Delhi District Court
Jai Prakash Narayan vs M/S Freight Systems (India) Pvt Ltd on 25 March, 2025
IN THE COURT OF MS. PRABH DEEP KAUR: DISTRICT
JUDGE-05, SOUTH EAST DISTRICT, SAKET COURTS,
DELHI
CS DJ 1378/2017
CIS No. DLSE01-006863-2017
M/S FREIGHT SYSTEMS (INDIA) PVT LTD Vs. JAY
PRAKASH NARAYAN (Main Suit)
&
CS DJ 23/2018
CIS No. DLSE01-000076-2018
JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS
(INDIA) PVT LTD (Counter-Claim)
In the matter of :-
M/s. Freight Systems (India) Pvt. Ltd.
B-6/8, Okhla Industrial Area,
Phase-II, New Delhi-110020......Plaintiff/Non-Counter-Claimant
Versus
Sh. Jay Prakash Narayan,
Proprietor, M/s Radhika International
CH 1-C, Hari Nagar,
New Delhi -110064
Also at:-
WZ-92, 2nd Floor, Janak Park,
New Delhi-110064 ..... Defendant/Counter-Claimant
Date of Institution of the main suit : 08.09.2017
Date of Institution of counter claim : 27.11.2017
Date of Arguments : 12.02.2025
Date of Judgment : 25.03.2025
Suit for Recovery of Rs. 13,51,440.00 along with pendente-lite
and future interest @ 18% and
Counter claim for Recovery of Rs.53,99,161/- along with
pendente-lite and future interest @ 18% per annum.
J U D G M E N T:
1. Vide this common judgment, the suit filed by the plaintiff
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M/S FREIGHT SYSTEMS (INDIA) PVT LTD Vs. JAY PRAKASH NARAYAN
CS DJ 23/18 CIS No. DLSE01-000076-2018
JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date: 2025.03.25
17:48:53 +0530
seeking recovery of a sum of Rs.13,51,440/- along with interest
and counterclaim filed by the defendant seeking recovery of
damages worth Rs. 53,99,161/- alongwith interest have been
disposed off.
2. The factual matrix of the case is that plaintiff company is
carrying on the business of freight forwarding, logistic
management, custom clearance and warehousing and defendant
is a Proprietor of M/s. Radhika International. In the year 2016,
the defendant booked several shipments with the Plaintiff
Company and the dispute is as to timely delivery at a particular
destination.
3. As per plaintiff, shipments were delivered by the Plaintiff
to the Consignee at the desired destination. The Plaintiff raised
Invoices, as aforesaid, in respect of the service rendered to the
Defendant in respect of carriage/export of goods/shipments/
consignments of the Defendant to his desired destinations. The
said Invoices for payment were duly received by the Defendant.
Defendant, however, contrary to its assurances and promises,
failed to make payment in respect of the services rendered to the
Defendant by the Plaintiff and as on June 2016 an amount of
INR. 11, 45, 288.00 (Rupees Eleven Lakhs Forty Five Thousand
Two Hundred and Eighty Eight only) along with interest etc. is
due and outstanding from the Defendant to the Plaintiff
Company. The plaintiff issued a Legal Notice dated 21.06.2016
to the Defendant and the defendant replied to the same vide reply
dated 06.07.2016 and admitted availing of services from the
Plaintiff Company, however, instead of clearing his outstanding
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M/S FREIGHT SYSTEMS (INDIA) PVT LTD Vs. JAY PRAKASH NARAYAN
CS DJ 23/18 CIS No. DLSE01-000076-2018
JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date:
2025.03.25
17:49:07 +0530
dues, the Defendant took false excuses and flatly refused to make
payment of the outstanding dues of the Plaintiff.
The averments of defendant in defence as well as for counter-
claim:
4.1 Defendant runs a courier business that specializes in
shipping books internationally. Customers such as online sellers
and buyers used the services of defendant to send books in bulk
and defendant negotiates better shipping rates with logistics
companies and ensures that the books are labeled with the
buyer’s details. Once the books reach the destination country, the
local postal services delivers them to individual buyers. For
example, one online book seller in India gets 100 orders from
customers in different parts of U.S. Then instead of shipping
each book separately, the seller sends all 100 books in one bulk
shipment to defendant who packs and ships these books together
to U.S. using a logistics company, which gives them a better
shipping rate because of bulk order. Once the packages reached
the U.S., the local postal services like USPS separates the books
and delivers each book to its respective customer at their address.
4.2 The time is essence in whole supply chain and contract
governing it because in case of purchase of book through online
portal, delay invites likelihood of cancellation of order with
negative review resulting into lose of future income.
4.3 A partnership firm namely FDA logistics, having younger
son and daughter-in-law of the Defendant as partners is engaged
in the business of aggregating/procuring book orders originally
placed with online sellers and getting them shipped to the
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JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
PRABHDEEP by PRABHDEEP
KAUR
KAUR Date: 2025.03.25
17:49:11 +0530
individual purchasers. For this purpose it uses the services of the
Defendant and it is the major customer of the Defendant.
4.4 Defendant availed the services of the plaintiff on
assurance of the plaintiff to give better services than DHL etc. As
per the agreement, Plaintiff company was required to deliver the
shipments at USPS (United States Postal Service) within 3-5
days of their picking up the shipment from the Defendant’s
warehouse, to be further shipped ahead by the USPS.
4.5 The first two shipments were shipped from Delhi on
12.01.2016 and 13.01.2016 and were delivered to USPS on
15.01.2016. The third shipment was shipped from Delhi on
14.01.2016 and it arrived at USA on 17.01.2016 and son of
defendant got it delivered to USPS on the same day.
4.6 The Plaintiff company, however, lost track of remaining
four shipments at Newark Airport. Plaintiff company gave a false
and misleading confirmation of the delivery of the shipments to
the Defendant. Since the goods comprising the shipment were
not shown ‘in transit’ at the USPS website the Defendant pursued
the matter with the USPS and on being told by the USPS that if
the goods comprising the shipment were not ‘in transit’ on its
website, it is very likely that the goods were not delivered to the
USPS, defendant then confronted the Plaintiff who provided fake
PoDs
4.7 It can be deduced from the following facts:
i) email dated 21.01.2016 written by Plaintiff says that only 1
out of 5 shipments have been delivered whereas PoD dated
20.01.2016 shows that 2 shipments were delivered on
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CS DJ 23/18 CIS No. DLSE01-000076-2018
JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025Digitally signed by
PRABHDEEP PRABHDEEP KAUR
KAUR Date: 2025.03.25
17:49:16 +0530
20.01.2016.
ii) sometime during the third week of February, 2016, i.e., about
35-40 days after the shipments were claimed to have been
delivered at the USPS office, the Plaintiff company informed the
Defendant that they had managed to retrieve the missing
shipments from the USPS office where they were lying
unattended. On being demanded by the Defendant that the
Plaintiff company provide the Defendant with the proof of
retrieval from the USPS office, the Plaintiff company failed to do
so.
iii) The Plaintiff company after a day or two, contradicted its
own claim and informed the Defendant that it had delivered
wrong consignment to the USPS office in place of the shipments
of the Defendant. The Plaintiff company also claimed that it was
the fault of the United Airlines through which the shipments
were sent from Delhi and the cargo-handling team at the Newark
Airport because of which the Plaintiff company was given the
wrong consignment. Vide email dated 28.03.2016, plaintiff also
provided 4 claim forms for 4 shipments that had remained
undelivered and the amount claimed in the 4 claim forms
summed upto USD 1,30,000/- (USD One Lakh Thirty Thousand
only which was based on actual and expected liability of the
Defendant. The liability of the Defendant under the business
practice of the industry is the final sale value of the products that
are lost in transit. On receiving the legal notice from the Plaintiff
company the Defendant realized that the attempts being made by
the Plaintiff company to compensate him for the losses caused
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CS DJ 23/18 CIS No. DLSE01-000076-2018
JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date:
2025.03.25
17:49:21 +0530
was nothing but a farce to fool the Defendant in order to buy
time.
iv) By the time the shipments were finally recovered towards
February end 2016, all the book purchase orders, except for a
few, were cancelled. The Defendant requested the Plaintiff
company to urgently deliver the few subsisting orders to the
USPS for onward delivery to the purchasers vide email dated
24.02.2016. The Plaintiff company delivered these subsisting
orders to the USPS and confirmed the same to the Defendant
through an email dated 27.02.2016.
