Delhi District Court
United India Insurance Co Ltd vs M/S Sfc Transport Pvt Ltd on 19 February, 2015
Page 1 of 27
IN THE COURT OF Ms. SUNENA SHARMA
Addl. Distt Judge - 04 (SE)
SAKET COURTS COMPLEX: NEW DELHI
CS No.268/2014
Unique Case ID No.02406C0103642014
Date of Institution : 02.05.2014
Arguments concluded : 19.02.2015
Date of decision : 19.02.2015
1. United India Insurance Co Ltd,
Divisional Office - 18, 5th Floor,
Bhagwan Sahai Palace, Naya Bans,
Sector - 15, NOIDA
through its Divisional Manager
2. M/s Haier Appliances (India) Pvt Ltd
B1/A14, Mohan CoOperative Industrial
Estate, Mathura Road, New Delhi - 110044
through plaintiff No.1 ............... Plaintiffs
V E R S U S
M/s SFC Transport Pvt Ltd
Shop No.7A, Rama Palace,
Near Ajronda Chowk,
Faridabad, Haryana - 121001 ............... Defendant
J U D G M E N T
1. This is a suit for money recovery filed by plaintiff No.1 as also on behalf of plaintiff No.2 to the tune of Rs.9,43,377/ with pendentelite and future interest @ 12% pa against the defendant.
2. The facts of the case as per plaint in brief are as follows: CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 2 of 27 Plaintiff No.1 is a Public Sector Undertaking engaged in the business of general insurance having registered/head office at 24, Whites Road, Chennai and divisional office amongst others at above mentioned address. The suit has been filed by Sh Pankaj Lamba being assistant manager of plaintiff No.1 who has been authorised by virtue of minutes of board of directors dated 28.02.1987. The plaintiff No.2 is stated to be dealing in electronic goods/items and its products are used to be transported via road. Plaintiff no.2 insured the goods in question with plaintiff no.1 and as such plaintiff No.2 has also been impleaded being non claimant. The defendant is averred to be engaged in the transportation of goods of customers including plaintiff No.2 from one place to another. On 21.06.2012 defendant was assigned a consignment of 137 packages of different types of LCDs and Chest Freezers by plaintiff No.2 for their transportation to their stockist M/s Haier Appliances Pvt Ltd 6609, HIL Punjab, 30 Feet Road, near ITC Godwn, Village Pabhat, Distt Mohali, Zirakpur vide two invoices Nos. 12 S TIN 6604001256 and 57 for a total value of Rs.14,56,394/ under GR/CN No.4701 dated 21.06.2012 by vehicle bearing No.HR 38 G-0951. It is also averred that said vehicle met with an accident on 22.06.2012 due to which truck and entire consignment caught fire and necessary documents were also burnt on the spot and new consignment note No.4709 dated 24.06.2012 was prepared and damaged consignment was sent through another truck no. HR 38 W2089. The FIR No.107/2012 under Section 279/304A/427 IPC was registered for said accident at police station Shahbad, Kurukshetra, Haryana.
Upon survey of the damaged units it was learnt that 27 units were totally razed due to accidental fire and remaining 110 unites also suffered damages and were sold only for a total sum of Rs.5,10,017/ as salvage as per the assessment of M/s Protocol Surveryors and Engineers Pvt Ltd and as per the report dated CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 3 of 27 27.11.2012, total loss was assessed to be Rs.9,43,377/. It is also averred that in compliance of the provisions of Carriage by Road Act, 2007 plaintiff No.2 served upon defendant a monetary claim through registered letter dated 23.08.2012. Similarly, plaintiff No.2 also lodged a monetary claim with plaintiff No.1. But, defendant instead of settling the claim of plaintiff No.2 issued a damage/shortage certificate dated 25.08.2012 wherein it admitted the damage and loss suffered by plaintiff No.2. It is also averred that plaintiff No.1 paid the claim amount of Rs. 9,43,377/ to plaintiff No.2 against Marin Open Policy No.221800/21/11/ 02/ 00000136. On receipt of said amount, plaintiff No.2 executed a letter of suborgation in favour of plaintiff No.1 under Section 79 of the Marine Insurance Act for said amount of Rs.9,43,377/, therefore, it is alleged that defendant is liable to make good the aforesaid losses caused during transit of goods due to negligence of defendant or its employee. It is alleged that the defendant failed to deliver the said consignment in safe and sound condition to consignee and also failed to settle the claim of plaintiff. The cause of action stated to have arisen against the defendant on 22.06.2012 when the truck carrying goods met with accident and also on 23.08.2012 when plaintiff No.1 indemnified the plaintiff No. 2 and lastly on 01.02.2013 when a legal notice was issued by plaintiff No.2 upon the defendant. It is also alleged that as the consignment in question was booked from New Delhi to Punjab, as such the territorial jurisdiction is stated to have been vested in this Court. Hence, the present suit for recovery of Rs.9,43,377/ with pendentelite and future interest @ 12% pa in favour of plaintiff No.1 and against defendant.
