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IN THE HIGH COURT OF DELHI AT NEW DELHI
Sachin Datta, J.
Strides Pharma Science Limited – Appellant
Versus
Round The Clock Logistics Private Limited & Ors. – Respondents
CS(COMM) 438 of 2023
Decided On : 28-07-2023
The plaintiff, a consignor, filed a suit against the defendant, a freight forwarding agent, seeking release of its consignment and damages for wrongful withholding of the same. The defendant claimed a lien over the consignment due to outstanding dues from the consignee. The court examined the relevant provisions of the Bills of Lading Act, 1856, the Indian Contract Act, 1872, and the Multimodal Transportation of Goods Act, 1993, to determine the validity of the defendant's lien.
Fact of the Case:
The plaintiff, a consignor, engaged the defendant, a freight forwarding agent, to transport a consignment of pharmaceutical goods to a consignee in New York. The defendant issued House Bills of Lading (HBOLs) and Seaway Bills of Lading (SBOLs) for the consignment. However, the defendant retained the original bills of lading and refused to release the consignment at the port of discharge, claiming a lien over the goods due to outstanding dues from the consignee. The plaintiff filed a suit seeking release of the consignment and damages for wrongful withholding of the same.
Finding of the Court:
The court held that the defendant's lien was invalid and that the plaintiff was entitled to release of its consignment. The court found that the defendant did not have a contractual or statutory basis for exercising a lien over the plaintiff's consignment. The court also found that the defendant's claim of a general lien under Section 171 of the Indian Contract Act, 1872, was not valid as the defendant was not a wharfinger, factor, banker, attorney of a High Court, or policy broker, which are the only categories of persons entitled to a general lien under the Act. Additionally, the court found that the defendant's lien was not valid under the Multimodal Transportation of Goods Act, 1993, as the defendant had not been paid the amount of consideration stipulated in the multimodal transport contract.
Issues: 1. Whether the defendant had a valid lien over the plaintiff's consignment. 2. Whether the plaintiff was entitled to release of its consignment.
Ratio Decidendi: 1. The court held that the defendant did not have a valid lien over the plaintiff's consignment because: a) The defendant did not have a contractual or statutory basis for exercising a lien over the plaintiff's consignment. b) The defendant's claim of a general lien under Section 171 of the Indian Contract Act, 1872, was not valid as the defendant was not a wharfinger, factor, banker, attorney of a High Court, or policy broker, which are the only categories of persons entitled to a general lien under the Act. c) The defendant's lien was not valid under the Multimodal Transportation of Goods Act, 1993, as the defendant had not been paid the amount of consideration stipulated in the multimodal transport contract. 2. The court held that the plaintiff was entitled to release of its consignment because: a) The defendant's lien was invalid. b) The plaintiff had a right to its consignment as the consignor. c) The plaintiff was suffering irreparable harm due to the defendant's wrongful withholding of the consignment.
Final Decision: The court issued a mandatory injunction directing the defendant to release the plaintiff's consignment and restrained the defendant from obstructing the release of the consignment. The court also directed the plaintiff to bear the demurrage charges incurred during the period of detention of the consignment, subject to further orders in the suit.
JUDGMENT
Sachin Datta, J.
I.A. No. 11644/2023
1. The present suit has been filed by the plaintiff (consignor), in connection with a consignment of a pharmaceutical goods which was to be consigned to one of its clients namely L.N.K. International Inc. New York (consignee).
2. For the purpose of the aforesaid consignment, the plaintiff engaged the services of defendant no. 1 i.e., Round the Clock Logistics Pvt. Ltd., a company registered under the Companies Act, 2013. The defendant no. 1, in turn, is stated to have forwarded the consignment to another forwarding agent i.e., the defendant no. 2 who further forwarded the said consignment to the defendant no. 3. Ultimately, the defendant no. 3 is stated to have booked the consignment for transportation to its destination through the defendant no. 4 and the defendant no. 5.
3. Pursuant to the arrangement/understanding between the plaintiff and the defendant no. 1, "House Bills of Lading" ("HBOLs") dated 31.03.2023 are stated to have been issued by the defendant no. 1. The same are stated to have been handed over to the plaintiff by the defendant No. 1. The said HBOLs contain a specific reference to each container number in which the goods were to be transported, the description of the goods, and the name of the consignee, the port of loading, the port of discharge, and the place of delivery. These have been filed alongwith the documents filed with the plaint at page nos. 18 to 28. The consignor in the said bills of lading is "Strides Pharma Science Limited on behalf of Strides Pharma Global Pte Ltd" and the consignee is "L.N.K International Inc." One such HBOL is as under:
[IMG]
4. It is the admitted case of the plaintiff and the defendant no. 1 that the aforesaid bills of lading could not have been used for carriage of the cargo to the destination since the relevant customs authority at the port of discharge (New York, USA) recognise only carriers who are registered with the Federal Maritime Commission ("FMC").
5. Consequently, the defendant no. 1 engaged services of the defendant no. 2, who in turn engaged the services of the defendant no. 3. Admittedly, even the defendant no. 3 is not a carrier registered with the FMC. Ultimately, services of the defendant no. 4 (EMU Lines Pvt. Ltd.) and the defendant no. 5 (Bluetide Eservices Pvt. Ltd.) were availed for the purpose of transportation of the consignment to its destination. For this purpose, bills of lading containing the endorsement "seaway" came to be issued by the defendant no. 5 [Seaway Bills of Lading ("SBOLs")] in which the consigner was again referred to as "Strides Pharma Science Limited on behalf of Strides Pharma Global Pte. Ltd". The consignee was reflected to be "L.N.K. International Inc.". As in the case of the HBOLs, the SBOLs also make a specific reference to each container, the description of the consignment, the name of the vessel etc. These SBOLs also contain the endorsement "Shipped on Board". Eight (out of ten) SBOLs contain an endorsement to the effect the goods have been shipped on 31.03.2023 whereas two of these SBOLs contain an endorsement to the effect that the goods have been shipped on 10.04.2023. The copies of these SBOLs have been filed alongwith the plaint at page No. 29 to 39 of the documents accompanying the plaint. A copy of one such SBOL is as under:
[IMG]
6. From the reply filed by the defendant no. 4 to the present I.A. and the contentions made by the said defendant in its written synopsis, it transpires that apart from the SBOLs, certain bills of lading were also issued by the defendant no. 4. In this regard, it has been specifically averred by the defendant no. 4 in its reply as under:
"...............
It is most respectfully submitted that the Defendant No.3 had approached the Answering Defendant and placed the booking of 10 containers for USA. Accordingly, Answering Defendant had secured the booking from Carrier- Cosco Line (not a party in the present suit) and handed over 10 empty container
A freight forwarding agent does not have a general lien over the goods of a consignor unless there is an express contract to that effect or the agent falls under one of the categories of persons enti....
The exercise of lien without statutory basis, the validity of territorial jurisdiction, and the exceptional circumstances for granting interim mandatory injunction.
The trial court's failure to consider the defendants' arguments led to an improper interim injunction, necessitating remand for a fresh assessment under applicable laws and regulations.
Common carriers are liable for short delivery due to negligence under the Carriers Act, and terms limiting liability may not be enforceable if inadequately notified to the other party.
The main legal point established in the judgment is that the carrier was not liable for the delivery of goods without the consignee copy of 'Goods Consignments Notes' in the absence of an agreement o....
Bills of lading must be surrendered for delivery of goods, constituting a breach of contract of carriage if not, establishing liability on the carrier for non-payment.
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