Karnataka High Court
Transport Corporation Of India (P.) ... vs Oriental Fire And General Insurance ... on 27 June, 1986
Equivalent citations: [1989]66COMPCAS208(KAR)
JUDGMENT Nesargi, J.
1. Defendant No. 2 in O.S. No. 311 of 1972 on the file of the First Additional Civil Judge, Bangalore City, is the first appellant. Respondents Nos. 1 and 2 as plaintiffs filed the suit for recovery of Rs.49,263.50 being the value of 3789.5 kgs. of copper coils at Rs.13 per kg., interest of Rs.5,051,.44 and Rs.446 as the survey fees and expenses.
2. The undisputed facts are that plaintiff No. 2 had sent copper scrap to the Indian Cable Company, Calcutta for being melted and converted into copper coils. The Indian Copper Company, Calcutta, converted the copper scrap into 115 copper weighing 11,744.500 kgs. It consigned the said copper coils to defendant No. 1 for being transported from Tatanagar to Bangalore, the consignee being plaintiff No. 2. On January 13, 1971, defendant No. 1 issued lorry receipts bearing Nos. B-508 to B-513. Defendant 1 in turn entrusted the same to defendant No. 2 for actual transport from Tatanager to Bangalore and for delivery to plaintiff No. 2 at Bangalore. Delivery was to be made by January 18, 1971. But, defendant No. 2 which had, on receiving the consignment, issued consignment notes bearing Nos. A-004 to 009, delivered the same on February 3, 1971, at Bangalore to plaintiff No. 2. At the time of delivery, it was found that there were only 112 copper coils weighing 7955 kgs. and as such there was shortage of 3789.500 kgs. valued at Rs.49,363.50 at Rs.13 per kg. Defendant No. 2 certified this shortage by issuing a certificate exhibit P-5 on February 3, 1971. The consignment was also surveyed by M/s. Surveyor Bureau, Madras and it was found that several of the coils bore evidence of having been cut at both ends and pilfered.
3. The said consignment had been insured with plaintiff No. 1. Plaintiff No. 2 lodged his claim with plaintiff No. 1 and plaintiff No.1, after satisfying itself about its liability to pay the amount under the insurance policy, paid a sum of Rs.49,263.50 to plaintiff No. 2 on March 20, 1971 and obtained a letter of subrogation as per exhibit P-16.
4. It is on this basis that the plaintiffs have filed the suit.
5. Defendant No. 1 did not file any written statement though represented by an advocate.
6. Defendant No. 2 contended that defendant No. 1 had not accepted the consignment for carriage from Indian Cable Company after accertaining the actual weight of the consignment to defendant No. 1 and that defendant No. 2 carried the goods as delivered by defendant No. 1 to it in the very same condition and delivered the same to plaintiff No. 2. It disputed the market value of the copper coils at Rs. 13 per kg. According to defendant No. 2, the market value of the copper coils was Rs. 8 per kg. It also contended that plaintiff No. 1 could not take advantage of the letter of subrogation per exhibit P-16 and as such the suit of plaintiff No. 1 was not maintainable. It was lastly contended that plaintiff No. 2's claim having been discharged, the cause of action that had accrued to plaintiff No. 2 had come to an end or perished.
7. It was incidentally contended that there was no privity of contract between the plaintiffs and defendant Nos. 1 and 2 and as such they were not liable to pay the claim of the plaintiff.
8. The trial court has decreed the suit.
9. Sri B. Neelakanta, learned advocate appearing on behalf of defendant No. 2, urged that the plaintiff have failed to establish any privity of contract between themselves and defendant No. 2 and therefore the suit is not maintainable. He next urged that the letter of subrogation at exhibit P-16 issued by plaintiff No. 2 to plaintiff No. 1 does not, in law, entitle plaintiff No. 1 to claim the relief against defendant No. 1 and much less against defendant No. 2. As these are questions of law, we will proceed to examine the same in the first instance.
10. At the relevant point to time, the provisions of the Carriers Act, 1865, were not made applicable to the State of Mysore. Even the, this court has, in Hercules Insurance Co. v. Sri Ganesh Transport Co. [1969] 1 Mys LJ 316, laid down that the principles of the provisions of the Act are applicable as principles of justice, equity and good conscience.
11. Section 8 of the Carriers Act, 1865, reads as follows.
"8. Common carrier liable for loss or damage caused by neglect or fraud of himself or his agent.-Notwithstanding anything hereinbefore contained, every common carrier shall be liable to the owner for loss of or damage to any property delivered to such carrier to be carried where such loss or damage shall have arisen from the criminal act of the carrier or any of his agents or servants and shall also be liable to the owner for loss or damage to any such property other than property to which the provisions of section 3 apply and in respect of which the declaration required by that section has not been made, where such loss or damage has arisen from the negligence of the carrier or any of his agents or servants."
