State Consumer Disputes Redressal Commission
Dhariwal Industries Limited vs East India Transport Agency on 19 December, 2018
`STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
MAHARASHTRA, MUMBAI
Consumer Complaint No.CC/12/335
1. Dhariwal Industries Ltd.
Manikchand House, 100-101
Kennedy Road, Pune 411 001
&
2.Bajaj Allianz General Insurance Co. Ltd.
GE Plaza, Airport Road
Yerwada, Pune 411 006 .....Complainants
Versus
East India Transport Agency
301, Steel Chamber
Devji Ratansey Marg
Masjid (East),
Mumbai 400 009 .........Opponents
BEFORE: Smt.Usha S.Thakare, Presiding Judicial Member
Dr.S.K.Kakade, Member
PRESENT: None present for the parties
ORDER
Per Hon'ble Smt.Usha S.Thakare, Presiding Judicial Member .
1. Complainants -M/s.Dhariwal Industries Ltd. and M/s.Bajaj Allianz General Insurance Co. Ltd. have filed this consumer complaint u/sec.12 r/w. section 17 of Consumer Protection Act, 1986 against the opponent - M/s.East India Transport Agency by alleging deficiency in service.
2. Facts giving rise to present consumer complaint in short are as under:-
Complainant no.1- M/s.Dhariwal Industries Ltd. is a company incorporated under the Indian Companies Act, 1956 and is doing business. Complainant no.2-Insurance Company is the underwriter of the claim consignment, doing the business of general insurance. The opponent is engaged in the business of Carriage of goods by road for hire and reward as a common carrier. The First complainant had engaged the services of the opponent for carriage, 1 consideration and safe delivery of their consignment of 350 cartons of Gutkha to their buyers at Kolhapur. The said consignment was dispatched under their suppliers invoice bearing no.730 & 731 dated 06/12/2010. The said consignment was well packed and accepted by the opponent. The consignment was booked under their Lorry Receipt bearing no.5559178 dated 06/12/2010. The consignment remained non delivered to their buyers. Upon intimation by their buyers that the consignment had not reached them, the first complainant contacted the second complainant. The second complainant/Insurance Company appointed cargo tracers to locate the whereabouts of the said consignment. The opponent informed the cargo tracers that the first complainant's consignment was stolen while in the custody of the opponent. The opponent willfully failed to reimburse the consignment value. The consignment was in the custody of the opponent. Complainant no.1 suffered loss as the consignment did not reach to the buyers. Opponent had confirmed the loss caused to the consignment while in their custody vide their Non-delivery certificate dated 16/12/2010. The first complainant lodged monetary claim with the opponent. The first complainant is the consignor/owner/insured of the said consignment.
3. It is further submitted that the first complainant had taken out Marine Insurance Policy from the second complainant to cover the risk to the said consignment during its transit. The second complainant accordingly settled the claim of the first complainant under the said insurance policy for a sum of Rs.28,72,142/- towards full and final settlement. The first complainant in pursuance of the payment received from the second complainant, had executed Letter of Subrogation and Special Power of Attorney in favour of second complainant for Rs.28,72,142/-. By virtue of subrogation in favour of second complainant, the first complainant subrogated all the rights and remedies available to first complainant. The opponent is responsible for the loss of the insured consignment. The second complainant made payment to the first complainant and, as such, entitled to claim from the opponent for 2 the amount paid by the second complainant to the first complainant. By virtue of subrogation, second complainant is claiming only to the extent of the amount indemnified by them and nothing more.
4. It is alleged that loss of consignment was caused due to gross failure on the part of opponent. Opponent did not exercise due care, caution and diligence. The damage to the consignment was caused while in the course of transit and while in the custody of opponent. The opponent, and/or its servants/agents failed to look into the safety of the consignment as a bailee and as common carriers. They made breach of statutory obligations. Complainant no.1 suffered a loss of Rs.28,72,142/- due to non delivery of consignment to the buyers. The opponent is guilty of deficiency in service. Ultimately, the complainants have filed consumer complaint and requested to give direction to the opponent to pay to the second complainant a sum of Rs.28,72,142/- with interest thereon @ 18% p.a. from the date of loss till realization of the amount. The complainants have claimed an amount of Rs.50,000/- towards costs of litigation.
5. The consumer complaint was admitted by order dated 19/12/2012. Notice was issued to the opponent. Notice was duly served to the opponent. None appeared on behalf of opponent. Hence, by order dated 29/04/2013 there was a direction to proceed without written version of the opponent. The complainants were directed to file their affidavit of evidence.
