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[Cites 9, Cited by 0]

Karnataka High Court

M/S Patel Roadways Ltd vs M/S New India Assurance Col Td on 29 October, 2022

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                                       RFA No. 575 of 2008


IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH

       DATED THIS THE 29TH DAY OF OCTOBER, 2022

                         BEFORE
          THE HON'BLE MR JUSTICE R.NATARAJ
     REGULAR FIRST APPEAL NO. 575 OF 2008 (MON)
BETWEEN:

M/S PATEL ROADWAYS LTD.,
PLOT NO.705/1, INDUSTRIAL ESTATE,
UDYAMBAG, BELGAUM-590001,
HEREIN R/BY SRI H R NARAYAN,
MANAGER (LEGAL), AGED 30 YEARS.
                                                ...APPELLANT
(BY SRI. V.G.BHAT, ADVOCATE)

AND:

1.   M/S NEW INDIA ASSURANCE CO.LTD.,
     SUBSIDIARY OF THE GENERAL INSURANCE
     CORPORATION OF INDIA,
     HAVING ITS REGD. OFFICE AT 87,
     M G ROAD, FORT MUMBAI AND
     A DIVISIONAL OFFICE,
     AMONGST OTHER PLACES,
     AT 3933/B-2, MUDALAGI BUILDING,
     CLUB ROAD, BELGAUM-590001,
     R/BY ITS ATTORNEY HOLDER PLAINTIFF NO.1.

2.  M/S GALAXY MACHINERY PVT. LTD.,
    PLOT NO.22, SY NO.336/1, UDYAMBAG,
    BELGAUM-590001,
    R/BY SPECIAL POWER OF ATTORNEY HOLDER,
    PLAINTIFF NO.1.
                                           ...RESPONDENTS
(BY SRI. G.N.RAICHUR, ADVOCATE FOR R1; R2 SERVED)

     THIS RFA IS FILED U/S.96 OF CPC AGAINST THE
JUDGMENT AND DECREE DATED 06/08/2007 PASSED IN
O.S.NO.194/2000 ON THE FILE OF THE PRL. CIVIL JUDGE
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                                             RFA No. 575 of 2008


(SR.DN.) BELGAUM, PARTLY DECREEING THE SUIT FILED FOR
RECOVERY OF MONEY.

    THIS APPEAL COMING ON FOR DICTATING THE
JUDGMENT DAY, THE COURT DELIVERED THE FOLLOWING:


                              JUDGMENT

This appeal is filed by the defendant in O.S.No.194/2000 on the file of the Principal Civil Judge (Sr.Dn.), Belagavi, challenging the judgment and decree dated 06.08.2007, by which it was ordered to pay a sum of Rs.7,46,755/- with costs along with simple interest @ 12% per annum from the date of suit till the date of realization.

2. The parties shall henceforth be referred as they were arrayed before the trial Court.

3. The suit in O.S.No.194/2000 was filed for recovery of Rs.7,46,755/- and interest of Rs.1,84,131/- thereon, from the date of cause of action till the date of suit.

4. The plaintiffs claimed that the plaintiff No.2 had availed the services of the defendant to transport a CNC- Chucker CLT-160 Machine from Belagavi to New Delhi for display in the exhibition held at Pragati Maidan, New Delhi. -3- RFA No. 575 of 2008 The defendant accepted the consignment which was valued at a sum of Rs.15,39,000/-. The plaintiff No.2 had also insured the consignment with the plaintiff No.1 against risk of non-delivery, short-delivery and damage during transit.

5. On 15.02.1998, the vehicle met with an accident on Gwalior road en-route to destination. As a result, the consigned machinery was badly damaged. The plaintiff No.2 intimated the plaintiff No.1 about the damage caused to the machinery in transit and thereafter, made a claim in respect of the damages as per the policy. The plaintiff No.1 engaged the services of a qualified Surveyor in accordance with Section 64-UM of the Insurance Act, 1938. The vehicle was surveyed and the Surveyors assessed loss at a sum of Rs.7,46,755/-. The plaintiff No.1 paid a sum of Rs.7,46,755/- to the plaintiff No.2 in full and final settlement on 18.08.1998. In the meanwhile, on 12-03-1998, the plaintiff No.2 had issued a notice to the defendant intimating it about the action intended against it. The plaintiff No.1, obtained a letter of subrogation from the plaintiff No.2 and initiated proceedings to recover damages of Rs.7,46,755/- -4- RFA No. 575 of 2008 paid to the plaintiff No.2 after issuing notices to the defendant on 22.07.1998 and 10.08.1998.

