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Union of India (Uoi) Vs. Deoria Sugar Mills Ltd. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad High Court
Decided On
Case NumberFirst Appeal No. 68 of 1968
Judge
Reported inAIR1979All200
ActsLimitation Act, 1963 - Sections 14(1); Railways Act, 1890 - Sections 73
AppellantUnion of India (Uoi)
RespondentDeoria Sugar Mills Ltd.
Appellant AdvocateS.K. Tiwari and ;Lalji Sinha, Advs.
Respondent AdvocateV. Swarup, Adv.
DispositionAppeal dismissed
Excerpt:
.....of limitation act, 1963 - suit for compensation against railway - notice served under section 80 - suit in calcutta high court -suit dismissed for territorial jurisdiction - cannot be said plaintiff was not diligent enough - entitled to exclude period when suit was pending in calcutta high court - suit not barred by limitation. (ii) damages for loss to plaintiff - section 73 of railways act, 1890 - damage caused to machinery - consignor sued railways - part damages received from insurance company - plaintiff can claim from railways - railways primarily liable - amount got from railways returnable to insurance company to extent to which they have indemnified plaintiff. - - according to the plaintiff, the said consignment reached deoria sadar on or about 11th of july, 1952 in such a..........with the union of india for the aforesaid amount at calcutta within the original jurisdiction of calcutta high court. as the defendant did not pay the said amount, the plaintiff served a notice under section 80 of the civil p. c. which was duly delivered to and accepted by the defendant at calcutta within the original jurisdiction of calcutta high court. eventually on 7th of may, 1953, the plaintiff filed suit no. 1945 of 1953 for recovery of the aforesaid amount on the original side of calcutta high court. the calcutta high court by its judgment and decree dated 6th june, 1966 dismissed the suit on the ground that it has no jurisdiction to try it. the plaintiff then filed the present suit no. 19 of 1966 on 25-7-1966 in the court of civil judge, deoria and claimed that as he had been,.....
Judgment:

H.N. Seth, J.

1. Being aggrieved by the judgment and decree dated 26th ofSept. 1967, passed by the Civil Judge, Deoria decreeing the suit filed by Deoria Sugar Mills Ltd., for recovery of a sum of Rs. 37,860.94 Paise, the Union of India has come up in appeal before us.

2. Briefly stated, the facts giving rise to the present appeal are that on or about 29th Feb., 1952 one Oriental Transport Service, acting for and on behalf of and as agent of the plaintiff, Deoria Sugar Mills Ltd., handed over a consignment of Sugar Mills Machinery consisting of vacuum creating Unit to the Central Railway at Victoria Dock for being carried at 'Railway Risk' rate to Deoria Sadar, a station on the North Eastern Railway which is owned by Union of India. According to the plaintiff, the said consignment reached Deoria Sadar on or about 11th of July, 1952 in such a badly damaged and broken condition that the machinery had become totally useless. The plaintiff was thus deprived of the use of the said machinery and had suffered loss and damages amounting to Rs. 37,860.94 Paise (Rupees 30,005.81 actual costs of consignment, Rs. 7,424.69 P. towards the freight and clearing charges paid to Oriental Transport Service and Rs. 440.44 P. insurance charged). Thereafter the plaintiff laid a claim with the Union of India for the aforesaid amount at Calcutta within the original jurisdiction of Calcutta High Court. As the defendant did not pay the said amount, the plaintiff served a notice under Section 80 of the Civil P. C. which was duly delivered to and accepted by the defendant at Calcutta within the original jurisdiction of Calcutta High Court. Eventually on 7th of May, 1953, the plaintiff filed Suit No. 1945 of 1953 for recovery of the aforesaid amount on the original side of Calcutta High Court. The Calcutta High Court by its judgment and decree dated 6th June, 1966 dismissed the suit on the ground that it has no jurisdiction to try it. The plaintiff then filed the present Suit No. 19 of 1966 on 25-7-1966 in the court of Civil Judge, Deoria and claimed that as he had been, between 7-5-1963 and 29-6-1966 prosecuting with due diligence. Suit No. 1945 of 1953 before Calcutta High Court which for defect or want of jurisdiction was unable to entertain it, it was, while computing period of limitation for filing the present suit, entitled to the benefit of Section 14 of the Limitation Act and it should be taken that the present suit had been filed within the limitation prescribed therefor.

