Bangalore District Court
L.T. Construction Equipment Company ... vs Aashirvadh Global Logistics Pvt Ltd on 22 March, 2024
KABC170007422023
IN THE COURT OF LXXXIV ADDL. CITY CIVIL AND
SESSIONS JUDGE (CCH-85) (COMMERCIAL COURT),
BENGALURU
DATED THIS THE 22nd DAY OF MARCH 2024
PRESENT
SRI.RAMAKANT CHAVAN,
B.Com., LL.B.(Spl)
LXXXIV ADDL. CITY CIVIL & SESSIONS JUDGE,
BENGALURU.
Com.O.S.No.452/2023
PLAINTIFFS:
1. L.T. Construction Equipment Ltd.,
Formerly known as L.T.
Construction Machinery Ltd.,
situated at No.27/28,
Thammashettihalli, Kasaba
Hobli, Doddaballapur Tq.,
Bengaluru - 561203
Rep. by its Subrogee/Power Agent
M/s National Insurance Co. Ltd.
2. National Insurance Co. Ltd.,
No.44, 4th Block, Opp.Vijaya Bank,
100 Feet Road, Koramangala,
Bengaluru - 560 034
Rep. by its Authorized Signatory
Smt.B.G.Lavanya
aged 31 years
(By Sri.P.S.Ranganathan, Adv.)
2 Com.O.S.No.452/2023
AND
DEFENDANT:
Aashirvadh Global Logistics Pvt. Ltd.,
SMJ Moore Plaza, New No.65,
Old No.31, 4th Floor, Moore Street,
Chennai - 600 001
Rep. by its Manager
(By Sri.M.Prabhu, Adv.)
Date of Institution 06.04.2023
Nature of suit For recovery of money
Date of First Case 19.01.2024
Management Hearing
Date of commencement of 21.02.2024
recording of evidence
Date on which judgment
22.03.2024
pronounced
Time taken for disposal Years Months Days
1) From the date of First Case 00 02 03
Management Hearing
2) Total duration 00 11 16
LXXXIV Addl. City Civil & Sessions Judge
(CCH-85) Commercial Court, Bengaluru
3 Com.O.S.No.452/2023
JUDGMENT
This is a suit filed by the plaintiffs for recovery of Rs.4,56,870/- towards damages from the defendant along with interest at the rate of 12% p.a. from the date of suit till the date of payment.
2. Brief facts of the plaintiffs' case are that the plaintiffs are a Public Limited company incorporated under the Companies Act. The defendant is a private limited company. The 1 st plaintiff during the course of their business transaction, imported a HSN Oil Controller Machine from their suppliers from China by Sea to Chennai Port and from Chennai Port to Bengaluru by road through the defendant carrier. The commercial invoice No.SD19-08-034 dated 31.08.2019 is valued at JPY 35000.000. The said consignment securely and adequately packed in carton pallet, placed on wooden crates, covered with tarpaulin sheet, was entrusted with the defendant carrier for safe carriage to their consignee's office at Bengaluru from Chennai Port. The defendant carrier issued their delivery receipt for local deliveries Nos.5242 and 5243 both dated 27.09.2019, thereby, undertaking to care for, carry and deliver the said consignment in the same apparent good order and condition as was entrusted. The plaintiffs insured the consignment under marine cargo open insurance policy bearing No.60440032118100000028 cover the period 01.10.2018 to 30.09.2019. The defendant delivered suit consignment in damaged condition. The plaintiffs, who are the owners of the suit 4 Com.O.S.No.452/2023 consignment, issued a statutory notice of loss dated 08.06.2021 due to Covid period in between and the same was duly served on the defendant under clear acknowledgment issued by the defendant. The defendant issued their damage certificate dated 08.06.2021 It is further pleaded that upon such damage, the plaintiffs appointed licensed independent surveyor M/s Subramanya H. & Associates surveyors & Loss Assessors, to assess the loss sustained by the plaintiffs. The surveyor conducted a detailed survey on various dates and submitted his survey report bearing No.72/M/L&TCEL/NI/2019 dated 26.05.2021. On account of short delivery, the plaintiffs suffered a loss of Rs.4,56,870/- being the value of the damaged delivered by the defendant carrier as mentioned in the plaint. Total loss is Rs.7,13,679/- (-) Salvage Rs.15,000/- (-) Excess Rs.89,517.31. Hence, net loss is Rs.6,09,161.69. The plaintiff restrict the net loss to Rs.4,56,870/-.