6. On behalf of the complainants, Mr.Praveen Chhajed, Head-Non Motor Claims of the second complainant has filed his affidavit. The complainants have relied on suppliers invoices, lorry receipt, Non-Delivery certificate issued by the opponent, Monetary claim lodged upon opponent, and Letter of Subrogation cum Special Power of Attorney executed by the first complainant in favour of second complainant. The documents relied upon are filed at Exhibits A1, A2, B, C, D & E to the complaint. Complainants 3 have filed brief notes of arguments. No one appeared on behalf of complainants and opponent to advance oral arguments. Hence, we have considered brief notes of arguments filed by the complainants. Along with written arguments complainants have filed rulings laid down by Hon'ble National Commission. Under these circumstances, following points arise for our determination and we record our finding for the reasons given below:-
Sr.No. Points Finding
1 Whether consumer complaint is Yes
maintainable before this Commission?
2 Whether opponent is guilty of Yes
deficiency in service?
3 Whether complainant no.2 is entitled Yes
for claim?
4 What order? As per final order.
7. As to point no.1:-
The complainants have filed consumer complaint and made a claim of Rs.28,72,142/- along with interest @ 18% p.a. from the date of loss. In addition, an amount of Rs.50,000/- is claimed towards costs of litigation. Considering the claim of complainants, present complaint is within the pecuniary jurisdiction of this Commission and, as such, it is maintainable before this Commission.
8. Since, liability of the carrier is that of Insurer and considering the nature of services hired of the carrier, it cannot be said that it had any nexus with profit and loss of first complainant. Services hired are not for commercial purpose. A useful reference is made to a ratio decidendi decision of Hon'ble National Commission in the matter of Harsolia Motors v/s. National Insurance Co.Ltd. I (2005) CPJ 27 (NC). Hiring of services of opponent are not for commercial purpose. Services of opponent were hired 4 as a carrier and it had nothing to do with or had any nexus with running and/or profit and loss of the business of complainants. In view of this discussion, we have no hesitation to hold that complainants are 'consumers' and consumer complaint filed by the complainants is maintainable.
9. In view of the judgment passed by Hon'ble National Commission in Revision Petition no.2712 of 2011 in the matter of M/s.Aggarwal Forwarding Egency v/s. M/s.Ramniwas Ravi Prakash and another decided on 23/04/2013, it is clear that present consumer complaint is maintainable before the Consumer Fora. Hon'ble National Commission while passing the above judgment in para nos.5 & 6 observed as under:-
"We have examined the entire material on record and given thoughtful consideration to the arguments advanced before us. The facts of the case make it very clear that the services of the petitioner was engaged by respondent no.1 for the transportation of goods in question to their destination at Calcutta. It was the duty of the petitioner to ensure that the transportation was arranged properly and in case, the consignment was lost in transit, it is the petitioner, which is at fault in the matter. It is also very clear that the registration number of the truck was not genuine and in fact it was the registration number of Vespa Scooter.
It is clear therefore, that the petitioner had been careless in discharging its duty for transportation of the goods in question. The orders passed by the District Forum and the State Commission do not suffer from any infirmity, illegality or jurisdictional error from any angle. The orders are therefore confirmed and the revision petition is ordered to be dismissed with no order as to costs."
10. The cause of action arose when the opponent failed to deliver consignment to the buyers or the first complainant. Non Delivery Certificate 5 was issued on 16/12/2010 as per 'Exhibit C'. The consumer complaint is filed on 10/12/2012. The consumer complaint is within limitation and hence it is maintainable. We are of the considered view that where the insurer pays to the insured the value of goods lost due to negligence of opponent, the rights and remedies of the insured against such a third party stands transferred to and vested in the insurer and such equitable assignment of rights and remedies of the insured in favour of the insurer, implied in contract of indemnity is known as "subrogation", which supports the stand of the Insurance Company.
11. For coming to this conclusion we have placed reliance on the latest ruling passed by the Hon'ble National Commission in the case of New India Assurance Co.Ltd. and another v/s. Industrial Transport Organisation passed in Revision Petition nos.665 and 666 of 2017 decided on 14/08/2018 and reported in Volume IV (2018) CPJ 1 (NC), in which it is held as under:-
"Insurance company settled the claim by paying complainant company a sum of Rs.8,21,195/-. After receipt of the claim, complainant company assigned/subrogated all its rights to the Insurance Company from Industrial Transport Organisation by signing a Letter of Subrogation. Consumer complaint filed before the District Forum was partly allowed. The State Commission allowed the appeals. Hon'ble National Commission held that where the insurer pays the loss to the insured the value of goods lost due to negligence of third party i.e. Industrial Transport Organisation, `the rights and remedies of the insured against such a third party stands transferred to and vested in the insurer and such equitable assignment of rights and remedies of the insured in favour of the insurer, implied in contract of indemnity is known as "subrogation". The impugned judgment is set aside and the 6 appeals are restored to the Board of the State Commission."
