Karnataka High Court
M/S Haryana Maharastra Roadways (Pvt) ... vs M/S The Oriental Insurance Company ... on 7 February, 2023
Author: N.S.Sanjay Gowda
Bench: N.S.Sanjay Gowda
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 7TH DAY OF FEBRUARY 2023
BEFORE
THE HON'BLE MR.JUSTICE N.S.SANJAY GOWDA
R.F.A.No.2014/2006(RES)
BETWEEN:
1. M/S HARYANA MAHARASTRA
ROADWAYS (PVT) LIMITED,
FLEET OWNERS & TRANSPORT,
CONRACTORS, HEAD OFFICE,
No.16/6, MATHURA ROAD,
(OPP. CAPITAL BUS STAND),
FARIDABAD,
REPRESENTED BY ITS
MANAGING DIRECTOR SRI.K.L.SETHI.
2. M/s HARYANA MAHARASTRA
ROADWAYS (PVT) LIMITED,
FLEET OWNERS & TRANSPORT
CONTRACTORS, REGISTERED OFFICE,
10/13, NEHRU NAGAR,
NEW DELHI - 65.
REPRESENTED BY APPELLANT No.1.
... APPELLANTS
(BY SRI.C.V.SUDHINDRA, ADVOCATE)
AND:
1. M/s THE ORIENTAL INSURANCE
COMPANY LIMITED,
DIVISION OFFICE No.2,
KHENY BUILDING,
No.3, 1ST FLOOR,
1ST CROSS,
2
GANDHINAGAR,
BANGALORE - 560 009.
REPRESENTED BY ITS
DIVISIONAL MANAGER.
2. M/s WIPRO FLUID POWER LTD.,
9-B, 10-A, PHASE I,
PEENYA INDUSTRIAL AREA,
BANGALORE - 560 058.
REPRESENTED BY R-1.
3. M/s HARYANA MAHARASTRA
ROADWAYS (PVT) LIMITED,
No.16-C, RAVI MANSION,
2ND FLOOR, JOURNALIST COLONY,
J.C.ROAD,
BANGALORE - 560 002.
... RESPONDENTS
(BY SRI.P.B.RAJU, ADVOCATE FOR R-1;
R-2 & R-3 ARE SERVED AND UNREPRESENTED)
THIS APPEAL IS FILED UNDER SECTION 96 OF CPC,
AGAINST THE JUDGMENT AND DECREE DATED:03.08.2006
PASSED IN O.S.No.241/2003 ON THE FILE OF THE VIII
ADDITIONAL CITY CIVIL JUDGE, BANGALORE CITY(CCH-15),
DECREEING THE SUIT FOR DAMAGES.
THIS APPEAL HAVING BEEN HEARD AND RESERVED
FOR JUDGMENT ON 12.01.2023, COMING ON FOR
PRONOUNCEMENT THIS DAY, THE COURT DELIVERED THE
FOLLOWING:
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JUDGMENT
1. The Oriental Insurance Company Limited (for brevity, referred to as "Insurer") and M/s. Wipro Fluid Power Limited (for brevity, referred to as "Consignor") instituted a suit for recovery of a sum of Rs.1,54,272/- against Haryana Maharashtra Road Ways (Private) Limited (for brevity, referred to as "Carrier") and the said suit was decreed for a sum of Rs.1,54,272/- along with interest at 6% per annum from the date of suit till the date of realisation. Aggrieved by the same, the Carrier is in appeal.
2. It was stated that a consignment containing Hydraulic Cylinders and various other components were packed in polythene bags and these bags were placed in 59 wooden crates/cases and the consignment was entrusted to the Carrier on 07.09.2001. The consignment was booked under carrier receipt Nos.G.R.1058 and 1059, which stated that the 4 consignment consisted of Hydraulic Cylinders worth Rs.31,07,611/- and the Consignee was M/s. Escorts J.C.B. Limited.