The missing shipments were finally recovered after gap of
35-40 days in very poor and damaged condition.
4.8 On 18.03.2016 the plaintiff company forwarded a mail to
defendant’s son Gaurav Kulshreshtha/DW-2 received by the
plaintiff company from the ground handling team ‘Swissport’ at
the Newark Airport. These emails had the following trail mails:
Sl. From To Date Import
No.
1. Selma A .Walsh-Wise Duty Standford Lobo 17.03.2013 Details about the
Manager Swissport Cargo- Vice-President missing shipments
EWR Freight Systems
Inc and others.
2. Standford Lobo Vice- Selma A.Walsh- 16.03.2016 Asking for a
President Freight Systems Wise and others detailed report on
Inc at United what went wrong.
Airlines
3. Tasha Hendricks EWR Standford Lobo 11.03.2016 Claiming that
Swissport CSI Agent Vice-President EWR was working
Freight Systems to resolve and /or
Inc and others correct the matter.
It is clear from trail emails that a part of the shipments of
the defendant was lost track of at Newark Airport by the plaintiff
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JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date:
2025.03.25
17:49:28 +0530
company and they were trying to get the details from other
people and agencies working at the Newark Airport. The
defendant requested plaintiff company to deliver remaining
consignment to one of defendant’s associate in US. The plaintiff
company delivered the consignment to defendant’s associate
after a considerable gap.
4.9 The defendant was informed by his business associate that
the consignment containing books were badly damaged because
of moisture and mishandling and of no use. The said associate
asked the defendant to verify the condition of the books for
himself. On 12.04.2016 defendant sent his elder son Gaurav to
the United States to verify the condition of the books. The son of
defendant after inspecting the said books realized that the books
were badly damaged and had zero commercial value. The total
expense relating to this travel amounted to Rs. 2,25,290/-.
4.10 Contemplating a legal action against the people and the
agencies involved in the shipment of its consignment because of
its non-delivery, the defendant had also consulted a lawyer in the
United States through its business associate having its presence
in the USA. The lawyer was paid USD 5,000/- by the business
associate of the defendant. The said amount remains unpaid as on
date because the defendant was hoping to pay this amount from
the compensation received from the plaintiff company/United
airlines.
4.11 In the meantime defendant’s major customer FDA
Logistics had issued a debit note of Rs. 4,55,550/- against the
defendant on 02.03.2016 due to non-delivery of the consignment.
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M/S FREIGHT SYSTEMS (INDIA) PVT LTD Vs. JAY PRAKASH NARAYAN
CS DJ 23/18 CIS No. DLSE01-000076-2018
JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
PRABHDEEP by PRABHDEEP
KAUR
KAUR Date: 2025.03.25
17:49:32 +0530
FDA Logistics further informed the defendant through a letter
dated 31.03.2016 that the customers of FDA Logistics had issued
debit notes and withheld payments due to non delivery of their
consignments and the defendant remained liable to pay a further
amount of Rs. 27,84,570/- to FDA Logistics. Not only the online
book purchase orders were cancelled by the buyers, they also
wrote negative reviews and gave poor ratings to the online sellers
on the e-commerce website affected by the non-delivery of the
shipment.
4.12 As part of agreement, plaintiff was to deliver the shipment
at USPS within 3 to 5 days and open the shipment so that USPS
could access individual book and deliver them at their respective
destination. For this purpose the individual books were
prestamped in India with appropriate amount before their
packing for shipment. The stamps were bought by business
associate of defendant as per procedure allowed by USPS and
later on the business associate of defendant raised an invoice on
the defendant for the same. The total value of US Postal Stamp
put on the book comprising the consignment was USD 12844
(approx. Rs. 6,06,651/-).
4.13 Plaintiff company did not deliver four out of the seven
shipments at the agreed destination as per arguments which
resulted in heavy financial losses, huge expenses and loss of
goodwill and reputation of the Defendant.
4.14 The total claim of the defendant against the plaintiff
company are as under:
Sl. No. Particulars Amount (in Rs.) CS DJ 1378/17 CIS No. DLSE01-006863-2017 Page No. 8 of 40
M/S FREIGHT SYSTEMS (INDIA) PVT LTD Vs. JAY PRAKASH NARAYAN
CS DJ 23/18 CIS No. DLSE01-000076-2018
JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
PRABHDEEP by PRABHDEEP
KAUR
KAUR Date: 2025.03.25
17:49:37 +0530
1 Claim already paid by defendant against 4,55,550.00
the debit note of FDA
2 Outstanding amount which the defendant 27,84,570.00
is liable to pay to FDA Logistics.
3 Outstanding amount which the defendant 3,27,100.00(approx.)
is liable to pay to his business associates
for hiring of an attorney in the USA.
4 Expenses incurred by the defendant’s son 2,25,290.00
of his US visit for verification of
recovered consignment and follow-up.
5 Cost of US postal stamps put on 6,06,651.00(approx.)
undelivered books.
6 Loss of business, reputation, goodwill 10,00,000.00
mental harassment, pain and agony etc.
7 Total 53,99,161.00
5. Defence of plaintiff to the counter- claim
The story of the defendant about alleged loss is nothing but
a counter blast to delay the legitimate dues of the plaintiff.
Moreover, the defendant has failed to prove their alleged loss as
per law. As freight forwarding agent, the plaintiff has performed
its part of duty as per law and the defendant has miserably failed
to prove alleged damage and loss as per law. The counter-claim
is time barred as well because as Section 24 of Multimodal
Transportation of Goods Act, the limitation for taking legal
action in respect of the loss or damages is nine months from the
date of delivery of goods. The plaintiff company acted as agent
of the defendant/counter claimant be it custom clearance, freight
forwarding or warehousing etc. and this fact is very much clear
from the HAWBs (Annexure P-3(colly), where the name of the
defendant is mentioned as shipper and the said documents were
duly shared with the defendant. In view of the same, the
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M/S FREIGHT SYSTEMS (INDIA) PVT LTD Vs. JAY PRAKASH NARAYAN
CS DJ 23/18 CIS No. DLSE01-000076-2018
JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date: 2025.03.25
17:49:42 +0530
averments of the defendant/consignee about having no privity of
contract with Airlines are false baseless and absurd. Moreover,
pursuing compensation from the United Airlines on behalf of the
consignee was not within its scope of employment /contract and
the consignee himself was excepted to follow the same. If the
consignee failed/neglected to pursue its claim with the United
Airlines, the plaintiff company can’t be held liable for the same.
6. Issues:-
Upon completion of the pleadings, on 08.02.2018 the
following issues were framed:
1. Whether the suit of the plaintiff is without cause of action as
the plaintiff f miserably failed to perform or fulfill its obligations
under the contract. OPD
2. Whether the plaintiff is entitled for a decree of Rs. 13,51,440/
OPP.
3. Whether the plaintiff entitled to interest pendentelite and
future @18% per annum and cost. OPP.
4. Relief.
Counterclaim
1. Whether the counter claimant/defendant is entitled for a
decree of Rs. 53,99,161/- .OPC/OPP
2. Whether the counter claimant/defendant is entitled for
interest pendentile and future interest @ 18% per annum and
cost. OPC/OPP
3. Whether the counter claim is time barred?OPD
4. Relief
Evidence on behalf of plaintiffs
7. AR of Plaintiff Sh. Rakesh Prasad examined as PW-1 who
deposed by way of affidavit Ex.PW1/A wherein he has reiterated
the case set forth in the plaint and has relied upon the following
documents: i) Ex.PW1 : Extract of the Board resolution dated
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M/S FREIGHT SYSTEMS (INDIA) PVT LTD Vs. JAY PRAKASH NARAYAN
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JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date: 2025.03.25
17:49:47 +0530
21.03.2017; Ex PW-2(colly): Computer Generated Invoices; Ex
P-3 (colly): Office copies of the HAWBs; Ex. PW-4: Computer
Generated Statement of account/outstanding as on June 2016;
Ex. P-5(colly): Office copy of the legal notice dated 21.06.2016
alongwith original postal and courier receipts; Ex. P-6(colly):
Reply dated 06.07.2016 (original) alongwith envelope; Ex.