6. The suit was resisted by the defendant who contended that the machinery in question was consigned at the risk of the plaintiff No.2 and therefore, it was not liable to indemnify the loss. It also contended that the defendant had restricted its liability to a sum of Rs.10/- per kg. as per the Goods Forwarding Note and therefore, it was not liable to indemnify the plaintiff No.1 in view of Section 6 of the Carriers Act, 1865. It contended that the agreement provided that in the event of any dispute between the parties, same should be resolved by initiating appropriate proceedings in Courts at Mumbai and therefore, the Court at Belagavi had no jurisdiction to decide the case. It contended that the plaintiffs had failed to issue notice as required under Section 10 of the Carriers Act, 1865 and that the suit was highly belated and hence was not maintainable. Further, it claimed that the plaintiffs had not pleaded any negligence on the part of the defendant in transporting the machinery consigned to it and therefore, the plaintiffs cannot maintain a -5- RFA No. 575 of 2008 claim for reimbursement of the compensation paid by the plaintiff No.1 to the plaintiff No.2. It contended that the plaintiff No.1 being an insurer was not entitled for subrogation and that there was no provision contained in the policy of insurance enabling plaintiff No.1 to claim subrogation. It also contended that the survey of the machinery in question was conducted in the absence of the defendant and therefore, it was not bound to accept it. Hence, it was not bound to pay the damages claimed by the plaintiff No.1. Based on these contentions, the trial Court framed the following issues:

i) Whether the plaintiffs proves that, on account of damages caused to the machinery they suffered loss for the tune of Rs.7,46,755/- as alleged in the plaint?
ii) Whether the plaintiffs proves the defendant is liable to pay interest if so for what rate?
iii) Whether the defendant proves that plaintiff No.1 and 2 in collusion of each other have created bogus documents to suit the illegal claim as alleged in their statement?
iv) Whether this court has jurisdiction to try this suit?
      v)          What relief the parties are entitled?
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                                                    RFA No. 575 of 2008


      vi)    What order or decree?


7. The plaintiff No.1 examined one of its officials as PW-1 and the Surveyor was examined as PW-2 and they marked Ex.P.1 to Ex.P.48(a). The defendant examined one of its officials as DW-1 and produced Ex.D.1 and Ex.D.2 which were the Special Power of Attorney and a Goods Forwarding Note.
8. Based on the oral and documentary evidence, the trial Court answered the issues as follows:
      i)     In the affirmative
      ii)    Partly in the affirmative and partly in the negative
      iii)   In the negative
      iv)    In the affirmative
      v)     Plaintiffs entitled for actual damages to the tune of
Rs.7,46,755/- and not entitled for interest claimed at Rs.1,84,131/-
      vi)    As per the final order.


and   consequently,     decreed        the   suit    and   directed   the

defendant to pay a sum of Rs.7,46,755/- along with simple interest at 12% p.a. from the date of the suit till the date of -7- RFA No. 575 of 2008 realization. Being aggrieved by the said judgment and decree, this appeal is filed.
9. Learned counsel for the defendant/appellant reiterated the contentions urged in the written statement and contended that the trial Court did not consider the questions of fact and law urged with all the required earnestness. On the contrary, he contended that the trial Court casually considered the case and blissfully ignored the questions of law that arose for consideration. He contended that a carrier is entitled to limit its liability by entering into a special contract as provided under Section 6 of the Carriers Act, 1865. He submitted that Ex.D.2 was the Goods Forwarding Note was a special contract entered into between the plaintiff No.2 and the defendant, whereby the liability was limited to a sum of Rs.10/- per kg. He, therefore, submitted that any liability beyond the amount agreed between the parties was not recoverable from the defendant.

Further, he submitted that the notice of loss of the goods had to be given within six months from the date of the incident. In the present case, he contended that the plaintiff -8- RFA No. 575 of 2008 No.1 did not issue any notice within six months and therefore, it was not entitled to launch a claim to recover the damages paid by it to plaintiff No.2. He further contended that the parties had agreed that the Courts at Mumbai would have the jurisdiction to adjudicate upon any dispute between the parties and therefore, the trial Court committed an error in not considering the same. Further, he submitted that the insurance policy per se did not contain any recital to enable it to step into the shoes of plaintiff No.2 and hence, the suit filed to recover a sum of Rs.7,46,755/- by the plaintiff No.1 was not maintainable. He also contended that the damages that was suffered by the plaintiff No.2 was assessed behind the back of the defendant and therefore, it was not bound to reimburse the plaintiff No.1 of the same.