3. It was stated that Carrier received the goods and agreed to deliver the same to the Consignee and necessary charges were paid for the transport of these goods. It was, however, alleged that the Carrier failed to deliver the consignment and due to the negligent act on their part, the truck, in which the consignment was carried, met with an accident on 09.09.2001, which had resulted in damage to the consignment.
4. It was stated that 20 Hydraulic Cylinders had been damaged and had been rendered useless resulting in short delivery of goods worth Rs.1,69,144/-.
5. It was stated that the Consignor had insured the goods with the Insurer and the office of the Carrier at Bengaluru had issued a Damage Certificate dated 16.09.2001 and the Consignor had also received a Short 5 Delivery intimation from the Consignee and consequently, a claim was laid with the Insurer for a sum of Rs.1,69,144/- and the Insurance Company, being satisfied with the claim, accepted the same and settled it for a sum of Rs.1,53,772/- on 18.06.2002.
6. It was stated that the Carrier was bound to deliver the consignment with due care and caution and since the damage had occurred to the goods entrusted to it, it was liable to reimburse the loss of Rs.1,53,772/-.
7. It was stated that a notice was issued on 10.09.2001 calling upon the Carrier to pay damages of Rs.1,53,772/- and though this notice was received, the claim was not settled. It was also stated that a legal notice was issued and on receipt of the legal notice, the Carrier had sought some clarification and after the same were furnished, the Carrier proceeded to refuse the settlement of the claim and therefore, left with no other alternative, the suit was filed.
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8. The Carrier entered appearance and contested the suit. It admitted the entrustment of the consignment but denied the assertion that it had not taken due care and caution in respect of goods entrusted to it.
9. It stated that the truck in which the goods were being carried had been parked on the side of the road and another truck coming from the opposite direction collided with the said truck and as a result, there was damage to the goods being carried in the truck. It was stated that the accident had occurred only due to the negligence on the part of the other truck, and this was clear from the contents of the FIR registered in respect of the accident.
10. The Carrier, however, did not admit that 20 Hydraulic Cylinders had been damaged and it called upon the Consignor to prove this assertion. It also stated that it was unaware that the goods had been insured with the Insurer and the Damage Certificate had been issued at the instance of the Consignor without admitting the 7 liability under the law. The Carrier did not admit that Consignor had received Short Delivery intimation from the Consignee and that the value of the goods short delivered was Rs.1,69,144/-. The entire claim made by the Consignor was denied by the Carrier.
11. It was also stated that in the notice dated 10.09.2001, there had been no description of the quantum of loss and therefore, it was impermissible to lay a claim for damages. It was stated that the Consignor and the Insurer had colluded together and fixed an imaginary sum as the quantum of loss.
12. The Trial Court framed three issues. The issues that were framed were essentially as to whether it had been established that 20 Hydraulic Cylinders worth Rs.1,69,144/- had been damaged during transportation and whether the Insurer was entitled to be reimbursed a sum of Rs.1,53,772/-.
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13. On behalf of the plaintiffs, one Mr. Uday Kumar Shetty, one of the officials of the Insurer was examined as P.W.1 and 15 documents were got marked.
14. On behalf of the Carrier, one G.L.Sapru, Power of Attorney holder of the Carrier was examined as D.W.1.
15. The Trial Court, on assessment of pleas and the evidence adduced, concluded that it had been established that 20 Hydraulic Cylinders worth Rs.1,69,144/- had been damaged during transit and the Insurer was entitled to reimbursement of Rs.1,54,272/- along with interest at 6% p.a.
16. Being aggrieved by the said decree, the Carrier is in appeal.
17. Sri C.V. Sudhindra, learned counsel appearing for the Carrier contended that the Trial Court had committed an error in decreeing the suit when the Carrier had agreed to carry the consignment at the owner's risk. According to him, since the consignment was carried at 9 the risk of the owner, the Carrier would not be liable for any damage which occurred during its transportation. He also submitted that there was no notice as contemplated under Section 10 of the Carriers Act, 1865 (for short, hereinafter referred to as "the Act") and therefore, the entire suit was untenable.
