Sunita Tannery and Others vs Beekay Niryat (P) Ltd.

Jyotirmay Bhattacharya, J.—This First Appeal is directed against the judgment and decree passed by the learned 3rd Civil Judge (Senior Division) Alipore on 10th June, 2009 in Title Suit No. 139 of 2004 whereby the plaintiff''s suit was decreed on contest.

The plaintiff was declared as owner of the machine described in schedule "A" (Ext. 2) appended to the plaint. The defendants were directed to pay a sum of Rs. 39,09,953.00 (Rupees thirty nine lakhs nine thousand nine hundred fifty three) only to the plaintiff with interest thereon at present bank rate with effect from the date of filing of the suit till recovery thereof. Such payment was directed to be made within sixty days from the date of the order. The defendants were further directed to pay a sum of Rs. 1,55,000.00 (Rupees one lakh fifty five thousand) only to the plaintiff which was paid by the plaintiff to the defendants towards advance within sixty days from the date of the order in default, the plaintiff was given liberty to put the decree into execution.

So far as the rental value of the machine is concerned, the plaintiff''s entitlement to recover the said rental value by a separate proceeding and upon proper enquiry with the help of Engineer and/or Advocate Commissioner was declared. At the same time, the counter-claim filed by the defendants in the said suit was dismissed.

The legality and/or propriety of the said judgement and decree of the learned Trial Judge is under challenge in this First Appeal at the instance of the defendants.

Let us now consider the merit of the said appeal in the facts of the instant case. The plaintiff is a Limited Company incorporated under the Companies Act, 1956. The plaintiff has got no tannery of its own and as such, the plaintiff deployed the defendants to carry its job on order basis in the factory of the defendants at Premises No. 128, South Tangra Road, Kolkata -700 046, within P.S. Tiljala. The plaintiff from time to time placed various orders verbally before the defendants for manufacturing of finished leather goods to be exported out of India. Accordingly, several oral contracts were entered into between the parties. The plaintiff supplied some machineries as mentioned in schedule "A" of the plaint to the defendants for processing the leather goods and for making those leather goods finished as per the order of the plaintiff. One of the terms and conditions of the aforesaid order was that the plaintiff would be entitled to take back its machineries and equipments from the tannery of the defendants without any obstruction/hindrance in any manner whatsoever, on revocation of the contract. It was also agreed between the parties that any renovation, repair and civil work and/or additional construction in the said premises and/or in the plant and machineries shall be taken by the defendant at his own cost. The plaintiff claims that the machineries which were installed in the defendants'' tannery by the plaintiff are valued at Rs. 39,09,953.00 (Rupees thirty nine lakh nine thousand nine hundred fifty three). It was stated in the plaint that the plaintiff for protecting the machineries installed in the defendant''s tannery insured those machineries and renewed the Insurance Policy from time to time and paid Insurance premium of the said machineries. The said Insurance is still valid. It is also stated by the plaintiff that the Insurance authority has also accepted the value of the said machineries as Rs. 39,09,953.00 (Rupees thirty nine lakh nine thousand nine hundred fifty three) and premium was also realised by the Insurance authority from the plaintiff accordingly. The plaintiff repeatedly requested the defendants for return of its machineries but the defendant failed and neglected to take any step whatsoever to return the machineries to the plaintiff. It is further disclosed in the plaint that the plaintiff demanded the return of those machineries as in spite of repeated reminders, the defendants failed and neglected to improve the quality of finished leather goods. As a result of which, the plaintiff had to suffer tremendous loss and good will from its foreign customers. Since even the advance money amounting to Rs. 1,50,000.00 (Rupees one lakh fifty thousand) has not been refunded to the plaintiff in spite of demand being raised by the plaintiff from the defendants, the suit was filed after cancellation of the agreement, seeking declaration of its ownership over the machineries mentioned in Schedule ''A'' of the plaint, return of these machineries or alternatively for payment of the value of these machineries, refund of the advance money and other incidental relief including realisation of the rental value of these machineries.

