Madras High Court
M/S. Jaihind Roadways Pvt. Ltd vs M/S.Hindustan Motors Limited on 16 June, 2010
Author: P.R.Shivakumar
Bench: P.R.Shivakumar
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 16.06.2010
CORAM
THE HONOURABLE MR. JUSTICE P.R.SHIVAKUMAR
Appeal Suit No.113 of 2003
M/s. Jaihind Roadways Pvt. Ltd.,
No.30-G, Mohammed Ali Road
Mumbai 400 003 having branch
at No.9, Vannier Street, Chennai 1
by its Divisional Manager ...Appellant
Vs.
1.M/s.Hindustan Motors Limited
No.9/1, R.N. Mukher Jee Road
Calcutta 700 001
branch at their Earth Moving
Equipment Division, Tiruvallur 602 004
2.The Oriental Insurance Company Ltd.,
Oriental Home, Asaf Ali Road
New Delhi 110 002 and their
Divisional Office at J.L.C Building
No.1, Katpadi Road, Vellore 632 004
rep. by their Divisional Manager ... Respondents
Prayer: Appeal filed under Section 96 of Civil Procedure Code against the judgment and decree passed in O.S.No.3409 of 1999 dated 30.04.2002 by the leaned Additional District Judge, (Fast Tract Court-V), Chennai.
For Appellants : Mr.S.A.Rajan
For Respondent : Mr.Nageswaran Narichania
JUDGMENT
M/s. Jaihind Roadways Pvt. Ltd., which figured as the defendant in O.S.No.3409 of 1999 on the file of the Additional District Judge, Fast Tract Court-V, Chennai has come forward with the present appeal against the decree of the said Court dated 30.04.2002 made in the above said original suit. The plaintiffs 1 and 2 in the original suit are the respondents 1 and 2 in the appeal.
2.The averments found in the plaint filed by the respondents herein/plaintiffs in brief are as follows:-
Respondents 1 and 2/plaintiffs 1 and 2 are public limited companies. The defendant / respondent is a private limited company and a common carrier for reward. The first appellant/first plaintiff purchased carbon steel castings of different specifications and low alloy steel castings from M/s. Steel Cast Limited, Bhavnagar under five invoices dated 28.05.1996. The particulars of the same are as follows:-
SL.No Invoice No. & Date Amount
1. 221/28.05.96 Rs.4,08,085.60
2. 222/28.05.96 Rs. 76,845.60
3. 223/28.05.96 Rs.2,21,963.04
4. 224/28.05.96 Rs.1,20,258.32
5. 225/28.05.96 Rs. 26,077.00
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Rs.8,53,229.56
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The said goods were entrusted to the appellant/defendant common carrier at Bhavnagar by the said seller (consigner) viz., Steel Cast Limited for safe carriage and delivery to the first respondent/first plaintiff under Consignment Note No.BVN 15445 dated 28.05.1996. By the Consignment Note issued, the appellant common carrier undertook to carefully transport and deliver the said consignment in good order and condition at Chennai to the first respondent/first plaintiff. The value of the consignment was declared and noted in the consignment note issued by the appellant/defendant common carrier. The total weight of the consignment entrusted to the appellant/defendant common carrier for transport was 9852 kgs. As the goods entrusted to the common carrier were not delivered to the first respondent's/first plaintiff's office at Chennai, a notice of loss was also sent to the carrier on 20.06.1996 and periodical demand for delivery of the consignment was also made. A complaint was also lodged with the Inspector General of Police, Mumbai on 29.06.1996. Then it was represented by the appellant/defendant common carrier that the entire consignment was lost on account of an alleged disturbance enroute. As the said goods sent through the appellant/defendant common carrier was insured with the 2nd respondent/2nd plaintiff, an independent enquiry was made by the 2nd respondent's/2nd plaintiff's Chennai office, whereupon the appellant/defendant common carrier on 07.10.1996 certified that they were unable to deliver the consignment on account of an alleged looting at Bhuing Carwar District, Sathara, Maharashtra. The value of the consignment was Rs.8,53,229.50. The non-delivery certificate was also addressed to the consignor viz., M/s. Steel Caste Limited, Bhavnagar and to the first respondent/first plaintiff at Chennai. Through the communications between the appellant/defendant and the first plaintiff, the first plaintiff was accusing the appellant/defendant common carrier of misfeasance and malfeasance and held the appellant/defendant liable in law to make good the loss caused to the first respondent/first plaintiff, the owner of the consignment. As per the terms and conditions of the policy of insurance, a sum of Rs.8,53,229/- was paid by the insurer, the 2nd respondent/2nd plaintiff on account of the non-delivery of the suit consignment and on such payment the first respondent/first plaintiff executed a letter of subrogation and special power of attorney in favour of the 2nd respondent/2nd plaintiff on 24.12.1996. As such, the 2nd respondent/2nd defendant is entitled to recover the said amount from the appellant/defendant. However, with a view to avoid any technical defence being raised, the suit has been filed by both the respondents/both the plaintiffs and the respondents/plaintiffs do not have any objection for a decree being passed in favour of the 2nd respondent/2nd defendant alone or in favour of both the respondents / both the plaintiffs. The 2nd respondent/ 2nd defendant through its Recovery Agent M/s.V.N.C.Narichania (P) Ltd., made a demand for compensation on 29.04.1997. By a reply dated 26.05.1997, the appellant/defendant common carrier admitted non-delivery of the consignment, but disowned its liability to pay compensation. Once again a fresh claim was made and a similar reply was sent by the appellant/defendant common carrier on 09.09.1997. Under such circumstances, the respondents/plaintiffs were forced to file the suit for the recovery of a sum of Rs.8,53,229/- being the value of the consignment entrusted to the appellant/defendant common carrier for the non-delivery of the same. Hence, a decree should be granted directing the defendants to pay 2nd respondent/ 2nd plaintiff a sum of Rs.8,53,229/- together with an interest at the rate of 18% p.a from the date of plaint till realization and with cost.