18. He also submitted that since the Consignor had attributed negligence on the part of the Carrier, it was necessary for the Consignor to prove in what manner the Carrier had been negligent. He stated that since no issue at all had been framed regarding negligence, the entire approach of the Trial Court was not justifiable.
19. It was also sought to be contended that there was no material details of the accident and the damage and therefore, the prayer in the suit could not have been granted by the Trial Court.
20. It was also contended that the accident to the truck had occurred due to the negligence on the part of 10 another truck and therefore, the Carrier could not be made liable.
21. It was also sought to be contended that the non- production of documents in respect of damage to the wooden cases and Hydraulic Cylinders clearly indicated that there was collusion between the Consignor and the Insurer. It was also contended that the Consignor was guilty of improper packing and therefore, any damage which had occurred could not be attributed to the Carrier.
22. Sri. P.B.Raju, learned counsel appearing for the Insurer and the Consignor supported the impugned judgment and decree and contended that there is absolutely no justification to entertain the appeal. He submitted that the Insurer had a right to institute proceedings for the sums that it had paid to the Consignor and by virtue of the subrogation made by the Consignor, it was lawfully entitled to recover the money paid by it.
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23. Learned counsel also contended that the assertion that the consignment was carried at the owner's risk was incorrect. He submitted that the receipt for accepting the consignment - Ex.P5 did not even contain the signature of the Consignor and therefore, the question of there being an acceptance for the transportation of the goods by taking the risk upon the owner would not at all arise.
24. Learned counsel submitted that the provisions of the Act would enable the limiting of the liability only in the case of a special contract having been entered into between the Consignor and the Carrier. To be a special contract, it ought to have been clear that the Consignor and Carrier had agreed in writing that the owner would be liable for damage notwithstanding the value of the consignment and this contract being termed as a special contract would have to be expressly indicated in a separate contract which presupposed that both the parties had affixed their signatures to this special contract. He submitted that printed form of Ex. P5 only 12 contained a tabular column titled as "At Owner's risk", but the same did not have any entry in it to signify that it was carried at the owner's risk and therefore, the entire argument of the Carrier was without any merit.
25. Learned counsel also contended that a Damage Certificate vide Ex.P7 had been issued in which the Carrier admitted that 20 cases out of 55 cases were delivered in a damaged condition and after opening, it was also noticed that 18 Hydraulic Cylinders had been damaged. He submitted that this Damage certificate clearly proved that damage had occurred to 20 cases and Carrier would be liable for the said damage. He submitted that the printed statement in Ex.P7 that the certificate was issued at the instance of the party and without admitting any liability under law would not take away the admission that the damage had occurred. He submitted that since a specific note was also made in Ex.P7 that the damage mentioned in Ex.P7 had occurred due to the accident caused clearly establish that the 13 damage had indeed occurred and the Consignor had suffered a loss due to the damage. He submitted that in the light of this clear admission, it was impermissible for the Carrier to contend that there was no loss and that loss need not be reimbursed.
26. Learned counsel also submitted that the accident occurred on 09.09.2001 and the very next day i.e., on 10.09.2001, a communication was addressed to the Carrier informing it that they had become aware that an accident had occurred to the truck which was carrying their consignment and they clearly stated that the Carrier would be liable to bear all the loss that occurred out of this accident and this by itself was an adequate notice of the claim as contemplated under the Act.
27. Learned counsel also submitted that since this notice of claim was responded to by the Carrier by the issuance of a Damage Certificate on 16.09.2001, it was obvious that the Carrier was aware of the damage 14 caused and in that sense, there was no need to issue a further notice.
28. From the arguments advanced by learned counsel for both parties, the point that arises for consideration is-
Whether the Trial Court was justified in concluding that the Carrier was responsible for the payment of Rs.1,54,272/- being the loss suffered due to the damage to the consignment?
29. The Carriers Act, 1865 was enacted to enable common carriers to limit their liability and to declare their liability occasioned by the negligence or criminal acts of themselves, their servants or agents.
