Delhi District Court
In Re vs Om Carrying Corporation on 8 April, 2013
IN THE COURT OF SH. SANJAY GARG, ADDITIONAL
DISTRICT JUDGE (CENTRAL)13, TIS HAZARI COURTS,
DELHI.
CS No.128/2011
In Re:
Indofil Chemicals Company,
A division of Modipon Ltd.,
Nirlon House,Dr. Annie Besant Road,
Box No.9112, Mumbai400025. ....Plaintiff
Versus
1. Om Carrying Corporation,
11098, East Park Road, New Delhi.
2. Saraswat Fertilizers,
Purani Adalat, Arrah, Bihar.
3. Chemat Chemicals & Materials Pvt. Ltd.,
204, Kaisons House,
84, Nehru Place, New Delhi110019 ....Defendants
Date of institution : 19.03
.1998
Date of reserving order : 25.03.2013
Date of decision : 08.04.2013
JUDGMENT:
1. This is a suit for recovery of Rs.11,21,084.69 alongwith pendentelite and future interest.
CS No.128/2011 Page 1/22
2. The plaintiff is stated to be a company incorporated under the Companies Act, 1956 and engaged in the business of manufacturing and marketing of agricultural and industrial chemicals. The defendant No.1 is stated to be the transporter and the defendants No.2 & 3 are stated to be the distributor and C&F agent of the plaintiff respectively. The case of the plaintiff is that the orders for the supply of goods placed by the defendant No.2 used to be despatched by the plaintiff through its C & F agent i.e. the defendant No.3 and that the defendant No.2 used to take delivery from the transporter on presentation of the documents. In December, 1995, pursuant to the orders placed by the defendant No.2, the defendant No.3 as the C&F agent of the plaintiff booked five consignments containing 250 cases of insecticides and one consignment containing 15 cases of tritone worth Rs.7,91,355.38 with the defendant No.1 at Delhi for carriage and delivery to the defendant No.2 at Arrah, Bihar. The details thereof are as under:
Sl. Invoice No. Date Amount Goods
No. Receipt No.
1. ICC/10702 12.12.95 Rs.1,55,617.25 2144916
CS No.128/2011 Page 2/22
2. ICC/10703 12.12.95 Rs.1,55,617.25 2144917
3. ICC/10704 12.12.95 Rs.1,55,617.25 2144918
4. ICC/10705 12.12.95 Rs.1,55,617.25 2144919
5. ICC/10706 12.12.95 Rs.1,55,617.25 2144920
6. ICC/10982 24.01.96 Rs. 13,269.13 2161283
The consignments reached Arrah on 28.01.1996 in safe and sound condition and were kept in the godown of the defendant No.1. Though the defendant No.2 was supposed to take delivery of the goods on presentation of the documents within a reasonable time i.e. within 57 days of the goods reaching Arrah but it failed to do the same in violation of the terms of the purchase orders. Since the plaintiff received no information from the defendants No.1 & 2 regarding the goods despite several telephonic calls, it wrote a letter dated 04.03.1996 to the defendant No.1 to rebook the said consignments to its C&F agent i.e. the defendant No.3 at the plaintiff's expenses in case the same had reached Arrah and the delivery had not been taken by the defendant No.2. However, the plaintiff did not receive any information whatsoever from the defendant No.1 till 16.04.1996. On 16.04.1996, the plaintiff came to know that the CS No.128/2011 Page 3/22 entire consignment had been destroyed in the fire that had erupted in the godown of the defendant No.1 at Arrah on 15.04.1996 and 16.04.1996. A detailed report dated 03.10.1996 was submitted in that regard by the All India Recovery Consultants who were appointed as cargo tracers by the plaintiff's insurers namely M/s. National Insurance Co. Ltd. The plaintiff lodged a claim with the defendant No.1 for the value of the lost consignments alongwith interest vide letters dated 01.05.1996 and 06.06.1996 as well as legal notice dated 25.04.1997 but to no avail. However, the defendant No.1 wrote a letter dated 18.10.1996 to the plaintiff asking it to take steps to recover damages for the loss of the goods from its insurers. The plaintiff also lodged a claim with its insurers but the same was rejected on the ground of delay in taking delivery of the consignments from the godown of the defendant No.1. The said rejection was communicated to the plaintiff vide letter dated 25.11.1996. According to the plaintiff, since the defendant No.2 failed to take delivery of the goods within reasonable time and the defendant No.1 not only failed to rebook the material to the defendant No.3 as per the instructions of the plaintiff but also CS No.128/2011 Page 4/22 did not take due care and precaution for the safety of the goods, both of them are jointly and severally liable to pay a sum of Rs. 7,91,355.38 i.e. the value of the consignments to the plaintiff alongwith interest at the market rate of 20% per annum from the date of booking of the consignments till its recovery.
