Trade Wings Limited Vs. Garment House (Exports), a Partnership Firm, Represented by Its Partner S. Ranganathan - Court Judgment

Excerpt:
- constitution of india article 141; [a.p. shah, c.j., f.m. ibrahim kaliffulla &v. ramasubramanian, jj] reference to larger bench - precedent - full bench decision held, it is binding on the division bench. only if the full bench comes to conclusion that earlier full bench decision is incorrect, there is scope for making reference to larger bench. division bench doubting correctness of full bench decision cannot direct registry for placing papers before chief justice to make reference to larger bench. v. kanagaraj, j.1. the above appeal is directed against the judgment and decree, dated 21.6.1984 made in o.s. no. 2633 of 1981 by the iv additional judge, city civil court, madras, thereby decreeing the suit as prayed for, deducting a sum of rs. 15,275.01 ps. from the decretal amount.2. the respondent herein is the plaintiff before the lower court and the averments of the plaint, in brief, are that the plaintiff being an exporter of ready-made garments, entered into an agreement with a west germany company, namely, m/s. iva & co., for exporting the ready-made garments; that in pursuance of the agreement, the said west germany company placed two orders with the plaintiff on 1.11.1976 and 16.12.1976 for the export of 4000 and 500 ready-made garments respectively; that the payment as indicated on the order is 'documents against payment' (d.p); that the documents were to be sent direct to the raifiessen bank, meerbusch through west deutsche genossens chafts zentral bank and that the terms of payment being 'd.p.' it did not stipulate immediate clearance by the buyer on presentation of documents.3. the further case of the respondent/plaintiff before the lower court is that the defendant acted as the shipping agents for the plaintiff, for the shipment of the ready-made garments, in january, 1977; that the plaintiff gave clear instructions to the defendant that the goods should be addressed to the said west deutsche genossens chafts zentral bank, west germany, showing them as 'consignee' as is the practice, when the documents have to be sent to the bankers of the buyer as indicated by the buyer in the order forms; that the order forms were placed in the hands of the defendant along with other details to enable the defendant to prepare the documents of title and the defendant was made aware of the terms under which the goods were being despatched.4. the further case of the plaintiff is that in the original airways bill, instead of writing the name of the said zentral bank, the defendant had written the name of m/s iva & co., that when it was impressed on the defendant that in the airways bill, the name of the said zentral bank should be written, the defendant had corrected only the original of the airways bill and sent the same to the plaintiff and in turn, the plaintiff sent it to the purchaser of the goods and to the zentral bank at west germany, but the defendant had not corrected the copy of the said airways bill, as a result of which, the purchaser of the goods did not pay the amount immediately; that the plaintiff received a letter from the state bank of india on 21.9.1977, thereby mentioning that the goods sent by the plaintiff had been put up for auction by the customs department and since the zentral bank at west germany was not shown as the 'purchaser' in the airways bill, they have not received any information; that when the plaintiff enquired the representatives of m/s iva & co, by a letter dated 4.10.1977, they informed the plaintiff that the customs department did not convey any information to the zentral bank at west germany; that when the plaintiff questioned the west germany customs department on 21.9.1977, as to why the west germany zentral bank was not informed, they sent a reply to the plaintiff on 17.11.1977 that m/s. iva & co, alone had been shown as the 'purchaser' and not the zentral bank; thus, therefore, the plaintiff sustained a loss of rs. 57,188.88 ps. and since this loss had happened only on account of the negligence and carelessness of the defendant, the plaintiff addressed a letter to the defendant on 3.4.1978, demanding make good the said amount, for which the defendant replied on 21.8.1978 stating thereby that the loss had occurred only on account of the purchaser of the goods, since he had not obtained the goods and that the defendant had not committed any mistake. the plaintiff sent another notice to the defendant on 25.10.1978, demanding the payment of the amount, which he sustained as loss, since it happened only on account of the negligence and carelessness of the defendant, for which the defendant denied and further the plaintiff sent a rejoinder on 27.11.1978, reiterating that the loss had occurred only on account of the negligence on the part of the defendant and ultimately the suit had been filed for the recovery of rs. 63,131.85 ps. from the defendant with interest at 12% p.a. on rs. 49,525.10 ps. from the date of plaint till the date of realisation