Delhi District Court
Oriental Insurance Co. Ltd vs M/S Ahmedabad Bengal Roadways Private ... on 9 January, 2024
IN THE COURT OF SHRI PANKAJ GUPTA:
DISTRICT JUDGE, (S/W) (COMMERCIAL COURT)-01,
DWARKA COURTS : DELHI.
CS (COMM) NO.177/20
ID No. CNR No. DLSW01-0083632020
In the matter of :
1. Oriental Insurance Co. Ltd.
101 L.S.C. Ist floor,
H-Block Market,
Vikas Puri,New Delhi,
Delhi-110018.
2. M/s. Havells India Limited
Offices at 2D, Sector 126
Expressway, Noida-201304
...........PLAINTIFFS
versus
1. M/s. Ahmedabad Bengal Roadways
Private Limited,
1295/I-B, Opp. D.C. Office,
Near Fun 'N' Food Village,
Kapashera Village,
New Delhi-110037.
2. Raj Singh, Director,
Ahmedabad Bengal Roadways
Private Limited,
1295/I-B, Opp. D.C. Office,
Near Fun 'N' Food Village,
Kapashera Village,
New Delhi-110037.
3. Ram Virender Narwal, Director
Ahmedabad Bengal Roadways
Private Limited,
1295/I-B, Opp. D.C. Office,
Near Fun 'N' Food Village,
Kapashera Village,
New Delhi-110037.
...........DEFENDANTS
CS (Comm) No. 177/20 Page No. 1 of 13
Oriental Insurance Co. Ltd. vs.
M/s. Ahmedabad Bengal Roadways Pvt. Ltd.
Date of Institution : 23.11.2020
Date when the case reserved
for Judgment : 09.01.2024
Date of Judgment : 09.01.2024
JUDGMENT
1. The plaintiffs filed the present suit for recovery of Rs. 12,00,180/-along with all costs and interest @ 18 % p.a. from the date of filing the suit till realization of money.
2. In the plaint, it is stated that the plaintiff deals in insurance of various kinds of risks including Medi-claim, auto insurance and transit insurance. Sh. A.K. Jha, Senior Divisional Manager is duly authorized to sign, verify, institute the present suit on behalf of the plaintiff. It is also stated that the plaintiff no. 1 provided "Open Marine Cargo Policy" (hereinafter referred to as "the policy") to the plaintiff no.2. The policy covered the Inland Transit (Rail/Road). Plaintiff no. 2 booked the consignment of 309 cardboard cartons with the defendant no. 1 for transportation from Sikandrabad to Kanpur, UP vide GR no. 31093 dated 20.03.2018 for Rs. 11,86,305/-. The consignment was loaded in the defendant's truck no. HR-55-H-3877. Later, the plaintiff no. 2 came to know that the whole consignment along with the truck and the driver was missing. On investigation, it was found that on 21.03.2018, when the truck was in transit some unknown persons had hijacked the truck. Since, the whole transit was insured by the plaintiff no. 2 with the plaintiff no. 1, hence, the plaintiff no. 2 raised a claim with respect to the loss which occurred due to the CS (Comm) No. 177/20 Page No. 2 of 13 Oriental Insurance Co. Ltd. vs. M/s. Ahmedabad Bengal Roadways Pvt. Ltd. theft. The plaintiff no. 1 allowed the claim of the plaintiff no. 2 for Rs. 12,00,180/- and released the said amount in its favour. Consequently, the plaintiff no. 2 executed a letter of subrogation in favour of the plaintiff no. 1 in terms of section 79 of the Marine Insurance Act. However, the defendants failed to pay Rs. 12,00,180/- to the plaintiff no. 1 despite receipt of the legal notice dated 20.05.2019. Hence, the present suit.
3. Notice of the suit was issued to the defendants and the same was duly served upon the defendants. Despite that, the defendants have neither appeared before this court nor have filed the written statement (WS) despite given opportunities. Vide order dated 30.09.2021, the defendants were proceeded ex-parte.
4. The plaintiff in order to prove its case has examined its authorized representative Sh. K.S. Bodh as PW-1 and his affidavit in evidence is Ex.PW1/A. He relied upon the following documents:-
1. Copy of Board Resolution / Power of Attorney Ex. PW- 1/1.
2. Marine Cargo Policy Ex. PW-1/2.
3. Copy of bills dated 20.03.2018 Mark A. 4 Copy of FIR Mark B.
5. Copy of claim Ex. PW-1/5.
6. Letter of Subrogation Ex. PW-1/6.
7. Copy of legal notice along with receipt Ex. PW-1/7.CS (Comm) No. 177/20 Page No. 3 of 13
Oriental Insurance Co. Ltd. vs. M/s. Ahmedabad Bengal Roadways Pvt. Ltd.