30. "Common carrier" is defined as a person, who is engaged in the business of transporting property under a multinodal transport document or of transporting the property for hire from place to place for all persons indiscriminately.
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31. Section 3 of the Act declares that Carriers would not be liable for the loss of certain goods above Rs.100/- in value, unless the person delivering such properties expressly declares to the Carrier, the value and description of the property.
32. Section 4 of the Act enables the Carrier to pay for the risk undertaken by it in carrying the property which exceeds the value of Rs.100/- at such rate as it may fix. The proviso to Section 4 permits the Carrier to charge payment at a higher rate if it has exhibited at the place of its business the notice of the higher rate.
33. Section 6 of the Act1 declares that the liability of a Carrier for the loss or damage to any property shall not be deemed to be limited or affected by any public notice, 1
6. In respect of what property liability of carrier not limited or affected by public notice Carriers, with certain exceptions, may limit liability by special contract.- The liability of any common carrier for the loss of or damage to any property (including container, pallet or similar article of transport used to consolidate goods) delivered to him to be carried, not being of the description contained in the Schedule to this Act, shall not be deemed to be limited or affected by any public notice; but any such carrier, not being the owner of a railroad or tramroad constructed under the provisions of Act 22 of 1863 (to provide for taking land for works of public utility to be constructed by private persons or Companies, and for regulating the construction and use of works on land so taken) may, be special contract, singed by the owner of such property so delivered as last aforesaid or by some person duly authorised in that behalf by such owner, limit his liability in respect of the same. 16 unless there was a special contract signed by the owner of such property.
34. The use of the expression "by special contract signed by the owner of such property so delivered"
would indicate that to limit the liability, the owner of the property, who delivers the property to the carrier for transportation, is required to sign a special contract. If there is no signature of the owner of the property to limit the liability of the Carrier under a special contract, the liability of the Carrier for the loss suffered during transportation cannot be avoided.
35. Section 7 of the Act deals with the liability of the owner of the railroad or tramroad.
36. Section 8 of the Act deals with the liability for the criminal act of the Carrier or any of its agents or servants. Since in this case, there is no allegation of any criminal act, Section 8 would have no application. 17
37. Section 9 of the Act2 states that in any suit brought against a common carrier for the loss, damage or non- delivery of goods which has been entrusted to the Carrier for carrying, it would be necessary for the plaintiff to prove that such loss, damage, or non-delivery was due to the negligence or criminal act of the Carrier. Thus, in a suit filed against the Carrier for the loss, damage or non-delivery, the statute discharges the plaintiff from the obligation of proving that the damage occurred due to the negligence of the Carrier.
38. Section 10 of the Act states that no suit can be instituted against the Carrier unless notice in writing of the loss or injury has been given to him before instituting a suit and within six months from the date on which the loss or injury came to the knowledge of the plaintiff.
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9. Plaintiffs, in suits for loss, damage, or non-delivery, not required to prove negligence or criminal act.- In any suit brought against a common carrier for the loss, damage or non- delivery of goods (including container, pallets or similar article of transport used to consolidate goods) entrusted to him for carriage, it shall not be necessary for the plaintiff to prove that such loss, damage or non-delivery was owing to the negligence or criminal act of the carrier, his servants or agents.
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39. Thus, a plain reading of the Act would indicate that the Carrier becomes liable for the loss, damage or injury to the goods which has been entrusted to it, if the value of the goods had been declared to it by the consignor. The only way that this liability could be avoided by the carrier would be if it had entered into a special contract in this regard and that special contract had been signed by the owner whereby the liability of the carrier was limited.
40. If there is no such special contract by the owner, the liability of the Carrier would stand automatically attracted. The Act makes it clear that it would not be necessary for the consignor to prove the negligence of the Carrier or its agents or servants and before the filing of a suit. It would however be necessary to issue a notice in writing about the loss or injury. A further requirement is also imposed that notice in writing is issued within six months from the date the injury became known to the plaintiff.