and for costs.5. the defendant filed a written statement contending inter alia that the defendant being an agent, is not bound to pay the suit amount; that the suit is barred by limitation; that the plaintiff did not give any information as regards the writing in the airways bill; that only at the request of the plaintiff, the defendant showed the west germany zentral bank as the 'purchaser' of the goods and since the goods had already been taken away, no corrections were made in the copies; that the defendant is not bound to pay the airways bill; that the defendant was given to understand that the customs department had given a notice in respect of the sale of goods to the plaintiff; that the airways bill should be prepared only by the plaintiff and since the loss had been sustained only on account of the act of the plaintiff the defendant is not bound to pay any amount to the plaintiff and has thus prayed for the dismissal of the suit.6. for the above written statement, filed by the defendant, the plaintiff filed a reply statement contending thereby that the plaintiff specifically mentioned to the defendant that the name of the west germany zentral bank should be written in the airways bill; that generally, only the defendant should prepare the airways bill and even at their request, the defendant corrected the name of the 'purchaser' only in the original bill, but not in the copies and that the plaintiff is ready to give credit to the amount obtained from the west germany customs department.7. based on the above pleadings, the court below, framing eight issues, has ordered for trial and during the trial, the plaintiff would examine one witness for oral evidence as p.w. 1 and would mark 25 documents, for documentary evidence, as exs.a-1 to a-25. on the part of the defendant, though one witness was examined as d.w.1 for oral evidence, no documents were exhibited.8. p. w. 1 one of the partners of the plaintiff-firm, would depose that their company is indulged in the export of ready-made garments; that m/s. iva & co. of west germany placed two orders with them under exs.a-1 and a-2 for export of ready-made garments; that the mode of payment is 'documents against payment', that means the person who receives the goods has to make payment in the bank and has to take the documents, to show them to the customs authorities to take delivery of the goods, that the mode of payment has been spelt out in exs.a-1 and a-2 also and the documents were to be sent direct to raifiessen bank, meerbusch through west deutosche genossenschafts zentral bank, west germany; that on receipt of the orders, they sent the goods through sabena airlines; that the defendant acted as the shipping agent and that they used to give the goods to the defendant for delivery along with necessary documents, he would further depose that they used to give the necessary information, in writing in a separate form, which was supplied to them by the defendant, for preparation of airways bill, by mentioning the name of the central bank at west germany as the consignees, but the defendant has not shown the name of the zentral bank at west germany as the consignee in the exs.a-3 and a-4 - airway bills.he would further depose that when the above mistake was brought to the notice of the defendant, by a letter dated 12.1.1977, the defendant corrected the mistake in the originals of exs.a-3 and a-4, further promising to correct the copies also and supplied them the exs.a-3 and a-4 along with the copies; that they showed the name of the zentral bank at west germany as the receiver of the goods, even in the copies, that the plaintiff got account with the state bank of india, that on 1.7.1977, the state bank of india addressed a letter to the plaintiff, under ex.a-5, stating thereby that no payment was made in the west germany bank, for which they have given reply as shown in ex.a-6 and the state bank of india addressed a letter to the west deutsche genossenschafts zentral bank, west germany, by marking a copy to the plaintiff under ex.a-7.this witness would further depose that the state bank of india by a letter dated 21.9.1977 in ex.a-8, informed them that they received a cable from the west germany bank stating that the goods sent by them was confiscated by the customs authorities and was put for public sale and they were not in a position to prevent the auction as they were not shown as recipients of the goods in the concerned documents i.e., in airways bill and since they were not informed by the customs authorities; that on receipt of ex.a- 8 -letter, they enquired with the representatives of the west german company at chennai, addressed a letter to the customs authorities at germany in ex.a-10 and they received reply from the west germany zentral bank in ex.a- 9 and the reply sent by the customs authorities at west germany is ex. a-11, the english translated copy of which is ex. a-12. he would further depose that they obtained copies of the airway bills through sabena airlines as shown in ex.a-13 and ex.a-14; that in exs.a-13 and a-14, the name of the west germany