In view of the above discussion, we arrive at the conclusion that consumer complaint is maintainable.
12. As to point no.2:-
The evidence adduced on behalf of the complainants remained unchallenged. Nothing is before us to disbelieve the evidence and the documents filed on record by the complainants. The opponent though duly served, failed to appear and contest the consumer complaint for the reasons best known to the opponent.
13. It is revealed from the evidence and documents that complainant no.1 had engaged the services of the opponent for carriage, consideration and safe delivery of their consignment of 350 cartons of Gutkha to their buyers at Kolhapur. The said consignment was dispatched under their suppliers invoice bearing no.730 & 731 dated 06/12/2010, copies of which are at Exhibit A1 and A2. The said consignment was well packed and accepted by the opponent. The consignment was booked under their Lorry Receipt bearing no.5559178 dated 06/12/2010, which is at Exhibit B. The consignment did not reach to their buyers. The buyers did not get delivery of the consignment. Complainant no.1 contacted the second complainant to locate the whereabouts of the consignment. Complainant no.2 issued Marine Insurance policy in favour of complainant no.1. On getting intimation of loss, complainant no.2 appointed cargo tracers to locate the whereabouts of the said consignment. The opponent informed the cargo tracers that the first complainant's consignment was stolen while in the custody of the opponent. Opponent issued Non-delivery certificate dated 16/12/2010 as per 'Exhibit C'. There was a contract of indemnity between complainant no.1 and complainant no.2. Complainant no.2 issued Marine Insurance policy in favour of complainant no.1 and agreed to indemnify the loss. Complainant no.1 had filed monetary claim with the opponent as per 7 'Exhibit D'. Complainant no.2 settled the claim and paid an amount of Rs.28,72,142/- under the insurance policy. First complainant received the payment and in pursuance of the payment, executed Letter of Subrogation and Special Power of Attorney in favour of second complainant for sum of Rs.28,72,142/-, copy of which is at 'Exhibit E'.
14. It is crystal clear that by virtue of Subrogation, all rights and remedies which were accrued in favour of first complainant were vested with complainant no.2 under contract of subrogation. Second complainant is entitled to claim from the opponent to the extent of amount paid by it to the first complainant by virtue of subrogation. Second complainant is claiming an amount of Rs.28,72,142/- from the opponent.
15. Admittedly, complainant no.1 has received an amount of Rs.28,72,142/- towards loss of consignment. Loss to the consignment was caused due to gross negligence of opponent in taking due care, caution and diligence. Damage was caused while in the course of transit and while in the custody of the opponent. It appears that servants and agents of the opponent failed to take proper care and caution of the consignment and did not look into the safety of consignment as a bailee and as common carrier. Opponent committed breach of statutory obligation as common/public carrier. Failure to deliver the consignment safely is a breach of duty independent of any contract of carriage.
16. There is a threefold liability imposed upon the opponents which is firstly that of an insurer of every extraneous risk to the cargo whilst in their custody. Secondly, as that of a bailee under the Indian Contract Act, 1872 as entrusting of the cargo to the opponents constitutes a bailment as evidenced by the Lorry receipts and thirdly, the responsibility of the opponents as common carriers does not merely originate in the contract but is cast upon them by virtue of their exercising public employment for 8 reward.
17. Opponent was grossly negligent. Opponent failed and neglected to deliver the consignment to the buyers at Kolhapur. It was informed that the consignment was stolen during transit. Complainant no.1 had suffered loss.
18. Nothing is there to disbelieve that complainant no.2 paid an amount of Rs.28,72,142/-. In view of subrogation, Complainant no.2 is entitled to claim the said amount from the opponent with interest. Opponent failed to consider the genuine claim of complainant no.1 and failed to repay the value of consignment. Ultimately, complainant no.1 has received amount of loss from second complainant. Loss to the consignment was admitted by the opponent. In that case, it was duty of the opponent to make payment of loss to complainant no.1. Certainly, opponent is guilty of deficiency in service.
As a result, we answer point no.2 for determination in affirmative and proceed to pass the following order:-
ORDER
1. Consumer complaint is partly allowed.
2. Opponent do pay an amount of Rs.28,72,142/- to the complainant no.2 with interest @ 9% p.a. from the date of letter of subrogation i.e.25/02/2011 till its realization.
3. Opponent do pay an amount of Rs.25,000/- as costs of litigation and shall bear its own.
4. Copies of the order be furnished to the parties.
Pronounced on 19th December, 2018.
[Usha S.Thakare] Presiding Judicial Member [Dr.S.K.Kakade] Member Ms 9 10