MAMA ROADWAYS TRANSPORT v. ORIENTAL INSURANCE CO. LTD.
2007-05-08
ARUN MISHRA, K.S.CHAUHAN
body2007
DigiLaw.ai
JUDGMENT Arun Mishra, J. This appeal has been preferred by defendant/common Carrier aggrieved by judgment and decree passed by 2nd Addl. District Judge, East Nimar, Khandwa in Civil Suit No. 3-B/99 for a sum of Rs. 5,47,280 towards cost of Cotton Bales along with interest at the rate of 10% per annum on account of total loss due to fire in the course of transit. Plaintiffs/respondents filed a suit for recovery of aforesaid sum. It was averred that Sri Venkateshwar Cotton Company transported 75 bales of cotton through M/s Mama Roadways Transport Contractor and Commission Agent (hereinafter referred to as "the Carrier"). The consignment was insured with M/s Oriental Insurance Co. Ltd. It was initially transported by Truck (MPB-1976) and thereafter by another Truck (MEH-4052). Said truck caught fire about 100 kms before Jalgaon on Aurangabad-Jalgaon Highway, resulting in total loss of consignment worth Rs. 5,23,233. As per insurance policy dated 27-10-1993 Sri Venkateshwar Cotton Co. realized a sum of Rs. 5,47,280 from the insurer Oriental Insurance Co Ltd. Said amount was demanded. There was subrogation cum power of attorney executed in favour of the Insurer by Venkateshwar Cotton Company. As the amount was not paid by the Carrier, suit was filed for recovery of a sum of Rs. 5,47,280. Defendant/Carrier in the written statement controverted the plaint averments contending that there was no negligence on its part. Full precaution was observed as such for loss of consignment due to fire, the Carrier was not responsible to make good the loss as per the terms and conditions mentioned in Builty due to fire/riot if any damage was caused, liability was of owner, goods were carried at the owner's risk. The trial Court has found that due to negligence of the Carrier, cotton bales were destroyed. Letter of subrogation and power of attorney has been executed by plaintiff No. 2 in favour of plaintiff No. 1 to recover the amount, plea of vis major has been rejected, a notice was issued in spite of that payment was not made by Carrier. It was submitted by Shri Naman Nagrath, learned counsel appearing with Shri Aditya Sharma, for appellant that there was special contract as envisaged u/s 6 of The Carriers Act, 1865 (hereinafter referred to as "the Act"). It was clearly mentioned in consignment note (Ex.P/1) that goods were transported at the owner's risk. Liability was clearly put on transporter and driver.
It was submitted by Shri Naman Nagrath, learned counsel appearing with Shri Aditya Sharma, for appellant that there was special contract as envisaged u/s 6 of The Carriers Act, 1865 (hereinafter referred to as "the Act"). It was clearly mentioned in consignment note (Ex.P/1) that goods were transported at the owner's risk. Liability was clearly put on transporter and driver. The goods were booked at the owner's risk. It was inter alia mentioned that for fire, accident, loot, owner was responsible not the Carrier. Secondly it was submitted that cotton bales not being the goods mentioned in the schedule in the Act as such presumption available u/s 9 of the Act was not attracted in the instant case. Thus, it was necessary to prove the negligence of the Carrier. It was also contended that letter of subrogation cum power of attorney was blank. Insurer's address was also not given, thus, there was no valid letter of subrogation cum power of attorney, thus, suit was not maintainable, it was not permissible for insurer to sue in its name. The value of the goods was worth Rs. 5,23,233 was also not proved. Counsel has also relied upon certain decisions to be referred later. Learned counsel appearing on behalf of plaintiffs/respondents while controverting the submissions of appellant contended that there was no special contract on the consignment note was signed in acceptance by the owner or any persons from owner's behalf. Thus, printed terms in the consignment note which was unilateral did not constitute a special contract envisaged by section 6 of the Act. Plaintiffs were not required to prove negligence or criminal act on part of common carrier for loss, damage or non-delivery of goods. Section 9 was clearly attracted in the facts situation of the instant case. Carrier has utterly failed to bring on record that it was a case of vis ma'jor. No evidence has been adduced. Letter of subrogation cum power of attorney was given by plaintiff No. 2 to plaintiff No. 1. There was no defect in the suit, value of consignment was admitted by defendant in correspondence, thus, liability has been rightly saddled upon the Carrier to make payment of compensation.
