Nippon Liner System, Care of James Finlay PLC and others Vs. Mahi Fish Processing Ltd. and others

Nippon Liner System, Care of James Finlay PLC and others (Petitioners)


Mahi Fish Processing Ltd. and others (Respondents)

Supreme Court

Appellate Division



Md Fazlul Karim J

Md Joynul Abedin J

SAN Mominur Rahman J 


March 12, 2009.

Lawyers Involved:

Dr. M Zahir, Senior Advocate with Md. Azizul Haq, Advocate instructed by Md. Aftab Hossain, Advocate-on-Record—For the Petitioners, (In both the cases).

MA Mannan, Senior Advocate instructed by Chowdhury Md. Zahangir, Advocate-on-Record—For that Respondent No.1. (In both the cases).

Not represented—Respondent Nos. 2-5 (In Civil Petition No. 640 of 2008).

Md. Nawab Ali, Advocate-on-Record—For the Respondent Nos. 2 and 3. (In Civil Petition No. 623 of 2008).

Not represented—Respondent Nos. 4-7 (In Civil Petition No. 623 of 2008).

Civil Petition for Leave to Appeal Nos. 640 and 623 of 2008.

(From the judgment and decree dated the 5th day of December, 2007 passed by the High Court Division in Appeal from Original Decree (FA) No.16 of 1998).


              Md. Fazlul Karim J. – These Petitions for Leave to Appeal at the instance of appellants are directed against the judgment and decree dated 3-12-2007 passed by the High Court Division in First Appeal No. 16 of 1998 dismissing the appeal by upholding the judgment and decree dated 31-8-1997 passed by the Subordinate Judge, 2nd Court, Chittagong in Money Suit No. 3 of 1992 decreeing the suit.

2. The facts alleged in the case, in short, are that the plaintiff as an exporter of frozen fish entered into an agreement with defendant No. 5 ‘Flag Importers Inc’ of USA through their agent defendant No. 6 for exporting headless prawn and accordingly, an irrevocable letter of credit was opened being Letter of Credit No. 667392, dated 11-10-1990, for US $ 3, 00,000 by the importer aforesaid. Subsequently, value of the letter of credit was enhanced to US$ 7, 50,000 and the said letter of credit was opened through Philadelphia International Bank, New York, the LC opening bank. Agrani Bank was the negotiating bank in Bangladesh. The plain­tiff submitted the bill of lading to defendant No. 7, Agrani Bank, the L/C confirming Bank. Out of 8 there was no problem with regards to 3 bills of lading being Nos. 900280, 900279 and 900278 but with regard to the other bills of lading being Nos. 900289, 900290, 900291, 900302 and 900304, the defendant delivered the cargo without endorsement on original L/C. So, defendant No. 7, Agrani Bank, the L/C confirming Bank, did not get money from the L/C opening Bank as they refused to pay the money for the exported goods to the plaintiff and deprived the plaintiff from his legitimate claim and the plaintiff was deprived of US$ 5, 24,441. For non-payment of the said money the plaintiff suffered huge pecuniary loss in money, good-will and reputation; the plaintiff has also suffered other losses. Since Agrani Bank, defendant No.7, the L/C confirming Bank, did not pay debt as per contract, the factory and business of the plaintiff was inoperative for a long time and accordingly, a huge amount of interest was credited against the loan account of the plaintiff with Agrani Bank proforma defendant No. 7 and due to the negligence of defendant Nos.1-4 the plaintiff did not get the price of the exported goods and therefore, he was also entitled to compensation of the amount mentioned in the schedule of the plaintiff. In order to recover the compensation the plaintiff instituted the aforesaid money suit praying for a decree of Taka 4,88,96,323.43 as damage and compensation against the defend­ants and pendenti lite interest at the rate of 18% per annum till recovery of the decretal amount.

3. After institution of the suit the defend­ants satisfied the claims of three bills of lading Nos. 900289,900290 and 900291 totaling to US $ 2,49,988,37 equivalent to Taka 1,04,29,211, and 24. After deducting the said amount the balance stood at Taka 2,93,96,765,63 payable to the plaintiff. So the plaintiff prayed for decree to the extent of the said amount along with 18% interest per annum thereupon.

