Orissa High Court
Road Transport Organization Of India vs Barunai Powerloom Weavers' ... on 27 June, 1997
Equivalent citations: 1997(II)OLR106
JUDGMENT R.K. Dash, J.
1. Unsuccessful defendant No. 1 in O.S. No. 8 of 1982-111 on the file of the Subordinate Judge, Khurda (presently designated as Civil Judge, Senior Division) by filling the present appeal has assailed the judgment whereby plaintiff's suit for compensation for loss of goods with interest to the tune of Rs. 14,960.23 p. has been decreed.
2. Barunai Powerloom Weavers' Co-operative Society Limited (hereinafter referred to as 'the plaintiff) is a registered society which deals in powerloom clothes and sends the finished products to different shopping centres situated in and outside the State by train as well as road carrier. Plaintiff's case, in short, is that on three occasions, i.e. 19.6.1978, 11.8.1978and 12.1.1979 it had consigned clothes in bundles through the carrier of defendant No. 1 by road to be delivered at the factory of defendant No. 2. On all these three occasions though goods were delivered at the destination, but there was shortage, as a result the plaintiff suffered loss of Rs. 20,909.98 p. The loss as aforesaid occurred, according to the plaintiff, on account of negligence and carelessness of the employees of defendant No. 1. It is stated that though there is a clause in the receipt that the goods were to be carried at the owner's risk, but such a clause is vague and inoperative. To make, good the loss notices were issued and in reply defendant No. 1 by letter dated 13.2.1979 promised to pay the claim amount in instalments. Accordingly it paid Rs. 5,949.75 p. in 7 instalments within the period from 13.2.1979 to 2.7.1979 and thereafter failed to pay the balance. The plaintiff, therefore, filed the suit and claimed for recovery of the balance amount of Rs. 19,286,33 p. which is inclusive of compensation.
3. Defendant No. 1 filed the written statement and denied the plaintiff's claim. It further pleaded that the suit was barred by limitation and that there was no cause of action to maintain the suit. Admitting the plaintiff's case of short delivery of goods, it contended that on one occasion, 36 bundles had fallen on the way while in transit and on the next occasion, 13 bundles had been stolen away near Balugaon for which report was made to the local police, and for such loss it cannot be held liable, since all precautions had been taken for safe carriage. Moreover, since there was a stipulation that the goods were carried at the owner's risk, defendant No. 1 cannot legally be held liable for the loss. As to the admission of defendant No. 1 to make good the loss as alleged by the plaintiffs, it is stated that in order to maintain good relationship defendant No. 1 agreed to deduct Rs. 800/- per month from the plaintiff's bills and so this cannot be construed as acknowledgement of the liability.
4. The trial Court on the pleadings of the parties framed six issues and on consideration of the evidence led during trial decided all the issues in favour of the plaintiff and decreed the suit.
5. Learned counsel for defendant No. 1 while assailing the judgment and decree of the trial Court, raised the following contentions:
(1) That there was a stipulation on the reverse of the receipt that any dispute between the parties will be raised within the jurisdiction of the Court at Cuttack only and in that view of the matter, the Court at Khurda had no jurisdiction to try the present suit.
(2) That defendant No. 1 could not have been held liable for damages since the loss did not occur on account of negligence by it or its employees and besides that, goods having been despatched through the carrier of defendant No. 1 at the owner's risk; liability for loss of goods during transit could not have been fixed with it.
(3) That the suit for compensation was barred by limitation.
(4) That in view of Rule 37 of the Orissa Co-operative Societies Rules, 1965 it is the Secretary who is competent to maintain a suit on behalf of the society and in the present case the suit having been filed by the Assistant Secretary of the plaintiff-society, the suit was not maintainable.