PW-7: Certificate u/S 65 (B) of Indian Evidence Act/Information
Technology Act, 2000; Ex. PW-8(Colly): Computer Generated
Track of shipments; Ex. PW-9: A set of Airways Bill/HAWB
(Original), containing terms of conditions of the Contract
between the parties. He was cross examined by Sh. Prakhar
Dixit, Ld. Counsel for defendant.
8. Evidence on behalf of Defendant
8.1 In D.E., the Defendant examined three witnesses i.e.
himself as DW-1, Sh. Gaurav Kulshreshth as DW-2 and Sh.
Praveen Shekhawat as DW-3.
8.2 DW-1, during his evidence, tendered and relied upon
documents i.e. Exh. DW1/1 to Ex. PW1/7 and Mark D-4 to D-9.
This witness was cross examined by Sh. Arvind Kumar Singh,
Ld. Counsel for plaintiff.
8.3 DW-2 Sh. Gaurav Kulshreshth tendered his affidavit of
evidence as Ex.DW-2/A and relied upon documents i.e. Exh.
DW2/1 to Exh. DW2/9. This witness was also cross examined by
Sh. Arvind Kumar Singh, Ld. Counsel for plaintiff.
8.4 DW-3 Sh. Praveen Shekhawat tendered his affidavit of
evidence as Ex.DW-3/A and relied upon documents i.e. Exh.
DW3/1 to Exh. DW3/12. This witness was also cross examined
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JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date: 2025.03.25
17:49:52 +0530
by Sh. Arvind Kumar Singh, Ld. Counsel for plaintiff.
9. Final arguments addressed by Ld. Counsel Sh. Arvind
Kumar Singh, Ld. Counsel for the plaintiff and Ld. Counsel
Sh.Sanjay Sehgal and Sh. Shivesh Sehgal and Sh. Anil Kr. Vohra
and Sh. Amol Preet Saini for the defendant have been heard.
Both the parties have also filed written arguments which
reiterated the arguments addressed before the Court and same are
not reproduced here in verbatim for the sake of brevity but will
be dealt alongwith the findings upon issues at the relevant stage.
Record has been carefully perused.
10. Issue wise findings:
Issue no. 3(in the counter claim) : Whether the counter claim is
time barred? OPD(defendant in the counter claim).
The burden to prove issue no. 3 was placed upon the
plaintiff who is defendant in the counter claim.
10.1 As per plaintiff/non-counter claimant, the present dispute
is governed by the Multimodal Transportation of Goods Act
1993 and as per Section 24 of the Act, any suit for damages is to
be filed within 9 months from the date of delivery of goods or
from the date when goods should have been delivered or from
the date when goods can be treated as lost under Section 13(2). It
has been further argued that the defendant had admitted that
consignments were delivered by end of February 2016 and the
counter claim has been filed in November 2017 i.e. beyond the
period of 9 months and therefore, the counter claim of defendant
is liable to be dismissed being time barred.
10.2 As per defendant/counter claimant, the dispute in the
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M/S FREIGHT SYSTEMS (INDIA) PVT LTD Vs. JAY PRAKASH NARAYAN
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JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date: 2025.03.25
17:49:56 +0530
instant suit is not governed by the said Act because plaintiff
admitted in its WS to the counter claim that it was the agent of
defendant and therefore, plaintiff is not a multimodal transport
operator as per Section 2 (m) of the said Act. Moreover, plaintiff
company has neither pleaded in the pleadings that it is a
multimodal transport operator nor has led any evidence in this
respect. It is also important that defendant raised the demand of
compensation within a month of the consignment being
discovered by the plaintiff and defendant also filed Claim Forms
provided by the plaintiff and thus, cause of action continued.
10.3 Arguments heard. Record perused.
10.4 In the present case, defendant has not filed counter claim
for the damages caused to the goods but the counter claim of the
defendant revolves around the grievance of non-delivery of
goods within agreed time at the agreed destination. The
defendant has filed the counter claim for damages on account of
contractual as well as tortious liability of plaintiff for delay in
delivery at agreed destination and also for the loss of reputation
in business. Further, plaintiff has not led any evidence to prove
that it is a multimodal transport agent in terms of Section 2(m) of
the Multimodal Transportation of Goods Act 1993. Therefore, the
period of limitation will not be governed by the Multimodal
Transportation of Goods Act 1993 and the period of limitation
will be computed as per the Limitation Act 1963. Admittedly,
counter claim has been filed within three years and therefore, it is
well within period of limitation. Accordingly, issue no. 3 is
decided in favour of defendant and against the plaintiff.
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M/S FREIGHT SYSTEMS (INDIA) PVT LTD Vs. JAY PRAKASH NARAYAN
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JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date:
2025.03.25
17:50:00 +0530
10.5 Issue no. i) Whether the suit of the plaintiff is without
cause of action as the plaintiff f miserably failed to perform or
fulfill its obligations under the contract. OPD (Main suit)
Issue No. 2. Whether the plaintiff is entitled for a decree of Rs.
13,51,440/ OPP. (main Suit)
Issue no. 1. Whether the counter claimant/defendant is entitled
for a decree of Rs. 53,99,161/- .OPC/OPP(Counter claim)
Issue no. 2. Whether the counter claimant/defendant is entitled
for interest pendentile and future interest @ 18% per annum and
cost. OPC/OPP (Counter claim)
All the issues are taken together for the sake of brevity as
all these issues are interlinked and involve same discussion. The
findings upon one issue is dependent upon the findings of other
issues.
Admittedly, defendant had availed the services of plaintiff
for sending seven shipments to USA. The defendant had disputed
the delivery stating that it was neither within agreed time nor at
the agreed destination. As per plaintiff, plaintiff had delivered the
goods and time was never the essence of contract. As per
defendant payment was contingent upon the satisfactory services
and as plaintiff had failed to provide services as per terms and
condition of the contract, defendant is not liable to pay anything
to the plaintiff, rather defendant is entitled for damages under the
various heads.
Admittedly, there is no written contract between parties
nor parties have agreed in writing that time was the essence of
the contract.
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JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date:
2025.03.25
17:50:04 +0530
10.6 Before going into further discussion, it is important to
mention the details of shipments which is as follows :
Sr. No. HAWB No. Invoice No. and date Port of origin and Amount of
port of destination Invoice/Outstan
ding amount in
INR
1 120106000048 1251-INV-60212010549 18.02.2016 1,27,648.00
Delhi to
18.02.2016 Newark
2 120106000057 1251-INV-60212010552 Delhi 1,91,216.00
to
18.02.2016 Newark
3 120106000060 1251-INV-60212010554 Delhi
to 1,86,499.00
18.02.2016 Newark.
4 120106000065 1251-INV-60212010557 Delhi 1,41,615.00
to
18.02.2016 Newark
5 120106000053 1251-INV-60212010561 Delhi 1,06,923.00
to
18.02.2016 Newark
6 120106000038 1251-INV-60212010562 Delhi 2,13,550.00
to
18.02.2016 Newark
7 120106000042 1251-INV-60212010564 Delhi 1,76,898.00
to
18.02.2016 Newark
8 12010600038 1251- Delhi 297.00
INV-606112010183 to
Newark
01.06.2016
9 12010600042 1251-INV-60612010214 Delhi 297.00
to
01.06.2016 Newark
10 12010600048 1251-INV-60612010725 Delhi 127.00
to
01.06.2016 Newark
11 12010600060 1251-INV-60612010765 Delhi 15.00
to
01.06.2016 Newark
12 12010600065 1251-INV-60612010308 Delhi 15.00
to
01.06.2016 Newark
13 12010600053 1251-INV-60612011353 Delhi 15.00
to
01.06.2016 Newark
CS DJ 1378/17 CIS No. DLSE01-006863-2017 Page No. 15 of 40
M/S FREIGHT SYSTEMS (INDIA) PVT LTD Vs. JAY PRAKASH NARAYAN
CS DJ 23/18 CIS No. DLSE01-000076-2018
JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
PRABHDEEP by PRABHDEEP
KAUR
KAUR Date: 2025.03.25
17:50:08 +0530
14 12010600057 1251-INV-60612010801 Delhi 173.00
to
01.06.2016 Newark
Total 11,45,288.00
10.7 The defendant had also admitted that defendant had
received three consignments (as mentioned at sl. no. 1, 6 and 7 in
above mentioned chart) in time as during DE, DW-1 deposed that
“12. I say that two of the shipments with HAWB Nos. 120106000038 and
120106000042 shipped from Delhi on 12.01.2016 and 13.01.2016
respectively were received by the younger son of the Defendant, Rohit on
15.01.2016 from the warehouse of the transport company contracted by the
Plaintiff to deliver the shipments at the USPS office. These two shipments
were delivered to USPS on 15.01.2016 under supervision of Defendant’s
son Rohit. Defendant’s son Rohit also took the delivery of shipment with
HAWB no. 120106000048, shipped from Delhi on 14.01.2016, from the
Newark airport after being authorized by the Plaintiff company. The reason
for Defendant’s son Rohit stepping in to receive the third shipment was that
this particular shipment was already delayed by 2-3 days in arriving in the
USA and when it was custom cleared by US authorities around 2.30 p.m. on
17.01.2016, the Plaintiff company had refused to hand it over to USPS the
same day owing to the unavailability of trucker. Defendant’s son Rohit hired
a truck and a driver and got the shipment delivered to the USPS office on lat
day itself.”
