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2014 DIGILAW 376 (AP)

Associated Road Carriers Ltd. v. Bharat Heavy Plates and Vessels Ltd.

2014-03-10

M.S.RAMACHANDRA RAO

body2014
JUDGMENT M.S. Ramachandra Rao, J. 1. This Appeal is filed challenging the judgment and decree Dt. 31-01-1997 in O.S. No. 400 of 1990 of the III Additional Subordinate Judge, Visakhapatnam. The appellant is defendant in the suit. Three consignments viz. (1) one 250 KVA diesel Welding generator set and silencer (2 Nos. ), (2) one 250 KVA diesel welding generator set and accessories (5 Nos. ) and (3) one 250 KVA diesel welding generator set and silencer (2 Nos. ) were entrusted to the defendant by 1st plaintiff/1st respondent hereon on 25-07-1997 and 28-07-1987 for safe carriage from Visakhapatnam to Nagothane, Maharashtra for ultimate delivery to M/s. I.P.C.L., M.G.C. Complex, Nagothane. The defendant accepted the consignments and issued consignment Note Nos. 580 and 581 Dt. 25-07-1987 and 589 Dt. 28-07-1987. The said consignments were insured with the 2nd respondent/2nd plaintiff under policy No. 51300/OPL/00003/86. The consignments were dispatched by plaintiff by truck Nos. MWT-4356, MWU5119 and MWC-4135, but they were received by the consignee in a damaged condition on 29-07-1987, 29-07-1987 and 03-08-1987 respectively. At the instance of 2nd respondent, a survey was conducted and the Surveyor submitted reports Exs. A-1, A-7 and A-9 stating that the damage was due to rough handling and transit jolts/jerks and the consignments had no external packing. The survey reports stated that the damage was only Rs. 37,473/-, Rs. 59,367/- and Rs. 31,257/-. The defendant issued Exs. A-11 to A-13 stating that goods arrived in a damaged condition at the destination. 2. The 2nd respondent had settled the claims of 1st respondent and also effected payments for the above amounts. Under a letter of subrogation Ex. A-3 Dt. 11-12-1989, it became subrogated to the rights of 1st respondent. 3. In spite of repeated demands, as the appellant/defendant did not pay the amount, the 1st respondent issued a notice Ex. A-2 Dt. 30-10-1987 in terms of Section 10 of the Carriers Act, 1865 and then filed the suit for recovery of a sum of Rs. 1,28,367/- from the defendant. 4. Written statement was filed by defendant raising a plea that the trial Court at Visakhapatnam had no jurisdiction to entertain the suit and the Courts at Calcutta alone can entertain the suit. It was pleaded that plaint was not signed by the competent person. 1,28,367/- from the defendant. 4. Written statement was filed by defendant raising a plea that the trial Court at Visakhapatnam had no jurisdiction to entertain the suit and the Courts at Calcutta alone can entertain the suit. It was pleaded that plaint was not signed by the competent person. It also pleaded that 1st respondent did not load and lash the consignments properly even though they were aware that the consignments had to be carried by road and there would be bumps and jerks en route. The appellant therefore contended that whatever damages were caused to the consignments were only on account of natural causes inherent while carrying the loads on road and it is not liable to pay any damage to respondents. It also contended that it was not aware of conduct of any survey by 2nd respondent and that the notice allegedly issued under Section 10 of the Carriers Act was not in accordance with law. It also contended that the certificates issued by the appellant did not amount to admission of liability and that they were given at the request of 1st respondent to lodge insurance claim. 5. The trial Court framed the following issues: "1. Whether the plaintiff is entitled to recover the suit claim? 2. To what relief?" 6. Before the trial Court, the respondents examined P.Ws. 1 and 2 and marked Exs. A-1 to A-23. The appellant examined D.Ws. 1 and 2, but did not mark any documents. 7. By judgment and decree dated 31-01-1997, the trial Court decreed the suit for Rs. 1,28,367/- with costs and granted subsequent interest thereon @ 18% p.a. from the date of filing of suit till realization on the ground that the transaction between the parties is a commercial transaction. The trial Court held that suit cannot be dismissed on the ground that the plaint was not signed by a competent person and that Sri T.N. Marga Badhu was competent and authorized to file the suit. It held that the appellant had issued damage certificates Exs. A-11 to A-13 to 1st respondent and although they were issued without prejudice to its rights and for the purpose of enabling the 1st respondent to claim insurance, they are helpful to 1st respondent to the extent of proving that there was a damage caused to the 3 consignments during transit. A-11 to A-13 to 1st respondent and although they were issued without prejudice to its rights and for the purpose of enabling the 1st respondent to claim insurance, they are helpful to 1st respondent to the extent of proving that there was a damage caused to the 3 consignments during transit. It held that since the consignments were not found damaged at the time of loading and they were delivered in a damaged condition, the damage would have occurred only during transit on the carriers belonging to the appellant. It held that the reports filed by the Surveyor show that the damage for the consignments was caused due to rough handling and jerks during transit and there is no reason to disbelieve the contents of survey reports filed by 2nd respondent. It concluded that there was rash and careless driving on the part of the driver of the carriers of the appellant during transit and the consignments could not be put in wooden packages because they were big in size. It relied on Ex. A-3 letter of subrogation Dt. 11-12-1989 executed by 1st respondent in favour of 2nd respondent and held that since the 2nd respondent had settled the insurance claim and paid the amount, it was entitled to claim the amount of damages from the appellant. It therefore decreed the suit. 8. Aggrieved thereby this appeal is filed by defendant. 