6. The first and foremost question that arises for consideration is whether the Court at Khurda had the jurisdiction and was competent to try the suit. Undisputedly plaintiff-society is functioning at Khurda wherefrom the consignments were despatched through the carrier of defendant No. 1 whose office is situated at the Mahatab Road in the town of Cuttack. All the consignments were to be delivered at calendering and dyeing factory at Berhampur. So as provided in Section 20(c) of the Code of Civil Procedure cause of action partly arose at Cuttack where the office of defendant No. 1 is situate and partly at Khurda, wherefrom the goods were despatched. It was contended on behalf of defendant No. 1 that since it was mutually agreed to between the parties that only the Court at Cuttack will have jurisdiction to entertain all disputes, the learned trial Court lacked jurisdiction to try the suit. In support of such contention reference was made to Clause 11 of the agreement as mentioned on the reverse of the receipt where it is stipulated that "all disputes-that may arise due to this consignment shall be within the jurisdiction of Cuttack Court only". Similar argument was advanced before the trial Court but the same was turned down since defendant No. 1 submitted to the jurisdiction of the Court and did not raise objection as to lack of jurisdiction at the earliest possible opportunity either in the written statement or at the time of settlement of issues.
7. Under Section 20 of the Code of Civil Procedure a suit can be instituted within the local limits of whose jurisdiction the defendant resides or carries on business or the cause of action wholly or in part arises. This being the statutory provision and in view of the admitted factual position as aforesaid, both the Courts at Khurda and Cuttack have jurisdiction to entertain and try the suit. It is well-settled by a catena of decisions that where there are two competent Courts to entertain and decide a suit, it is open for the parties to mutually agree to submit to the jurisdiction of one of the Courts for adjudication of the disputes that may arise between them. But if originally a Court does not have jurisdiction, they cannot by agreement confer jurisdiction on it. A private agreement cannot have higher sanctity than a legislation. (See A.B.C. Laminart Pvt. Ltd v. A.P. Agencies :AIR 1989 Supreme Court 1239 and M/s. Angile Insulations v. M/s. Davy Ashmore India Ltd.: AIR 1995 Supreme Court 1766). Learned counsel for defendant No. 1 referring to Clause 11 of the conditions as mentioned on the reverse of the receipt contended that the parties agreed that all disputes would lie within the jurisdiction of Cuttack Court only and in view of such agreement the Court at Khurda had no jurisdiction to try the suit. Plaintiff-society does not dispute that there is such a clause, but what it has urged is that since defendant No. 1 submitted to the jurisdiction of the trial Court and participated in the proceeding without any protest, it cannot challenge the impugned judgment and decree on the ground of lack of territorial jurisdiction; the trial Court being one of the competent Courts to try the suit.
8. For answering the question raised at the Bar at the outset reference may be made to Section 21 of the Code of Civil Procedure which reads as under:
"21 (1) No objection as to the place of suing shall be allowed by any Appellate or Revisional Court unless such objection was taken in the Court of first instance at the earliest possible opportunity and in all cases where issues are settled, at or before such settlement, and unless there has been a consequent failure of justice.
(2) No objection as to the competence of a Court with reference to the pecuniary limits of its jurisdiction shall be allowed by any Appellate or Revisional Court unless such objection was taken in the Court of first instance at the earliest possible opportunity, and, in all cases where issues are settled, at or before such settlement, and unless there has been a consequent failure of justice.
(3) No objection as to the competence of the executing Court with reference to the local limits of its jurisdiction shall be allowed by any Appellate or Revisional Court unless such objection was taken in the executing Court at the earliest possible opportunity, and unless there has been consequent failure of justice." , In order to attract the applicability of Sub-section (1) of Section 21 the following three conditions are essential :
(i) That objection was taken in the Court of the first instance;
(ii) That it was taken at the earliest opportunity and in all cases where issues are settled at or before such settlement; and
(iii) That there has been consequent failure of justice.