3. In the written statement, the defendant No.1 has taken the preliminary objections that the suit is bad for want of notice under Section 10 of the Carriers Act; that there was no privity of contract between the plaintiff and the defendant No.1 and that the plaint has not been properly presented and verified. On merits, though the defendant No.1 has admitted that the defendant No.3 had booked six consignments with it as per the goods receipts mentioned in the plaint but has denied that the defendant No.3 was C&F agent of the plaintiff. According to the defendant No.1, since the consignments were booked by the defendant No.3 with 'self' as consignee, the same were not to be delivered to the defendant No.2 as alleged by the plaintiff. It has been stated that the defendant No.3 was required to take the delivery of the consignments immediately on their arrival at CS No.128/2011 Page 5/22 Arrah on 28.01.1996 but since it failed to do so, the consignments kept lying in the godown at the risks and costs of the defendant No.3 and no liability can be fastened upon the defendant No.1 for the loss of the consignments in the fire that took place in the godown on 15/16.04.1996 especially when the eruption of fire was an act of God. The defendant No.1 has denied the details of the invoices as specified in the plaint as well as the receipt of letters dated 04.03.1996, 01.05.1996 & 06.06.1996 and legal notice dated 25.04.1997. A prayer for dismissal of the suit has been made.
4. The defendant No.2 also filed the written statement denying its liability for the suit amount. Subsequent thereto, the defendant No.2 moved an application under Order XII Rule 6 read with Section 151 CPC for dismissing the suit and striking out its name from the array of parties. The said application was allowed vide order dated 22.11.2000 by observing that the title in the consignments in question had not passed to the defendant No.2 and the suit qua defendant No.2 was dismissed.
CS No.128/2011 Page 6/22
5. Though the defendant No.3 entered appearance in the matter but failed to file the written statement.
6. In its replication, the plaintiff traversed the pleas raised in the written statement of the defendant No.1 and reiterated the averments of the plaint.
7. On 28.10.2002, the following issues were framed:
(i) Whether the present suit is not maintainable for want of statutory notice under Section 10 of the Carrier Act? ...OPD1.
(ii) Whether the present plaint is not signed and verified by a duly authorised person and whether the suit is not instituted by a duly authorised person? ....OPD1
(iii) Whether there is no privity of contract between the plaintiff and the defendant No.1 and if so, its effect? ....OPD1
(iv) Whether the goods destroyed while in the custody of the defendant No.1 was a result of an act of God and if so, whether the defendant No.1 is absolved from its obligations in regard to the goods in question? ....OPD
(v) Whether the plaintiff is entitled to recover any amount from defendant No.1 and if so, what amount? ....OPP CS No.128/2011 Page 7/22
(vi) If the aforesaid issue is answered in favour of the plaintiff, whether the plaintiff is also entitled to claim interest and if so, at what rate and for which period? ....OPP
(vii) Relief.