Thus, as per defendant two shipments at sl. no. 6 and 7 of
the chart were shipped from Delhi on 12.01.2016 and 13.01.2016
and were received by son of defendant on 15.01.2016 and the
third shipment mentioned at sl. no. 1 was shipped on 14.01.2016
and was received by son of defendant on 17.01.2016.
10.8 Now the defendant has taken plea that the third shipment
was delayed by 2-3 days but admittedly the third shipment was
delivered within three days from shipment i.e. shipped on
14.01.2016 and delivered on 17.01.2016. Admittedly, previous
two shipments were also delivered within 2-3 days and therefore,
there is no reason why defendant stated that the third shipment
was delayed by 2-3 days. It seems that the plea has been taken
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CS DJ 23/18 CIS No. DLSE01-000076-2018
JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date: 2025.03.25
17:50:12 +0530
just for the name sake.
Further, defendant had relied upon the presentation given
by plaintiff and the presentation is Ex. DW-1/1. Admittedly,
presentation is just an offer of the plaintiff to provide the services
as per the description provided therein but it is not a contract
between parties. It is settled principle that in the advertisements
or offers some exaggeration is made and same is acceptable too.
Moreover, in the presentation plaintiff had assured to airlift the
consignments on the same day and plaintiff had admittedly done
the same i.e. the consignments were airlifted on the same day and
there is no assurance even in the presentation that the delivery of
goods will be done within one and same day. Therefore,
defendant is liable to pay the amount at least for first three
consignments (the question of damages claimed by the defendant
will be discussed at later stage and at this stage, court is not
stating that irrespective of claim of damages defendant is to pay
the amount. The amount payable by defendant may be set off
against the damages if any awarded to defendant at the later
stage.
11. Remaining four consignments:
Now parties are at loggerheads for the remaining four
consignments. As per defendant, plaintiff failed to delivery the
remaining consignments at the agreed time and destination while
as per plaintiff time was not essence of the contract.
11.1 In commercial or mercantile contracts, the need of
certainty is of great importance. Where both parties are engaged
in business and articles are purchased by one party from the other
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CS DJ 23/18 CIS No. DLSE01-000076-2018
JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date: 2025.03.25
17:50:18 +0530
party for business purposes, the transaction falls within the term
mercantile transaction”. There is no place in mercantile contracts
for the presumption that time is not of the essence of the contract,
and the Supreme Court has held time and again that stipulation as
to time is ordinarily of the essence of the contract in mercantile
contracts, and that when this important condition is broken, the
aggrieved party is entitled to rescind the contract.
In modern business documents, men of business are taken to
mean exactly what they say. Merchants are not in the habit of
placing upon their contracts, stipulations to which they do not
attach some value and importance. Parties to mercantile
contracts, therefore, cannot rely upon the present section to save
them from the consequences of unpunctuality.
11.2 The question, whether time is of the essence of the
contract, does not depend upon express stipulation to that effect
made by the parties, but it depends upon the intention of the
parties. Notwithstanding that a specific date is mentioned, one
has not to look at the letter but at the substance of the contract.
Whether time is of essence is a question of fact, and the real test
is the parties’ intention. It depends on the facts and circumstances
of each case. The intention of the parties can be ascertained from:
(i) the express words used in the contract; (ii) the nature of the
property which forms the subject matter of the contract; (iii) the
nature of the contract itself; and (iv) the surrounding
circumstances.
In various judgments, time has been held to be of the
essence of contract in shipping and commercial contracts as
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CS DJ 23/18 CIS No. DLSE01-000076-2018
JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date: 2025.03.25
17:50:23 +0530
regards delivery of goods. Where the contract work was
connected with another time bound project, which in turn was
linked with a work undertaken by a foreign country to fabricate
and erect plant and machinery within a stipulated time, time was
of the essence.”
11.3 Now the defendant has relied upon the judgment of M/s
Rajasthan Art Emporium Vs. Kuwait Airways & Anr., Civil
Appeal No. 9106 of 201 and it has been observed therein that:-
“…..The NCDRC has rightly noted that the appellant has paid air freight
which is ten times more than the sea freight only to ensure that the
consignment reaches its destination within a week because sea cargo would
have taken 25 to 30 days for delivery and the appellant has paid such huge
freight charges for ensuring early delivery, hence, the delay in delivery of
consignment has necessarily inflicted damage to the appellant which is
liable to be satisfied by the respondent No.1 as provided under Section 19
and 13(3) of the Carriage by Air Act 1972…”
11.4 Further, defendant has relied upon the email dated
03.02.2016 written by defendant to USPS which is part of Mark
-D1(Colly) and the relevant portion is follows:
“Once these boxes are located, then please let me know.
Because these were time bound amazon order meant to be delivered within
10-12 days and that timeline has already passed now. I have to refund all my
buyers.
Getting the books back will help me to salvage my losses to some extent.
Thanks for your support.”
Thus, from the above discussion it is clear that though
parties have never agreed in writing about the schedule of
delivery but shipments, being sent by AIR were expected to be
delivered within reasonable time which in such cases might vary
from 5 to 15 days. Accordingly, it is settled by now that time was
essence of the contract in the present suit.
11.5 Now the court has to consider the effect to failure of
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CS DJ 23/18 CIS No. DLSE01-000076-2018
JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date: 2025.03.25
17:50:29 +0530
performance at the fixed time. In absence of written contract
between parties, the contract between parties will be governed by
the general principles of Indian Contract Act. At this stage, it is
important to have a look upon Section 55 of Indian Contract Act
1872.
“55. Effect of failure to perform at fixed time, in contract in which time is
essential.-When a party to a contract promises to do a certain thing at or
before a specified time, or certain things at or before a specified times, and
fails to do such thing at or before the specified time, the contract, or so
much of it as has not been performed, becomes voidable at the option of the
promise, if the intention of the parties was that time should be of the essence
of the contract. ……..
Effect of acceptance of performance at time other than agreed upon.- If, in
case of a contract voidable on account of the promisor’s failure to perform
his promise at the time agreed, the promisee accepts performance of such
promise at any time other than agreed, the promisee cannot claim
compensation for any loss occasioned by the non-performance of the
promise at the time agreed, unless, at the time of acceptance, he gives notice
to the promisor of his intention to do so.”
Thus, where a party, who has promised to do a certain
thing at a specified time, fails to do it at or before that time, the
contract becomes voidable at the option of the promisee, if the
intention of the parties was that time should be of the essence of
the contract. In other words, where a party has not performed his
obligations under the contract at the specified time, being of the
essence of the contract, the contract becomes voidable at the
option the other party, thus giving to the other party an option to
treat the contract as at an end.
Thus, once the plaintiff failed to deliver the shipment in
time to USPS, the contract became voidable at the instance of
defendant and defendant had the option or right to avoid the
contract.