9. Heard Sri R. Srinivasa Rao, learned counsel for appellant and Sri V. Srinivasa Rao, learned counsel for 2nd respondent. None appears for 1st respondent even though notice is served on it. 10. The learned counsel for appellant contended that the trial Court could not have relied on the survey reports Exs. A-1, A-7 and A-9 since they were prepared without notice to appellant and the surveyor was also not examined by 2nd respondent to prove the contents of the survey reports. It is also contended that it was the responsibility of 1st respondent to properly pack the consignments and that the appellant could not be blamed for the damage to the consignments. He contended that the respondents failed to prove that there was negligence on the part of appellant. He also contended that the jerks are natural while transporting of goods by truck. He contended that the respondents failed to prove that there was negligence on the part of appellant. He also contended that the jerks are natural while transporting of goods by truck. He also contended that the material transported was old and used material and not intended for sale, that the trial Court should have therefore refused the relief of damages and that interest could not have been granted by the Court below. He placed reliance on the decision of this Court in Transport Corporation of India Ltd., Secunderabad v. The New India Assurance Co. Ltd., and another C.C.C.A. No. 18 of 1996 of this Court Dt. 17-02-2012, an unreported judgment Dt. 17-02-2012 of a Division Bench of this Court in C.C.C.A. No. 18 of 1996 in support of his contention that a survey report prepared by an insurer of goods behind the back of a Carrier like the appellant, and which survey had not been conducted at the premises of appellant but at a different place, ought to be proved by examining the Surveyor and the value of damaged goods would have to be arrived at after the Surveyor was cross-examined by the appellant. 11. On the other hand, the learned counsel for 2nd respondent insurer supported the decision of the Court below and contended that the appellant was rightly held liable to pay the decretal amount by the trial Court and the mere fact that the survey was got done by it behind the back of appellant and the Surveyor was not examined, would not operate as a bar to it to rely upon the survey reports of the Surveyors. He also contended that the certificates Exs. A-11 to A-13 issued indicate that the appellant had admitted that the consignments were delivered in a damaged condition and therefore the appellant cannot deny its liability to compensate the respondents for the damage caused to the consignments. He placed reliance upon the judgment of this Court in M/s. Economic Roadways Corporation, Hyderabad v. National Insurance Company Ltd., Hyderabad and another 2002 (1) An.W.R. 661. He further contended that the Court below had given valid reasons for decreeing the suit and so the appeal be dismissed. 12. I have noted the submissions of both sides. 13. He placed reliance upon the judgment of this Court in M/s. Economic Roadways Corporation, Hyderabad v. National Insurance Company Ltd., Hyderabad and another 2002 (1) An.W.R. 661. He further contended that the Court below had given valid reasons for decreeing the suit and so the appeal be dismissed. 12. I have noted the submissions of both sides. 13. The admitted facts are that 3 consignments of goods (mentioned in para-2 supra) of 1st respondent, which were transported on carriers belonging to the appellant and which had been insured by 2nd respondent, were delivered in a damaged condition. Under Exs. A-11 to A-13, the appellant no doubt issued to 1st respondent, certificates admitting damage to the consignments. It is also not disputed that a Surveyor was appointed by 2nd respondent and he submitted three survey reports Ex. A-1 Dt. 09-09-1987, Ex. A-7 Dt. 14-09-1987 and Ex. A-9 Dt. 12-09-1987 assessing the damage to the consignments. As the insurer, the 2nd respondent paid the amounts assessed by the Surveyor to 1st respondent and on the basis of a letter of subrogation Ex. A-3 Dt. 11-12-1989 issued by 1st respondent to 2nd respondent, it made a claim for the said amount from the appellant. 14. The main issue to be considered is whether in the absence of examination of Surveyor, who prepared Exs. A-1, A-7 and A-9 survey reports which were admittedly prepared without the knowledge of appellant, the appellant can be said to be bound by the assessment of damage made by Surveyor in the said reports. 15. In M/s. Economic Roadways Corporation (supra), a consignment of machinery was entrusted by a Company to the defendant, a common carrier, for safe transport to be delivered to 2nd plaintiff, but they were delivered in a damaged condition. The defendant issued a damage certificate on 03-04-1982. The 2nd plaintiff preferred a claim against defendant/carrier. The 1st plaintiff had issued a marine-cum-erection open policy covering the risk of the consignment in favour of 2nd plaintiff. The 2nd plaintiff also made a claim against 1st plaintiff insurance company and 1st plaintiff paid a sum of Rs.1,59,499/- to 2nd plaintiff. In that case also, the report of the Surveyor was relied upon by plaintiffs and the Surveyor was not examined. The trial Court relying on the certificate Dt. 03-04-1982 decreed the suit. The Carrier filed the appeal. The 2nd plaintiff also made a claim against 1st plaintiff insurance company and 1st plaintiff paid a sum of Rs.1,59,499/- to 2nd plaintiff. In that case also, the report of the Surveyor was relied upon by plaintiffs and the Surveyor was not examined. The trial Court relying on the certificate Dt. 03-04-1982 decreed the suit. The Carrier filed the appeal. It was the plea of the Carrier in the written statement and in the appeal that the damage certificate was issued on a stolen letterhead pad with forged signatures. The trial Court did not accept this plea. The Division Bench held that when the 1st plaintiff had accepted the Surveyor's report, even at that stage, no objection was taken by the carrier to show that the survey report was not genuine. The said contention was rejected placing reliance on the judgment in T. Venkatachalapathi Lorry Service v. The N.I.A. Co. Ltd. II (1988) ACC 102 (DB) (Madras). 