3.The suit was resisted by the appellants/defendants by filing a written statement containing allegations which are, in brief, as follows:-
The appellant/defendant owned its own trucks for movement of different kinds of commercial goods entrusted to it. The appellant/defendant is not aware as to whether the first respondent/first plaintiff was the owner of the steel castings of different specifications set out in para 3 of the plaint. The appellant/defendant also does not know the value of the goods. However, it is a fact that a consignment of the description found in Para 3 of the plaint was entrusted to the appellant/defendant at Bhavnagar by the consignor viz., M/s.Steel Cast Limited and a Goods Consignment Note bearing No.BVN 15445 dated 28.05.1996 was issued by the agent of the appellant/defendant at Bhavnagar. According to the instruction, the goods were to be delivered at Tiruvallur, near Chennai. Tiruvallur is not within the jurisdiction of the trial Court and hence the Court situated at Tiruvallur District alone shall have the jurisdiction. For reasons beyond the control of the appellant/defendant, it became impossible to deliver the goods entrusted to the appellant/defendant. After the despatch of the goods by a lorry truck bearing Registration No.GJ-1 X-6875 from Bhavnagar Gujarat to Bangalore enroute to Tiruvallur, it came to be noticed that the goods did not reach Bangalore in time. Thereupon the Officer of the appellant/defendant company took up a preliminary investigation from which it came to know that the Cargo was despatched on 28.05.1996 at Bhavnagar; that after filling the fuel tank there at Thane near Mumbai on 30.05.1996; It had left Thane in the evening of 30.05.1996 itself and the said truck reached Catrej Ghat near Pune next day; that when the truck was passing through the Highway, the drivers of a number of trucks found two other persons seated in the said truck who were not connected with the truck and that the truck did not reach Bangalore on 02.06.1996 as per schedule. A telephonic message sent by one Jeevarji Bhai was received at the Bangalore office of the appellant/defendant on 08.06.1996 to the effect that their truck was stranded near Vela with single tyre on the rear side and the entire vehicle was found empty without any material loaded on it. On receipt of the said information, officers of the appellant/defendant company went to that place on 09.06.1996 and other places in search of the vehicle and they were not in a position to find it. On an enquiry with their office at Thane, they came to know that the lorry truck was towed by crane and was taken to Bhuyinj Police Station. When the officers of the appellant/defendant went to the said police station, they came to know that the driver and cleaner were missing and the consignment materials were also stolen. The police officer was informed by the officer of the appellant/defendant and also gave a complaint in writing informing the said fact furnishing the value of the goods to be Rs.8,50,000/-, based on which FIR No.58/1996 was registered on 12.02.1996. On thorough investigation made by the police, one Makdoom and Kasam were arrested. They accepted the sale and purchase of the steel cast materials that were transported in the above said lorry. A very small portion of the consignment alone could be found, that too altered and melted into different shapes. Only 12 pieces of broken original castings were available. Apart from the above said Makdoom and Kasam, Bapoo Bansode, the cleaner of the lorry and one Gosavi were arrested and released. The fate of the driver by name M.T.Joyus was not known and he could not be traced. The officers of the appellant/defendant rendered all assistance by providing a lawyer to co-ordinate the investigation of the police. Despite their best efforts they were not able to trace and recover the missing goods. There was an act of King's enemy which resulted in the loss of consigned cargo. On investigation it revealed Makdoom, Gulab and Agarwal were the persons involved in the theft of the consignment. The investigation also revealed that one Rohidas Gosavi, a notorious thief, was involved in looting goods on highways and selling them to Makdoom and others. Photograph of one Bapu Bansoda was also published in the area. The investigation revealed that the said Babu Bansoda picked up friendship with the driver of the lorry in which the suit consignment was sent. The appellant/defendant had taken all steps and made honest attempts to recover the goods. As the goods were lost after the truck was hijacked, no liability attached to the appellant/defendant in respect of the loss. The loss/damage was not the one caused by the neglect or fraud of the carrier or anyone of the persons employed by them on whom they had control. While