3. On receipt of suit, summons were sent to defendant and defendant contested the suit by filing the WS wherein preliminary objection was taken for CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 4 of 27 rejecting the plaint in view of bar of provisions of Indian Arbitration &Conciliation Act, 1996 and also on account of lack of privity between defendant and plaintiff No.1 either dejure or defacto at the time of institution of suit. The defendant also denied the territorial jurisdiction of this Court, alleging that no part of cause of action has arisen within the territorial jurisdiction of this Court. It is further averred that plaintiff No.2 has not filed any claim or suit against defendant arising out of their contractual relations and the agreement between the plaintiff No.2 and defendant contains an arbitration clause. It is claimed that the vehicle bearing No.HR38G 0951 belonged to one Sh Balwinder Singh, B2B, Back Side, First Floor, Mansarover Park, New Delhi and the goods were lifted from village Ghewara, New Delhi and were to be transported to Zirakpur, Distt Mohali, Punbjab. The factum of accident of vehicle has not been denied and it is stated that due to accident the goods could not be further transported and hence the goods were transported by another vehicle vide a new consignment note. The appointment of surveyor and the proceedings of assessment were denied by defendant for want of any knowledge. The settlement of plaintiff No.2's claim by plaintiff No.1 is stated to be the result of contractual relations between two plaintiffs flowing from the Marine Policy issued by plaintiff No.1 to plaintiff No.2. It is further averred that defendant has no concern with the same. Defendant further averred that execution of any letter of subrogation between the plaintiffs has no effect of any nature upon the defendant. The defendant has categorically stated that as per the terms of consignment receipts printed thereon, goods were carried 'at the owner's risk' and transporter is not responsible for any damages in case of accident. It is further stated that plaintiff No.2 has no authority to assign any right or claim which it did not have against the defendant. It is averred further that shortage certificate was issued by defendant at the request of plaintiff CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 5 of 27 No.2 for the purpose of lodging the claim with plaintiff no.1 with whom the consignment was insured, without admitting any liability or negligence on their (defendant's) part. It is also averred that suit is liable to be dismissed for non joinder of necessary party as the drivers or owners of the vehicles involved in the accident have not been impleaded in this case.
4. In the replication, plaintiff reiterated its claim as set out in the plaint and denied the averments made in the WS. It is further averred that the agreement for transportation of goods in question were placed by plaintiff No.2 upon defendant from their office at Mathura Road, New Delhi. It has also been claimed that impleadment of the driver or owner of the offending truck is relevant only for MACT cases and not present proceedings.
5. On the basis of the pleadings of parties, following issues were framed vide order dated 12.08.2014:
1. Whether the suit of the plaintiff is barred in view of the provisions of the Arbitration & Conciliation Act, 1996? OPD
2. Whether this Court has no territorial jurisdiction to try and entertain the present suit ? OPD
3. Whether the suit of plaintiff is bad for misjoinder of parties? OPD
4. Whether the plaintiff is entitled to the recovery of the suit amount from the defendant? OPP
5. Whether the plaintiff is entitled to any pendentelite and future interest? If so, at what rate? OPP.
6. Relief.
6. During trial, PW1 Sh Pankaj Lamba, assistant manager of plaintiff CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 6 of 27 entered the witness box on 29.10.2014 and tendered his affidavit as Ex.PW1/A while relying upon the documents as Ex.PW1/1 to Ex.PW1/8 and Ex.PW1/10 to Ex.PW1/13 as well as Mark A and Mark B (though mentioned in affidavit as Ex.PW1/8). After due crossexamination of this witness, PE was closed on same date.
In defence evidence, DW1 Sh Shyam Sunder Mthreja appeared in the witness box on 27.01.2015 and tendered his affidavit as Ex.DW1/1 while relying upon two documents as Ex.DW1/A and Ex.DW1/B. No other witness has been examined on behalf of defendant and DE was closed.
7. I have heard submissions of learned counsels for the parties and gone through the entire record with their assistance.
8. Before embarking upon the facts of the case, let us recapitulate the evidence adduced in this case. PW1 Sh Pankaj Lamba is the assistant manager of plaintiff No.1 and in his affidavit he has relied upon the documents as Ex.PW1/1 and Ex.PW1/2 being the stock transfer invoices dated 21.06.2012; Ex.PW1/3 is the carbon copy of GR/consignment note dated 24.06.2012 vide which the goods were further transported to the destination after the accident by another truck; Ex.PW1/4 is the survey report dated 27.11.2012; Ex.PW1/5 is the monetary claim of damages raised by plaintiff No.2 upon defendant; Ex.PW1/6 is the damage/short certificate dated 25.08.2012 issued by defendant in favour of plaintiff No.2; Ex.PW1/7 is claim note dated 19.12.2012 issued by plaintiff No.1 to the tune of Rs.9,43,377/ in favour of plaintiff No.2 for damages; Ex.PW1/8 is the payment note of said amount vide NEFT dated 24.12.2012; Mark B is the NEFT report (mentioned as Ex.PW1/9 in affidavit of evidence) Ex.PW1/10 is the CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 7 of 27 certificate under Section 65B of the Indian Evidence Act for computer generated record; Ex.PW1/11 is subrogation letter dated 19.10.2011 issued by plaintiff No.2 in favour of plaintiff No.1; Ex.PW1/12 is legal notice dated 01.02.2013 issued by counsel for plaintiff no.2 to defendant for payment of suit amount with interest; Ex.PW1/13 is the copy of minutes of meeting dated 20.02.1987 in favour of witness himself; Ex.PW1/14 is the original claim bill dated 21.06.2012 raised by plaintiff No.2 for the damaged goods and Mark A is the copy of FIR No.160/2012 registered at PS Shahbad, Kukshetra, Haryana under Section 283/279/304A/427 IPC.
