1977 Supreme(Ker) 272
Judges : T.KOCHU THOMMEN
SRI PRASAD INDUSTRIALS - Appellant
Versus
SAVANI TRANSPORTS (P) LTD - Respondent
Case No : C.R.P. No. 1292 of 1976-H
Decided On : 11/30/1977
Advocates Appeared :
C.P. Sudhakara Prasad; For Petitioner S.K. Brahmanandan; A. Rama Prabhu; G. S. Prabhu; For Respondents
The buyer, upon the passing of the property in the goods, obtains the right to enforce the contract of carriage by virtue of his title, but can only sue the carrier in terms of the contract made on his behalf by the seller.
Headnote:
Jurisdiction - Contract of Carriage - Buyer's Right to Sue Carrier
Fact of the Case:
The plaintiff sued the carrier for recovery of the value of short-delivered goods. The carrier raised a preliminary objection on the basis of a jurisdiction clause in the contract of carriage, stating that only the courts in Bombay had jurisdiction over claims and matters arising under the consignment.
Finding of the Court:
The court upheld the objection, ordering the plaint to be returned for presentation to the proper court in Bombay. The plaintiff approached the Court in revision, arguing that the jurisdiction clause in the contract was not binding on the buyer.
Issues: The main issue was whether the buyer, who was not a party to the contract of carriage, had the right to sue the carrier for the lost or damaged goods.
Ratio Decidendi: Upon delivery of the goods to the carrier by the seller, the property in the goods is deemed to have passed to the buyer, and the buyer is entitled to enforce the contract of carriage by virtue of his title. However, the buyer can only sue the carrier in terms of the contract made on his behalf by the seller.
Final Decision: The civil revision petition lacked merits and was dismissed. The jurisdiction clause in the contract of carriage was deemed binding on the buyer as well as the seller and the carrier. Each party was ordered to bear their respective costs.
1. Bakelite Hylam Ltd., Secunderabad, entrusted a consignment of Bakeiite Powder with the defendant-carriers for carriage to the plaintiff at Quilon. The goods were carried and delivered to the plaintiff at Quilon. Upon arrival of the consignment at Quilon, it was noticed that some of (he bags were torn. At the request of the plaintiff a survey of the goods was conducted whereupon it was found that there was a shortage to the value of Rs. 143.25. The plaintiff sued the carrier in the Munsiff's Court, Quilon for recovery of the value of the short-delivered goods. A preliminary objection as to the jurisdiction of the court was raised by the carriers on the basis of clause (17) of the terms and conditions of the contract of carriage. This clause reads:
"This contract shall be deemed to have been entered into and made with the administrative and Head office of the company at Bombay. It is therefore expressly agreed that the courts in Bombay alone shall have jurisdiction in respect of all claims and matters arising under the consignment or of the goods entrusted for transport."
The objection was upheld by the court. The plaint was therefore ordered to be returned for presentation to the proper court in Bombay. Aggrieved by this order the plaintiff has approached this Court in revision.
2. In Hakam Singh v. Gammon (India) Ltd. (AIR. 1971 S. C. 740, 741), it was held:
"It is not open to the parties by agreement to confer by their agreement jurisdiction on a Court which it does not possess under the Code. But where two courts or more have under the Code of Civil Procedure jurisdiction to try a suit or proceeding an agreement between the parties that the dispute between them shall be tried in one of such Courts is not contrary to public policy. Such an agreement does not contravene S.28 of the Contract Act."
Admittedly the bead office of the carriers is in Bombay and the competent court in Bombay has jurisdiction to entertain the suit. Although the court in Quilon also has jurisdiction, it is open to the parties to confer jurisdiction exclusively upon the competent court in Bombay.
3. Shri Sudhakara Prasad, appearing for the revision petitioner, contends that the observation of the Supreme Court in Hakam Singh v. Gammon (India) Ltd. does not apply to the facts of the present case where the provision conferring jurisdiction exclusively on the Bombay court appears in the contract between the carriers and the seller. Such a contract, he argues, is not binding upon the consignee who seeks to sue the carriers on the strength of title to the goods. I do not agree.
4. Delivery of the goods to the carrier by the seller is prima facie deemed to be delivery of the goods to the buyer. [See S.39 read with S.23 the Sale of Goods Act, 1930]. Upon such delivery the goods are deemed to have been unconditionally appropriated to the contract. Consequently the buyer has acquired the property in the goods which were delivered to the carrier by the seller. These facts are not disputed in the present case. It is also not disputed that the buyer, having obtained the property in the goods, is entitled to sue the carrier it the goods are lost or damaged. The question however is whether the carrier can be sued by the buyer otherwise than in terms of the contract of carriage.
5. The buyer was not a party to the contract of carriage. It is with the seller that the carrier agreed to carry the goods. The agreement is subject to various terms and conditions including clause [17] referred to above. It is by virtue of S.39 and 23 of the Sale of Goods Act, that upon delivery of the goods to the carrier by the seller the property in the goods is deemed to have passed to the buyer and that the seller is deemed to have contracted with the carrier for and on behalf of the buyer, thereby making the carrier a bailee who is accountable to the buyer. Although the buyer was not a party to the contract of carriage, upon the passing of the property in the goods, he obtains th