In an appeal filed before the Bombay High Court to challenge an order dated 26-07-2013 by the Bombay Civil Court whereby a suit filed for a money claim by the appellant was dismissed because the appellant had failed to prove its ownership of goods, which were sold by an auction by the defendant, a Single Judge Bench of Justice Jitendra Jain quashed and set aside the impugned order to the extent that the same was challenged by the appellant.
The appellant is a UK-based company, which contended that, in 1993-94, it sold goods to M/s. Kansale Hosiery Exports, Ludhiana, under the trade name M/s. Blackwell Enterprises. Since Kansale Hosiery gave up its claim, the goods were sought to be re-shipped to the U.K. However, the goods were kept by the defendant, who demanded various charges and subsequently, on 08-08-1994, sold the goods for Rs. 18,30,070/- even though all charges were paid by a local agent.
The appellant filed a suit within three months of the date of the sale, claiming the sale proceeds on the grounds that they were the owners of the goods and M/s. Blackwell Enterprises was a trade name used by them for trading. The Trial Court held that the auction sale conducted by the defendant was contrary to the provisions of the Major Port Trusts Act, 1963, and that the appellant had not proved that they were owners of the goods, which is why they were not entitled to the sale proceeds.
The Court stated that the only issue to be considered was whether the Trial Court was justified in holding that the appellant had not proved its ownership over the subject goods sold in the auction. The Court noted that the defendant had not challenged the Trial Court’s finding that the auction was contrary to the 1963 Act and held that the defendant’s retention of the auction sale proceeds was illegal, constituting unjust enrichment. It was said that since the sale itself was held to be illegal, the defendant was liable to refund the sale proceeds to the owner.
The Court referred to Order XII Rule 2 and Order XII Rule 2-A of the Code of Civil Procedure, 1908 (CPC), and noted that one of the documents by the appellant was a letter dated 05-09-1994, which called upon the defendant to return the sale proceeds. Further, the Court found that the Trial Court had not exercised its discretion by recording the reasons and called upon the appellant to prove the said document, though its admission and contents were admitted on 04-08-2006, and hence, held that the documents and their contents are deemed to have been proved.
It was stated that since the appellant admitted not only the said document but also its contents and no objection had been raised at the time, at present, the defendant is estopped from contending that the appellant had failed to prove ownership of the goods because, as per the chain of events, both parties had admitted the appellant to be the owner of the goods. The Court said that framing an issue on ownership by the Trial Court would not mean that it had exercised its discretion under the proviso to Order XII Rule 2-A (1).
Further, the Court stated that the issue of M/s. Blackwell Enterprises, being a trade name, arose only after the defendant raised this objection, and the appellant could not have pleaded this in the plaint, since it was filed only to assert its ownership of the goods. Hence, the Court held that the reasoning given by the Trial Court that the claim of ownership is not proved since the plaint does not mention the trade name was erroneous.
The Court said that the appellant’s bona fide had been proved since, even though three decades had passed, no one other than the appellant had staked its claim to the sale proceeds, and that the appellant had undertaken to file an indemnity before the Trial Court to secure any future claim against the defendant. Thus, the Court allowed the appeal and quashed the Trial Court’s order to the extent challenged by the appellant. The Court clarified that the present order should not be read to mean that, if only documents are admitted, there is no need to prove them, as the facts in the present case were different.
The Court directed a decree to be drawn as per prayer clause (a) of the plaint with modification in the amount and the rate of interest of 18% p.a. claimed. It was noted that the defendants had deposited Rs. 11,60,729/- as per this Court’s order in a motion by the appellant and directed them to pay interest on the said amount from the date of filing of the suit till the said order at a rate of 6% per annum. Additionally, the Court held that the appellant was also entitled to Rs. 2,96,187/- and interest thereon at 6% per annum from the date of filing of the suit till the date of payment.
Appearances:
For Appellant – Mr. Cyrus Bharucha, Solicitor Krunal Gadhia, Mr. Jainuddin Khan, Mr. Hisham Abdus Salam, Ms. Maitreyi Kulkarni, Ms. Neha Dhuru
For Respondent – Mr. Dhruva Gandhi, Ms. Kajal Gupta, Ms. Shweta Singh, M.V. Kini & Co.
