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Bangalore District Court
Naha Blue Link Inc vs Freight Systems India Private Limited on 19 April, 2025
KABC170027162023
IN THE COURT OF LXXXIII ADDL. CITY CIVIL & SESSIONS JUDGE,
COMMERCIAL COURT, BENGALURU (CCH-84)
Present: Sri S. Sudindranath, LL.M., M.B.L.,
LXXXIII ADDL. CITY CIVIL & SESSIONS JUDGE
BENGALURU.
COM.O.S.No.1282/2023
Dated on this 19th day of April 2025
Plaintiff/s NAHA BLUE LINK INC
A Partnership firm
Having its office at No.9,
9th Main, II Block, Jayanagar, Bengaluru-
560 011
Rep. by its Partner,
Rajesh Shah
(By Sri Sanjay H Sethiya, Advocate)
// versus //
Defendant/s FREIGHT SYSTEMS INDIA PRIVATE
LIMITED
A company incorporated under the
provisions of the Companies Act, 1956
having its registered office at Super A7,
Thiruvika Industrial Estate, 1st Floor,
Rathna Tower, Guindy,
Chennai-600 032,
Also having its Branch Office at No.506,
Oxford Towers, 4th Floor, No.139, Airport
Road, Kodihalli,
Bengaluru-560 008
Rep by its Managing Director
(By Sri Amit Sahukar, Advocate)
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Date of Institution of suit : 15/11/2023
Nature of the suit : Recovery of money
Date of commencement of : 17/12/2018
recording of the evidence
Date on which the : 19/04/2025
Judgment was pronounced.
: Year/s Month/s Day/s
Total duration
01 05 04
JUDGMENT
This is a suit filed by the plaintiff, which is a
partnership firm, against defendant, which is a company, for
recovery of sum of Rs. 7,01,600 along with interest and also
for mandatory injunction. In this suit, the defendant has
raised counterclaim for recovery of sum of Rs. 3,96,733
along with interest.
2. The case of the plaintiff in brief is that, the plaintiff is a
partnership firm engaged in the business of manufacture
and supply of household and electrical home appliances.
The defendant is engaged in business of providing freight
forwarding, logistics and related services. One MFM Traders
of Sri Lanka approached the plaintiff for supply of table fans
and issued purchase order dated 25/4/2016. To supply the
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said material to MFM Traders to Sri Lanka at Port of
Colombo, plaintiff engaged services of defendant to look
after the shipping. In pursuance of the same, defendant
sent container to the plaintiff’s place and plaintiff loaded the
container with the goods / table fans and the same was
sealed and delivered to Custom Yard in Bangalore on
6/6/2016. On 8/6/2016, plaintiff realized that there was
amendment to regulations brought in by Government of Sri
Lanka which required quality certificate to accompany home
appliances. Therefore, before shipping the table fans to Sri
Lanka, it was necessary that the material should be
inspected by certified agent and only after issuance of
quality certificate and accompanied by such quality
certificate, the goods had to be shipped to Sri Lanka. Since
the same had not been complied with in respect of the
shipment, the plaintiff immediately issued email dated
8/6/2016 to the defendant not to proceed with the shipment
until further information. On receipt of the said email, the
defendant assured the plaintiff that the consignment would
not be shipped and would be retained to comply with the
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quality check. The plaintiff arranged for inspection of the
container by a certified agent, but it was found that
shipping agent of the defendant had already shipped the
containers on 8/6/2016 and therefore, the goods reached Sri
Lanka on 17/06/2016, without compliance with the quality
check regulations required by the Government of Sri Lanka.
The Custom Authorities in Colombo, Sri Lanka, therefore
refused to release the same without payment of penalty
and in the case of non-payment of penalty, the demurrage
charges were also threatened to be levied on the purchaser,
namely MFM Traders. Therefore, left with no alternative,
MFM Traders paid penalty and demurrage charges of Rs.
7,84,775, which is equivalent to (Sri Lankan currency) LKR
17,06,027. MFM Traders has debited the said amount from
the account of the plaintiff, as a result of which the plaintiff
has incurred a loss of Rs. 7,84,775. Apart from this, plaintiff
has spent Rs. 33,093 towards travel expenditure to go to
Colombo to sort out the issue. The total of said sums comes
to Rs. 8,17,868. The shipment charges payable to
defendant for the said transportation is Rs. 2,69,743, and
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after deducting the same, the balance payable by the
defendant to the plaintiff is Rs. 5,48,125, to which interest
component of Rs. 1,53,475 for interest at 21% per annum
from 9/8/2016 till 9/12/2017 has to be added. And hence,
plaintiff is entitled to recover total sum of Rs. 7,01,600 from
the defendant. Apart from this, it is pleaded that in respect
of certain other shipments to Colombo through the
defendant of aluminum pressure cookers, mixer grinders,
etc., various documents as tabulated in the table at
paragraph 16 of the Plaint have to be handed over by the
defendant to the plaintiff. Hence, for recovery of the above
sum of Rs. 7,01,600 along with interest and for mandatory
injunction to direct the defendant to hand over all of the
documents enumerated at paragraph 16 of the Plaint, the
present suit has been filed against the defendant.
3. On issuance of suit summons, the defendant has
entered appearance through counsel and admitted that the
defendant was engaged to deliver the shipment of table
fans to Colombo. It was also admitted that the sealed
container containing the shipment of table fans was
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delivered to the custom yard in Bangalore on 6/6/2016 and
defendant also admitted the receipt of email dated
8/6/2016, whereby plaintiff requested the defendant not to
proceed with the shipment in order to comply with the
quality check regulations of the Government of Sri Lanka.