ordinarily a common carrier shall be ipso facto liable for the loss of goods or non-delivery, if the loss of goods occurs due to an act of god or act of King's enemies, the common carrier shall be exempted from such liability. An act of dacoity, theft, robbery or murder of the employees of the carrier is suspected or proved the act shall be deemed to be an act done by King's enemy beyond the control of the appellant/defendant. In any event, the appellant/defendant invariably advised the consignor to get the goods insured and accept the goods for transportation at owner's risk, mentioning such a condition in the goods consignment notice issued by the defendant. The 1st respondent/ 1st plaintiff had insured the Cargo and had admittedly recovered the value of the Cargo from the insurer viz., the 2nd respondent/2nd plaintiff. There is no privity of contract between the 2nd respondent/2nd plaintiff and the appellant/defendant and provisions of Marine Insurance Act will not apply to the facts of the case. The 2nd respondent/2nd plaintiff was liable to compensate the 1st respondent/ 1st plaintiff under a contract. The 2nd respondent/2nd plaintiff cannot initiate an action for recovery of damages against the carrier. Only if the carrier is liable to compensate the 1st plaintiff, the 2nd plaintiff shall have the right to claim the compensation based on subrogation. Appellant/defendant does not know whether M/s. VNC Narichanta Pvt. Ltd., was the recovery agent of the 2nd respondent/2nd plaintiff. Even if there is any such contract between them, the same shall be void as opposed to public policy. Therefore, the suit should be dismissed with cost holding that the appellant/defendant is not liable to pay any amount as compensation to either of the respondents/plaintiffs.
4.Based on the above said pleadings the following issues were framed in the trial Court:-
1)Are the plaintiffs entitled to a decree for a sum of Rs.8,53,229/- against the defendant?
2)Are the plaintiffs entitled to interest at 18% p.a?
3)Whether there is territorial jurisdiction for trying the case?
4)Whether the defendant is not liable to pay the suit claim?
5)To what relief the plaintiffs are entitled?
5.PW1 was examined as the sole witness and Exs.A1 to A20 were marked on the side of the respondents herein/plaintiffs. Dws.1 and 2 were examined and Exs.P1 and P2 were marked on the side of the appellant herein/defendant.
6.The learned trial Judge after hearing the arguments advanced on both sides considered the pleading and evidence adduced on both side and upon such consideration came to the conclusion that the appellant herein/defendant being a common carrier was liable to pay the suit claim and decreed the suit directing the defendant/appellant to pay a sum of Rs.8,53,229/- together with a subsequent interest from the date of plaint till realization at the rate of 6% p.a and with cost.
7.Aggrieved by and challenging the said decree passed by the trial Court, the appellant/defendant has come forward with the present appeal on various grounds set out in the memorandum of appeal.
8.The main contention raised by the defendant/appellant in the appeal is that the goods were lost during transit due to an act done by King's enemy and therefore, the carrier should be exonerated from the liability to pay compensation to the owner for the loss of cargo; that there was no negligence or foul play on the part of the appellant/defendant or its agent and in such circumstances, the appellant/defendant should be exonerated from the liability to pay compensation for the loss of the Cargo; that since the owner of the goods viz., the 1st respondent/ 1st plaintiff received the value of the goods from the 2nd respondent/ 2nd plaintiff, as per the contract of insurance, the 1st respondent/ 1st plaintiff shall not have any right to recover damages from the appellant/defendant; that when the 1st respondent/ 1st plaintiff is not entitled to recover damages from the appellant/defendant, the insurer viz., the 2nd respondent/ 2nd defendant cannot have a similar right against the appellant/defendant and that since the goods were transported under owner's risk, the 1st respondent/ 1st plaintiff would not be entitled to claim any compensation from the appellant/defendant for the loss of the goods. It is also the contention of the appellant that the provisions of the Marine Insurance Act do not have any application in this case covering the risk of surface carriage.
9.Therefore, the points that arise for consideration in this appeal are as follows;
1)Whether the appellant/defendant is not liable to pay compensation for the loss of the consignment as the goods were transported at owner's risk?
2)Whether the respondents/plaintiffs are entitled to a decree for a sum of Rs.8,53,229/- against the appellant/defendant?