16. In Transport Corporation of India Ltd., Secunderabad (supra), on the other hand, on similar facts, a contrary view was expressed by another Division Bench by relying upon the judgment of the High Court of Kerala in Associated Transport Corporation Pvt. Ltd. v. National Insurance Co. Ltd. 1989-tlker-0-496 : 1989 KERLT-1-386. The Bench in Transport Corporation of India Ltd., Secunderabad (supra) held that where no notice was issued to the Carrier before the survey is made on behalf of an insurer, and the Surveyor was not examined to prove the survey report and the loss arrived at by him, and the survey was done unilaterally without participation of the carrier, who had no opportunity to object to the assessment of the Surveyor, the said survey report would not bind on the carrier. The Division Bench also held that the damage certificate issued by Carrier would not amount to an admission or acknowledgment of the value of the damage, and at best it can only be treated as an admission that the goods were damaged and nothing more and that the said certificate only entitles the consignee to claim insurance from the insurance company. It therefore set aside the judgment of the trial Court on the ground that unilateral survey conducted by an insurance company at a premises different from that of the carrier, and without inviting the representatives of the carrier to be present at the time of survey, would not bind the carrier unless the Surveyor is examined to prove the value of damaged goods by making the Surveyor available for cross-examination by the Carrier. The Division Bench observed that in T. Venkatachalapathi Lorry Service (supra) [relied upon in M/s. Economic Roadways Corporation, Hyderabad (supra)], the Madras High Court took the view that New India Assurance Company Limited (the party in the case before the Madras High Court) was a statutory body and would not have any need to create a false receipt showing that it paid amount to the consignee of the goods; but the said view of the Madras High Court is not correct since the law relating to proof of damages remains the same whether the plaintiff is a statutory body, or a government company or a non-government company, or a private individual, and no distinction can be made between them on presumptions or assumptions having regard to the status and character of the plaintiff. 17. The Division Bench also held that in a claim for damages based either on a breach of contract to transport the goods without causing any damage to them, or on a tort, the plaintiff should not only prove the breach of the contract or the tort but it should also prove the actual damage caused and the quantum of damages it claims. It held that when the insurer has failed to prove the quantum of damages, its claim for damages even for any lesser amount cannot be upheld. Therefore, the claim for the value of the damaged goods must be rejected as "not proved" within the meaning of that expression as defined in Section 3 of the Evidence Act, 1872. 18. It is true that the judgment of this Court in M/s. Economic Roadways Corporation (supra) was not brought to the notice of the Division Bench which decided Transport Corporation of India Limited, Secunderabad (supra). 18. It is true that the judgment of this Court in M/s. Economic Roadways Corporation (supra) was not brought to the notice of the Division Bench which decided Transport Corporation of India Limited, Secunderabad (supra). But in my view since the Madras High Court judgment relied upon in M/s. Economic Roadways Corporation, Hyderabad (supra) was distinguished specifically in Transport Corporation of India Limited, Secunderabad (supra), the principle laid down in Transport Corporation of India Limited, Secunderabad (supra) is to be preferred and not the view in M/s. Economic Roadways Corporation, Hyderabad (supra). 19. I therefore respectfully follow the judgment in Transport Corporation of India Limited, Secunderabad (supra) and hold that since 2nd respondent/insurer has not examined the Surveyor to prove the quantum of damage to the consignments and has thus deprived the appellant of an opportunity to cross-examine the Surveyor, such a survey report prepared behind the back of the appellant would not bind the appellant. The burden of proof as to quantum of damages lay on the 2nd respondent and it has failed in that regard. Therefore, its claim for damages for any lesser amount also cannot be upheld. Therefore, the findings of the trial Court that the survey reports Exs. A-1, A-7 and A-9 could be relied upon to assess the quantum of damages is erroneous and the decree of the trial Court on the said basis cannot be sustained. 20. Therefore, the appeal is allowed, and the judgment and decree Dt. 31-01-1997 in O.S. No. 400 of 1990 of the III Additional Subordinate Judge, Visakhapatnam is set aside. No costs. Miscellaneous petitions pending, if any, in this appeal shall stand closed. Appeal allowed.