8. In support of its case, the plaintiff company examined Sh. B. N. Srivastava, Resident Manager, as PW1. He led evidence on affidavit (Ex. PA) and got exhibited the copy of distributorship agreement dated 15.12.1993 executed between the plaintiff and the defendant No.2 and the renewal letter dated 24.05.1995 as Ex. PW1/1 (Colly); the copy of six invoices raised by the defendant No. 3 against the defendant No. 2 as Ex. PW1/2 (Colly); the copy of letter dated 04.03.1996 written by the plaintiff to the defendant No.1 as Ex. PW1/3; the copy of surveyors report dated 27.05.1996 as Ex. PW1/4; the copy of report of cargo tracers dated 03.10.1996 as Ex. PW1/5; the copy of letter dated 18.10.1996 written by the defendant No. 1 to the plaintiff as Ex. PW1/6; the copy of rejection letter of the National Insurance Company dated 25.11.1996 as Ex. PW1/7; the copy of letters dated 01.05.1996 and 06.06.1996 written by CS No.128/2011 Page 8/22 the plaintiff to the defendant No.1 as Ex. PW1/8 and Ex. PW1/9 respectively; the copy of legal notice dated 25.04.1997 as Ex. PW1/10 and the original power of attorney dated 08.09.2005 executed by Sh. Rajinder Kumar Malhotra in favour of PW1 as Ex. PW1/11. The plaintiff also examined Sh. Mehmood M. Abdi, Senior Manager(Legal), as PW2 who placed on record the copy of board resolution dated 13.11.2001 as Ex. PW2/1; the copy of power of attorney dated 31.05.1995 executed in favour of Sh. J. Raphael as Mark A and the original power of attorney executed in favour of Sh. Rajinder Kumar Malhotra as Ex. PW2/3.
On the other hand, the defendant No.1 examined Sh. Mahesh Chander Tiwari, Manager Administration, as DW1. In his affidavit (Ex. DW1/A), the DW1 supported the averments of the written statement.
9. My issuewise findings are as under:
Issue No.1:
"Whether the present suit is not maintainable for want of statutory notice under Section 10 of the Carrier CS No.128/2011 Page 9/22 Act? ...OPD1"
Section 10 of the Carriers Act, 1865 provides that no suit shall be instituted against a common carrier for the loss of goods unless a notice in writing of the loss has been given to the carrier before the institution of the suit and within six months of the time when the loss first came to the knowledge of the plaintiff. The object of the section is to put the carrier on notice about the claim in respect of the loss or damage to the consignment so that it can make good the loss occasioned. Admittedly, the consignments were destroyed in the fire that took place in the godown of the defendant No.1 at Arrah on 15/16.04.1996. According to the plaintiff, after coming to know about the loss of the consignments on 16.04.1996, it lodged a claim with the defendant No.1 for the value of the lost consignments vide letters dated 01.05.1996 & 06.06.1996 as well as legal notice dated 25.04.1997. The photocopy of the said letters and legal notice have been produced on record by the plaintiff as Ex.PW1/8 to Ex.PW1/10 respectively. Though the defendant No.1 has denied the receipt of above mentioned letters and notice in its written statement but Sh. Mahesh Chander Tiwari, CS No.128/2011 Page 10/22 who has been examined as DW1 by the defendant No.1, has admitted in his crossexamination that the plaintiff had called upon the defendant No.1 to pay the value of the lost goods vide letters and legal notice. Since the plaintiff has pleaded that the claim was lodged vide letters dated 01.05.1996 & 06.06.1996 and legal notice dated 25.04.1997, the above admission of the DW1 has to be read in reference to the same. A perusal of the letters dated 01.05.1996 and 06.06.1996, which are within the period of six months of the loss of goods, shows that the plaintiff had categorically asked the defendant No.1 to make good the loss suffered by it. In addition to the above letters, the plaintiff has also placed on record the photocopy of the reply dated 18.10.1996 (Ex.PW1/6) given by the defendant No.1 to its letter No.591 dated 04.07.1996 wherein the defendant No.1 advised the plaintiff to take steps to recover damages for the loss of goods from the insurance company. The said reply is not in dispute. From the above documents, it is clear that the defendant No.1 was put on notice about the claim in respect of loss of the consignments within the time stipulated under Section 10 of the Carriers Act. Considering the same, the present issue is decided CS No.128/2011 Page 11/22 against the defendant No.1.
