CS(OS) No. 78/2002 Page 1 REPORTABLE * IN THE HIGH COURT OF DELHI AT NEW DELHI + CS(OS) NO. 78 OF 2002 % Date of Decision : 24th October, 2008. UNITED INDIA INSURANCE COMPANY LTD.&ANR. …Plaintiffs. Through Mr. R.K. Ram, Advocate. VERSUS M/S BLUE DART EXPRESS LTD. & ANR. .... Defendants. Through Mr. Jay Savla, Ms. Meenakshi Ogra & Mr. Arundhati Das, Advocates. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA 1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporter or not ? Yes. 3. Whether the judgment should be reported Yes. in the Digest ? SANJIV KHANNA, J: 1. Plaintiff No. 1, United India Insurance Company Limited and plaintiff No. 2, M/s Rolta India Limited have filed the present suit for recovery of Rs.23,53,476/- against M/s Blue Dart Express Limited, CS(OS) No. 78/2002 Page 2 the defendant No. 1. Plaintiff No. 1 claims that it is entitled to file the present suit under Letter of Subrogation and Special Power of Attorney dated 10th September, 1999 executed by plaintiff No. 2. 2. The defendant No. 1, M/s Blue Dart Express Limited is a common carrier and had transported consignment of imported computers and computer peripherals in 52 boxes from Delhi to Military Intelligence Headquarters, 4 Corps, Tejpur, Assam vide carriage way bill dated 1st December, 1998. The delivery was taken on 10th December, 1998 and the consignee viz. Directorate of Military Intelligence, Tejpur, Assam at that time had noticed damage to box No. 2. 3. The plaintiffs claim that the said box was opened on 15th April, 1999 in the presence of the experts of the plaintiff No. 2 and it was found that photo scanner had been damaged and required complete replacement. 4. Plaintiff No. 2 had taken an inland transit insurance policy from plaintiff No. 1 and on account of damage, Rs.23,53,476/- including survey fee of Rs.3,505/- and excluding Rs.2,25,000/- recovered by plaintiff No. 1 from sale of the damaged goods, was paid by plaintiff No. 1 to the plaintiff No. 2. 5. On the basis of Letter of Subrogation and Special Power of Attorney executed by plaintiff No. 2, the plaintiff no.1 insurance CS(OS) No. 78/2002 Page 3 company has filed the present suit for recovery of Rs.23,53,476/- along with interest against the defendant No. 1. It is claimed that the defendant No. 1 was negligent and had caused damage to the goods when they were within their custody and is liable as a transporter. 6. Pursuant to objection taken by defendant No. 1 in their written statement, that the consignor and the consignee as per the carriage way bill were Directorate of Military Intelligence, the plaintiffs had filed an application under Order I, Rule 10 and Directorate of Military Intelligence was impleaded as defendant No. 2. Written statement has been filed on behalf of the said defendant stating, inter alia, that they had no role to play as the goods had been insured by plaintiff No. 2 with the plaintiff No. 1 and plaintiff No. 2 had settled the claim with the insurance company and received payment. They have also stated that when the consignment had reached Tejpur, one box being box No. 2 out of 52 boxes, was found to be damaged. It is also stated that the photo scanner, which was damaged was incapable of repair and had to be replaced. 7. On the basis of the pleadings of the parties, on 24th January, 2006 following issues were framed:- (1) Whether the plaintiff No. 1 can maintain a suit on the basis of letter of subrogation cum Special Power of Attorney dt. 10/9/99 CS(OS) No. 78/2002 Page 4 in its favour by plaintiff No. 2 as alleged in para 2 of the plaint?OPP (2) Whether the present suit is barred by law of limitation? OPD (3) Whether the claim of the plaintiff No. 1 based on a Letter of Subrogation-cum-Power of Attorney from the plaintiff No. 2 is maintainable against the present Defendant when the shipment in question recorded Military Intelligence, New Delhi, i.e., Defendant No. 2 as Consignor amd(sic)Military Intelligence, Tejpur as Consignee as stated in para 2 of the written statement? OPP (4) Whether the Plaintiff& Defendant No. 1 are governed by the terms & conditions of the contract dt. 2-12-1994 wherein the liability of the Defendant for any loss or damage to the shipment shall be strictly