However, the defense raised was that defendant has
exercised due diligence by informing the carrier Safmarine
to hold the container for quality check without guaranteeing
the same to the plaintiff. And in order to help the plaintiff,
defendant sent several mails to the Safmarine to hold the
container. But since all the formalities were completed,
Safmarine shipped the container to Colombo in spite of all
efforts of the defendant. On this basis, Defendant denied
any liability for paying the amount towards the penalty
allegedly imposed by Government of Sri Lanka on MFM
Traders. Instead, it was contended that it is the plaintiff who
is liable to pay the invoice amount for shipping of Rs.
2,69,743 along with the interest component, the total
whereof comes to Rs. 3,96,733. Accordingly, the defendant
not only prayed for dismissal of the suit but also raised
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counterclaim for recovery of Rs. 3,96,733 from the plaintiff,
along with interest at 18% per annum from date of
counterclaim till date of realization.
4. On the basis of the above pleadings, the following
issues were framed:
(1) Whether the plaintiff company proves
that it had engaged the service of
defendant to deliver the shipment
containing table fans and allied
products at the Port of Colombo, Sri
Lanka via container / OTL No.
MRICU3298633/ML-IN2234425 and
shipping bill No. 8097832 dated 06-
06-2016?
(2) Whether the plaintiff company proves
that the defendant had handed over
the documents and container to the
shipping agent Safmarine on 8-6-2016
itself in spite of requests made to
hold the container for quality check?
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(3) Whether the plaintiff company proves
that, due to inadvertence on the part
of the defendant, the consignment
reached Port of Colombo, Sri Lanka on
17-6-2016 without completion of
quality check regulation as required
by the Government of Sri Lanka?
(4) Whether the plaintiff company proves
that its buyer, i.e., MFM Traders, had
taken delivery of shipment by paying
sum of Rs. 7,83,775 including
demurrage and penal charges and
debited the said amount to the
account of the plaintiff and it has
been penalized for the wrongful acts
committed by the defendant?
(5) Whether the plaintiff company proves
that it had incurred loss of Rs.
8,13,360 to resolve the mistake
committed by the defendant and the
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defendant is liable to pay the said
amount to it?
(6) Whether the plaintiff company proves
that the defendant has willfully and
unjustifiably withheld the documents
described in Para 16 of the plaintiff?
(7) Whether the plaintiff company is
entitled to recovery of sum of Rs.
7,01,600 from the defendant?
(8) Whether the plaintiff company is
entitled for interest at the rate of 21%
per annum on Rs. 5,48,125 from the
date of suit till realization?
(9) Whether the plaintiff company is
entitled for the relief of return of
documents from the defendant as
prayed for?
(10) Whether the defendant proves that it
had provided shipment service to
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plaintiff through invoices dated 14-7-
2016, 21-7-2016 and 23-7-2016 for
the amount of Rs. 88,950, Rs. 90,656
and Rs. 90,137 respectively?
(11) Whether the defendant proves that
plaintiff is liable to pay Rs. 3,96,733
to it?
(12) Whether the defendant is entitled for
relief as prayed for in the
counterclaim?
(13) What order or decree?
5. In the trial, the partner and attorney holder of the
plaintiff is examined as PW1 and got marked Ex. P1 to P28.
On behalf of the defendant, representative of the defendant
is examined as DW1 and got marked Ex. D1.
6. After closure of evidence of both sides, I have heard
the arguments of both sides and perused the records of the
case.
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7. To complete the narration of facts, it is to be noted
that initially the present suit was filed before the City Civil
Court and numbered as OS 481 of 2018 and thereafter on
the basis of memo filed by both parties, the Hon’ble City
Civil Court, as per orders dated 26-10-2023, transferred the
suit to the Commercial Court under Section 15(2) of the
Commercial Courts Act, and thereafter the suit was
proceeded from the stage which it had reached prior to the
transfer, under Section 15 (3) of the Commercial Courts Act.
8. I have perused the records of the case.
9. My answer to the issues are as follows:
Issue No. 1 : In the affirmative,
Issue Nos. 2 to 5 : As per finding,
Issue No. 6 to 9: In the negative,
Issue Nos. 10 to 12 : As per finding,
Issue No. 13 : As per final order for the following
:-
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KABC170027162023REASONS.
Issue No. 1:-
10. The case of the plaintiff in brief is that, the plaintiff is a
partnership firm engaged in the business of manufacture
and supply of household and electrical home appliances.
The defendant is engaged in business of providing freight
forwarding, logistics and related services. One MFM Traders
of Sri Lanka approached the plaintiff for supply of table fans
and issued purchase order dated 25/4/2016. To supply the
said material to MFM Traders to Sri Lanka at Port of
Colombo, plaintiff engaged services of defendant to look
after the shipping. In pursuance of the same, defendant
sent container to the plaintiff’s place and plaintiff loaded the
container with the goods / table fans and the same was
sealed and delivered to Custom Yard in Bangalore on
6/6/2016. On 8/6/2016, plaintiff realized that there was
amendment to regulations brought in by Government of Sri
Lanka which required quality certificate to accompany home
appliances. Therefore, before shipping the table fans to Sri
Lanka, it was necessary that the material should be
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inspected by certified agent and only after issuance of
quality certificate and accompanied by such quality
certificate, the goods had to be shipped to Sri Lanka. Since
the same had not been complied with in respect of the
shipment, the plaintiff immediately issued email dated
8/6/2016 to the defendant not to proceed with the shipment
until further information. On receipt of the said email, the
defendant assured the plaintiff that the consignment would
not be shipped and would be retained to comply with the
quality check. The plaintiff arranged for inspection of the
container by a certified agent, but it was found that
shipping agent of the defendant had already shipped the
containers on 8/6/2016 and therefore, the goods reached Sri
Lanka on 17/06/2016, without compliance with the quality
check regulations required by the Government of Sri Lanka.
