Shahi Exports V Gold Star Line Limited and Others
Shahi Exports V Gold Star Line Limited and Others
Shahi Exports V Gold Star Line Limited and Others
35 of 2021
in C.S.No.669 of 2019
Coram:
A.No.35 of 2021
in C.S.No.669 of 2019
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A.No.35 of 2021
in C.S.No.669 of 2019
Prayer:- This application is filed under Order XIV and Rule 8 of Original Side
Rules read with Order VII Rule 11 of C.P.C.
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A.No.35 of 2021
in C.S.No.669 of 2019
ORDER
2. The brief facts of the case as stated in the plaint is that the 1st
plaintiff as its Agent. The 2nd plaintiff is responsible for filing Import General
containers/cargo shipped by the 1st plaintiff into Chennai Port. In the course of
their business, 1st plaintiff shipped 10 containers stuffed with cargo which were
entrusted to them from the Port of Shanghai, China to Port of Chennai India, vide
8 Master Ocean Bills of Lading. The 1st defendant is the consignee for all the
above Master Ocean Bills of Lading. In respect of the Master Ocean Bills of
Company is the counterpart of the 1st defendant in China. House Bills of Lading
(HBL) was issued by M/s.Fast logistics Company Limited and the plaintiff is not
privity to this document. It is between the House Bills of Lading issuer and their
customer. The Master Bill of Lading in this instant case issued by the 1 st
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consignment and therefore, as per the terms of the contract, the 1st defendant is
liable to the carrier/plaintiff for all conditions of the Master Bills of Lading as
discharged the containers. Prior to the arrival of the containers in India, the 1st
defendant being the consignee instructed the 2nd plaintiff through email to file the
Import General Manifest (IGM) in the name of 2nd defendant on the HBL in 3
cases and for the rest in the name of the 1st defendant. The 1st defendant also
nominated the 4th defendant as Container Freight Station (CFS). As per instruction
of the 1st defendant, 2nd defendant filed Import General Manifest (IGM) on
the name of the 2nd defendant in respect of 3 MBL and in the name of the 1 st
defendant as the C&F agent of the 2n defendant arranged for the movement of the
Bill of Lading is involved, the entity to whom the HBL is surrendered would issue
delivery order in the name of the Carrier so that, the carrier could collect the
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import charges from the consignee and issue delivery order to the consignee
named in the House Bill of Lading. In the instant case, the 2nd defendant ought to
have surrendered HBL to the 1st defendant and 1st defendant should have issued
delivery order in the name of the plaintiff for the 3 HBL. This was not done by the
defendants. The 4th defendant who is the custodian of the imported cargo is well
aware that the containers cannot be released to the consignee named in the HBL
i.e., the 2nd defendant unless the 2nd defendant obtains 'Delivery Order' from the 2nd
plaintiff and surrenders the same before the 4th defendant. Floating the
procedures, the 4th respondent was permitted to take delivery of the cargo by the
2nd respondent, without the delivery order issued by the 2nd plaintiff.
3. The plaintiff raised “Proforma Invoice” on the 1st defendant for the
Container detention charges and terminal handling charges for total sum of
plaintiff to arrange the invoice in the name of the 3 rd defendant. Accordingly, the
plaintiff re-issued the Proforma Invoice in the name of the 3rd defendant and same
was collected by the 1st defendant from the 2nd plaintiff's Office. The actual
invoice are issued only at the time of making payment to the plaintiff and
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4. The 1st defendant did not surrender the Original Master Bills of
Lading and paid the container detention charges and handling charges. Hence, the
2nd plaintiff issued another notice to the 1st defendant on 26.12.2017 informing that
accumulating. The 1st defendant did not respond to that. To the shock, the plaintiff
stated that the cargo was released to the 2nd defendant on receipt of the original
House Bill of Lading duly endorsed by the 1st defendant to release the cargo to the
2nd defendant. Contending that release of the cargo to the 2nd defendant without the
delivery order of the plaintiff and without the effective payment of the local
charges and Container detention charges to the plaintiff, which is contrary to the
5. The 2nd defendant, who received the suit summons has filed this
application to reject the plaint primarily on the ground that the suit is barred by
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law for (a). No privity of contract. Non-disclosure of cause of action against the
2nd defendant. (b). Non-joinder of “Link Fast Logistics Company Ltd” which is
6. The Learned Counsel for the plaintiff has filed counter refuting all
submit that nowhere in the plaint, the role of 2nd defendant being specifically
mentioned. There is no privity of contract between the plaintiff and the 2nd
defendant. The goods were taken delivery by the 2nd defendant pursuant to the
delivery order given by the 1st defendant. When there is no privity of contract
between the plaintiff and the 2nd defendant, the suit as against the 2nd defendant is
not maintainable. Further, the Learned Senior Counsel would submit that the
reading of the plaint does not indicate any cause against the 2 nd defendant. The
vague reference to the 2nd defendant is not based on any evidence. Just to harass
the 2nd defendant, the plaintiff has filed the suit arraying 2nd defendant as one of
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the party. Furthermore, the Leaned Senior Counsel would submitted that, the
plaintiff specifically states that Link Fast Logistics Company Limited at China is
the counterpart of the 1st defendant and as a freight forwarder Company, the said
M/s.Link Fast Logistics Company Limited has issued House Bills of Lading.
