Bangalore District Court
M/S. The New India Assurance vs M/S. Mysore Sales on 11 February, 2015
IN THE COURT OF VIII ADDL. CITY CIVIL &
SESSIONS JUDGE(CCH-15), BENGALURU CITY
DATED THIS THE 16TH DAY OF APRIL, 2014
PRESENT:
SHRI.MASTER R.K.G.M.M. MAHASWAMIJI,
M.A., LL.B.,
VIII Additional City Civil & Sessions Judge,
Bengaluru.
ORIGINAL SUIT NO. 9483/2001
PLAINTIFFS: 1. M/s. THE NEW INDIA ASSURANCE
CO. LTD.,
Mission Road,
Bangalore-27,
By duly constituted Attorney.
2. M/s. AT & S INDIA LTD.,
12-A, Industrial Area,
Mysore.
By Special Power of attorney
Plaintiff No.1.
(By K. Suryanarayana Rao, Advocate)
/VS/
DEFENDANTS: 1. M/s. MYSORE SALES
INTERNATIONAL LTD.,
Air Cargo Complex,
H.A.L. Post, Bangalore-17.
By the General Manager.
2. M/s. THE ORIENTAL INSURANCE
CO. LTD.,
Leo Complex,
H.A.L. Post,
2
O.S.9483/2001
Bangalore-17.
By Manager.
3. M/s. THE NATIONAL INSURANCE
CO. LTD.,
Regional Office, M.G. Road,
Bangalore.
4. THE CHIEF COMMISSIONER OF
CUSTOMS,
Queens Building, Avenue Road,
Bangalore.
(D1 by RCK/K.M.Prakash, Advocates,
D2 & 3 by B.V. Nagarathna, Advocate
D4 by S.C.Mahadeva murthy,
Advocate)
*****
Date of institution of the suit: 22.12.2001
Nature of suit: damages
Date of commencement of 16.01.2012
Recording the evidence:
Date on which the judgment 16.04.2014
Was pronounced:
Total Duration : 12-Years, 03-Months &
24-Days
*****
JUDGMENT
3 O.S.9483/2001 The plaintiffs have filed this suit against the defendants praying to direct them to pay a sum Rs.21,078/- to the 1st plaintiff together with interest with 12% per annum from the date of loss till the date of realisation, as they are liable to pay the damages as bailee with costs.
2. The case of the plaintiffs in brief is as under:
It is stated that the 1st plaintiff- New India Assurance Co. is a public sector undertaking carrying on business in general insurance like marine, fire, motor and other kind insurance.
The 2nd plaintiff AT & S India Ltd. is a manufacturer of electronic goods having their factory at Nanjanagud, Mysore.
The 1st defendant is Government undertaking engaged in business of handling import and export cargo at Bangalore Airport Complex having its ware house.
The 1st defendant had been appointed by the customs authority as custodian of cargo received by air at Bangalore Airport and to hold the same on behalf of the consignee till the customs formalities are completed and 4 O.S.9483/2001 required to handover the consignment to the consignee in the same condition as they were received by them from Air carriers.
The 2nd defendant-Oriental Insurance Co. has insured a Air Cargo Complex and consignment held by the 1st defendant covering the risk of damages/loss due to fire and other perils.
The 2nd plaintiff in the course of its business had imported hot air masking tape from Singapore and obtained a Marine Open Insurance Policy from the 1st plaintiff New India Assurance Co. covering the period from 21.01.2000 to 20.01.2001 for risk of damages, loss and short delivery in transit of all their imported shipments.
The consignment was airlifted from Singapore to Bangalore and arrived at Bangalore Airport on 25.05.2000 and was kept in the custody of 1st defendant Aircargo Complex, for customs clearance.
It is further stated that on 04.06.2000, at warehouse, due to fire accident, the entire consignment of 2nd plaintiff and of several others were destroyed. 5
O.S.9483/2001 The 1st defendant M/s. MSIL informed the 2nd plaintiff about the loss of consignment due to fire and issued a non delivery certificate. The 1st plaintiff New India Assurance Co. was also informed about the fire accident and on intimation, the 1st plaintiff appointed M/s. BODA Surveyors and after inspection of godown, they reported that the entire consignment was burnt and loss was assessed at Rs.21,078/-
In view of the loss of consignment kept in the custody of 1st defendant, 2nd plaintiff made a claim and 1st plaintiff settled the claim in terms of policy and 2nd plaintiff has executed a letter of subrogation and special power of attorney in favour of 1st plaintiff-insurance company. Therefore 1st plaintiff is entitled to recover the said amount from the defendants.
It is pleaded that the 1st defendant-MSIL was a bailee with whom the goods were entrusted and it was bound to take care as a man of ordinary prudence and it is liable for loss, destruction or deterioration of goods while they were in their custody. The 1st defendant has not taken reasonable care and precautions against the 6 O.S.9483/2001 damage by fire. Thus, the 1st defendant is liable to pay value of the goods to the plaintiffs.