It is further pleaded that the defendant having admitted the fact of damages/short delivery by issuing its certificate on 08.06.2021. Hence, the defendant is liable to pay the value of the damaged / short delivered consignment as a common carrier for reward. The damaged delivery and consequent loss suffered by the plaintiffs ought to have been due to negligence, lack of care on the part of the defendant. The defendant is called upon to disclose how it handled the consignment, when it had exclusive custody of the same during transit. The plaintiffs have lodged their claim on 10.03.2021 on the 2 nd plaintiff under the policy of 5 Com.O.S.No.452/2023 insurance. The 2nd plaintiff indemnified the 1st plaintiff's claim under the insurance policy and paid a sum of Rs.4,56,870/- through their loss voucher. Upon this indemnification, the 1 st plaintiff executed a Letter of Subrogation and Letter of Idenmnity as attorney in favour of the 2 nd plaintiff on 22.09.2021 thereby suborgating its right in favour of the 2nd plaintiff. By virtue of the said execution of Letter of Subrogation and SPA and as provided under the provisions of Sec.79 of Marine Insurance Act, the 2 nd plaintiff is entitled to file and maintain this suit.
It is further pleaded that the plaintiffs have issued a legal notice and the same was served on the defendant. In spite of service of notice, the defendant did not come forward and settle the legitimate claim. Hence, the plaintiffs are constrained to file this suit and pray for decree the suit.
3. On service of summons, the defendant has appeared through its counsel. The defendant has filed its written statement and denied most of the contents of the plaint averments. It is further contended that, the defendant is not the direct agent to the plaintiff No.1, but only a customs broker. One M/s Seyon Logistics Pvt. Ltd. situated at 67A, Ground Floor, St.John's Road, Opp. Malabar Gold Office, Bengaluru, are the direct agent of the 1st plaintiff company and who are entrusted by the 1 st plaintiff company to deliver the consignment from Chennai to Bengaluru. The defendant on the request of M/s Seyon Logistics Pvt. Ltd. received necessary documents from them and cleared the consignments. M/s Seyon Logistics Pvt. Ltd. was only responsible 6 Com.O.S.No.452/2023 for the transportation of consignment since they had appointed transport. The defendant is only the clearing agent to fill Bill of Entry (BOE) with customs and completed all customs formalities and then handed over the documents to the transporter as directed by M/s Seyon Logistics Pvt. Ltd. The defendant issued Two delivery receipts on behalf of M/s Seyon. At the time of unloading, the plaintiff had not informed any damage to the defendant. The plaintiff issued notice, after a period of more than one year claiming Rs.8,49,205/- towards compensation on account of incomplete delivery of the consignment. On 08.06.2021 the defendant issued a certificate of fact to the plaintiff No.1, there is mention that the loss arose on the consignment is subject to physical verification of the material and consignment identification by the surveyor. The damage in the consignment does not occur due to any fault or any negligent act of the defendant company or its agents.
It is further stated that the 1st plaintiff had not permitted the defendant's officials to physical verification of the material. The 1st plaintiff's surveyor conducted survey in absence of the defendant. The survey report is fabricated document created for the purpose of the case. The defendant has not committed any short delivery in the consignment subject matter of the suit as alleged in the plaint. The 1st plaintiff has not suffered loss of Rs.4,56,870/- and the defendant is not liable to pay the same. The defendant mentioned that the loss arose on the consignment is subject to physical verification of the material and consignment 7 Com.O.S.No.452/2023 identification by the surveyor. Hence, the defendant prays to dismiss the suit.
4. Based on the above, this court has framed the following:
ISSUES
1. Whether the plaintiff proves that the defendant did not deliver the suit consignment in the same apparent good order and condition as was entrusted, but delivered the suit consignment in damages condition?