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41. In the light of this legal requirement, the argument of the learned counsel for the Carrier that as the consignment had been accepted at the owner's risk, the Carrier would have no liability, would have to be examined.
42. As stated above, to escape the liability, the Carrier has to establish that there was a special contract which was signed by the owner of the property, limiting the liability of the carrier. It is to be stated here that Section 6 of the Act does not actually provide for exoneration of liability, but it only enables the limiting of liability. Thus, under the Act, the Carrier cannot absolve itself of all liability and it can only limit its liability, provided there is a special contract entered into with the owner of the property and which is signed by the owner.
43. The contract in this case which is relied upon is Ex.P5. Ex.P5 is a printed receipt which indicates the receipt of the consignment. This printed receipt contains 20 three boxes. The first box relates to a notice. The second box reads as follows:
AT OWNER'S RISK INSURANCE The customer has stated that:- he has not insured the consignment OR he has insured the consignment Company.................................. Policy No............... date........... Amount.................Risk.............
AP-80319-27 AP-80329-38 AP-80328 The third box would not be of any relevance.
44. The entire plank of the argument of the learned counsel for the Carrier is that the consignment was carried at the owner's risk, and this stood established from the box found in the printed receipt. It is to be stated here that none of the fields in this box have been filled up by the Carrier. The material in the second box basically states two things. Firstly, that the Consignor has not insured the consignment or in the alternative that, he has insured the consignment. If the consignment is insured, the details are required to be 21 mentioned. In this case, neither of the options have been indicated by the Consignor. Therefore, the argument that the consignment was carried at the owner's risk cannot be accepted at all.
45. It is also pertinent to state here that the signature of the Consignor or its authorised representative is not at all found in Ex.P5. If the Consignor has not signed this receipt, the question of the Consignor limiting the liability of the Carrier or absolving the liability of the Carrier would not arise at all.
46. As narrated above, if the Carrier intends to limit its liability, it must establish in clear terms that a special contract had been entered with the owner and that a special contract had been signed by the owner. Since admittedly the consignment had been entrusted vide Ex.P5 - the receipt, this receipt constituted the basic contract. This basic contract itself does not contain the signature of the Consignor. Since, admittedly, no special contract apart from Ex P5 had been entered into 22 between the Carrier and the Consignor, which contained the signature of the consignor, the question of absolving or limiting the liability of the Carrier would not at all arise. It is, therefore, clear that as the consignment was entrusted with a declaration being made about the value of the goods and its description, the Carrier would be liable for the damage that had occurred to the consignment.
47. To establish that there was damage, the Consignor basically places reliance on the Damage Certificate. The Damage Certificate dated 16.09.2001 - Ex.P7, clearly states that the Carrier delivered 20 cases out of 55 cases in damaged condition and after opening the damaged cases, it was found that 18 Hydraulic Cylinders had been damaged. No doubt this certificate also contains a printed statement stating that it was issued at the instance of the party without admitting liability under the law.
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48. Even if the liability under the law is not admitted, the admission that 20 cases out of 55 cases were damaged would not be lost. The further fact that a specific note is appended to this printed Damage Certificate which states that the damages stated above had occurred when the truck which was carrying it met with an accident near Dhullia (Maharashtra) also constitutes a clear admission regarding the damage. This note which is appended at the end of the Damage Certificate is not qualified with any disclaimer. It, therefore, follows that the damages mentioned in the Damage Certificate were indeed caused to the consignment during its transit by the Carrier.
49. Learned counsel for the Carrier contends that there was no notice as contemplated under Section 10 of the Act. Section 10 of the Act basically casts an obligation on the Consignor to issue a notice in writing of the loss or injury before filing a suit and within six months from the date on which the loss or injury came to the knowledge 24 of the Consignor. The intent of the law is that there should be a notice of either the loss or injury to the goods which had been entrusted to the Carrier. It is not necessary that this notice should provide explicit detail of the exact loss or injury. So long as the loss or injury is indicated, there is complete compliance with the requirement of Section 10 of the Act.