3)Whether the plaintiffs are entitled to interest? if so, at what rate?
4)To what relief the parties are entitled?
10.Admitted facts are as follows:
M/s. Hindustan Motors Limited, the first respondent/first plaintiff purchased Carbon Steel Castings of different specifications for a total value of Rs.8,53,229.56 under 5 invoices all dated 28.05.1996 from M/s. Steel Cast Limited, Bhavnagar, Gujarat. Those five invoices are marked as Exs.A3 to A7. The goods thus purchased by the first plaintiff from M/s. Steel Cast Limited, Bhavnagar (consignor) were entrusted to the appellant/defendant, a common carrier for transportation and delivery at Tiruvallur in Tamil Nadu. The goods consignment was acknowledged by the Consignment Note No.BVN 15445 dated 28.05.1996 issued by the appellant/defendant to the consignor M/s. Steel Cast Limited, Bhavnagar marked as Ex.A8. The goods were not delivered in time to the first respondent/first plaintiff within the expected time. On enquiry, it revealed that the goods were transported by a lorry truck bear Registration No. GJ-1-X-6875 and the same were lost in transit in between Bhavnagar and Bangalore. A complaint was lodged with the police and a criminal case was registered, is evident from the evidence of DW2 and Exs.B1 and B2. However, the goods could not be recovered for being delivered to the 1st respondent/ 1st plaintiff. Consequently, the appellant/defendant issued a non-delivery certificate to the 2nd respondent/2nd plaintiff so as to enable it to settle the claim of the 1st respondent /1st plaintiff under the contract of insurance as the goods had been insured with the 2nd respondent/ 2nd plaintiff. The non-delivery certificate to which a photocopy of the police compliant has been annexed has been produced and marked as Ex.A9. Pursuant to the issuance of such non-delivery certificate, the 2nd respondent/ 2nd defendant settled the claim of the 1st respondent/ 1st plaintiff and got a letter of subrogation-cum-special power of attorney dated 24.12.1996 from the 1st respondent/1st plaintiff under Ex.A12. Based on the letter of subrogation-cum-special power of attorney, the claim is made against the appellant/defendant. However, in order to avoid any technical objection, the suit has been jointly filed by the respondents/plaintiffs stating that they have no objection for granting a decree either in favour of the 2nd respondent/2nd plaintiff alone or in favour of the respondents /plaintiffs.
11.Based on the above said admitted facts, the claim of the respondents/plaintiffs shall be considered in the light of the evidence adduced on both sides. It is the contention of the respondents /plaintiffs that the appellant/defendant being a common carrier shall be liable to pay the value of the goods lost in transit as compensation, unless the appellant/defendant is able to prove certain special circumstances exonerating it from such liability. The Head Office of the appellant/defendant is at Mumbai. It is having a branch office at No.9, Vanniar Street, Chennai 600 001. The consignment was made at the branch office of the defendant at Bhavnagar, Gujarat under the consignment note marked as Ex.A8. According to Ex.A8, the goods were to be delivered to the consignee viz., the 1st respondent/1st plaintiff at its branch office at Tiruvallur and as per the contract door delivery of the goods was to be effected.
12.It is not the case of the appellant/defendant that it has got a branch office at Tiruvallur. However, the plaint allegation that the appellant/defendant has got a Branch office at No.9, Vanniar Street, Chennai 600 001 is not disputed. The appellant/defendant has just made a plea in the written statement that the City Civil Court, Chennai does not have the jurisdiction to entertain the suit and that the Courts in Tiruvallur alone shall have the jurisdiction. However, the appellant/defendant seems to have submitted to the trial Court by filing a written statement incorporating averments touching the merits of the case and omitting to lead any evidence regarding jurisdiction. Though, such a plea was raised in the written statement, it was not pressed during trial and the appellant/defendant proceeded with the case resisting the claim on the merits of the case leaving aside the question of jurisdiction. A suit for recovery of damages can be instituted against a person in a Court within whose jurisdiction such person resides or carries on business as per Section 19 C.P.C. That is the reason why the appellant/defendant did not pursue the plea of absence of jurisdiction of trial Court to try the case and resisted the suit on merit. In this appeal also the question of jurisdiction has not been made a ground of attack on the decree passed by the trial Court. Therefore, the question of jurisdiction does not arise as a point for determination in this appeal.