As noted above, defendant has relied upon only two documents i.e. Ex.DW1/A is copy of initial consignment note dated 21.06.2012 and Ex.DW1/B is the original Agreement for Transportation Service dated 25.12.2011 executed between plaintiff No.2 and defendant herein. In the affidavits of evidence, the witnesses have more or less reiterated the respective contents of the plaint and WS on oath and reaffirmed the averments thereof, which are not being repeated for sake of brevity. However, import of further deposition and documents relied upon by them shall be discussed at apposite place in this judgment.
9. After giving my thoughtful consideration to the rival contentions of parties and having gone through the entire material available on record, my issue wise findings are as under:
10. Issue No.1 : Whether the suit of the plaintiff is barred in view of the provisions of the Arbitration and Conciliation Act, 1996? OPD The onus to prove the issue was upon the defendant. In the WS, defendant has taken the objection that as per clause 26 & 27 of the Agreement for CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 8 of 27 Transportation Service executed between the plaintiff No.2 and the defendant, all the disputes between the parties arising out of said agreement were referable to sole arbitrator to be appointed by the plaintiff No.2 in accordance with the provisions of Arbitration and Conciliation Act, 1996. Hence, in view of Section 8 of said Act, parties were required to be referred to arbitration. DW1 in his evidentiary affidavit also has deposed on identical lines.
In this regard, learned counsel appearing on behalf of plaintiff argued that the aforementioned agreement Ex.DW1/B was executed only between plaintiff No.2 and the defendant and terms and conditions thereof are not binding upon the plaintiff No.1 who was not even signatory to the same. He further urged that for want of privity of contract defendant cannot be asked to take recourse of arbitration by virtue of arbitration clause contained in said agreement Ex.DW1/B. He further argued that in view of Section 8 of the Act, defendant was required to apply to the Court for referring the parties to arbitration and by not moving any such application, defendant even otherwise shall be deemed to have waived off his right to take recourse of arbitration.
The claim of the plaintiff in instant case is mainly based upon the letter of subrogation Ex.PW1/11 executed between insured i.e. plaintiff No.2 herein and the insurance company i.e. plaintiff No.1 in respect of the loss or damage of goods insured under policy No.221800/21/11/02/00000136 which was valid for the period wef 31.12.2011 to 30.12.2012. On general principle of subrogation the insurer can have only the rights and remedies of the assured. In the instant case, the rights of assured i.e. plaintiff No.2 herein for claiming damages against loss of goods is arising out of the Agreement for Transportation Service and under said agreement the remedy available to plaintiff No.2 for settling any dispute arising out of said contract was to refer the dispute to arbitration for its decision by the CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 9 of 27 sole arbitrator to be appointed by the assured company i.e. plaintiff No.2 herein.
In view of the fact that by letter of subrogation, the subrogee has just stepped into the shoes of insured for raising any claim against the carrier for recovery of damages caused to the insured goods, subrogee shall also be governed with the terms and conditions of Agreement of Transportation Service just in the same manner as was the insured. In said circumstances, insurance company cannot be allowed to take the plea that it lacks privity of contract with the carrier. Reliance placed on AIR 2010 NOC 160 ; 2009 (8) Mad LJ 376.
But, it is pertinent to note here that in view of Section 8 of the Arbitration and Conciliation Act, mere existence of arbitration clause in the agreement does not bar the jurisdiction of the Civil Court automatically unless any of the parties to such agreement applies the Court for referring such dispute to arbitration. In this case, although an objection was taken in the WS regarding bar of jurisdiction of the Court in view of Section 8 of the Arbitration Act, but no prayer was ever made either in the WS or vide any separate application for referring the parties to arbitration. Perusal of WS shows that in preliminary objection No.1, defendant has just averred that plaint is liable to rejected under Order 7 Rule 11 CPC read with Section 8 of the Arbitration and Conciliation Act, 1996 but there is no prayer that parties may be referred to arbitration under Section 8 of the Act.
In view of aforementioned facts and circumstances, defendant even otherwise deemed to have waived off his right to take recourse to arbitration for adjudication of present suit.
In view of above discussions, issue is decided against the defendant and in favour of plaintiffs.
11. Issue No.2 : Whether this Court has no territorial jurisdiction to try CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 10 of 27 and entertain the present suit ? OPD The onus to prove the issue was again upon the defendant. In this regard, DW1 in his evidentiary affidavit has deposed that neither defendant company had any office in the area falling in South or SouthEast District, nor the defendant entered into any contract with the plaintiff No.1 in said area. He further deposes that the goods of the plaintiff No.2 were carried from Village Ghevra, Delhi which is situated near Mundka, Delhi and the same were to be transported to Zirakpur, District Mohali, Punjab. The vehicle in question carrying the goods met with an accident in the area of PS Shahbad, District Kurekshetra, Haryana, therefore, this Court has no territorial jurisdiction to try and entertain the present suit.