It is further pleaded that the 2nd defendant oriental insurance company, the insurer of ware house/Aircargo complex is liable to indemnify the loss caused due to fire to the 1st defendant insured.
Therefore the plaintiffs are constrained to file this suit praying above reliefs.
3. On receipt of suit summons, defendant No.1 to 4 entered appearance through their counsels.
4. The 1st defendant-MSIL has filed a written statement contending inter alia as under:-
The 1st defendant denied all the plaint averments except specifically admitted.
It is contended that the plaint is not maintainable and it is bad for non-joinder of necessary party. As per Sec. 45 of customs act, all the imported goods unloaded in a customs area shall remain in the custody of such person as may be approved by collector of customs (bailee) until the customs are cleared.7
O.S.9483/2001 There is no privity of contract between the plaintiffs and 1st defendant. In view of appointment of 1st defendant as a custodian under sec. 45(3) of customs act 1962, the 1st defendant was obliged to receive the consignment and as such the goods were held by the 1st defendant for and on behalf of customs authority.
It is further contended that 1st defendant received the consignment in a sealed condition and the contents of packages were not verified. Therefore the nature of goods are not admitted by the 1st defendant.
The 1st defendant has taken all reasonable care of goods and there is no negligence on the part of it.
The 1st defendant alleged that the fire in the godown was broke out as follows:-
On 04.06.2000 around 1.40 p.m. when 1st defendant staff was working in the ware house located at air cargo complex HAL, Bangalore, noticed smoke coming out of 'C' location. On noticing the same, immediately the electrician switched off the electrical supply to the complex. The godown was opened and fire was try to put off by using fire extinguisher and also informed about the 8 O.S.9483/2001 fire incident to the HAL fire service and Karnataka fire service over telephone. Within a minute the fire force arrived at the spot and extinguished the fire around 5.30 p.m. Said fire incident dated 04.06.2000 is not due to negligence of 1st defendant; therefore it is not liable.
The fire may be a result of electrical short circuit. There is no liability of this defendant as per sec.152 Indian Contract Act, 1872.
The 1st defendant has already the settled the claims in respect of baggage which were destroyed in the fire accident in accordance with public notice dated 10.10.1984 and the 1st defendant has also expressed its willingness in settling the plaintiffs' the claim in accordance with above public notice.
The 1st defendant is not responsible to compensate the 1st plaintiff, since it is not liable to the plaintiff No.2 itself.
If the court find that the 1st defendant is liable, the liability is confined to US $ 20 per Kg. only in terms of above public notice.
9
O.S.9483/2001 Wherefore the 1st defendant prays to dismiss the suit with cost in limine.
5. The 2nd defendant-Oriental Insurance Co. Ltd. has filed a written statement contending inter alia as below :-
The 2nd defendant denied all the plaint averments except specifically admitted.
It is contended that this suit is barred by time in terms of clause 6 of general conditions of fire policy as it has been filed after expiry of 12 months from the date of happening of fire.
This defendant has admitted the existence of valid policy covering the period from 31.05.2000 to 31.03.2001.
It is further contended that this defendant is liable to the extent of 60% of sum insured subject to terms and conditions fire policy and national insurance company is liable to balance of 40% and the suit claim is subject to provisions of insurance act 1938, Marine Insurance Act 1963 and law of contract pertaining to Indemnity and guarantee.10
O.S.9483/2001 This defendant has taken pleas that under clause 11 of Fire Policy, if at the time of damage to the property insured and there is any other subsisting insurance, whether entered by insurer or any other person covering the property, the 2nd defendant is not liable to pay or contribute more than its ratable portion of such loss/damage; there is no privity of contract between the plaintiffs and 2nd defendant; at the highest, it would be liable to indemnify the 1st defendant to an extent of US $ 20 per kg. only as notified in public notice dtd. 10.10.1984.
Therefore 2nd defendant prays to dismiss the suit against it with cost.
6. The 3rd defendant-National Insurance Co. Ltd. has filed a written statement contending inter alia as follows:-
The 3rd defendant denied all the plaint averments except specifically admitted.
It is contended that this suit is barred by time in terms of clause 6 of general conditions of fire policy as it has been filed after expiry of 12 months from the date of happening of fire.11
O.S.9483/2001 This defendant has admitted the existence of valid policy covering the period from 01.05.2000 to 31.03.2001.
It is further contended that this defendant is liable to the extent of 40% of sum insured subject to terms and conditions fire policy and national insurance company is liable to balance of 60% and the suit claim is subject to provisions of insurance act 1938, Marine Insurance Act 1963 and law of contract pertaining to Indemnity and guarantee.
This defendant has taken pleas that under clause 11 of Fire Policy, if at the time of damage to the property insured and there is any other subsisting insurance(Marine Policy), whether entered by insurer or any other person covering the property, the 2nd defendant is not liable to pay or contribute more than its ratable portion of such loss/damage; there is no privity of contract between the plaintiffs and 2nd defendant; at the highest, it would be liable to indemnify the 1st defendant to an extent of US $ 20 per kg. only as notified in public notice dtd. 10.10.1984.
