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.

1. Plaintiff, a registered partnership firm, carries on business, inter alia, of import and export of dairy and agro products. Defendant is a registered Multimodal Transport Operator.

2. Sometime in March 2007, one Agrizala Co. (Pte) Ltd, Singapore (Agrizala) had entered into a contract with plaintiff for supply of 780 m.t. of Indian White Crystal Sugar ("the goods"). This contract (Exh.PKJ 23) provided rate for the goods at USD 320 per m.t. F.O.B. Nhava Sheva / JNPT. It was also agreed that Agrizala will negotiate the freight rate and pass the same to plaintiff basis that the contract be converted to C&F contract. In effect, Agrizala would identify the carrier through whom plaintiff will transport 780 m.t. of sugar. Agrizala has, it appears, wanted to negotiate the rates because Agrizala probably was in a better position to geta more competitive rate and thereby bring down its procurement cost. The payment term agreed was D/P at sight within 3 working days from any firstclass prime bank for full invoice value. The freight was to be paid by plaintiff at the rate which Agrizala had negotiated with the defendant. Agrizala by an email dated 2.3.2007 (Exh.P24) directed plaintiff to transport the said goods in 40 x 20 ft. containers from NSICT (Nhava Sheva Port) to Colombo Port, Sri Lanka, per defendant as carrier. Though nominated or identified by Agrizala, the contract of carriage, because it was C&F (cost & freight), was to be between plaintiff and defendant.

3. Plaintiff packed 780 m.t. of sugar in 15,600 bags of 50 kg. each and stuffed them into 20 ft. containers and handed them over to defendant for shipment as evidenced by the 3 bills of lading at Exh. P2, Exh.P7 and Exh.P12, respectively. After shipping the goods, plaintiff submitted in accordance with the terms of contract with Agrizala, the 3 sets of bills of lading dated 13.4.2007, 18.4.2007 and 20.4.2007 with other documents including bill of exchange through plaintiff's bankers Union Bank of India, VashiTurbhe branch (UBI) for acceptance by Agrizala. UBI duly sent the documents to Agrizala's bank in Singapore, Overseas Chinese Banking Corporation (OCBC), for delivery and payment by Agrizala. The documents for the three shipments were forwarded to OCBC on or around 20.4.2007, 30.4.2007 and 7.5.2007, respectively. Agrizala was to take up the documents from OCBC against payment of the agreed purchase price being USD 260850 / equivalent to approximately Rs.1,30,00,000 / . Agrizala did not pay or accept the documents and the documents were returned to plaintiff unpaid. It came to the light of plaintiff and admittedly so, that the goods have been delivered to the order of Agrizala. The goods were taken delivery by a receiver nominated by Agrizala without the plaintiff being paid for the value of the cargo and without surrender of the bills of lading. Plaintiff demanded the value of the cargo from Agrizala which was not paid. Plaintiff demanded from defendant return of the cargo which defendant could not, since delivery had already been given to the order of Agrizala. Hence this suit.

4. It is the case of plaintiff that the bills of lading issued by defendant were documents of title which were required to be produced or surrendered to obtain delivery; a negotiable (transferable) bills of lading and defendant, having delivered the goods without surrender of bills of lading, is guilty of conversion and breach of contract of carriage. Therefore, defendant is bound and liable to pay to plaintiff the value of the cargo which is Rs.1,30,