regulated by the limitation of liability clause and other relevant terms & conditions as mentioned on the Way Bill? OPD (5) Whether this Court has the jurisdiction to adjudicate upon the present dispute between the parties wherein the Way Bill limits the settlement of all disputes and claims subject to Mumbai jurisdiction? OPD CS(OS) No. 78/2002 Page 5 (6) Whether the Plaintiff has forfeited its right by not lodging its claim in writing within 30 days of acceptance of shipment as per clause 11.1 of the Way Bill? OPD (7) Whether the goods were loaded in sound condition and whether they were damaged enroute due to carelessness and mishandling by the Defendant as alleged by Plaintiff in paras 4, 6, 8 of the Plaint? OPP (8) Whether goods were delivered in sealed condition by Defendant No. 1 as alleged by the Defendant No. 1 in para 14 of written statement? OPD (9) Whether the Plaintiffs are entitled to the decree as prayed for? (10) Relief. ISSUE NOS. 1 AND 3 8. For the sake of convenience, these issues are being dealt with together. 9. The plaintiffs have filed affidavit of Mrs. R.K. Kala, PW-1, who has placed on record the original insurance policy Exhibit PW-1/1 dated 4th August, 1998. The inland transit insurance policy was taken out by plaintiff No. 2 for transportation of computers and computer peripherals from Delhi by lorry. The said policy is under Marine Insurance Act, 1963. The list of material covered by the policy is CS(OS) No. 78/2002 Page 6 enclosed with Exhibit PW-1/1. Mrs. R.K Kala, PW-1 has further stated that after report of damage was received, Shri Gopal Chandra Kath Hazarika was appointed as a surveyor and loss assessor to assess quantum of damage. Periodical consultations were held with the plaintiff No. 2 and the supplier M/s Intergraph Corporation and thereafter the Surveyor had assessed complete loss of the photo scanner. The survey report has been proved on record as Exhibit PW-1/5. Plaintiff No. 2 had served loss notice dated 19th April, 1999 under Section 10 of the Carriers Act, 1865 marked Exhibit PW-1/6 and the defendant No. 1 had also executed a damage certificate dated 9th August, 1999 marked Exhibit PW-1/7. Plaintiff No. 2 had filed a claim note with the plaintiff no.1 dated 9th September, 1999, marked Exhibit PW-1/8. The plaintiff No. 1 has also proved payment disbursement voucher marked Exhibit PW-1/9 and it has been stated that payment of Rs.23,53,476/- was made by the plaintiff No. 1 to plaintiff No. 2 under the insurance policy. Ms. R.K. Kala, PW-1, has also proved on record the Letter of Subrogation and Special Power of Attorney executed by plaintiff No. 2 in favour of plaintiff No. 1, which has been marked Exhibit PW-1/10. Plaintiff No. 1 had also issued legal notice to defendant No. 1 being notice dated 10th February, 2001, which has been proved as Exhibit PW-1/11. The said legal notice was sent by registered post. In view of Section 79 read with Section 90 of the Marine Insurance Act, 1963 the plaintiff No. 1 has CS(OS) No. 78/2002 Page 7 been able to establish and prove that in view of Letter of Subrogation, Exhibit PW-1/10, they are entitled to file the present suit for recovery against the defendant No. 1. 10. Learned counsel for the defendant No. 1 had submitted that in the Carriage Way Bill, which has been marked Exhibit PW-1/3, name of the consignor has been mentioned as Director General of Military Intelligence, Army Headquarters, New Delhi and, therefore, plaintiff No. 2 was not the consignor. It was stated that Letter of Subrogation and Special Power of Attorney, Exhibit PW1/10, executed by plaintiff No. 2 in favour of the plaintiff No. 1 was of no value and does not furnish right of subrogation to the plaintiff No. 1 to file the present suit as plaintiff No. 2 was not the consignor. The said contention of the defendant No. 1 cannot be accepted in view of the clear stand taken by the defendant No. 2, Director General of Military Intelligence in their written statement stating that they had no role to play and goods had been transported by plaintiff No. 2. Further, plaintiff No. 2 had written notice dated 19th April,1999, Exhibit PW-1/6, to defendant No. 1 in respect of the said damaged consignment. Receipt of the said notice has been admitted by the defendant No. 1. The said defendant also admits that the fare and transport charges were paid by plaintiff no.2 and not by defendant no.2. The stand of Defendant No. 1, is contrary to their taken in I.A. No. 10932/2008 under Order XI, Rule 14 stating, inter alia, that plaintiff No.2 was the consignor. Even in the CS(OS) No. 78/2002 Page 8 written statement defendant No.1 has relied upon agreement dated 2nd December, 1994, Exhibit DW-1/1, executed between them and plaintiff No.2 and claimed that carriage way bill PW No. 1/3 was issued as per terms of agreement Exhibit DW-1/1. 