Therefore 3rd defendant prays to dismiss the suit against it with cost.12
O.S.9483/2001
7. Defendant No.4 - Chief Commissioner of Customs has filed written statement.
8. On the basis of the pleadings of the parties, my learned predecessor of this court has framed the following issues for consideration and decision:
ISSUES
1. Whether the plaintiffs prove that 1st defendant has not taken reasonable care and precautions against damages by fire and thus 1st defendant is liable to pay value of goods to them as stated in para 10 of the plaint?
2. Whether the plaintiffs prove that the 2nd plaintiff has executed subrogation letter and power of attorney in favour of 1st plaintiff (Insurance Company) authorizing to recover the amount from the defendants?
3. Whether plaintiffs prove that they have suffered damages and loss of Rs.21,078/-
as stated in the plaint?
4. Whether plaintiffs are entitled to recover a sum of Rs.21,078/- from the defendants along with interest and cost as prayed for?
5. What order or decree?
9. The plaintiffs in order to prove their case, got examined Administrative officer of 1st plaintiff insurance company by name R. Seshadri as P.W.1 and produced the 13 O.S.9483/2001 documents and got marked them as Ex.P.1 to Ex.P.12 and closed their side.
10. On the other hand, the 1st defendant MSIL is examined Manager of the company by name Nalini gowda as D.W.1 and produced the documents and got marked them as Ex.D.1 to D.7.
Further, defendant No.2- Oriental Insurance Co. got examined its deputy manager by name Dr. B. Selvanayagam as D.W.2 and produced the copy of standard fire and special perils policy and got marked it as Ex.D.8 and closed the side.
I heard the arguments and perused the oral and documentary evidence on record.
11. My findings on the aforesaid Issues are as under:
Issue No.1 - In Affirmative, Issue No.2 - In Affirmative, Issue No.3 - In Affirmative, Issue No.4 - In Partly affirmative, Issue No.5 - As per final order for the following:
REASONS 14 O.S.9483/2001
12. ISSUES NO.1 to 4: Since these issues are inter linked each other they are taken up together for joint consideration.
It is the case of plaintiffs that the consignment was entrusted with the 1st defendant and said goods were burnt/lost/damaged due to negligence of 1st defendant and 2nd plaintiff has executed letter of subrogation and Special power of attorney to recover the discharged amount from the 1st defendant etc. The defendants denied some aspects in their written statements. Therefore, the burden of proof is on the plaintiffs to prove their case as per Sec. 101 and 102 of Indian Evidence Act.
In this regard, in this case, in support of the plaintiffs case, Administrative officer of 1st plaintiff insurance company by name R. Seshadri is examined as P.W.1 and produced the documents and got marked them as Ex.P.1 to Ex.P.12.
13. P.W.1 Sri. R. Seshadri, Administrative Officer of 1st plaintiff-Insurance Co., he stated on his affidavit evidence reiterating the plaint averments. 15
O.S.9483/2001 On perusal of cross-examination of P.W.1, no worth mentioning points are elicited to discredit his evidence. It is also noticed that the 4th defendant was appointed the 1st defendant as custodian of the goods; After investigation the 1st plaintiff settled the claim of 2nd plaintiff and the goods were destroyed due to fire while it were in the custody of 1st defendant
14. In this case, in support of plaintiffs case, they have produced relevant documents i.e., Ex.P.1 to Ex.P.12.
Ex.P.1 - Copy of air cargo arrival notice cum Invoice dated 23.05.2000, it shows that the 2nd plaintiff had imported the consignment. Ex.P.2 - Airway bill, which shows that the consignment was transported through air. Ex.P.3 - Air cargo arrival notice cum Invoice dtd. 24.05.2000, it discloses the consignment was sent through air to India as ultimate destination.
Ex.P.4 - Copy of claim notice/letter dtd. 19.06.2000 issued by the 2nd plaintiff to the 16 O.S.9483/2001 1st defendant requesting to refund the claim in respect of the consignment burnt Rs. 21,078/-.
Ex.P.5 - Copy of Non delivery certificate (damage certificate) dtd. 01.08.2000, issued by the 1st defendant to the 2nd plaintiff stating that the import consignments and baggages kept in 'C' location were destroyed in fire accident.
Ex.P.6 - Marine Insurance policy, issued by 1st Plaintiff to the 2nd plaintiff, and it is valid on the date of fire accident.
Ex.P.7 - Marine Claim Form of 1st plaintiff Insurance company duly filled.
Ex.P.8 - Claim bill, issued by 2nd plaintiff claiming a sum of Rs.21,078/-.
Ex.P.9 Survey Report dtd. 04.09.2000, which reveals that Shafik Ahmed has assessed the value of consignment burnt/ damaged in the fire and value/loss worked out at Rs. 21,078/-.
