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2013 DIGILAW 365 (CHH)

East India Transport Agency v. Oriental Insurance Co. Ltd.

2013-12-17

RANGNATH CHANDRAKAR, SUNIL KUMAR SINHA

body2013
ORDER Sunil Kumar Sinha, J. 1. Being aggrieved with the judgment and decree dated 13th of September, 2002 passed in Civil Suit No. 5-B/2002 by the First Additional District Judge, Durg, the defendant has filed this appeal. Respondent No. 1/plaintiff No. 1 is Insurance Co. Respondent No. 2/plaintiff No. 2 is consignee of the goods sent by consignor, M/s. Bharat Aluminium Co. Ltd., Korba. The appellant is a carrier, carrying out business of road transport. It was having branches at Korba and Bhilai. A consignment of 12.978 tons (695 pcs) of Aluminium LP ingots was handed over to the respondent on 23rd/24th October, 1991 under Consignment Note No. 5659829 for carriage and safe delivery to the destination at Bhilai. The goods under consignment were insured by respondent No. 1 at the instance of respondent No. 2, vide Policy No. OPL/21/92/00081, dated 1-7-1991. 2. The consignment was never delivered to respondent No. 2, therefore, a notice dated 25-11-1991 was issued by respondent No. 2 to the appellant claiming the losses sustained by them on account of non-delivery of consignment. Reply to the notice was given. It was contended that the consignment was looted on the route after commission of murder of driver and cleaner of the truck. A survey was conducted and the loss was ascertained to Rs.7,40,212/-. This amount was paid by respondent No. 1 to respondent No. 2 as a payment on full and final settlement and a letter of subrogation was issued by respondent No. 2 in favour of respondent No. 1 on 14-12-1992. Respondents, then filed the civil suit for damages claiming the said amount with interest from 15-2-1993 till the date of filing of the suit, total amounting to ` 8,14,681.80 p. It also claimed interest on the said amount @ 6% per annum from the date of filing of the suit till realisation. 3. The appellant/defendant filed written statement denying the contents of the plaint. Though it admitted that it was running the carrier business, however, it contended that it simply used to book the insured trucks for transportation, and there was no liability on them regarding accident, loot & fire, if any, caused on the way. It was imply a commission agent. In fact, the goods were loaded on truck No. B.R. 1-H 1101 on the instructions of respondent No. 2 and the appellant/defendant was simply a commission agent for arranging the truck. It was imply a commission agent. In fact, the goods were loaded on truck No. B.R. 1-H 1101 on the instructions of respondent No. 2 and the appellant/defendant was simply a commission agent for arranging the truck. According to the appellant/defendant, the entire liability was that of the driver of the truck and thereafter, on the Insurance Co. The appellant/defendant also contended that the owner of the truck, namely Sushil Kumar, was a necessary party and the suit was liable to be dismissed on account of his non-joinder. 4. The learned Trial Judge framed various issues and recorded evidence giving full opportunity to both the parties. It was held that the appellant was liable under carrier liability to pay the entire damages incurred upon respondent No. 2, owner of the truck was not a necessary party; since the amount of damages was paid by the Insurance Co. (respondent No. 1) to respondent No. 2 and a letter of subrogation was issued, therefore, the appellant was liable to pay the above amount to respondent No. 1 along with interest @ 6% per annum. Hence this appeal. 5. We have heard Counsel for the parties. 6. Mrs. Tiwari, learned Counsel for the appellant, firstly contended that the alleged negligence and criminal act was not proved by the respondents/plaintiffs. 7. Admittedly, the appellant was a "common carrier" within the meaning of Section 2 of the Carriers Act, 1865 (3 of 1865, hereinafter referred to as "the Act"). According to Section 8 of the Act, the common carrier would be liable for loss or damage caused by neglect or fraud of himself or his agent. Section 8 clearly states that every common carrier shall be liable to the owner for loss of or damage to any property, including container, pallet or similar article of transport used to consolidate goods delivered to such carrier to be carried which such loss 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 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. Section 9 of the Act provides that 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. 8. A bare reading of the various provisions of the Act, including Section 9, would make it clear that the common carrier would be liable for injury and damages caused to the goods which are delivered to them for transportation and delivery and in suit for the loss or damages brought against the common carrier, the burden of proving the criminal act or negligence would not be on the plaintiff and the exceptional circumstances are to be established by the defendant/carrier. 9. In the instant case, there is no dispute that the above consignment was handed over to the appellant for transportation and delivery from Korba to Bhilai. The appellant/defendant did not bring any circumstance in this defence which may show that it has taken due care and caution for protection and proper delivery of the consignment. On the contrary, Area Manager of the appellant, Pradeep Kumar Jain (D.W. 1), deposed that their company used to book the consignments on risk and the subject consignment was also booked on risk, therefore, there was no liability of their company in case of any such mis-happening taking place. We are of the view that in the above facts and circumstances of the case, no exception was established by the appellant/defendant and on the contrary, the appellant came with the case that the consignment was booked on risk that is to say on the risk of the parties. Therefore, the learned District Judge was fully justified in holding that the liability was that of the common carrier. 