While so, the said Link Fast Logistics Company Limited is a necessary party to the
filing the suit. The plaintiff, without exhausting the pre-ligitation Mediation and
rushed to this Court. The said Section is mandatory and pre-requisite before filing
the suit invoking the provisions of Commercial Courts Act, 2015. Having failed
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(i). Ganga Taro Vazirani -vs- Deepak Raheja reported in 2021 SCC
C.R.P.No.3687 of 2018
(iii). Sathyam Wood Industries -vs- Adoniss (P) Limited and another dated
(v). Terai Overseas Private Limited -vs- Kejriwal Sugar Agencies Private
10. Per contra to the submissions made by the Learned Counsel for
the applicant, the Learned Counsel for the respondent/plaintiff submitted that there
is sufficient cause of action disclosed to maintain the suit against the 2nd
defendant. The Import General Manifest (IGM) which is usually filed in the name
of the consignee appearing on the MBL, on the instruction of the 1st defendant, the
IGM was filed in the name of the 2nd defendant as consignee. 10 containers
manifesting the name of the 2nd defendant were discharged from the respective
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ships. The cargo were released to the 2nd defendant without effecting payment of
charges to the plaintiff. The 2nd defendant being the actual consignee is liable to
make good lose caused to the plaintiff on account of the illegal act done in
collusion with the other defendants. The delivery order for the cargo ought to
have been issued by the plaintiff. Whereas, the 2nd defendant has taken delivery
from the 4th defendant through 3rd defendant without the delivery order issued by
the plaintiff. Therefore, the 2nd defendant cannot claim that there is no privity of
contract between the plaintiff and the defendant. By taking the delivery of the
cargo in connivance with the 1st defendant with whom the plaintiff has direct
contract, the 2nd defendant is necessary, proper and liable party to the suit and it
cannot be claimed by the 2nd defendant that there is no cause of action against him.
concerned, the respondent/plaintiff would contend that the role of the Link Fast
Logistics Company Limited which is freight forwarder at the load point i.e, Port of
Shanghai, China). On loading, the consignment at Shanghai Port their role in the
transaction completed. The Link Fast Logistics Company Limited has no role at
the discharge Port of Chennai. It is the 1st defendant who should have surrendered
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the Original Master Bills of Lading and paid the charges due to the plaintiff.
12. The specific case of the plaintiff is that the defendants 1 to 4 had
colluded with each other to enable the 2nd defendant to take delivery of the cargo
at the discharge Port of Chennai without obtaining delivery order from the
Section 12-A of the Commercial Courts Act, the respondent Counsel state that the
suit was filed in the year 2019 and the Registry at Madras High Court had
accepted the suit and numbered it without noting any defect. While so, 2 nd
defendant after entering appearance in the suit during the early month of 2020 and
after filing the written statement, as an afterthought had file this application as if
the plaintiff has failed to comply the procedure envisaged under Section 12-A of
the Commercial Court Act. Order VII Rule 11 (d) of C.P.C envisage rejection of
plaint only in case of non-compliance of substantive law and not the procedural
Settlement) Rule, 2019, has made pre-institution mediation an optional and not
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mandatory.
Sambhaji and others -vs- Gangabai and others reported in (2008) 17 SCC 117,
Surinder Kumar and others -vs- Praveen Kumari reported in 2017 SCC OnLine
HP 1135 and Salem Advocate Bar Association T.N -vs- Union of India reported
in (2005) 6 SCC 344. The Learned Counsel for the plaintiff would submit that the
Commercial Court Act, cannot be the ground to reject the plaint. If strict
interpretation of Section 12-A of Commercial Court Act, is made, then it will lead
dispute through mediation, can always request the Court to refer the matter for
mediation. Instead cannot seek dismissal of the suit. The Learned Counsel would
submit that provisions of law should enable the citizens to have access to justice
and not denial of access to justice. If the word 'shall' in Section 12-A of the
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16. Perused the plaint and the arguments submitted by the Learned
Counsels.