All these three conditions must co-exist. But there are certain judicial pronouncements laying down the law that even in a case where the conditions (i) and (ii) as aforesaid are satisfied, yet the judgment will not be disturbed unless there is consequent failure of justice. Reference in this context may be made to the decision of the Apex Court in Kiran Singh and Ors. v. Charnan Paswan and Ors. : AIR 1954 Supreme Court 340, where the Court observed:
".........The policy underlying Sections 21 and 99, C.P.C. and Section 11 of the Suits Valuation Act is the same, namely, that when a case had been tried by a Court on the merits and judgment rendered, it should not be liable to be reversed purely on technical grounds, unless it had resulted in failure of justice, and the policy of the legislature has been to treat objections to jurisdiction both territorial and pecuniary as technical and not open to consideration by an appellate Court. unless there has been a prejudice on the merits."
Similar view has also been taken by various High Courts. In M/s. Savani Transport (Private) Ltd. v. Gangadhar Ghosal: AIR 1986 Calcutta 330, the view expressed by the Calcutta High Court runs thus:
" No objection as to place of suing can be entertained by appellate Court unless following essential conditions are satisfied-(i) the objection was taken in Court of first instance, (ii) it was taken at earliest possible opportunity and in cases where issues are settled at or before such settlement and (iii) there has been consequent failure of justice. In the instant case, first two conditions having been satisfied and third condition was not satisfied as there was nothing on record to show that because suit against carrier for compensation in respect of goods consigned was tried at place "C" there had been any consequent prejudice on merits or any failure of justice, x x x "
(Quoted from head-note) From the aforesaid judicial pronouncements it is made clear that when a case has been tried by a Court on merits, judgment rendered by it cannot be reversed on technical ground of lack of territorial jurisdiction, unless the party taking the objection shows that there was failure of justice.
9. Adverting to the present case, it may be stated that no objection was raised by defendant No. 1 either in the written statement or before settlement of issues that the Khurda Court before which the suit was filed, had no jurisdiction to entertain and try the suit. Such objection was, however, taken at a belated stage when hearing of the suit had already commenced. Thus the first two conditions were not satisfied. Equally the third condition does not appear to have been satisfied and there is no material on record to show that because of the trial of the suit by the Khurda Court having no territorial jurisdiction, there has been a prejudice on merits and consequent failure of justice. Added to that, continued participation in the proceeding by defendant No. 1 without any protest till examination of plaintiff's witnesses amounts to waiver of any objection as to jurisdiction.
10. The next question arises is whether the plaintiff was bound by the term contained in the reverse of the receipt regarding the place of suing. It need be stated that law requires that before making a person bound by any such term, it must be proved that the same was the outcome of mutual contract. It has been pointed out in Chitty on Contract (Vol.1) 24th Edn. 1977, at page 313, paragraph 677:
"... The document must be of a class which either the party receiving it knows, or which a reasonable man would expect, to contain contractual conditions. Thus a cheque book (Burnett v. West Minister Bank, (1966) 1 QB 742) a ticket for a deck chair (Chapelton v. Barry UDC (1940) 1 KB 532), a ticket handed to a person at a public bath house (Taylor v. Glasgow Corporation, 1952 SC 440) and a parking ticket issued by an automatic machine (Thornton v. Shoe Lane Parking Lt. (1971) 2 QB 163) have been held to be cases, where it would be quite reasonable that the party receiving it should assume that the writing contained on condition and should put it in his pocket unread. (Parket v. South Eastern Rly. (1877) 2 CPD416, 422)"
Lord Denning M.R. in George Mitchell v. Finney Lock Seeds: (1983) 1 All E R 108 observed :
" The clause was not negotiated between persons of equal bargaining power. It was inserted by the seed merchants in their invoices without any negotiation with the farmers."
In another decision in Thornton v. Shoe Lane Parking Limited : (1971) 2 QB 163, he also observed :
" The Customer is bound by these terms as long as they are sufficiently brought to his notice beforehand, but not otherwise."
Lord Diplock in Schroeder Music Publishing Company Limited v. Macaulay : (1974) 3 All E R 615, held :
"The ticket cases in the 19th century provided what are probably the first examples. The terms of this kind of standard form of contract have been the subject of negotiation between ......the parties to it, or approved by any organisation representing the interests of the weaker party. They have been dictated by that party whose bargaining power, other exercised alone or in conjunction with others providing similar goods or services, enables him to say : if you want those goods or services at all, these are the only terms on which they are available. Take it or leave it'."