17
O.S.9483/2001 Ex.P.10 - Discharge receipt/voucher, which discloses that the 1st plaintiff - New India Assurance Co. has discharged its liability and satisfied the claim of 2nd plaintiff i.e. Rs.21,078/-.
Ex.P.11 - Letter of Subrogation and Ex.P.12 Special power of attorney dtd. 22.01.2001, it reveals that it is executed by the 2nd plaintiff in favour of 1st plaintiff to recover the discharged amount Rs. 21,078/- from the defendants.
From the above documents, it could be concluded that the 2nd plaintiff has claimed the damage and it was discharged by the 1st plaintiff on the basis of survey report Ex.P.9. and accordingly, it is paid to 2nd plaintiff by getting executed a letter of subrogation and special power of attorney to recover the same from the defendants.
15. In this instant case, the 1st defendant MSIL is examined Manager of the company by name Nalini gowda as D.W.1 and produced the documents and got marked them as Ex.D.1 to D.7 and further, defendant No.2- 18 O.S.9483/2001 Oriental Insurance Co. got examined its deputy manager by name Dr. B. Selvanayagam as D.W.2 and produced the copy of standard fire and special perils policy and got marked it as Ex.D.8.
16. D.W.1-Smt. Nalini Gowda, Chief General Manager of 1st defendant company, she stated on her affidavit evidence reiterating the written statement contentions of 1st defendant.
On perusal of cross examination of D.W.1, it is seen that she was not present in the spot at the time of fire accident took place. She admitted that the 1st defendant was appointed as custodian of goods by the 4th defendant and the 1st defendant has collected charges to keep the goods in safe.
She did not dispute or deny the issuing of non-delivery certificate to the 2nd plaintiff. She also not disputed regarding the survey report and its contents prepared by the authorized surveyor appointed by the 1st plaintiff insurance company.
17. In the cross-examination of DW-1 it is also seen that the defendants did not produce the fire report prepared by the Karnataka fire service. 19
O.S.9483/2001
18. The 1st defendant has also produced following documents in support of its case i.e., Ex.D.1 to D.7. Ex.D.1 Copy of Public Notice dtd. 10.01.1977 Ex.D.2 Copy of Notification dtd. 10.01.1977 Ex.D.3 Copy of Public Notice dtd. 29.12.1977 Ex.D.4 Copy of Notification dtd. 15.09.1979 Ex.D.5 Copy of Public Notice dtd. 03.11.1979 Ex.D.6 Public Notice dtd. 05.07.1976 Ex.D.7 Copy of Gazette Notification dtd.
10.10.1984
19. Above, Ex.D.1 to D.7 are public notices, containing different dates and which show that the 1st defendant has limited liability; but this contract is between the 1st defendant and 4th defendant and in my opinion, which do not bind the plaintiffs.
20. D.W.2 - Dr. B. Selvanayagam, the Deputy Manager of 2nd defendant- Oriental Insurance Co. Ltd., he stated on his affidavit evidence reiterating the contents of written statement of 2nd defendant.
21. D.W.2 has produced Ex.D.8 Standard Fire and Special Perils policy in support of his contentions. 20
O.S.9483/2001 On going through the cross-examination of D.W.2, it is noticed that he has no personal knowledge about the case and he deposes on the basis of documents. He has not seen fire accident; he admitted as true that some of the cases filed against 1st and 2nd defendants are decreed.
22. The oral evidence of P.W.1 is corroborated and fortified by the contents of Ex.P.1 to P.12, and which prove the case of plaintiffs that they have suffered loss to the goods to the extent of Rs.21,078/- and 1st defendant failed to take reasonable care and precautions against the damages by fire.
23. As far as negligence and liability of 1st defendant is concerned Admittedly the 1st defendant is lawful custodian of goods or consignment entrusted by 4th defendant.
24. As the defendant No.1 has failed to keep the consignment or goods in safe condition, the defendants are liable to pay the amount of damages to the 1st plaintiff, which was paid by it to the 2nd plaintiff in respect of non delivery of admitted lost/burnt consignment.
21
O.S.9483/2001
25. The contention of 1st defendant that there is no privity of contract between 1st defendant and plaintiffs and it is not liable to pay damages to the plaintiffs is not acceptable.
26. The another contention of 1st defendant that its liability to pay damages does not exceed 20 US $ per Kg., of the consignment is also not sustainable because said notifications Ex.D.1 to 7 are bind only the 1st defendant and the 4th defendant.
27. At this juncture, in so far as negligence and liability of 1st defendant, the learned counsel appearing for plaintiffs is relied following rulings :
28. It is relevant and helpful to refer a ruling in INTERNATIONAL AIRPORT AUTHORITY OF INDIA VS. ASHOK DHAWAN REPORTED IN 1999(106) ELT 16 (SC) wherein the Hon'ble Apex Court is held that "Import and export-loss of goods while in the custody of international airport authority, port trust etc.,- principle of res ipsa loquitur applied-custodian having no explanation what ever to give for the loss, its plea that the owner should be relegated to a suit is only on excuse to buy time- the custodian liable to 22 O.S.9483/2001 compensate the owner for the loss-(Sec.45 of customs act 1962).
