IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 16.06.2010 CORAM THE HONOURABLE MR. JUSTICE P.R.SHIVAKUMAR Appeal Suit No.113 of 2003 M/s. Jaihind Roadways Pvt. Ltd., No.30-G, Mohammed Ali Road Mumbai 400 003 having branch at No.9, Vannier Street, Chennai – 1 by its Divisional Manager ..Appellant/Defendant Vs. 1. M/s.Hindustan Motors Limited No.9/1, R.N. Mukher Jee Road Calcutta 700 001 branch at their Earth Moving Equipment Division, Tiruvallur 602 004. rep. by Power Agent/Subrogee 2. The Oriental Insurance Company Ltd., Oriental Home, Asaf Ali Road New Delhi 110 002 and their Divisional Office at J.L.C Building No.1, Katpadi Road, Vellore 632 004 rep. by their Divisional Manager. ..Respondents/Plaintiffs Prayer: Appeal filed under Section 96 of Civil Procedure Code against the judgment and decree passed in O.S.No.3409 of 1999 dated 30.04.2002 by the Additional District Judge, (Fast Tract Court-V), Chennai. For Appellants : Mr.S.A.Rajan For Respondents : Mr.Nageswaran Narichania JUDGMENT M/s. Jaihind Roadways Pvt. Ltd., which figured as the defendant in O.S.No.3409 of 1999 on the file of the Additional District Judge, Fast Tract Court-V, Chennai has come forward with the present appeal against the decree of the said Court dated 30.04.2002 made in the https://hcservices.ecourts.gov.in/hcservices/ above said original suit. The plaintiffs 1 and 2 in the original suit are the respondents 1 and 2 in the appeal. 2.The averments found in the plaint filed by the respondents herein/plaintiffs in brief are as follows:- Respondents 1 and 2/plaintiffs 1 and 2 are public limited companies. The defendant / respondent is a private limited company and a common carrier for reward. The first appellant/first plaintiff purchased carbon steel castings of different specifications and low alloy steel castings from M/s. Steel Cast Limited, Bhavnagar under five invoices dated 28.05.1996. The particulars of the same are as follows:- SL.No Invoice No. & Date Amount 1. 221/28.05.96 Rs.4,08,085.60 2. 222/28.05.96 Rs. 76,845.60 3. 223/28.05.96 Rs.2,21,963.04 4. 224/28.05.96 Rs.1,20,258.32 5. 225/28.05.96 Rs. 26,077.00 --------------- Rs.8,53,229.56 --------------- The said goods were entrusted to the appellant/defendant common carrier at Bhavnagar by the said seller (consigner) viz., Steel Cast Limited for safe carriage and delivery to the first respondent/first plaintiff under Consignment Note No.BVN 15445 dated 28.05.1996. By the Consignment Note issued, the appellant common carrier undertook to carefully transport and deliver the said consignment in good order and condition at Chennai to the first respondent/first plaintiff. The value of the consignment was declared and noted in the consignment note issued by the appellant/defendant common carrier. The total weight of the consignment entrusted to the appellant/defendant common carrier for transport was 9852 kgs. As the goods entrusted to the common carrier were not delivered to the first respondent's/first plaintiff's office at Chennai, a notice of loss was also sent to the carrier on 20.06.1996 and periodical demand for delivery of the consignment was also made. A complaint was also lodged with the Inspector General of Police, Mumbai on 29.06.1996. Then it was represented by the appellant/defendant common carrier that the entire consignment was lost on account of an alleged disturbance enroute. As the said goods sent through the appellant/defendant common carrier was insured with the 2nd respondent/2nd plaintiff, an independent enquiry was made by the 2nd respondent's/2nd plaintiff's Chennai office, whereupon the appellant/defendant common carrier on 07.10.1996 certified that they were unable to deliver the consignment on account of an alleged looting at Bhuing Carwar District, Sathara, Maharashtra. The value https://hcservices.ecourts.gov.in/hcservices/ of the consignment was Rs.8,53,229.50. The non-delivery certificate was also addressed to the consignor viz., M/s. Steel Caste Limited, Bhavnagar and to the first respondent/first plaintiff at Chennai. Through the communications between the appellant/defendant and the first plaintiff, the first plaintiff was accusing the appellant/defendant common carrier of misfeasance and malfeasance and held the appellant/defendant liable in law to make good the loss caused to the first respondent/first plaintiff, the owner of the consignment. As per the terms and conditions of the policy of insurance, a sum of Rs.8,53,229/- was paid by the insurer, the 2nd respondent/2nd plaintiff on account of the non-delivery of the suit consignment and on such payment the first respondent/first plaintiff executed a letter of subrogation and special power of attorney in favour of the 2nd respondent/2nd plaintiff on 24.12.1996. As such, the 2nd respondent/2nd defendant is entitled to recover the said amount from the appellant/defendant. However, with a view to avoid any technical defence being raised, the suit has been filed by both the respondents/both the plaintiffs and the respondents/plaintiffs do not have any objection for a decree being passed in favour of the 2nd respondent/2nd