracted for, in that case, the plaintiff may have some cause of action against the defendant no.3 and even because of some technical difficulties, the original defendant no.1 vessel could not discharge the full cargo as a result of which the original plaintiff might have suffered some loss, in that case also, the original plaintiff may have a cause of action against the original defendant no.1 vessel. but these facts by themselves did not establish any cause against the present applicant and as a matter of fact, nowhere in the plaint itself it is stated as to how the claim lies against the present applicant. the court is, therefore, of the view that this is a fit case where the court has to exercise its powers under o.7, r.11 of c.p.c. and reject the plaint so far as the present applicant is concerned. the authorities cited before me are also relevant for the purpose of taking this view as the hon'ble supreme court has made it clear time and again that the purpose of conferment of powers under o.7, r.11 of c.p.c. is to ensure that litigation which is meaningless and bound to prove abortive should not be permitted to occupy the time of the court and the concerned litigants are relieved of the psychological burden of the litigation so as to be free to follow their ordinary pursuits and discharge their duties. precisely for this reason, the court rejects the plaint so far as the applicant is concerned.15. it is, however, made clear that any observation made here in this order would not come in the way of the other parties to the suit proceedings and their respective rights and contentions would not get prejudiced by any of these observations.16. in the above view of the matter, the present application is allowed. no order as to costs.