Delhi High Court
M/S Transway Cargo Lifters Pvt. Ltd vs National Insurance Co. Ltd. & Anr on 19 April, 2016
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
*IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 19th April, 2016
+ RFA No.729/2005
M/S TRANSWAY CARGO LIFTERS PVT. LTD. ..... Appellant
Through: Mr. Rajiv Talwar, Mr. Sanjay Sarin,
Ms. Gagandeep Kaur and Mr. Nipu
Patiri, Advs.
Versus
NATIONAL INSURANCE CO. LTD. & ANR. ..... Respondents
Through: Ms. Hetu Arora Sethi and Mr. Shravan
Sahny, Advs. for R-1.
CORAM:-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. This first appeal under Section 96 of the Code of Civil Procedure, 1908
(CPC) impugns the judgment and decree dated 30th July, 2005 of the Court of
the Additional District Judge (ADJ), Delhi decreeing Suit No.331/03 filed by
the respondents for recovery of Rs.19,81,280 with costs and interest at 9%
per annum from 29th March, 2000 till realization against the appellant.
2. Notice of the appeal was issued and subject to the appellant depositing
50% of the decretal amount execution was stayed. The appeal on 6 th October,
2006 was admitted for hearing and the maturity value of the fixed deposited
created of the amount deposited by the appellant ordered to be released in
W.P.(C) No.729/2005 Page 1 of 18
favour of the respondent no.1 / plaintiff subject to ultimate result of the
appeal. The appeal, on 5th November, 2009 was dismissed in default of
appearance of the appellant but notice of the application made by the
appellant for restoration of the appeal was issued and remained pending for
service of the respondent no.2 M/s. BPL Display Devices Ltd. till 15th
December, 2014 when the application was dismissed in default. Again
restoration was applied for and vide order dated 10th August, 2015, observing
that the respondent no.2 was reported to have been wound up and none had
appeared for the Official Liquidator inspite of notice, the appeal restored to its
original position and Trial Court record requisitioned. The counsels were
heard on 17th September, 2015 and judgment reserved.
3. The two respondents instituted the suit from which this appeal arises
pleading (i) that the respondent no.2 / plaintiff had entrusted 28 pallets
containing 560 colour picture tubes to the appellant / defendant, a common
carrier/transporter, for transportation Ex- Sahibabad to Bangalore and the
appellant / defendant issued a goods receipt dated 21st March, 2000 on
collection of Rs.20,000/- as freight charges and the goods were loaded in
truck No.HR-38-0495 on 21st March, 2000; (ii) the said consignment was
insured by the respondent no.2 / plaintiff with the respondent no.1 / plaintiff
W.P.(C) No.729/2005 Page 2 of 18
against all transit risks; (iii) that due to culpable negligence and misconduct
on the part of the appellant/its employees, the vehicle never reached its
booked destination (Bangalore) and disappeared enroute; (iv) the appellant /
defendant informed the respondent No.2/plaintiff of having lodged FIR
No.218 dated 11th April, 2000 of PS Faridabad with respect to disappearance
of the truck and that the Faridabad Police had on 12 th June, 2000 reported that
neither the goods were recovered nor accused arrested and case filed as
untraced; (v) however according to detailed investigations conducted by the
surveyor appointed by the respondent no.1/plaintiff, the truck was being
driven by driver-cum-owner of the truck Mr. Jasbir Singh who disappeared
near Kishangarh, Rajasthan on 24th March, 2000 and till then neither the
vehicle nor consignment had been traced and that the truck was last seen near
Nepal border; (vi) that the respondent no.2 / plaintiff within six months of the
date of booking served notice under Section 10 of the Carriers Act claiming
compensation of Rs.19,81,280/- from the appellant / defendant for the goods
lost and in response thereto the appellant / defendant issued Certificate dated
31st August, 2000 confirming that the consignment had been lost in transit;
(vii) that the respondent no.2 / plaintiff preferred a claim against the
respondent no.1 / plaintiff under the policy and the respondent no.1 / plaintiff
W.P.(C) No.729/2005 Page 3 of 18
after processing the claim for damages settled the claim of the respondent
no.2 / plaintiff for Rs.19,81,280/- and paid the said amount to the respondent
no.2 / plaintiff and the respondent no.2 / plaintiff in consideration thereof
executed the Letter of Subrogation (LoS) in favour of the respondent no.1 /
plaintiff; (viii) that the respondent no.2 / plaintiff through the LoS and Special
Power of Attorney (SPA) assigned, transferred and abandoned their claim in
favour of the respondent no.1 / plaintiff including all accountable rights, titles
and interests in the said goods and proceeds thereof; (ix) that the respondent
no.2 / plaintiff also assigned and transferred all rights and remedies against
the carrier in favour of the respondent no.1 / plaintiff; and, (x) that the
appellant/defendant had failed to make payment of the said amount to the
respondent no.1 / plaintiff despite admission.