5. I have heard the learned counsel for the plaintiff and have perused the material available on record.
6. Counsel for the plaintiff pleaded that the plaintiff no. 1 provided the policy Ex. PW1/2 to the plaintiff no. 2 on 03.04.2017 which covered the Inland Transit ( Railway/ Road) of the consignment and insured that against any loss and damage. The plaintiff no.2 booked the consignment of 309 cardboard cartons with the defendant no. 1 for transportation from Sikandrabad to Kanpur, UP vide GR no. 31093 dated 20.03.2018 for Rs. 11,86,305/-. The consignment was loaded in the defendant's truck no. HR- 55-H-3877. However, during transit, the consignment along with the truck and the driver was missing. Upon investigation, it was found that on 21.03.2018, during the transit near Etta Nagar, U.P, some unknown person hijacked the truck. Consequently, FIR no. 354/2018 was registered on 30.03.2018. Subsequently, the truck was traced out and 56 cardboard boxes were found in the truck. The plaintiff no. 2 raised a claim upon the plaintiff no. 1 for Rs. 12,00,180/- towards loss of the boxes which was allowed by the plaintiff no. 1. On receipt of said amount, the plaintiff no. 2 executed a letter of subrogation Ex. PW1/6 in favour of plaintiff no. 1 along with other requisite documents. Accordingly, the defendants are liable to compensate the plaintiff no. 1 for the loss caused due to their negligence because the defendant no. 1 is the carrier in terms of section 17 of Carriage by Road Act, 2007.
7. PW-1 by way of his affidavit Ex. PW-1/A deposed CS (Comm) No. 177/20 Page No. 4 of 13 Oriental Insurance Co. Ltd. vs. M/s. Ahmedabad Bengal Roadways Pvt. Ltd. the facts as pleaded in the plaint. Perusal of the Marine Cargo Policy Ex. PW-1/2 reveals that the plaintiff no. 2 insured the consignment with the plaintiff no. 1.
8. It is the own case of the plaintiff that the defendant no. 1 is a private limited company and the defendants no. 2 and 3 are its directors and impleaded them as such. As per record, no allegation of fraud has not been made against the defendants no. 2 and 3. Therefore, the issue arises as to whether they are the necessary and proper party to the suit.
9. In the judgment titled as "Sanuj Bathla & Anr vs Manu Maheshwari & Anr", passed by the Hon'ble Delhi High Court in C.R.P. 166/2018, it was held:
"19. The averments at the highest are that Defendant Nos. 2 and 3 had jointly and personally requested and persuaded the Plaintiff for financial assistance for smooth functioning of the Company. The Company is a Private Limited Company and Defendant Nos. 2 and 3 are its Directors and Principal Officers in-charge and responsible for day- to-day business affairs of the Company. It is further averred that the loan amount was given to the Defendants on a certain rate of interest and while the Defendants were making payment from time to time for some time, but later stopped making the payments. The last payment was made on 05.04.2010 by a cheque of Rs.5 Lakhs.CS (Comm) No. 177/20 Page No. 5 of 13
Oriental Insurance Co. Ltd. vs. M/s. Ahmedabad Bengal Roadways Pvt. Ltd.
20. Allegations in plaint do not refer to any transaction with Defendant Nos. 2 and 3 in their personal capacity apart from stating that they were known to the Plaintiff in a friendly capacity. Although it is claimed that the money was advanced as loan due to personal relation with Defendant Nos. 2 and 3, it is undisputed that the transaction was directly with the Company and loan was advanced in the name of the Company by a cheque. Instalments were being paid to the Plaintiff from the account of the Company. There is no allegation of fraud levelled against Defendant Nos. 2 and 3 and nor is there any averment that the Corporate structure was created as a mere facade or camouflage to avoid liabilities.
21. Learned counsel for the Defendant Nos. 2 and 3, in my view, has rightly argued that in the absence of any allegations of fraud or misrepresentation, Directors cannot be held personally liable. It is also not the case of the Plaintiff that the Directors were personal guarantors to the loan transaction or had assured to indemnify the amount. It is a settled law that doctrine of lifting the corporate veil is available to the Plaintiff where it is permitted by the Statute or Corporate structure is instituted to perpetuate a fraud. The averments made in the plaint, in my view, do not justify the lifting of the corporate veil to make the Directors personally liable. The cryptic observation of the Trial Court, that the facts and circumstances of the case attract the principle of CS (Comm) No. 177/20 Page No. 6 of 13 Oriental Insurance Co. Ltd. vs. M/s. Ahmedabad Bengal Roadways Pvt. Ltd.
lifting the corporate veil, is not supported by the pleadings and I may also note that the order does not even give any reasons for having so held."