zentral bank has not been shown as consignee, even though there is mention in them that the consignments have been despatched; that ex. a-15 is the letter dated 3.4.1978 addressed by them to the defendant, claiming compensation from the defendant, that ex.a-16 is the reply sent by the defendant on 21.8.1978 to the plaintiff; that ex. a-17 is the copy of the legal notice issued by them to the defendant on 25.10.1978, for which the reply notice sent by the defendant is ex.a-18, dated 11.11.1978; that the rejoinder sent by the plaintiff to the defendant is ex.a-19; that ex.a-20 is the copy of the circular sent by the defendant on 2.3.1976 where in it has been clearly mentioned that only the name of the bank should be shown as the receiver of the goods in the airway bill; that the invoices furnished by the defendant to the plaintiff are exs.a-21 to a-24 that ex.a-25 is the certificate issued by the state bank of india to the plaintiff and that they obtained an amount of seven thousand and odd rupees from the customs authorities and they are prepared to forego an amount of rs. 5,163.75 and rs. 2,500 from the total suit claim and for the rest of the amount, the defendant is liable to pay to them. in his cross examination, this witness would depose that even after this incident, they have sent consignments through the defendant/that he is not aware that as per schedule i, rule 6(1) of the carriage by air act, the exporter, who sent the consignment by air has to give one ad-dress that in exs. a-1 and a-2, it has been mentioned that the documents should be sent to the west german bank and that he knew about the auction of the goods.9. d.w.1 in his evidence, would depose that he is the manager of the defendant-company and would admit that the plaintiff sent two consignments through them and exs.a-3 and a-4 are the airway bills, which were prepared by their office and signed by the chief; that excepting exs. a-1 and a-2, no other information had been passed on by the plaintiff for preparation of the airway bills; that in exs.a-1 and a-2, the name of the consignee is shown as m/s. iva & co.; that they supplied the copies of exs.a-3 and a-4 to the plaintiff and that the plaintiff did not ask them to make any correction in exs.a-3 and a-4; that after some time, the plaintiff informed them that they have to enter the name of the german bank as the consignee; that they informed the sabena airlines over phone, requesting them to make the west german bank as the consignee, by correcting the papers, but within such time, the consignment had reached the west germany; that they carried out the corrections in the copies, as requested by the plaintiff and prior to ex.a-15, they have not received any communication from the plaintiff.in the cross examination, this witness would depose that ex.a-20 is the circular sent by them to all the exporters, including the plaintiff, wherein they have indicated as to who to make the mention of the name of the consignee; that only after issuing circular in ex.a-20, they prepared exs.a-3 and a-4, that the plaintiff should give instructions to them for preparing exs.a-3 and a-4 and they will prepare the airway bill based on the instructions received from the exporters. this witness would further depose that at the first instance, when they prepared exs.a-3 and a-4, they did not show the name of the west german bank as the consignee; that it is indicated in ex.a-18 - reply sent by them to the plaintiff that on 12.1.1977, the plaintiff wanted the name of the consignee changed to that of the west germany bank and that mistake had been committed by the advocate himself; that neither they informed the sabena airlines nor the customs authorities, regarding the correction of the name of the consignee in the airway bill and he would formally deny a suggestion that only on account of their carelessness, the loss has occurred to the plaintiff.10. based on the above evidence placed on record, both oral and documentary, the lower court, appreciating the same in its own way, has ultimately arrived at the conclusion to decree the suit as prayed for, testifying the validity of which, the defendant therein has come forward to file the above appeal suit, on certain grounds as offered in the memorandum of grounds of appeal.11. during arguments, the learned counsel appearing for the appellant/defendant would contend that the suit has been filed by the exporter, for the loss sustained by him on account of two consignments of ready-made garments, which were exported to a company in west germany, through the medium of the defendant, who is the shipping agent, that the defendant is the agent of the sabena airlines, through which the two consignments of ready-made garments have been despatched; that in the airway bill, the name of the west germany bank should have been shown as the consignee, but the name of m/s. iva & co., was shown as the consignee and since the consignee did not claim the goods, the customs department sold the goods in public auction and saying that meager amount of rs. 14,000 had been realised against