Singareni Collieries Co. Ltd. v. T. Subrahmanyeshwar Rao
2025-04-17
K.SUJANA
body2025
DigiLaw.ai
JUDGMENT : K. Sujana, J. 1. Challenging the order dated 07.12.1998 passed in O.S.No.13 of 1992 by the learned Senior Civil Judge, Asifabad, the present appeal suit is filed. 2. The brief facts of the case are that the plaintiff is a coal transport contractor for the defendant company under a contract from July 1991 to July 1993. He owns a tipper vehicle bearing No. AEK-2298 which was damaged on November 19/20, 1991, when a coal bunker unexpectedly fell on it while stationed under the bunker for coal loading. The plaintiff reported the incident to the defendant, and both parties assessed the damages. The plaintiff claims that the defendant neither repaired the vehicle nor compensated him for waiting charges, which caused a daily loss of Rs.1,500/- from November 19, 1991, until repairs were completed on December 27, 1991. The plaintiff spent Rs.1,67,219/- on repairs and sustained additional losses due to waiting charges of Rs.55,500 for 37 days. He sold damaged parts as scrap for Rs.5,000 and is now claiming a total amount of Rs.2,17,719/-from the defendant. 3. However, the defendant acknowledges the plaintiff's contractor status and ownership of the vehicle but denies responsibility for the accident. They claim the coal bunker fell accidentally and the damage was assessed at Rs.40,000/-. The defendant offered to repair the vehicle at its workshop, but the plaintiff refused and chose to repair it himself. The defendant disputes the repair cost claimed by the plaintiff and denies any obligation to pay waiting charges. He argued that the plaintiff's claim is excessive and that, per the contract agreement, the defendant is not liable for accidents beyond its control. The defendant asserts that the plaintiff should seek compensation from his insurance company and requests the dismissal of the suit. 4. Basing on the above pleadings, the trial Court framed two issues and on behalf of the plaintiffs i.e., PWs.1 and 2 were examined and Ex.A1 to A27 are marked. DWs.1 and 2 are examined and Exs.B1 to B7 were marked on behalf of the defendants. 5. After examining the evidence, the trial Court, vide order dated 07.12.1998, partly allowed the suit holding that the damage caused to the plaintiff’s vehicle was a direct consequence of the defendant company's negligence in maintaining the bunker on its premises. Relying on exhibits such as Ex.
5. After examining the evidence, the trial Court, vide order dated 07.12.1998, partly allowed the suit holding that the damage caused to the plaintiff’s vehicle was a direct consequence of the defendant company's negligence in maintaining the bunker on its premises. Relying on exhibits such as Ex. A-2, A-25 to A-27 and joint inspection reports, the trial Court concluded that the damage was not remote but arose during the discharge of contractual obligations. It was observed that the defendant did not fail to respond to multiple notices sent by the plaintiff, nor did it protest the quotations issued for repairs. The oral offer to get the vehicle repaired or pay Rs.40,000/- was unsubstantiated by written communication and was therefore considered insufficient to refute the plaintiff’s claim. 6. Further, the trial Court accepted the claim of the plaintiff of Rs.1,67,219/- towards actual repairs, supported by a series of bills (Ex. A-7 to Ex. A-22), as genuine and unrebutted. Waiting charges for 37 days were also awarded at Rs.1,200/- per day, amounting to Rs.44,400/-, based on prevailing transportation rates. After deducting Rs.5,000/- realized from selling damaged parts, the trial Court held the plaintiff entitled to Rs.2,06,619/- as total damages. Interest at 12% p.a. from the date of the suit till realization was also granted, considering the silence of the defendant and failure to challenge the claim. Aggrieved by the said judgment, the appellant/defendant preferred the present appeal suit. 7. Heard Sri P. Sri Harsha Reddy, learned Standing Counsel for Singareni Collieries Co. Ltd., appearing on behalf of the appellant as well as Sri L. Harish, learned counsel appearing on behalf of the respondent. 8. Learned counsel for the appellant submitted that the judgment and decree passed by the trial Court is contrary to law, based on a wrong reading of the evidence, and ignores the actual terms of the contract between the parties and that the contract does not mention payment of any compensation or damages in case of an accident. The vehicle involved was insured, and the insurance company was not made a party to the suit, making the suit defective. The accident was not intentional or due to negligence but purely accidental and beyond the control of the appellant. He further submitted that according to Clause 14 of the agreement, the appellant is not liable for any loss or damage caused due to factors beyond its control. 9.