17. The specific case of the plaintiff is that, the plaintiff who is
engaged in Shipping Line, Carrier Business has not paid a total sum of
Rs.2,34,35,476/- as under:-
requested to file Import General Manifest in the name of the 2 nd defendant for 3
House Bills of Lading. Without original delivery advise, from the plaintiff, the 2 nd
defendant had taken delivery of the goods without paying the charges. Out of 8
containers of cargo covered under 3 Master Bills of Lading (MBL) been taken
delivery by the 2nd defendant and Cargoes falling under 5 Master Bills of Lading
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(MBL) were taken delivery by the 1st defendant. The 4th defendant which is the
Containers Freight Station (CFS) and the 3rd defendant which is the C & F Agent
has connived with the defendants 1 & 2 for removing the goods from the
Containers Freight Station (CFS). It is trite law that for rejection of plaint, the
averments made in the plaint alone has to be looked into for prima facie
satisfaction whether there is any ground to reject the same as envisaged under
found in the plaint indicates that the plaintiff has filed Import General Manifest
(IGM) in the name of the 2nd defendant on the request of the 1st defendant. Thus,
privity of contract between the plaintiff and the 2nd defendant is disclosed in the
plaint.
20. The Learned Senior Counsel appearing for the 2nd defendant
would submit the copy of the email referred in the plaint are not filed. But it is not
denied by the 2nd defendant that the cargo was taken delivery by them pursuant to
the Import General Manifest (IGM) issued in their name as consignee. Therefore,
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maintainable of the suit particularly when the 2nd defendant had not denied the
allegation of taking delivery without the original delivery order issued by the
plaintiff. Therefore, this Court holds that the plaint discloses the privity of contract
between the plaintiff and the 2nd defendant and also cause of action for instituting
the suit against all the defendants including the 2nd defendant.
Court Act, it is to be noted that Section 12-A of Commercial Court Act, did not
find place in the Act as originally enacted when passed by the Parliament in the
year 2015. Section 12-A of the Commercial Court Act was introduced by way of
India” on 3rd May 2018. Later, in exercise of the power conferred under Section
21-A of the amended Act, in consultation with NALSA, Ministry of Law and
Justice, drafted Rules for the Commercial Court (Pre-Institution Mediation and
Settlement). This rule was notified of 03.07.2018. The present suit for recovery of
money presented on 13th July 2019. On the date of filing the suit, Section 12-A as
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under:-
framed Rule and the Rule 3(1) and 3(7) of the Commercial Courts Act, 2015 (Pre-
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24. Though, the word 'shall' in Section 12-A of the Act, sounds Pre-
before filing suit under Commercial Court Act, the Rule framed use the word
'Shall' and makes it an optional. Also even if one party go for pre-litigation
mediation the other party may conveniently abstain from participating in the
mediation and make it a non-starter. Even otherwise, mediator can proceed only if
the both the parties appear and give consent to participate in the mediation
process. Thus, it is very clear that on combined reading of the Commercial Courts
Act and the Rules framed thereunder, pre-litigation mediation is subject to urgency
for any interim relief and the consent of the sparing parties.
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the irresistible conclusion that Section 12-A of the Commercial Courts Act, is not
cannot be denied or deprived for not resorting to mediation. The Court is not
denied the doors of justice for directly approaching the Court without exploring
defendant is ready for mediation, even after Institution of the suit. Also there is no
impediment either for the party or for the Court to refer the pending matter to be
mechanism. This provision is meant for the parties to work out an amicably
of this Section is not to prevent access to justice or to aid anyone who refuse to
subject himself to the judicial process. The intention is to avoid the procedural
Section 12-A of the Act contrary to the intention will amount to miscarriage of
Justice. Therefore, this Court holds that there is no ground to entertain this
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costs of Rs.10,000/-.
17.08.2021
Index : Yes/No.
Internet : Yes/No.
Speaking order/Non-speaking order
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Dr.G.Jayachandran,J.
bsm
Pre-delivery order in
A.No.35 of 2021
in C.S.No.669 of 2019
17.08.2021
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