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Assam Bengal Roadways (P) Ltd. Vs. Hindustan Photo Films Manufacturing Co. Ltd. and anr. - Court Judgment

LegalCrystal Citation
SubjectInsurance;Motor Vehicles
CourtChennai High Court
Decided On
Judge
Reported in2(1988)ACC391
AppellantAssam Bengal Roadways (P) Ltd.
RespondentHindustan Photo Films Manufacturing Co. Ltd. and anr.
Cases ReferredIn Assam Roadways v. National Insurance Co.
Excerpt:
- - the defendant has categorically admitted in the said certificate dated 21-12-1977 that in case the inside contents of the packets delivered in good conditions are affected, they shall make the good the loss. the allegation that the goods were carried at owner's risk and that therefore, the defendant is not liable, is also untenable as it is contrary to the absolute liability of a common carrier like the defendant under law in the circumstances, the defendant's/appellant's repudication of the plaintiff's demand of the suit claim is clearly illegal and in any event untenable. the plaintiffs have also issued a lawyers notice dated 16th september, 1979 claiming payment but the defendant has failed to make the payment. the said accident was not due to any human failure or due to any.....swamikkannu, j.1. this is an appeal filed by the defendant, m/s. assam bengal roadways (p) ltd., against the judgment and decree dated 23 10-1981 in o.s. no. 234 of 1980 on the file of the subordinate judge of nilgiris at ootacamund in a suit for damages finding that the plaintiffs m/s. hindustan photo films ., ootacamund and m/s. the united india insurance company ltd., are entitled to a decree directing the defendant/appellant to pay a sum of rs. 1,34.904.82 to the second plaintiff-insurance company with costs and with interest at 6% per annum from the date of the suit till date of realisation.2. before the lower court, the case of the respondents is as under: the first plaintiff is m/s. hindustan photo films ., a government of india enterprise, having their registered office at indu.....
Judgment:

Swamikkannu, J.

1. This is an appeal filed by the defendant, M/s. Assam Bengal Roadways (P) Ltd., against the judgment and decree dated 23 10-1981 in O.S. No. 234 of 1980 on the file of the Subordinate Judge of Nilgiris at Ootacamund in a suit for damages finding that the plaintiffs M/s. Hindustan Photo Films ., Ootacamund and M/s. The United India Insurance Company Ltd., are entitled to a decree directing the defendant/appellant to pay a sum of Rs. 1,34.904.82 to the second plaintiff-Insurance Company with costs and with interest at 6% per annum from the date of the suit till date of realisation.