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CS DJ 23/18 CIS No. DLSE01-000076-2018
JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025 Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date:
2025.03.25
17:50:34 +0530
11.6 It is settled principle that in a contract, where the intention
of the parties is that time shall be of the essence of the contract, it
is voidable at the option of the promisee; but it does not by itself
come to an end after the expiry of the period. The termination
has to be by proper notice under s. 66 of the Contract Act. It is
open to the promisee not to exercise the option, or to exercise the
option at any time. But he cannot, by the mere fact of not
exercising the option, change or alter the date of performance
fixed under the contract itself. Therefore, a claim for
compensation under this section would be barred, if the promise
accepts performance after the stipulated time, unless he had
given notice to the promise of his intention to claim
compensation at the time of the delayed acceptance. Thus, where
no such notice was given, while accepting the sites from the
Government after the tine agreed had lapsed, it was held that
claim for compensation was barred by law.”(State of Kerala Vs.
M.A. Mathai, AIR 2007 SC 1537).
11.7 Coming to the facts in hand, the defendant has relied upon
email dated 07.03.2016 Ex. DW-2/8 written by DW-2 /Son of
defendant to one Ms. Deepali and the relevant portion is as
follows:
“..As all the orders got cancelled and were refunded by us because we
missed the delivery dates. Freight Systems was kind enough to search the
cargo from USPS premises after a months time and took it back into their
premises and is now planning to return the cargo at our TX office after
dispatching those 150 packets to the customers which we saved from getting
refunded. I understand the financial loss and other impacts which are
incurred now but the entire exercise was done with the right intention for
the benefit of the company. I request Team Freight System to put in their
inputs and observations too which can help you better to deal with your
customers and vendors”
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CS DJ 23/18 CIS No. DLSE01-000076-2018
JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date: 2025.03.25
17:50:40 +0530
11.8 Further, defendant has also relied upon another email dated
18.03.2016 Ex. DW-2/7 written by plaintiff to DW-2 and the
relevant portion is:
“As discussed please find below the snapshot of investigation we did for
your consignments:
We started this whole process to provide you all the advantages over your
existing setup. Be it be cost, transit or making the whole supply chain
process cost effective and efficient we did our level best to do that. We use
to fly shipments from here on regular basis, origin process was made
smooth in terms of pick up, clearance and air lift. As per planning once
shipment lands Newark it was to be custom cleared and delivered to USPS
We did the same for all your consignments but what happened in last four is
as below:
The trucker picked up the consignments from the airport as the part
of regular routine and delivered the same to USPS (POD’s of same are
already shared)
While investigating the whole case we came to know that Airline
doc staff handed over the wrong consignment to the trucker and trucker
delivered the goods to USPS
All the four shipments were found in the warehouse of United
Airline
What action we took immediately after knowing all this:
We got the goods released from airline We got it truck down from airport to our warehouse As per instruction took out 150 parcels to connect the load to USPS Arranged the movement of remaining lot of 114 boxes from Newark to Houston Got Claim Form arranged to get the claim from airline for the delay caused by them
Further to above we had already shared the mail conversation with
airline and claim form we arranged for you. Please let us know if anything
else is needed from our end.”
11.9 From the perusal of above emails, it is clear that all the
orders have not been refunded and defendant saved 150 packets
from getting refunded and as per instructions from the defendant,
plaintiff had delivered 150 packets out of remaining four
shipments to USPS and remaining 114 boxes were sent from
Newark to Houston as desired by defendant. Thus, defendant had
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CS DJ 23/18 CIS No. DLSE01-000076-2018
JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date: 2025.03.25
17:50:44 +0530
taken delivery of all four shipments and nowhere, defendant had
objected to taking delivery of delayed shipment or delivery at the
other place than agreed upon between parties. Clearly, defendant
continued to accept the delivery without avoiding the contract on
the ground that there was breach of agreement by plaintiff. Even
if it was the case of the defendant that there was non-compliance
of certain terms and conditions by the plaintiff, there was waiver
and abandonment of the rights conferred upon defendant and
therefore, it is not open to defendant to refuse the payment on the
ground of breach of contract by plaintiff.
11.10 As per record available with the Court, defendant has
nowhere given any notice or intimation by way of email, letter or
message that defendant was taking delivery under the protest or
subject to recovery of losses and damages incurred due to late
delivery or delivery at another place.
11.11 Now the defendant had taken plea that previously, plaintiff
had misled the defendant and defendant was under the
impression that USPS had lost the shipments and later on, from
the email dated 18.03.2016 Ex. DW-1/6, defendant got the clarity
that plaintiff was at the fault.
As far as this plea is concerned, after the said email dated
18.03.2016, defendant had the clarity that plaintiff was at fault
and despite that, defendant had not sent any email, letter or legal
notice to the plaintiff claiming that plaintiff is liable to pay
damages for non-delivery of goods at agreed place within agreed
time. Only in reply to the legal notice of the plaintiff, defendant
for the first time, had taken the plea of damages and losses. As
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JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed by
PRABHDEEP
PRABHDEEP KAUR
KAUR Date: 2025.03.25
17:50:48 +0530
has already been discussed, merely because plaintiff has failed to
deliver the remaining four shipments within time, it does not ipso
facto render the contract void or terminated but the contract
became voidable at the instance of defendant and defendant had
the option to exercise his rights to cancel or avoid the contract,
however, clearly defendant had impliedly waived off his rights to
avoid or terminate the contract and accepted the delivery without
raising any voice.
Even in the judgment relied upon by the defendant i.e.
judgment of M/s Rajasthan Art Emporium(Supra), prior to filing
of the complaint before consumer forum, the complainant had
made the claim against respondent for refund of full freights and
thereafter, even served the legal notice for the said purpose and
thereafter, filed the complaint. In the present suit, prior to service
of legal notice by the plaintiff, defendant had not even written a
single email to the plaintiff that defendant is not liable to pay
anything to the plaintiff because of lapse on part of plaintiff to
fulfill the contractual obligations. Even after reply to the legal
notice, defendant had not initiated any suit against the plaintiff
and it is the plaintiff who first approached the Court. Had the
defendant suffered such a huge loss as claimed by defendant,
defendant should have initiated legal action against plaintiff prior
to filing of suit by plaintiff as plaintiff served the legal notice in
June 2016 but had filed the suit in September 2017 i.e. after lapse
of more than one year.
It is also important to mention that the documents Mark-
D-4/Mark-D5 mentions the subject as “Commercial Litigation
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JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date: 2025.03.25
17:50:53 +0530
Vs. USPS, Freight System…..”. From the above mentioned
document, it seems that defendant had the intention to sue the
plaintiff but had not preferred to do so for the reasons best known
to him.
11.12 Further, the defendant had repeatedly taken the plea that
plaintiff had handed over fake PoDs to the defendant and both
DW-1 and DW-3 have entered into witness box and have
deposed on the same lines regarding the said PODs. However, as
per plaintiff it was just a miscommunication.
Now the defendant himself has relied upon email dated
18.03.2016 Ex. DW-1/6 written by plaintiff to son of defendant
and the relevant portion is as follows:
“Hi Gaurav,
As discussed, please find the communication we have received from the
EWR ground handling/UA Team.
The below are the list of occurrences for:
AWB 016-04497312:
* 17-Jan-2016 – Cargo arrived in EWR.
* 27-Jan-2016 – Driver arrive in EWR to recover cargo, Driver signed for 30
pcs.
* 21-Feb-2016 – 12 pc were located in the EWR warehouse and customer
contacted.
* 23-Feb-2016 – Driver recovered 12 pcs.
Consignee was given the incorrect cargo due to front dock agent not
verifying the airway bill number on all the cargo before giving to the driver.
AWB 016-04496671:
* 16-Jan-2016 – Cargo arrived in EWR:
* 21-Jan-2016 – Driver arrive in ER to recover cargo, Driver signed 22 pcs.
* 23-Jan-2016 – 04 pc were located in the EWR warehouse and customer
contacted.
* 23-Feb-2016 – Driver recovered 04 pcs.
Error – Agent and driver did not verify the amount of pieces loaded on the
truck.
AWB 016-04497323:
* 19-Jan-2016 – Cargo arrived in EWR.
* 20-Jan-2016 – Driver arrive in EWR to recover cargo, Driver signed 36
pcs.
31-Jan-2016 – Additional pcs were located in the EWR warehouse and
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JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date:
2025.03.25
17:50:57 +0530
customer contacted.
23-Feb-2016 – Driver recovered additional pcs.
Error – Agent and driver did not verify the amount of pieces loaded on the
truck.