he actual value of rs. 49,000 and hence the plaintiff has filed the suit for the recovery of the said sum with interest.12. the learned counsel for the appellant would further argue that (1) suit was barred by limitation, as per the provisions of the carriage by air act, 1972, according to which, if the suit has not been brought in two years from the date of arrival of the aircraft in the destination, the right to sue will extinguish, (ii) it is the duty of the consignor to prepare the airway bill and (iii) the defendant is only an agent of air and therefore, he could not personally be held liable, as per the provisions of section 230 of the contract act.13. the learned counsel for the appellant would further contend that even though they have raised the question of limitation in para no. 3 of their written statement, since as per the provisions of rule 29 of schedule i of the carriage by air act, 1972, the suit has to be instituted within two years from the date of reaching the destination by the aircraft and since the consignment had been sent on 12.1.1977 and the suit had been filed on 4.4.1979, the court below has not determined that question, before ever considering the other questions, that arise from out of the facts, since it should be determined first, being a legal question.14. the learned counsel for the appellant would further argue that they are the agents of sabena airlines; that they have included the cargo bill in the airways bill in exs.a-3 and a-4; that the consignments under exs.a-1 and a-2 were taken delivery of and they handed them over to the customs authorities, from whom the consignee have to take delivery of; that the defendant is responsible only for the loss, if any, occurred during the freight and not thereafter; that instead of suing the importer, the plaintiff has sued the carrier; that the evidence of p.w.1 itself would reveal the persons, who were to take delivery of the goods; that due to change of colour and pattern, the consignment was not taken delivery of; that suing the defendant is not proper and there is no ground to sue the defendant either in law or on facts and no case is made against the defendant. the learned counsel for the appellant would further submit that at time of entertaining this appeal, interim stay was granted by this court, as per the order dated 22.6.1985 made in c.m.p. no. 7277 of 1985, on ground that the appellant should deposit a sum of rs. 15,000 before the lower court and the same had been complied with and the interim stay was also made absolute 7.2.1986.15. since there was no appearance shown on the part of the respondent, on perusal of the evidence placed on record and on perusing the grounds of appeal and upon hearing the learned counsel for the appellant, the above appeal suit has to be decided on merits. so far as the questions raised on the part of the appellant are concerned, they are quite legal and hence, based on the grounds of appeal and the other facts and circumstances pleaded by parties and of course in the context of the position of law, the following points are framed for determining the above appeal:(1) whether the suit filed by the respondent/ plaintiff is barred by limitation as per the provisions of rule 29 of schedule i of the carriage by air act, 1972?(2) whether it is the exporter, who should offer the address of the consignee within the meaning of rule 6(1) of schedule i of the carriage by air act, 1972?(3) whether the defendant, as an agent, could not be personally held liable, under section 230 of the indian contract act, for any loss or damage?(4) whether the plaintiff is entitled to the relief as prayed for in the plaint and as decreed by the lower court?(5) to what relief, if any the appellant become entitled to?16. point no. 1:- so far as this point is concerned, it is the case of the appellant, even according to his pleading in para no. 3 of the written statement, that the action should have been initiated within two years from the date of arrival of the goods at the destination, lest, the right of claiming damages shall be extinguished, as per rule 29 of schedule i of the carriage by air act, 1972, which reads.29. the right of damages shall be extinguished if an action is not brought within two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped.this is a legal question and in fact it should have been preliminarily decided by the lower court perior to deciding the other questions based on facts. it is the definite case of the defendant that since the consignment had been sent on 12.1.1977 and the suit before the lower court came to be initiated by the respondent/plaintiff on 4.4.1979, under the above provision of the carriage by air act, 1972, the suit is barred by limitation. dealing with this point under issue no. 3, framed by it, the court below, in para no. 6 of its judgment would write that 'either during the trial of the suit or during the arguments the learned advocate for the defendant had not chosen to prove the aforesaid issue. even though it had been mentioned in the written statement that this suit is