10. Per contra, learned counsel for the plaintiffs/respondents submitted that the Goods Forwarding Note is not a special contract where the defendant could restrict its liability. On the contrary, he contended that the Goods Forwarding Note should only contain the nature of the goods and its value and there was no clear understanding -9- RFA No. 575 of 2008 that the liability would be limited to Rs.10/- per kg. He submitted that the conditions printed on the rear of the Goods Forwarding Note (Ex.D.2) were never agreed upon as they were not signed by the parties. He submits that the carrier owed a responsibility to ensure that the machinery was delivered at the destination in a good condition and therefore, the carrier cannot avoid responsibility by contending that the same was carried at the risk of the plaintiff No.1. He submitted that soon after the plaintiff No.2 notified the plaintiff No.1 about the accident and the damages caused to the machinery, the plaintiff No.2 had issued a notice of loss as prescribed under Section 10 of the Carriers Act, 1865, to the defendant. He submitted that after the plaintiff No.1 stepped into the shoes of plaintiff No.2, the plaintiff No.1 issued notices as required under Section 10 on 22.07.1998 and 10.08.1998. He submits that the defendant having acknowledged these two notices did not issue any reply and therefore, the defendant is deemed to have accepted the claim made by the plaintiff No.1. He further submitted that the parties cannot vest jurisdiction on

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RFA No. 575 of 2008 a Court by agreement and even, if there is condition vesting the jurisdiction on any Court, the same is not binding. He submitted that the goods were consigned at Belagavi and was to be transported to New Delhi and therefore, the Courts at Belagavi or the Court at New Delhi would have the jurisdiction and not the Courts at Mumbai. Therefore, he contends that any vesting of jurisdiction on any other Court cannot deprive the plaintiffs from initiating action before the Courts at Belagavi. He further submitted that the right of a Subrogatee is well engrafted in Section 69 of the Contract Act, 1872 and therefore, the plaintiff No.1 stepped into the shoes of the plaintiff No.2 and was therefore, entitled to recover the damages paid to the plaintiff No.2. In so far as the damages assessed by the Surveyor, he contends that the Surveyors were appointed in accordance with Section 64-UM of the Insurance Act, 1938 and that the Surveyor was examined before the trial Court and the defendant did not establish that the report of the Surveyor was in any way wrong or did not correspond to the actual damages found on the machine.

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RFA No. 575 of 2008

11. Having considered the submissions made by the learned counsel for the plaintiffs and the defendant, the following points arise for consideration in this appeal:

i) Whether the defendant had limited its liability as provided under Section 6 of the Carriers Act, 1865, to an extent of Rs.10/- per kg?
ii) Whether the defendant could avoid liability on the ground that the plaintiff No.2 had consigned the goods at "owner's risk"?
iii) Whether the plaintiffs could maintain a suit for recovery of the amount paid as damages without pleading negligence on the part of the defendant in consigning the goods?
iv) Whether the plaintiffs had complied with the requirement as provided under Section 10 of the Carriers Act, 1865?

12. I have considered the pleadings, the oral and documentary evidence on record as well as the judgment and decree of the trial Court and answer the points for consideration as follows:

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RFA No. 575 of 2008

13. The entrustment of the machinery in question by the plaintiff No.2 to the defendant, is not in dispute. The nature of goods and its value declared by the plaintiff No.2 in the Goods Forwarding Note is also not in dispute. The fact that the machinery consigned by the plaintiff No.2 was damaged in the accident that occurred on 15.02.1998 is also not in dispute. It is also not in dispute that the consigned machinery was insured by the plaintiff no.2 with the plaintiff no.1. Likewise it is not in dispute that the plaintiff no.2 had raised a claim with the plaintiff no. who got the damaged machinery surveyed and paid the damages. It is further not in dispute that the plaintiff no.2 had caused a notice to the defendant on 12-03-1998 informing it about the action intended against it. In the above factual backdrop, the points for consideration are answered seriatum.

