When insurer is entitled to receive damages from common carrier?

IN THE HIGH COURT OF KERALA AT ERNAKULAM

AS. No. 234 of 1996

Decided On: 03.06.2009

Appellants: Kerala Transport Company
Vs.
Respondent: Scientico Instruments

Hon'ble Judges/Coram:
M.L. Joseph Francis, J.

Insurance - Recovery of damages - Suit for special Power of Attorney by the Insurance Company and consignee, claiming the estimated loss of Rs. 49,368/- with interest - Learned Sub Judge, on considering the evidence, decreed the suit - Hence, present appeal against judgment and decree - Held, in a suit filed for recovery of damages, burden would not lie on Plaintiff owner to prove that loss or damage to the goods was caused owing to negligence or criminal act of the carrier or his agent or servants by virtue of Section 9 of the Carrier's Act - Only exception to the carrier's liability was whether the loss or damage was caused due to the act of God or enemies of the State - Appellant had no case that accident was due to the act of God or enemies of the State - Therefore, first Defendant was liable for the damage caused to the goods - Since, goods were insured with the first Plaintiff and he had paid the amount to the second Plaintiff consignee and obtained Ext.A7 letter of subrogation, first Plaintiff was entitled to realize the suit amount from first Defendant carrier - Learned Sub Judge was fully justified in decreeing the suit - Impugned judgment and decree in original suit on the file of the Sub Court was confirmed - Appeal dismissed.

1. This appeal is filed by the first defendant in O.S. No. 358 of 1993 on the file of the Sub Court, Kozhikode. The first respondent is the second defendant. Respondents 2 and 3 are the plaintiffs in that suit.

2. The case of respondents 2 and 3, who are the plaintiffs in the suit, is that the second respondent purchased some goods from the third respondent and booked the same through the appellant's office at Pune to Quilandy. On transit, by the appellant in its lorry, they got damaged. Since it was insured with the second respondent, the second respondent paid the amount in terms of the Insurance policy and upon a letter of subrogation and special Power of Attorney filed the suit by the Insurance Company and the consignee, claiming the estimated loss of Rs. 49,368/- with interest.

3. The appellant admitted the transport of goods and inter alia contended that the consignee took delivery of the articles without any complaints and demanded no certificate of damage in the prescribed form. The appellant also contended that no damage is caused to the goods.

4. In the Sub Court, PWs. 1 and 2 and DWs. 1 and 2 were examined and Exts.A1 to A8 and B1 to B5 were marked. The learned Sub Judge, on considering the evidence, decreed the suit, directing the first defendant to pay a sum of Rs. 53,328/- together with interest at the rate of 12% p.a. on the principal sum of Rs. 49,368/- from the date of the suit, together with cost of the suit to the first plaintiff. Against that judgment and decree, the first defendant filed this appeal.

5. Heard the learned Counsel for the appellant and the respondents.

6. There is no dispute that the second plaintiff used to purchase Laboratory equipments from M/s. Scientico Instruments, Bombay and the goods are used to carry through public carriers. The second defendant as per Ext.A1 lorry receipt dated 12.1.1992 forwarded the consignment through the first defendant from Bombay to Kozhikode. The second plaintiff received the goods from the first defendant on 25.1.1992. The plaintiffs alleged that when the goods were received by the second plaintiff, it was found to be in a damaged condition and so survey was conducted and the Surveyor assessed the damages as Rs. 46,196.28. It is further alleged by the plaintiffs that the damage was caused to the consignment due to the negligent and careless transportation of the goods by the first defendant carrier. The second defendant has consigned BOD incubator and anti-vibration tables from Thane to Quilandy. Since the goods were insured with the first plaintiff Insurance Company, that company paid the insurance value of the goods of Rs. 49,368/- to the second plaintiff.

7. PW1, the Assistant Manager of the first plaintiff Insurance Company, has given evidence that they have obtained Ext.A7 letter of Subrogation and Special Power of Attorney on 4.11.1992 and as such the first plaintiff is entitled to get the entire amount that was paid to second plaintiff on 5.11.1992, which is evident from Ext.A6 bill. DW1, Assistant Manager of the first defendant company, deposed that the first defendant is not liable for the damage, if any, caused to the goods transported to the second plaintiff. DW2, who is an agent of the first defendant, swears that he was present at the time of delivery of the consignment to the second plaintiff and that there was no damage due to the packing condition or transportation of goods to the second plaintiff.