The defendants contested the said suit by filing written statement. They stated that they supplied goods to the plaintiff without receiving payment. The defendants, thus, claimed that since the plaintiff failed to pay their dues, they adjusted price of the machineries with the dues payable by the plaintiff to the defendants. The defendants claimed that the valuation given in the Insurance premium report is a collusive one and it was made without inspecting the nature and condition of the machines. The defendant further claimed that a sum of Rs. 1,50,000.00 (Rupees one lakh fifty thousand) was paid by the plaintiff to the defendants, in part satisfaction of the defendants'' claim. They denied that a sum of Rs. 1,50,000.00 (Rupees one lakh fifty thousand) was paid by the plaintiff to the defendants as and by way of advance to the defendants. The defendants claimed that the machinery supplied by the plaintiff to the defendant were all condemned machineries which did not function at any point of time. They also denied the cancellation of the agreement between the parties from June, 2001. They further stated that they have no obligation for maintaining the defunct machineries. They claimed that the particulars of the losses and damages mentioned in schedule "B" of the plaint are imaginary and baseless. The defendant thus, not only prayed for dismissal of the suit but made a counter-claim in the said suit praying for a decree for a sum of Rs. 60,00,000.00 (Rupees sixty lakh) only from the plaintiff on account of non-payment of their bills raised due to goods sold and delivered to the plaintiff from time to time. The defendants have also prayed for a decree for a sum of Rs. 30,00,000.00 (Rupees thirty lakh) only from the plaintiff for the loss they suffered in their business. The defendants have also prayed for a decree for a sum of Rs. 35,00,000.00 (Rupees thirty five lakh)) only against the plaintiff for the loss of their business of cow leathers. The defendant have also prayed for a sum of Rs. 10,00,000.00 (Rupees ten lakh) only towards sale tax alternatively to furnish sale tax declaration form to this defendants.

The parties led their evidence in respect of their respective claims and thereafter the suit was tried on the basis of the pleadings and the evidence of the respective parties. After scanning the evidence of the respective parties, learned Trial Judge held that the plant and machineries described in schedule "A" of the plaint lying in the suit factory/tannery admittedly, belong to the plaintiff and the value of the said plant and machineries is Rs. 39,09,953.00 (Rupees thirty nine lakhs nine thousand nine hundred fifty three). The learned Trial Judge held that the defendants failed to prove their counter-claim as they failed to produce any material including their books of account to substantiate their counter-claim which they claimed on account of various counts as mentioned above. The learned Trial Judge thus, held that the defendants were not justified in withholding the delivery and/or return of the machineries belonging to the plaintiff as mentioned in schedule "A" of the plaint and as such the learned Trial Judge passed the aforesaid decree declaring the plaintiff''s title in those machineries and also directed the defendants to refund a sum of Rs. 1,50,000.00 (Rupees one lakh fifty thousand) which was paid by the plaintiff to the defendants by way of advance. A decree for enquiry was also passed by the learned Trial Judge with regard to the plaintiff''s claim for rental value of the machines mentioned in schedule "A" of the plaint which are lying in the defendants'' factory.

Mr. Ahin Chowdhury, Learned Senior Counsel appearing for the defendants/appellant was very precise in his submission while arguing the appeal challenging the legality of the decree impugned therein.

Mr. Chowdhury, submits that his client is not aggrieved by that part of the decree by which the plaintiff''s ownership in respect of those machineries was declared. He however, submits that since the suit has been framed under the scheme of order 20 Rule 10 of the Code of Civil Procedure, the learned Trial Judge ought not to have passed a decree for payment of a sum of Rs. 39,09,953.00 (Rupees thirty nine lakh nine thousand nine hundred fifty three) towards the value of the machineries mentioned in schedule "A" of the plaint without allowing the plaintiff''s principal and primary prayer for return of those machineries to the plaintiff. He further argued that the decree for payment of the value of the plant and machinery amounting to Rs. 39,09,953.00 (Rupees thirty nine lakh nine thousand nine hundred fifty three) by the defendants to the plaintiff is illegal inasmuch as such decree was passed by the learned Trial Judge without holding that return of those machineries to the plaintiff is not possible. He strenuously argued before us that when the learned Trial Judge held that defendants failed to substantiate their counter-claim and nothing was due of payable by the plaintiff to the defendants and the defendants were not justified in withholding the return of the plaintiff''s machineries supplied to the defendants and/or installed in the defendants'' factory even after termination of the contract, the learned Trial Judge ought to have allowed the plaintiff''s primary relief which the plaintiff claimed for return of the machineries as mentioned in schedule "A" of the plaint. He further submits that in case of wrongful detention of the machineries over which the plaintiff has not abandoned its claim for ownership, the plaintiff is not entitled to claim the value of the machineries. According to him, the value of the machineries can be claimed by the plaintiff only when the plant and machineries cannot be returned and the plaintiff abandoned its claim for ownership over the said machineries and the bailee is found to be guilty either for wrongful conversion of the goods or for wrongful detention thereof. In support of his such submission he relied upon a decision of the Hon''ble Supreme Court in the case of Dhian Singh Sobha Singh and Another Vs. The Union of India (UOI), AIR 1958 SC 274 : (1958) 1 SCR 781 .

