Decided on March 21,1961



- (1.) THE main question involved in this suit is one of jurisdiction of this court to entertain it. The defendants are two in number, the first defendant being described as the owners, masters and parties interested in s. s. 'edison Mariner'. The second defendant is Jugometal TRG Republic 3 Beograd in Jugoslavia. There are two plaintiffs, the first being Rungta Sons Private Limited, a company carrying on business in the town of Calcutta : the second plaintiff Madan Gopal Rungta is a director of the first plaintiff.
(2.) THE case laid in the plaint is as follows :- (A) The first plaintiff entered into a contract for sale to the second defendant of 10,000 Long Tons of Iron Ore (Magnetite) 10 p. c. more or less depending on charter party conditions at buyer's option on terms and conditions contained in a written document annexed to the plaint and marked 'a'. The main terms of the contract are as under : (a) Shipment during February/june, 1957; (b) payment to be made under an irrevocable, divisible and transferable letter of credit opened by the buyer in favour of the seller with a validity of 60 days (to be extended, if necessary), following the date of the opening of the credit, in English pounds with a first class bank of India. Letter of credit to be opened by the end of December 1956 covering 100 p. c. of the goods value based on 65 p. c. Fe. content. Provisional payment under the letter of credit to be made against the following documents: full set bills of lading to order Jug metal Beograd, notifying the forwarding agent appointed by Jug metal beograd. Provisional invoice, at the rate of 95 per cent. of the goods' value, on basis of the weight and fore-analysis results shown in the certificate issued by Surveillance, after deducting the total moisture from the gross weight and computing the value of the dry net weight. Surveillance's certificate on the preliminary sampling determined weights, preliminary moisture determination and fore-analysis. Copy of cable of Jug metal advising forwarding of goods. Final settlement to be made on the basis of dry weight determined at the discharge of goods at the percentage of Fe. content determined on the basis of exchange of analysis. (B) The second defendant opened a letter of credit on or about February 12, 1957 for 21250 through the United commercial Bank Ltd. , Calcutta, in favour of the plaintiff representing the value of 5000 tons of iron ore. The plaintiff effected shipment of 3510 Long Tons of ore by s. s. 'alriadah' on or about March 4, 1957 leaving a balance of 6490 tons to be shipped and utilised the letter of credit to the extent of 15,168. 2s. 2d. being the value of 3510 tons of iron ore shipped as aforesaid. (C) By exchange of cables between the plaintiff and the second defendant in Yugoslavia it was agreed that the balance of the goods were to be shipped by s. s. 'edison Mariner' chartered for the purpose by the second defendant by July 10, 1957 from the Port of Calcutta. The plaintiff received a copy of the charter party sent by the second defendant on June 11, 1957 on or about July, 22, 1957. The charter party provided inter alia, that the steamer would load at Calcutta as much cargo as her master would consider proper but not more than the steamer could take to safe draft for navigating in the Hooghly and the balance of the cargo would be loaded in the Port of Madras. (D) The Steamship 'edison Mariner' arrived at the Port of Calcutta on or about June 13, 1957 but was not ready to load iron ore until June 25, 1957. At the request of the Master of the said steamship and the charterer's agents the plaintiffs shipped 7037 long tons of the said goods on board the said steamship between June 25, 1957 and July 16, 1957. (E) On account of the inability of the Master of the steamship to put her alongside a loading berth in the Port of Calcutta, the steamer was moored midstream at West Buoy, King George's Docks, Kidderpore and goods were put on board on the said steamship midstream by employing lorries and country boats by reason whereof the plaintiff had to incur additional expenditure amounting to Rs. 45,000/ -. The plaintiffs never intended to incur the said expenses gratuitously and having had the benefit thereof the second defendant is liable to pay the same to the plaintiffs. (F) By cable dated July 17, 1957 the plaintiff informed the second defendant at Beograd of having shipped the goods by the said steamer under the letter of credit and requested the second defendant to increase the quantity under the contract to the quantity shipped as also to increase the amount of the letter of credit to the price of the goods shipped and to amend the shipping date to July 17, 1957 in the letter of credit as promised by the second defendant and as the second defendant was obliged to do under the terms of the contract. By cable dated July 19, 1957 received by the plaintiff in Calcutta on July 20, 1957, the second defendant acceded to all the requests of the plaintiff contained in the aforesaid cable dated July 17, 1957 and informed the plaintiff that it had instructed the bank to increase the credit and requested the plaintiff to ask the bank to mail documents by the first plane. (G) On or about July 24, 1957 the plaintiff No. 1 was informed by the United Commercial Bank Ltd, bankers of the second defendant, that the latter had not amended the letter of credit nor the shipping date with the result that the plaintiff was unable to operate on the said letter of credit although the plaintiff No. 1 was ready and willing to deliver all necessary shipping documents under the agreement to the bank against payment by the bank of the plaintiff's dues. (H) In the belief that the defendants would pay the price of the goods shipped the plaintiffs caused the bills of lading relating to the goods to be made out in the name of the second defendant. The said bill of lading are still in possession of the plaintiff and the parties never intended that the property in the goods would pass to the buyer before the payment of the price of the goods in terms of the contract. (I) S. S. 'edison Mariner' left the port of Calcutta on July 18, 1957 with the plaintiff's goods bound for the port of Madras. (J) In breach of its obligations under the contract the second defendant failed and neglected to arrange for payment of the plaintiff's dues and threatened to remove the goods in the said steamer from the Port of Madras and the Republic of India without paying the value thereof unless the said steamship and cargo were immediately arrested by or under the orders of this court. (K) The first defendant was the authorised representative and agent of the second defendant in the matter of taking delivery of the cargo and carriage of the same under the charter party and had acted as such. (L) The steamship 'edison Mariner' was a vessel sailing under U. S. Flag. The owner of the said steamship was not domiciled in India nor was the ship registered in this country. The second defendant had no place of business in India nor had it any agents in India or any other assets in India.
(3.) ON the above allegations along with the averments made in paragraph 16 of the plaint that the second defendant owed to the plaintiff the sum of Rs. 4,50,880. 80 np. made up of two items, namely, the price of the goods shipped at the contract rate Rs. 4,05,880, 80 np. and lorry and boat hire amounting to Rs. 45,000/-, the plaintiff asked for a decree for the said total sum against the defendants and the steamship with her cargo, tackle, apparel, furniture and freight as also for the arrest of the steamship or the said cargo and detention thereof until security was given to the extent of the plaintiff's claim and costs and/or unloading of the said cargo at Madras. Further prayers were for sale of the steamship with her cargo etc. and payment of the sale proceeds to the plaintiffs and enquiry as to damages and decree for such amount as might be found due.;

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