10. As mentioned above, the plaintiff no.1 has not levelled any allegation of fraud against the defendants no. 2 and 3. Hence, in view of the above cited judgment, I am of the opinion that the defendants no. 2 and 3 are not the necessary and proper party to the present suit. Accordingly, the suit is bad for mis-joinder of the defendants no. 2 and 3.
11. Case of the plaintiff no. 1 is that it insured the consignment of the plaintiff no. 2 which was to be transported from Sikandrabad to Kanpur, UP. The plaintiff no. 2 booked the consignment for transportation with the defendant no.1 vide GR no. 301093 dated 20.09.2018 and the consignment was transported in truck no. HR-55-H- 3877. The plaintiff no. 1 has relied upon the bills dated 20.03.2018 Mark A to show that the plaintiff no. 2 booked the consignment with the defendant no.1. However, the plaintiff no.1 has failed to prove the said bills as per law because these are the photocopies only.
12. During the course of the arguments, counsel for the plaintiff no. 1 relied upon the intimation letter dated 02.04.2018 sent by the plaintiff no. 2 to the defendant no. 1 and the certificate dated 06.04.2018 issued by the defendant no. 1 to substantiate that it booked the consignment with the defendant no.1. However, the pleadings and the testimony of PW-1 are completely silent to this effect. Hence, the said plea is beyond pleadings. Further, the plaintiff no. 1 has CS (Comm) No. 177/20 Page No. 7 of 13 Oriental Insurance Co. Ltd. vs. M/s. Ahmedabad Bengal Roadways Pvt. Ltd. failed to prove letter dated 02.04.2018 and certificate dated 06.04.2018.
13. According to the plaintiff no. 1, the truck along with the consignment and the driver was lost during the transit. Counsel for the plaintiff no. 1 relied upon copy of FIR No. 354/2018 Mark B to this effect. However, the plaintiff has failed to prove the said document as per law.
14. Counsel for the plaintiff no. 1 has relied upon copy of claim Ex. PW-1/5 lodged by the plaintiff no. 2 upon the plaintiff no.1.
15. Perusal of copy of claim Ex. PW-1/5 reveals that along with the same, the plaintiff no. 1 submitted the letter of intention regarding theft dated 02.04.2017 with the defendant no. 1 and the certificate of fact dated 06.04.2018 and the certificate issued by the defendant no. 1 to the plaintiff. However, as discussed above, the plaintiff has failed to prove the abovementioned documents. On the other hand, copy of claim Ex. PW-1/5 itself is not sufficient to prove that the plaintiff no. 2 booked the consignment with the defendant no. 1.
16. In view of the foregoing discussions, it can be held that the plaintiff no.1 has failed to prove that the plaintiff no. 2 booked the consignment with the defendant no. 1 and some part of the same was lost during the transit due to negligence of the defendant no. 1.
17. In the judgment titled as "Essemm Logistics v.
CS (Comm) No. 177/20 Page No. 8 of 13Oriental Insurance Co. Ltd. vs. M/s. Ahmedabad Bengal Roadways Pvt. Ltd. DARCL Logistics Ltd.", reported in (2023) 9 SCC 753, it was held:
"7. The above Section 10 of the Carriers Act, 1865 for convenience's sake is reproduced hereinbelow:
"10. Notice of loss or injury to be given within six months.--No suit shall be instituted against a common carrier for the loss of, or injury to, goods [including containers, pallets or similar articles of transport used to consolidate 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."
8. The above Section 10 of the Carriers Act, 1865 bars the institution of a suit only against a common carrier for the loss of, or injury to, goods entrusted to the common carriage for the purposes of carriage without giving a notice in writing of the alleged loss within six months of the loss or injury first coming to the knowledge of the plaintiff. In other words, only a suit for recovering damages for the loss of or injury to the goods entrusted to the common carrier for carriage is barred without a legal notice, as aforesaid but not suits of other nature or for recovery of any amount other than due to loss or injury to the goods entrusted for carriage.
9. The Carriage by Road Act, 2007 (new) which replaced the earlier Act vide Section 16 provides as CS (Comm) No. 177/20 Page No. 9 of 13 Oriental Insurance Co. Ltd. vs. M/s. Ahmedabad Bengal Roadways Pvt. Ltd.
under:
"16. Notice for institution of a suit.--No suit or other legal proceeding shall be instituted against a common carrier for any loss of, or damage to, the consignment, unless notice in writing of the loss or damage to the consignment has been served on the common carrier before the institution of the suit or other legal proceeding and within one hundred and eighty days from the date of booking of the consignment by the consignor."