3. The defendant, Union of India contested the suit on the ground that the plaintiff had no cause of action against defendant. According to defendant, after the consignment reached the destination, a notice under Ss. 55 and 56 of the Railways Act was sent to the plaintiff asking it to take delivery of the goods. The plaintiff, however, refused to take the delivery and the said consignment is still lying at the Railway premises at Deoria Sadar, North Eastern Railway at plaintiff's risk and responsibility. The North Eastern Railway was throughout ready and willing to deliver the goods on payment of railways dues and charges. The consignment lying at the destination was of considerable value and under the law the plaintiff should have removed the same and in case of damage it should have sued the defendant for the balance; that the suit was bad because the Central Railway on which consignment had been booked had not been made a party. Further the defendant had already realised the amount of damages if any from the Insurance Company. The cause of action for filing the present suit did not survive and that in any case, the plaintiff was not entitled to the benefit of Section 14 of the Indian Limitation Act and the present suit was barred by time.

4. The trial court, after discussing the evidence produced in the case, came to the conclusion that the consignment of machinery booked on behalf of the plaintiff at Victoria Dock, a station on the Central Railway reached Deoria Sadar, North Eastern Railway in a badly damaged condition and that it had been so damaged during the course of transit due to negligence of the railways owned by the Union of India. It held that the suit was neither bad for non-joinder of a necessary party nor was it barred by limitation as the plaintiff would be entitled to the benefit of Section 14 of the Limitation Act. The trial court further held that notwithstanding the fact that the plaintiff has already recovered part of the damages from the Insurance Company nonetheless it is entitled to recover the amount claimed by it from the Union of India.

5. In this appeal, learned counsel appearing for the Union of India did not question before us the finding recorded by trial court, that the consignment booked on behalf of the plaintiff from the Victoria Dock station was badlydamaged during the transit to Deoria Sadar. He also did not dispute before us that the extent of damage, suffered by the plaintiff in connection with the consignment booked by it, was to the extent as claimed by the plaintiff in the suit. Learned counsel appearing for the appellant pressed the appeal only on the following 2 grounds:--

1. That the trial court erred in holding that the plaintiff was entitled to the benefit of Section 14 of the Limitation Act. The suit filed in Deoria Civil Court on 25-7-196-6 in respect of damage to a consignment which was to be delivered at Deoria in the year 1953 was barred by time and,

2. The trial court erred in holding that notwithstanding the fact that the plaintiff had recovered substantial portion of the loss suffered by it from the Insurance Company, it was entitled to recover the entire amount of damage suffered by it from the Railway Companies.

As far as the first submission made by the learned counsel for the appellant is concerned, the plaintiff had served a notice under Section 80 of C.P.C. on the Union of India at Calcutta within the jurisdiction of Calcutta High Court. It filed Suit No. 1945/53 in the Calcutta High Court on its original side on 7th May, 1953 and claimed that a part of the cause of action had arisen within the jurisdiction of that court inasmuch as notice under Section 80 of the Code of Civil Procedure had been served upon the Union of India at Calcutta within the jurisdiction of that court. The plaintiff claimed that in the case of Dominion of India v. Jag-dish Prosad Pannalal (AIR 1949 Cal 622) a Division Bench of that Court had ruled that as in that case notice under Section of C. P. C. had been served upon defendant at Calcutta, that Court, had ample jurisdiction to try the suit. It was for this reason that he was under a bona fide impression that the Calcutta High Court before which he had been prosecuting Suit No. 1945 of 1953 with due diligence, had ample jurisdiction to try the suit. The case of the defendant on the other hand is that in the case of Niranjan Agarwalla v. Union of India : AIR1960Cal391 a Division Bench of Calcutta High Court had held (at p. 394):--

'Notice under Section 80 is not a part of the plaintiffs' cause of action although it is a condition precedent which must be pleaded and, if necessary, proved, un-less waived before a suit can be instituted and maintained against the Government. In any event the place from where notice under Section 80 is sent or issued in no circumstances gives the court of that place jurisdiction to entertain the suit.'