Point No.1:
13.The entrustment of the goods to the appellant/defendant common carrier on 28.05.1996 at Bhavnagar under the goods Consignment Note marked as Ex.A8 is not in dispute. It is also not in dispute that the goods were lost on its way from Bhavnagar to Bangalore enroute Tiruvallur. The specification of the goods entrusted to the appellant/defendant for transportation have been noted in Ex.A8 Goods Consignment Note. The fact that the goods were insured by the consignee through their underwriters have also been noted at the bottom of the Goods Consignment Note. The appellant/defendant would admit the description of the goods and the weight of the goods entrusted for transportation; nevertheless it was stated by the appellant/defendant in the written statement that it was not aware of the value of the goods entrusted to it for transportation. However, it is obvious from Ex.A8 that all the five invoices produced as Exs.A3 to A7 and also the total value of the consignment were noted in the Goods Consignment Note, marked as Ex.A8. The total value has been noted as Rs.8,53,229.54. The total weight of the consignment is also noted as 9852 kgs. Therefore, it is quite obvious that the appellant/defendant has come forward with an untenable stand that though the goods of the description and weight found in the plaint averments were entrusted to the appellant / defendant for transporting, it was not aware of the value of the goods. Such a contention is falsified by the very particulars found in Ex.A8, Consignment Note. It is also an admitted fact that the goods entrusted to the appellant/defendant at its Bhavnagar Branch were not delivered to the branch Office of the first respondent/first appellant in Tiruvallur. The appellant/defendant has also issued a non-delivery certificate admitting the loss of goods on transit and impossibility of the common carrier to deliver the goods to the consignee at the intended point of delivery. The non-delivery certificate dated 03.12.1996 has been marked as Ex.A11. Before that, the first respondent/first defendant has made a claim on 25.11.1996 itself, as evidenced by Ex.A10. Pursuant to the issuance of the Non-delivery certificate, the second respondent /second plaintiff with whom the goods were insured by the first respondent/first plaintiff, paid the value of the goods and got a letter of subrogation and special power of attorney to make a claim against the common carrier viz., the appellant/defendant. The insurance policy is Ex.A2. The letter of subrogation and special power of attorney is Ex.A12. As per Ex.A12 the amount paid by the 2nd respondent /2nd plaintiff to the 1st respondent/1st plaintiff is Rs.8,53,229/-.
14.Thereafter, the 2nd respondent/2nd plaintiff seems to have entrusted the matter to its Recovery Agent M/s.V.N.C.Narichania (P) Ltd., having its office at 157, Linghi Chetty Street, Chennai 600 001. The appellant/defendant might have stated in the written statement that it does not know whether M/s.V.N.C.Narichania (P) Ltd., was the recovery agent of the 2nd respondent/2nd plaintiff, the communications between the appellant / defendant and the said M/s.V.N.C.Narichania (P) Ltd., are marked as Exs.A13 to A18. They include a notice sent by the Advocate of the appellant/defendant to M/s.V.N.C.Narichania (P) Ltd., and a copy of the reply notice sent by M/s.V.N.C.Narichania (P) Ltd.,. In all those communications, the appellant/defendant admitted that the said M/s.V.N.C.Narichania (P) Ltd., was the recovery agent of the 2nd respondent/2nd plaintiff and the claim was made only on behalf of 2nd respondent/2nd plaintiff. Therefore, the contention of the appellant/defendant that it did not know whether M/s.V.N.C.Narichania (P) Ltd., was the recovery agent of the 2nd respondent/2nd plaintiff is against the truth.
15.However, it is obvious from the above said documents that right from the beginning the appellant/defendant was holding out that the goods were transported at owner's risk under a special contract and that the appellant/defendant would not be liable for the loss occasioned to the goods unless negligence or criminal act is attributed to the appellant/defendant or its agents or employees. The same is also reflected in the Non-delivery certificate marked as Ex.A11, wherein it was specifically mentioned that the appellant/defendant was not responsible for the loss in transit, as the goods were transported at "owner's risk" and there was no negligence or default on the part of the appellant/defendant. It was also stated therein that the non-delivery certificate was being issued without prejudice to the defence of the appellant/defendant since such certificate was issued specifically at the request of the first respondent/first plaintiff to enable it to lodge and recover a claim from the insurer. Nowhere in the pleading or in the evidence adduced on the side of the respondents/plaintiffs, the contention of the appellant/defendant that the goods were transported under a special contract at "owner's risk" has been disputed. In Ex.A8, the words "owner's risk" have been printed prominently and with bold letters. Therefore, the contention of the appellant/defendant that the goods were accepted for transporting from Bhavnagar to Tiruvallur only on a special contract that they would be transported under owner's risk has to be sustained. A consignment to a common carrier on land within the country or inland navigation shall be governed by the provisions of the Carriers Act, 1865. The definition of common carrier as found in Section 2 of the Act refers to a person other than the Government engaged in the business of transporting property under multinodal transport document or of transporting for hire property from place to place, by land or in land navigation, for all persons indiscriminately. It is not in dispute that the appellant is a common carrier engaged in the business of transporting property from place to place for hire by land. In this case, the property was entrusted to the appellant/defendant for being transported on road from Bhavnagar in Gujarat to Tiruvallur in Tamil Nadu. Therefore, there cannot be any doubt that the provisions of the Carriers Act 1865 shall apply to the suit transaction.
