KAVERI ENGINEERING INDUSTRIES LTD. versus UNITED SHIPPING CORPORATION LTD. AND ANR.

Citation: [1995] SUPP. 6 S.C.R. 796 · Decided: 15-12-1995 · Supreme Court of India · Bench: K. RAMASWAMY, B.L. HANSARIA · Disposal: Appeal(s) allowed

Judgment (excerpt)

-
A 
KA VERI ENGINEERING INDUSTRIES LTD. 
v. 
UNITED SHIPPING CORPORATION LTD. AND ANR. 
DECEMBER 15, 1995 
B 
[K. RAMASWAMY AND B.L. HANSARlA, JJ.) 
l11dia11 Contract Act, 1872-Valid contracr:-Transhipment of goods for 
a fixed freight charge-frrespective of volume of carg<r-Demand for freight 
charges based 011 the volume of the freight-Suit for specific peifonnance-f11-
c terim order obtained--Bill of lading released-Shipment was effected-Con-
tractual obligations fulfilled-Suit becomes inftuctuous. 
Arbitration Act, 194~Section 34--Dispute arbitrable under the arbitra-
tion clause of the contract-Civil suit not maintainable. 
D 
Appellant and the second respondent, a shipping agent entered into 
a contract in respect of a transhipment of 400 MT of fabricated steel 
structures for a freight Charge of Rs. 2 lakhs (irrespective of volume of 
cargo). Second respondent demanded Rs. 10,70,000 as freight charges 
based on the volume of the freight. Appellant refused and paid only Rs.2 
E lakhs. When the second respondent refused to release the bill of lading, 
the appellant filed a Civil Suit for specific performance in the High Court, 
and obtained an ad-interim order pursuant to which the bill of lading was 
cleared. The High Court dismissed the suit as infructuous. The first 
respondent filed an application to reopen the suit. The Division Benell 
declared that the suit was still deemed to be pending and directed the 
F disposal of the suit. Hence this appeal. 
Allowing the appeal and setting aside the Division Bench's order and 
restoring the order of the Single Judge, this Court 
G 
HELD : Since the bill of lading was already released to the appellant 
for transhipment of the goods to Chittagong in terms of the contract, the 
appellant had contracted with ti1e second respondent and the shipment 
was effected, nothing more needs to be done in this case. As admitted by 
the second respondent the suit has become infructuous. If any rights arise 
in the transaction it would be open to the parties to work out the same 
H according to law. [798-G-H] 
796 
>-
-
\ 
j 
KAVERIENGG.INDS.LTD.v. UNITEDSH!PPINGCORPN.LTD. 797 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 12080 of A 
1995. 
From the Judgment and Order dated 26.7.93 of the Madras High 
Court in O.S.A. S.R. No. 28783 of 1991. 
Raju Ramachandran, Braj K. Mishra, Josph Pookkatt and Ezaj Maq-
B 
boo! for the Appellant. 
The foltowing Order of the Court was delivered : 
Pursuant to the order passed by this Court on November 16, 1995, C 
the counsel for the petitioner communicated to the respondent 30th 
November, 1995 indicating that the respondent is at liberty to engage a 
counsel. This is stated in the affidavit and the enclosed letter dated 
December 11, 1995 filed by Mr. Ejaz Maqbool, counsel for the appellant. 
In view of the fact that the first respondent has been duly communicated D 
the order and no arrangement to engage a counsel is made, the matter is 
being disposed of on merits. 
Leave granted. 
Though notice has been served on the respondents as ordered earlier E 
none appears through counsel, on representation has also been made. 
From the narration of the facts, it is clear that the appellant offered 350 
MT 400 to MT of fabricated steel structures for carriage by the shipping 
agent, the second respondent, from Madras Port Trust to Chittagong 
(Bangladesh) by vessel M.V. Siuli, irrespecitve of the volume of the cargo. 
On negotiation, the second respondent accepted the offer to lift 400 MT 
of the appellant's cargo for a freight charge of RS. 2 lakhs and thus the 
appellant and the second respondent entered into a concluded contract for 
shipment of 400 MT of fabricated steel structures to Chittagong through 
the aforesaid vessel. 
Later, the second respondent issued a telex message on July 12, 1980 
calling upon the appellant to pay Rs. 10, 70,000 as freight charges based 
on the volume of the freight against the contracted freight charge of Rs. 2 
lakh on weightage basis. Thereupon the appellant gave a reply that under 
F 
G 
the concluded contract the second respondent was entitled only for Rs. 2 H 
798 
SUPREME COURT REPORTS (1995] SUPP. 6 S.C.R. 
A lakhs and that, therefore, the cheque in that behalf was issued on July 14, 
1980. Since the second respondent refused to release the bill of lading, the 
appellant filed Civil Suit No. 409/80 on July 21, 1980 on the original side 
of the Madras High Court seeking the specific performance of the contr

Excerpt shown. Read the full judgment & AI analysis in Lexace.