AWB 016-04497334:
* 20-Jan-2016 – Cargo arrived in EWR
* 21-Jan-2016 – Driver arrive in EWR to recover cargo, Driver received 24
pcs but no signature on form. Delivery slip states 2 pcs unable to locate.
* 23-Jan-2016 – Additional pcs were located in the EWR warehouse and
customer contacted.
* 23-Feb-2016 – Driver recovered additional pcs.
Error – EWR agent was unable to locate 2 pcs at the time of recovery.
I have attached the Delivery slips to confirm the above details.”
From the above email, it is clear that as per investigation
done by the plaintiff, the airline staff had handed over wrong
consignments to trucker and trucker deposited the same to USPS
and plaintiff provided PoDs of the same to the defendant and
only later on, it was transpired that PoDs handed over to the
defendant were not related to the consignments of defendant.
Irrespective of the fact whether it was the fault of Airline alone or
not, clearly plaintiff had handed over wrong PoDs to the
defendant unintentionally and plaintiff nowhere had created fake
PoDs and it was clearly miscommunication on part of plaintiff
and plaintiff should have been more careful but nowhere plaintiff
had given false PODs.
11.13 Further, during cross examination defendant was asked
about the insurance of the consignments and defendant/DW-1
deposed during cross examination that :
“Q.No.54 Did you take insurance in respect of shipments in question to
cover any loss?
Ans. I do not remember as to what formalities were got completed by FSL
before taking delivery from our godown?
Q.No.55 Can you answer the aforesaid question no. 54
after verifying your records as well as judicial records?
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JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date:
2025.03.25
17:51:01 +0530
Ans. Since the case against non counter claimant is related lack of service,
non delivery of goods to destination in time, question of insurance is not
material..”
The question of insurance is material because if the
shipment was insured, then there are two possibilities: (i)
defendant had taken the insurance for the loss caused due to late
delivery and if the defendant had already taken the insurance
claim, then defendnat cannot claim the same again from plaintiff
or (ii) that defendant had not taken the insurance claim despite
the shipment being insured and it gives inference that defendant
had not suffered any loss that’s why defendant had taken any
claim from insurance and therefore, defendant cannot claim the
same from plaintiff. It seems that defendant has withhold the
material information from the Court and defendant should have
come clear whether the shipments in question were insured or
not.
11.14 From the above discussion, it is clear that the remaining
four shipments were not delivered to defendant within time but
defendant agreed to take the delayed delivery of remaining four
shipments without any protest and defendant had not exercised
his rights to terminate or avoid the contract nor defendant had
given any notice to the plaintiff that defendant was accepting the
delivery subject to recovery of losses and damages caused to the
defendant due to delay. Further, from the perusal of record it is
clear that 150 boxes out of remaining four shipments were
delivered at USPS i.e. the agreed place and remaining 114
packets out of remaining four shipments were sent from Newark
to Houston as per directions of the defendant, though Houston
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JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed by
PRABHDEEP PRABHDEEP KAUR
KAUR Date: 2025.03.25
17:51:05 +0530
was not the agreed place as per the initial agreement but because
of defendant instructions it impliedly became agreed place later
on.
11.15 Further, defendant had also admitted the invoices raised by
the plaintiff as in the written statement defendant has
categorically stated that “It is admitted that the defendant booked
shipments with the plaintiff company in the year 2016 as per the details
mentioned in the invoices”.
However, during cross examination, defendant had
objected to the invoices Ex. PW-2(colly) and deposed that:
“Q No. 53 Did you take any objection in writing in respect of date of issue
of invoices (Exh. PW-2 Colly)?
Ans. These invoices are annexed with plaint and we have already denied
almost all contents, including the fact that there are two types of invoices
one date 18.02.2016 and other dates 01.06.2016 wherein KKC (Krishi
Kalyan Cess) has been unauthorisedly charged as the KKC was leviable on
from 1.6.2016 and it could not have been charged on defendant/counter
claimant.”
Considering the fact that during pleadings, defendant had
already admitted the invoices, the defendant cannot object to the
same during cross examination, otherwise the sanctity attached to
the pleadings will be lost.
From the above discussion, it is clear that defendant is
liable to pay the amount to the plaintiff as per invoices Ex.
PW-2(Colly) and defendant cannot claim any damages from the
plaintiff as defendant has not exercised the option to terminate
avoid the contract and had taken the delivery of remaining four
shipments even after delay, without any notice to the plaintiff that
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JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed by
PRABHDEEP PRABHDEEP
KAUR
KAUR Date: 2025.03.25
17:51:10 +0530
delivery was being taken subject to recovery of losses and
damages caused due to delay nor defendant has given any notice
in this respect to plaintiff prior to service of legal notice by the
plaintiff. Accordingly, plaintiff is entitled for recovery of Rs.
11,45,288/-.
11.16 Plaintiff has also sought pendent lite and future
interest at the rate of 18% per annum. The plaintiff has been
deprived of its rightful amount and therefore, plaintiff is entitled
for reasonable interest to compensate for the loss of money
which plaintiff could have utilized for better prospective.
Considering the nature of transactions between parties and facts
and circumstances of the case, plaintiff is held entitled for the
interest at the rate of 7% per annum from filing of the suit till its
realization.
12. Let us assume, for the sake of arguments that defendant
had served the notice upon the plaintiff in time that defendant
was accepting the delivery of goods subject to recovery of losses
and damages caused due to delay.
We are living in an era of quick delivery apps where
Blinkit, Zepto etc. assure to deliver the goods within the period
of less than half an hour. Now if A places an order from one of
these apps and does not get delivery within time due to which A
could not cook food to be supplied at his office and was forced to
pay penalty, Can ‘A’ recover the penalty and damages from the
app and the answer, definitely, would be ‘No’. But if A gets a
customized order from the app., informing the app about specific
requirement of A’s order, and then the app failed to deliver order
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M/S FREIGHT SYSTEMS (INDIA) PVT LTD Vs. JAY PRAKASH NARAYAN
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JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
PRABHDEEP by PRABHDEEP
KAUR
KAUR Date: 2025.03.25
17:51:15 +0530
on time due to which ‘A’ suffered penalty, then ‘A’ can recover
the damages from app but despite late delivery ‘A’ accept the
order without any protest, then irrespective of the fact that
whether ‘A’ suffered the penalty or not, ‘A’ cannot claim any
damages from the app.
Let us take this discussion to one step further. Now a days
delivery through ‘porter’ app is very common where some goods
are handed over to the deliveryman for their delivery at the
agreed destination. The delivery is expected to be done within
few hours. Now, if the delivery is delayed by five days then
definitely consignor can claim the damages but the issue is to
determine the quantum of damages.
It is settled principle that in case of breach of contract the
plaintiff is entitled to receive compensation for the damage, loss
or injury he has suffered through the breach. The purpose of
damages is compensatory and the tests of burden of proof are of
remoteness and causation. In the present suit, the defendant has
sought damages for contractual breach and for loss of business
and reputation. Therefore, the defendant must show that the loss
flowed naturally and in the usual course of things from the
breach or was within the reasonable contemplation of parties at
the time of making the contract. On the basis of these principles,
let us examine the damages claimed by defendant under different
heads.
12.1 Loss due to cancellation of orders: The defendant had
taken plea that the orders placed on Amazon were canceled due
to which the money was refunded to the proposed buyer and
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JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025 Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date:
2025.03.25
17:51:19 +0530
defendant suffered loss.
As far as this plea is concerned, during cross examination
defendant /DW-1 had deposed that:
“……It is correct that there was no any concern/direct contract with the
online book purchases. Vol. Though I have already clarified the full
procedures vis-a-vis order for purchase the books were taken by sellers of
the books, they had been purchasing, packing and then handing over to FDA
Logistics for onward courier through Radhika International.
Q. No. 61 Did anyone have lodged any complaint/civil suit or any other
legal proceedings against you for recovery of compensation in respect of
said damage?
Ans. We had decided maxim of the claims by mutual discussions out of
Court and right now we are not faith any legal case, but we have to still
clear claims of the customer whom we can brought in the court on your
insistence…..”
Thus, admittedly no claim has been raised against the
seller on Amazon or against the FDA Logistics or against the
defendant due to cancellation of orders.
12.2 Claim of defendant for debit note of FDA Logistics dated
02.03.2016 for Rs. 4,55,550/- and letter dated 31.03.2016 for
demand of Rs. 27,84,570/-.