The Custom Authorities in Colombo, Sri Lanka, therefore
refused to release the same without payment of penalty
and in the case of non-payment of penalty, the demurrage
charges were also threatened to be levied on the purchaser,
namely MFM Traders. Therefore, left with no alternative,
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MFM Traders paid penalty and demurrage charges of Rs.
7,84,775, which is equivalent to (Sri Lankan currency) LKR
17,06,027. MFM Traders has debited the said amount from
the account of the plaintiff, as a result of which the plaintiff
has incurred a loss of Rs. 7,84,775. Apart from this, plaintiff
has spent Rs. 33,093 towards travel expenditure to go to
Colombo to sort out the issue. The total of said sums comes
to Rs. 8,17,868. The shipment charges payable to
defendant for the said transportation is Rs. 2,69,743, and
after deducting the same, the balance payable by the
defendant to the plaintiff is Rs. 5,48,125, to which interest
component of Rs. 1,53,475 for interest at 21% per annum
from 9/8/2016 till 9/12/2017 has to be added. And hence,
plaintiff is entitled to recover total sum of Rs. 7,01,600 from
the defendant. Apart from this, it is pleaded that in respect
of certain other shipments to Colombo through the
defendant of aluminum pressure cookers, mixer grinders,
etc., various documents as tabulated in the table at
paragraph 16 of the Plaint have to be handed over by the
defendant to the plaintiff. Hence, for recovery of the above
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sum of Rs. 7,01,600 along with interest and for mandatory
injunction to direct the defendant to hand over all of the
documents enumerated at paragraph 16 of the Plaint, the
present suit has been filed against the defendant.
11. In support of its case, the plaintiff has examined its
partner and attorney holder as PW1 and got marked Ex. P1
to P28.
12. Ex. P1 is the power of attorney executed by one of the
partners of the plaintiff partnership firm namely Karuna
Rajesh Shah in favour of the other partner (PW1) who is
none but her own husband, authorising him to represent the
plaintiff partnership firm in the present suit. Ex. P2 is way-
bill of Safmarine in respect of transportation of table fans
which is the subject matter of the present suit. Ex. P3 is
letter by MFM traders to the plaintiff giving details of the
various penalty amounts which have been paid by MFM
traders due to the table-fans shipment having reached Sri
Lanka without quality check certificate, along with the
enclosures to the said letter, which are the various receipts
and bills in respect of payment of said penalty amounts. Ex.
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P4 is multimodal transport document issued by the
defendant in respect of earlier shipment of mixer grinders.
Ex. P. 5 is the legal notice caused by the Plaintiff to
Defendant dated 26-11-2016. Ex. P6 to P8 are the postal
receipts and acknowledgement cards in respect of service
of the said legal notice on the defendant. Ex. P9 and P10
are invoices raised by the Plaintiff against the purchaser
(MFM Traders) in respect of the table fans which were
shipped to Colombo. Ex. P11 is deed of partnership of the
plaintiff partnership firm. Ex. P12 is the VAT Registration
Certificate of the plaintiff. Ex. P13 is the CST commodities
list. Ex. P14 is the Registration Certificate under VAT of the
plaintiff. Ex. P15 is Certificate of Enrollment of the plaintiff
under Karnataka Tax on Profession, Trades, Callings and
Employment Act 1976. Ex. P16 is the Importer-Exporter
Certificate of the plaintiff. Ex. P17 is another invoice raised
by plaintiff in respect of earlier shipment of pressure
cookers. Ex. P18 is bill of lading in respect of the shipment
of table fans which is the subject matter of the present suit.
Ex. P19 is commercial invoice and Ex. P20 is the packing list
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raised by plaintiff against MFM traders in respect of
shipment of table fans. Ex. P21 is pro forma invoice in
respect of the same shipment. Exhibits P22 to P24 are
invoices raised by defendant against the plaintiff towards
freight charges. Ex. P25 is company master data of the
defendant company. Ex. P26 are printouts of emails
exchanged between the parties. Ex. P27 is 65B certificate in
respect of the printout of emails. Ex. P28 is letter written by
MFM traders to the plaintiff in respect of adjusting the
penalty amounts towards the credit payment due to the
plaintiff.
13. Per contra, the defence raised by the defendant is
that, defendant has exercised due diligence by informing
the carrier Safmarine to hold the container for quality check
without guaranteeing the same to the plaintiff. And in order
to help the plaintiff, defendant sent several mails to the
Safmarine to hold the container. But since all the formalities
were completed, Safmarine shipped the container to
Colombo in spite of all efforts of the defendant. On this
basis, Defendant has denied any liability for paying the
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amount towards the penalty allegedly imposed by
Government of Sri Lanka on MFM Traders. Instead, it is
contended that, it is the plaintiff who is liable to pay the
invoice amount of Rs. 2,69,743 (freight charges) along with
the interest component, the total whereof comes to Rs.
3,96,733. Accordingly, the defendant not only prayed for
dismissal of the suit but also raised counterclaim for
recovery of Rs. 3,96,733 from the plaintiff, along with
interest at 18% per annum from date of counterclaim till
date of realization.
14. In support of its case, the defendant has examined its
authorised representative as DW1 and got marked only one
document i.e. Ex. D1, which is board resolution authorising
DW1 to represent the defendant in the present suit.
15. Having considered the rival contentions of both
sides and the oral and documentary evidence on
record, at the outset, it is to be noted that there is no
dispute that the plaintiff had engaged the services of the
defendant to transport its shipment of table fans from India
to Colombo for the purpose of sale of the said table fans by
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the plaintiff to MFM traders. This fact is specifically pleaded
at paragraph 5 of the plaint and in the written statement at
paragraph 2, the averments at paragraph 3 to 5 are
specifically admitted to be true and correct. Moreover, the
defendant has raised the counterclaim for recovery of the
invoice amount towards freight charges in respect of the
selfsame shipment. Therefore, there is absolutely no
dispute that plaintiff had engaged the services of
defendant for transporting shipment of table fans
from India to Colombo and accordingly, Issue No. 1 is
answered in the affirmative.
