In Patel Roadways Limited v. Birla Yamaha Ltd. AIR 2000 SC 1461 , Supreme Court held that the liability of a carrier in India is like that of an insurer and is an absolute liability subject to an Act of God and a special contract which the carrier may choose to enter with a customer. In this regard, the Court referred to the provisions of Section 9 of the Act, which specifically provides that in case of claim of damage or loss to or deterioration of goods entrusted to a carrier, it is not necessary for the plaintiff to establish negligence. It was further held that even assuming that the general principle in cases of tortuous liability is that of the party who alleges negligence against the other must prove the same, the said principle has no application to cover the case under the Carriers Act.
Print Page
THE HIGH COURT OF DELHI AT NEW DELHI
Judgment Pronounced on: 23.11.2010
CS(OS) No. 1468/2001
M/S NATIONAL INSURANCE CO. LTD. & ANR.
V
M/S MUKESH TEMPO SERVICE (CARRIER)
CORAM:-
HON’BLE MR JUSTICE V.K. JAIN
Citation: 2011IAD(Delhi)294, (2011)ILR 1Delhi801, (2011)161PLR36
1. This is a suit for recovery of `31,06,425/-. Plaintiff
No.1 is an Insurance Company registered under Companies
Act. The suit has been instituted and the plaint is signed
and verified by its Manager Mr D.P. Ghosh, who is alleged to
be holding a Power of Attorney from plaintiff No.1 in this
regard. Plaintiff No.2 is also a company and it is alleged that
it has authorized plaintiff No.1 to file the suit on its behalf.
Plaintiff No.2 booked 13 packets containing 30,000 pieces of
ICs and 42 packets containing 1134000 capacitors with the
defendant for transportation from IGI Airport, New Delhi to
the factory premises of plaintiff No.2.
The consignment
however was not delivered by the defendant to plaintiff No.2.
Since the consignment was insured with plaintiff No.1,
investigators were appointed to carry out investigation and
they reported loss of the consignment. Plaintiff No.1 settled
the claim of plaintiff No.2 on payment of `31,06,425/-. A
Letter of Subrogation was executed by plaintiff No.2 in
favour of plaintiff No.1 whereby plaintiff No.1 became
entitled to recover the aforesaid amount from the defendant.
The plaintiffs have accordingly claimed the amount of
`31,06,425/- from the defendant.
2.
The defendant has contested this suit and has
taken a preliminary objection that the suit is barred for
non-compliance of Section 10 of Carriers Act, 1865. It has
also been alleged in the written statement that the
subrogation by plaintiff No.2 in favour of plaintiff No.1 is not
valid and legally enforceable. It has also been alleged that
the suit is not properly valued for the purpose of Court fee
and jurisdiction. It has further been alleged that in view of
the provisions contained in Section 3 of Carriers Act, the
suit against the defendant is not maintainable since value of
the goods were not disclosed by plaintiff No.2 to the
defendant while booking the goods for transportation. On
merits, it has been alleged that when the goods of the
plaintiffs were being transported in tempo No. DL-1L-B-
0994 on 1st July 1998, some robbers travelling in a car
stopped the tempo near Gopinath Bazar, New Delhi,
represented themselves to be police officials and took the
keys of the vehicle from the driver on the pretext that they
wanted to take the tempo to the Police Station.
The
robbers, however, took the tempo to some unknown place
and abandoned it there after taking away all the goods. FIR
No. 242/1998 in this regard was lodged at Police Station,
Delhi Cantt on 1st July 1998. It has also been claimed that
there was no negligence on the part of the defendant and
the acts of robbery being beyond its control, it cannot be
made liable for the loss.
3.
The following issues were framed on the pleadings
of the parties:-
(i) (ii) Whether the purported subrogation by the
plaintiff No.2 in favour of plaintiff No.1 is a
valid and legally enforceable subrogation?
OPP
(iii) Whether the suit is correctly valued for the
purposes of court fees and jurisdiction? OPP
(iv) Whether the present suit is maintainable
against the defendant? OPP
(v)
4.
Whether the suit is barred for non-
compliance of Section 10 of the Carriers Act,
1865? OPD
Whether the plaintiff is entitled to any relief?
OPP
The plaintiffs have examined only one witness Mr
A.K. Goel in support of their case.
