M.A.A.KHAN,J. - (1.) THE petitioners B.C. Brahmanna and Raj Kumar were at the relevant time, Managing Director and Director respectively of M/s Swarna Cements Ltd. a Company manufacturing cement and having its Administrative office at Hyderabad (A.P.), (the Hyderabad Company). M/s Rajasthan Refractories (P) Ltd. (the Jaipur Company) is also a private company manufacturing Refractory bricks, insulation bricks, Refractory concrete etc. and having its registered office at Jaipur (Raj.). The Transport Company, M/s Associated Road Carriers Ltd., is a public limited company having its registered office at Calcutta and Head Office at Secundrabad. Bal Raj respondent Np. 2 was the Circle Manager of this Transport Co. at its Jaipur office.
(2.) ON October 29, 1984 the Hyderabad Company placed an order with Jaipur Company for purchase of Refractory Bricks, insulation Bricks, Refractory concrete etc. worth Rs. 12,35,775, 17 P. The terms and conditions agreed between the two, interalia, included that the delivery of the goods shall be made at the factory site of the Hyderabad Co. at Mallacheruva village Kodak Taluka in Nalgoda district within 12 weeks from the date of letter of intent and the commencement of the first consignment shall start from the eighth week and the delay in delivery would attract penalty between 1/2% to 5% of the total cost of contract. It was further agreed that the goods would be of the standard, quality and specification as given in the Schedule 1 -B of the Purchase Order and the defective and faulty material shall have to be replaced immediately at seller's cost and therefore the material shall be thoroughly inspected by the Jaipur Co. at its place, before offering the same to Hyderabd Co. for inspection at later's site. It had specifically been agreed that the prices were inclusive of packing, forwarding, excise duty, sales -tax, Freight up to the factory site of Hyderabad Company and any other duties, charges etc. payable and also transit insurance. The Jaipur company was to guarantee the satisfactory performance of the contract as per Schedule. The Hyderabad Company had to make payment of Rs. 2,95,354/ - in two installments, one with letter of intent and the other with purchase order. The balance price was payable against despatch of documents through their Banker, Canara Bank, Masab Tank, Hyderabad. The Hyderabad Co. had enclosed alongwith the purchase order a D.D. No. 31011578 dated 27.10.84 for Rs. 1,47,677/ - in favour of Jaipur Co. towards advance. In the course and towards the performance of the contract dated 29.10.84 the Jaipur Co. consigned on 23.1.86, three truck load of fire bricks through the Transport Company at Jaipur vide consignment note Nos. 1473, 1478 and 1479 (Lorry receipts) pertaining to challan Nos. 138, 140 and 141. The goods had been sent at owners risk and was not to be detained, diverted, re -routed or re -booked without consignees Bank's written permission. Consignees Bank was Syndicate Bank Malacheruva (A.P.). The lorry receipts issued by the Transport Company carried on them a notice to the effect that the consignment covered by the receipts shall be stored at the destination under the control of transport operator and shall be delivered to or, the order of, the consignee Bank whose name was mentioned in the Lorry Receipts and the goods will, under no circumstances be delivered to any -one without the written Authority from the consignee Bank or its order endorsed on the Consignee copy or on separate letter of Authority. Other terms and conditions mentioned in the Lorry Receipts issued by the Transport Company, interalia, included the following: (1) Where a Bank has agreed to accept the Lorry Receipt as a Consignee/endorsee of holder thereof or in any other capacity for the purpose of giving advances to and/or collection of discounting bills of any of its customers whether before or after the instruments of the goods to the Transport Operator for carnage, the transport Operator hereby agree in consideration of the same to hold themselves liable and shall be deemed to have held themselves concerned as if the Bank were a party to the contract herein contained with the right of recourse against the Transport Operator to the extent of the full value of the goods handed over to the Transport Operator for carnage storage and delivery. (4) The consignor shall be primarily liable to pay the transport charge and all other incidental charge if any at the head office of the Transport Operator in or at any other agreed place. (6) The Transport Operator shall have the right to dispose of other goods after 30 days arrival, after due notice in writing to the consignor the consignee Bank and the holder interested (including the Banker under Clauses 1 above). (8) Consignee Banks accepting Lorry Receipt under Clause 1 above will not be liable for payment of any charges arising out of any lien of the Transport Operator against the consignor of the buyer where it becomes necessary for any Bank to obtain delivery of the consignment from the Transport Operator in terms of the Scheme, (because buyer does not retire the documents or because of any other reason). The Transport Operator shall deliver the goods unconditionally to the bank on payment of the normal freight and storage charges only in connection with the'consignment in question, without claiming any lien on the goods in respect of any monies due by the consignor or the consignee to the Transport Operator on any account whatsoever. (9) Notwithstanding any statement made in this Lorry Receipt or any circumstance surrounding the issue of this Lorry Receipt, the Transporter is obligatory to the Consignee Bank named in the Lorry Receipt and shall be responsible for damage to the goods of consignment, that arises as a result of negligence default failure to take reasonable precautions, malafide or criminal or fraudulent actions of the Transport Operator or any of its Manager, agents Employees, partners, Directors or business associate or branches etc.
(3.) THE goods of the three consignments reached the factory site of the petitioners between 26.1.86 and 1.2.86. It was at that point of time that dispute over unloading of the goods appears to have arisen between the parties. According to the petitioners since the goods was below standard and not upto the agreed specification, standard, and quality, they had refused to take delivery thereof but the drivers of the Transport Company unauthorisedly and without their permission unloaded the goods. But according to the Transport -Company th.s goods was left with the Hyderabad Co. in trust as the said Company could not produce the necessary documents, duly retired by the consignee Bank. Such dispute gave birth to the Institution of Civil suits in the court of City Civil Judge, Hyderabad and to initiation of Criminal Proceedings at Jaipur.;