10. Mrs. Tiwari next contended that respondent No. 1 had no right to file the instant suit. 11. The Insurance Co. was plaintiff No. 1. It had paid the entire amount of damages incurred on the consignee, plaintiff No. 2. The consignee (plaintiff No. 2) had issued a letter of subrogation (Exh. P-10) in favour of the Insurance Co. (plaintiff No. 1) in following manner:-- LETTER OF SUBROGATION The Oriental Insurance Co. 11. The Insurance Co. was plaintiff No. 1. It had paid the entire amount of damages incurred on the consignee, plaintiff No. 2. The consignee (plaintiff No. 2) had issued a letter of subrogation (Exh. P-10) in favour of the Insurance Co. (plaintiff No. 1) in following manner:-- LETTER OF SUBROGATION The Oriental Insurance Co. Ltd., Block No. 2, Street No. 31, Sector-1, BHILAI-1 (M.P.) In consideration of your paying us the sum of Rs.7,40,212.00 (Rupees Seven lakhs forty thousand two hundred twelve only) in final settlement of our claim for damages under policy/certificate No. and under open policy issued by you on the under mentioned goods we hereby assign transfer and abandon to you all our rights against the Transporter of other persons whatsoever, caused or arising by reason of the said damages or loss and grant you full power to take and use all lawful ways and means in your name and otherwise at your risk and expenses to recover the said damages or loss and we hereby subrogate to you the same rights as we have in consequence or our arising from the said loss or damage. And we hereby undertake and agree to make and execute at your expenses all such further deeds, assignment and documents and to render you such assistance as you may reasonably require for the purpose of carrying out this agreement. At witness we set our hands this day 14th December, 1992. Interest Inv. No. MR No. Date From To Amount Cost of Aluminium Ingots 695 pcs. C12.978 kgs. 5659829/24-10-92 Korba Bhilai 7,40,212/- Sd/-14-12-92 (T.M. Choudhary) Jr. Manager (Fin. Claims) A Letter of Authority (Exh. P-9) and Letter of Undertaking (Exh. P-10) were also executed. 12. Mrs. Tiwari has not disputed the execution of these documents. The Letter of Subrogation is based on principles and provisions of Section 69 of the Indian Contract Act, 1872. Section 69 makes provisions regarding reimbursement of person paying money due by another, in payment of which he is interested. It provides that a person who is interested in the payment of money which another is bound by law to pay, and who therefore, pays it, is entitled to be reimbursed by the other. In the instant case, the entire amount of damage was paid by the Insurance Co. to the consignee. Therefore, the Insurance Co. It provides that a person who is interested in the payment of money which another is bound by law to pay, and who therefore, pays it, is entitled to be reimbursed by the other. In the instant case, the entire amount of damage was paid by the Insurance Co. to the consignee. Therefore, the Insurance Co. was entitled for reimbursement from the common carrier on the basis of the above Letter of Subrogation (Exh. P-10) because the insurer steps into the shoes of insured for recovery of the suit amount and the suit filed by the Insurance Co., therefore, was maintainable. Moreover, in the instant case, the suit was jointly filed by both the parties, i.e., the Insurance Co. (plaintiff No. 1) and the consignee (plaintiff No. 2), however, the relief regarding damages was claimed by the Insurance Co. (plaintiff No. 1) alone. 13. Mrs. Tiwari also contended that a notice under Section 10 of the Act was not served, therefore, the suit was not maintainable. The contention is factually incorrect. A notice dated 25-11-1991 (Exh. P-2) was sent by respondent No. 2 to the appellant by Registered Post AD, which was duly received by the appellant on 2-12-1991. The acknowledgment has been filed as Exh. P-1. Thus, it was established that a notice was duly served upon the appellant and the requirement of Section 10 was fulfilled. 14. Mrs. Tiwari lastly contended that rate of such interest was not reasonable. We are unable to accept the said argument in light of Section 34 of the Code of Civil Procedure. Section 34 provides for interest. Sub-section (1) of Section 34 provides that where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate not exceeding six percent per annum as the Court deems reasonable on such principal sum, from the date of the decree to the date of payment, or to such earlier date as the Court thinks fit. The proviso talks about commercial transactions. The proviso talks about commercial transactions. In the instant case, the rate of interest awarded is 6% per annum. We note from the pleadings of the Para 12 of the plaint that the principal amount of loss to respondent No. 2 was Rs.7,40,212/- which includes the price of the ingot, excise duty, basic packing, MPST @ 2.5% and overhead charges. Apart from that Rs.1,742.60 p. was charged as the surveyor fee, and the principal amount was determined. On the said amount interest @ 6%, from 15-2-1993, i.e., from the date of giving notice of demand through Advocate till the filing of the suit, was calculated. Thus, neither the claimed interest rate nor the pendente lite rate nor future interest rate on decretal amount has exceeded 6% per annum. We are of the view that in light of the provisions of Section 34, CPC, the rate of interest charges at different stages was quite reasonable and the same also cannot be interfered. 15. For the foregoing reasons, we do not find any substance in the appeal. The appeal filed by the appellant/defendant is liable to be dismissed and is hereby dismissed. 16. The appellant/defendant shall bear its own cost and it shall also bear the cost of the respondents of this appeal. A decree be drawn accordingly.