No witness has been
examined by the defendant.
ISSUE No. 3
5.
This is a suit for recovery of money and ad valorem
Court fee has been paid by the plaintiffs on the amount
claimed by them.
The issue is decided against the
defendant and in favour of the plaintiff.
ISSUE No. 1
6.
Section 10 of Carriers Act, provides that no suit
shall be instituted against a common carrier for the loss of,
or injury to, goods entrusted to him for carriage, unless
notice in writing of the loss or injury has been given to him
before the institution of the suit and within six months of
the time when the loss or injury first came to the knowledge
of the plaintiff.
7.
The goods in question were admittedly booked by
plaintiff No.2 with the defendant on 1st July 1998. Ex. PW
1/3 is the letter written by plaintiff No.2 to the defendant on
3rd July 1998. Vide this letter a claim was lodged with the
defendant for Rs1Lac in respect of loss of 1,40,000 pieces of
Ceramic Capacitors. The letter also refers to tempo No. DL-
1L-B-0994.
It also contains reference to Airway Bill No.
618103565222.
Ex. PW 1/4 is the letter dated 3rd July
1998 sent by plaintiff No.2 to the defendant lodging claim
for Rs30Lacs on account of loss of 30,000 pieces of ICs and
11,34,000 pieces of Electrolitic Capacitors.
There is
reference to tempo No. DL-1L-B-0994 and Airway Bill No.
6180040284 and 21728833803H in this letter. Ex. P-2 is
the letter dated 29th July 1998 written by the defendant to
plaintiff No.2.
This is an admitted document, the same
having been admitted on 16th October 2003. Vide this
CS(OS) No. 1468/2001 Page 5 of 23
letter, the defendant acknowledged receipt of the letters in
which plaintiff No.2 had claimed `1Lac and `30,000/-,
respectively
for
the
loss
of
the
goods,
transported in vehicle No. DL-1L-B-0994.
which
were
Obviously, the
reference is to the letters of plaintiff No.2 Ex. PW1/3 and
PW1/4. The notice envisaged in Section 10 of Carriers Act
is a notice whereby the carrier is informed of the loss or
injury to the goods and the object of the notice is to give an
opportunity to the carrier to make amendments for the
occurrence of the loss and settle the claim of the consigner
or owner of the goods. There is no particular form of notice
prescribed in the Act and, therefore, it would be sufficient
compliance of the requirement of the Section if the carrier is
informed about the loss or injury to the goods. In any case,
Ex. PW1/3 and PW1/4 meet the requirement of law in this
regard. The issue is decided against the defendant and in
favour of the plaintiffs.
ISSUE No.4
8.
During the course of arguments, it was contended
by the learned counsel for the defendant that in view of the
provisions contained in Section 3 of the Carriers Act, the
liability of the carrier is limited to `100/- since the value
CS(OS) No. 1468/2001
Page 6 of 23
and description of the goods were not disclosed to the
defendant,
at
the
time
the
goods
were
sent
for
transportation. Section 3 of the Act provides as under:-
Carriers not to be liable for loss of
certain goods above one hundred rupees
in value unless delivered as such.- No
common carrier shall be liable for the loss
of or damage to property delivered to him
to be carried exceeding in value one
hundred rupees and of the description
contained in the Schedule to this Act,
unless the person delivering such property
to be carried, or some person duly
authorized in that behalf, shall have
expressly declared to such carrier or his
agent the value and description thereof.
9.
A bare perusal of this Section would show that it
applies to those goods which are described in the schedule
to the Act.
1865.
I have perused the schedule to Carriers Act,
Neither the Capacitors nor the ICs are included
amongst the goods described in the schedule. The learned
counsel for the defendant could not point our any entry in
the schedule which covers either Capacitors or ICs.
Therefore, Section 3 of the Act has no application to the
consignments which were booked by plaintiff No.2 with the
defendant.
10.
The main plea taken by the defendant is that since
the goods were stolen while they were being transported in a
tempo,
there
was
no
negligence
on
its
part
and
consequently, it is not liable to compensate the plaintiffs for
the loss of the goods.
Ltd., AIR 2000 SC 1461, Supreme Court held that the
liability of a carrier in India is like that of an insurer and is
an absolute liability subject to an Act of God and a special
contract which the carrier may choose to enter with a
customer.