In this regard, learned counsel for plaintiff has drawn my attention to the document Ex.DW1/B i.e. Agreement for Transportation Service and submitted that the said agreement was executed between the defendant and plaintiff No.2 at latter's office at B1/A14, Mohan Cooperative Industrial Estate, Mathura Road, New Delhi-110044. He further submitted that the place of execution of said agreement is situated in the area falling within the territorial jurisdiction of this Court and as such a part of cause of action has arisen within the territorial jurisdiction of this Court which is sufficient to confer jurisdiction to this Court to try and decide this suit.
On the other hand, it is argued on behalf of defendant that the agreement Ex.DW1/B was executed only between plaintiff No.2 and defendant and therefore, the execution of said document does not form part of cause of action for the plaintiff No.1 for filing the present suit. It was further submitted that claim of plaintiff No.1 is mainly based on the Letter of Subrogation Ex.PW1/11 allegedly executed by plaintiff No.2 in favour of plaintiff No.1 and the same was executed at the office of plaintiff No.1 at Divisional Office - 18, 5th Floor, CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 11 of 27 Bhagwan Sahai Palace, Naya Bans, Sector - 15, NOIDA, UP, which admittedly does not fall in the territorial jurisdiction of this Court. He further argued that had this case been filed by plaintiff No.2 only, for claiming damages from defendant, execution of said agreement Ex.DW1/B might have given a cause of action to plaintiff No.2 to institute this case before this Court, but execution of said agreement Ex.DW1/B can never form a part of cause of action for the plaintiff No.1 to file the case against defendant.
It is an undisputed fact that document Ex.DW1/B was executed between plaintiff No.2 and defendant at the office of plaintiff No.2 at B1/A14, Mohan Cooperative Industrial Estate, Mathura Road, New Delhi - 110044, which is an area falling within the territorial jurisdiction of this Court. DW1 during his cross examination also admitted that said agreement was executed at the office of plaintiff No.2.
Now, the question that needs to be answered is whether the execution of said Agreement will constitute a part of cause of action for the insurer/subrogee to file the claim for recovery of damages against the carrier.
As already noted above, present claim of plaintiff No.1 is based on letter of subrogation executed by plaintiff No.2 in favour of plaintiff No.1. The said letter of subrogation is available on the record as Ex.PW1/11. The testimony of PW1 has gone unrebutted qua the execution of Ex.PW1/11 as no question or suggestion has been put to PW1 for challenging the execution or validity of said document. Vide said document plaintiff No.2 has assigned, transferred, abandoned all its actionable rights, title and interest in goods ensured with the plaintiff No.1 vide Insurance Policy bearing No.221800/21/11/02/00000136 and further transferred all its rights and remedies against the railway administration and/or carrier and / or authorities and / or persons who ever is/are liable in CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 12 of 27 respect thereof. The relevant portion of said letter reads as under: "And we hereby subrogate to you the same rights and remedies that we have in consequence of or arising from loss of/damage to the under mentioned goods and we further hereby grant to you full power to take and use all lawful ways and means to recover the said/loss damages from whomsoever it may concern.
And we also hereby authorize you to our name in any action or proceedings that you may bring either in your own and in our name in relation to any of the matters hereby assigned, transferred and/or abandoned to you and we undertake for ourselves to assist and concur in any matters or proceedings which you may deem expedient or necessary in any such actions to proceedings and to execute all deeds assignments and/or documents including any and all pleadings and releases which may be necessary therefore and generally to assist therein by all means in our power.
We hereby appoint you, your officer and agents and their successors severally our agents and attorneysinfact with irrevocable power to collect any and all such claims and to begin, prosecute, compromise, arbitrate or withdraw either in our name or in your name but at your expense any and all legal proceedings which you may deem necessary to enforce such claim or claims including, proceedings before any international tribunal and to execute in our name any documents which may be necessary to carry into effect the purpose of this agreement."
Aforementioned terms and conditions of letter of subrogation makes it clear that vide said agreement plaintiff No.2 has subrogated all rights and remedies that plaintiff No.2 had in consequences of or arising from loss of / damage to the insured goods and further granted full authorisation to plaintiff No.1 to use all lawful ways and means to recover the said loss/damage from whomsoever it may concern. Whereas, the rights and remedies of plaintiff No.2 to claim damages from the carrier are flowing from said Agreement for Transportation Service Ex.DW1/B. It is also evident from the clause (8) of the CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 13 of 27 said agreement vide which the transporter/carrier has made it liable to comply with the terms and conditions of the insurance company and the agreement executed between the plaintiff No.2 and the insurance company. The relevant para No.8 of agreement Ex.DW1/B reads as under: "8. The Company shall be taking the transit insurance for all the goods being transported through the Transporter. The Transporter shall be liable to comply with the terms and conditions of Insurance Company and the agreement executed between the company and the insurance company. Transporter shall take utmost care to ensure that proper safety of the goods is ensure while transporting and in any case where insurance claim is to be taken by the company. The Transporter shall be responsible to extend all the help to settle the insurance claims in case of loss damage by providing the Company and required certificates and documents within 10 days from the date of the event. In any case of delay or default the Transporter shall be liable to compensate the company for losses incurred by the company due to any act/commission of Transporter."
The term 'cause of action' has not been defined anywhere in the CPC or in any other statute, but this term has been defined time and again in plethora of judgments. Hon'ble Apex Court has defined this term in the matter of M/s Kusum Ignots and Alloys Ltd v UOI & Ors decided on 28.04.2014 interalia held as under: "Cause of action implies a right to sue. The material facts which are imperative for the suitor to allege and prove constitutes the cause of action. Cause of action is not defined in any statute. It has, however, been judicially interpreted inter alia to mean that every fact which would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the Court."