No evidence has been adduced. Letter of subrogation cum power of attorney was given by plaintiff No. 2 to plaintiff No. 1. There was no defect in the suit, value of consignment was admitted by defendant in correspondence, thus, liability has been rightly saddled upon the Carrier to make payment of compensation. First question for consideration is whether there was special contract between the parties as envisaged u/s 6 of the Act, due to the conditions mentioned in the printed consignment note that goods, were carried at the owner's risk and that liability was put on transporter/driver, thus, for loss of goods due to fire, the Carrier would not be responsible. Section 6 of the Act reads thus : 6. In respect of what property liability of carrier not limited or affected by public notice. Carriers, with certain exceptions, may limit liability by special contract -- The liability of any common carrier for the loss of or damage to any [property (including container pallet or similar article of transport used to consolidate goods) delivered] to him to be carried, not being of the description contained in the Schedule to this Act, shall not be deemed to be limited or affected by any public notice; but any such carrier, not being the owner of a railroad or tramroad constructed under the provisions of Act 22 of 1863 (to provide for taking land for works of public utility to be constructed by private persons or Companies, and for regulating the construction and use of works on land so taken) may. By special contract, signed by the owner of such property so delivered as last aforesaid or by some person duly authorised in that behalf by such owner, limit his liability in respect of the same. It is apparent from section 6 that liability of common Carrier for loss or damage to any property shall not be limited merely by the fact that goods carried were not of description contained in the Schedule. At the same time the Carrier who is not an owner of a railroad or tramroad may, by special contract, "signed" by the owner of such property so delivered or by some person duly authorised in that behalf by such owner, limit the liability.
At the same time the Carrier who is not an owner of a railroad or tramroad may, by special contract, "signed" by the owner of such property so delivered or by some person duly authorised in that behalf by such owner, limit the liability. What is necessary is that a special contract envisaged u/s 6 has to be signed by the owner of the property or any person duly authorised on his behalf. Merely printing of any condition on the consignment note unilaterally as done in the instant case did not make out a special contract between the parties. Shri Naman Nagrath, learned counsel appearing on behalf of appellant submitted that on the top of the back of consignment note an endorsement was made to deliver the Consignment Note to Royal Seema Mills by the partner/manager of plaintiff No. 2, that was enough to constitute the contract contemplated u/s 6, in our considered opinion submission cannot be accepted as this was not a signature put in token of acceptance of terms and conditions made on the consignment note. The language of the note "please deliver to Royal Seema Mills" and beneath it there were signatures of partner/manager could not be said to be acceptance of terms and conditions as the terms and conditions were mentioned below the aforesaid note and signature, on the back of the consignment note. Merely by the mention in the consignment note that goods were received at the owner's risk, until and unless it was signed by owner or any person on his behalf so as to bring a special contract between the parties such a printed condition on the consignment note was not enough to constitute a special contract. In The Associated Traders & Engineers Pvt. Ltd. vs. Delhi Cloth & General Mills Ltd. and others, ILR 1974(1) Delhi 790 , it was opined that goods receipt issued by Carrier not signed by owner, the terms on such a receipt do not constitute contract u/s 6. In South Eastern Carriers (P) Ltd. Vs. The Oriental Fire and General Insurance Co. Ltd. and Another, it was held that Carrier would be liable for loss of goods and printing of conditions on reverse on the consignment note that goods were carried at the owner's risk was not found sufficient to constitute a special contract signed by owner to protect Carrier from liability.
The Oriental Fire and General Insurance Co. Ltd. and Another, it was held that Carrier would be liable for loss of goods and printing of conditions on reverse on the consignment note that goods were carried at the owner's risk was not found sufficient to constitute a special contract signed by owner to protect Carrier from liability. In The South Eastern Roadways Vs. The United India Insurance Co. Ltd., , similar view was taken. In M/s. Milap Carriers, Transport Contrs. and Commissions-Agents Vs. National Insurance Company Ltd., Hyderabad and another, the consignment note printed on reverse was signed by the consignor, hence it was opined that there was special contract, hence amount could be recovered by the insurer from the Carrier, but that is not found to be so in the instant case as such decision in Milap Carriers relied by Shri N. Nagrath is distinguishable on facts. A single Bench of this Court in M.P. Highway Organisation Vs. New India Assurance Co. Ltd. and Another, the condition printed on consignment note that all consignments are carried entirely at owner's risk was accepted, there was no acceptance in the instant case and acceptance has to be as envisaged by section 6 by signing of owner or his authorised representative. In Gwalior Transport Company (P) Ltd. vs. National Insurance Co. Ltd., 1983 MPLJ 804 : 1984 ACJ 81 (M.P.), a Division Bench of this Court in spite of printing of special condition on the consignment note fastened the liability on the Carrier. Thus, in the facts and circumstances of the case, we hold that there was no special contract entered into between the parties absolving the Carrier. Coming to the submission that the goods cotton bales, were not specified in the Schedule to the Act, sect-ion 9 was not attracted. Section 9 is quoted below : 9. Plaintiffs, in suits for loss, damage or non-delivery, not required to prove negligence or criminal act :-- In any suit brought against a common carrier for the loss, damage or non-delivery of [goods (including container, pallets or similar article of transport used to consolidate goods) entrusted] to him for carriage, it shall not be necessary for the plaintiff to prove that such loss, damage or non-delivery was owing to the negligence or criminal act of the carrier, his servants or agents.