16.The goods transported are not the scheduled goods in respect of which the Section 3 of the said Act will apply. Section 6 of the Carriers Act provides for a right to the carriers to limit their liability by special contracts for which also certain expectations are provided. For better appreciation Section 6 is reproduced:
"6.In respect of what property liability of carrier not limited or affected by public notice. Carriers, with certain exception, may limit liability by special contract.
The liability of any common carrier for the loss of or damage to any 1 [property (including container pallet or similar article of transport used to consolidate goods) delivered] to him to be carrier, 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 authorised in that behalf by such owner, limit his liability in respect of the same."
However, a non obstinant clause is provided in Section 8 of the Act which says that in respect of loss of or damage to goods entrusted to the common carrier other than the scheduled goods and in respect of which the declaration required by that Section has not been made, then the carrier shall be liable for such loss or damage where such loss has arisen from the negligence of the carrier or any of his agents or servants or from the Criminal Act of the carrier or any of his agents or servants. As per Section 8, notwithstanding a special contract limiting the liability of the carrier, if the loss or damage to the goods has arisen from the criminal act of the carrier or any of his agents or servants, then the carrier shall be liable to the owner of the goods for the loss of or damage to such property including containers. For the sake of convenience Section 8 is reproduced here under:
"8.Common carrier liable for loss or damage caused by neglect or fraud of himself or his agent.
Notwithstanding anything hereinafter contained, every common carrier shall be liable to the owner for loss of or damage to any 1[property including container pallet or similar article of transport used to consolidate goods delivered] to such carrier to be carried where such loss of or damage shall have arisen from the criminal act of the carrier or any of his agents or servants and shall also be liable to the owner for loss or damage to any of such property other than property to which the provisions of Section 3 apply and in respect of which the declaration required by that section has not been made, where such loss or damage has arisen from the negligence of the carrier or any of his agents or servants."
The next question that arises for consideration shall be, if at all there was a special contract to the effect that the goods were transported under owner's risk and thereby limiting the liability of the carrier, then whether the owner of the goods is duty bound to prove such loss or damage or non-delivery was owing to the negligence or criminal act of the carrier, his servants or agents. The answer is found in Section 9 which reads as follows;
"9.Plaintiffs, in suit 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 1 [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."
A conjoint reading of Section 6,8 and 9 will make it clear that, though there is a special contract limiting the liability of the carrier to the effect that the goods are being transported at owner's risk, in a suit brought by the owner of the goods against a common carrier for loss, damage or non-delivery of goods entrusted to the carrier for carriage, the burden of proof of negligence or criminal act of the carrier, his servants or agents is not cast on the plaintiff. The burden of proof of absence of those aspects shall lie on the common carrier which figures as the defendant.
17.In this case, it is an admitted fact that the goods were lost during transit between Bhavnagar and Bangalore and that was the reason for non-delivery of the goods of the consignee. Hence, the appellant/defendant shall have to prove not only that its liability was limited under a special contract under Section 6 of the Carriers Act, but also that there was no negligence or criminal act on the part of the appellant/defendant, its agents or servants leading to the loss of the goods entrusted to it for carriage. In this regard, the appellant/plaintiff has taken a stand that the goods were looted on the Highway by thieves and hence no negligence or criminal act can be attributed to the appellant/defendant, its agents or its servants. It is not in dispute that the lorry in which the goods were sent was stranded near vela and some of the tyres of the lorry and the goods loaded in that lorry were found missing. It is an admitted fact that a case was registered in Bhuyinj Police Station in FIR No.58/1996. It is also an admitted fact that though some small quantity of goods were recovered by the Police, which now lie in the custody of the police, they do not answer to the description of the goods transported as the steel castings had been melted and moulded in different shapes. Under such circumstances alone, none of the parties have taken the plea that the goods now lying with the police is that of the first plaintiff, consignee so that its value can be set off against the loss. However, it is the contention of the appellant/defendant that on investigation it was found out that notorious highway robbers had a hand in the theft of the goods concerned in this case; that the appellant/defendant extended its full assistance and cooperation for investigation of the case and that hence it cannot be assumed that there was negligence either on the part of the appellant/defendant, its agents or its servants leading to the loss. Hence the sustainability of the contention of the appellant/defendant that no criminal act on the part of the appellant/defendant, its agents or its servants has been proved and that hence the appellant / defendant shall be exonerated from the liability to make good the loss has to be considered.