Here, in this case, rights and remedies which plaintiff No.2 has assigned in CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 14 of 27 favour of plaintiff No.1 by way of letter of subrogation are actually arising out of said Agreement for Transportation Service. Hence, any argument that execution of said agreement Ex.DW1/B will not constitute a part of cause of action for the plaintiff No.1 for filing the present suit before this Court cannot be accepted.
Indisputably, the agreement Ex.DW1/B was executed at the office of plaintiff No.2 at B1/A14, Mohan Cooperative Industrial Estate, Mathura Road, New Delhi - 110044, falling in the area within the territorial jurisdiction of this Court. Thus, a part of cause of action having arisen in the area falling in South East District, this Court is vested with jurisdiction to try and entertain the present suit.
The issue is accordingly decided against the defendant and in favour of the plaintiff.
12. Issue No.3: Whether the suit of plaintiff is bad for misjoinder of parties? OPD On perusal of WS, it appears that this issue came to be framed in view of the preliminary objection No.6 in the WS, wherein defendant has taken an objection as to the nonjoinder of the owners, drivers and insurance companies of the two trucks involved in the accident. Whereas there is no objection with regard to misjoinder of parties in the entire WS.
In view of above, it is clear that aforementioned error in the issue has crept in due to typographical error.
The onus to prove this issue was also upon the defendant. But, in the evidentiary affidavit DW1 appears to have not deposed anything in this regard.
Considering the fact that defendant is a common carrier and as per Section 17 of the Carriage by Road Act, 2007, which is a provision analogous to the CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 15 of 27 provision of Section 9 of the old Carrier's Act 1865, the liability of a common carrier is absolute except for the Act of God which means he is answerable for the loss of goods even when the loss is not caused by the negligence or want of care on his part or even where the negligence is attributable to his agents or servants. (Reliance placed on Nath Bros Exim International Ltd v Best Roadways Ltd :
(2000) 4 SCC 553 as well as Patel Roadways Ltd v Birla Yamaha Ltd) (2000) 4 SCC 91.
Considering the aforementioned position of law, I am of the view that owners or drivers of offending vehicles are neither necessary nor even proper party to the suit. Accordingly, the issue is decided against the defendant and in favour of plaintiffs.
13. Issue No.4 : Whether the plaintiff is entitled to the recovery of the suit amount from the defendant? OPP The onus to prove this issue was casted upon the plaintiffs. In order to prove the issue, plaintiff examined its AR Sh Pankaj Lamba, Assistant Manager as PW1.
Before appreciating the evidence for ascertaining the strength of the plaintiff's case on merits, I deem it appropriate to first deal with two technical objections taken by learned counsel for defendant during the course of arguments.
First objection is relating to the competency and authority of PW1 to file the case and depose on behalf of plaintiff. Counsel for the plaintiff submitted that as per deposition of PW1, he was empowered to sign and file the present case in the capacity of Assistant Manager vide minutes of meetings of Board of Directors of plaintiff company. But, at the time of tendering the affidavit of PW1, photocopy CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 16 of 27 of extract from minutes of meeting of 20th February, 1987 of the board of directors of United India Insurance Co. Ltd. was exhibited as Ex.PW1/13 only subject to production of original of said document on the next date as original extract was not on record. But on next date of hearing as is also evident from the ordersheet dated 14.11.2014, extract of Minutes of Meeting of 06.08.2012 was produced by the witness and as such document Ex.PW1/13 by virtue of which PW1 claimed to have derived authority to file the present case and to depose on behalf of plaintiff no.1 cannot be read into evidence. Thus, is absence of any authorisation by plaintiff no.1, the witness PW1 was not competent to file the plaint or to depose on behalf of plaintiff No.1.
To counter said contention of defendant's counsel, it was argued on behalf of plaintiff that even the subsequent resolution i.e. the extract of meeting vide which all the Assistant Managers of all division offices were authorized to sue or defend all action & proceedings for or against the company, is also of the date prior to filing of present case and vide said resolution, the resolutions passed by the board of directors on 20.02.1987, 11.05.1988 and 14.02.2005 were also held to be in force in respect of cases where said officers have represented the company by virtue of said resolutions.
I have considered the respective submissions and also perused both the said documents ie. copy of extract of resolution dated 20.02.1987 and 06.08.2012.
Perusal of the record shows that although an objection has been taken by defendant in the WS regarding authorisation and competency of Pankaj Lamba PW1 to file the suit on behalf of plaintiff no.1 but no issue in this regard was framed nor the same was pressed for by the defendant. Even in the cross examination of PW1, except a suggestion to the effect that Assistant Manager was CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 17 of 27 not authorized to file the suit on behalf of plaintiff No.1, no other suggestion has been put to challenge the authority or competency of PW1 or to challenge the validity or genuineness of document Ex.PW1/13.