2. Whether the defendant proves that, the damages mentioned in the consignment does not occur due to any negligent act by the defendant company or its agent?
3. Whether the plaintiff proves that the defendant is liable to pay for a sum of Rs.4,56,870/-?
4. Whether the plaintiff proves that the defendant is liable to pay the interest at the rate of 12% p.a. from the date of filing the suit till its realization?
5. Whether the plaintiff is entitled for relief as prayed for?
6. What Decree or Order?
5. To prove the case, the Administrative Officer of the 2 nd plaintiff is examined as PW1 and got marked some documents at Ex.P1 to P15. The defendant has not led any evidence and not produced any documents.
8 Com.O.S.No.452/20236. The learned counsel for the plaintiffs has submitted his written arguments.
7. My findings on the above issues are:
Issue No.1: In the affirmative Issue No.2: In the negative Issue No.3: In the affirmative Issue No.4: In the affirmative Issue No.5: Partly in the affirmative Issue No.6: As per the final order for the following REASONS
8. Issue No.1 to 4: These issues are interlinked to each other. The burden of proving Issue Nos.1, 3 and 4 lies on the plaintiffs and the burden of proving Issue No.2 lies on the defendant. To avoid repetition of facts and evidence, I have taken up these issues together for common discussion.
9. The Administrative Office of the 2nd plaintiff has filed her affidavit. She has examined as PW1. She has narrated the plaint averments. The documents produced by PW1 are authorized letter, commercial invoice, packing list, bill of lading, delivery receipts, claim bill, notice of claim, copy of the survey report, certificate of fact, loss voucher, letter of subrogation, email copy, PIM report, certificate U/Sec.65B of the Evidence Act etc. at Ex.P1 to P15. There is no cross examination.
9 Com.O.S.No.452/202310. Though the defendant has filed its written statement, but not led any evidence, even defendant has not cross examined PW1. The evidence and documents remained as unchallenged.
11. The learned counsel for the plaintiffs has submitted his arguments basing on the plaint averments and evidence of PW1 as well as Ex.P1 to P15. He has pointed out towards the provisions of Sec.79 of the Marine Insurance Act and also Law of Subrogation. It is stated that the plaintiff No.1 during its business transactions imported a HSN Oil Controller machine from China by Sea to Chennai port through another logistics company and from Chennai Port to Bengaluru by road through the defendant's carrier or its agents. The Ex.P2 is the commercial invoice dated 31.08.2019 and this consignment adequately packed in Carton Pallet placed on wooden crates and the parking list is at Ex.P3 dated 31.08.2019. The defendant has issued Two delivery receipts for local deliveries on 27.08.2019. The 1 st plaintiff insured the said consignment under Marine Cargo open insurance policy for the period from 01.10.2018 to 30.09.2019. The defendant did not deliver the suit consignment in the same apparent good order and condition as was entrusted, but delivered the same in damaged condition. He has pointed out towards the Ex.P9 i.e. Survey report regarding damages. The Ex.P8 is the notice of loss and Ex.P10 to go prove the case of the plaintiffs.
12. He has further stated regarding the provisions of Sec.9 of the Carriers Act. The damages caused and same is admitted by the Carrier cannot absolute their liability as the carriers' liability is 10 Com.O.S.No.452/2023 absolute as that of the insurer. He has further stated regarding the "Doctrine of Subrogation - Equitable assignment" of rights and remedies of the assured as subrogation is based on the principles - (a) No tort-feasor shall escape the liability of his wrong; (b) No unjust enrichment for the injured by recovery of compensation for the same loss, from more than one source - Doctrine of Subrogation enables the insurer to step into the shoes of the assured and enforce its rights and remedies available to the assured. The rights of subrogation are statutorily recognized and described in Sec.79 of the Marine Insurance Act. The Doctrine of Subrogation is a creature by enmity not found on contract, but, arising out of relations of the parties.