18.In this regard, the learned counsel for the appellant has chosen to rely on a judgment of Assam High Court in Rukmanand Ajitsaria Vs. Airways (India) Ltd., and another reported in AIR 1960 Assam 71. Suffice to state that the said judgment is not applicable to the case on hand, as in the said case it was held that neither the Indian Carriage by Air Act, 1934 nor the Carriers Act, 1865 was applicable to that case and English common law regarding carriers' liability was applicable. Here in this case, we have already pointed out that the provisions of Carriers Act 1865 shall apply to the consignment concerned in this case. State of Rajasthan Vs.Mehta Transport Company and others reported in AIR 2002 Rajasthan 157 is another case relied on by the learned counsel for the appellant. In that case it has been observed in para 13 as follows:
A common carrier is responsible for safety of goods except when loss is caused by an act of God. If the carrier wants exoneration from the liability he has to prove that he had taken such care which under the circumstances of the case, was reasonably and practically possible to ensure the safety of the goods. But on evidence, the Court held that the accident took place due to unexpected bursting of tyre and that the carrier was able to show that there was no negligence on the part of the driver of the truck.
19.In the present case, it is true that there is no evidence has been adduced on the side of the respondents/plaintiffs to prove negligence or criminal act on the part of the appellant/defendant, its agents or servants as the cause of the loss. However, as pointed out supra, the burden of proving negligence or criminal act on the part of the appellant/defendant, its servants or agents is not cast on the plaintiffs. The burden proving the negative is cast on the carrier viz., the appellant/defendant. The evidence adduced on the side of the appellant/defendant shall not be enough to prove the absence of negligence or criminal act on the part of appellant/defendant, its agents or servants. It is pertinent to note that the appellant/defendant having accepted the consignment for transporting it from Bhavnagar to Tiruvallur had chosen to entrust the job of transporting it to Norton Gujarat Transport Company. It transpires from Ex.B1 that the truck bearing Registration No. GJ 1 X 6875 in which the goods were sent belonged to M/s.Norton Gujarat Transport Company, Bhavnagar through which the goods were transported and the same was hired on commission basis by the appellant/defendant. From the evidence of Dws 1 and 2 and from the particulars found in Exs.B1 and B2. It is obvious that the police investigation revealed the complicity of the driver and cleaner of the truck in which the goods were sent, in the looting of goods in transit. Especially having hired the vehicle on commission basis the appellant/defendant should have come forward with a clear plea as to whether the driver and cleaner of the vehicle were under its direct control or under the control of Norton Gujarat Transport Company. DW1 has admitted in his evidence that the driver and cleaner were the employees of Norton Gujarat Transport Company. It is also admitted by DW1 that though respondent/defendant has several lorries and trucks of its own, the job of carrying the consignment concerned in this case was entrusted to the lorry owned by Norton Gujarat Transport Company. There is no evidence to show that making entrustment it ensured the safety of the goods by ascertaining the credentials of the driver and cleaner or by deputing an employee of its own to accompany the goods in the truck. It is also admitted by DW1 that the goods were entrusted to the truck owned by Norton Gujarat Transport Company, taking the risk on itself. It is also a clear admission made by DW1 that the driver and cleaner of Norton Gujarat Transport Company had misappropriated the consignment. It is also admitted by DW1 that such a misappropriation by the driver and cleaner was a criminal misconduct. It shall be quite clear that the driver and cleaner shall be construed to be the servants of the appellant/defendant. If it is not so, they could be construed to be the servants of its agents Norton Gujarat Transport Company. In either case the liability of the appellant/defendant carrier shall stand established, leave alone the fact that the appellant/defendant has not proved absence of negligence or criminal act on its part or on the part of its agents or servants.
20.In this regard, the judgment of the Hon'ble Supreme Court in Nath Bros. Exim International Ltd., vs. Best Roadways Limited reported in 2001-1-L.W.756 shall be the precedent to be noticed. After referring to several earlier judgments in this regard, the Hon'ble Supreme Court has held that when the loss is occasioned due to negligence or criminal act of the carriers or its servants, the special contract limiting the liability of the carrier will not absolve the carrier's liability to make good the loss. It has also been clearly held that the burden is not on the owner of goods to show that the loss or damage was caused owing to negligence or criminal act of the carrier, his servants or his agents and that the carrier can escape liability only if it is due to act of god or enemies of State. It has also been held that the fact that the goods were booked at "owner's risk" will not exempt the carrier from his liability for the loss or damage due to the negligence or criminal act of his agent or servant. The Hon'ble Supreme Court made the following observations:
"26.We have already reproduced the provisions of Sections 6,8 and 9 above. Section 6 enables the common carrier to limit his liability by a special contract. But the special contract will not absolve the carrier if the damage or loss to the goods, entrusted to him, has been caused by his own negligence or criminal act or that of his agents or servants. In that situation, the carrier would be liable for the damage to or loss or non-delivery of goods. In this situation, if a suit is filed for recovery of damages, the burden of proof will not be on the owner or the plaintiff to show that the loss or damage was caused owing to the negligence or criminal act of the carrier as provided by Section 9. The carrier can escape his liability only if it is established that the loss or damage was due to an act of God or enemies of the State (or the enemies of the King, a phrase used the Privy Council)....."