50. In this case, admittedly, the accident occurred on 09.09.2011 and the very next day, on becoming aware of the accident, a notice has been sent in writing to the Carrier by the Consignor stating that the truck had met with an accident and therefore, the Carrier would be liable for all the loss which occurred due to the accident. Thus, both the loss and the injury caused to the Consignor was specifically informed in writing on the very next day. This intimation about the loss or injury was also acknowledged by the Carrier by the issuance of a Damage Certificate on 16.09.2001 vide Ex.P7. Since the Carrier was informed of the loss and it also 25 proceeded to acknowledge the loss within 7 days of the accident, it would clearly go to show that the requirement of Section 10 of the Act has been completely complied with.
51. An argument was also advanced that the damages had not been proved. The Insurer and the Consignor produced the invoice of the consignment containing the value of the goods and specifically stated the damage which had occurred to each of the goods.
52. The value of the goods damaged cannot be in dispute since the value of the entire consignment had been declared in the invoice and the extent of damage was also acknowledged. The assessment, therefore, made by the Insurer and payment of the said sum cannot also be denied. The Trial Court was, therefore, justified in accepting the claim of the Consignor that it had suffered loss of Rs.1,54,272/- and accordingly decreed the suit. The Trial Court has, in my view, correctly concluded that an accident had occurred to the 26 truck which has resulted in damage to the consignment and the Carrier was liable to reimburse the loss.
53. Reliance was placed by the learned counsel for the Carrier on the judgment rendered by a Co-ordinate Bench of this Court in the case of ORIENTAL FIRE AND GENERAL INSURANCE COMPANY Vs. SATHYANARAYANA TRANSPORT - II (1989) ACC 321 to contend that as the Consignor had alleged specific acts of negligence, unless that was proved, the suit could not have been decreed.
54. As narrated above, under Section 9 of the Act, the statute discharges the obligation on the Consignor to prove the negligence on the part of the Carrier. In the case referred to supra by the learned counsel for the Carrier, a specific allegation was made by the plaintiff therein and a narration was made in the plaint pleading specific negligence on the part of the Carrier as the cause for damages. In the light of this specific plea, this 27 Court held that the normal rule applicable under Section 9 of the Act would not be applicable.
55. It is to be stated here that the Division of this Court in the case of INTER STATE TRANSPORTS Vs. PFIZER LIMITED - ILR 1987 KAR 2870 has held that in a case where any specific act of negligence is not pleaded and it is only pleaded that the Carrier had not acted in a prudent manner, the Carrier would be liable. In the present case also, the Consignor made a plea in the following terms:
"8. The Plaintiff submit that the defendants being a common carrier bound to deliver the consignment to the consignee by using due care and caution during transit. That due to carelessness and negligent act of the defendants, the consignment has not reached the consignee."
56. This plaint averment cannot be imputed to be a plea of a specific negligence. The general use of the term "carelessness and negligent act" cannot be construed as a plea imputing specific acts of negligence. The decision, 28 relied upon by the learned counsel for the Carrier, therefore, would have no application at all.
57. As regards the contention of the learned counsel for the Carrier that because of improper packing by the Consignor, damage had been caused to the consignment is concerned, it is to be stated here that it was the duty of the Carrier to examine the packing and then receive the goods. Once the consignment was accepted, then the Carrier cannot be permitted to contend that the damage had occurred due to defective packaging and thereby absolve itself of liability. It is also to be stated here that under the provisions of the Carrier Act, the Carrier cannot be exonerated of liability on the ground that there was defective packing.
58. As already stated above, the statute does not absolve the liability of the Carrier at all and the liability of the Carrier is attracted the moment a declaration is made about the value of the goods. In this view of the 29 matter, the argument advanced by the learned counsel for the Carrier is devoid of merits.
59. Accordingly, I find no merit in the appeal and the same is, therefore, dismissed.
Sd/-
JUDGE PKS