It, therefore, follows that unless the term of a contract as to the jurisdiction of the Court to entertain and try the suit regarding any dispute between the parties are arrived at after due negotiation, the same cannot be held binding merely because the receipt contains such term. It must be proved by evidence that the term had been brought to the notice of the consignor at or before the goods were delivered to the carrier for transportation. So unless the printed term becomes a part of contract, it cannot be enforced unilaterally and the consignor cannot be held bound by it. This view of mine gains support from what has been ruled by the Andhra Pradesh High Court in Grandhi Pitchaiah, Vehkataraju and Co. v. Palukuri Jagannadham and Co., Calcutta : AIR 1975 Andhra Pradesh 32. It was a case where the bill contained the words "Subject to Calcutta Jurisdiction". The Court ignored the said condition since it was not one for which the plaintiff assented. To the same effect is also the view of Bombay High Court in the case of Road Transport Corporation v. Kirlosker Brothers : AIR 1981 Bombay 299. Besides the aforesaid judicial pronouncements, it can be taken note of what actually happens at the time when goods are delivered at the place of carrier for onward transport. A consignor delivers the goods and makes payment towards carriage under a receipt. He is not made aware of any instruction or conditions printed by the carrier on the reverse of the receipt, nor has he any time to go through the same. Only when he claims damage for loss or damage of goods, a usual defence is taken by the carrier that since the claim does not conform to the terms of contract printed on the receipt, he is not liable for the damage as claimed. In such a case, therefore, it is for the carrier to plead and prove that what were printed on the receipt which he terms as contract were brought to the notice of the consignor and that he had agreed and accepted the same.
11. The next question is whether the Court will exercise territorial jurisdiction and determine the dispute according to law or according to the term of contract ousting jurisdiction. In this context reference may be made to the landmark judgment of M.P. Thakkar, J. (as he then, was) in M/s. Snehalkumar Sarabhai v. M/s. Economic Transport Organisation and Ors. AIR 1975 Gujarat 72, where the Hon'ble udge held as under :
"x x x It is no doubt true that ordinarily Courts would respect the agreement between the parties which is born out of the meeting of their minds and out of considerations of convenience. But the Courts are not obliged to do so in every case, x x x A new approach to this question deserves to be made for the ouster clause is calculated to operate as an engine of oppression and as a means to defeat the ends of justice x x x"
The aforesaid view of Gujarat High Court has been approved by the Apex Court in A.B.C. Laminart (supra).
12. Very often a receipt contains a clause confining the litigation to the exclusive jurisdiction of a Court which would be advantageous to the carrier and disadvantageous to the consignor. To lay claim for damage for the loss due to negligence of the carrier or his employees/servants a consignor should not be compelled to proceed to a distant place to institute a suit, where not only the expenses would be more than the amount claimed but also frequent journey to fight out the litigation would be oppressive, since as well all know a civil litigation takes minimum a decade to reach its finality. In such a case, I think the Court should exercise jurisdiction in accordance with law and not in accordance with a clause ousting jurisdiction contained in the receipt, even if the same is held to be outcome of any contract. This line of reasoning is in accord with what has been ruled by this Court in the case of Arja Venkata Ratnam v. Calendar Printing House of Sivakasi: 42 (1976) CLT 696. On an analysis of various judicial pronouncements as discussed above, I would hold that the learned trial Court had jurisdiction to entertain and try the suit.