8. There is no dispute that the goods were transported in the carrier on 21.1.1992 and the Carrier reached the destination on 25.1.1992. The plaintiffs allege that on the same day damage to the goods was noted and the second plaintiff requested for damage certificate from the carrier, but the same was not issued. PW1 swears that on the same day of delivery of consignment it was inspected by PW2, who is a licensed Surveyor, and prepared Ext.A6 Survey report. PW2 swears that he assessed the damage and the damage was caused due to the transportation of goods. PW2 swears that the consignment was not in good condition and no repair can be effected for the same and that on the second day of inspection on 10.2.1992 the Engineers of the first defendant company were present and he had discussion with them.

9. Ext.B2 is the letter dt.26.6.1992 issued to the second plaintiff by the first defendant, in which it is stated that the consignment was despatched to Quilandy in Truck No. MH 04/C 5109 and the consignment was delivered at Quilandy on 25.1.1992 in Truck No. KL 11/4236. In Ext.B2 it is mentioned that the Truck MH 04/C 5109 met with an accident and so the consignment was changed to Truck No. KL 11/4236. The learned Counsel for the appellant argued that there is no evidence to show that the first defendant was negligent in transporting the goods. This argument cannot be accepted in view of the fact that the first defendant admits in Ext.B2 that an accident took place enroute. The learned Counsel for the appellant submits that the first defendant is not liable to compensate the damage, as the second plaintiff is bound by the terms of the conditions printed on the reverse side of ext.A1 lorry receipt and B1 goods forwarding note and that it is a special contract signed between the parties and as such the carrier is not liable for any damage caused to the consignment on transit. But on perusing Exts.A1 and B1, it is seen that the first defendant has only signed it and the second defendant had not signed the same.

10. Section 6 of the Carriers Act provides that if there is a special contract signed by the owner of the property or by some other person duly authorised by such owner limiting liability, the common carrier can escape from the liability. It is true that certain conditions are printed on the back of Exts.A1 ad B1 and as per Clause 6 of Ext.A1, the company is not responsible for the damage to the contents of the package and as per Section 7 of the Carriers Act the company is not responsible for the package of the articles. The first defendant has no case that apart from Exts.A1 and B1 there is any document signed between the first defendant and the second plaintiff so as to construe a contract.

11. The only question to be considered is whether the conditions printed on the reverse side of Exts.A1 and B1 absolve the liability of a carrier from paying the damages caused in the accident. The learned Counsel for the contesting respondents, relying on the decision reported in Orient Roadlines v. M.B. Mohammad Hassan Sahib Co. MANU/KE/0308/1988 : 1989 ACJ 778 argued that the conditions printed on the reverse side of the consignment note will not absolve the liability of the carrier for the loss of goods entrusted to the carrier. In the decision in Metro Freight Carriers Pvt. Ltd. v. National Insurance Co. Ltd. MANU/KE/0224/1988 : 1989 ACJ 1042 it was held that the carrier's liability to compensate for the loss or damage of the goods is absolute with the only exception being loss due to act of God. In the decision reported in Nath Bros. Exim International Ltd. v. Best Roadways Ltd. MANU/SC/0200/2000 : [2000]2SCR538 it was held that the liability of a common carrier is the same as that of an insurer. He would be liable for the loss or damage caused to the goods due to his own negligence or criminal act or that of his agent or servants, notwithstanding any special contract limiting his liability as envisaged under Section 6 of the Carrier's Act. Even if the goods were booked with the carrier "at owner's risk" that would not exempt the carrier from his own negligence or that of his agent or servants.

12. In a suit filed for recovery of damages, the burden will not lie on the plaintiff owner to prove that the loss or damage to the goods was caused owing to negligence or criminal act of the carrier or his agent or servants by virtue of Section 9 of the Carrier's Act. The only exception to the carrier's liability is whether the loss or damage is caused due to the act of God or enemies of the State. The appellant has no case that the accident was due to the act of God or enemies of the State. Therefore, the first defendant is liable for the damage caused to the goods. Since the goods were insured with the first plaintiff and the first plaintiff had paid the amount to the second plaintiff consignee and obtained Ext.A7 letter of subrogation, the first plaintiff is entitled to realise the suit amount from the first defendant carrier. Therefore, I find that the learned Sub Judge is fully justified in decreeing the suit.

13. This appeal is hence dismissed and the judgment and decree in O.S. No. 358 of 1993 on the file of the Sub Court, Kozhikode is confirmed. The parties are directed to suffer their respective cost in this appeal.

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