Issue Nos. 2 to 5, 7 and 8:-
16. All these issues are framed with regard to the question
whether, in spite of being intimated by the plaintiff to stop
the shipment, defendant transported the container with
table fans to Colombo and since the consignment reached
Colombo without quality check certificate, the Sri Lankan
authorities imposed penalty and demurrage charges of Rs.
7,84,775 which was paid by MFM traders and MFM traders
has debited the plaintiff’s account to the said sum, and on
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this ground, whether plaintiff is entitled to recover the said
sum along with interest from the defendant, and therefore
all these issues require common discussion and hence
considered together.
17. Briefly stated, the grievance of the plaintiff is that,
after the plaintiff loaded the table fans to the container and
entrusted the same to the defendant, the sealed container
containing the table fans was deposited in Custom Yard in
Bangalore on 6/6/2016. Only at that stage, the plaintiff
realized that the Sri Lankan government has recently
amended the quality check regulations and under the
amended quality check regulations, the table fans had to be
accompanied by quality check certificate. Therefore, to
provide the quality check certificate, the table fans had to
be physically inspected in India and the certified agent had
to issue the quality check certificate which had to
accompany the table fans to Sri Lanka and unless the table
fans were accompanied by the quality check certificate, the
Sri Lankan authorities would impose penalty and also
demurrage charges till clearance of the penalty amount.
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Therefore, to avoid such adverse consequences, it is the
case of the plaintiff that on 8/6/2016, plaintiff requested the
defendant not to proceed with the shipment but to hold it
back in India till the table fans could be physically inspected
and quality check certificate could be issued in India.
18. The grievance of the plaintiff is that, defendant, in
email, assured the plaintiff that the shipment would be held
back, but, when the plaintiff arranged for inspection of the
table fans, the shipment could not be physically found and it
was realized that the defendant, contrary to its undertaking
to keep the shipment in abeyance, had handed over the
documents and container to Safmarine on 8/6/2016 itself
and Safmarine had transported the shipment to Sri Lanka
and the consignment reached Sri Lanka on 17/6/2016
without quality check certificate. As a result of which, Sri
Lankan authorities imposed penalty of Rs. 7,84,775 which
includes penalty and demurrage charges which was paid by
MFM traders and MFM traders has debited the said amount
to the plaintiff’s account. Thereby, the short case of the
plaintiff is that, due to a breach of contract by the
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defendant in keeping the shipment in abeyance (holding
back the shipment), although it had assured to do so, the
plaintiff has incurred loss of Rs. 7,84,775 and after
deducting the freight charges and including the interest
component, the plaintiff is entitled to recover a total sum of
Rs. 7,01,600 and hence for recovery of the said amount the
present suit is filed.
19. Per contra, the defence of the defendant is that in
spite of all due diligence and in spite of informing Safmarine
to hold the shipment in abeyance, Safmarine transported
the shipment and therefore defendant cannot be held liable
for the same.
20. To prove its case, the Plaintiff principally relies upon
the emails exchanged between the parties to contend that,
there is a breach of contract by the defendant in allowing
the shipment to proceed to Sri Lanka, although defendant
had specifically assured the plaintiff to keep the same in
abeyance. In this regard, the printout of emails exchanged
between the parties are collectively marked as Ex. P26.
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21. The perusal of Ex. P26 discloses that on the first page
of Ex. P26, (running page 93), there is email dated 8/6/2016
written by the plaintiff to defendant to hold back the
consignment in Bangalore since QC (Quality Check) test has
not been completed. At running page 95 of Ex. P26, there is
an email dated 10/6/2016 issued by the defendant to the
plaintiff stating that the earlier email dated 8/6/2016 is
noted and the shipment will not sail on the 13th vessel and
to confirm to plan shipment for the 20th. This email
purports to show that there was assurance by the defendant
to the plaintiff that the consignment will not be shipped on
the 13th but will be held back till further confirmation.
22. At Ink page 96, there is an email dated 15/6/2016
issued by defendant to the shipping agent namely
Safmarine stating that the certified agent will inspect the
goods and issue quality certificate and therefore the cargo
should be physically available in India to inspect the goods
and issue quality certificate. At ink page 97, there is a reply
by Safmarine to the defendant on the same day i.e.
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15/6/2016 stating that the consignment is already on the
way to Colombo.
23. The reason for this fiasco is available in the email at
running page 99, dated 14/6/2016, issued by Safmarine to
the defendant, where it is stated as follows:
“Once the unit is gated in and units are moved,
we have very limited chance of holding it. Even
our team replied to your mail on 8th June,
(Freight Systems), to amend the booking
online till when you want to hold. It seems
it was not actioned.”
(Emphasis Supplied)
24. Therefore, it is clear that the reason why the
consignment was not held back in India, but was allowed to
be shipped to Colombo on 13/6/2016 is because the online
booking was not amended.
25. When DW1 is asked why the online booking was not
amended, his answer is at paragraph 11 of cross-
examination dated 18-06-2024 as follows:
“If I am asked whether we have amended online
booking as requested by third-party delivery agent
in email dated 14-6-2016 at 5.40 p.m. at page 7 of
Ex. P26, I say we have not amended online
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KABC170027162023booking since it was a time-consuming
process and therefore we were in continuous
touch with the liner.”