He contended that after it was definitely ruled by a Division Bench, in Niranjan Agarwalla's case, that giving of notice under Section 80 of the Civil P. C. is not part of cause of action for filing a suit, it cannot be said that the plaintiff acted diligently in prosecuting the suit thereafter in the Calcutta High Court. We are unable to accept this submission. When the plaintiff filed Suit No. 1945 of 1953 before the Calcutta High Court the decision of that court in Dominion of India v. Jagdish Prosad Pannalal a Firm (AIR 1949 Cal 622) which was a Division Bench decision held that it cannot be said that the plaintiff did not act with due diligence in filing the suit before that Court. The decision of Calcutta High Court in Niranjan Agarwalla's case, which also was a Division Bench decision did not notice the earlier Division Bench decision in Dominion of India v. Jagdish Prosad Pannalal (supra). In the circumstances, if the plaintiff decided to press his claim before Calcutta High Court on the basis of earlier Division Bench decision of that court in Dominion of India v. Jagdish Prosad's case, it cannot be said that he was not acting diligently in prosecuting his case before the Calcutta High Court. We, therefore, agree with the trial court that although from 7-5-1953 when the plaintiff filed Suit No. 1945 of 1953 in Calcutta High Court, and till 29-6-1968 when the suit was dismissed on the ground that Calcutta High Court had no jurisdiction to try the same it had been prosecuting the suit with due diligence. Section 14 of the limitation Act runs thus:

'(1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuting in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.'

It is not disputed that during all this time the plaintiff had been prosecutingthe suit No. 1945 of 1953 in the Calcutta High Court and that the suit related to a matter which is in issue in the present suit as well. As has already been held by us, the plaintiff had been prosecuting that suit with due diligence, and there is nothing to show that the suit was not being prosecuted in good faith. The Calcutta High Court held that it could not entertain the suit as it had not territorial jurisdiction to try the same. Accordingly as provided under S 14 of the Limitation Act, in computing the period of Limitation, the period during which the Suit No. 1945 of 1953 remained pending in the Calcutta High Court i.e. the period between 7-5-1953 and 29-6-1960 has got to be excluded. Learned Counsel for the appellant concedes that if this period is excluded in computing the period of limitation, the present suit is well within time. In the circumstances we find no substance in the first submission made by the learned counsel for the appellant and held that the suit is not barfed by time.

6. Coming now to the second submission, the case of the appellant is that the liability of Union of India is merely to compensate the plaintiff for the loss suffered by it. Total loss which the plaintiff claimed to have suffered was Rs. 37860.94. It has in this regard already received a sum amounting to Rs. 33,135 from the Insurance Company. His loss to this extent already stands made good. Actual loss for which the plaintiff could maintain the claim thus comes to Rs. 4,725.94 P. According to the learned counsel, the plaintiff cannot after realising the sum of Rs. 33,135 from the Insurance Company, claim that amount over again from the defendant; if the claim of the plaintiff is accepted, it would be entitled to a decree for a sum of Rs. 4,725.94 only.

7. In support of the aforesaid submission, learned counsel relied upon a decision of the Madras High Court in the case of Trustees of the Port of Madras v. Home Insurance Co. Ltd. : AIR1970Mad48 where in Natesan, J. of the Madras High Court in para 23 of the judgment observed thus:--

'Contracts of insurance are considered really as contracts of indemnity and the principle of subrogation is applied to it, being an equitable arrangement incidental to all contracts of indemnity and to payment on account of the indemnity. Subrogation is an equity rule and theequity of subrogation arises as the assured has concurrent remedies for relief from the loss against the person responsible for loss, say on contract of tort and also against the insurer on the contract of insurance, each independent of the other. And equity will not permit the injured to be doubly compensated by the insurer and the person liable for the loss. On payment to the assured by the insurer in terms of his policy the doctrine of subrogation steps in and vests in the insurer the rights the assured has against the person, who has caused the loss. He succeeds to all the ways and means by which the assured may have reimbursed himself for the loss from the person responsible for the loss.'