In this regard, the Court referred to the
provisions of Section 9 of the Act, which specifically
provides that in case of claim of damage or loss to or
deterioration of goods entrusted to a carrier, it is not
necessary for the plaintiff to establish negligence.
It was
further held that even assuming that the general principle
in cases of tortuous liability is that of the party who alleges
negligence against the other must prove the same, the said
principle has no application to cover the case under the
Carriers Act.
11.
In the case before this Court no special contract
between plaintiff No.2 and the defendant has even been
alleged.
Assuming that the goods entrusted to the
defendant for
transportation
were stolen
while being
transported to the premises of plaintiff No.2, a loss to the
plaintiffs on account of theft of the goods cannot be
considered as an Act of God. In South Eastern Carriers (P)
Ltd. vs Oriental F & G Insurance Co. Ltd. AIR 2004 Kerala
139, the plaintiffs had chartered a truck for carrier of goods.
The truck met with an accident.
It was claimed by the
carrier that there was no negligence or carelessness on the
part of the driver and that the accident had occurred only
due to unforeseen and inevitable reasons.
Noticing that
under Section 8 of Carriers Act the liability of a common
carrier is absolute except for Act of God and no evidence
had been produced by the carrier to show that the accident
had occurred due to Act of God, it was held that the carrier
was answerable for the loss of goods even when the loss is
not caused by negligence or for want of care on its part. It
was held that the only exceptions recognized by the Act are
the Act of God and of State‟s enemies or a special contract
that the carrier may choose to enter into with the customer.
In Oriental Insurance Company vs Mukesh & Co. AIR
2000 MP 35, the goods entrusted to the carrier were gutted
by fire during transport. The cause of fire was attributed to
sparks emitted at the time of tightening of consignment by
nylon ropes at the octroi post.
It was held by a Division
Bench of High Court that if the fire broke out due to some
unknown cause or due to the negligence of coolies, the
transporter as the common carrier under Section 8 of the
Carrier Act, was liable to pay for the loss of the damage to
the consignee. In any case, driver of the vehicle in which
the goods booked by plaintiff No.2 were neither being
transported nor any other witness has been produced to
prove the alleged theft. Hence, even the alleged theft of the
goods does not stand established.
The issue is decided
against the defendant.
12.
Issues No.2 and 5
These issues are inter-connected and can be
conveniently decided together.
„Exhibits PW-1/6 and PW-
1/7‟ are the Letters of Subrogation purporting to be
executed by plaintiff No.2, Calcom Electronics Ltd. in favour
of plaintiff No.1 National Insurance Company Ltd.
these
documents,
Rs.12,50,000/-
loss/damage
plaintiff
from
No.2,
plaintiff
to
No.420602/175152/31.03.98
it
Vide
on
No.1
receipt of
in respect of
under
assigned,
Policy
transferred
and
abandoned all its rights, title and interest in respect of the
above mentioned policy.
It also granted full power to
plaintiff No.1 to use all lawful ways and means to recover
the damages. Plaintiff No.1 was also authorized to sue in
the name of plaintiff No.2 in any action or proceedings that
it might bring in its own name or in the name of plaintiff
No.2 in relation to the matter assigned, transferred and
abandoned under these documents. It also agreed that any
money collected from any person shall be the property of
plaintiff No.1 and if the same is received by plaintiff No.2, it
will be made over to plaintiff No.1. These documents have
been proved by PW-1, Shri A.K. Goel, Assistant Manager of
plaintiff No.1.
The authenticity of these documents which
have otherwise been attested by a Notary Public in New
Delhi has been assailed by the defendant on the ground
that the policy number mentioned in these documents is
different from the policy number mentioned in the receipt
„Exhibit PW-1/11‟ and also on the ground that according to
PW-1 the Letter of Subrogation was executed in Rohtak,
whereas they have been attested at New Delhi. I, however,
find no merit in the contention.
PW-1 did not have any
personal knowledge as to the place where these documents
were executed.
He stated that he presumed that it must
Page 11 of 23
have been executed in the office of the plaintiff-Company in
Rohtak, from where the policy had been taken.