Issue No.2:
"Whether the present plaint is not signed and verified by a duly authorised person and whether the suit is not instituted by a duly authorised person? ....OPD1"
The present suit has been signed, verified and instituted by Sh. J. Raphael, who is stated to be the Legal Manager of the plaintiff company. The photocopy of the power of attorney dated 31.05.1995 executed by the plaintiff company in his favour has been placed on record by the PW2 as Mark A. The counsel for the defendant No.1 has contended that since the original power of attorney dated 31.05.1995 has not been produced, the plaintiff company has failed to prove that Sh. J. Raphael had any valid authority to file the suit on its behalf. On the other hand, the counsel for the plaintiff has placed reliance upon United Bank of India v. Naresh Kumar and others, (1996) 6 SCC 660, wherein it has been held that a combined reading of Order 6 Rule 14 CPC and Order 29 Rule 1 CPC makes it clear that even in the absence of any formal letter of authority or power of attorney, a principal officer of the corporation can, by virtue of CS No.128/2011 Page 12/22 the office which he holds, sign and institute a suit on behalf of the corporation. He has argued that since Sh. J. Raphael was the principal officer of the plaintiff company, the nonproduction of the original power of attorney in his favour is of no consequence. The PW2 Sh. Mehmood M. Abdi has categorically deposed that Sh. J. Raphael was the legal manager of the plaintiff company. No suggestion has been put to him by the defendant No.1 controverting the status of Sh. J. Raphael in the plaintiff company at the time of the institution of the suit. There can be no doubt that a Legal Manager is the principal officer of a company. Thus in view of the law laid down in United Bank of India case (supra), it is clear that Sh. J. Raphael was competent to sign, verify and institute the present suit on behalf of the plaintiff company. Even otherwise, the fact that the suit had been filed in the name of the plaintiff company; the entire court fee was paid by the plaintiff company; the suit is pending since 1998 and the documentary as well as oral evidence has been adduced on behalf of the plaintiff company lead to the only conclusion that Sh. J. Raphael had been authorised to sign the plaint and, in any case, the plaintiff company had ratified the act CS No.128/2011 Page 13/22 of Sh. J. Raphael in signing and instituting the plaint. For the foregoing reasons, the present issue is decided against the defendant No.1 and in favour of the plaintiff.
Issue No.3:
"Whether there is no privity of contract between the plaintiff and the defendant No.1 and if so, its effect? ....OPD1"
It is the admitted position that the defendant No.3 had booked six consignments with the defendant No.1 for transportation from Delhi to Arrah vide goods receipts Nos. 2144916 to 2144920 dated 12.12.1995 and No.2161283 dated 24.01.1996.