13. He has further stated that an assignment on the other hand refers to a transfer of the right for consideration when there is an absolute assignment. The defence made out by the defendant that the assignment is carried at the owner's risk has no bearing upon the claim of the plaintiff. The carrier has to protect the consignment entrusted to him for safe carrier and the accident to vehicle carrying goods by the defendant has projected by the carrier has no relevance to the act of God and does not qualify under the owner's risk. The policy availed by the 1st plaintiff is marine insurance policy. The policy is issued for a certain period and all dispatches covered during the said period of the policy are covered within the ambit of the said policy and the claims would be settled as per the terms and conditions of the policy. The insurance of the policy on payment of the 11 Com.O.S.No.452/2023 premium entitles the insured claim for their loss. The loss has been assessed by an independent licensed surveyor. When the surveyor is appointed under the provisions of Sec.64-UM of the Insurance Act is engaged to assess damage / loss arising claimed by insured only on the ground that the surveyor failed to give notice to the claimant.
14. During his arguments, he has relied upon the following decisions :
(2010) 4 SCC 114 Economic Transport Organization, Delhi Vs Charan Spinning Mills Pvt. Ltd. & Anr.
"In all three types of subrogation, the insurer can sue the wrongdoer in the name of the assured. This means that the insurer requests the assured to file the suit/complaint and has the option of joining as co- plaintiff. Alternatively the insurer can obtain a special power of Attorney from the assured and then to sue the wrongdoer in the name of the assured as his attorney."
ILR 2005 Kar 3403 Basavaraj Yellappa Pundi Vs The National Insurance Co. Ltd. & Anr.
"Carriers Act, 1865 - Sec.10 Notice to Loss under Notice of Loss or Injury to be given within Six months - held, when the mandatory requirement as per Sec.10 is not complied with it is with the Court's power to dismiss the suit or non-suit the plaintiff - however, this does not make it obligatory on the part of the plaintiff to mention the insurance of such notice in the plaint itself - The object of the notice was only to put a carrier on guard against the proposed claim."12 Com.O.S.No.452/2023
2000 Supreme (Mad) 142 Ravichandran Transport Vs United India Insurance Company Ltd.
Civil Procedure Code (V of 1908), Sec.20(c) - Marine Insurance Act (XI of 1963), Sec.2(1) and 4(2) and Explanation - Maintainability of suit - Goods entrusted to carrier at Mettur, place of destination being Bangalore - Goods were insured with plaintiff, whose office was located at Madaras - Letter of subrogation executed at Madras and attested by Notary at Maadras - Suit by plaintiff against carrier was maintainable at Madras.
AIR 2004 Mad 538 (A) & (D)(head note) Bond Food Products Pvt. Ltd. & Anr. Vs M/s Planters Airways Ltd.
"(A) Carriers Act (3 of 1865), S.8 - Liability of carrier - Damages to consignment - Recovery of compensation paid by insurer - Plaintiff entrusted insured consignment to carrier for transportation of same from place B to C - During transit, due to accident said consignment was damaged - No notice was given by insurer to carrier before appointing surveyor to assess damages - On report of said surveyor, compensation amount was paid by insurer to plaintiff - Plaintiff executed letter of subrogation in favour of insurer to lay suit for recovery of amount paid as compensation - Therefore, plaintiff and insurer are entitled to claim damages from carrier - Carrier liable to indemnify loss."
"(D) Evidence Act (1 of 1872), S.23 - Report of surveyor - Admissibility of, in evidence - Damages to consignment - Recommendation of surveyor that his assessment with respect of quantum of damages is 'without prejudiceandapos; - Would mean that same is subject to negotiation between consignor and insurance company - Surveyor had assessed damages 13 Com.O.S.No.452/2023 on higher side - Plaintiff agreed to receive lesser amount towards damages waiving differential amount
- Therefore, neither opinion of surveyor nor acceptance of lesser amount by plaintiff, could be a ground to reject report of surveyor as irrelevant."