(Emphasis Supplied)
26. Relying on the above material, it was the argument of
learned counsel for the plaintiff that immediately after the
container was entrusted to the defendant for transportation
to Colombo, on 8/6/2016 itself, the plaintiff had intimated to
the defendant to hold back the consignment and not allow it
to go to Colombo without the quality check certificate. And
the defendant had also assured in the email dated
10/6/2016 that the consignment will be held back and will
be sent to Colombo only after further confirmation by the
plaintiff. But in the meantime, the shipper, namely
Safmarine, who is agent of the defendant, loaded the
container to the ship on 13/6/2016 itself and the
consignment reached Colombo without QC certificate on
17/6/2016 leading to imposition of penalty and demurrage
charges and this occurred only because of the failure on the
part of the defendant to amend the online booking.
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Therefore, it was argued that there is a breach of contract
and negligence on the part of the defendant and therefore
the defendant is liable to indemnify the plaintiff for the loss
and damage suffered due to the table fans reaching
Colombo without a quality check certificate.
27. No doubt, at first blush, the said argument is attractive
and appears to show negligence and breach of contract on
the part of the defendant. However, having considered the
overall facts of the case, I am of the view that the plaintiff is
not entitled to the relief for recovery of the penalty and
demurrage charges imposed on MFM Traders, from the
defendant for the following reasons.
28. Firstly, from the above case put forward by the
plaintiff, it is clear that it is the case of the plaintiff that
there was breach of contract by the defendant in failing to
hold on to the consignment in India, although specifically
assured to do so in the email dated 10/6/2016. This is not a
case seeking compensation for wrongful act, because, once
the goods are entrusted to the freight forwarding agent, it is
no part of the duty of the freight forwarding agent to hold
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on to the goods. Therefore, the essence of the claim of the
plaintiff against defendant is that, plaintiff intimated the
defendant to hold on to the cargo (email dated 08-06-2016)
and defendant assured to do so (email dated 10-06-2016)
and thereafter failed to do so which shows that, essentially,
this is a claim arising out of breach of contract by the
defendant.
29. The plaintiff is a partnership firm. For the plaintiff to
maintain any suit for recovery of damages for breach of
contract, it is necessary for the plaintiff to show that the
plaintiff is a registered partnership firm with the Registrar of
Firms. Otherwise, the suit would be hit by Section 69(2) of
the Partnership Act.
30. For ready reference, Section 69 of the Partnership
Act is extracted below as follows;
69. Effect of non-registration.–(1) No suit to
enforce a right arising from a contract or
conferred by this Act shall be instituted in any
Court by or on behalf of any person suing as a
partner in a firm against the firm or any person
alleged to be or to have been a partner in the
firm unless the firm is registered and the
person suing is or has been shown in the
Register of Firms as a partner in the firm.
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KABC170027162023
(2) No suits to enforce a right arising from
a contract shall be instituted in any Court
by or on behalf of a firm against any third
party unless the firm is registered and the
persons suing are or have been shown in
the Register of Firms as partners in the
firm.
(3) The provisions of sub-sections (1) and (2)
shall apply also to a claim of set-off or other
proceeding to enforce a right arising from a
contract, but shall not affect–
(a) the enforcement of any right to sue for the
dissolution of a firm or for accounts of a
dissolved firm, or any right or power to realise
the property of a dissolved firm; or
(b) the powers of an official assignee, receiver
or Court under the Presidency-towns Insolvency
Act, 1909 (3 of 1909), or the Provincial
Insolvency Act, 1920 (5 of 1920), to realise the
property of an insolvent partner.
(4) This section shall not apply–
(a) to firms or to partners in firms which have no
place of
business in the territories to which this Act
extends, or whose places of business in the said
territories are situated
in areas to which, by notification under Section
56, the
Chapter does not apply, or
(b) to any suit or claim or set-off not exceeding
one hundred
rupees in value which, in the Presidency-towns,
is not of a kind specified in Section 19 of the
Presidency Small Cause Courts Act, 1882 (15 of
1882), to outside the Presidency-towns, is not of
a kind specified in the Second Schedule to the
Provincial Small Cause Courts Act, 1887 (9 of
1887), or to any proceeding in execution or
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KABC170027162023
other proceeding incidental to or arising from
any such suit or claim.
(Emphasis Supplied)
31. Therefore, on plain reading of Section 69(2) of the
Partnership Act, it is clear that a partnership firm which is
not registered with the Registrar of Firms cannot maintain a
suit to enforce any right arising from contract. Since this is a
suit for recovery of damages for breach of contract by the
defendant, certainly Section 69(2) of the Partnership Act is
attracted. It is to be noted that, from the plaint at paragraph
2, it is clear that the plaintiff is a partnership firm, but
neither is there any pleading nor is any document produced
to show that the plaintiff is a registered partnership firm
with the Registrar of Firms. It is precisely for this reason
that, after the matter was initially reserved for judgment, by
orders dated 7/3/2025, this court reopened the hearing,
inter alia, for seeking the following clarification from counsel
for the plaintiff:
“Firstly, the present suit is filed by the
plaintiff partnership firm for recovery of
money. Under Section 69 of the
Partnership Act, in order to render the suit
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CT 1390_Com.O.S.No.1282-2023_Judgment.doc
KABC170027162023maintainable, it is necessary for the
plaintiff to prove that the plaintiff is a
registered partnership firm, but no
document is produced to show that the
plaintiff is registered under the Partnership
Act. Hence, counsel for plaintiff to clarify in
this regard.”
32. In spite of specifically reopening the hearing for the
plaintiff to clarify in this regard, the plaintiff did not produce
any document to show that the plaintiff is a registered
partnership firm with the Registrar of Firms and instead,
counsel for plaintiff filed written synopsis reiterating that
the partnership deed is produced at Ex. P11. It is not
sufficient to produce the partnership deed, but the plaintiff
was expected to produce the extract of Registrar of Firms to
show that the plaintiff is registered with the Registrar of
Firms and the persons suing are shown as partners in the
register of firms maintained in the Registrar of Firms’ office.