affected by the law of limitation, d.w. 1 - nagabushanam, who was working as the manager of the defendant's firm, did not mention about the suit having been affected by the law of limitation. further, no arguments were made in this regard. therefore, i hereby decide that the suit had not been affected by the law of limitation and decide this issue in favour of the plaintiff.'17. this is not the way in which a responsible judicial officer is expected to deal with the vital question of law, which has been brought forth by the defendant. the lower court does not have the mind to go into the exact provision of law, to find out whether really the suit is barred by limitation and what has been prescribed by law. the provision of law is definite to the effect that the right of damages shall be extinguished, if action has not been brought within two years, reckoned from the date of arrival of the goods at the destination and it is also patent that the date of arrival of the consignment at the destination was 12.1.1977 and the suit had been filed on 4.4.1979. but, as per the provisions of rule 29 of schedule i of the carriage by air act, 1972, the suit should have been filed on or before 11.1.1979, since the plaintiff had not come forward to institute the suit within the period of limitation prescribed by law, the same becomes hopelessly time-barred and not maintained under the said provision of law.18. it is a legal question and the court is bound by the provisions of law, since the courts are destined to deliver the judgments only according to law. but, the lower court throwing the blame on the counsel for the defendant that he did not mention this provision of law in his argument, even though it had been mentioned in the written statement and no argument was made on this regard, would decide that the suit was not affected by the law of limitation, which would only reveal the miserable misconception of law by the lower court. whether it is pleaded or not, since it is a settled law that pleading is necessary for fact and not for law, the moment the court gets the hint that the law is in operation against the maintainability of the suit, whether it is brought forth by either of the parties or not, it is the bounden duty of the court to consider the position of law on the subject and deliver the judgment according to the dieturn of law. the lower court has committed a serious legal error in bypassing the legal provision and hence this point is answered in favour of the appellant/defendant and against the respondent/plaintiff, making it clear that the very suit instituted by the respondent/plaintiff before the lower court is hopelessly time barred and the same is not maintainable in law.19. point no. 2:- rule 6(1) of schedule i of the carriage by air act, 1972 reads as follows: the air consignment note shall be made out by the consignor in three original parts and be handed over with the goods.therefore, it is clear that it is the duty and responsibility of the consignor to prepare the air consignment note in three original parts and be handed over with the goods. dealing with this point under issue no. 4, framed by it, in para no. 8 of its judgment, the lower court would write that since the responsibility of preparing the airway bills had been entrusted with, the defendant, they had been prepared by them under exs.a-3 and a-4 and in spite of a request having been made by the plaintiff to correct the name of the consignee of the goods, showing the zentral bank of west germany as the consignee, the defendant had not chosen to effect the aforesaid correction and therefore the defendant alone should pay the compensation.20. whether it is the plaintiff or the defendant, who prepared the airway bills as shown under exs.a-3 and a-4 is not the point for determination nor is it relevant to determine whether a request had been made on the part of the plaintiff with the defendant for preparing exs.a-3 and a-4 and whether at the request of the plaintiff, the defendant, being the agent had prepared the airway bills. but, the foremost and uppermost point that is to be decided is whose responsibility is it to prepare the airway bills, as contemplated by law and not who actually prepared it. the first is the legal point and the second is the factual one. as per rule 6(1) of schedule i of the carriage by air act, 1972, the responsibility for preparing the airway bills has been cast only on the consignor i.e., the plaintiff herein. the courts are mainly guided by law and only thereafter on the facts, revealed by the parties to suit their case. the legal conviction is that it is the responsibility of the consignor to see that the airway bills are prepared correctly, and hence he cannot cast the burden on somebody else and shirk his legal responsibility and then come forward to say that he requested the defendant to make some corrections in the airway bills, but the defendant had not done it. regarding the request, said to have been made by the plaintiff with the defendant also, there does not seem to be any agreement in existence and in enforcement