4. The appellant/defendant contested the suit by filing a written statement
pleading (i) that the Court at Delhi had no territorial jurisdiction as no part of
cause of action had arisen within the territorial jurisdiction of the Court at
Delhi; (ii) that no notice under Section 10 of "Carriers Act" had been served
on the appellant; (iii) that there is no privity of contract between the
respondent no.1 / plaintiff and the appellant/defendant and the respondent
no.1 / plaintiff has no right or claim against the appellant/defendant; (iv) that
W.P.(C) No.729/2005 Page 4 of 18
there was no negligence on the part of the appellant/defendant in transporting
the goods; some unknown persons looted the goods and abducted the driver
along with the truck near Kishangarh, Rajasthan; (v) that the suit claim was
barred by limitation; and, (vi) that the authorised representative of the
respondent no.1 / plaintiff had no authority to institute the suit on behalf of
the respondent no.2 / plaintiff.
5. The respondents/plaintiffs filed replication but need to refer thereto is
not felt.
6. On the pleadings of the parties the following issues were framed on 2 nd
March, 2005:-
"1. Whether this court has no jurisdiction to try and
entertain the present suit? OPD
2. Whether this suit is not maintainable as no
notice under Section 10 of Carriers Act has been
served on the defendant? OPD
3. Whether the suit is bad for mis-joinder of the
necessary parties? OPD
4. Whether the suit is barred by limitation? OPD
5. Whether there is no privity of contract between
the plaintiff and defendant? OPD
6. Whether the plaintiff is entitled to a decree for a
sum of Rs.19,81,280/- against the defendant?
OPP
W.P.(C) No.729/2005 Page 5 of 18
7. Whether the plaintiff is entitled to any interest?
If yes, at what rate and for which period? OPP
8. Relief".
7. The respondents/plaintiffs examined two witnesses i.e. Administrative
Officer of respondent No.1 as PW1 and the Surveyor appointed by respondent
No.1 as PW2 and the appellant/defendant examined one witness i.e. the
Managing Director of appellant / defendant as DW1.
8. The learned ADJ has decreed the suit as aforesaid
finding/observing/holding:-
(a) that the registered office of the appellant/defendant being at
Delhi and the regional office of the respondent no.1 / plaintiff
which claims to be entitled to money, being at Delhi, the cause of
action in favour of the respondent no.1 / plaintiff and against the
appellant/defendant had accrued at Delhi and the Courts at Delhi
had territorial jurisdiction - accordingly Issue No.1 was decided
in favour of the respondents/plaintiffs and against the
appellant/defendant;
(b) that though the appellant/defendant had denied receipt of notice
dated 21st August, 2000 under Section 10 of the "Carriers Act"
W.P.(C) No.729/2005 Page 6 of 18
but from the perusal of AD card returned thereof to the
respondent no.1 / plaintiff it was borne out that the said notice
was received by the appellant; that though the appellant had
suggested to the witnesses of the respondents/plaintiffs that the
same was not a notice under Section 10 and the said suggestion
was denied by the witnesses but the appellant/defendant had
failed to prove that notice under Section 10 had not been served;
moreover the appellant/defendant had issued certificate dated 31st
August, 2000 of theft/loss - thus Issue no.2 was decided in
favour of the respondents/plaintiffs and against the
appellant/defendant;
(c) the appellant/defendant had failed to prove as to how the
respondent no.1 / plaintiff was not a necessary party when the
respondent no.1 / plaintiff had proved having made payment to
the respondent no.2 / plaintiff for the loss suffered and had
proved the LoS - thus Issue no.3 was decided in favour of the
respondents/plaintiffs and against the appellant/defendant;
(d) though the appellant/defendant had taken the plea of the suit
claim being barred by time but had not disclosed how; the
W.P.(C) No.729/2005 Page 7 of 18
consignment was booked on 21st March, 2000 and the suit was
filed on 15th March, 2003 and the suit was thus within time -
accordingly Issue No.4 was decided in favour of the