defendant alone or in favour of both the respondents / both the plaintiffs. The 2nd respondent/ 2nd defendant through its Recovery Agent M/s.V.N.C.Narichania (P) Ltd., made a demand for compensation on 29.04.1997. By a reply dated 26.05.1997, the appellant/defendant common carrier admitted non-delivery of the consignment, but disowned its liability to pay compensation. Once again a fresh claim was made and a similar reply was sent by the appellant/defendant common carrier on 09.09.1997. Under such circumstances, the respondents/plaintiffs were forced to file the suit for the recovery of a sum of Rs.8,53,229/- being the value of the consignment entrusted to the appellant/defendant common carrier for the non-delivery of the same. Hence, a decree should be granted directing the defendants to pay 2nd respondent/ 2nd plaintiff a sum of Rs.8,53,229/- together with an interest at the rate of 18% p.a from the date of plaint till realization and with cost. 3.The suit was resisted by the appellants/defendants by filing a written statement containing allegations which are, in brief, as follows:- The appellant/defendant owned its own trucks for movement of different kinds of commercial goods entrusted to it. The appellant/defendant is not aware as to whether the first respondent/first plaintiff was the owner of the steel castings of different specifications set out in para 3 of the plaint. The appellant/defendant also does not know the value of the goods. However, it is a fact that a consignment of the description found in Para 3 of the plaint was entrusted to the appellant/defendant at Bhavnagar by the consignor viz., M/s.Steel Cast Limited and a Goods Consignment Note bearing No.BVN 15445 dated 28.05.1996 was issued by the agent of the appellant/defendant at Bhavnagar. According to the https://hcservices.ecourts.gov.in/hcservices/ instruction, the goods were to be delivered at Tiruvallur, near Chennai. Tiruvallur is not within the jurisdiction of the trial Court and hence the Court situated at Tiruvallur District alone shall have the jurisdiction. For reasons beyond the control of the appellant/defendant, it became impossible to deliver the goods entrusted to the appellant/defendant. After the despatch of the goods by a lorry truck bearing Registration No.GJ-1 X-6875 from Bhavnagar Gujarat to Bangalore enroute to Tiruvallur, it came to be noticed that the goods did not reach Bangalore in time. Thereupon the Officer of the appellant/defendant company took up a preliminary investigation from which it came to know that the Cargo was despatched on 28.05.1996 at Bhavnagar; that after filling the fuel tank there at Thane near Mumbai on 30.05.1996; It had left Thane in the evening of 30.05.1996 itself and the said truck reached Catrej Ghat near Pune next day; that when the truck was passing through the Highway, the drivers of a number of trucks found two other persons seated in the said truck who were not connected with the truck and that the truck did not reach Bangalore on 02.06.1996 as per schedule. A telephonic message sent by one Jeevarji Bhai was received at the Bangalore office of the appellant/defendant on 08.06.1996 to the effect that their truck was stranded near Vela with single tyre on the rear side and the entire vehicle was found empty without any material loaded on it. On receipt of the said information, officers of the appellant/defendant company went to that place on 09.06.1996 and other places in search of the vehicle and they were not in a position to find it. On an enquiry with their office at Thane, they came to know that the lorry truck was towed by crane and was taken to Bhuyinj Police Station. When the officers of the appellant/defendant went to the said police station, they came to know that the driver and cleaner were missing and the consignment materials were also stolen. The police officer was informed by the officer of the appellant/defendant and also gave a complaint in writing informing the said fact furnishing the value of the goods to be Rs.8,50,000/-, based on which FIR No.58/1996 was registered on 12.02.1996. On thorough investigation made by the police, one Makdoom and Kasam were arrested. They accepted the sale and purchase of the steel cast materials that were transported in the above said lorry. A very small portion of the consignment alone could be found, that too altered and melted into different shapes. Only 12 pieces of broken original castings were available. Apart from the above said Makdoom and Kasam, Bapoo Bansode, the cleaner of the lorry and one Gosavi were arrested and released. The fate of the driver by name M.T.Joyus was not known and he could not be traced. The officers of the appellant/defendant rendered all assistance by providing a lawyer to co-ordinate the investigation of the police. Despite their best efforts they were not able to trace and recover the missing goods. There was an act of King's enemy which resulted in the loss of consigned cargo. On investigation it revealed Makdoom, Gulab and Agarwal were the persons involved in the theft of the consignment. The investigation also revealed that