29. It is also useful to refer a decision reported in 1988(35) E.L.T. page 244(SC) wherein the Hon'ble Apex court of India has observed as under:-
"Redemption of goods-goods confiscated for valuation for import policy-option to redeem the goods availed by importer-majority of goods neither traceable with port authorities nor with the customs authorities-customs authorities have statutory liability to account for the goods and liable to pay the value of the goods lost or damaged from their control and custody."
From the ratio laid down in the above decisions it is obviously clear that the custodian of the goods is liable to pay compensation of the value of goods damaged or lost.
30. It is not in dispute that in respect of fire accident, which took place on 04.06.2000 in the warehouse or godown of 1st defendant, number of other cases were also filed against the defendants by the same 1st plaintiff claiming damages.
23
O.S.9483/2001 Admittedly those matters went up to Hon'ble High Court of Karnataka for adjudication in appeal and disposed off.
31. The said decision rendered by the Hon'ble High Court of Karnataka is reported in ILR 2009 KAR 2974 in between the parties i.e. Mysore Sales International Ltd. Vs. United India Insurance Co. Ltd. and others, and it is relied by the plaintiff counsel in support of his argument. Wherein, the Hon'ble High Court of Karnataka has observed and held as under:
Custody of imported goods will be with custodian appointed U/Sec. 45 (1) of the Customs Act, 1962 and it exercise complete control over the imported goods though in possession of custodian till it is cleared either for home consumption or for warehousing or transshipped.
1. There will be a statutory creation of bailment and the Customs Authorities (the 1st defendant in the case on hand) become the bailee vis-a-vis the importer (the plaintiffs in the case on hand).
Therefore, the customs authorities are principally liable for the proper return of the imported goods to the importer concerned on its clearance; customs 24 O.S.9483/2001 authorities are liable to account for the loss of such imported goods and any arrangement made by the customs Department for proper storage of imported goods, by appointing the custodian, would not absolve its liability to account for loss.
2. The Customs Authorities cannot plead that they are not liable to answer the importer for any loss or damage to such imported goods, though in possession of the Custodian as the Customs Authorities would exercise complete control over the imported goods even in the possession of the Custodian appointed under Section 45(1) of the Act;
3. In the light of the statutory creation of the Custodian under Section 45(1) of the Act, even Custodian (the defendant-2 in the case on hand) is answerable to the Customs Department for any loss or destruction of such goods;
4. As per Sec.151 of the Indian Contract Act, in all cases of bailment, bailee is bound to take as much care of goods bailed to him as a man of ordinary prudence would under similar circumstances take, of his own goods of same bulk quality and value. Thus, Bailee is under an obligation to take proper care in respect of the 25 O.S.9483/2001 goods bailed with him and it is only if he establishes that he has taken all the care as he is required by a man of ordinary prudence, he is absolved from liability.
5. As per Sec.152 of the Indian Contract Act, if the bailee has taken the amount of care of it, as he required by a man of ordinary prudence, he is not responsible for the loss, destruction or deterioration of the thing bailed;
6. No doubt, as per the Public Notice (Ex.D.1 to 7 in the case on hand), which were issued pursuant to an arrangement between the Customs Department and the Custodian, the liability of the Custodian is limited to US $ 20 per Kg., or the actual value of the imported goods, whichever is less.
7. Even if the said Public Notice has been Gazetted, it does not absolve the 1st defendant from its liability to answer the claim of the plaintiffs with regard to the loss of goods. The terms of the said Public Notice would only bind the MSIL and the Customs Authorities. It is open to the 1st defendant to workout its remedies with the Customs Authorities in accordance with the terms agreed between them to restrict 26 O.S.9483/2001 its liability. The terms of the said Public Notice would not bind the importer."
32. From the supra noted ruling, it is clear and evident that the Hon'ble High court of Karnataka opined and held that the 1st defendant did not prove satisfactorily that he had taken all the care and precaution in respect of the goods or consignment entrusted and in the above appeal, the Hon'ble High Court of Karnataka has held with regard to liability of the defendants stating that the defendants-1 and 2 both are jointly and severally liable to pay damages and 1st defendant can workout its remedies with 2nd defendant in accordance with law, by observing that the 1st defendant had not taken all the precaution and care as required by a ordinary prudent man in safeguarding the consignment bailed.
33. Aforesaid decision made it clear that both the custodian of the goods and the commissioner of customs are liable to pay damages. Therefore the issue of liability is not in res integra. Hence, I inclined to follow the ratio or principle laid down in the supra noted decision.