The accident was not intentional or due to negligence but purely accidental and beyond the control of the appellant. He further submitted that according to Clause 14 of the agreement, the appellant is not liable for any loss or damage caused due to factors beyond its control. 9. Learned counsel for the appellant argued that both parties had mutually agreed during a joint inspection to settle the matter by paying Rs.40,000/-. Despite this, the trial Court awarded a much higher amount, which goes against the agreement. There is no proper evidence to show that the bunker was in bad condition or that the appellant was negligent. In fact, the respondent did not check the condition of the bunker before using it, which any responsible person should have done. Both parties believed the bunker was in working condition, so blaming the appellant alone is unjustified. He contended that the claim for waiting charges is baseless as the contract does not provide for any such payment. The repair bills produced by the respondent are inflated, not supported by proper evidence, and were wrongly accepted by the trial Court. The trial Court shifted the burden of proof to the Appellant and assumed negligence without any solid proof. The appellant had even offered to repair the vehicle out of goodwill, which was not an admission of fault or liability. The learned Judge misread the intention behind this offer and wrongly concluded that the Appellant had a role in causing the accident. 10. He further contended that the trial Court relied on unrelated judgments and misapplied the law under Section 73 of the Contract Act . The trail Court also wrongly excluded the appellant’s documents and accepted exaggerated credit bills from the respondent without proper verification. The award of Rs.2,06,619/- with interest at 12% and costs is not justified in light of the contract terms, especially Clause 14. Therefore, he prayed the Court to set aside the judgment of the trial Court by allowing this appeal suit. 11. On the other hand, learned counsel for the respondent submitted that the appellant himself admitted that a joint inspection was conducted and that the respondent agreed to accept Rs.40,000/- towards damages. When there was no negligence on the part of the appellant, there would be no reason to offer Rs.40,000/- as compensation.
11. On the other hand, learned counsel for the respondent submitted that the appellant himself admitted that a joint inspection was conducted and that the respondent agreed to accept Rs.40,000/- towards damages. When there was no negligence on the part of the appellant, there would be no reason to offer Rs.40,000/- as compensation. On the one hand, he admitted his negligence by offering Rs.40,000/-, and on the other hand, he claims that the negligence lies with the respondent. He cannot take such a contradictory stand. With regard to negligence, the trial Court elaborately discussed the documents filed by the plaintiff and also examined the concerned witness, P.W.2 - professional mechanic, who deposed about the damage to the vehicle, the repairs carried out, and the accident involving the said vehicle. Based on the evidence and the documents filed by the respondent, the trial Court rightly delivered its judgment. There is no illegality in the judgment of the trial Court, and hence, the learned counsel prayed for dismissal of the appeal suit. 12. The points that arise for consideration in this appeal are: i. Whether the respondent/plaintiff is entitled to damages to the tune of Rs.2, 11,619/-? ii. Whether the appellant is liable to pay the said compensation? iii. Whether the judgment of the trial Court warrants any interference? Point Nos.i and ii: 13. In light of the submissions made by both the learned counsel and upon perusal of the material available on record, it is the case of the plaintiff that he entered into a contract with the Defendant-Company for transportation of coal. In pursuance of the said contract, the plaintiff deposited an amount of Rs.25,000/- with the Defendant-Company and commenced transportation work. On the alleged date of the incident, while the plaintiff's tipper was stationed under the bunker at SRP-2 incline for loading coal, the coal bunker suddenly collapsed, causing substantial damage to the tipper. 14. There is no dispute regarding the collapse of the coal bunker and the resultant damage to the plaintiff’s vehicle. The appellant/defendant has admitted the said incident. The primary contention raised by the appellant is that, in view of Clause 14 of the agreement, the company is not liable for any compensation.