respondents/plaintiffs and against the appellant/defendant;
(e) that the appellant/defendant had not examined the driver of the
truck as well as Shri Chander Bhan Sharma who lodged the FIR
and who alone could have thrown light about the facts and
incident of the alleged hijacking and disappearance of the truck
along with the consignment; nothing had been placed on record
to show any collusion between the two plaintiffs; in the absence
of such evidence it could be said that the respondent no.2 /
plaintiff made a fake claim or the respondent no.1 / plaintiff
settled a fake claim without verification and investigation;
(f) the arguments of the counsel for the appellant/defendant that the
goods were put at the risk of the consignor is not tenable as the
appellant/defendant as a carrier was bound to take reasonable
care of the goods and the appellant/defendant had failed to prove
that he had taken all reasonable care;
W.P.(C) No.729/2005 Page 8 of 18
(g) that there was no merit in the plea of the appellant/defendant of
the suit having not been instituted by a competent person on
behalf of the respondent no.2 / plaintiff in view of Union Bank
of India Vs. Naresh Kumar AIR 1997 SC 3; even otherwise the
Manager of the respondent no.1 / plaintiff had been authorised by
the respondent no.2 / plaintiff to sue and prosecute; and,
(h) though the respondents/plaintiffs had claimed interest at 18% per
annum but because the Nationalized Banks were advancing loans
at a much lower rate, interest at 9% per annum was awarded.
9. The counsel for the appellant/defendant before me also argued on the
aspect of the Courts at Delhi having no territorial jurisdiction and the claim of
the respondent no.1 / plaintiff being on the basis of letter of subrogation and
no valid subrogation having been proved, and
(i) drew attention to the LoS proved by the respondents/plaintiffs
and contended:-
(a) that it was without date;
(b) that the authority of signatory thereof was not disclosed;
W.P.(C) No.729/2005 Page 9 of 18
(c) that no details of goods, payment or Power of Attorney
were contained therein;
(d) that the signatures thereon were also not identified by the
witness of the respondents/plaintiffs;
(e) that the Insurance Company cannot sue the transporter
merely on the basis of the LoS; and,
(f) that there was no mention of the respondent no.2 / plaintiff
in the LoS.
(ii) contended that payment by the respondent no.1 / plaintiff to
respondent no.2 / plaintiff had also not been proved;
(iii) contended that no witness from the respondent no.2 / plaintiff
was examined;
(iv) contended no Power of Attorney on behalf of the respondent no.2
to institute the suit had been proved; and,
(v) placed reliance on Economic Transport Organization, Delhi Vs.
Charan Spinning Mills Private Limited (2010) 4 SCC 114.
W.P.(C) No.729/2005 Page 10 of 18
10. Per contra the counsel for the respondents/plaintiffs contended that (i)
Courts at Delhi had territorial jurisdiction owing to the registered office of the
appellant / defendant being at Delhi and owing to the appellant / defendant
carrying on business at Delhi; (ii) the LoS itself referred to Insurance
Company and which finds mention in the report of the surveyor; and, (iii) no
such pleas regarding subrogation were taken in the written statement and no
Issue thereon was sought before the Trial Court.
11. I have considered the controversy in the light of the testimony of the
witnesses of the parties. The Administrative Officer of the respondent no.1 /
plaintiff in his affidavit by way of examination-in-chief, besides other
documents proved the LoS-cum-Special Power of Attorney as Ex.PW1/14.
No objection to admission thereof into evidence was taken by the counsel for
the appellant/defendant at the time when the said affidavit by way of
examination-in-chief along with other documents referred to therein were
tendered into evidence. In his cross examination, the counsel for the
appellant/defendant asked whether the witness could identify the signature on
the LoS and in response whereto the witness replied in the negative and
otherwise only a suggestion was given to the effect that the same was forged.