However,
this presumption on the part of PW-1 cannot be preferred to
the documents themselves.
Plaintiff No.2 is a Company
based in Delhi. The stamp papers on which the documents
have been prepared were purchased from a stamp vendor in
Delhi, as is evident from the stamp of the stamp vendor on
the back side of the documents. The documents have been
attested by a witness Mr. A.K. Dixit, who has given his
address as B-23, Wazirpur Industrial Area, Delhi.
They
have been attested by a Notary Public at New Delhi. There
is no indication in the documents that they were executed
at Rohtak, though they are addressed to Rohtak Branch of
National Insurance Company Ltd. Hence, there is no merit
in the contention that the documents were executed at
Rohtak and attested at New Delhi.
„Exhibits PW-1/8 and PW-1/9‟ are the other two
Letters of Subrogation purporting to be executed by plaintiff
No.2 in favour of plaintiff No.1 in respect of Policy
No.420602/21/99/96/00020/11-06-96. These documents
also have been attested by a Notary Public at New Delhi.
They also have been signed by Mr. A.K. Dixit who has
signed `Exhibit PW-1/6 and PW-1/7‟ as a witness.
The
stamp paper for these documents have also been purchased
from a stamp vendor in Delhi as is evident from the stamp
of the stamp vendor on the back side of these documents.
As regards the alleged discrepancy in the policy
number, a bare perusal of the receipt `Exhibit PW-1/11‟
would show that the number 420602/21/99/0005/98
mentioned in this document is claim number and not the
policy number. Therefore, there is no contradiction in the
receipt and the Letters of Subrogation as regards the
number of the policy to which these documents pertain.
13.
In view of the Letters of Subrogation „Exhibits PW-
1/6 to PW-1/9‟, executed by plaintiff No.2 in favour of
plaintiff No.1, it was competent for plaintiff No.1 to file this
suit in the joint name of National Insurance Company Ltd.
and Calcom Electronics Ltd.
14.
„Exhibit
PW-1/10‟
is
the
Power
of
Attorney
purporting to be executed by plaintiff No.2, Calcom
Electronics Ltd.
in favour
of
plaintiff
No.1,
National
Insurance Company Ltd. Vide this document, plaintiff No.1,
was authorized to present any application before any
authority or any person concerned for the claim arising
under the policy mentioned in the document. Plaintiff No.1
was also authorized to file suit in Court of law against any
concerned person for recovery of money for the claim on
behalf of plaintiff No.2 and give a valid discharge and an
effectual receipt.
This document has been attested by a
Notary Public at New Delhi on 6th March, 1999.
15.
Since
the
Power
of
Attorney
Ex.
PW-1/10,
purporting to be executed by plaintiff No. 2 in favour of
plaintiff No. 1 has been attested by a Public Notary, there is
a statutory presumption under Section 85 of Evidence Act
that the Power of Attorney was executed by the person by
whom it purports to have been executed and the person
who executed the power of attorney was fully competent in
this regard. In Jugraj Singh and Anr. Vs. Jaswant Singh
and Ors., AIR 1971 SC 761, the Power of Attorney attested
by a Public Notary was disputed on the ground that it did
not show on its face that the Notary had satisfied himself
about the identity of the executant. Supreme Court held
that there was a presumption of regularity of official acts
and that the Notary must have satisfied himself in the
discharge of his duties that the person who was executing it
was the proper person.
In Rajesh Wadhwa vs. Sushma
Page 14 of 23
Govil, AIR 1989, Delhi 144, it was contended before this
Court that till it is proved that the person who signed the
said power of attorney was duly appointed attorney, the
court cannot draw a presumption under Section 57 and 85
of the Evidence Act. Repelling the contention, it was held by
this Court that the very purpose of drawing presumption
under Sections 57 and 85 of the Evidence Act would be
nullified if proof is to be had from the foreign country
whether a particular person who had attested the document
as a Notary Public of that country is in fact a duly appointed
Notary or not.