13. It is not disputed that defendant No. 1 is a common carrier. The duties and responsibilities of a common carrier in India are governed by principles of English common law recognised in Carriers Act, 1865. Reference may be made to certain provisions of the said Act which has bearing on the issue According to Section 3, no common carrier shall be liable for the loss or damage to the property delivered to him to be carried exceeding Rs. 100/-in value and of the description contained in schedule of the Act, unless the value of the goods has been declared expressly to the carrier or his agent. Section 5 stipulates that in case of loss or damage to the property the consignor would be entitled to recover the value of the property and also the charges paid for carriage. So far as Section 6 is concerned, it provides that the carrier may limit his liability by a special contract signed by the owner of the goods. Then comes Section 8 which provides, inter alia, that every common carrier shall be liable to the owner for the loss or damage of any property delivered to such carrier to be carried where loss or damage has arisen from the criminal act or negligence of the carrier, his agent or servants. The next provision which is important is Section 9 which embodies the common law principle that a plaintiff in a suit for loss, damage or non-delivery of goods entrusted to the carrier for carriage would not be required to prove negligence of the carrier for the reason that the liability of a common carrier is that of an insurer. In K.C. Dhar v. Ahmad Bux : AIR 1933 Calcutta, 735. Rankin. C.J. observed that the liability of a common carrier was not under any contract of insurance; but he was only liable as an insurer. This observation was made to show that a common carrier's liability exists irrespective of any privity of contract between him and the consignor. So common carrier to whom goods are entrusted for transport should carry the same safely and deliver at the destination. He would be liable if anything happened to the goods during the period the sme were in his custody.
14. In the case in hand there is a clause embodied on the reverse of the receipt that the company would not be responsible for loss, damage or destruction of any goods arising out of or resulting from an act of God, the act of war, hostilities and war-like operations, strike, lock out, riots or civil commotion, act of thieves, dacoity, fire heating, rain, insufficiency of packing, inadequacy of marks or accident whatsoever arising. The case of defendant No. 1, as stated earlier, is that some cloth-bundles either fell on the way or were stolen away while in transit. Though a plea has been taken in the written statement that the loss was not due to any negligence or carelessness of the employees entrusted with the goods for carriage, but no satisfactory evidence was led in proof thereof. Since as provided in Section 9 of the Carriers Act, it is not incumbent upon the plaintiff to prove that the loss, damage or non-delivery, was owing to the negligence of the carrier, his servants or agents and the loss as claimed by the plaintiff having been admitted, the contention raised by defendant No. 1, carrier, that it is not liable for damage or loss is unsustainable.
15. The next question is whether the suit was barred by limitation. Three consignments were delivered to defendant No. 1, for carriage on 19.6.1978, 11.8.1978 and 12.1.1979 and the plaintiff coming to know of short delivery claimed damages by issuing notice under Ext. 9/a. It would appear from the said notice that on all the occasions the plaintiff had informed defendant No. 1 that it was liable to pay damages for loss of goods in transit. Defendant No. 1 in reply though denied its liability, yet agreed to make good the loss in instalments under letter dated 13.3.1979, Ext. 11. In fact it (defendant No. 1) adjusted certain amounts from the subsequent bills of the plaintiff, the last adjustment being on 2.7.1979, D.W.I, the proprietor of the carrier also admitted in his evidence that a sum of Rs. 5,246.75 had been adjusted. Since defendant No. 1 acknowledged its liability and in fact made payments by way of adjustment and the last adjustment being on 2.7.1979, fresh period of limitation started from the said date and therefore, the suit which was filed on 15.5.1982 was within time.
16. The last limb of submission of defendant No. 1 is that the suit was not maintainable since it was filed by the Assistant Secretary of the plaintiff-society and not the Secretary. Rule 37 of the Orissa Co-operative Societies Rules, 1965 says that Secretary shall be the officer to sue or to be sued on behalf of the society. The word "Secretary" defined under Rule 2(n) of the said Rules means a person who subject to the provision of the bye-laws, is entrusted with the management of the affairs of a society and includes a member of a committee or any other person discharging the duties of a Secretary by whatever name called. It is in the evidence of P.W.1 that since the post of Secretary was vacant at the relevant time, he as the Assistant Secretary filed the suit on being authorised by the Managing Director and the Board. In view of such evidence, the contention of defendant No. 1, as aforesaid merits no consideration.
17. In view of discussions made above, I find no reason to upset the judgment and decree passed by the trial Court. In the result appeal fails and the same is dismissed with cost which is quantified at Rs. 1,000/-.