Learned counsel argued that in this view of the matter after the insurance company had covered plaintiff's loss amounting to Rs. 33,134 it got subrogated in place of the plaintiff to that extent. Accordingly it was the concerned insurance company which could maintain the claim against the defendant and the plaintiff could not recover damages in that respect twice over, i.e. once from the Insurance Company and again from the Union of India.

8. We are unable to accept this submission. The observations of Justice Natesan, J. quoted above were made while dealing with a question regarding maintainability of the claim made by an insurance company in a case where it had already compensated the consignor for the loss suffered by it during the course of transit of goods. The court merely ruled that in such cases the insurance company got subrogated in place of the consignor and that it had the right to maintain the suit in the same manner, in which the consignor himself Could have instituted the same.

9. Arnold in his classic on Marine Insurance (British Shipping Laws Vol. 10, page 1193) has stated the position thus:

'...... it is entirely foreign to thespirit of contracts of indemnity that a person damnified should recover his loss more than once; it is, therefore, clear that if he has already recovered from a third party, there can be no liability under the contracts of indemnity; on the other hand, if he has not previously recovered from such third party, but has the right to do so, there is no reason why such third party should be allowed to allege that his liability has been satisfied or reduced by a payment made bya stranger to him, under a contract with which he has nothing to do. The third party remains liable to the person indemnified just as if there had been no contract of indemnity. But the person indemnified can only take the sum recovered from the third party as trustee for the indemnifier, and similarly, if he has not himself received any sum to which he is entitled he is bound to afford the latter all facilities for doing so. In practice, the commonest way in which the principle of subrogation is applied to insurance is for the insurer to pay the claim of the assured and then to institute proceedings in the name of the latter, but for his own benefit against the parties ultimately liable.'

In Macgillivary on Insurance Law, 5th Edition para 1882, the learned author has pointed out that the right of subrogation is a corollary of the general principle that insurance is only a contract to indemnify the assured, that the insurer's right of subrogation arises whenever he pays a loss for which he is liable under his policy, and that it arises upon payment of a partial as well as upon payment of a total loss. The learned author states in para 1886:

'The legal right to compensation remains in the assured, and, therefore, unless there hag been an express assignment of the legal right, actions at law brought for the benefit of the insurer are brought in the name of the assured. In courts of Equity or of Admiralty the insurer has always been allowed to sue in his own name.'

Another instructive passage from Porters' Laws Insurance, 8th Edition, at page 232 the position is stated thus:

'The insurer, having contracted to indemnify, could not insist on others being sued first who were primarily liable or on consolidation of his action with others by the same assured against other insurers in respect of the same loss. The mere payment of a loss by the insurer does not afford any defence to a person whose fault has been the cause of the loss in an action brought against the latter by the assured but the insurer required by such payment a corresponding right in any damages recoverable by the assured against the wrong-doer or other party responsible for the loss.'

A perusal of the aforesaid authorities shows that the position of the insurancecompany in the circumstances was, that of an indemnifier. The railway company continues to be primarily liable for the damages sustained by the plaintiff and it not being a party to the contract of indemnity, cannot be absolved of its liability to pay the damages to consignor merely because the consignor had already recovered the money from the insurance company, under a contract of insurance. In such a case the consignor will receive the compensation for damage suffered by him in trust for the insurance company. After the consignor receives the amount from the railway company, he will have to make it over to the insurance company to the extent to which it had already indemnified him. This is how the consignor is prevented from being doubly compensated in respect of the loss suffered by him i.e. once by receiving the compensation from the insurance company and again receiving the same directly from the railway company. Viewed in this light the observations of Natesan, J. in Trustees of the Port of Madras case : AIR1970Mad48 (supra) relied upon by the learned counsel for the appellant do not support his submission.

10. We are accordingly of opinion that the right of the plaintiff to claim compensation to the extent of Rupees 37,860.94 was not in any way affected because the plaintiff had received a sum of Rs. 33,135 from the insurance company. Of course from out of a sum of 'Rs. 37,860 which the plaintiff would receive from the Union of India, a sum of Rs. 33,135 would be held by him as a trustee for the insurance company which had insured the machinery involved in the suit. We, therefore, find no force even in the second submission made by the appellant.

11. As in our opinion, neither of the two submissions made on behalf of the appellant has any force, the appeal fails and is dismissed with costs.


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