Defendant deposed that FDA Logistics which was major
customer of defendant issued debit note of Rs. 4,55,550/- against
defendant on 02.03.2016 due to non-delivery of consignments
and further FDA Logistics informed the defendant through letter
dated 31.03.2016 that they had issued debit note and withhold
the payment due to non-delivery of their consignments and
defendant is liable to pay Rs. 27,84,570/- to FDA Logistics.
Now during cross examination, DW-2/son of defendant
admitted that the staff members of FDA Logistics and
defendant’s firm are not only common but they do work for the
both at the one and same time. Moreover, admittedly, partners of
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M/S FREIGHT SYSTEMS (INDIA) PVT LTD Vs. JAY PRAKASH NARAYAN
CS DJ 23/18 CIS No. DLSE01-000076-2018
JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date:
2025.03.25
17:51:23 +0530
FDA Logistics are sons and daughter in law of defendant.
Now during cross examination, defendant /DW-1 deposed
that:
Q. No. 63 I put it to you that you had not paid the claims as mentioned in
your evidence affidavit of para no. 34 at Sr. No. 2 and 3, as the same are not
genuine, is it correct?
Ans. It is incorrect. Vol. It is incorrect that the claims at Srl. No. 2 and 3 are
not genuine, under para in business, normally it happens that we have to do
business on credit. As a credit facility was allowed to us by FSL, we also
had been and have been allowing similar credits to our customers. But when
their shipment did not reach in time, they not only retained our payment for
these shipments, but also retained our payment for earlier shipments. And
thus FDA Logistics could not recover Rs. 27,84,570/-
Q. 64 I put it to you that you had paid the claim of Rs. 4,55,550/- against the
debit note of FDA Logistics only on the basis that it is of your son and the
said claim is also not genuine, what do you want to say?
Ans. It is incorrect. Vol. We had to close books at the financial year and
since both firms M/s Radhika International and FDA Logistics are related to
me as the FDA is a partnership firm of my son and daughter-in-law, so at the
end of financial year we had to account for entry of loss debited to FDA as
by that date he had only paid that amount, so he issued the debit note to M/s
Radhika International.”
Now perusal of debit note Mark-D6 mentioned that “claim
for shipment loss”. It nowhere gives the details as to which
shipment is lost, despite the fact that admittedly, first three
shipments were delivered in time. Moreover, defendant himself
admitted that by end of February 2016, even the remaining four
shipments had been traced and therefore, technically the
shipments cannot be considered as lost. Moreover, admittedly,
out of remaining 4 shipments, 150 boxes were delivered as per
original order as these orders were not cancelled.
Further, as per letter of FDA Mark-D8, the clients of FDA
withheld the payment of previous shipments as the shipments in
question did not reach in time and FDA had put liability upon the
defendant and claimed the amount from defendant and now inCS DJ 1378/17 CIS No. DLSE01-006863-2017 Page No. 32 of 40
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JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
PRABHDEEP by PRABHDEEP
KAUR
KAUR Date: 2025.03.25
17:51:27 +0530
the counter claim, defendant is claiming the said amount from
plaintiff.
Clearly, the damages claimed by the defendant under this
head are far fetched and are remote damages which cannot be
claimed. The defendant can claim only reasonable damages
which could have been contemplated by the parties at the time of
entering into contract and defendant cannot claim all the
damages from the plaintiff which might have occurred during the
chain of event happened due to non-delivery of shipments well
within time. Moreover, considering the fact that FDA Logistics
and defendant’s firm involve close relatives and have common
staff members, the liability is upon the FDA Logistics to
comeforward to prove how they suffered the loss of Rs. 455550/-
due to loss of the shipments as alleged. But no such proof has
been brought on record and mere raising of debit note by FDA
against defendant is not sufficient to prove loss to defendant so
as to claim damages from plaintiff.
12.3 Legal expenses :
Further, defendant had claimed that contemplating a legal
action against the people and agencies involved in the shipments
of its consignment because of its non-delivery, defendant had
also consulted a lawyer in USA through its business associate
present in USA and the lawyer was paid USD 5,000 by the
business associate of defendant who later on raised the same
claim from defendant.
As far as this plea is concerned, the defendant admitted
during examination in chief by way of affidavit Ex. DW-1/A that
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M/S FREIGHT SYSTEMS (INDIA) PVT LTD Vs. JAY PRAKASH NARAYAN
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JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date: 2025.03.25
17:51:31 +0530
the amount remains unpaid as on date because defendant was
hoping to pay this amount from the compensation received from
plaintiff company/United Airlines. Defendant further deposed
that:
“Q. No. 62 What is the role of “business associate” in the present subject
matter as mentioned in para no. 29 of your evidence by way of affidvit?
Ans. Directly there was no role but when our packets /shipments were not
reached to destination and the plaintiff was handing over to us PODs, it was
not possible for us to just not rely the plaintiff and we were suspecting that
the shipments must have misplaced by USPS so we were making our mind
to proceed against USPS and when we needed services of an advocate and
the business associates only helped us in searching the advocate.
It is wrong to suggest that I had not paid USD 5000 to Lawyer as
there was no need for the same. Vol. I had not filed a case against USPS
because by that time non-counter claimant informed that missing shipments
had been traced in the Godown of United Airlines.”
Thus, defendant had taken legal opinion for taking
safeguard against the legal actions which might have been
initiated against the defendant and if the defendant sought the
legal opinion to save himself, then how defendant can make the
plaintiff liable to pay for that. Moreover, defendant has not
placed on record any evidence to prove that the business
associate of defendant had paid the said amount to the lawyer.
Further, defendant had taken plea that the said amount had
not been paid to the business associate in the hope of getting
compensation from plaintiff while the son of defendant /DW-2
had taken contradictory stand that they had paid the amount to
business associate but even DW-2 had not produced any
document to prove that the said amount was paid to any law firm
as claimed by DW-2. Moreover, the amount claimed by the
defendant under this head has no reasonable nexus to the action
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M/S FREIGHT SYSTEMS (INDIA) PVT LTD Vs. JAY PRAKASH NARAYAN
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JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date: 2025.03.25
17:51:35 +0530
of plaintiff in not delivering the goods within time.
12.4 Expenses for the visit of the son of the defendant to USA:
The defendant had claimed a sum of Rs. 2,25,290/-
claiming that he had spent this money in sending his son Sh.
Gaurav /DW-2 to USA to verify the condition of the recovered
shipments. As per defendant, he sent DW-2 to USA on
12.04.2016 and DW-2 reported that books were badly damaged
and had zero commercial value.
As far as this claim is concerned, from the email and
record produced by the defendant himself, it is clear that by the
end of February 2016 the remaining four shipments were found
in the warehouse of United Airlines and by 18.03.2016, 150
boxes out of these shipments were delivered to USPS by the
plaintiff and remaining 114 boxes were sent from Newark to
Houston. No reason is coming forward why the son of defendant
would visit USA after lapse of approximately one month because
had the visit been so necessary, he would have visited USA
immediately upon tracing of the shipments and would not have
waited for one month. Moreover, even if all the facts are taken as
true on their face, then only 114 boxes remained undelivered to
USPS and were sent to Houston, so all the remaining boxes
could never have been damaged as claimed.
Further, plaintiff had cross examined both defendant/
DW-1 and the son of defendant/DW-2 on this aspect. Now during
cross examination, DW-1 deposed that:
Q. No. 57 Did you appoint any independent surveyor in respect your claim
regarding said damage to the shipment? (Objected to on the ground of
beyond the pleadings).
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PRABHDEEP by PRABHDEEP
KAUR
KAUR Date: 2025.03.25
17:51:39 +0530
Ans. So far damage is concerned which was because of moisture and
mishandling, the counter claimant was put to a very difficult situation
because neither it could be delivered there to the beneficiaries, nor it could
be called back because that would have again demanded freight expenses
from US to Delhi, which were more higher. We also did not asked for any
survey as the lost had already caused by us and we were now in a mood to
further invest good money for bad money.
It is incorrect to suggest that no survey by independent surveyor was
conducted as there was no damage to the shipment.”
Further, during cross examination DW-2/son of defendant
deposed that:
“Q. No. 30 Had you taken any photographs in respect of the alleged
damaged consignment?