27
O.S.9483/2001 i. In this context, it is also advantageous to refer another ruling relied by the plaintiffs counsel in Transport Corporation of India (P) Ltd. Vs. Oriental Fire and General Insurance Co. Ltd. and another ( 1988 ACJ
166), wherein Hon'ble High Court of Karnataka has held as under :
"Carriers Act, 1865, Section 8 - Common carrier - principal and agent-short delivery of goods - Liability of agent-Consignment was booked with 'A' who entrusted it to 'B' for actual transportation - Short delivery of goods by 'B' to the consignee - whether 'B' is liable for the loss
- Held yes, 'B' is an agent of 'A' and 'B's liability would be co-extensive with liability of 'A' even though there is privity of contract between the consignee/Insurer and 'B' (AIR 1965 Rajasthan 200 relied on) Marine Insurance Act, 1963, section 79 - Common carrier - Subrogation - short delivery of goods - Goods insured and the insurance company paid the claim to the consignee - Suit filed jointly by insurer and consignee against the carrier - Carrier contended that the insurer cannot take advantage of the letter of subrogation and maintain this suit and further that cause of action for the consignee has since perished, he having been paid by the insurer-28
O.S.9483/2001 whether the suit is maintainable - Held: yes; carrier liable.
ii. It is also lucrative to note down another decision relied by plaintiffs counsel in INTER STATE TRANSPORTS Vs. PFIZER LTD. (ILR 1987 KARNATAKA 2870), Wherein the Hon'ble High Court of Karnataka has held as below :
"Liability of common carrier for loss and damage caused by negligence or misconduct cannot be limited by contract - Exclusion clause in G.C. Note not protection for damages arising from negligence or misconduct - carrier to prove absence of negligence or misconduct on its part.
It is further held that the suit for damages against carrier for delivery of goods in a damaged deteriorated and soiled condition on account of carelessness, negligence, rashness and misconduct on the parts of carrier, its servants and agents - resisted on a ground of accident to vehicle for reasons beyond its control with liability denied also on grounds of non compliance with section 4, 6 and 8 of the act and protection under terms of G.C. Note. In the appeal, it is held that liability cannot be limited by contract. The condition that 29 O.S.9483/2001 goods to be sent at owners risk and no responsibility would be taken in case of fire or accident do not and cannot protect a common carrier, so it was incumbent on the defendant to prove that there was no negligence or misconduct on its part. A duty is cast on the defendant to prove that its servants and agents had acted prudently and not negligently and accident was due to the reasons beyond control.
iii. It is also helpful to refer another authority relied by the plaintiffs counsel in NATH BROS EXIM INTERNATINAL LTD. VS. BEST ROADWAYS LTD. ((2000) 4 SCC 553), wherein the Hon'ble Apex Court of India is held that Consumer Protection Act, 1986- S.2(1)(d) - Carriers Act, 1865, Ss.6,8 and 9 -Defect in service- Goods entrusted to common carrier for transportation- Liability of common carrier, held, would be governed by Carriers Act- Ss.151 and 152 of Contract Act not applicable- Liability same as that of an insurer- Carrier has to take due care of the goods as he would have taken of his own goods- He would be liable for the loss or damage cause to the goods due to this own negligence or criminal act or that of his 30 O.S.9483/2001 agent or servants, notwithstanding any special contract limiting his liability as envisaged under S.6 of Carriers Act- even if the goods were booked with the carrier "at owner's risk", that would not exempt the carrier from his own negligence or that of his agent or servants-
It is further held that in a suit filed for recovery of damages, burden will not lie on the plaintiff owner to prove that the loss or damage to the goods was caused owing to negligence or criminal act of the carrier or his agent or servants by virtue of S.9 of Carriers Act- Only exception to the carrier's liability is where the loss or damage is caused due to an act of God or enemies of the State- Goods booked by appellant with respondent common carrier "at owner's risk" for transportation-Goods, while stored in godown destroyed by fire.
In the same authority, Hon'ble Chief Justice Hale observed in Mors Vs. Slew - vent at page 239 - that if a carrier be robbed by a hundred men, he is never the more excused. Thus, the general principle of common law is - a common carrier is insurer of goods, which he contracts to carry and he is liable for all losses or injury to the goods while they are 31 O.S.9483/2001 in the course of transit unless, it is caused by 'Act of God' or state enemies or in consequence of inherent vise in the thing carried or attributable to consigners own fault".
If 1st defendant has taken all precautionary safety measures to prevent the fire accident, the untoward incident might have been avoided.
34. It is pertinent to note that D.W.1 is also admitted that she was not in the spot when the accident occurred. As such, the evidence of D.W.1 is of no assistance to the defendant No.1 to show that the defendant-1 had taken all precautionary safety measures or reasonable care to prevent the fire accident.
It is important to note that admittedly the 1st defendant failed to examine the persons, who were present at the place of fire accident.
35. Moreover, it is worth-mentioning to note that as admitted by D.W.1, till today, nobody is known the reason for fire accident. This clearly goes to show that the 1st defendant has not taken precautionary or safety measures as alleged.