2. Before the lower Court, the case of the respondents is as under: The first plaintiff is M/s. Hindustan Photo Films ., a Government of India Enterprise, having their registered office at Indu Nagar, Ootacamund, Tamil Nadu and the second plaintiff is M/s. United India Insurance Co., Ltd., Coimbatore having their registered Office at Coimbatore. The defendant/appellant herein/is a public common carrier carrying its business in transporting goods from place to place for hire. It has got its registered and head office at No. 9437, Multani Dhande, Gali No. 10, Dhari Ganji, New Delhi. As per transfer of Stock 8/21/121 dated 12/14-11 1977 issued by M/s. Hindustan Photo Films ., the first plaintiff entrusted 152 wooden cases of X-ray film with the defendant at Ootacamund under the defendant's consignment Note No. 270 dated 14-11-1977 for transport to the first plaintiff's branch office at New Delhi The first plaintiff-first respondent herein was the consignor and the first plaintiff's branch office at New Delhi is the consignee under the aforesaid consignment note No. 270. The original consignment Note No. 270 has been given to the defendant at the time of taking delivery of the goods. When the goods arrived at Delhi, the defendant delivered all 152 cases of X-ray film, out of which 62 cases were found completely damaged and wet in diesel oil Therefore an open delivery was taken and the defendant has given a shortage/damage certificate dated 21-12-1977 in token of having delivered 525 packets in damaged condition. The damage to the consignment is due to the negligence of the defendant in handling and transport. The defendant has categorically admitted in the said certificate dated 21-12-1977 that in case the inside contents of the packets delivered in good conditions are affected, they shall make the good the loss. The allegation in the said certificate that was issued strictly without prejudice and without admission of liability on the part of the defendant is illegal, and in any event untenable as it is contrary to the absolute liability of a common carrier under law. The damage to the goods having been caused by the negligence of the defendant, they are liable to pay their value by way of damages. The damaged goods are totally unfit for use The plaintiffs are restricting their claim for damages representing the cost of materials delivered in damaged condition by the defendant less salvage together with the survey fees incurred in surveying and assessing the damages. Since the first plaintiff has insured the goods, it caused the damaged goods to be surveyed and damages assessed by a qualified Surveyor/assessor by name M/s. K D. Kholi & Co., and they have also assessed the damages. The first plaintiff has insured the said goods with the second plaintiff under the latter's Policy No. 112/83/1/00006/77 to cover the risk against loss or damage in transit In the circumstances the second plaintiff was obliged to pay to the 1st plaintiff a sum of Rs. 1,34.904-3 as detailed in the particulars of damages, made up of value of the goods damaged plus Central excise, less salvage value. Hence the second plaintiff is entitled to sue the defendant in its own name for the recovery of the suit claim, under the name of subrogation. In consideration of the aforesaid payment, the first plaintiff has executed a letter of subrogation, an assignment, assigning and transferring in favour of the second plaintiff all its right and remedies including the right of suit against the defendant to recover the damages. If for any reason the Court holds that the first plaintiff alone is entitled to sue the defendant for the recovery of the suit claim, then, the plaintiff No. 2 submits that the first plaintiff has also joined in this action. The first plaintiff by its letter dated 26-12-1977, made a claim upon the defendant and demanded payment of the suit claim but without any effect. The defendant has sent a reply dated 3-1-1978 alleging illegal and untenable grounds. The allegation that the goods were carried at owner's risk and that therefore, the defendant is not liable, is also untenable as it is contrary to the absolute liability of a common carrier like the defendant under law In the circumstances, the defendant's/appellant's repudication of the plaintiff's demand of the suit claim is clearly illegal and in any event untenable. The plaintiffs have also issued a lawyers notice dated 16th September, 1979 claiming payment but the defendant has failed to make the payment. Therefore the plaintiffs have been constrained to file the suit for recovery of the suit amount.

3. The defendant/appellant herein has filed a written statement to to the following effect. The consignment in question was accepted by the defendant for transportation to New Delhi only at owner's risk. A part of the consignment in question was no doubt slightly damaged due to the accident to the lorry D.H.G. 5573 in which the goods in question were transported from Ootacamund to New Delhi. The said lorry met with an accident near Bijapur, in the Karnataka State. The said accident was not due to any human failure or due to any rash or negligent driving of the lorry by the driver; but the accident was solely due to reasons beyond anyone's control and was caused by mechanical failure. Therefore, whatever the damages or shortages the first plaintiff has suffered, as the defendant is not guilty of any negligence and further as the goods were carried at owner's risk, the defendant is not liable to make good the damages or loss to the plaintiff The damages have been highly exaggerated solely with the object of making unlawful gains at the cost of defendant. The defendant is not aware of the alleged survey by M/s. K.D. Kohli & Co. In any event, the defendant does not admit the correctness of the alleged report of the alleged surveyor dated 21-12-1978. The shortage certificate dated 21-12-1977 was issued by the defendant's branch at Delhi at the request of the first plaintiff and without prejudice and without admitting any liability there under on the part of the defendant which fact has also been clearly stated in the said certificate. There is nothing unusual in the second plaintiff's setting the alleged claim of the first plaintiff as the second plaintiff of its own volition had entered into an Insurance Agreement with the first plaintiff. If the second plaintiff has paid any amount to the first plaintiff which the defendant does not admit, the second plaintiff has merely discharged its liability in the matter which will not clothe the second plaintiff with the right of reimbursement from the defendant. The second plaintiff is not entitled to demand any amount from the defendant by way of reimbursement. Besides, the alleged settlement of claim between the plaintiff has taken place behind the back of the defendant and the defendant suspects some sort of collusion between the plaintiffs in the matter in an attempt to put the defendant to wrongful loss. There' is no privity of contract between the second plaintiff and the defendant and the second plaintiff is not entitled to file or maintain this suit. The first plaintiff who claims that it has executed the alleged letter of subrogation and assignment in favour of the second plaintiff has no locus standi to file this suit or to figure as one of the plaintiffs in the plaint. The defendant is not liable to pay interest. As the plaintiffs have no cause of action for the suit, and the plaintiffs are not entitled to any ficree, it has to be dismissed with costs.