Ans. The consignment which were sent in Jan. between 10 and 17 th Jan.
were misplaced due to the non responsive and in appropriate handling by
Freight Systems. After about 60 days freight Systems gave the information
of the found consignment. Mr. Sandford Lobo confirmed in his mail that
there was a big service failure and there should be an expected legal claim.
He assured all the claims would be given to Radhika International since
during that time Cargo was in possession of Freight Systems no photograph
was taken.”
Thus, defendant had not produced any evidence on record
to prove that the books, which were recovered later on, were in
bad condition and had no commercial value. Books being non-
perishable entity, it will be presumed that they were received in
normal condition and the burden was upon the defendant to
produce the evidence that books were in damaged condition but
defendant has failed to prove the same. Further, the books
generally don’t loss their sale value and defendant cannot even
claim that he suffered the losses due to decrease of rate. Further,
as per DW-2 at the time of his visit to USA on 12.04.2016, the
Cargo was in possession of plaintiff so no photograph was taken
but the defendant himself has produced the emails showing that
by 18.03.2016, 150 boxes were delivered to USPS and 114 boxes
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M/S FREIGHT SYSTEMS (INDIA) PVT LTD Vs. JAY PRAKASH NARAYAN
CS DJ 23/18 CIS No. DLSE01-000076-2018
JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed
PRABHDEEP by PRABHDEEP
KAUR
KAUR Date: 2025.03.25
17:51:44 +0530
were sent to Houston. Thus, cargo was not in possession of
plaintiff as claimed by DW-2. Therefore, defendant cannot claim
any damages under this head.
12.5 Cost of USA Postal Stamps put on undelivered books:
Now, the defendant had claimed the above mentioned
amount stating that the books were to be sent from India having
the stamps of USA Postal Services and the business associate of
the defendant purchased the same on behalf of defendant and
later on, raised the invoice against the defendant and the plaintiff
is liable to pay the same to the defendant.
Further, during cross examination, defendant deposed that:
Q. No. 66 I put it to you that the claim of Rs. 6,06,651.00 (approx) is also
not genuine as there is no documentary proof in support of the same. What
do you have to say?
Ans. This is also not correct. Vol. We had actually spend the amount on
USA postal stamp and we had claimed on only undelivered books.”
Now the defendant had not placed on record any proof to
prove that defendant paid the amount for USA Postal Stamps as
claimed by the defendant nor defendant had placed on record any
evidence to prove that the amount claimed by defendant under
this head is limited to the undelivered books only. Defendant has
not even disclosed the total value of USA Postal Stamps paid by
the defendant.
12.6 Compensation for loss of business and reputation:
The defendant had claimed a sum of Rs. 10 lacs towards
loss of business and reputation and for mental harassment and
agony.
The defendant had relied upon the negative remarks
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CS DJ 23/18 CIS No. DLSE01-000076-2018
JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025 Digitally signed
by PRABHDEEP
PRABHDEEP KAUR
KAUR Date:
2025.03.25
17:51:49 +0530
written on portal of Amazon and same are mark 9.
Admittedly, the remarks are not with respect to the
services of defendant nor defendant had proved the same as per
law because neither the author has been examined nor anyone
from the Amazon has been summoned to show the record of
above mentioned remarks. Moreover, interestingly, the remarks
have been written on 05.03.2016 and 15.03.2016 while as per
email dated 07.03.2016 Ex. DW-2/8, by that time plaintiff had
already dispatched the books at the destination required by
defendant.
Further, during cross examination, DW-2 deposed that:
Q. No. 21 Whether any litigation was made against defendant in respect of
your alleged loss/counter claim?
Ans. With the on-line sellers with some of them 100% claims are being
adjusted and with some of them are waiting for our claims to come that is
why there is no litigation.
Q. No. 22 Whether defendant had placed on judicial record details of the
said 100% claim?
Ans. As per my knowledge the claim settlement which I am referring is
shared with Freight Systems. The said on-line sellers with settled claims can
come and present in the court and confirm the fact.
Q.No.23 Did you place on record any document to substantiate your
statement about sharing details of settled claims with the Freight Systems?
Ans. The Witness is showing the documents marked as D-9 running into
pages 119 to 127, this is one of the evidences.
Q. No. 24 Whether the defendant made payment in respect of D-9 running
into pages 119 to 127?
Ans. The defendant made payments to or waved off the invoice amount of
on-line seller.
Thus, admittedly no claim has been filed against the
defendant with respect to the shipment in question. Moreover, in
case of online purchase through the portal like Amazon, if the
goods are not delivered in time, Amazon gives the refund to the
customers and no payment is being made to the seller, therefore,CS DJ 1378/17 CIS No. DLSE01-006863-2017 Page No. 38 of 40
M/S FREIGHT SYSTEMS (INDIA) PVT LTD Vs. JAY PRAKASH NARAYAN
CS DJ 23/18 CIS No. DLSE01-000076-2018
JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed by
PRABHDEEP
PRABHDEEP KAUR
KAUR Date: 2025.03.25
17:51:54 +0530
at maximum all the seller has lost is the amount spent by the
seller in arranging the delivery of goods but the seller still has the
goods which seller can further sale out to mitigate the loss.
However, admittedly from the record it is apparent from
the record that defendant had to undergo undue hardship, mental
pain and harassment due to non-delivery of goods in time,
therefore, it is a case where there is a legal injury though
defendant failed to prove actual loss. Therefore, defendant is
entitled for damages of Rs. 2 lacs as compensation for loss of
business, reputation and mental harassment. The grant of
damages for the tortious liability is discretion of the court. In the
present suit, defendant had not only failed to give statutory notice
to the plaintiff at the time of taking delivery but had also shown
the dishonest intention in denying the payment of all shipments
despite the fact that three shipments were already received in
time and out of four remaining shipments, as per directions of
the defendant, plaintiff had delivered 150 boxes to USPS towards
the orders which were not refunded by that time and 114 boxes
were moved from Newark to Houston. In the email dated
07.03.2016 Ex. DW-2/8 (already mentioned in para no. 11.7 of
the judgment), the defendant had even use the terms of “freight
systems/plaintiff was kind enough to search the Cargo from
USPS premises…….). Thus, clearly, plaintiff had cooperated the
defendant to mitigate his loss and to compensate the defendant
for the delay and nothing has been charged by the plaintiff for
moving 100 boxes from Newark to Houston and still defendant
had refused to make the payment for all 7 shipments. The
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M/S FREIGHT SYSTEMS (INDIA) PVT LTD Vs. JAY PRAKASH NARAYAN
CS DJ 23/18 CIS No. DLSE01-000076-2018
JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
Digitally signed by
PRABHDEEP PRABHDEEP
KAUR
KAUR Date: 2025.03.25
17:51:58 +0530
defendant could have tendered at least the payment of first three
shipments to show his honesty and bonafide. In view thereof,
defendant is not liable to get any damages for tortious liability of
the plaintiff.
13. Therefore, the issue no. I, II, III of the main suit and issue
no. I and II of the counter claim are decided in favour of plaintiff
against defendant.
Relief:
14. In view of above discussion and findings on aforesaid
issues and the conclusion that all issues (except issue no. III of
the counter claim) have been decided in favour of plaintiff
against the defendant, the suit of the plaintiff is decreed in its
favour against the defendant and counter claim of defendant filed
against plaintiff is dismissed. Plaintiff is entitled for decree of
Rs. 11,45,288/- alongwith interest @ 7% per annum from filing
of the suit till its realization. Cost of suit is also awarded in
favour of plaintiff. Decree sheet be prepared accordingly.
File be consigned to record room after due compliance.
PRABHDEEP Digitally signed by
PRABHDEEP KAUR
KAUR Date: 2025.03.25 17:52:05
+0530
Announced in the Open Court (Prabh Deep Kaur)
Dated: 25rd March, 2025. District Judge-05
South-East District, Saket Court
CS DJ 1378/17 CIS No. DLSE01-006863-2017 Page No. 40 of 40
M/S FREIGHT SYSTEMS (INDIA) PVT LTD Vs. JAY PRAKASH NARAYAN
CS DJ 23/18 CIS No. DLSE01-000076-2018
JAI PRAKASH NARAYAN Vs. M/S FREIGHT SYSTEMS Dated 25.03.2025
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