one Rohidas Gosavi, a notorious https://hcservices.ecourts.gov.in/hcservices/ thief, was involved in looting goods on highways and selling them to Makdoom and others. Photograph of one Bapu Bansoda was also published in the area. The investigation revealed that the said Babu Bansoda picked up friendship with the driver of the lorry in which the suit consignment was sent. The appellant/defendant had taken all steps and made honest attempts to recover the goods. As the goods were lost after the truck was hijacked, no liability attached to the appellant/defendant in respect of the loss. The loss/damage was not the one caused by the neglect or fraud of the carrier or anyone of the persons employed by them on whom they had control. While ordinarily a common carrier shall be ipso facto liable for the loss of goods or non-delivery, if the loss of goods occurs due to an act of god or act of King's enemies, the common carrier shall be exempted from such liability. An act of dacoity, theft, robbery or murder of the employees of the carrier is suspected or proved the act shall be deemed to be an act done by King's enemy beyond the control of the appellant/defendant. In any event, the appellant/defendant invariably advised the consignor to get the goods insured and accept the goods for transportation at owner's risk, mentioning such a condition in the goods consignment notice issued by the defendant. The 1st respondent/ 1st plaintiff had insured the Cargo and had admittedly recovered the value of the Cargo from the insurer viz., the 2nd respondent/2nd plaintiff. There is no privity of contract between the 2nd respondent/2nd plaintiff and the appellant/defendant and provisions of Marine Insurance Act will not apply to the facts of the case. The 2nd respondent/2nd plaintiff was liable to compensate the 1st respondent/ 1st plaintiff under a contract. The 2nd respondent/2nd plaintiff cannot initiate an action for recovery of damages against the carrier. Only if the carrier is liable to compensate the 1st plaintiff, the 2nd plaintiff shall have the right to claim the compensation based on subrogation. Appellant/defendant does not know whether M/s. VNC Narichanta Pvt. Ltd., was the recovery agent of the 2nd respondent/2nd plaintiff. Even if there is any such contract between them, the same shall be void as opposed to public policy. Therefore, the suit should be dismissed with cost holding that the appellant/defendant is not liable to pay any amount as compensation to either of the respondents/plaintiffs. 4.Based on the above said pleadings the following issues were framed in the trial Court:- 1)Are the plaintiffs entitled to a decree for a sum of Rs.8,53,229/- against the defendant? 2)Are the plaintiffs entitled to interest at 18% p.a? 3)Whether there is territorial jurisdiction for trying the case? 4)Whether the defendant is not liable to pay the suit claim? 5)To what relief the plaintiffs are entitled? https://hcservices.ecourts.gov.in/hcservices/ 5.PW1 was examined as the sole witness and Exs.A1 to A20 were marked on the side of the respondents herein/plaintiffs. Dws.1 and 2 were examined and Exs.P1 and P2 were marked on the side of the appellant herein/defendant. 6.The learned trial Judge after hearing the arguments advanced on both sides considered the pleading and evidence adduced on both side and upon such consideration came to the conclusion that the appellant herein/defendant being a common carrier was liable to pay the suit claim and decreed the suit directing the defendant/appellant to pay a sum of Rs.8,53,229/- together with a subsequent interest from the date of plaint till realization at the rate of 6% p.a and with cost. 7.Aggrieved by and challenging the said decree passed by the trial Court, the appellant/defendant has come forward with the present appeal on various grounds set out in the memorandum of appeal. 8.The main contention raised by the defendant/appellant in the appeal is that the goods were lost during transit due to an act done by King's enemy and therefore, the carrier should be exonerated from the liability to pay compensation to the owner for the loss of cargo; that there was no negligence or foul play on the part of the appellant/defendant or its agent and in such circumstances, the appellant/defendant should be exonerated from the liability to pay compensation for the loss of the Cargo; that since the owner of the goods viz., the 1st respondent/ 1st plaintiff received the value of the goods from the 2nd respondent/ 2nd plaintiff, as per the contract of insurance, the 1st respondent/ 1st plaintiff shall not have any right to recover damages from the appellant/defendant; that when the 1st respondent/ 1st plaintiff is not entitled to recover damages from the appellant/defendant, the insurer viz., the 2nd respondent/ 2nd defendant cannot have a similar right against the appellant/defendant and that since the goods were transported under owner's risk, the 1st respondent/ 1st plaintiff would not be entitled to claim any compensation from the appellant/defendant for the loss of the goods. It is also the contention of the appellant that the provisions of the Marine Insurance Act do not have any application in this case covering the risk of surface carriage. 