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O.S.9483/2001
36. Therefore it is inevitable to hold that the fire accident is occurred due to the negligence of 1st defendant and it is also liable to pay the damages.
In view of aforesaid reasons, in the light of supra noted authorities under the facts and circumstances of this case, I hold and record my findings on Issue No.1 in Affirmative.
37. In so far as the issue No.2, that execution of letter of subrogation and special power of attorney in favour of 1st plaintiff insurance company by the 2nd plaintiff authorizing to recover the amount is concerned, admittedly, the 1st plaintiff-New India Assurance company Limited has discharged its liability mentioned in marine insurance policy by paying Rs.21,078/- to the 2nd plaintiff by settling its claim. It is not in dispute.
38. Moreover, Ex.P.11 subrogation letter and Ex.P.12 Special Power of Attorney clearly indicate that the 2nd plaintiff has executed the same on 22.01.2001 in favour of 1st plaintiff authorizing it to recover damages on its behalf.
33
O.S.9483/2001 In view of that, I safely conclude and record my findings on issue No. 2 in affirmative.
39. In so far as issue No.3 that plaintiffs have suffered damages and loss to the extent of 21,078/- i.e. suit claim and Issue No.4 that the plaintiffs are entitled to recover a sum of Rs. 21,078/- from the defendants along with interest and cost are concerned, as per Ex.P.9 Survey Report and as per Ex.P.11 Letter of subrogation and P.12 Special power of attorney, the 2nd plaintiff is authorized the 1st plaintiff insurance company to recover Rs.21,078/-. The oral evidence of P.W.1 and other exhibited documents also corroborate and fortify this suit claim. Therefore, as such, under the facts and circumstances of this case, I constrained to hold and record my findings on this issue No.3 that plaintiffs are suffered the damages/loss to the tune of Rs.21,078/- and they are entitled to recover that amount from the defendants.
40. The next question arises for my consideration is that, with regard to the interest payable on the amount of damage?
In my considered view, under the facts and circumstances of this case, it is just and reasonable to 34 O.S.9483/2001 award 6% interest per annum on the amount of damage awarded.
For the reasons stated above, under the given facts and circumstances of this case, I hold and record my findings on issue No. 3 in Affirmative and Issue No.4 in partly affirmative; since prayed 12% interest per annum is not allowed.
41. As far as liability of defendant No.2 Oriental insurance Co. Ltd. and National Insurance Co. Ltd. is concerned, these defendants have taken contentions that there is bar of limitation and since there is existence of marine policy insured with the 1st plaintiff- New India Assurance Co. Ltd., they are not liable to pay the compensation or to indemnify the 1st defendant. They rely upon the clause No.4, Clause No.6(ii) and 11 of Standard Fire and Special Perils Policy. For convenience, said clauses are extracted and they read as follows :
Clause 4. This insurance does not cover any loss or damage to property which, at the time of the happening of such loss or damage, is insured by or would, but for the existence of this policy, be insured by any marine policy or policies except in respect of any excess beyond the amount which would have been payable 35 O.S.9483/2001 under the marine policy or polices had this insurance not been effected.
Clause 6(ii): In no case whatsoever shall the company be liable for loss or damage after the expiry of 12 months from the happening of the loss or damage unless the claim is the subject of pending action or arbitration; it being expressly agreed and declared that if the Company shall disclaim liability for any claim hereunder and such claim shall not within 12 calendar months from the date of the disclaimer have been made the subject matter of a suit in a court of law the claim shall for all purposes be deemed to have been abandoned and shall not there after by recoverable hereunder:
Clause 11: If at the time of any loss or damages happening to any property hereby insured thereby any other subsisting insurance or insurances, whether effected by the insured or any other person or persons covering the same property, this company shall not be liable to pay or contribute more than its rateable proportion of such loss or damage.
42. I find no substance in such, contentions/arguments. Admittedly, the fire accident is occurred on 04.06.2000 and this is being recovery of 36 O.S.9483/2001 money suit and the period of limitation for recovery of money is fixed as 3 years and it is well within 3 years from the date of fire accident loss/damage. Therefore, as per law of Limitation Act, this suit is not barred by time. If the clause 6(ii) is against the provisions of Limitation Act, then it can be considered that said clause is against law and it is not enforceable. Moreover, at this stage, the suit claim is pending before this court of law for adjudication.
43. The clause-4 and 11 of Standard Fire and Special Perils Policy are also not in accordance with law. If that kind of agreement is there among the insurance companies, it may be bound to those Insurance companies only; it does not bind the 1st defendant; moreover, in the terms and conditions filed by the 2nd defendant insurance company, there is no signature of 1st defendant accepting the terms and conditions. Therefore, defendant No.2 and 3 Insurance companies do not escape from liability taking such kind of unacceptable contentions.