As per record Ex.PW1/13 was exhibited on 29.10.2014 subject to production of the original on the next date. On the next date of hearing instead of producing the original of Ex.PW1/13, PW1 filed another document i.e. extract of minutes of meeting held on 06.08.2012, vide which similar rights and authorities were again conferred to various officials of plaintiff No.1 including the Assistant Manager of Divisional Officers as were conferred by previous resolution dated 20.02.1987 and even said subsequent resolution with certificate of Section 65(B) Evidence Act filed on the record on 14.11.2014, is also of the date prior to filing of present suit and no objection was raised by defendant's counsel at the time of filing of said documents nor he sought any permission to cross PW1 on said documents.
Furthermore, in view of law laid down by Hon'ble High Court in Gurdev Singh Dhillon v T.S. Mahal & Anr : (1198) 75 DLT 393 where the power of attorney executed by the plaintiff fulfilled the requirements of Order 3 Rule 1 & 2 CPC and by the subsequent power of attorney the plaintiff ratified all the works, acts and deeds of the said power of attorney holder, the objection as to authority of power of attorney holder to file suit was held to be not tenable. Furthermore, in the affidavit of PW1, Ex.PW1/13 is the extract of minutes of meeting vide which he was authorized to file the suits, to sign the plaint on behalf of plaintiff No.1 and there is no mention of any date of such resolution. In said circumstances, not allowing the said subsequently filed resolution of the company to be read in evidence would be too technical approach of the Court which in my considered view should be avoided especially when the technical flaw otherwise is not CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 18 of 27 effecting the merits of the case. Hence, said objection taken by learned counsel for defendant is discarded as meritless.
The second limb of argument raised on behalf of defendant was that insured M/s Haier Appliances India Pvt Ltd has been arrayed as plaintiff no.2 but plaint has neither been signed by said coplaintiff nor the same is even supported with the affidavit of any AR of said company and therefore, in absence of examination of any witness from M/s Haier Appliances (India) Pvt Ltd present suit is liable to be dismissed as plaintiff no.1 has failed to prove the averments relating to the facts which were in exclusive knowledge of plaintiff no.2.
However, as already noted above while deciding issue No.3, an insurer gets subrogated to the rights and remedies of insured person and by way of assignment through letter of subrogation executed by insured in favour of insurer, the insurer also becomes entitled to sue even on behalf of insurer. In instant case, plaintiff No.2 has been arrayed as a coplaintiff only through plaintiff No.1. By virtue of letter of subogation plaintiff No.1 has also been authorized by plaintiff No.2 to sue the carrier in their (plaintiff no.2's) name. Relevant portion of letter of subrogation has already been reproduced herein above. Even otherwise, plaintiff no.2 has been arrayed only as a proforma plaintiff as relief of recovery has been sought only by plaintiff No.1 against the defendant.
I do not feel convinced even with the argument that non examination of any witness from plaintiff No.2 has been proved to be fatal to the case of plaintiffs, for the simple reason that a party to a suit is not required to prove the admitted facts or admitted documents. In this regard Section 58 of the Indian Evidence Act, 1872 is very clear which says that no fact need to be proved in any proceeding which the parties thereto or their agents agree to admit at the hearing, or which, by any rule of pleading in force at the time they are deemed to have CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 19 of 27 admitted by the pleadings.
In para 4 of the plaint, plaintiffs have averred that plaintiff No.2 rendered a consignment of 137 packages containing electronic items to defendant to transfer their stock from New Delhi to its consignee at Zirakpur, Mohali, Punjab vide two invoices No.12 STIN 6604001256 and 57 both dated 21.06.2012 for total value of Rs.14,56,394/ through carrier of defendant, vehicle bearing No.HR 38G 0951 vide GR/CN No.4701 dated 21.06.2012. In corresponding para of WS there is no denial to said averments. Even in para no.5 of WS, there is no denial as to the fact that truck carrying consignment had met with an accident resulting in burning of some part of consignment and goods lying in the truck were transported to its destination by another vehicle vide new consignment note issued by defendant. Defendant, however feigned ignorance about surveyor's report dated 27.11.2012 available on record as Ex.PW1/4.
Even the averment with regard to service of notice of monetary claim raised by plaintiff No.2 upon defendant through registered letter dated 23.08.2012 (in compliance of Section 16 of the Carriage by Road Act, 2007) has also been vaguely denied in para 6 of the WS. But there is absolutely no denial as to the issuance of damage/shortage certificate dated 25.08.2012 by the defendant in favour of plaintiff No.2 which shows to an implied admission on the part of defendant in respect of service of notice of Monetary Claim. As shortage certificate was issued by defendant only pursuant to the aforementioned letter of claim dated 23.08.2012 of plaintiff no.2, there is an implied admission on the part of defendant with regard to receipt of claim notice of plaintiff no.2.
Further in para 7 of WS, the defendant appears to have nowhere denied the receipt of claim by plaintiff No.2 from plaintiff No.1 for the total sum of Rs. 9,43,377/ under Marine Open Policy No.221800/21/11/02/ 00000136 and CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 20 of 27 execution of letter of subrogation by plaintiff No.2 in favour of plaintiff No.1 as per Section 79 of the Marine Insurance Act. Defendant has just taken the lame plea that same must have been done owing to the contractual rights and obligations of the parties under said insurance policy and the same has no effect of any nature upon the defendant.