When a seal of the Notary is put on the
document, Section 57 of the Evidence Act comes into play
and a presumption can be raised regarding the genuineness
of the seal of the said Notary, meaning thereby that the said
document is presumed
to have been attested by a
competent Notary of that country. In Punjab National Bank
vs. Khajan Singh, AIR 2004 Punjab and Haryana 282, the
Power of Attorney in favour of a bank, which had been duly
attested, was rejected by the learned District Judge on the
ground that the presumption under Section 85 of Evidence
Act was available to a particular class of Power of Attorneys
described in the section, which was confined to its execution
and authenticity alone. The High Court, however, rejected
the view taken by the learned District Judge holding that
absence of proof of resolution authorizing the executant to
execute the Power of Attorney could not be sustained and a
presumption in favour of the attorney would arise under
Section 85 Act.
Hence, in this case also the Court is
required to draw the requisite statutory presumption that
the power of attorney Ex. PW-1/10 was executed by plaintiff
No.2 in favour of plaintiff No.1 and that the person who
executed the Power of Attorney on behalf of plaintiff No. 2
was duly authorized in this behalf.
16.
The authenticity of the Power of Attorney Ex. PW-
1/10 has been disputed by the defendant on the ground
that it has been executive at Rohtak, but attested at New
Delhi. I, however, find no merit in the objection. The Stamp
Paper for this document was purchased from Delhi as is
evident from the stamp of the stamp vendor Reeta Kashyap
on the back side of the stamp paper. Plaintiff No. 2 has an
office in New Delhi and not in Rohtak. There is a staturory
presumption
of
a
valid
execution
of
this document.
Therefore, it appears that though at the time this document
was typed, the intention could be to get it executed at
Rohtak, it was in fact executed at New Delhi as is evident
from attestation by Notary Public at New Delhi on 06 th
March, 1999.
Another important aspect in this regard is that
plaintiff No. 2 has not come forward to file any suit against
the defendant for recovery of compensation for the loss of
the goods which it had booked with the defendant. Letters
of Subrogation have also been executed by plaintiff No.2 in
favour of plaintiff No. 1.
The claim of plaintiff No. 2 has
been settled by plaintiff No. 1 by paying a sum of Rs
3106425/- to it. Therefore, there can be no genuine dispute
with respect to the authenticity of the Power of Attorney Ex.
PW-1/10.
17.
The learned counsel for the defendant has referred
to the decision of the Supreme Court in Oberai Forwarding
Agency vs. New India Assurance Company Limited, AIR
2000 Supreme Court, 855 where the Court referred to the
following statement in the standard text book on Insurance
Law by Mac. Gillivray Parkington (Seventh Edition).
“1131. Difference between subrogation
and assignment permit one party to enjoy
the rights of another, but it is well-
established that subrogation is not a
species of assignment.
Rights of
subrogation vest by operation of law
rather than as the product of express
agreement. Whereas rights of subrogation
can be enjoyed by the insurer as soon as
payment is made, an assignment requires
an agreement that the rights of the
assured be assigned to the insurer. The
insurer cannot require the assured to
assign to him his rights against third
parties as a condition of payment unless
there is a special clause in the policy
obliging the assured to do so. This
distinction is of some importance, since
in certain circumstances an insurer
might prefer to take an assignment of an
assured‟s rights rather than rely upon his
rights of subrogation. If, for example,
there was any prospect of the insured
being able to recover more than his
actual loss from a third party, an insurer,
who had taken an assignment of the
assured‟s rights, would be able to recover
the extra money for himself whereas an
insurer who was confined to rights of
subrogation would have to allow the
assured to retain the excess.
1132. Another distinction lies in the
procedure of enforcing the rights acquired
by virtue of the two doctrines. An insurer
exercising rights of subrogation against
third parties must do so in the name of
the assured. An insurer who has taken a
legal assignment of his assured‟s rights
under statute should proceed in his own
name..”
18.
The learned counsel has also referred to Gujarath
Andhra Road Carriers Transport Contractors and ors. vs.
United India Insurance Company Ltd. AIR 2006, Andhra
Pradesh, 401 where the aforesaid statement in the book by
Mac Gillivray Parkington was extracted.