2008 Supreme (AP) 664 New India Assurance Co. Ltd. & Anr. Vs State of A.P. & Ors.
"(b) General Insurance Act, 1938 - Sec.64-UM -
Principles of claim in marine hull insurance stated - i) Licensed surveyor report can not be ignored just because notice was not giving to the claimant by the surveyor or he was not examined, ii) Even an unlicensed surveyors report can be accepted after giving an opportunity to prove the investigation, iii) Report of licensed insurance surveyor can not be ignored just because he is not examined, iv) The probate value of the surveyor increases on failure of the claimant to appoint a surveyor."
15. After going through the written arguments submitted on behalf of the plaintiffs, I have gone through the pleadings of the parties. The defendant though filed its written statement, but not adduced any evidence, even not produced any documents. It has not cross examined the PW1. After perusing the pleadings of the parties, the plaintiff No.1 is a public limited company and carrying its business. During its business it has imported a HSN Oil Controller machinery from its supplier, it has to come from China by Sea to Chennai port. From Chennai Port to Bengaluru by way of Road. The defendant is the carrier of the said machine. There was a commercial invoice bearing No.SD19-08-34 dated 14 Com.O.S.No.452/2023 31.08.2019. The said invoice is produced at Ex.P2. Ex.P3 is the packing list on the same day. The Ex.P4 is the bill of lading dated 02.09.2019. The Ex.P5 and P6 are the delivery receipts issued by the defendant on 27.09.2019 and the Ex.P7 is the claim bill dated 10.03.2021. The Ex.P8 is the notice of claim dated 24.03.2021. The Ex.P9 is the Surveyor's report. The Ex.P12 is the letter of Subrogation dated 22.09.2021. It consists the policy No.604400211810000028 dated 30.09.2019. The commercial invoice number referred above dated 31.08.2019 marked as Ex.P2, its reference is also forthcoming in Ex.P12. The Ex.P13 is the copy of email regarding notice dated 08.01.2023.
16. Prior to the institution of this suit, PIM application No.2219/2022 was filed before DLSA and there also the defendant did not appeared. Non starter report has been issued as per Ex.P14 on 01.12.2019. I have also gone through the photos produced under Ex.P9. After going through these photos, it could be seen, some parts of the machine have been damaged, for which the surveyor has submitted his report as per Ex.P9. The Ex.P12 also consists letter of Indemnity. The name of insurance company i.e. National Insurance Company, Koramangala Branch is forthcoming. Admittedly, the name of defendant is also forthcoming in the documents referred above.
17. I have gone through the decisions relied upon by the learned counsel for the plaintiff. The principles laid down in these decisions are well founded. I have also gone through the 15 Com.O.S.No.452/2023 provisions of Sec.79 of the Marine Insurance Act, it reads as under:
"Right of subrogation -
(1) Where the insurer pays for a total loss, either of the whole, or in the case of goods of any apportionable part, of the subject-matter insured, he thereupon becomes entitled to take over the interest of the assured in whatever may remain of the subject-matter so paid for, and he is thereby subrogated to all the rights and remedies of the assured in and in respect of that subject-matter as from the time of the casualty causing the loss.
(2) Subject to the foregoing provisions, where the insurer pays for a partial loss, he acquires no title to the subject-matter insured, or such part of it as may remain, but he is thereupon subrogated to all rights and remedies of the assured in and in respect of the subject-matter insured as from the time of the casualty causing the loss, in so far as the assured has been indemnified, according to this Act, by such payment for the loss."
18. I have also gone through the provisions of Sec.9 of the Carriers Act, reads as under:
"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, pallet 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."16 Com.O.S.No.452/2023
19. It is repealed by new Act of the year 2007 - The Carriage by Road Act. Sec.10 reads as under:
"Liability of common carrier -
(1) The liability of the common carrier for loss of, or damage to any consignment, shall be limited to such amount as may be prescribed having regard to the value, freight and nature of goods, documents or articles of the consignment, unless the consignor or any person duly authorised in that behalf have expressly undertaken to pay higher risk rate fixed by the common carrier under section 11.