The Managing Director of the appellant / defendant who was its sole witness
W.P.(C) No.729/2005 Page 11 of 18
in his examination-in-chief did not advert to the aspect of subrogation claimed
by the respondent no.2 / plaintiff in favour of the respondent no.1 / plaintiff. It
is not the case of the appellant/defendant that the respondent no.2 / plaintiff
made any claim with respect to the subject goods against the
appellant/defendant or that the respondent no.2 / plaintiff on enquiry by the
appellant/defendant controverted the subrogation. It is not in dispute that the
appellant / defendant issued Theft / Loss Certificate dated 31st August, 2000
to the respondent No.2 / plaintiff certifying that the consignment subject
matter of suit valued at Rs.19,81,280/- had been lost in transit and that related
documents had been handed over to the respondent No.2 / plaintiff. Though
the appellant / defendant denies receipt of notice dated 21 st August, 2010 got
sent by respondent No.2 / plaintiff claiming Rs.19,81,280/- from appellant /
defendant but A/D card thereof returned to the respondent No.2 / plaintiff
bears the stamp of authorised signatory of appellant / defendant. The sole
witness of appellant / defendant though generally denied receipt of notice but
did not depose that the stamp on the A/D card was not of the appellant /
defendant or that the address at which notice had been sent and from which
A/D card had been returned was not the correct address of appellant /
defendant. Clearly, a case for drawing presumption under Section 27 of the
W.P.(C) No.729/2005 Page 12 of 18
General Clauses Act, 1897 read with Section 114 of Indian Evidence Act,
1872 of presumption of service of notice is made out. The proof of the LoS
has to be considered in the said light. Though undoubtedly the witness of the
respondents/plaintiffs in reply to the specific question in cross examination
stated that he could not identify the signatures on the LoS but the same
signatures appear also on the receipt, proved by the witness, issued by the
respondent No.2 / plaintiff of receipt of Rs.19,81,280/- from the respondent
No.1 / plaintiff and which is not challenged in cross examination. The two
documents appear to have been signed at the same time. The Evidence Act in
Section 3 thereof defines „proved‟ as when after considering the matters
before it the Court either believes it to exist or considers its existence so
probable that a prudent man ought, under the circumstances of the particular
case, to act upon the supposition that it exists. It cannot be lost sight of that
the respondent No.1 / plaintiff is a Govt. owned company and the decretal
amounts are to go to the account of respondent No.1 / plaintiff and none of its
officials personally benefit therefrom and have performed the tasks of settling
the insurance claim of respondent No.2 / plaintiff by making payment against
receipt and LoS and of pursuing the legal proceedings in the course of their
official duties and not guided by personal profit or entrepreneurial motive. It
W.P.(C) No.729/2005 Page 13 of 18
is perhaps because of this that the lacunas as of not producing the official who
dealt, in the witness box remain. I am on a conspectus of pleadings, admitted
facts and evidence led satisfied that the respondent No.1 / plaintiff as insurer
settled the claim of the respondent No.2 / plaintiff of the loss admittedly
suffered of goods entrusted to appellant / defendant for carriage.
12. Supreme Court, in Economic Transport Organisation, Delhi supra so
summarized the principles relating to subrogation as follows:
(i) Equitable right of subrogation arises when the insurer
settles the claim of the assured, for the entire loss. When there
is an equitable subrogation in favour of the insurer, the insurer
is allowed to stand in the shoes of the assured and enforce the
rights of the assured against the wrongdoer.
(ii) Subrogation does not terminate nor puts an end to the
right of the assured to sue the wrong-doer and recover the
damages for the loss. Subrogation only entitles the insurer to
receive back the amount paid to the assured, in terms of the
principles of subrogation.
(iii) Where the assured executes a Letter of Subrogation,
reducing the terms of subrogation, the rights of the insurer vis-
à-vis the assured will be governed by the terms of the Letter of
Subrogation.
(iv) A subrogation enables the insurer to exercise the rights
of the assured against third parties in the name of the assured.
Consequently, any plaint, complaint or petition for recovery of
compensation can be filed in the name of the assured, or by the
assured represented by the insurer as subrogee-cum-attorney,
or by the assured and the insurer as co-plaintiffs or co-
complainants.
(v) Where the assured executed a subrogation-cum-
assignment in favour of the insurer (as contrasted from a
W.P.(C) No.729/2005 Page 14 of 18
subrogation), the assured is left with no right or interest.