In the said decision, the Hon''ble Supreme Court had made a fine distinction between action for wrongful conversion and the action for wrongful detention, otherwise known as action in trover and action in detinue. It was held therein that a conversion is an act of wilful interference, without lawful justification, with any chattel in a manner inconsistent with the right of another, whereby that other is deprived of the use and possession of it. It was held therein that if a carrier or other bailee wrongfully and mistakenly delivers the chattel to the wrong person or refuses to deliver it to the right person, he can be sued for conversion. It was further held therein that the action of detinue can be initiated only upon a wrongful detention of the plaintiff''s chattel by the defendant, evidenced by a refusal to deliver it upon demand and the redress in such action claim is not damages for the said wrong but return of the chattel or its value. Thus, it follows that if a bailee unlawfully or negligently loses or parts with possession, he cannot get rid of his contractual liability to restore the bailor''s property on the termination of the bailment and if he fails to do, he may be sued in detinue. Detinue at present day has two main uses. The plaintiff in the first place may desire the specific restitution of his chattels and not damages for their conversion. He will then sue in detinue, not to trover. In the second place, the plaintiff may sue in detinue if the defendant sets up a claim of ownership and has not been guilty of trespass; but the original acquisition in detinue sur bailment was lawful. Thus, detinue lies against him who once had but has improperly parted with possession. In such action judgment will be in alternative; i.e., plaintiff do recover the possession of the chattels or their assessed value in case possession cannot be had together in any case with damages for their detention. In paragraph 23 of the said judgment it was held as follows:-

"It is clear therefore that a bailor in the event of the non-delivery of the goods by the bailee on a demand made by him in that behalf is entitled at his election to sue the bailee either for wrongful conversion of the goods or the wrongful detention thereof and if the bailor pursues his remedy against the bailee for wrongful detention of the goods it would be no answer for the bailee to say that he was guilty of wrongful conversion of the goods at an earlier date which fact of conversion of the goods the plaintiff knew or ought to have known at or about that time and is therefore not liable to the plaintiff for wrongful detention thereof. It is the option of the plaintiff to pursue either remedy against the bailee just as it suits him having regard to all the circumstances of the case and the bailee cannot be heard to say anything to the contrary for the simple reason that he cannot take advantage of his own wrong and cannot ask the plaintiff to choose a remedy which may be less beneficial to him."

Mr. Jayanta Mitra, learned Senior Counsel, appearing for the plaintiff/appellant submits by placing reliance upon paragraph 23 of the said judgment that since the defendants refused to deliver and/or return the machineries of the plaintiff on demand, the plaintiff was entitled to select its option i.e., either to sue the defendants for wrongful conversion of the goods or for wrongful detention thereof. He further submits that since the defendant has refused to deliver its machineries, the plaintiff may either sue for return of its plant and machineries or alternatively for its value when the return of plant and machineries cannot be had. In support of such submission Mr. Mitra, learned Senior Counsel has relied upon a decision of the Hon''ble Rajasthan High Court in the case of Fatehlal Vs. Nandlal and Another, AIR 1961 Raj 241 .

Mr. Mitra submits that return of the machineries was claimed by the plaintiff on termination of the contract in 2001. The defendant did not return the machineries of the plaintiffs. On the contrary they set up a claim for their ownership and/or lien over those machineries of the plaintiff on a plea that the plaintiff has not paid up their dues. They made a counter-claim in the suit but ultimately failed to establish the same. Their counter-claim was refused and no appeal was preferred against the refusal to allow the said counter-claim. He further submitted that though the defendants claimed in their pleadings that the machineries which were supplied to the defendants were defective and could not be put into operation but they failed to establish by evidence that those machineries were defective and they could not be put into operation. Mr. Mitra, further pointed out from the evidence of the defendants that the defendants also admitted in their evidence that they never complained about the defect in those machineries to the plaintiff and they also did not take any step to repair the same for restoring the operation of those machineries. Mr. Mitra, further submitted that when the insurance authority being an independent authority made valuation of the said machineries of the plaintiff and accepted premium therefor, it cannot be stated that the value of the said machine is less than the claimed amount of the plaintiff. He thus, supports the impugned judgment.

We have heard the learned Counsel appearing for the parties. We have also considered the pleadings of the parties and their evidence on record. We have seen that the defendants have admitted the plaintiff''s ownership in respect of the plant and machineries mentioned in schedule "A" of the plaint which were installed in the defendants tannery.