44. The defendant No.2 and 3 Insurance Companies themselves have admitted in the written statements that the 1st defendant is insured the goods kept in godown 37 O.S.9483/2001 and there are valid insurance policies insured with them. Therefore, I can safely hold that defendant No.2 and 3 Insurance companies liable to indemnify the 1st defendant against damages/loss of 1st defendant; however, the liability of defendant No.2 is 60% and liability of defendant No.3 is at 40% rateable liability. As such, the defendant No.2 and 3 are liable to indemnify the defendant No.1.
45. ISSUE NO.5 : In view of my findings on Issue No.1 to 4 and discussions and foregoing reasons, under the facts and circumstances of this instant case, in the light of rulings, I am of the considered opinion and inclined to hold that the 1st plaintiff- New India Assurance Company Co. Ltd. is entitled for recovery of damages as already held. It is fit case to grant such reliefs, since there is sufficient and satisfactory oral and documentary evidence on record to the required civil standard or preponderance of probabilities. Accordingly, I answered aforesaid issues and proceed to pass the following:
ORDER In the result, therefore this suit filed by the plaintiffs against the defendants is hereby partly decreed with cost.38
O.S.9483/2001 ii. Consequently, the defendant No.1 to 4 are jointly or severally held liable and hereby directed to pay sum of Rs. 21,078/- as damages, with interest at the rate of 6% per annum pendentelite and future interest till the date of realization of decreed amount.
iii. The defendant No.2-Oriental Insurance Company Ltd. and Defendant No.3- National Insurance Co. Ltd. are hereby held liable to indemnify the defendant No.1 -MSIL, the liability at the ratio of 60% and 40% respectively and pay the decreetal amount to the 1st plaintiff- New India Assurance Co. Ltd.
iv. However, the 2nd and 3rd defendant are at liberty to workout their remedy with the 4th defendant-The Chief Commissioner of Customs regarding their limited liability to the extent of 20 US $ per Kg. or actual value of the consignment which ever is less in pursuance of contract with 4th defendant as per 'D' series documents.
Draw decree accordingly.39
O.S.9483/2001 (Dictated to the Stenographer, directly over computer, typed matter, corrected, signed and then pronounced by me in open Court on this the 16th day of April, 2014.) (MASTER R.K.G.M.M. MAHASWAMIJI) VIII Addl. City Civil & Sessions Judge, Bengaluru ANNEXURE List of witnesses examined on behalf of the plaintiffs:-
P.W.1 - Sri. R. Seshadri.
List of Documents marked on behalf of the plaintiffs:-
Ex.P.1 Copy of Invoice Ex.P.2 Airway bill Ex.P.3 Aircargo Arrival Notice/Invoice. Ex.P.4 Claim notice Ex.P.5 Copy of Non delivery certificate Ex.P.6 Insurance policy Ex.P.7 Marine claim form Ex.P.8 Claim bill Ex.P.9 Survey Report Ex.P.10 Voucher Ex.P.11 Letter of subrogation. Ex.P.12 Special power of attorney
List of witnesses examined on behalf of 1st defendant:-
D.W.1 - Smt.Nalini Gowda D.W.2 - Dr. Sri. B. Selvanayagam List of Documents marked on behalf of the 1st Defendant:-
Ex.D.1 Copy of Public Notice dated 10.01.1977.
Ex.D.2 Copy of Notification dated 10.01.1977.40
O.S.9483/2001 Ex.D.3 Copy of Public Notice dated 29.12.1977. Ex.D.4 Copy of Notification dated 15.09.1979. Ex.D.5 Copy of Public Notice dated 0311.1979. Ex.D.6 Copy of Public Notice dated 05.07.1976. Ex.D.7 Copy of Gazette Notification dated 10.10.1974.
Ex.D.8 Standard Fire and Special Perils Policy VIII Addl. City Civil & Sessions Judge, Bengaluru.
16.04.2014 P- KSR D1-RCK/KMP D2, D3- BVN D4-SCM (The following order is pronounced in the open Court vide separate) ORDER In the result, therefore this suit filed by the plaintiffs against the defendants is hereby partly decreed with cost.
ii. Consequently, the defendant No.1 to 4 are jointly or severally held liable and hereby directed to pay sum of Rs. 21,078/- as damages, with interest at the rate of 6% per annum pendentelite and future interest till the date of realization of decreed amount. 41
O.S.9483/2001 iii. The defendant No.2-Oriental Insurance Company Ltd. and Defendant No.3- National Insurance Co. Ltd. are hereby held liable to indemnify the defendant No.1 -MSIL, the liability at the ratio of 60% and 40% respectively and pay the decreetal amount to the 1st plaintiff- New India Assurance Co. Ltd.
iv. However, the 2nd and 3rd defendant are at liberty to workout their remedy with the 4th defendant-The Chief Commissioner of Customs regarding their limited liability to the extent of 20 US $ per Kg. or actual value of the consignment which ever is less in pursuance of contract with 4th defendant as per 'D' series documents.
Draw decree accordingly.
VIII ACC & SJ, Bengaluru.