of which the plaintiff is said to have launched the claim of compensation against the defendant nor is it the case of the plaintiff. hence, in the above circumstances, since the responsibility to prepare the airway bills is cast on the plaintiff-consignor, this burden or responsibility cannot be shifted to the shoulders of the defendant, by simply saying that the plaintiff requested the defendant to prepare the airway bills and that the defendant has wrongly prepared them.21. even factually, no satisfactory evidence has been placed on record by the plaintiff to show that he requested the defendant to prepare the airway bills. from the evidence of d.w. 1 it comes to be known that the connected forms were forwarded to the plaintiff by the defendant for preparing the airway bills and then without giving proper instructions to the defendant, the plaintiff again sent them to the defendant, as a result of which, instead of making the name of zentral bank, west germany as the consignee, the name of m/s. iva & co. has been mentioned and immediately after getting instructions, the original bill was corrected regarding the above mistake and the copies were not able to be corrected, since they have gone along with the goods. thus, a satisfactory explanation could be offered on the part of the defendant, to have committed the error, in a convincing manner and hence even on facts, the plaintiff cannot be said to have established his claim against the defendant, so as to become eligible to claim compensation against the defendant. hence, this point is also answered against the respondent/plaintiff and in favour of the appellant/defendant since it is not the duty or responsibility of the defendant to prepare the airway bills nor is he bound to do under any contractual liability.22. ponit no. 3:- this point is concerned with yet another question of law and a glance at section 230 of the indian contract act would make it clear that an agent cannot personally enforce contracts nor be bound by contracts on behalf the principal. section 230 of the indian contract act reads as follows:230. in the absence of any contract to that effect, an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them.for the above rule, there are also certain exceptions and they do not become applicable to the facts of this case, since (1) the contract is not made by the agent, (2) not does he disclose the name of his principal and (3) where the principal, though disclosed, cannot be sued. here, first of all, no agreement entered into in between the plaintiff and the defendant has been filed or marked as a document, much less specifying the terms and conditions of the contract in between them. but, it is an admitted fact that the defendant was acting as the agent of m/s. sabena airlines and the plaintiff has come forward to file the very suit against the defendant in that capacity only. it is not known whether there is any contract between the plaintiff and the defendant to the effect that the defendant has to fill-up the necessary documents and forms. while so, for not complying with certain requests, said to have been made on the part of the plaintiff to the defendant, the plaintiff has not brought forth or established that he is entitled to sue the agent for compensation of loss or damage, even though it is his burden to prove, much less bringing the case under one of the exceptions of section 230 of the indian contract act, without which the plaintiff will have no case at all, since it is the rule that the agent cannot personally be held liable for anything done on behalf of the principal and hence this point is also decided in favour of the appellant/defendant and against the respondent/ plaintiff.23. point nos.4 and 5: the plaintiff, neither on facts nor, in law, has made out a concrete case nor proved the same with such standard of proof i.e., with preponderance of probability, as required by law. neither the provisions of law concerned with the case put up by the respondent/plaintiff, nor the facts and circumstances, as depicted by the plaintiff, comes to be established in evidence, both oral and documentary or even by circumstance and the lower court should have arrived at the conclusion to dismiss the suit with costs. but, failing to appreciate the legal position and the evidence, in the proper manner, as expected by law and adopting a wrong method of appreciation, the lower court has arrived at a wrong conclusion to decree the suit as prayed for. the lower court has definitely committed patent errors of law and perversity in approach, thus calling for interference by this court into the judgment and decree made by the court of iv additional judge, city civil court, madras.24. in result, the above appeal suit is allowed, setting aside the judgment and decree, dated 21.6.1984 made in o.s. no. 2633 of 1981 by the court of iv additional judge, city civil court, madras, with costs throughout. the amount if any, that had been deposited by the appellant before the lower court should be returned to him. consequently c.m.p. no. 7277 of 1985 is closed.