4. The plaintiffs/respondents, filed their reply statement in the following manner. The defendant accepted the consignment for transport at Owner's risk only is illegal and in any event untenable and that the damage to the consignment was due to an accident to the transport lorry and that the accident to the lorry was caused by mechanical failure are very vague. The plaintiffs do not admit the same as true and put the defendant to strict proof of the same and the defendant's non-liability in consequence. Even if true, the same could very well have been averted by proper care and mainte-nance of the vehicle and sufficient precautions. When the goods entrusted to a common carrier for transport is found damaged at the destination, it is quite natural and perfectly legal for the owner to demand a damage certificate, and the giving of such a certificate by the carrier but incorporating words such as 'without prejudice' and without admitting liability' is but illegal attempt to avoid liability, is possible. In any event these conditions or stipulations cannot at all affect the statutory liability of the defendant for his negligent transport of goods. The allegations in para 6 of the written statement in respect of the second plaintiff's settlement of the insurance claim with the first plaintiff, and the second plaintiff's right to sue the defendant for recovery and reimbursement of the suit claim in consequence are misleading, misconceived, and in any event untenable. Therefore, the plaintiffs are entitled to a decree as prayed for with costs.

5. On the above pleadings, the following issues have been framed by the lower court for trial.

1. Whether the accident alleged to transport lorry of the defendant in para 3 of the written statement is true and if so, whether the defendant is not liable for the suit claim.

2. Whether the defendant in any event is not liable for damages.

3. What is the quantum of damages to which the plaintiffs are entitled.

4. Whether the plaintiffs are entitled to claim interest.

5. To what relief is the plaintiff entitled ?

6 On behalf of the plaintiffs, PW 1 N.G. Rao, PW 2 Kesavan Nair, PW 3 Raja and PW 3 Srikumar were examined. Ex A1 to A13 were filed on behalf of the plaintiffs. DW 1 Singali was examined of behalf of the defendant/appellant herein Ex. B1 dated 21-12-1977, copy of letter sent by defendant to 1st plaintiff and Ex. B2 dated 28-9-1979 office copy of reply sent bv defendant to plaintiff's counsel were filed on behalf of the defendant/ appellant before the trial Court. On the consideration of the above evidence both oral and documentary, the trial Court came to the conclusion on issue Nos 1 to 4 that in view of the provisions laid down under Section 9 of the Carriers Act, even if the goods were consigned at owner's risk, the onus is still upon the Carrier to prove absence on his part, that the damage was occasioned on account of the negligence on the part of the defendant carrier and therefore, the defendant/appellant is liable for damages. It was also held that the accident alleged to the Transport lorry of the defendant is not true and therefore the defendant is liable for the suit claim and the second plaintiff is entitled for damages to the extent of Rs. 1,34,904.82 While issues Nos. 1 and 2 were answered in the negative, issue No. is answered in the affirmative and issue No. 3 is answered accordingly. On issue No. 5, the suit was decreed directing the defendant to pay a sum of Rs 1 34,904.82 to the second plaintiff Insurance Company with costs and with interest at 6% per annum from the date of suit till the date of realisation. Time for payment three months.

7. Aggrieved by the above decision of the trial Court, the defendant M/s. Assam Bengal Roadways (P) Ltd., New Delhi, has come forward with this appeal.

8. Mr. K. Krishnamur the, learned Counsel for the appellant/defendant inter ali a contends that the trial Court has not appreciated that under Section 6 of the Carriers Act, the appellant had every right to limit his liability and it is exactly what he has done by issuing the lorry receipt under 'owner's risk'. He further contends that the contents of Ex. A7 Consignment Note dated 14-11-1977 for sending 152 packages from the first respondent to New Delhi through the defendant carrier, Ex. A3 Damage Certificate which had been issued without prejudice and Ex. A9 Subrogation letter issued by the first respondent to second respondent had not been considered in proper prospective and as such the decision arrived at is wrong and not in accordance with law. In this regard the provisions of Section 6 as well as Section 9 of the Carriers' Act are relied upon by the learned Counsel for the appellant. It is also strenuously contended on behalf of the appellant by Mr. K. Krishnamurthy that the trial Court has ignored the fact that the respondents have failed to prove the quantum of damages.