10. The aforesaid Section 16 of the new Act is more or less in pari materia with Section 10 of the Carriers Act, 1865 which has been repealed. It also lays down that no suit or legal proceedings shall be instituted against a common carrier for any loss of, or damage to, a consignment unless a notice in writing of such loss to the consignment has been served upon the carrier before the institution of the suit or the legal proceedings within six months from the date of booking of the consignment by the consignor. A close look to the above provision would reveal that it not only bars the suit but also legal proceedings which were not included in the earlier provision of Section 10 of the Carriers Act, 1865. The other deviation is by the use of word "consignment" in place of "goods entrusted". In other words, both the aforesaid provisions though Section 10 of the Carriers Act stands repealed and ceased to be in force, provides for a notice before instituting any suit/legal proceedings against a common carrier for any loss or CS (Comm) No. 177/20 Page No. 10 of 13 Oriental Insurance Co. Ltd. vs. M/s. Ahmedabad Bengal Roadways Pvt. Ltd.
damage to the consignment. The aforesaid provision is only in context of the institution of a suit or a legal proceeding for the loss of or damage to the consignment and not in respect of any other kind of loss or damage or claim other than to the loss or damage to the consignment.
15. A plain reading of Section 16 of the new Act reveals that it is applicable only in respect of institution of a suit or legal proceeding against a common carrier for any loss of, or damage to, the consignment. The use of the word "consignment" in the said provision is very material. It denotes that the suit and legal proceedings in connection with the loss or damage to the consignment alone are covered by it for which purpose, a notice is mandatory. The said provision has no application in reference to loss of any other kind or the suit or legal proceedings instituted for recovery of damages in respect of loss of different nature."
18. In view of the above cited judgment, it can be held that in view of section 16 of Carriage by Road Act, 2007, no suit or legal proceedings shall be instituted against a common carrier for any loss of, or damage to, a consignment unless a notice in writing of such loss to the consignment has been served upon the carrier before the institution of the suit or the legal proceedings within six months from the date of booking of the consignment by the consignor. The aforesaid provision is only in context of the institution of a suit or a legal proceeding for the loss of or CS (Comm) No. 177/20 Page No. 11 of 13 Oriental Insurance Co. Ltd. vs. M/s. Ahmedabad Bengal Roadways Pvt. Ltd. damage to the consignment and not in respect of any other kind of loss or damage or claim other than to the loss or damage to the consignment.
19. It is the own case of the plaintiff no. 1 that the defendant no. 1 is the common carrier within the meaning of Carriage by Road Act, 2007. According to the plaintiff no.1, the plaintiff no.2 booked the consignment with the defendant no. 1 on 20.03.2018. It is evident from the marine claim form dated 23.05.2018 Ex. PW1/5 that the loss and damage was noticed on 28.03.2018. According to the plaintiff no.1, the plaintiff no. 2 executed a letter of subrogation dated 18.04.2018 Ex. PW1/6 in its favour. Hence, according to section 16 of Carriage by Road Act, 2007, notice in writing of such loss to the defendant no. 1 must have been served upon it before the institution of the suit within six months from 18.04.2018 at best. However, it is the own case of the plaintiff no. 1 that it served a legal notice dated 20.05.2019 Ex. PW1/7 upon the defendants whereby it called up them to pay Rs. 12,28,966/- for the loss and damages caused to the consignment during the transit. Hence, the present suit is hit by section 16 of Carriage by Road Act, 2007.
20. In view of the foregoing discussions, the plaintiff is held not entitled to the decree as prayed.
21. In view of the foregoing discussions, the suit of the plaintiff is dismissed. No order as to cost. Decree sheet be prepared accordingly.
CS (Comm) No. 177/20 Page No. 12 of 13Oriental Insurance Co. Ltd. vs. M/s. Ahmedabad Bengal Roadways Pvt. Ltd.
22. File be consigned to the record room.
ANNOUNCED IN THE OPEN COURT, Digitally signed On this 09th day of January, 2024 PANKAJ by PANKAJ GUPTA GUPTA Date:
2024.01.09 15:34:16 +0530 (PANKAJ GUPTA) District Judge, S/W (Commercial Court)-01:
NEW DELHI CS (Comm) No. 177/20 Page No. 13 of 13 Oriental Insurance Co. Ltd. vs. M/s. Ahmedabad Bengal Roadways Pvt. Ltd.