Transport Corporation of India Ltd. vs Andhra Bank and Another

Valmiki J Mehta, J.—No one has appeared for the Respondents although it is 3.00 P.M. I have therefore heard the learned Counsel for the Appellant and am proceeding to dispose of the appeal.

This Regular First Appeal u/s 96 of Code of Civil Procedure, 1908 (CPC) challenges the impugned judgment and decree dated 3.10.2001 whereby the suit of the Respondent No. 1 bank was decreed against the Appellant/transporter and also the original borrower/Defendant No. 1/Respondent No. 2. I may note that in the memo of parties, there is no numbering of the Respondents, however, it is clear that the Plaintiff bank is the Respondent No. 1 and M/s. Shankar Engineers/borrower/Defendant No. 1 is the Respondent No. 2.

The facts of the case are that the Respondent No. 1 bank filed a suit for recovery of Rs. 1,52,177/- against the Respondent No. 2/Defendant No. 1/principal borrower and the Appellant/transporter/Defendant No. 2 on the averments that the Respondent No. 2 against security of transport documents availed credit facility from the Respondent No. 1 bank. It was further pleaded in the plaint that the consignee of the goods did not retire the documents or accept the goods and which goods remained with the Appellant/Defendant No. 2/transporter. It was further alleged that since the payment with respect to goods was not made by the drawee of the negotiable instrument, the Defendant No. 1/principal borrower/Respondent No. 2 was therefore liable to repay the amount which was advanced against the security of the documents. The Appellant/Defendant No. 2 was sued on the basis of a clause in the lorry receipt which stated that in case the lorry receipt is discounted to a bank alongwith negotiable instrument, then, the transporter will be liable to directly deal with the bank. It was further the case of the Respondent No. 1/Plaintiff bank that on account of non-payment of the amount advanced against the security, both the Defendants i.e. the Appellant and the present Respondent No. 2 became liable to pay the suit amount.

Learned Counsel for the Appellant has argued before me that at the very best the bank would step into the shoes of the consignor only, and once it stepped into the shoes of the consignor, no doubt the Appellant will have to deal with the bank in place of the original consignor, however, the same cannot mean that as a transporter the Appellant will not have lien on the goods with respect to the freight charges and demurrage charges which is the liability either of the consignor or of the Plaintiff bank. Learned Counsel for the Appellant has also drawn my attention to the deposition of PW-1 Sh. Rakesh Pratap Shukla, the Manager of the Plaintiff bank, and in which deposition dated 26.7.2001 the bank officer in the cross-examination has admitted that they were liable to pay the freight charges and damage charges (sic, demurrage charges), and, it was then admitted that such freight charges and demurrage charges have not been paid. Reliance is placed by learned Counsel for the Appellant on clauses 8 and 9 of the lorry receipt which read as under:

In cases falling under Clause 6 or 7 above, the Bank or claimant with Bank''s authority shall be entitled to the proceeds, less freight and demurrage and the Transport Operator shall render full accounts to it/him immediately after sale.

The Consignee Bank accepting Lorry Receipt under Clause 2 above will not be liable for payment of any charges arising out of any lien of the Transport Operator against the consignor or the buyer. Where, under the IBA scheme for Recommending Transport Operators to Member Banks it becomes necessary for any Bank to obtain delivery of the consignment from the Transport Operator (because the buyer does not retire the documents or because of any other reason), the Transport Operator shall deliver the goods unconditionally to the Bank on payment of the normal freight and storage charges only in connection with the consignment in question, without claiming any lien on the goods in respect of any monies due by the consignor or the consignee to the Transport Operator on any account whatsoever.

(Emphasis argued).

On the basis of the aforesaid clauses and the fact that Plaintiff bank admits having not paid the freight charges, it is pleaded that not only no decree for the amount claimed with respect to the loan granted to Defendant No. 1 could be passed, further, the Appellant/transporter was not even bound to return the goods unless the freight and demurrage charges were paid. It is also argued simultaneously that the liability of the transporter cannot be to the extent of credit facility granted to Respondent No. 2/Defendant No. 1/principal borrower, as has been decreed by the trial Court, but, only to the extent of the value of the goods which were in control and possession of the Appellant/transporter.

I find considerable merit in the arguments as advanced on behalf of the counsel for the Appellant. The admitted facts which emerge from the record and from the deposition of the witness of the bank, besides the affirmative evidence led on behalf of the Appellant/transporter, are that freight and demurrage charges were never paid to the Appellant/transporter. Therefore, the Appellant/transporter was not bound to even return the goods either to the consignor or to its successor in interest i.e. the Plaintiff bank. Also, in any case, the transporter surely cannot be liable for the entire credit facility which is granted to a borrower by the bank and the liability of the transporter at the very best can be for the value of the goods and which also in the present case is not there because the freight charges and demurrage charges of the Appellant/transporter admittedly have not been paid.

In view of the above, I accept the appeal. The impugned judgment and decree dated 3.10.2001 is accordingly set aside so far as the Appellant is concerned. Suit will stand dismissed as against the Appellant/transporter. Parties are left to bear their own costs. Decree sheet be prepared. Since the Appellant had deposited the amount pursuant to the impugned judgment and decree in this Court and which amount has been withdrawn by the Respondent No. 1 bank, the Appellant will be entitled to restitution in accordance with law with respect to the amount which has been withdrawn by the Respondent No. 1 bank from this Court on furnishing the bank guarantee. Trial Court record be sent back.