Having not done so, the suit for recovery of damages and
also for return of documents which are essentially to
enforce rights arising from contract is not maintainable
since the plaintiff is unregistered partnership firm and
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KABC170027162023
therefore the suit is barred under Section 69(2) of
the Partnership Act and this is the first reason for
dismissing the suit.
33. Secondly, it is to be noted that although the plaintiff
seeks to put the blame on the defendant for failure to hold
on to the consignment due to defendant not amending the
online booking as directed by Safmarine, the fact remains
that there was initial negligence on the part of the plaintiff
in loading the table fans to the container and sealing the
same without complying with the requirement of quality
check certification.
34. In this regard, it is the specific case of the plaintiff
that only after the table fans were loaded into the
container, there was an amendment to the regulations
brought in by the Government of Sri Lanka, requiring quality
check certification. Therefore, the plaintiff seeks to contend
that since the amendment of the regulations took place
after the table fans were loaded in the container,
immediately after coming to know about the amendment,
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KABC170027162023
on 8/6/2016, the plaintiff intimated to the defendant to hold
back the container in India.
35. Therefore, the date on which the amendment to the
regulations was brought about by the Government of Sri
Lanka requiring quality check certification becomes a
relevant factor. The said regulations and the amendment
thereto are not produced and brought on record. Therefore,
there is no material to show on what date the amendment
was brought into force requiring quality check certification
for the table fans. In the cross-examination of PW1, at page
15 of the deposition dated 28/09/2022, when he is asked
whether at the time of loading the table fans to the
container, the defendant was informed that quality check
certification has not taken place, he has said that quality
check certification does not concern the plaintiff and it has
to be looked after by the purchaser i.e. MFM Traders. At
pages 17-18 of the same deposition of cross-examination,
PW1 has stated that he does not know when the
amendment of the regulations was brought into force by Sri
Lanka. At page 18 of the same deposition, he says that
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KABC170027162023
when the goods were in the Bangalore warehouse, he came
to know about the amendment brought about by the
Government of Sri Lanka. It is for this reason that in the
order sheet dated 07-03-2025, while reopening the
hearing, after initially reserving the matter for judgment,
this Court also sought second clarification from the counsel
for plaintiff as follows;
“Secondly, it is noted that as per the case
of the plaintiff at paragraph 6 of the plaint,
there was amendment to the regulations
for quality check by the Government of Sri
Lanka in respect of home appliances which
necessitated plaintiff to issue email dated
8-6-2016 requesting the defendant not to
proceed with the shipment. The date on
which the regulations were amended by
the Government of Sri Lanka is not brought
on record. This is a relevant point because
unless the plaintiff can show that the
regulations were amended after the
container was loaded with plaintiff’s goods
at the plaintiff’s site, it will mean that there
was also contributory negligence on the
part of the plaintiff in loading the goods
without obtaining the requisite quality
certificate. Therefore, it is necessary for
the plaintiff to prove the date on which the
amendment of the regulations was brought
in by the Government of Sri Lanka to show
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CT 1390_Com.O.S.No.1282-2023_Judgment.doc
KABC170027162023that there is no contributory negligence on
the part of the plaintiff in loading the
goods into a container without obtaining
the quality certificate.”
36. In spite of this clarification specifically sought from
the plaintiff, as already noted supra, the counsel for plaintiff
has only filed written synopsis reiterating the contentions
already taken. The date on which the amendment of the
regulations was brought about by the Government of Sri
Lanka is not brought on record.
37. Therefore, there is nothing on record to show that,
plaintiff realized the requirement of quality check certificate
only after the table fans were loaded in the container and
entrusted to the defendant. This being the case, when the
plaintiff itself has loaded the table fans to the container and
entrusted the same to the defendant on 6-6-2016 itself, as
pleaded in paragraph 6 of the plaint, the plaintiff could not
have expected the defendant to hold on to the container.
The plaintiff informed the defendant to hold on to the
container only on 8/6/2016. It was the duty of the plaintiff to
load the table fans after ensuring compliance with all the
35
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KABC170027162023
requirements for exporting the goods. When the plaintiff
has failed to prove that the amendments to the regulations
were brought about subsequent to 6/6/2016, it means that,
the initial negligence was on the part of the plaintiff itself in
loading the table fans to the container and entrusting it to
the defendant for shipment without quality check
certification. Such being the case, the plaintiff cannot seek
to impose liability on the defendant on the ground that, due
to the negligence of defendant or breach of contract by the
defendant, the plaintiff has suffered loss due to imposition
of penalty by the Government of Sri Lanka.
38. Thirdly, as already noted above, in the cross-
examination of PW1 at page 15 of the deposition, PW 1 has
specifically stated that obtaining the quality check
certification is the lookout of the purchaser and the seller,
i.e., the plaintiff, is not concerned with the same. Such
being the case, if any penalty or demurrage charges were
imposed by the Government of Sri Lanka due to absence of
quality check certification, it would be the lookout of the
purchaser, i.e., MFM Traders, to pay the same and MFM
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KABC170027162023
Traders could not have shifted the burden to the plaintiff by
deducting the said amount from the credit amount payable
to the plaintiff.
39. It is to be noted that, Issue No. 4 specifically places
the burden on the plaintiff to prove that the sum of Rs.
7,83,775 has been debited to the account of the plaintiff by
MFM Traders. The only document produced by the plaintiff
to show that MFM Traders has debited the said amount to
the plaintiff’s account is Ex. P-28, which is produced
belatedly and got marked on 19-10-2024 by recalling PW1
after the matter had reached the stage of final arguments.