The counsel for the defendant No.1 has contended that since the consignments were booked by the defendant No.3, there is no privity of contract between the plaintiff and the defendant No.1. On the other hand, the counsel for the plaintiff has argued that pursuant to the orders placed by the defendant No.2 with the plaintiff, the defendant No.3 being the C & F agent of the plaintiff booked the consignments with the defendant No.1 at Delhi for carriage and delivery to the defendant No.2 at Arrah and therefore, the plaintiff has locus standi to file the present suit CS No.128/2011 Page 14/22 against the defendant No.1. He has drawn the attention of the court towards the photocopy of six invoices bearing Nos. ICC/10702 to ICC/10706 dated 12.12.1995 and No. ICC/10982 dated 24.01.1996 [Ex. PW1/2 (Colly)] raised by the defendant No.3 against the defendant No.2 wherein the above goods receipts numbers have been mentioned and the defendant No.3 has been shown as the selling agent of the plaintiff. The counsel for the defendant No.1 has submitted that the said invoices do not further the case of the plaintiff against the defendant No.1 as the defendant No.1 was not a party to the same and had no knowledge that the defendant No.3 was acting as the agent of the plaintiff. The submission of the counsel for the defendant No.1 does not hold water. Since a common carrier is under a legal obligation to carry invoice/bill of sale of the goods during transit, the defendant No.l can not feign ignorance about the contents of invoices Ex.PW1/2 (Colly). Further, as mentioned earlier, in reply dated 18.10.1996 (Ex.PW1/6), the defendant No.1 had advised the plaintiff to take steps to recover damages for the loss of the consignments from its own insurer. This also goes to show that CS No.128/2011 Page 15/22 the defendant No.1 knew that the plaintiff was the owner of the consignments and that the defendant No.3 had booked the same in the capacity of its agent.
Section 226 of the Indian Contract Act, 1872 provides that the contracts entered into through an agent may be enforced in the same manner as if the contracts had been entered into by the principal in person. In view thereof, it is clear that the plaintiff is entitled to sue the defendant No.1 for the loss of the consignments. Even if it is assumed that at the time of booking of consignments, the defendant No.1 neither knew nor had any reason to suspect that the defendant No.3 was an agent of the plaintiff, still the plaintiff can claim damages for the loss of the consignments from the defendant No.1 in terms of Section 231 of the Contract Act especially when it is not the case of the defendant No.1 that had it known that the plaintiff was the principal, it would not have entered into the contract.
Considering the above, the present issue is decided against the defendant No.1 and in favour of the plaintiff. Issue No.4:
"Whether the goods destroyed while in the custody of the CS No.128/2011 Page 16/22 defendant No.1 was a result of an act of God and if so, whether the defendant No.1 is absolved from its obligations in regard to the goods in question? ....OPD"
Admittedly, the consignments were destroyed in the fire that had erupted in the godown of the defendant No.1 at Arrah on 15/16.04.1996. According to the defendant No.1, since the fire was caused accidentally and not due to any omission and negligence on its part, the same was an act of God and thus no liability can be fastened upon it for the loss of the goods. In P.K. Kalasami Nadar v. K. Ponnuswami Mudaliar, AIR 1962 Madras 44, it has been held that an act of God will be an extraordinary occurrence due to natural causes, which is not the result of any human intervention and which can not be avoided by any amount of foresight and care, e.g. a fire caused by lightening; but an accidental fire though it might not have resulted from any act of or omission of the common carrier, can not be said to be an act of God. As it is not the case of the defendant No.1 that the fire had taken place due to any natural cause, the plea raised by it that the goods had been destroyed as a result of an act of God is not sustainable. Accordingly, the CS No.128/2011 Page 17/22 above issue is decided against the defendant No.1. Issue No.5:
"Whether the plaintiff is entitled to recover any amount from defendant No.1 and if so, what amount? ....OPP"
Section 8 of the Carriers Act, 1865 provides that notwithstanding anything thereinbefore contained, every common carrier shall be liable to the owner for loss of or damage to any property delivered to such carrier where such loss or damage shall have arisen from the negligence or criminal act of the carrier. In Patel Roadways Ltd. v. Birla Yamaha Ltd., (2000) 4 SCC 91, it has been observed that the liability of a common carrier under the Carriers Act is that of an insurer which is clear from Section 9 of the Act wherein it has been specifically laid down that in a case of claim of damage for loss to or deterioration of goods entrusted to a carrier, it is not necessary for the plaintiff to establish negligence, and that the absolute liability of the carrier is subject to two exceptions namely an act of God and a special contract which the carrier may choose to enter with the customer. While deciding Issue No.4, it has already been held that the loss of goods in the fire CS No.128/2011 Page 18/22 that had erupted in the godown of the defendant No.1 can not be said to be an act of God. Further, it is not the case of the defendant No.1 that any special contract limiting its liability for the loss of goods was entered into between the parties. The counsel for the defendant No.1 has contended that since the consignments were safely transported to its godown at Arrah and the defendant No.3 failed to collect the goods within the reasonable period, the plaintiff can not claim any compensation for the loss of goods. The above contention is devoid of any merit in view of the law laid down in M/s. Prakash Road Lines (P) Ltd. and another v. H.M.T. Bearing Ltd., AIR 1999 Andhra Pradesh 106, wherein it has been held that the liability of the carrier for the loss of goods can not be evaded merely because the plaintiff or the consignee did not collect the goods within a reasonable time upon reaching the destination and that the carrier at the most be entitled to recover demurrage charges if there is delay in collecting the goods by the plaintiff or the consignee or to dispose of the goods after following the procedure for disposal of the goods in case the plaintiff or the consignee fails to take delivery of the same before the stipulated CS No.128/2011 Page 19/22 date. Resultantly, it is clear that the plaintiff is entitled to recover the value of the lost consignments from the defendant No.1.