9.Therefore, the points that arise for consideration in this appeal are as follows; 1)Whether the appellant/defendant is not liable to pay compensation for the loss of the consignment as the goods were transported at owner's risk? 2)Whether the respondents/plaintiffs are entitled to a decree for a sum of Rs.8,53,229/- against the appellant/defendant? https://hcservices.ecourts.gov.in/hcservices/ 3)Whether the plaintiffs are entitled to interest? if so, at what rate? 4)To what relief the parties are entitled? 10.Admitted facts are as follows: M/s. Hindustan Motors Limited, the first respondent/first plaintiff purchased Carbon Steel Castings of different specifications for a total value of Rs.8,53,229.56 under 5 invoices all dated 28.05.1996 from M/s. Steel Cast Limited, Bhavnagar, Gujarat. Those five invoices are marked as Exs.A3 to A7. The goods thus purchased by the first plaintiff from M/s. Steel Cast Limited, Bhavnagar (consignor) were entrusted to the appellant/defendant, a common carrier for transportation and delivery at Tiruvallur in Tamil Nadu. The goods consignment was acknowledged by the Consignment Note No.BVN 15445 dated 28.05.1996 issued by the appellant/defendant to the consignor M/s. Steel Cast Limited, Bhavnagar marked as Ex.A8. The goods were not delivered in time to the first respondent/first plaintiff within the expected time. On enquiry, it revealed that the goods were transported by a lorry truck bear Registration No. GJ- 1-X-6875 and the same were lost in transit in between Bhavnagar and Bangalore. A complaint was lodged with the police and a criminal case was registered, is evident from the evidence of DW2 and Exs.B1 and B2. However, the goods could not be recovered for being delivered to the 1st respondent/ 1st plaintiff. Consequently, the appellant/defendant issued a non-delivery certificate to the 2nd respondent/2nd plaintiff so as to enable it to settle the claim of the 1st respondent /1st plaintiff under the contract of insurance as the goods had been insured with the 2nd respondent/ 2nd plaintiff. The non-delivery certificate to which a photocopy of the police compliant has been annexed has been produced and marked as Ex.A9. Pursuant to the issuance of such non-delivery certificate, the 2nd respondent/ 2nd defendant settled the claim of the 1st respondent/ 1st plaintiff and got a letter of subrogation-cum-special power of attorney dated 24.12.1996 from the 1st respondent/1st plaintiff under Ex.A12. Based on the letter of subrogation-cum-special power of attorney, the claim is made against the appellant/defendant. However, in order to avoid any technical objection, the suit has been jointly filed by the respondents/plaintiffs stating that they have no objection for granting a decree either in favour of the 2nd respondent/2nd plaintiff alone or in favour of the respondents /plaintiffs. 11.Based on the above said admitted facts, the claim of the respondents/plaintiffs shall be considered in the light of the evidence adduced on both sides. It is the contention of the respondents /plaintiffs that the appellant/defendant being a common carrier shall be liable to pay the value of the goods lost in transit as compensation, unless the appellant/defendant is able to prove certain special circumstances exonerating it from such liability. https://hcservices.ecourts.gov.in/hcservices/ The Head Office of the appellant/defendant is at Mumbai. It is having a branch office at No.9, Vanniar Street, Chennai – 600 001. The consignment was made at the branch office of the defendant at Bhavnagar, Gujarat under the consignment note marked as Ex.A8. According to Ex.A8, the goods were to be delivered to the consignee viz., the 1st respondent/1st plaintiff at its branch office at Tiruvallur and as per the contract door delivery of the goods was to be effected. 12.It is not the case of the appellant/defendant that it has got a branch office at Tiruvallur. However, the plaint allegation that the appellant/defendant has got a Branch office at No.9, Vanniar Street, Chennai – 600 001 is not disputed. The appellant/defendant has just made a plea in the written statement that the City Civil Court, Chennai does not have the jurisdiction to entertain the suit and that the Courts in Tiruvallur alone shall have the jurisdiction. However, the appellant/defendant seems to have submitted to the trial Court by filing a written statement incorporating averments touching the merits of the case and omitting to lead any evidence regarding jurisdiction. Though, such a plea was raised in the written statement, it was not pressed during trial and the appellant/defendant proceeded with the case resisting the claim on the merits of the case leaving aside the question of jurisdiction. A suit for recovery of damages can be instituted against a person in a Court within whose jurisdiction such person resides or carries on business as per Section 19 C.P.C. That is the reason why the appellant/defendant did not pursue the plea of absence