The Hon'ble Supreme Court has also made the following observations:-
"28.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."
21.The said observations squarely apply to the facts of the case on hand. In this case, though the appellant/defendant made an attempt to show that there was no negligence or criminal act on the part of the appellant/defendant, its agent or its servant leading to the loss of the consignment, it not only failed to prove it, but on the other hand the fact that there was a criminal act on the part of the servants or agents of the appellant/defendant was proved by the admission of DW1 and the even in the form of deposition of DW2 and Exs.B1 and B2. The learned counsel for the appellant relied on a recent judgment of a learned single Judge of this Court in Brakes India Ltd., and another Vs. BIC Logistics Ltd., reported in 2010 (3) CTC 258 and made an attempt to contend that the appellant shall be absolved of its liability to make good the loss because a highway theft of the consignment was committed and moreover case registered on the same is still under investigation. The said decision relied on by the learned counsel for the appellant shall not be applicable to the facts of the case. In the said case it was proved that the employees of the carrier viz., the driver and cleaner of the lorry were murdered and the goods were taken away by gangsters. The murder of the driver and cleaner would clinchingly establish the act of the State's enemies in looting the goods. That is the reason why in the said case this Court had chosen to decide the questions of the liability of the carrier to make good the loss in the negative. In the case on hand, it is not the clear case of the appellant/defendant that the driver /cleaner of the vehicle were murdered. Moreover, there is no clear cut plea that there was no complicity on the part of either the driver or cleaner of the lorry in looting the consignment. There is clear admission as indicated supra that the driver and cleaner have been implicated in the criminal case registered by the police regarding the looting of the consignment. It has been pointed out supra, that the burden is on the carrier to prove absence of negligence or criminal act on its part or on the part of its servant or agent. In this case, apart from there being no evidence to prove the absence of such negligence or criminal act, there is a clear admission regarding the involvement of the driver and cleaner in the commission of the offence. Cleaner was arrested and the driver is yet to be arrested. Under such circumstances, this Court is of the view that the judgment relied on by the learned counsel for the petitioner is not applicable to the case on hand. Therefore, though there is a special contract to the effect that the goods were transported at owner's risk, since the loss has occurred due the criminal act of the servant / agent of the appellant/defendant, the appellant/defendant is liable to pay compensation to the first respondent/first plaintiff, the owner of the goods.
22.Admittedly, as per the contract of insurance between the first plaintiff /2nd plaintiff, the 2nd plaintiff paid the value of the goods to the first plaintiff as evidenced by Ex.A12, subrogation letter. In terms of Section 10 of the Carriers Act, the claim was made by the first plaintiff within six months. Thereafter, for several communications made by the first plaintiff through its Recovery Agent and by the 2nd plaintiff, after the settlement of the claim of the first plaintiff, the appellant/defendant was disputing its liability. Hence, the respondents/plaintiffs were constrained to file the suit. By the letter of subrogation the 2nd respondent/2nd plaintiff has got into the shoes of the 1st respondent/1st plaintiff and thus became entitled to recover the compensation for the loss of the goods from the appellant/defendant. However in order to avoid any technical plea, they have chosen to file the suit jointly expressing no objection for a decree being passed in favour of the 2nd plaintiff lone or in favour of both the plaintiffs. The defence plea taken by the appellant/defendant is proved to be untenable. Therefore, the finding of the trial Court that the appellant/defendant is bound to pay the value of the goods fixed at Rs.8,53,229.56 does not suffer from any defect or infirmity and the same deserves to be confirmed.
Point No:3
23.Of course, the plaintiffs shall have a right to claim interest for the claim amount from the date of claim itself. However, they have chosen to restrict their claim for interest only from the date of plaint. Though interest was claimed at 18%, the Court below has chosen to award interest at the rate of 6% from the date of plaint till realization. The appellant/defendant cannot have any valid grievance against the same. Therefore, this Court comes to the conclusion that there is no defect or infirmity in the decree passed by the trial Court and that the same deserves to be confirmed and that the appeal deserves to be dismissed.
24.In the result, the decree of the trial Court dated 30.04.2002 made in O.S.No.3409 of 1999 is confirmed and the appeal is dismissed with cost.
gpa To The Additional District Judge, (Fast Tract Court-V), Chennai