14. Point No.1: The defendant has claimed that it was entitled to limit its liability under Section 6 of the Carriers Act, 1865, which reads as follows:

"6. In respect of what property liability of carrier not limited or affected by public notice. Carriers, with
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RFA No. 575 of 2008
certain exceptions, may limit liability by special contract -
The liability of any common carrier for the loss of or damage to any property (including container pallet or similar article of transport used to consolidate goods) delivered to him to be carried, not being of the description contained in the Schedule to this Act, shall not be deemed to be limited or affected by any public notice; but any such carrier, not being the owner of a railroad or tramroad constructed under the provisions of Act 22 of 1863 (to provide for taking land for works of public utility to be constructed by private persons or Companies, and for regulating the construction and use of works on land so taken) may, by special contract, signed by the owner of such property so delivered as last aforesaid or by some person duly authorized in that behalf by such owner, limit his liability in respect of the same."

The preamble to the Carriers Act, 1865, reads as follows:

"WHEREAS it is expedient not only to enable common carriers to limit their liability for loss of, or damage to, property delivered to them to be carried but also to declare their liability for loss of, or damage to, such property occasioned by the negligence or criminal acts of themselves, their servants or agents."

15. The defendant has claimed that in terms of Ex.D.2, a Goods Forwarding Note, the parties had agreed to the following condition:

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RFA No. 575 of 2008
"The liability of the Company will in no event exceed Rs.1/- per k.g. irrespective of the total value declared."

16. It is relevant to note that in terms of Exhibit P.2, the plaintiff No.2 had raised an invoice which indicated the value of the machinery at a sum of Rs.15,39,000/-. Ex.P.3 provided a detailed description of the machinery along with other parts. ExP.5 was the lorry receipt issued by the defendant. One of the terms and conditions of carriage printed on the overleaf of Ex.P.5 disclosed the following:

"12. Where the goods have been lost or destroyed or damaged or have deteriorated, the compensation payable by the transport operator shall not exceed the value declared."

17. The lorry receipt does not bear any reference to the Goods Forwarding Note or the conditions attached to it. Under the Carriers Act, 1865, there was no requirement of a Goods Forwarding Note. However, in common parlance, Goods Forwarding Note was to only contain the specification of the goods consigned along with its value. Hence the question of the defendant limiting its liability based on an illegible term contained in the Goods Forwarding Note, does

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RFA No. 575 of 2008 not arise, that too when there was no tangible evidence to establish that the parties had agreed to such a term. As a matter of fact, presently under Section 8 of the Carriage of Road Act, 2007, the Goods Forwarding Note is a compulsory document that has to be executed by a consignor, declaring the value of the goods and the nature of the goods consigned. It also warrants that the consignor shall indemnify the common carrier against any damage suffered by it by reason of incorrectness or incompleteness of the particulars mentioned in the Goods Forwarding Note. Therefore, Ex.D.2 was bound to contain only the names and address of the consignor and the address at which it had to be delivered, the nature of the goods consigned, its value and its weight. The conditions prescribed on the reverse of the Ex.D.2 limiting its liability ran contrary to the conditions found in the lorry receipt at Ex-P2. Even otherwise, there is no evidence to indicate that the plaintiff No.2 and the defendant had agreed to a condition limiting the liability of the defendant. Therefore, the defendant cannot contend that its liability is limited to the extent mentioned in the

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RFA No. 575 of 2008 Goods Forwarding Note. Hence, it is held that in the facts and circumstances of this case that there was no understanding between the plaintiff No.2 and the defendant limiting the liability of the defendant to a sum of Rs.10/- per kilogram of the consignment.

18. Point No.ii: The next point relates to the contention that the plaintiff No.2 had consigned the goods at its risk and therefore, the defendant was not liable. This is no longer res integra as it is eloquently answered by the Hon'ble Apex Court in NATH BROS. EXIM INTERNATIONAL LTD., DVS. BEST ROADWAYS LTD., [(2000) 4 SCC 553) where it held that the expression at "owners risk" as used in the goods receipt does not exempt the carrier from its own negligence or the negligence of its servants or agents. The consignor/plaintiff No.2 had no control over the way in which the goods were transported. The defendant did not place any material on record to establish that its driver was not negligent and that he tried avoiding hitting a buffalo on the road. The fact that the lorry fell into a deep ditch indicates that the driver was careless

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RFA No. 575 of 2008 and negligent. The Hon'ble Apex Court in the case referred supra observed " from the above discussion, it would be seen that the liability of a carrier to whom the goods are entrusted for carriage is that of an insurer and is absolute in terms, in the sense that the carrier has to deliver the goods safely, undamaged and without loss at the destination, indicated by the consignor. So long as the goods are in the custody of the carrier, it is the duty of the carrier to take due care as he would have taken of his own goods and he would be liable if any loss or damage was caused to the goods on account of his own negligence or criminal act or that of his agent and servants."

