Overseas Trading Corporation v. Handlooms & Handicrafts Export Corporation of India Ltd

S. RAVINDRA BHAT, J (JUDGE)

NAJMI WAZIRI, J (JUDGE) AUGUST 08, 2013 'sn'

Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI DECIDED ON 08th August, 2013 + RFA(OS) 105/2012 OVERSEAS TRADING CORPORATION ..... Appellant Through : Mr. Vibhor Garg, Adv. versus HANDLOOMS & HANDICRAFTS EXPORT CORPORATION OF INDIA LTD. ..... Respondent Through : Mr. Vivek Singh and Ms.Madhu Sharan, Advs. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE NAJMI WAZIRI % MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT) 1. The appellant is an unsuccessful plaintiff. It appealed against the judgment and order of the learned Single Judge dated 9th July, 2012 by which its suit had been dismissed. Simultaneously, the sole defendant's/respondent's (hereafter referred to as "HHEC'') suit preferred against M/s. Unisilk Limited, Hong Kong (hereafter referred to as "the exporter") was decreed in full with interest awarded at 18% per annum till date of execution. Page 2 2. The brief facts are that the plaintiff entered into an Agreement on 27th October, 1998 with HHEC. In terms of their arrangement, the plaintiff agreed to purchase 500 bales of silk during the period of the contract, i.e. one year. Apparently, in furtherance of this Agreement, HHEC, the sole canalising agency for goods such as silk, entered into a separate contract with M/s. Unisilk Limited Hong Kong for purchase of 311 bales of raw silk on 27th October, 1998. The latter purporting to act in terms of the Agreement with HHEC shipped the goods. It was discovered that instead of the contracted quantity, i.e. 311 bales, actually a consignment of 235 bales were received. HHEC immediately initiated proceedings and sought for recovery of the price of goods, i.e. the price of the goods short delivered (76 bales). This was in the form of a suit, i.e. CS(OS) No.2340/2001. In that suit, HHEC impleaded the exporter, i.e. i) M/s. Unisilk Limited, (ii) the insurer as well as (iii) the carrier. About a decade after the aforesaid transaction, i.e. sometime in 2008, the present appellant filed an independent proceeding CS(OS) No.480/2008, impleading only HHEC, contending therein (i) that its arrangement on 27th October, 1998 with HHEC was an independent contract and that the latter was Page 3 not its agent; (ii) that the arrangement was in the nature of one between a principal to principal and; (iii) that HHEC defaulted in insuring the supply of full contracted bales, i.e. 235 bales. The plaintiff/appellant claimed the price of goods, in turn, from HHEC alone. 3. HHEC's contention in the suit is that the arrangement with the appellant/plaintiff was not an independent one or based on a principal to principal transaction but was really by way of an agency. The plaintiff/appellant filed the suit in 2008; consequently, the HHEC took the defence that the claim was time barred. The appellant, however, sought to rely upon certain alleged admissions in the form of letters and endorsements made by HHEC in 2001 & 2002 and also certain letters dated 7th August, 2005 and 4th April, 2006. In addition, the plaintiff/appellant also relied upon certain averments made in the suit instituted by HHEC (CS(OS) 2340/2001). 4. By her common judgment, the learned Single Judge had dismissed the appellant's suit – as noticed in an earlier part of this judgment. At the same time, HHEC's suit was decreed in full as against the insurer, exporter and the carrier with 18% interest per Page 4 annum from the date of institution till date of recovery of the amount. The appellant contends that the impugned judgment is erroneous insofar as the findings recorded, vis-a-vis the existence of an agency between itself and HHEC are concerned. For this purpose, Mr.Garg, the learned counsel for the appellant relied upon the terms of the Agreement dated 27th October, 1998 as well as the order placed on the same day. He further contended that upon a proper application of the test indicated in K. Gopinathan Nair and Ors. v. State of Kerala, 1997 (10) SCC 1, which, in turn, had relied upon the judgment of the Constitution Bench