12. There can be no doubt that defendant No. 2 is the agent of defendant No. 1 as per the facts and circumstances of this case. Therefore, the provisions in section 8 of the Carriers Act apply to defendant No. 2. Hence, though there is no privity of contract6 between the plaintiff and defendant No. 2, the liability of defendant No. 2 would be co-extensive with the liability of defendant No. 1 so far as the plaintiff are concerned. This view is supported by the decision in Vidya Ratan v. Kota Transport Co., Ltd., .
13. The next question is about the letter of subrogation, exhibit P-16. Section 79 of the Marine Insurance Act, 1963, reads as follows.
"79. 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 any 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."
14. If these provisions are applicable to the facts on hand, then there would not be much difficulty about this aspect of the law.
15. Section 4 of the Marine Insurance Act, 1963, reads as follows.
"4. Mixed Sea and Land Risks.-(1) A contract of marine insurance may, by its express terms, or by usage of trade, by extended so as to protect the assured against losses on inland waters or on any land risk which may be incidental to any sea voyage.
(2) Where a ship in course of building or the launch of a ship, or any adventure analogous to a marine adventure, is covered by a policy in the form of a marine policy, the provisions of this Act, in so far as applicable, shall apply thereto, but, except as by this section provided, nothing in this Act shall alter or affect any rule of law applicable to any contract of insurance other than a contract of marine insurance as by this Act defined.
Explanation.- An adventure analogous to a marine adventure includes an adventure where any ship, goods or other movables are exposed to perils incidental to local or inland transit."
16. Reading of this provision leaves no doubt in our mind that losses sustained by the assured are protected even when they are sustained on any land risk. It has been held in G.M. Roadways Co. v. F.G. Industries Ltd., that the definition of "an adventure analogous to a marine adventure" in section 4(2) of the Marine Insurance Act corresponding to section 135A of the Transfer of Property Act apply to cases of local or purely inland transit if covered by a policy in the form of marine policy. Exhibit P-35 is the policy in question that covers this aspect. Therefore, section 79 of the Marine Insurance Act does apply to the facts and circumstances of this case.
17. The next question to be considered is whether the letter of subrogation, exhibit P-16, ensures to the benefit of plaintiff No. 1. In the case on hand, there is no difficulty in this behalf because plaintiff No. 2 is the assured and has joined plaintiff No. 1 in seeking the relief. It was argued in this behalf that the cause of action that accrued to plaintiff No. 2 has since perished because the relief sought for by plaintiff No. 2 has been satisfied by plaintiff No. 1. It is this aspect that is to be examined. In Union of India v. Sri Sarada Mills, , it has been held as follows (page 432);
"Subrogation does not confer any independent right ton underwriters to maintain in their own name and without reference to the persons assured an action for damage to the thing insured. The right of the assured is not one of those rights which are incident to the property insured."
18. It is held further on as follows:
"Where the mill on satisfaction of its claim for the loss and damage by the insurance company has assigned all rights against the Railway Administration in favour of the insurer as a subrogee and the letter of subrogation contains intrinsic evidence that the mill would give the insurance company facilities for enforcing rights but the insurance company has chosen to allow the mill to sue, the cause of action of the mill against the Railway Administration did not perish on giving the letter of subrogation. The mill was competent to institute and maintain the suit against the Railway Administration. The mill could be answerable and accountable to the insurance company for the moneys recovered in the suit to the extent the insurance company paid the respondent mill:"
19. In the said case, the insurance company was not a plaintiff but the insured, namely, Sri Sarada Mills was the only plaintiff. This decision is a complete answer to this part of the argument of Sri B. Neelakanta.
20. The contention of defendant No. 2 (appellant No. 1) that the Indian Cable Company had not declared the value of the goods sent to defendant No. 2 fro transport has no leg to stand on because the goods consigned are copper coils and not articles whose value was required to be declared such as paintings, antiques, etc. The survey conducted by M/s. Surveyor Bureau, Madras, is found in the report exhibit P-1. That is spoken to by the manager of that establishment. Its contents have been satisfactorily proved. The evidence of P.W.-1 has been rightly believed by the trial court. Apart from that, evidence in regard to the market value of the copper coils as on the date of consignment, namely, January 13, 1971, has been adduced by the plaintiff and that evidence is unimpeachable. Therefore, if it is for the sake of argument, assumed that the Indian Cable Company had not declared the value of the goods consigned to defendant No. 1 on the date of consignment, that lacuna cannot accrue to the benefit of defendant No. 1 and much less to the benefit of defendant No. 2. It may be remembered at this juncture that defendant No.1 has not entered into any dispute with defendant No. 2 by filing any writing statement and effectively taking part in the trial court. Hence, we are not impressed by this argument.
21. Exhibit P-5 effectively establishes the quantity of the shortage in copper coils and the copper coils as delivered by defendant No. 2 to plaintiff No. 2 at Bangalore on February 3, 1971. When that is so, the quantum of shortage in terms of money has to be calculated and it has been correctly calculated by the trial court.
22. In view of the foregoing, we find no substance in this appeal and dismiss it with costs.