19. There is no evidence on record that the accident occurred due to an "act of God" and therefore, the defendant was liable for the damage caused to the consignment. Hence, the second point for consideration is answered against the defendant.

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RFA No. 575 of 2008

20. Point No.(iii): The defendant claimed that the accident was not due to any negligence on the part of the driver of the vehicle which carried the consignment, but, it claimed that the driver while avoiding hitting a buffalo which crossed the road suddenly, swerved and fell into a ditch. Therefore, it is claimed that the consignment was damaged due to a reson beyond the control of the driver and not due to the negligence or any criminal act of the carrier or it is servants or agents. This contention is liable to be rejected at the threshold in view of what is contained in Section 9 of the Carriers Act, which is extracted below:

"9. Plaintiffs, in suits for loss, damage, or non- delivery, not required to prove negligence or criminal act -
In any suit brought against a common carrier for the loss, damage or non-delivery of goods (including container, pallets or similar article of transport used to consolidate goods) entrusted to him for carriage, it shall not be necessary for the plaintiff to prove that such loss, damage or non-delivery was owing to the negligence or criminal act of the carrier, his servants or agents."

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RFA No. 575 of 2008

21. The question of the plaintiffs requiring to plead or prove negligence or criminality on the part of the carrier or its servants does not arise as the plaintiff No.2 had entrusted the goods for proper delivery at the destination by the defendant. The plaintiff No.2 could have no control in the manner in which the defendant transported the consigned goods for delivery at the destination. It is precisely for this reason that Section 9 of the Carriers Act, 1865 mandates that plaintiffs, in suits for loss, damage or non-delivery, are not required to prove negligence or criminal act on the part of the carrier, its servants or agents. The Hon'ble Apex Court in ECONOMIC TRANSPORT ORGANIZATION VS. CHARAN SPINNING MILLS PRIVATE LIMITED AND ANOTHER [(2010) 4 SCC 114] held as follows:

"Thus where the consignor establishes loss or damage or non- delivery of goods, it is deemed that negligence on the part of the carrier is established. The carrier may avoid liability if it establishes that the loss, damage or non- delivery was due to an act of God or circumstances beyond its control. Section 14(1)(d) of the Act does not operate to relieve the carrier against the presumption of negligence created under Section 9 of the Carriers Act."

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RFA No. 575 of 2008

22. Point iv: In so far as the last point for consideration, in the event of any loss or injury to the goods consigned, the Act provides for issuance of a prior notice before instituting claim against the carrier and the same is extracted below:

"10. Notice of loss or injury to be given within six months: - No suit shall be instituted against a common carrier for the loss of, or injury to, goods (including container, pallets or similar article of transport used to consolidate goods) entrusted to him for carriage, unless notice in writing of the loss or injury has been given to him before the institution of the suit and within six months of the time when the loss or injury first came to the knowledge of the plaintiff."

23. It is not in dispute that the plaintiff No.2 had issued a notice on 12.03.1998 (Ex.P.8) to the defendant intimating about the loss caused to the machinery and called upon the defendant to indemnify the same. Thus, the defendant was put on notice about the injury caused within six months from the date of the loss as required under Section 10 of the Carriers Act, 1865. Soon thereafter, the

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RFA No. 575 of 2008 plaintiff No.2 lodged a claim with the plaintiff No.1 to claim the loss caused to the machinery in view of the policy of insurance that was in force between the plaintiff No.1 and the plaintiff No.2. The plaintiff No.1 for assessment of the damages caused to the machinery, appointed a Surveyor who conducted an extensive survey and determined the loss at a sum of Rs.7,46,755/-. Thereupon, the plaintiff No.1 settled the same and obtained a letter of Subrogation by which it stepped into the shoes of plaintiff No.2 to recover the same from the defendant who was responsible for the damage caused to the goods that was consigned. The plaintiff No.1 as a subrogate-cum-assignee was entitled to take advantage of the notice issued by plaintiff No.2 and lodge a claim for recovery of the loss caused to the machinery in question. Based upon such a letter of Subrogation (Ex.P.19), proceedings were initiated to recover the said sum of Rs.7,46,755/-. The right of the insurer to proceed against the carrier to recover the damages is lucidly elucidated in the judgment of the Hon'ble Apex Court in ECONOMIC TRANSPORT ORGANIZATION VS. CHARAN

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RFA No. 575 of 2008 SPINNING MILLS PRIVATE LIMITED AND ANOTHER [(2010) 4 SCC 114] wherein at paragraphs 28, 29 and 30, it held as follows:

"28. We may, therefore, classify subrogations under three broad categories:
(i) subrogation by equitable assignment;
(ii) subrogation by contract; and
(iii) subrogation-cum- assignment.

