JUDGMENT :

1. This is a plaintiff’s appeal challenging the correctness and legality of the judgment and decree passed in OS No.248/2008 dated 03.05.2013 by the XIX Addl. City Civil and Sessions Judge, Bengaluru, whereunder the plaintiff’s suit for recovery of money has been decreed against defendant No.2 alone with future simple interest @ 12% p.a. from the date of suit till date of realization with costs, contending interalia it ought to have been decreed against third defendant.

The parties in this appeal are referred to as per the rank in the trial court.

BRIEF BACKGROUND OF THE CASE:

2. Plaintiff is a partnership firm carrying on the business of import and export of iron, steel alloy products i.e., scrap iron and steel products. The sugar plant established by third defendant in the year 1960 and same having become old and unproductive, resulted in said plant being closed. Plaintiff entered into an agreement of sale with third defendant on 26.02.2004, whereunder plaintiff agreed to purchase the machinery and equipments, which had become scrap, for a total consideration of MUR 6.5 Million (Mauritius Rupees Six Million Five Hundred Thousand only).

3. Plaintiff entered into high seas sale contract on 10.03.2005 with second defendant agreeing thereunder to sell 110.00 metric tons out of 130.500 of MTS iron and non alloy steel shipped as per vessel “Tiger Sky Voy, 269”. Subsequently, on 18.04.2005 there was an agreement dated 18.04.2005 entered into between plaintiff and second defendant whereunder plaintiff had agreed to sell 131.500 MTS of iron and non alloy steel to second defendant. Plaintiff has further entered into a contract with second defendant on 25.04.2005 and had agreed to sell second defendant 110.000 MTS of said material on high seas sale basis subject to conditions agreed thereunder.

4. Plaintiff in order to transport the goods purchased from third defendant, had engaged the services of fifth defendant and under bill of lading dated 18.02.2005 first consignment of 6 containers STC 130.500 tons of obsolete and condemned plant and machinery of cast iron and non allied steel and alloy steel came to be shipped. Subsequently, under bill of lading dated 01.03.2005 second consignment of 6 containers of STC 131.5000 of obsolete and condemned plant and machinery of cast iron and non allied steel and alloy steel came to be shipped. Likewise, on 08.03.2005 under consignment of 5 containers STC 110.00 tons of obsolete and condemned plant and machinery of cast iron and non allied steel and alloy steel was shipped.

5. It was contended by plaintiff that pre-shipment inspection was conducted and a pre-shipment inspection certificate issued in this regard by the port authorities. It was further contended by plaintiff that said goods came to be insured from “Port Louis” to “Port Chennai” with first defendant under an insurance policy dated 19.03.2004 covering the period commencing from 19.04.2004 to 18.03.2005 for a sum of Rs.2.23 Crores. It was contended that said coverage of insurance was for the loss and damage to the goods contained in shipping during the period of assignment and the period of policy issued.

6. The grievance of plaintiff was that on arrival of goods it was found that there was a shortage of goods in all the three consignments received at Chennai Port and as such plaintiff got the legal notice issued and after exchange of correspondence fourth defendant being the clearing agent on behalf of second defendant and Chartered Engineer Certificate, submitted a report that there was shortage of materials in all the three consignments. On a complaint of plaintiff with first defendant a surveyor was appointed, who conducted a survey and submitted a report on 09.09.2005 stating that short shipment was ruled out as the overseas people have confirmed on correct quantities being shipped. The surveyor however further observed regarding pilferage in transit or during transshipment that there was no room to conclude in the affirmative