40. The perusal of Ex. P-28 discloses that it is a letter by
MFM Traders written to the plaintiff dated 10/10/2016
stating the details of the various penalties imposed and
concluding as follows:
“These payments have been made on your
behalf and the total amount will be
adjusted against your outstanding
payment. Please find the necessary
payment receipt attached for your records.
This is for your kind information. If you
have any questions or require further
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CT 1390_Com.O.S.No.1282-2023_Judgment.doc
KABC170027162023clarification, please do not hesitate to
contact us.”
41. This letter at Ex. P-28 is produced along with IA No. 5
only on 21/9/2024. And after the applications for recalling
PW1 and seeking leave to produce additional document was
allowed, this document is got marked on 19/10/2024. This
letter at Ex. P-28 by MFM Traders has only expressed its
intention to adjust the amount of the penalty and
demurrage charges against outstanding payment payable
to the plaintiff. Although Ex. P-28 is produced and got
marked only in 2024, no document is produced to show that
the said penalty and demurrage charges were actually
adjusted against outstanding payment to the plaintiff.
42. In the cross-examination of PW1 dated 7/1/2025, at
paragraph 11, he has stated as follows:
“If I am asked whether I have produced
any document to show that in
furtherance to Ex. P-28, MFM Traders
have adjusted the amount shown as paid
under Ex. P-28 against credit payments
payable to the plaintiff, I say I have to
check the records. Now, the entire P-
series exhibits are given to witness and
after going through all the documents,
38
CT 1390_Com.O.S.No.1282-2023_Judgment.doc
KABC170027162023the witness says the documents to
show that MFM Traders have
adjusted the payment against credit
payment payable to the plaintiff is
not there.”
(Emphasis Supplied)
43. Therefore, firstly, PW1 has categorically admitted in
earlier cross-examination that obtaining quality check
certification is the lookout of the purchaser MFM Traders.
Secondly, except the letter at Ex. P-28, no document is
produced to show that the penalty and demurrage charges
were actually adjusted to plaintiff’s account by debiting the
said amount towards credit payment payable to plaintiff.
Thirdly, it is to be noted that as per Ex. P3, which is the
letter written by MFM traders, giving the breakup of all the
penalties and demurrage charges imposed on MFM traders
by Government of Sri Lanka, the substantial amount is
custom penalty charges of Sri Lankan Rs. 1,20,000/= but at
serial No. 1 of the said letter (Ex. P. 3) itself, it is stated that
there is no receipt for the same. Therefore, when according
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KABC170027162023
to document of plaintiff, when there is no receipt for the
substantial payment for custom penalty charges and when
there is no document to show that MFM traders have
actually deputed the said amount against credit payments
payable to the plaintiff, even assuming that there was a
breach of contract and negligence by the defendant in
allowing the shipment to reach Colombo without quality
check certification, the plaintiff, having not proved that
plaintiff has incurred any loss or damage, is not entitled to
claim for recovery of the penalty and demurrage charges
amount from the defendant.
44. In conclusion, I hold that, firstly, the claim for the
plaintiff arises out of contract and the plaintiff being an
unregistered partnership firm cannot maintain the present
suit. Secondly, there was negligence on the part of the
plaintiff itself in loading the table fans to the container
without quality check certification, and therefore the
plaintiff cannot blame the defendant for allowing the
shipment to reach Colombo. This is so because the plaintiff
has failed to bring on record documents to show that
40
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KABC170027162023
amendment to the regulations by the Sri Lankan
Government requiring quality check certification was
subsequent to 6/6/2016 when plaintiff loaded the table fans
to the container. Thirdly, plaintiff has failed to prove that as
a result of the table fans reaching Colombo without quality
check certification, the penalty and demurrage charges
were actually debited from the plaintiff’s account by MFM
Traders, and therefore plaintiff cannot claim to recover the
said penalty and demurrage charges from the defendant,
even assuming that the suit is maintainable and even
assuming that there was breach of contract by defendant.
45. For all these reasons, I answer the above issues
by holding that the plaintiff is not entitled to
recovery of the suit claim of Rs. 7,01,600/= from the
defendant.
Issue Nos. 6 and 9:
46. These issues are framed regarding the entitlement of
the plaintiff to prayer No. iii of the plaint, i.e., to direct the
defendant to hand over the documents stated at paragraph
16 of the plaint. However, in this regard, the plaintiff has
41
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KABC170027162023
not produced any evidence to show that the defendant has
willfully withheld the said documents. The documents
enumerated at paragraph 16 are Exchange Control Shipping
Bill and other documents. In the cross-examination of DW1,
nothing is elicited from DW1 to show that the plaintiff is
entitled to seek the above documents from the defendant or
that the defendant is willfully withholding the above
documents. Except for producing a multimodal transport
document at Ex. P4, in respect of an earlier shipment of
mixer grinders and an invoice at Ex. P. 17 in respect of sale
of pressure cookers to a third party entity in Sri Lanka, no
documents are produced to show that the documents
sought for, are willfully withheld by the defendant.
Therefore, the plaintiff is not entitled to the relief mandatory
injunction directing the defendant to return the documents,
and accordingly, I answer issue Nos. 6 and 9 in the
negative.
Issue Nos. 10 to 12:
47. These issues are framed regarding the entitlement of
the defendant to the counterclaim. The counter-claim of the
42
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KABC170027162023Defendant is essentially for recovery of the invoice amounts
raised by the defendant against the plaintiff for shipping the
table fans from India to Colombo. The principal amount of
the invoices is Rs. 2,69,743, and after adding the interest
component, the defendant is seeking recovery of Rs.