Consequently, the assured will no longer be entitled to sue the
wrongdoer on its own account and for its own benefit. But as
the instrument is a subrogation-cum-assignment, and not a
mere assignment, the insurer has the choice of suing in its own
name, or in the name of the assured, if the instrument so
provides. The insured becomes entitled to the entire amount
recovered from the wrongdoer, that is, not only the amount that
the insured had paid to the assured, but also any amount
received in excess of what was paid by it to the assured, if the
instrument so provides.
Applying the aforesaid law, the arguments of counsel for appellant /
defendant of the respondents/ plaintiff having not proved LoS, the respondent
No.1 / plaintiff being not entitled to sue in its own name, no power of attorney
on behalf of respondent No.2 / plaintiff to institute the suit having been
proved, no witness of respondent No.2 / plaintiff having been examined, are
of no avail.
13. This Court, in National Insurance Co. Ltd. Vs. Mukesh Tempo
Service (Carrier) MANU/DE/3196/2010 held (i) that there is no particular
form of notice prescribed in the Carriers Act, 1865 and it is sufficient if
carrier is informed about the loss of the goods; (ii) that Section 3 of the Act
where the liability of carrier is limited, applies only to carriage of goods
specified in Schedule to the Act (it is not the plea of the appellant / defendant
here that the goods were scheduled goods); (iii) that as per law laid down in
W.P.(C) No.729/2005 Page 15 of 18
Patel Roadways Limited Vs. Birla Yomana Ltd. AIR 2000 SC 1461 the
liability of a carrier is absolute and referring to Section 9 of the Act it was
held that it is not necessary for the plaintiff to establish negligence; (iv)
reliance was placed on South Eastern Carriers (P) Ltd. Vs. Oriental F&G
Insurance Co. Ltd. MANU/KE/0653/2003 where it was held that a carrier is
answerable for the loss even when not caused by negligence or for want of
care on its part; (v) that the Insurance Co. is competent to sue in the name of
insured also; (vi) that notwithstanding the impersonal nature of testimony of
witnesses of Insurance Co. and discrepancy in documents, their genuineness
is established from the consignor of the carrier having not preferred any claim
against the carrier for recovery of compensation for the loss of the goods. To
the same effect is the another recent judgment of this Court in Road
Transport Corporation Pvt. Ltd. Vs. National Insurance Co. Ltd.
MANU/DE/6854/2011 where qua objection of authority to sue having not
been proved, relying on United Bank of India Vs. Naresh Kumar supra it
was held that once a company such as a banking company or even an
insurance company has pursued a suit to the hilt, the suit cannot be thrown out
on technicalities.
W.P.(C) No.729/2005 Page 16 of 18
14. Reference in this regard may also be made to (a) New India Assurance
Co. Ltd. Vs. Okay Transport Corporation MANU/KE/0268/1990 where a
Division Bench of Kerala High Court held that when all the parties including
the party entitled to recover damages are before the Court, the Court would be
reluctant to take a hypertechnical view and dismiss the suit only because
insured is made a defendant instead of being made a co-plaintiff along with
insurer; and, (b) United India Insurance Company Ltd. Vs. Muthulakshmi,
Radhakrishnan and Star Match Factory MANU/TN/0031/2003 (& SLP(C)
No.20140/2003 whereagainst was dismissed on 6th December, 2004) where a
Division Bench of Madras High Court held that the Court has power to mould
and grant necessary reliefs to the parties, when all parties who are interested
in the suit are before the Court.
15. The paragraphs of Economic Transport Organization, Delhi supra on
which counsel for appellant / defendant placed reliance, are in the context of
maintainability of a complaint by the insured before the consumer fora and of
no relevance to a suit.
16. I may record that the Carriers Act, 1865 during the pendency of this
appeal was repealed by the Carriage By Road Act, 2007 but the same is of no
significance to the issues for adjudication therein.
W.P.(C) No.729/2005 Page 17 of 18
17. Qua territorial jurisdiction also, in the light of registered office of
appellant / defendant being admittedly within the jurisdiction of this Court, no
error is found in conclusion drawn by learned ADJ.
18. There is thus no merit in the appeal; dismissed with costs throughout.
Decree sheet be prepared.
RAJIV SAHAI ENDLAW, J.
APRIL 19, 2016 „pp‟ W.P.(C) No.729/2005 Page 18 of 18