According to the plaintiff, the total value of the consignments was Rs.7,91,355.38. In para No. 7 of the plaint, the details of the invoices/bills of sale of the consignments have been mentioned by the plaintiff. Though the defendant No.1 has disputed the details of the invoices including the dates and the amounts thereof but it has failed to divulge the value of the consignments as per its own record. Even in the cross examination of PW1, no suggestion has been put by the defendant No.1 in order to point out any discrepancy in the details of the invoices furnished by the plaintiff. Here it is noteworthy that the plaintiff has also produced on record the copies of all the six goods receipts issued by the defendant No.1. The said goods receipts have not been disputed by the defendant No.1. In the goods receipts No.2144916 to 2144920 dated 12.12.1995, the value of the consignments has been shown as Rs.1,58,000/ each which, infact, exceeds the value of the consignments as mentioned in the corresponding invoices. It is CS No.128/2011 Page 20/22 only the last good receipt No.2161283 dated 24.01.1996 wherein the value of the consignment has not been mentioned. Since the defendant No.1 has neither disclosed the value of the last consignment nor given any suggestion to the PW1 disputing the valuation of the plaintiff, the value of the consignment as stated by the plaintiff has to be accepted. Accordingly, the plaintiff is entitled to recover a sum of Rs.7,91,355.38 from the defendant No.1. The above issue is accordingly decided in favour of the plaintiff and against the defendant No.1.
Issue No.6:
"If the aforesaid issue is answered in favour of the plaintiff, whether the plaintiff is also entitled to claim interest and if so, at what rate and for which period? ....OPP"
The plaintiff has claimed interest at the rate of 20% per annum on the value of the consignments from the dates of their respective bookings. It is not the case of the plaintiff that the said rate of interest was an agreed term between the parties. Nothing has been brought on record by the plaintiff to show that the said rate was the prevalent market rate of interest at the relevant time. The interest as claimed by the plaintiff appears to CS No.128/2011 Page 21/22 be on higher side. Keeping in view the commercial nature of transaction, in my opinion, it would meet the ends of justice if the plaintiff is awarded interest at the rate of 12% per annum from the date of booking of the last consignment i.e. 24.01.1996. This issue is accordingly decided.
Relief:
In the light of the above findings, the suit of the plaintiff is allowed and a decree for recovery of Rs.7,91,355.38 alongwith interest at the rate of 12% per annum from the date of booking of the last consignment i.e. 24.01.1996 till the realization of the decretal amount is passed in favour of the plaintiff and against the defendant No.1. The plaintiff shall also be entitled to costs.
Decree sheet be prepared.
File be consigned to the record room.
Pronounced in the open court. (SANJAY GARG) Dated : 08.04.2013. Additional District Judge13, (Central), Tis Hazari Courts, Delhi.CS No.128/2011 Page 22/22