14. There is no dispute regarding the collapse of the coal bunker and the resultant damage to the plaintiff’s vehicle. The appellant/defendant has admitted the said incident. The primary contention raised by the appellant is that, in view of Clause 14 of the agreement, the company is not liable for any compensation. A perusal of Clause 14 reveals that the company shall not be liable for compensation in the event of losses suffered by the contractor due to reasons such as strike, lock-out, shortage of labour, fire, breakdown or road accidents, riots, war, insurrection, restraints imposed by Governmental Acts or Legislation, or any other causes beyond the control of the company. 15. However, none of the contingencies enumerated in Clause 14 are applicable to the present case. The collapse of the bunker, which was under the control of the Appellant-Company, cannot be said to be a circumstance beyond the control of the company. Thus, the protection under Clause 14 does not extend to the facts of this case. 16. Furthermore, the appellant, in both the written statement and the grounds of appeal, categorically admitted that he offered to repair the vehicle and even proposed payment of Rs.40,000/- towards damages after receiving legal notice from the respondent/plaintiff. This itself is an indication of implied admission of negligence on part of the appellant. 17. The contention of the learned counsel for the appellant that the respondent should have claimed compensation from the insurance company is also without merit. The learned counsel for the respondent rightly pointed out that the incident did not constitute a road accident, and therefore, the insurance company was not liable to pay damages. When the negligence is attributable to the Company, the respondent is not bound to proceed against the insurer. Thus, the appellant's contention on this aspect is liable to be rejected. 18. With regard to the quantum of damages awarded by the trial Court, the appellant contended that the amount is exorbitant. However, the respondent/plaintiff produced documentary evidence under Exhibits A1 to A27, including repair bills under Exhibits A7 to A22, amounting to Rs.1,71,000/-. To substantiate the said bills, the respondent examined P.W.2, a professional mechanic, who corroborated the extent of damage and the repair work undertaken. Nothing substantial was elicited during the cross-examination of P.W.2 to discredit his testimony.
However, the respondent/plaintiff produced documentary evidence under Exhibits A1 to A27, including repair bills under Exhibits A7 to A22, amounting to Rs.1,71,000/-. To substantiate the said bills, the respondent examined P.W.2, a professional mechanic, who corroborated the extent of damage and the repair work undertaken. Nothing substantial was elicited during the cross-examination of P.W.2 to discredit his testimony. Therefore, the trial Court rightly concluded that the respondent/plaintiff spent an amount of Rs.1,67,270/- towards repairs and mechanic charges. 19. The trial Court also awarded waiting charges at the rate of Rs.1,200/- per day, based on prevailing market rates, for a total of 37 days. The said claim is supported by the evidence on record, and there appears to be no illegality in awarding such damages. 20. However, with respect to the interest awarded, the trial Court granted interest @ 12% per annum from the date of filing of the suit till the date of realization. This needs modification in light of Section 34 of the Code of Civil Procedure , 1908 (for short ‘CPC’), which reads as follows: “Section 34 CPC – Interest (1) 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, 1 [with further interest at such rate not exceeding six per cent. 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 : [Provided that where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed six per cent. per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions. Explanation I.--In this Sub-section, "nationalised bank" means a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970).
Explanation I.--In this Sub-section, "nationalised bank" means a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970). Explanation II.-- For the purposes of this section, a transaction is a commercial transaction, if it is connected with the industry, trade or business of the party incurring the liability.] (2) Where such a decree is silent with respect to the payment of further interest 3[on such principal sum] from the date of the decree to the date of payment or other earlier date, the Court shall be deemed to have refused such interest, and a separate suit therefore shall not lie. Correct the grammar and improve the sentences like the judgment of the Court and further insert section 34 of CPC in the judgment where it is relevant and improve the sentences with regard to section 34 of CPC.” 21. In the present case, though the transaction is in the nature of a commercial arrangement, no contractual rate of interest has been established. Therefore, in the absence of a specific contractual stipulation or evidence of prevailing lending rates from nationalised banks, the interest rate must be regulated within the permissible limits of Section 34 CPC. 22. Accordingly, the interest awarded by the trial Court is modified to the following extent: a) The respondent/plaintiff shall be entitled to interest at the rate of 12% per annum from the date of suit till the date of decree, as adjudged by the trial Court. b) However, from the date of the decree till the date of realization, the interest shall be limited to 6% per annum, in consonance with the mandate of Section 34 CPC. Point No.iii 23. In view of the above discussion, the appeal suit is liable to be dismissed except to the extent of modification in the interest component. The judgment and decree of the trial Court are upheld, subject to the variation in interest as indicated above. 24. In view thereof, this appeal suit is dismissed. There shall be no order as to costs. Miscellaneous applications, if any pending, shall stand closed.