Delhi District Court
National Insurance Co. Ltd vs M/S Skyline India Ltd on 6 September, 2014
IN THE COURT OF CIVIL JUDGE11, CENTRAL DISTRICT,
TIS HAZARI COURTS: DELHI
Civil Suit No. 72/13
Unique case ID No. 02401C0194082005
In the matter of
National Insurance Co. Ltd.,
4, Peareylal Building,
42, Janpath,
New Delhi .....Plaintiff
VS.
1. M/S Skyline India Ltd.,
Head Office
1E/11, Swai Ramtirath Nagar,
Jhandewalan Extn.
New Delhi - 110 055.
2. M/S Daewo Motors India Ltd.,
Regd. Office : 33, Siri Fort Road,
New Delhi - 110 049. .....Defendant
Date of institution of the Suit : 14.03.2005
Date on which arguments were heard : 30.08.2014
Date of decision : 06.09.2014
SUIT FOR RECOVERY OF RS. 2,90,073.00 (RUPEES TWO LAC
NINTY THOSAND SEVENTY THREE ONLY)
JUDGMENT
Despite having contracted an inland open policy of insurance, the insurer terming it as covered under the Marine Insurance Act 1963 and thereby treating itself to be entitled to sue on the basis of a letter of subrogation issued in its favour by the insured against the paid loss is claiming certain reliefs against the common National insurance Co. Vs. Skyline India Ltd. 1 carrier which had contracted to carry the goods of the insured by road but unfortunately caused damage to the goods. Very interestingly, the Insurer instead of making the insured a coplaintiff in the case has made the insured a defendant. The question therefore before me is very simple: whether such insurer can maintain any claim against common carrier in such circumstances or not. Ld. Counsel for the insurer (plaintiff herein) by relying upon a judgment of Hon'ble High Court of Calcutta in G.M. Roadways Co. Vs F.G. Industries Ltd. AIR 1971 Cal 49 has insisted that even the inland risks irrespective of maritime voyage is covered under the Marine Insurance Act 1963 and therefore the claim is maintainable. I regret my inability to agree with the Ld. Counsel. The judgment relied upon is very categorical in its opinion i.e. insurance policy having only land risk is also covered under the Marine Insurance Act 1963 if the same is in the form of Marine Insurance Policy. In the present case however, the insurance policy relied upon by the insurer(plaintiff) clearly shows that the same is an open inland insurance policy. There is not even a whisper that the policy was intended to be in the form of marine insurance policy. Therefore, such insurance policy can not come under the Marine Insurance Act 1963. Faced with this situation, the Ld. Counsel brought certain dictionary meaning of marine insurance and contended that the same includes land policy. I have my reservations. Once the statute has been expressly explained by a Constitutional Court and that too in a judgment relied upon by the party, there remains nothing to be explored contrary to such expression on the basis of any dictionary meaning of a term. Even otherwise, the term "marine insurance" is clearly defined in Section3 of the Marine Insurance Act 1963 and therefore we can not rely upon any dictionary meaning of the said term. In such circumstances, we are bound to arrive at a conclusion that the present open inland policy is not in the form of marine insurance policy and therefore even with the aid of aforesaid judgment the National insurance Co. Vs. Skyline India Ltd. 2 present policy can not be treated as falling under the Marine Insurance Act 1963. But to my mind, subrogation enshrined in Marine Insurance Act is not the only place where the subrogation can be invoked. It can also be invoked as rights incidental to an insurance policy as right of restitution. The doctrine of subrogation will thus enable the insurer, to step into the shoes of the assured, and enforce the rights and remedies available to the assured.
2. Be that as it may, let's have a glance at the factual position emerging from the record. Four persons/entities are involved in the factual position as may be inferred from the record of the suit. Two insurance companies, one is NIC i.e. the plaintiff and the other is OIC. Other two entities are Skyline and Daewoo motors. There were three contracts between the parties. One contract of insurance was between NIC and Daewoo Motors, the second contract of insurance was between Skyline and OIC and third contract of carriage between Daewoo Motors and Skyline.
2.1. The Skyline Company while carrying the goods of Daewoo Motors somehow damaged the goods in an accident happened somewhere on 08/09.03.2002 and issued a loss certificate in favour of Daewoo Motors which in turn settled the claim with the NIC for a sum of Rs. 2,90,073/ against its total loss amounting to Rs. 5,50,211/ and thereupon issued letter of subrogation and power of attorney on which basis the NIC filed the present suit against Skyline for recovery of the amount paid by it to the Daewoo Motors.
3. Ld. Predecessor having framed 5 substantive issues and one further substantive additional issue allowed the parties to lead evidence and the plaintiff examined one M.K. Suneja, Assistant Manager as PW1 and Suresh Kumar Rathi National insurance Co. Vs. Skyline India Ltd. 3 as PW2. Defendant examined one Rajiv Gupta director of Skyline as DW1. Arguments have been heard and record has been perused. I therefore proceed to record my reasons and decision on the issues so framed.