4. The defendant Nos.1-4 contested the suit by filing written statement denying all the material allegations stating, inter alia, that they released the cargo to defendant No. 5, the importer or buyer of the goods, on the basis of letter of indemnity executed by Philadelphia International   Bank. New York, the L/C opening Bank and therefore, they were not liable to pay the above amount claimed by the plaintiff. It was further contended that it is not the responsibility of appellant No.1 to recover the plaintiff’s money. It was also contended by the appellant that the fish exported by the plaintiff was not in accordance with the purchase order and the buyer and the seller were having disputes over the last few consignment as to the quality of the fish exported by the plaintiff and received by the importer purchaser. It was a dispute between the respective parties themselves and their Banks. Therefore, it had nothing to do with the appellant who is only a carrier of the goods. It was further stated that the purchaser returned the bills of lading to the L/C confirming Bank, the Agrani Bank, and at the same time the ship arrived with the goods under the bills of lading Nos. 900302 and 900304 but the bills of lading concerned were not available and in the absence of the same it is the normal practice in international trade to release the goods against letters of indemnity issued by the Bank. It was further contended that the L/C opening Bank did not present the invoices connected with the five bills of lading because the documents sub­mitted were not in compliance with the letters of credit and therefore, were refused by the importer. The carrier was not concerned whether the payment to the consignor was made or not by the Bank concerned.

5. Against the judgment and decree dated 5-12-2007 two petitions for leave to appeal were filed by the appellant Nippon Liner System, Care of James Finlay PLC and Agrani Bank, Agrabad Branch, Agrabad, Dr. M Zahir, learned Counsel, appearing for the petitioner, submit­ted that the alleged claims arisen out of five bills of lading were duly compromised in Money Suit No.11 of 1992 filed by Agrani Bank against Mahi Fish Processing Limited and others including the petitioner on 30th January, 1992 for which an amount of US$ 2,49,988.37 equivalent to Taka 2,27,65,358 has already been enjoyed/received by the respondent No.1 in full and final settlement of their claims and that has been supported by their documentary evidence and the attendant facts and circum­stances, which fact was suppressed by the respondent No.1 intentionally and obtained fraudulent judgment and decree by practicing fraud upon the Court as has been shown by the petitioner, that the respondent No.1 has not come before the Court with clean hands, inasmuch as it enjoyed the benefits of five outstanding bills as  is  evidenced  by  the compromised decree in Money Suit No.11 of 1992 dated 30th November, 1993; that despite all   the indemnity  bonds, of  course,  the photocopies as secondary evidence exhibited by the petitioner while the L/C opening Bank taking all liabilities over its head and the respondent No.1 adjusted its liabilities with another branch of Agrani Bank, Hotel Agrabad Branch, Chittagong for which plaintiff made Agrani Bank as pro-forma defendant without seeking any relief against them to serve its ulterior motive by practicing fraud upon the Court. The learned Counsel further submitted that according to section 124 of the Contract Act, 1872 which gives definition of contract of indemnity as, “A Contract for which one party to save the other from loss caused to him by the conduct of the promisor himself or by the conduct of any other person is called contract of indemnity.” Where the consignee of a cargo wants the steamship company to deliver the same with the production of bill of lading he is required to give an indemnity bond upon/by which he undertakes to compensate the steam­ship company for any loss which the company may have to suffer, as a result of delivering the goods to him without production of bill of lading. The learned Counsel further submitted that carrier shall have to take the enormous risk of non-delivering goods in absence of pro­duction of bill of lading, although to do this, now in practice, the receiver furnishes the carrier with a bond of indemnity, that the High Court Division committed an error of law without applying its judicial mind as to why the plaintiff did not directly hold responsible the Agrani Bank which negotiated the settlement and enjoyed the benefits through another branch of Agrani Bank, in such a situation by making Agrani Bank Pro-forma defendant No.7 wanted only to make the carrier responsible to become doubly benefited by adopting deceptive means.

6. It appears from the record that the original shipping document in respect of any consignment of goods exported, the bills of lading are indeed, the title deeds to the con­signment in question; that the defendant No.1, carrier of the consignment had delivered the consigned goods to the importer in New York in absence of the original bills of lading duly discharged just on furnishing of an indemnity bond by Philadelphia Bank International Inc, New York on the assumption that they were entitled to do so as the consignment in question in respect of the five disputed bills of lading consisting of perishable goods. It further appears that the stand of the defendant No.1, that it delivered the perishable consignment to the consignee on securing an indemnity from the Philadelphia Bank international does not appear to give him any legal cover to do so. It would be evident from the reading of the con­tract that the consignment is supposed to be preserved at the temperature of minus 18 degree Celsius.  It is found from the evidence on record that the plaintiff has not yet been able to realise his dues on the consignment and that the plaintiff has suffered heavy financial loss due to the irresponsible and whimsical action of the defendant in delivering the disputed consignment to the buyer in clear violation of the established rules and principles of inter­national trade.

7. The High Court Division held that whatever might be the consideration of the defendant in delivering the disputed consign­ment to the buyer consignee, it must be done at its own risk and peril and thus the action of the defendant No.1, carrier could not be absolved from its responsibility to the consignor. Accordingly, the appeal is dismissed affirming the judgment and decree of the trial Court in Money Suit No. 3 of 1992 decreeing the suit.

8. In view of the above, we find no subs­tance in the submissions of the learned Advocate for the petitioners.

Accordingly, the petitions are dismissed.


Source: 14 BLC (AD) (2009) 124