Rule 3, 4 & 5 of Order 8 CPC deal with the manner in which allegations of act in the plaint should be traversed and the legal consequences flowing from its noncompliance. As per the mandate of these provisions, written statement must deal specifically with each allegation of fact in the plaint and when a defendant denies any such fact he must not do it so evasively but answer the point of substance. If his denial of fact is not specific but evasive, said fact shall be taken to be admitted of which no other proof is necessary unless the Court in its discretion under the proviso to Rule 5 requires any fact so admitted to be proved otherwise than by such implied admission.
Furthermore, no objection was ever raised as to mode of proof of any of the aforementioned documents when the same were tendered in evidence by PW1. Even the validity and correctness of the claim bills Ex.PW1/14, claim note Ex.PW1/7, Marine Survey Report Ex.PW1/4 NEFT Report Ex.PW1/9 as proof of disbursement of claim by plaintiff No.1 to plaintiff No.2, has never been challenged either in the pleadings or even in the evidence. No question or suggestion has been put to PW in his crossexamination for raising any challenge to the correctness or genunity of said documents. Even in the affidavit of DW1, nothing has been deposed so as to deny or challenge the correctness of aforementioned documents.
It is also pertinent to mention here that during the course of evidence, AR of plaintiff No.2 had also appeared before the Court pursuant to notice of CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 21 of 27 defendant issued under Order 12 Rule 8 CPC for production of two original documents viz Agreement of Transportation Service and GR No.4701 dated 21.06.2012; said documents were filed on record by AR of plaintiff No.2 and same were exhibited in the affidavit of DW1 as Ex.DW1/A and Ex.DW1/B. Hence, it is clear that though plaintiff No.2 has not signed the plaint nor even joined the proceedings of this case, but they are aware of present claim of plaintiff No.1 filed against the defendant for seeking damages on the basis of letter of subrogation executed by plaintiff No.2 in favour of plaintiff No.1.
In the instant case, the goods entrusted with carrier were insured with plaintiff No.1 under Marine Insurance Policy No.221800/21/11/02/ 00000136 and therefore, plaintiffs have filed this case to recover the claim amount which plaintiff No.1 has already disbursed as insurance claim to the insured i.e. plaintiff No.2 herein. In view thereof, claim of plaintiff No.2 is based on Section 79 of the Marine Insurance Act 1963 which reads as under: "79. Rights of subrogation. (1) Where the insurer pays for a total loss, either of the whole, or in the case of goods of any apportionable part, of the subjectmatter insured, he thereupon becomes entitled to take over the interest of the assured in whatever may remain of the subjectmatter so paid for, and he is thereby subrogated to all the rights and remedies of the assured in and in respect of this subjectmatter as from the time of casualty causing the loss.
(2) Subject to the foregoing provisions, where the insurer pays for a partial loss, he acquires no title to the subjectmatter insured, or such part of its as may remain, but he is thereupon subrogated to all rights and remedies of the assured in and in respect of the subjectmatter insured as from the time of casualty causing the loss, in so far as the assured has been indemnified, according to this Act, by such payment for the loss."
However, it is argued on behalf of defendant that Marine Insurance covers CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 22 of 27 only 'maritime perils' as defined under Section 2(e) of the Marine Insurance Act, 1963 whereas the goods in question were transported by road only and therefore, case is not covered under Section 79 of the said Act.
In this regard, learned counsel for plaintiff has drawn my attention to Section 4 of the Marine Insurance Act, 1963 which provides that a contract of Marine Insurance may by its express terms or by usage of trade be extended so as to protect the assured against losses on inland waters or on any land risk which may be incidental to any sea voyage. Sub Section (2) also provides that where 'any adventure analogous to a marine adventure, is covered by a policy in the form a marine policy, the provisions of the Act in so far as applicable, shall apply thereto.
The 'Explanation' to this sub section defines analogous adventure as under: "Explanation'An adventure analogous to a marine adventure includes an adventure where any ship, goods or other movables are exposed to perils incidental to local or inland transit." This definition of 'adventure analogous obviously covers the present case where the goods entrusted for transit and covered by the policy in the form of marine were wholly transported through inland. Reliance placed on AIR 1971 Calcutta 494.
The next point urged by learned counsel for defendant is that goods in question were carried and transported at 'owner's risk' as per the terms and conditions of GR/Consignment note Ex.DW1/A. It is an admitted position on record that there was short delivery on account of accident which is also evident from short certificate Ex.PW1/6 issued by defendant to the insured though the same was allegedly issued without CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 23 of 27 prejudice to defendant's right to deny their liability for any losses as the goods were alleged to be transported at owner's risk.
Considering the whole scheme of the Carrier Act and the New Carriage by Road Act, 2007, the liability of a common carrier is absolute except for the Act of God as is envisaged in Section 17 of new Act. It is nowhere the defendant's case that accident had occurred due to the Act of God. The contention of defendant that goods were carried at owner's risk cannot be accepted especially in view of the terms and conditions of Agreement of Transportation Service which was duly signed by both the parties. Furthermore, printing of any such condition on the reverse of consignment note which is not even signed by the consignor cannot be said to be binding on a party who did not even sign the same. Even otherwise, the consignment note vide which the goods in question were booked with the carrier was never placed on record as the same allegedly got burnt at the time of accident. In said circumstances, terms of said consignment cannot be said to be binding on parties so as to protect the carrier from the liability. A common carrier is not mere bailee of goods entrusted to him. He is answerable for the loss of goods even when the loss is not caused by negligence or want of care on his part. Reliance placed on South Eastern Carrier (Pvt) Ltd v The Oriental Fire & General Insurance : AIR ( 2004) Kerala 139.