9. The points that arise for consideration in this appeal are:

1. Whether the contention raised on behalf of the appellant that the appellant is not liable for the damages claimed by the respondents has to be upheld or not.

2. Whether the principles of law relating to subrogation has been properly appreciated and applied for by the trial Court in granting the decree in favour of the respondents/plaintiffs as prayed for in the plaint.

10. Points 1 and 2. Before going to the facts of this case, we think we can usefully extract Sections 8 and 9 of the Carriers Act, 1865.

Section 8. Notwithstanding anything herein before contained, every common carrier shall be liable to the owner for loss of or damage to any property delivered to such carrier to be carried where 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 provision of Section 3 apply and in respect of which the declaration required by that section has not been made, where such loss or damages has arisen from the negligence of the carrier or any of his agents or servants.

Section 9. In any suit brought against a common carrier for the loss, damage or non-delivery of 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 of criminal act of the carrier, his servants or agents.

11. In Union of India v. Sri Sarada Mills Ltd. : [1973]2SCR464 , it was held thus:

Subrogation does not confer any independent right on underwriters to maintain in their own name and without reference to the persons assured an action for damage to the thing insured. The right of the assured is not one of those rights which are incident to the property injured.

(cide Brief Note (A))

Before actually beginning to discuss the evidence in this case we bear in mind the provisions of Section 8 and 9 as well as the radio decedent of the above said ruling of the Supreme Court, so that we can appreciate the facts in this case carefully in accordance with the above.

12. It is well established principle of law that the right of the insurer against the person responsible for the loss does not rest upon any relation of contract or of privity between them. It arises out of the nature of the contract of insurance as a contract of indemnity, and is derived from the assured alone, and can be enforced in his right only.

13. The branch of law relating to 'Subrogation' in Insurance is very interesting. The expression 'Subrogation' in relation to a contract of insurance is not more than a common way of referring to those terms which are to be implied in the contract between the assured and the insured to give business efficacy to an agreement whereby the assured in case of loss against which the policy has been issued, shall be fully indemnified.

14. The general rule of law is that where there is a contract of indemnity (it matters not whether it is a marine policy, or a policy against fire on land, or any other contract of indemnity) and a loss happens, anything which reduces or diminishes that loss reduces or diminishes the amount which the indemnifier is bound to pay; and if the indemnifier has already paid it, then, if anything which diminishes the loss comes into the hands of the person to whom he has paid it, it becomes an equity that the person who has already paid the full indemnity is entitled to be recouped by having that amount back- That the insurer is entitled to recoupment only for the loss for which he has paid and to the extent of his payment is clear from what Lord Ask in said in Glen Line v. Attorney General (1930) 46 ITR 451.

15. In King v. Victoria Insurance Co., Ltd. (1896) AC 250 , Lord Hobhouse, made it quite clear that, under the doctrine of subrogation an insurer was entitled to recover from the assured only 'to the extent of the payment' made to the assured by the insurer under the policy. As between the insurer and the assured, the insurer is entitled to the advantage of every right of the assured, whether such right consists in contract, fulfilled or unfulfilled, or in remedy for tort capable of being insisted on or already insisted. But as stated by the Privy Council in King v. Victoria Insurance Co., Ltd., (supra) 'Subrogation by act of law would not give the insurer a right to sue in a Court of law in his own name '

16. In Mac Gillivray & Parkington on Insurance Law, Seventh Edition at page 1134, the doctrine of Subrogation has been dealt with comprehensively. The said passage reads as follows:

Subrogation and equitable doctrine One, school of thought holds that subrogation is a principle of equity (Burnand v. Rodocanachi (1882)7 A. C. 333, and that insurers' rights of subrogation were acquired from Chancery, Judicial statements of this proposition have relied in support of it on a remark by Lord Hard wicke in an early case in Chancery (Randal v. Cockran (1748) 1 Ves Sen. 97 that an insurer possessed 'the plainest equity', on the recognition by courts of equity in the eighteenth century of the notion of subrogation Morris v. Ford Motor Co. (1973) QB 792, and on the assistance given by equity to an insurer wishing to comp lean un coerative assured to lend his name to proceedings to be taken against a third party. Morris v. Ford Motor Co. (supra). Indirect support is lent to this view by those decisions in which subrogation has been described as achieving an assignment by operation of law Burnand v. Rodocanchi, (supra) since the closest analogy would be equitable assignment.