(2) The liability of the common carrier in case of any delay up to such period as may be mutually agreed upon by and between the consignor and the common carrier and specifically provided in the goods forwarding note including the consequential loss or damage to such consignment shall be limited to the amount of freight charges where such loss, damage or delay took place while the consignment was under the charge of such carrier:
Provided that beyond the period so agreed upon in the goods forwarding note, compensation shall be payable in accordance with sub-section (1) or section 11:
Provided further that the common carrier shall not be liable if such carrier proves that such loss of, or damage to, the consignment or delay in delivery thereof, had not taken place due to his fault or neglect or that of his servants or agents thereof."
20. Therefore, after going through these materials on record and evidence of PW1 and also after perusing the provisions of Sec.79 of the Marine Insurance Act as well as the Sec.10 of the Carriage by Road Act 2007, admittedly, the machine was brought from Chennai Port to Bengaluru by road, 17 Com.O.S.No.452/2023 the carrier was the defendant. The Ex.P9 is the report of the surveyor regarding loss / damage caused to the machine. The decisions relied upon by the learned counsel for the plaintiffs, come to the aid of the plaintiffs in this suit. Therefore, in the light of discussions made supra, the plaintiffs had succeeded in proving the Issue No.1, 3 and 4 by placing cogent evidence. Though the defendant put its appearance and filed written statement, but not adduced any evidence, not produced any documents. Mere pleading is not sufficient to prove the case. Accordingly, I am of the opinion that the defendant has failed to prove the Issue No.2. Hence, I answer the Issue No.1, 3 and 4 in the affirmative and Issue No.2 in the negative.
20. Issue No.5: The plaintiffs sought the aforesaid relief. The plaintiffs claims an amount of Rs.4,56,870/- with interest at the rate of 12% p.a. The total loss as per the plaintiff, as valued by the Surveyor in Ex.P9 is Rs.7,13,679/-, Less : Salvage Rs.15,000/- = Rs.6,98,679/-, Less : Excess Rs.89,517/- = Rs.6,09,161. But the plaintiff restricts its claim i.e. loss Rs.4,56,870/-. The plaintiffs have not examined the surveyor. The sum insured was Rs.120 Crores. The defendant is not able to prove that it is not liable to pay the claim made by the plaintiffs by producing evidence. Hence, the plaintiffs are entitled for the loss to the tune of Rs.3.5 lakhs as against Rs.4,56,870/-. Accordingly, I answer the Issue No.5 Partly in the affirmative.
21. Issue No.6: In the result, I pass the following :
18 Com.O.S.No.452/2023ORDER Suit of the plaintiffs is decreed in part with cost.
The plaintiffs are entitled for Rs.3.5 lakhs from the defendant.
Draw decree accordingly.
Issue copy of the judgment to the parties through email as provided U/Or. XX Rule 1 of CPC if email ID is furnished.
(Dictated to the Stenographer, typed by her directly on the computer, corrected and then pronounced by me in the open court on this the 22nd day of March 2024) (RAMAKANT CHAVAN) LXXXIV Addl. City Civil & Sessions Judge, (CCH-85) Commercial Court, Bengaluru.
ANNEXURE List of witnesses examined for the plaintiffs:
PW1 Rajeshwari B. V. List of documents marked for the plaintiffs:
Ex.P1 Authorization letter dated 21.02.2024 Ex.P2 Commercial invoice dated 31.08.2019 Ex.P3 Packing list dated 31.08.2019 Ex.P4 Bill of lading dated 02.09.2019 Ex.P5 & P6 Delivery receipts dated 27.09.2019 Ex.P7 Claim bill dated 10.03.2021 19 Com.O.S.No.452/2023 Ex.P8 Notice of claim dated 24.03.2021 Ex.P9 Copy of the survey report dated 26.05.2021 Ex.P10 Copy of the certificate of fact dated 08.06.2021 Ex.P11 Loss voucher dated 29.09.2021 Ex.P12 Letter of subrogation dated 22.09.2021 Ex.P13 Copy of email regarding notice dated 08.01.2023 Ex.P14 PIM report Ex.P15 Certificate U/Sec.65B of the Evidence Act List of witnesses examined for the defendant:
NIL List of documents marked for the defendant:
NIL (RAMAKANT CHAVAN) LXXXIV Addl. City Civil & Sessions Judge, (CCH-85) Commercial Court, Bengaluru.