3,96,733. The fact that the plaintiff is liable to pay the
principal invoice amount of Rs. 2,69,743 to the defendant
towards freight charges for the consignment of table fans
from India to Colombo is admitted in the plaint itself. In this
regard, at paragraph 24 of the plaint, while computing the
suit claim, the total outstanding of Rs. 8,17,868 is deducted
by reducing Rs. 2,69,743, being the sum payable by the
plaintiff towards shipment. After deducting the said sum,
the principal suit claim of Rs. 5,48,125 is arrived at.
Therefore, the plaintiff, in the plaint itself, categorically
admits that the plaintiff is due to pay the principal
counterclaim amount of Rs. 2,69,743 to the defendant
towards shipment/freight charges. The only reason the
plaintiff contends that, it is not liable to pay the said amount
43
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KABC170027162023
is because the defendant is liable to pay the higher amount
of Rs. 8,17,868 towards penalty and demurrage charges.
48. I have already held supra that the plaintiff is not
entitled to recover penalty and demurrage charges from the
defendant for the detailed reasons already discussed above.
Such being the case, the plaintiff is not entitled to adjust the
freight charges payable to Defendant against demurrage
and penalty charges and therefore, the plaintiff is liable to
pay the freight charges of Rs. 2,69,743 to the defendant.
49. Be it noted that, the bar under section 69 of the
Partnership Act is only in respect of suit by unregistered
firm and there is no bar for institution of suit or claiming
counterclaim against unregistered firm. Therefore, the
counterclaim against the plaintiff, although the plaintiff is an
unregistered firm is maintainable.
50. Insofar as the interest on the invoice amount is
concerned, the invoices raised by the defendant against the
plaintiff, which are produced by the plaintiff itself (Ex. P22
to P24), do not contain any condition for imposing interest
for delayed payment. No legal notice has ever been issued
44
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KABC170027162023
by the defendant to the plaintiff putting the plaintiff on
notice that Plaintiff liable to pay interest on the outstanding
invoice amounts. Therefore, under section 3 of the Interest
Act, 1978, the defendant is entitled to interest only from the
date on which the counterclaim was raised. Accordingly, I
answer issue Nos. 10 to 12 by holding that the
defendant is entitled to recover the principal invoice
amount for freight charges of Rs. 2,69,743, along with
interest from the date on which the counterclaim was filed.
Insofar as the rate of interest is concerned, considering that
it is a commercial transaction between the parties, I am of
the view that the defendant is entitled to interest at 9% per
annum. Accordingly, I hold that the defendant is entitled to
recover the invoice amount of Rs. 2,69,743, along with
interest at the rate of 9% per annum from the date of the
counterclaim (i.e., 2/3/2019) till the date of realization from
the plaintiff.
Issue No. 13:
51. Having answered issue Nos. 1 to 12 as above, I
proceed to pass the following :-
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CT 1390_Com.O.S.No.1282-2023_Judgment.doc
KABC170027162023ORDER.
The suit of the plaintiff is dismissed,
with cost.
The counterclaim of the defendant is
partly allowed, with cost and it is held that,
defendant is entitled to recover sum of Rs.
2,69,743/= along with interest of the rate
of 9% per annum from date of
counterclaim. i.e. 02/03/2019 till date of
realization, from the plaintiff.
Office to draw decree accordingly.
Office to issue soft copy of this
judgment to both sides, by email, if
furnished.
[Dictated using MacWhisper Pro 10.8.1, transcript revised,
corrected, signed and then pronounced by me in open court
on this the 19th day of April, 2025]
SUDINDRA Digitally signed by
SUDINDRA NATH SNATH S Date: 2025.04.22 18:02:28
+0530(S. Sudindranath)
LXXXIII ADDL.CITY CIVIL AND SESSIONS JUDGE,
COMMERCIAL COURT, BENGALURU
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KABC170027162023ANNEXURE
1. List of witnesses examined on behalf of
Plaintiff/s:
PW1 : Sri. Rajesh Shah
2. List of witnesses examined on behalf of
Defendant/s:
DW1 : A. Anthony Thinakaran
3. List of documents marked on behalf of
Plaintiff/s:
Ex.P1 : Original GPA dated 09.01.2018
Ex.P2 : Bill of lading dated 13.06.2016
Ex.P3 : Bill of lading
Ex.P4 : Bill of lading
Ex.P5 : Legal notice dated 28.11.2016
Ex.P6 & Two postal receipts
P7:
Ex.P8 : Postal acknowledgment
Ex.P9 & Two commercial invoice
P10 :
Ex.P11 : Original partnership deed dated 15.04.2023
Ex.P12 : Original VAT certificate dated 02.05.2015
Ex.P13 : Original CST Commodities
Ex.P14 : Original dealers partners
Ex.P15 : Original certificate of enrollment issued under
Karnataka Tax on Profession, Trades, Callings and
employments Act, 1976
Ex.P16 : Original certificate of importer/exporter code
47
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KABC170027162023Ex.P17 : Original Commercial invoice dated 06.07.2016
Ex.P18 : Original shipping bill dated 06.06.2016
Ex.P19 : Original commercial invoice dated 28.07.2016
Ex.P20 Original packing list dated 28.07.2016
Ex.P21 Original purchase order dated 25.04.2016
(Proforma Invoice)
Ex.P22 Invoice dated 04.06.2016
Ex.P23 Invoice dated 13.07.2016
Ex.P24 Invoice dated 15.07.2016
Ex.P25 ROC extract of defendant company
Ex.P26 Several e-mail communications between plaintiff
and defendant.
Ex.P27 Certificate under Section 65B of the Indian
Evidence Act pertaining to Ex.P25 and P26.
Ex.P28 Letter dated 10.10.2016
4. List of documents marked on behalf of
Defendant/s:
Ex.D1 Resolution of Board of Directors auhorising DW1.
(S. Sudindranath)
LXXXIII ACC & SJ,
(COMMERCIAL COURT), BENGALURU
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