XX XX XX Equity's effective performance in that role has created the impression that subrogation was an entirely equitable doctrine, but equity should not be permitted to upstage the common law in that way.' '...subrogation applies only in cases of indemnity insurance, but it applies to all types of insurances within that classification.

17. So far as Salvage is concerned, the law relating to the same is incorporated in paragraphs 1572 to 1574.

1572. Salvage. Where the insured property is totally destroyed and cannot be repaired and the debris is of no value whatever, the assured is entitled to a cash payment of the full value of the property. Honteleone v. The Royal Insec Co. (1895) 47 La. Ann. 1563 . In cases of marine insurance where the cost of repairs will exceed the repaired value, the doctrine of constructive total loss .comes into play whereby the assured is entitled to give notice of abandonment and underwriters are bound to pay the full value as for a total loss, but are entitled to the damaged property as salvage (see Arnould, Marine Insurance, British (Shipping Laws, Vol. 10. Chaps. 28-29). There is no such doctrine in non-marine insurance law and the assured is, strictly speaking, only entitled to the difference between the value of the undamaged property and the value of what remains. Hough v People's Fire Insce. Co. (1872) 36 Hd. 398 . In practice, however, insurers often pay as for a total loss on goods which are seriously damaged and when they do so they are entitled to damaged goods as salvage, or their value. Skipper v. Grant (1861) 10 CB (NS) 237. Similarly if they pay a total loss on real property, they are entitled to anything which may be realised or realisable from the ruins. Sometimes a policy contains a specific clause to the effect that before a claim is adjusted, the insurer's may take possession and have power to sell the property insured; if in such a case the insurers take possession, they will probably be stopped from thereafter saying that they are not liable to the insured.

1573. Insurers' right to Inspect. After a fire the insurers should be afforded all reasonable opportunity of entering and inspecting the premises in order to ascertain the extent of the damage or the value of the salvage. The right to enter the assured's premises is sometimes made a condition of the policy but in the absence of any exprrss condition, such a right Will probably be implied as flowing from the nature of the contract and the custom of the insurance business. Old field v. Price (1860) 2 F. & F. 80. If the insurers remain longer than reasonably necessary for the purpose of investigating the damage, they run the risk of an action for trespass and in Cumberland v. The Albert Insurance Co. (Ins. Rec. May 11, 1866, cited in Bunyon, Fire Insurance 7the dn., (1923), P. 184), the judge in the mayor's court awarded damages on the grounds that the insurers had kept possession for two months and entirely stopped the plaintiff's business. Moreover, it has been held by the Privy Council that the extent of the damage flowing from the peril insured against must, subject to the principles of remoteness, be assessed as at the time when the insurance company gives back possession and not at the time of the cessation of the peril. Ahmedbhoy Habbibhoy v. Bombay Fire and Marine Insce. Co. (1912) LR 40 Ind. App 10, when the property damaged is inspected by the insurers, the assured should be given an opportunity of being present. Masters v. Le fevre, Bunyon (supra), when the property is not in the control or possession of the assured, there can presumably be no implied condition that the insurers shall have access to the premises and probably any express condition in the policy would be held inapplicable.

18. In the instant case before us there are two plaintiffs. They are respondents herein. M/s. Hindustan Photo Films ., Ootacamund, and M/s. The United India Insurance Co., Ltd., Coimbatore, the former being a Government of India Undertaking which is registered under the Indian Companies' Act, the liability of which is limited, and the latter one an Insurance Company. It is well known principle of law that a company is a person. It is argued that these two companies cannot figure as plaintiffs in a suit. But we find no substance in this argument advanced on behalf of the appellant because the plaintiffs being assured and the insured, certainly can figures as Co-plaintiffs especially when the principle of subrogation comes to play a prominent role in the relationship. 'Subrogation' by act of law would not give the insurer a right to sue in a Court of law in his own name. Subrogation is concerned solely with the mutual rights and liabilities of the parties to the contract of insurance. It confers no rights and imposes no liabilities upon third parties. They are strangers to the contract and the insurer who had paid the loss gets no refund or remedy against anyone. Thus the assured only can sue such parties in his own name. The plaintiffs respondents in the instant case have got every right to sue the defendant-appellant in this case by figuring themselves as plaintiffs. This is quite in consonance with the principle retained by the Supreme Court in Union of India v. Sri Sarada Mills Ltd. : [1973]2SCR464 .