4. Additional issue which was placed at serial No.5a shall be taken first which read as "Whether the suit is liable to be dismissed for misjoinder or non joinder of necessary party? OPD"
4.1. From the order dated 22.04.2009 it appears that the additional issue was framed on the basis of objection taken by the defendant in Paragraph4 of its WS and a reading of application filed by the defendant under OrderXIV Rule5 CPC clarifies that the Paragraph4 indicated therein is the paragraph4 of preliminary objection of the WS. Now, this paragraph of WS talks about contract of insurance between Skyline and OIC for the vehicle of the defendant. Defendant contends that the OIC should have been made a party as its vehicle was insured with the OIC. I have given my thoughts to this situation. I am of the view that the claim made in the suit does not relate to the vehicle of the defendant Skyline but it relates to the goods (vehicle) of the Daewoo Motors. Therefore, any separate contract between Skyline and OIC can hav any relevance for the Daewoo Motors or for NIC. The issue raise therefore is clearly misconceived.
4.2. As such Issue No.5a is decided against the defendant no.1 and in favour of the plaintiff.
5. Now, the Issue No.5 is required to be taken which reads as "Whether suit is barred by limitation?"
National insurance Co. Vs. Skyline India Ltd. 4 5.1. Order dated 02.03.2006 of Ld. Predecessor by which issues were framed does not show as to on whom the onus lies. However, the framework of issue clearly indicated that the onus was on defendant. Plaintiff claimed that the cause of action arose on 14.03.2002 (damage information was received), on 15.03.2002 (when survey was made and damage certificate was issued by), on 19.03.2002 (when Daewoo Motors served a claim letter on Skyline) and on 30.01.2003 (when Daewoo Motors was paid by plaintiff). Defendant on the other hand claimed that date of accident was 09.03.2002 and on the same day information was given to Daewoo Motors and therefore the suit filed on 14.03.2005 is barred by limitation of three years.
5.2. To my mind the cause of action was not of a continuing nature and therefore several dates given by the plaintiff for subsistence of cause of action are immaterial. Further, I consider that a person by his unilateral act or omission can not create a cause of action for enlarge the of limitation period. Plaintiff by sending for a survey on his convenience or completing the survey or by serving claim letter or by making payment to other person can not create starting point of limitation. Plaintiff has not shown me any law which goes contrary to this proposition. No dispute has been raised by either side about total period of limitation being three years though they have not pointed out the specific article of the Limitation Act in respect of the claim. The entire dispute between the parties relates to the starting point of limitation. The plaintiff wants to count the period at least from 14.03.2002 when it received information about damage whereas the defendant wants to count the period from date of accident i.e. 09.03.2002.
5.3. In such circumstances we have to carefully ascertain the nature of the suit and have to select the particular article of Limitation Act which may have National insurance Co. Vs. Skyline India Ltd. 5 application to the present controversy. Though the suit has been titled as recovery suit, the same in essence is a suit for damages under the Carriers Act, 1865. It is also clear from the pleading of the plaintiff in paragraph7 of the plaint wherein for entitlement it has relied upon Section8 & 9 of the Carriers Act, 1865. In such circumstances, Article10 of Schedule appended to Limitation Act, 1963 will apply which provides for a 3 years limitation period from the date "when the loss or injury occurs". If this is so, the limitation the present case has to be counted from the date of accident and not from the date of knowledge of accident. There is some vagueness about the date of accident as at some places it has been indicated as 08.03.2002 and at some other places the same has been indicated as 09.03.2002, however, I consider that the same does not make any difference as the limitation of three years counted from any of the dates would have expired well before 14.03.2002 when the present suit was filed.
5.4. Plaintiff has however relied upon Section10 of the Carriers Act, 1865. This provision certainly talks about issuance of notice as a precondition for filing a suit against any common carrier but it does not talk anything about limitation neither does it give any duration of notice (like section80 of CPC which provides a two months notice duration) which could be excluded for computing limitation period by virtue of Section15 of the Limitation Act, 1963. The period of 6 months mentioned therein only relates to act of issuance of notice and not as a duration of notice. The expression "date of knowledge" mentioned in Section10 can not be taken as giving any limitation period as the provision talks about the prerequisite for filing a suit but does not cover the concept of limitation and therefore the Schedule appended to Limitation Act will prevail. It can be seen from entirely a different angle. Suppose, a person comes to know about the loss of his goods on the hand of a carrier after 4 years of the date of accident and he National insurance Co. Vs. Skyline India Ltd. 6 thereafter issues a notice under Section10 of the Carriers Act, should we say that the limitation be counted from the date of knowledge irrespective of the Schedule of Limitation Act which provides the starting point of limitation from date of occurrence? Answer has to be in negative otherwise the particular article of the schedule would be redundant.
5.5. Even on factual position the plaintiff has failed to establish the fact that it received knowledge of accident on 14.03.2002. Affidavit filed by PW1 M.K. Suneja has not even mentioned the factum of accident or of knowledge and therefore the date of knowledge can not be treated as established. In the cross examination however he stated that knowledge was received from Daewoo Motors on 14.03.2002 through telephonic message but he failed to substantiate his statement by any cogent means such as any record, any person who received such telephonic message or any person from Daewoo Motors who sent such telephonic message. So, even the date of knowledge can not be taken as established.