28.1) In the first category, the subrogation is not evidenced by any document, but is based on the insurance policy and the receipt issued by the assured acknowledging the full settlement of the claim relating to the loss. Where the insurer has reimbursed the entire loss incurred by the assured, it can sue in the name of the assured for the amount paid by it to the assured. But where the insurer has reimbursed only a part of the loss, in settling the insurance claim, the insurer has to wait for the assured to sue and recover compensation from the wrongdoer; and when the assured recovers compensation, the assured is entitled to first appropriate the same towards the balance of his loss (which was not received from the insurer) so that he gets full reimbursement of his loss and the costs, if any, incurred by him for such recovery. The insurer will be entitled only to whatever balance remaining, for reimbursement of what it paid to the assured.

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RFA No. 575 of 2008 28.2) In the second category, the subrogation is evidenced by an instrument. To avoid any dispute about the right to claim reimbursement, or to settle the priority of inter-se claims or to confirm the quantum of reimbursement in pursuance of the subrogation, and to ensure co-operation by the assured in suing the wrongdoer, the insurer usually obtains a letter of subrogation in writing, specifying its rights vis-a-vis the assured. The letter of subrogation is a contractual arrangement which crystallizes the rights of the insurer vis-a-vis the assignee. On execution of a letter of subrogation, the insurer becomes entitled to recover in terms of it, a sum not exceeding what was paid by it under the contract of insurance by suing in the name of the assured. Even where the insurer had settled only a part of the loss incurred by the assured, on recovery of the claim from the wrongdoer, the insurer may, if the letter of subrogation so authorizes, first appropriate what it had paid to the assured and pay only the balance, if any, to the assured.

28.3) The third category is where the assured executes a letter of subrogation-cum-assignment enabling the insurer retain the entire amount recovered (even if it is more than what was paid to the assured) and giving an option to sue in the name of the assured or to sue in its own name.

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RFA No. 575 of 2008

29. In all three types of subrogation, the insurer can sue the wrongdoer in the name of the assured. This means that the insurer requests the assured to file the suit/complaint and has the option of joining as co- plaintiff. Alternatively the insurer can obtain a special power of Attorney from the assured and then to sue the wrongdoer in the name of the assured as his attorney.

30. The assured has no right to deny the equitable right of subrogation of the insurer in accordance with law, even whether there is no writing to support it. But the assured whose claim is settled by the insurer, only in respect of a part of the loss may insist that when compensation is recovered from the wrongdoer he will first appropriate the same, to recover the balance of his loss. The assured can also refuse to execute a subrogation-cum-assignment which has the effect of taking away his right to receive the balance of the loss. But once a subrogation is reduced to writing, the rights inter-se between the assured and insurer will be regulated by the terms agreed, which is a matter of negotiation between the assured and insurer.

24. Hence, the contention of the defendant that the requirement of Section 10 of the Carriers Act, 1865, was not complied with, is liable to be rejected.

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RFA No. 575 of 2008

25. Though the defendant raised a question regarding the jurisdiction of the Court at Belagavi to adjudicate the suit, no cause of action arose at Mumbai as the goods were consigned at Belagavi and the defendant was also carrying business at Belagavi and the destination was New Delhi. Thus, the cause of action entirely arose within the territorial jurisdiction of the Courts in Belagavi. Therefore, a contract between the plaintiff No.2 and defendant vesting jurisdiction in the Courts at Mumbai, was inconsequential and unenforceable. Hence, the contention regarding lack of jurisdiction of the Court, is liable to be rejected.

26. The contention of the defendant that the Surveyor did not survey the machinery and assess the damages in its presence is inconsequential, since the Surveyor himself was examined before the trial Court and the defendant failed to elicit any information that ran contra to the report of the Surveyor.

27. In that view of the matter, the points for consideration framed by this Court are all held against the defendant and in favour of the plaintiffs.

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RFA No. 575 of 2008

28. In view of the above, the trial Court has rightly answered the questions of law and fact urged by the defendant and has rightly rejected the same. Hence, this appeal lacks merit and is dismissed.

SD/-

JUDGE CLK-paragraph 1;

JM - from paragraph 2 till end.