19. Now let us discuss the evidence in this case relating to the points framed for consideration in this appeal.

20. It is the case of the respondents that the first respondent entrusted 152 wooden cases of X-ray film with the defcndant-appellant at Ootacamund under consignment Note No. 270 dated 14 11-1977 for transport to the first respondent's office at New Delhi. When the goods arrived at Delhi, the appellant delivered all 152 cases of X-ray film, out of which 62 cases were found completely damaged and wet in diesel oil. Therefore an open delivery was taken and the appellant had given a shortage/damage certificate dated 21-12-1977 in token of having delivered 525 packets in damaged condition It is also relevant in this connection to note that the further case of the respondents is that the damage to the consignment is due to negligence on the part of the appellant in handling and transport. Since the first respondent had insured the goods, the goods damaged were surveyed for the purpose of assessing the damages of M/s. K.D. Kholi & Co., who is a qualified assessor. According to the respondents as the first respondent had insured with the Second respondent to cover the risk against loss or damage in transit, the second respondent was obliged to pay a sum of Rs. 1,34,904.32 as detailed in the particulars of damages, made up of value of the goods damaged plus Central exise, less salvage value.

21. The first plaintiff has executed a letter of subrogation, an assignment, assigning the transferring in favour of the second respondent all its right and remedies including the right of suit against the defendant-appellant to recover the damages, and inspite of repeated demands through lawyer's notice, the appellant failed to make the payment. The appellant says that the consignment in question was accepted for transportation to New Delhi only on owner's risk and that a part of the consignment in question was no doubt slightly damaged due to the accident to the lorry DHG 5573 in which the goods in question were transported from cotacamund to New Delhi and the said lorry met with an accident near Bijapur, in Karnataka State. The said accident was not due to any failure on the part of the person or due to any rash or negligent driving of the lorry by the driver. But the accident was solely due to reasons beyond anyone's control and was caused by mechanical failure. Therefore, whatever the damages or shortages the first respondent has suffered, the appellant is not guilty of any negligence and further as the goods were carried at owner's risk. The appellant is not liable to make good the damages or loss to the respondents. Without prejudice and without admitting any liability in the part of the appellant, the shortage certificate was issued at the risk of the first respondent and the second respondent is not entitled to any payment from the appellant by way of rembursement and there is no privet of contract between the second respondent and the appellant.

22. The main points that would arise in this appeal for consideration, are:

(1) Whether there has been any negligence on the part of the appellant in transporting the consignment;

(2) Whether the appellant is not liable to pay the said amount to the respondents by way of damages.

23. PW 1 is the Section Officer of the first respondent, Hindustan Photo Films, at New Delhi. PW 2 is the Section Officer at city. PWs. 3 and 4 are other two witnesses e a mined on behalf of the respondents-herein. They filed thirteen documents. On the other hand, the defendant-appellant has examined its branch manager at Coimbatore as DW 1 and filed two documents as mentioned above. The evidence that has been unfurled through PW 1 is that the Hindustan Photo Film manufacturing Company has got its Regional Sales Office at New Delhi. As per Invoice, Ex. A21, One hundred and fifty two wooden cases containing medical X-ray films have been transported from the stock in the appellant's lorry to New Delhi Regional Sales Office. PW 1 has deposed that out of 152 wooden cases, 62 cases have been delivered in a damaged condition and with oil strips and certificate of damage Ex. A3 was issued by the appellant. PW 1 further deposed that the damaged X-ray films cannot be used for taking X-rays. The evidence of DW 1 and PW 1 and the production of invoice, Ex. Al and the certificate of damage, Ex. A3 would go to show that 152 wooden cases containing medical X-ray films have been transported in the appellant's lorry and out of 152 cases, 62 wooden cases containing 525 pockets were delivered in completely damaged and wet in diesel oil.