In Nath Bros Exim (supra) Hon'ble Apex Court held that 'owner's risk in the realm of commerce has a positive meaning. It is understood in the sense that the carrier would not be liable for damages or loss to the goods if it were caused on account of the carriers own negligence or the negligence of its servants or agents. It was further held as under: "Section 6 of Carriers Act enables the common carrier to limit his liability by a special contract. But the special contract will not CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 24 of 27 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 nondelivery 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."
In Carriage by Road Act 2007, Section 12 and 17 are the relevant provisions which read as under: "12 (1) Every common carrier shall be liable to the consignor for the loss or damage to any consignment in accordance with the goods forwarding note, where such loss or damage has arisen on account of any criminal act of the common carrier, or any of his servants or agents.
(2) In any suit brought against the common carrier for the loss, damage or nondelivery of consignment, 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 common carrier, or any of his servants or agents.
17. Save as otherwise provided in this Act, a common carrier shall be responsible for the loss, destruction, damage or deterioration in transit or nondelivery of any consignment entrusted to him for carriage, arising from any cause except the following namely:
(a) act of God;
(b) act of war or public enemy;
(c) riots and civil commotion;
(d) arrest, restraint or seizure under legal process;
(e) order or restriction or prohibition imposed by the
Central Government or a State Government or by an officer or authority subordinate to the Central Government or a State Government authorised by it in this behalf."
A combined reading of said two provisions shows that in a suit filed against a carrier for damages on account of loss of goods, presumption of damages having CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 25 of 27 occurred on account of criminal act on the part of carrier or his agent shall exist in favour of claimant and it shall be for the carrier to prove that damage had not occurred on account of any criminal act attributable to him or his agent.
In the instant case, the original GR No.4701was got burnt and after the accident the goods were sent to destination by a new GR No.4709 available on record as Ex.PW1/3. The consignment note being not signed by consignor/insured or any of his agents was a unilateral agreement and therefore, cannot limit the liability of the carrier. This is an undisputed position that suit goods were damaged due to criminal act of the driver of the truck carrying the goods and against said driver an FIR No.160/2012 under Section 283/279/304A/427 IPC was also lodged at PS Shahbad, District Kurukshetra, Haryana. Undisputably, defendant was a carrier and not a commission agent. Thus, driver of the truck was presumably defendant's agent or servant.
In view of Section 10 and 12 of the Act, onus was upon the defendant to prove that accident had not occurred due to the negligence or criminal act of its own or of its servants or agents, whereas besides a bald assertion in the affidavit that fire in the vehicle was neither resulted due to rashness or negligence of defendant company or any of the employees, nothing has been brought on record to substantiate the same. It is neither the pleaded nor proved case of defendant that driver of the offending vehicle carrying the goods, was not their employee or agent. In the crossexamination, DW1 although denied the suggestion that plaintiff No.2 (insured) had suffered a loss to tune of Rs.9,43,377/ due to negligence of defendant and their driver but considering the mandate of Section 10, 12 & 17 of the Carriage by Road Act, 2007, it is obligatory for the carrier to prove by adducing positive evidence that loss of goods had not occurred due to his or his agent's or servant's criminal act or negligence whereas, there is no iota of CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 26 of 27 evidence in this regard. On going through the entire evidence on record, it is seen that the defendant has admitted the short delivery of the goods entrusted with them due to the accident. With regard to the value of the goods, no serous contention has been raised by the defendant. Apart from the survey report, there are other documentary evidence to prove the quantity entrusted, the quantity lost and delivery made.
There is no challenge as to claim disbursement of Rs.9,43,377/ by plaintiff No.1 to plaintiff No.2, for the recovery of which instant suit has been filed against defendant. The plaintiff No.1 is hence entitled to recover the same from defendant.
Having regarding the aforementioned facts and circumstances, plaintiff has been able to successfully prove its entitlement for suit claim. Issue is accordingly decided against the defendant and in favour of plaintiff.
14. Issue No.5 : Whether the plaintiff is entitled to any pendentelite and future interest? If so, at what rate? OPP.
The onus to prove the issue was upon the plaintiff. The plaintiff has claimed interest @ 12 % from date of filing till date of recovery. The interest claimed by plaintiff appears to be on a higher side and considering the nature of the transactions and facts of the case, the ends of justice would be met if plaintiff is awarded interest @ 9% pa from date of filing till date of realisation.
In view thereof, the issue is decided against the defendant and in favour of the plaintiff.
15. Issue No.6 : Relief.
In view of the findings of the Court on issue Nos.1 to 5 in preceding paras, CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd Page 27 of 27 instant suit is decreed with costs in favour of plaintiff No.1 and against defendant for suit amount of Rs.9,43,377/ with pendentelite and future interest @9% pa from date of filing of suit till date of realisation.
Decree Sheet be drawn accordingly. File be consigned to Record Room.
(Sunena Sharma) Addl. Distt Judge04/SouthEast Saket Courts Complex, New Delhi Announced & dictated in the Open Court on 19.02.2015.
CS No.268/2014 United India Insurance Co Ltd & Ors v SFC Transport Pvt Ltd