Mr. Chowdhury, learned Senior Counsel, in course of his argument made it candidly clear before us that the defendants are not aggrieved by that part of the decree whereby the plaintiff''s ownership in respect of those machineries was declared. We have also seen that the defendants have failed to establish that they supplied finished leather goods to the plaintiff and the plaintiff has not paid the value thereof. As such, we hold that the defendants unjustly withheld the return and/or delivery of the machineries to the plaintiff. The defendants could have delivered these machineries to the plaintiff when the plaintiff demanded for return of those machineries after termination of the contract. The defendants did not do so. Even after filing of the suit, the defendants did not express their intention to deliver those machineries to the plaintiff. Instead of delivering those machineries to the plaintiff, they set up a frivolous claim for their ownership and/or lien over those machineries for non-payment of their alleged dues by the plaintiff. We also find that the defendants have stated in their evidence that the machineries are not in working condition. Simultaneously, we find from the evidence of the defendants that the defendants have failed to prove that those machineries were defective and were unworkable at the time when those machines were delivered to the defendants by the plaintiff. The defendants have also stated that they never informed the plaintiff about the defects in the machines and the machines could not be put into use due to the defects in it. They also stated in evidence that they never repaired those machines. They also stated in their evidence that those machines are not in working condition now. As such on analysis of the pleadings of the parties and/or their evidence on record we hold that the machineries which were mentioned in schedule "A" of the plaint cannot be delivered by the defendant to the plaintiff in the same condition as those were there at the time of delivering the same by the plaintiff to the defendants. We disbelieve the defendants'' claim that these machineries were defective and could not be put into operation because of the defects in these machineries. Had those machineries been really defective, the defendants would have detained them. We find that instead of delivering these so called defective machineries to the plaintiff, the defendants claimed their ownership and/or lien over these machineries. Such claim of the defendants proves beyond doubt that these machineries were all in working condition and the defendants utilised the same for their other related business.

Had those machineries been really unworkable right from the date of delivery thereof to the defendants as claimed by them, the Insurance company would not have insured these machineries right from the time of delivery of these machineries to the defendants and also the Insurance company would not have renewed such Insurance policy for the subsequent periods. As such, we hold that the defendants are liable to pay the value of these machineries as on the date of the decree and interest thereon by way of compensation from the date of the decree until such payment is made to the plaintiff.

Under such circumstances, we hold that the learned Trial Judge was not unjustified in allowing the plaintiff''s claim for value of those machineries which the plaintiff claimed in the alternative under the scheme of the provision contained in order 20 Rule 10 of the Code of Civil Procedure. Such conclusion is drawn by us by relying upon the decisions of the Hon''ble Supreme Court in the case of Dhian Singh Sobha Singh and Anr. V. Union of India (supra) wherein it was held as follows:-

"It is, therefore, clear that in actions for wrongful detention the plaintiff is entitled on default of the defendant in re-delivering the goods to him, to payment in the alternative of the value of the goods thus wrongfully detained as at the date of the verdict or judgment, in other words, at the date of the decree. We are, therefore, of opinion that the appellants were entitled to recover from the respondent the value of the said trucks which, as has been already stated, was Rs. 7,000 in the alternative, on default, committed by the respondent in re-delivery of the same to the appellants."

Having regard to the fact that the plaintiff was deprived of utilising these machineries after termination of the contract, the plaintiffs is also entitled to get a decree for rental compensation. As such we do not want to disturb that part of the impugned decree whereby the plaintiff''s right for ascertainment of such claim by enquiring in a separate proceeding was recognised. We also do not find any illegality in the other part of the impugned decree whereby the defendant was directed to refund a sum of Rs. 1,50,000.00 (Rupees one lakh fifty thousand) which was given to the defendants by the plaintiff by way of advance. As such we approve the decree as a whole.

It is further clarified that on payment and/or realisation of the value of the machineries and the interest thereon by and/or from the defendants, the ownership of these machineries will stand automatically passed to the defendants and the liability to pay rental compensation will cease to operate immediately on payment of the value of these machineries together with interest thereon.

The impugned judgment and decree are thus affirmed accordingly.

The appeal is thus, dismissed.

Urgent photostat certified copy of this judgment, if applied for, be supplied to the learned Counsels for the parties upon compliance of all formalities.

After delivery of the judgment, Mr. Chowdhury, learned Senior Counsel appearing for the appellants prays for stay of operation of the order as his clients want to test the legality of this judgment before the Hon''ble Supreme Court. He also informs us that the decreetal money is already secured by his clients by way of deposit of the same with the learned Registrar General of this Court.

Mr. Amiya Narayan Mukherjee, learned Counsel appearing for the plaintiff/respondent opposes such prayer of stay.

However, considering the submission of the learned Counsel of the parties, we feel that nobody should be deprived of availing of the legal right of challenging this order before the higher forum. As such, we stay the operation of this order till the end of July, 2015.

Debi Prosad Dey, J.

I agree.