These judgments are of no help to the defendant since
the insured has also been joined as plaintiff No.2 in the suit,
though the Letters of Subrogation executed by plaintiff No. 2
in favour of plaintiff No. 1 also stipulate assignment and
transfer of the actionable rights, title and interest of plaintiff
No.2 to plaintiff No.1. However, the legal proposition in this
regard has recently been settled as under by a Constitution
Bench
of
Supreme
Court
in
Economic
Transport
Organization vs. Charan Spinning Mills Private Limited
and Anr. (2010) 4 SCC 114
“(a) The insurer, as subrogee, can file a
complaint under the Act either in the
name of the assured (as his attorney-
holder) or in the joint names of the
assured and the insurer for recovery of
the amount due from the service
provider. The insurer may also request
the assured to sue the wrong doer
(service provider).
(b) Even if the letter of subrogation
executed by the assured in favour of the
insurer contains in addition to the words
of subrogation, any words of assignment,
the complaint would be maintainable so
long as the complaint is in the name of
the assured and insurer figures in the
complaint only as an attorney holder or
subrogee of the assured.
(c) The insurer cannot in its own name
maintain a complaint before a consumer
forum under the Act, even if its right is
traced to the terms of a Letter of
subrogation-cum-assignment executed by
the assured.
(d) Oberai is not good law insofar as it
construes a Letter of Subrogation-cum-
assignment, as a pure and simple
assignment. But to the extent it holds
that an insurer alone cannot file a
complaint under the Act, the decision is
correct.”
19.
referred
The learned counsel for the defendant has also
to
the
decision
of
Supreme
Court
in
S.P.
Chengalvaraya Naidu (dead) by L.Rs. vs. Jagannath
(dead) by L.Rs., and others, AIR 1994 Supreme Court 853
where it was held that if the litigants withhold vital
documents relevant to the litigation, it amounts to fraud on
the Court since one who comes to the Court must come
with clean hands. This judgment does not advance the case
of the defendant for the simple reason that the plaintiffs
have not withheld any vital document from the Court, and
no forged document is shown to have been filed by them.
20.
Though no officer/official of plaintiff No.2 has been
produced in the witness box to prove the value of the goods
which were booked by plaintiff No.2 with the defendant,
that, to my mind, would not be material in the facts and
circumstances of this case.
In the written statement, the
defendant did not dispute the amount of Rs 3106425/-
alleged to have been paid by plaintiff No.1 to Plaintiff No. 2
though there was a specific averment in this regard in para
8 of the plaint.
This is not the case of the defendant,
anywhere in the written statement, that plaintiff No.1 did
not pay any amount to plaintiff No.2 or that it had paid an
amount less than Rs3106425/- to it. This was also not the
case of the defendant in the written statement that the
value of the goods booked with it was less than Rs
3106425/- and that plaintiff No. 1 had made excess
payment to plaintiff No.2.
That appears to be the reason
why no issue was framed by the Court on this aspect of the
matter.
The plaintiffs have placed on record the receipt
executed by plaintiff No.2 in favour of plaintiff No. 1 while
receiving the aforesaid amount. In para 9 of his affidavit,
Shri A.K. Goel specifically stated that plaintiff No. 2 has
suffered a loss of Rs 3106425/- on account of loss of
consignment.
During his cross-examination, it was not
suggested to him that this loss suffered by plaintiff No.2, on
account of loss of the consignment, was less than the
aforesaid amount.
Mr. A.K. Goel also stated in para 10 of
his affidavit that on claim being preferred with it by plaintiff
No.2, it had deputed M/s Investigators Legal Advisors and
Surveyors
to
investigate
in
the
matter
and
after
investigation, the surveyors had confirmed the loss vide
report Ex. PW-1/5.
This is not the case of the defendant
that no surveyor was appointed by plaintiff No.1, to assess
the loss sustained by plaintiff No.2.
Mr Mukesh Kumar,
who came in the witness box as DW-1, also did not claim
that the value of the goods lost by the defendant was less
that the amount paid by plaintiff No. 1 to plaintiff No.2. In
these circumstances, I hold that the plaintiff No. 1is entitled
to recover the amount of Rs 3106425/- from the defendant.
The issues are decided against the defendant.
ORDER
21.
In view of my findings on the issues, a decree of Rs
3106425/- with costs is passed in favour of plaintiff No.1
and against the defendant. Plaintiff No. 1 shall also be
entitled to pendente lite and future interest at the rate of 9%
per annum. Decree sheet be prepared accordingly.
(V.K. JAIN)
JUDGE
NOVEMBER 23, 2010
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