5.6. It is further clarified that since the factual even of the present case occured before the enforcement of the Carriage by Road Act, 2007 therefore by virtue of Section22(2) thereof, we had to proceed in accordance with the Carriers Act, 1865.
5.7. In such circumstances, it is held that the limitation was to be counted from the date of accident and not from the date of knowledge and therefore it is held that the suit was barred by limitation. As such the Issue No.5 is decided in favour of defendant no.1 and against the plaintiff.
6. Next issue which requires priority is the Issue No.3 which reads as National insurance Co. Vs. Skyline India Ltd. 7 "Whether there is no cause of action in favour of the plaintiff and against the defendant?"
6.1. On this issue, I am of the view that since accident and relationship between Daewoo Motors and Skyline are not in dispute, by virtue of Section9 of the Carriers Act, 1865 there exists a cause of action for recovery of loss/damage against the common carrier Skyline irrespective of any negligent conduct and therefore the Skyline can be sued for this. The only question is by whom? Naturally, either by Daewoo Motors or by Insurance Company which paid Daewoo Motors or by both depending upon the circumstances of contractual relationship between Daewoo Motors and Insurer. As such, the Issue No.3 is required to be decided against the defendant no.1 and in favour of the plaintiff. Decided accordingly.
7. Now Issue No.4 will be taken up for decision which reads as "Whether there is any privity of contract between the parties?"
7.1. PW1 during his cross examination has thought categorically accepted that there was no direct privity of contract between the Skyline and the plaintiff, however, the plaintiff is relying of Letter of Subrogation and Special Power of Attorney issued in its favour by the Daewoo Motors to contend that it is entitled to file the present suit for recovery of the amount paid by it to Daewoo Motors. I have considered the submission and also perused the documents.
7.2. A constitution bench of Hon'ble Supreme Court in Economic Transport Organization vs M/s. Charan Spinning Mills (P) Ltd. & Anr (2010) 4 SCC 114 has held that in case of subrogation simplicitor a common carrier can be sued National insurance Co. Vs. Skyline India Ltd. 8 by insurer in the name of assured or jointly by assured and insurer but in the case of subrogation cum assignment, the insurer has the choice of suing in its own name, or in the name of the assured, if the instrument so provides. Following paragraphs from the said judgment clarifies the matter:
"35. The principles relating to subrogation can therefore be summarized thus: xxxxxxxx
(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 subrogeecumattorney, or by the assured and the insurer as coplaintiffs or co complainants.
(v) Where the assured executed a subrogationcum assignment in favour of the insurer (as contrasted from a 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 National insurance Co. Vs. Skyline India Ltd. 9 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."
7.3. In the present case if the documents are meaningfully construed in the light of observations of the Constitution Bench in the above noted case in paragraph47 thereof (as reported in the SCC), the document has to be treated as subrogation cum assignment and therefore the insurer has to be held entitled to sue the common carrier in its own name. Since, the insurer NIC(plaintiff) is entitled to sue the common carrier Skyline in its own name, the insurer should be allowed to stand in the shoe of the insured who contract with the common carrier Skyline. Therefore, it is held that there was privity of contract between the parties.
7.4. Even in view of judgment of Hon'ble High Court of Delhi in Syal Auto Carriers vs National Insurance Co. RFA518/2010 decided on 13.12.2011, I consider that irrespective of any such letter of subrogation, the NIC (plaintiff) is entitled to sue the common carrier for the amount paid by it to the insured.
7.5. As such, the Issue No.4 is decided against the defendant no.1 and in favour of the plaintiff.
8. Issue No.1 & 2 relate to the entitlement of plaintiff for recovery of amount and interest. The defendant has failed to controvert the claim of plaintiff made about payment to Daewoo Motors or to discard the testimony of PW2 in respect of survey conducted. Further, in view of Section9 of Carriers Act, 1865 negligence National insurance Co. Vs. Skyline India Ltd. 10 being not a factor for claiming damages/loss and accident and contract being not in dispute, the plaintiff should have been entitled for recovery of the amount paid to the Daewoo Motors on account of indemnification. So far as interest is concerned, in the absence of any material justifying the claimed interest of 12% per annum, I would have granted a nominal interest of 6% per annum to the plaintiff.
8.1. As such, Issue No.1 would have been decided in favour of plaintiff and against the defendant no.1 and Issue No.2 would have been allowed partly in favour of the plaintiff.
9. However, in view of the decision on Issue No.5 which goes against the plaintiff, the present suit can not be treated as maintainable due to the bar of limitation and therefore the plaintiff can not be granted any relief.
10. In the ultimate analysis, the suit is dismissed. No costs. Decree be prepared accordingly.
Announced in the open
court today on 06.09.2014 (Rakesh Kumar Singh)
CJ11/CENTRAL
DELHI
National insurance Co. Vs. Skyline India Ltd. 11