24. A careful reading of the provisions under Section 9 of the Carriers' Act shows that when once the loss, damage or non-delivery of the goods is proved by the respondents, the negligence or criminal act is presumed on the part of the carrier and then it becomes the duty of the common carrier to rebut the presumption. Thus, the onus of proving the negligence of the carrier is not upon the consignor that is the first respondent and on the other hand, the loss or damage to the goods is prima facie proof of negligence under Section 9 of the Carriers Act and the burden of proof to the absence of negligence is thrown upon the common carrier.

25. In P.K. Kalasahi Nadar v. K. Ponnuswami Mudaliar AIR 1962 Madras 44, it was held that in a suit against the common carrier for loss, damage or non-delivery of articles or goods entrusted to the carrier is not required to prove negligence, the reason being that the liability of a common carrier is that of an insurer.

26. In Assam Roadways v. National Insurance Co. : AIR1979Cal178 , it was held that the carriers had succeeded in proving that there was no negligence or criminal act on their part and they had limited their liability in case of accident and as such, were not liable for damages resulting from accident. But the above authority has no application to the facts of the present case. The contention raised on behalf of the appellant in the instant case before us by Mr. K. Krishnamurthy is that inasmuch as consignment in question was despatched at ower's risk, the carrier is not liable for the loss or damage and in any event, the onus is upon the consignor to prove negligence on the part of the carrier. Ex. A.7 dated 14-11-1977 is a consignment note which discloses that the consignment was booked at owner's risk. Ex A.3 dated 21-12-1977 is a certificate of damage/shortage which discloses that this certificate is issued strictly without prejudice and without admission of liability either on their part or on the part of the original Carriers or our/their servants or agents. It is relevant in this connection to note that though the recitals found in the consignment note, Ex. A.7 and in the certificate of shortage/damage, Ex. A3, exonerate the carrier from the liability for negligence on his part or on the part of his servants, yet it is well settled that any contract exonerating the carrier from liability for negligence on his part or on the part of his servant, is invalid since it is opposed to the provisions of Section 8 of the Carriers Act which lays down that every common carrier shall be liable to the owner for loss or damage to any property delivered to such carrier to be carried. Though in Ex. A3 it is stated that this certificate issued strictly without prejudice and without admission of liability on the part of the original carriers or their servants, yet the evidence of PWs 1 and DW 1 evidently go to show that 62 wooden cases containing 525 pockets were delivered in completely damaged and wet with diesel oil. In the instant case before us, we find that 62 wooden cases containing 525 pockets were delivered in completely damaged and wet with diesel oil. Thus we find that the first respondent has discharged the initial onus of proving the loss or damage. Now it is for the appellant to prove the absence of negligence.

27. It is the case of the appellant that the lorry in which goods were transported from city to New Delhi met with an accident near Bijapur in Karnataka State and the said accident was not due to any human failure or due to any rash or negligent driving of the lorry by the driver, but the accident was solely due to reasons beyond any one's control and was caused by mechanical failure. The appellant examined its Coimbatore Branch Manager as DW 1. The evidence of DW 1 is that the goods were sent from city to Bangalore in one lorry and at Bangalore, the goods were transhiped and sent to New Delhi in a different lorry which was hired by the appellant and at the place called Bijapur, the said lorry was involved in an accident due to the failure of the break and that hence the accident was not due to the rash driving or negligence on the part of the driver of the lorry It is also the evidence of DW 1 that on information he visited the scene of accident and took photos and since the said lorry was involved in an accident a part of consignment loaded in that lorry were damaged. It is also relevant in this connection to note that DW 1 was not present at the time when the accident is said to have been taken place and the appellant has failed to examine the concerned lorry driver to prove the alleged accident. The evidence of DW 1 would further go to show that it does not know as to how the driver was driving the lorry at the time of the alleged accident. It is also the evidence of PW 1 that the Motor Vehicle Inspector inspected the lorry involved in the accident and he has given a report. But both the parties have not produced the report before the Court and the appellant has not examined the concerned driver who is the competent witness to speak about the accident. From the evidence of DW 1, it cannot be concluded that the accident has taken place due to the mechanical failure in the break and on the other hand, it has got to be held that the damage of the goods in question was occasioned only due to the negligence on the part of the appellant Under the circumstances, we hold that the damage was occasioned on account of the negligence on the part of the defendant-appellant carrier and therefore, the defendant-appellant is liable for damages.

