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Chartered Bank of India Vs. Imperial Bank of India - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKolkata
Decided On
Reported inAIR1930Cal534
AppellantChartered Bank of India
Respondentimperial Bank of India
Cases ReferredIn Blackmore v. Edwards
Excerpt:
- .....and that the said' firm had accepted the bills, and that the plaintiffs had made over to the said firm the bills of lading, etc., to enable them to take delivery of the goods before payment, in exchange for certain documents called trust receipts. by these receipts the said firm undertook to hold the goods or the proceeds thereof when sold in trust for the plaintiffs.3. in the said plaint they further stated that the said firm had stored the goods in their godown, and that the defendants had wrongfully taken possession of them under an alleged pledge. further that any alleged disposition of the goods by the said firm was of no effect, the said documents or goods having been dealt with by the said firm fraudulently by concealing the terms and conditions on which the goods were held, that.....
Judgment:

Lort-Williams, J.

1. On 14th October 1927 the plaintiffs wrote to the defendants, claiming certain goods lying in Messrs. Kerr Tarruck's godown in the Bengal Bonded Warehouse, on which the defendants had placed their name. The defendants replied on the following day saying that all the goods in the said godown had been pledged to them by Messrs. Kerr Tarruck in accordance with an arrangement for advances against goods pledged, which had been in existence between them and the said firm for some 15 years, and they gave to the plaintiffs full particulars about the character of the pledge and of their possession and control of the said goods, showing that they had been validly pledged to them by the said firm.

2. Seven months after, viz., on 11th May 1928, the plaintiffs issued their plaint. Therein they stated that they were holders for value of certain bills of exchange drawn by British shippers on Messrs. Kerr Tarruck & Co., for the price of goods sold to the said firm, and that they received from the shipper's bills of lading, etc., as security for the due payment of the bills, and that the said' firm had accepted the bills, and that the plaintiffs had made over to the said firm the bills of lading, etc., to enable them to take delivery of the goods before payment, in exchange for certain documents called trust receipts. By these receipts the said firm undertook to hold the goods or the proceeds thereof when sold in trust for the plaintiffs.

3. In the said plaint they further stated that the said firm had stored the goods in their godown, and that the defendants had wrongfully taken possession of them under an alleged pledge. Further that any alleged disposition of the goods by the said firm was of no effect, the said documents or goods having been dealt with by the said firm fraudulently by concealing the terms and conditions on which the goods were held, that is to say, that the said firm had defrauded the defendants. The written statement is dated 27th June 1928. Therein the defendants say that for many years the said firm had had an overdraft account with the defendants on the basis of a cash credit agreement on the security of the pledge of goods which were deposited in a godown over which the defendants exercised effective and indisputable control, that the goods in dispute were pledged to the defendants in pursuance of the said agreement, that they received them in good faith, that there were no circumstances to raise a reasonable presumption of fraudulent dealing by the said firm, and that defendants had no knowledge thereof. Further that plaintiffs by their action permitted the defendants to believe that the said firm were owners of the goods or entitled to deal therewith.

4. Upon those pleadings, certain issues were raised which were settled by me on 17th January 1929. A number of witnesses were called on behalf of both plaintiffs and defendants, and after several days' hearing, and several adjournments their cases were both closed, save and except for counsels' final speech. In the meantime, viz. on 10th August 1928, I gave judgment in the case of Rahimbux Ashan Karim v. Central Bank of India, Ltd. : AIR1929Cal497 , and, on 28th January 1929, my decision was upheld upon appeal. The issues raised in that case substantially were the same as the issues raised in this. And, having regard to the evidence given in this case, I have no doubt in my mind, subject to any arguments which may be addressed to me by learned Counsel on both sides, that, in consequence of and in consonance with that decision, the defendants must succeed in the present case as matters now stand.

5. That being the position, the learned Advocate-General, on behalf of the plaintiffs, has applied to me for leave to amend his plaint and to raise a new issue thereon by alleging that the said goods were obtained from the plaintiffs by the said firm by fraud and the offence of cheating, and to rely upon the proviso to Section 178, Contract Act. That is to say to allege that the said firm had defrauded It he plaintiffs.

6. The applications are made under Order 6, Rule 17, and Order 14, Rule 5, Schedule 1, Civil P.C. Order 6. Rule 17, practically is a replica of Order 28, Rule 1, of the Rules of the Supreme Court in England. In my opinion, it is clear that plaintiffs are seeking, at this late stage of the proceedings, to introduce an entirely new case. Neither the pleadings, nor the issues raised, nor the evidence, nor the arguments throughout have been addressed to this issue which plaintiffs now seek to raise for the first time, Their contention advanced in their petition that this aspect of the case has now for the first time become apparent is disingenuous to a degree, because it was apparent, if at all, as far back as the month of October 1927, when defendants first wrote to plaintiffs setting out particulars of their pledge and their possession.

7. If the amendment is allowed, it will entail, as counsel for plaintiffs frankly admits, in any case, the recall of plaintiffs' witnesses for further cross-examination, and probably the amendment of defendants' written statement, further discovery, and further evidence on both sides. I have little doubt that in the English Court, such an application would be refused if made at this stage of the proceedings : see the remarks of North J., in Edevain v. Cohen [1889] 41 Ch. D. 563. Though the Courts will not refuse to allow an amendment simply because it introduces a new case, Budding v. Murdoch [1875] 1 Ch. D. 42, it will do so where the amendment would change the action into one of a substantially different character which would more conveniently be the subject of a fresh action: Raleigh v. Goschen [1898] 1 Ch. 73. Leave is generally refused also, where there has been substantial delay 'in making the application, as in the present case. And it is refused, almost invariably, where the purpose of the amendment is to add a plea of fraud, where fraud has not been pleaded in the first instance.

8. However, the general tendency for many years past has been to allow an amendment at any stage of the proceedings, if it can be made without injustice to the other side-there being no injustice if the other side can be compensated by costs: Per Brett M.R. in Clarapede v. Commercial Union Association [1883] 32 W.R. 263 the object being to avoid, if possible, 'multiplicity of legal proceedings. This is not a case where rights have accrued to the defendants which might be prejudiced by allowing the amendment, such for example as might have arisen under the law of limitation.

9. On the other hand, I am clearly of opinion, after hearing the evidence, subject to any arguments which may be addressed to me, that, as the case stands now, the defendants are entitled to judgment with costs. Whereas, there is no telling what their position and the result may be, after the amendment has bean allowed.

10. In Blackmore v. Edwards [1879] W.N. 175, where the plaintiff amended by adding an entirely new claim, and at the same time abandoned his original claim, the amendment was allowed only upon condition that the plaintiff paid to the defendant all the costs of the action up to the date of the amendment, and all proceedings were stayed until payment of those costs.

11. Substantially the position in this case is very similar to the position in that, and I propose to deal with this matter in the same way, or, if the plaintiffs prefer, I will hear arguments and give judgment in this case as it stands at present, without amendment of the pleadings, and if I decide that judgment must be for the defendants, it shall be without prejudice to plaintiff's right to bring a fresh suit dealing with the subject-matter of the proposed amendment whichever counsel think will be the cheaper and more convenient course to pursue.


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