of jurisdiction of trial Court to try the case and resisted the suit on merit. In this appeal also the question of jurisdiction has not been made a ground of attack on the decree passed by the trial Court. Therefore, the question of jurisdiction does not arise as a point for determination in this appeal. Point No.1: 13.The entrustment of the goods to the appellant/defendant common carrier on 28.05.1996 at Bhavnagar under the goods Consignment Note marked as Ex.A8 is not in dispute. It is also not in dispute that the goods were lost on its way from Bhavnagar to Bangalore enroute Tiruvallur. The specification of the goods entrusted to the appellant/defendant for transportation have been noted in Ex.A8 Goods Consignment Note. The fact that the goods were insured by the consignee through their underwriters have also been noted at the bottom of the Goods Consignment Note. The appellant/defendant would admit the description of the goods and the weight of the goods entrusted for transportation; nevertheless it was stated by the appellant/defendant in the written statement that it was not aware of the value of the goods entrusted to it for transportation. However, it is obvious from Ex.A8 that all the five invoices produced as Exs.A3 to A7 and also the total value of the consignment were noted https://hcservices.ecourts.gov.in/hcservices/ in the Goods Consignment Note, marked as Ex.A8. The total value has been noted as Rs.8,53,229.54. The total weight of the consignment is also noted as 9852 kgs. Therefore, it is quite obvious that the appellant/defendant has come forward with an untenable stand that though the goods of the description and weight found in the plaint averments were entrusted to the appellant / defendant for transporting, it was not aware of the value of the goods. Such a contention is falsified by the very particulars found in Ex.A8, Consignment Note. It is also an admitted fact that the goods entrusted to the appellant/defendant at its Bhavnagar Branch were not delivered to the branch Office of the first respondent/first appellant in Tiruvallur. The appellant/defendant has also issued a non-delivery certificate admitting the loss of goods on transit and impossibility of the common carrier to deliver the goods to the consignee at the intended point of delivery. The non-delivery certificate dated 03.12.1996 has been marked as Ex.A11. Before that, the first respondent/first defendant has made a claim on 25.11.1996 itself, as evidenced by Ex.A10. Pursuant to the issuance of the Non-delivery certificate, the second respondent /second plaintiff with whom the goods were insured by the first respondent/first plaintiff, paid the value of the goods and got a letter of subrogation and special power of attorney to make a claim against the common carrier viz., the appellant/defendant. The insurance policy is Ex.A2. The letter of subrogation and special power of attorney is Ex.A12. As per Ex.A12 the amount paid by the 2nd respondent /2nd plaintiff to the 1st respondent/1st plaintiff is Rs.8,53,229/-. 14.Thereafter, the 2nd respondent/2nd plaintiff seems to have entrusted the matter to its Recovery Agent M/s.V.N.C.Narichania (P) Ltd., having its office at 157, Linghi Chetty Street, Chennai – 600 001. The appellant/defendant might have stated in the written statement that it does not know whether M/s.V.N.C.Narichania (P) Ltd., was the recovery agent of the 2nd respondent/2nd plaintiff, the communications between the appellant / defendant and the said M/s.V.N.C.Narichania (P) Ltd., are marked as Exs.A13 to A18. They include a notice sent by the Advocate of the appellant/defendant to M/s.V.N.C.Narichania (P) Ltd., and a copy of the reply notice sent by M/s.V.N.C.Narichania (P) Ltd.,. In all those communications, the appellant/defendant admitted that the said M/s.V.N.C.Narichania (P) Ltd., was the recovery agent of the 2nd respondent/2nd plaintiff and the claim was made only on behalf of 2nd respondent/2nd plaintiff. Therefore, the contention of the appellant/defendant that it did not know whether M/s.V.N.C.Narichania (P) Ltd., was the recovery agent of the 2nd respondent/2nd plaintiff is against the truth. 15.However, it is obvious from the above said documents that right from the beginning the appellant/defendant was holding out that the goods were transported at owner's risk under a special contract and that the appellant/defendant would not be liable for the loss occasioned to the goods unless negligence or criminal act is https://hcservices.ecourts.gov.in/hcservices/ attributed to the appellant/defendant or its agents or employees. The same is also reflected in the Non-delivery certificate marked as Ex.A11, wherein it was specifically mentioned that the appellant/defendant was not responsible for the loss in transit, as the goods were transported at "owner's risk" and there was no negligence or default on the part of the appellant/defendant. It was also stated therein that the non-delivery certificate was being issued without prejudice to the defence of the appellant/defendant since such certificate was issued specifically at the request of