We find that for applicability of section 9, it is not necessary that goods carried must be mentioned in the "schedule". In section 6 there is a mention of schedule with respect to limiting the liability by a special contract. In that context schedule has been referred. Reading of section 6 and section 9 makes it clear that operation of section 9 is not limited by the mention of goods carried in the schedule. Applicability of section 9 is not dependent upon mention of goods in the schedule. Thus, we hold that in the suit brought against a common carrier for loss, damage or non-delivery of the goods, it shall not be necessary for the plaintiff to prove that loss, damage or non-delivery was owing to negligence or criminal act of Carrier or on his behalf. Thus, it was not necessary for the plaintiff to adduce evidence to prove the negligence, on the contrary, defendant Tarachand examined on behalf of Carrier has not stated that it was vis ma'jor due to which fire was caught. He has expressed his ignorance as to how the cotton bales caught fire or whether it was put by some one else. Thus, Carrier has not been able to oust the negligence, it was incumbent upon the Carrier to take due care as it would have taken of his own goods and it would be liable if any loss or damage was caused to the goods on account of its own negligence or criminal act. In Nath Bros. Exim International Ltd. Vs. Best Roadways Ltd., , it was held that the liability of a Carrier to whom the goods are entrusted for carriage was 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. He is required to take care of the goods. Apex Court in Patel Roadways Ltd. vs. Birla Yamaha Ltd., AIR 2000 SC 1461 has laid down that liability of a common carrier under the Carriers Act is that of an insurer. It is not necessary as per section 9 for the plaintiff to establish negligence. The general principle that party who alleges negligence must prove the same, has no application to the case covered under the Carriers Act. This is also the position notwithstanding a special contract between the parties.
It is not necessary as per section 9 for the plaintiff to establish negligence. The general principle that party who alleges negligence must prove the same, has no application to the case covered under the Carriers Act. This is also the position notwithstanding a special contract between the parties. Consequently we have no hesitation in rejecting the aforesaid submission made on behalf of common carrier. Coming to the third submission that there was no proper subrogation, counsel has submitted that in the letter of subrogation cum special power of attorney (Ex.P/12) address of the insurer in whose favour the subrogation made and power of attorney was executed was not mentioned, policy number was also kept blank, thus, it was not enough to clothe the insurer to file the suit. When we read letter of subrogation cum special power of attorney, it is clear that it was signed on behalf of Sri Venkateshwar Cotton Company by its partner. We find from the statement of Rajendra Kumar examined on behalf of Insurer that owner has executed letter of subrogation and special power of attorney (P. 12) in relation to the disputed amount. There is nothing to disbelieve the statement of Rajendra Kumar. There is no objection by Sri Venkateshwar Cotton Company or by the Insurer that letter of subrogation cum special power of attorney was not executed. It has been signed on behalf of Sri Venkateshwar Cotton Company. As per section 79 of The Marine Insurance Act, 1963 where the insurer pays for a loss, either of the whole, or in the case of goods of any apportionable part, it becomes entitled to take over the interest of the assured and is thereby subrogated to all rights and remedies of the assured in respect to subject-matter as from the time of the casualty causing the loss. We find no merit in the third submission raised by appellant as to invalid subrogation cum power of attorney, we hold that on the basis of letter of subrogation cum power of attorney insurer was entitled to recover the amount. Coming to the fourth submission raised that insurer could not have sued in its own name, counsel has relied upon decision of Apex Court in Union of India (UOI) Vs.
Coming to the fourth submission raised that insurer could not have sued in its own name, counsel has relied upon decision of Apex Court in Union of India (UOI) Vs. Sri Sarada Mills Ltd., where Apex Court has approved the decision of the High Court laying down that Insurer should sue in the name of insured in spite of subrogation. In the instant case, the objection is found to be untenable as the insured has also been impleaded as plaintiff No. 2, apart from insurer, there is power of attorney executed by insured in favour of insurer as such objection is not found to be of substance. Thus, we repel it. Lastly the submission was raised that loss to the extent of Rs. 5,23,233 has not been established, again the submission is found to be unacceptable for the reason that common carrier in the letter (Ex.P/3) has clearly mentioned the value of Cotton Bales booked as per invoice was Rs. 5,23,233 and the cotton bales were carried by the Truck No. MEH-4052. In view of the aforesaid admission as to the value of the goods as per invoice submission raised is rejected. 14-15. Thus, we find appeal to be devoid of merit, same is hereby dismissed. We leave the parties to bear their own costs as incurred of this appeal. Final Result : Dismissed