28. Now let us discuss the evidence relating to the quantum of damages payable by the appellant. The evidence of PWs 1 and 2 and DW 1 would go to show that the first respondent has sustained damages in respect of 525 packets which were packed in 62 cases. Ex A. 8 dated 7-10-1978 is the detailed claim bill which discloses the details of loss sustained by the first respondent on account of such damages and it is clear from Ex. A.8, that the first respondent has sustained loss of Rs. 1,34,904.82. In this behalf the contents of Ex. A8 and A9 as well as Ex. A10 were perused by us carefully. The only objection that has been taken by the learned Counsel for the appellant to the claim bill Ex. A8 is that the salvage value of the goods was not properly worked out. But the Assistant Manager who has been examined as DW 3 has explained that there is a silver quoting over the paper and that the value of the silver quoting is Rs. 10 per sq. foot and at that rate, the salvage value has been worked out. There is absolutely no contra evidence and DW 1 has not stated anything in his evidence about the value of the damages. So the evidence on the side of the respondents, namely that of the evidence of PWs. 1 to 3 has to be accepted. Therefore we hold that the first respondent has sustained the loss to the extent of Rs. 1,34,904.82.

29. The first respondent had received the said amount of Rs. 1,34,904.82 from the second respondent-Insurance Company. Ex. A9 is the letter from the first respondent to the second respondent which discloses that the claim was settled between the first respondent and consequent upon such settlement the first respondent has executed the letter of subrogation Ex. A9, in favour of the second respondent. By virtue of that letter of subrogation Ex. A9, the second respondent gets into the shoes of the first respondent for the purpose of recovering the amount paid by it to the first respondent from the appellant. It is contended by the learned Counsel for the appellant that the letter of subrogation Ex. A9 is not in proper order since the Insurance Policy number has not been mentioned and Ex. A9 has been created for the purpose of the suit. Ex. A9 is the letter of subrogation which discloses that the said letter of subrogation has been issued by the Assistant Section Officer and it is clear from Ex. A9 that the Subrogation letter was executed only on behalf of the first respondent. It is also relevant in this connection to note that the subrogation letter issued by the first respondent in favour of the second respondent has been admitted by the first respondent. The plaint, as already seen, has been instituted by both the plaintiffs/ respondents herein Ex. A10 dated 28-1-1977 is a copy of Insurance Policy insured by the first respondent with the second respondent which discloses that the goods have been insured against 'A11 Risks' of physical loss or damages. Ex. All dated 22 11-1978 is a discharge voucher given by the first respondent to the second respondent which discloses that the first respondent herein received from the second respondent herein a sum of Rs 1,34,904.82 in full and final discharge of all claim upon them. Ex. A12 dated 7-3-1978 is a receipt for payment of Rs 1050 being the fee for the surveyor payable by the first respondent herein. The evidence of PWs 1 & 2 and DW1 and the production of the copy of the Insurance Policy, Ex. A10 and the discharge voucher Ex. A11 and the receipt for Rs. 1050 under Ex. A1 2 would clearly go to show that the goods consigned in the suit consignment have been insured with the second respondent Insurance Co., and the first respondent has received the sum of Rs 1,34,904 82 in full settlement of their claim and a sum of Rs. 1,050 has been paid towards the fee for survey work done by K.D. Kohli & Co., who are the surveyors and Loss Assessors at New Delhi.

30. It is relevant to note that the appellant has not summoned the register or account book through court to be produced by the respondents. There need not be any presumption against the claim regarding salvage. The appellant cannot now at this stage be heard to say that the burden is on the respondents to prove the details of salvage especially when there was no notice given for the production of any document in this behalf by the appellant. Therefore we hold that there was valid subrogation in favour of the second respondent by the first respondent and that being so, it is only the second respondent Insurance Company that is entitled to the suit claim. Under these circumstances, we find that the accident is not true and that the appellant is liable for the suit claim and the second respondent is entitled to the sum of Rs. 1,34,904.82.

31. In the result, we confirm the judgment and decree of the trial Court and dismiss the appeal since there is no merit in the same. There will be no order as to costs.


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