11. PW-1, Mrs. R. K. Kala along with her affidavit has filed letter dated 26th March, 2006 Exhibit PW-1/12 written by plaintiff No. 2 that the goods were transported by defendant No. 1 in view of the transaction entered into between plaintiff No. 2 and defendant No. 1. Moreover, the plaintiffs had summoned Major Kapil Yadav, Station Workshop, EME, Delhi Cantt., Delhi and his statement was recorded as PW-3. He has categorically stated that the subject matter i.e. the consignment was imported from abroad and was transported by M/s Rolta India Limited, the plaintiff No. 2, as a consignor as per records of Directorate of Military Intelligence. In the cross-examination, he has stated that Directorate of military intelligence was not the owner of the consignment at the time of loading of the goods by defendant No. 1, rather M/s Rolta India Limited, plaintiff No. 2 was the owner. He has stated that in the carriage way bill it was wrongly mentioned that Directorate of Military Intelligence was a consignor and instead M/s Rolta India Limited, plaintiff No. 2, should have been recorded as a consignor in the said way bill Exhibit PW-1/3. CS(OS) No. 78/2002 Page 9 12. In view of the above discussion, issue Nos. 1 and 3 are decided in favour of the plaintiffs and against the defendant No. 1. Plaintiff No. 1 is entitled to file the present suit in view of Letter of Subrogation and Special Power of Attorney, Exh.PW1/10, executed by the plaintiff No. 2. ISSUE NOS. 4, 5 AND 6 13. These issues being interconnected are being dealt with together. 14. Learned counsel for the parties in connection with these issues had drawn my attention to Section 6 of the Carriers Act, 1865, which reads as under:- “6. In respect of what property liability of carrier not limited or affected by public notice. Carriers, with certain exceptions, may limit liability by special contract- The liability of any common carrier for the loss of or damage to any property delivered to him to be carried, not being of the description contained in the Schedule to this Act, shall not be deemed to be limited or affected by any public notice; but any such carrier, not being the owner of a railroad or tramroad constructed under the provisions of Act 22 of 1863 (to provide for taking land for works of public utility to be constructed by private persons or Companies, and for regulating the construction and use of works on land so taken) may, by special contract, signed by the owner of such property so delivered as last aforesaid or by some person duly authorized CS(OS) No. 78/2002 Page 10 in that behalf by such owner, limit his liability in respect of the same.” 15. The defendant No. 1 relying upon the said Section had submitted that the plaintiff No. 2 and defendant No. 1 had entered into an agreement dated 2nd December, 1994, Exhibit DW-1/1 and under the said agreement they had agreed that all shipments would be subject to terms and conditions of carriage mentioned in the way bill and these terms and conditions would be deemed to be part of the said written contract. My attention is also drawn to the wording of the said clause wherein it is mentioned that liability of defendant No. 1 for any loss or damage to the shipment would be strictly regulated by the limitation of liability clause and other terms and conditions thereto as mentioned in the way bill. On the basis of this document Exhibit DW- 1/1, it was submitted that terms and conditions mentioned on the back side of the way bill Exhibit PW-1/3 are special terms and conditions as stipulated in Section 6 of the Carriers Act, 1865 and are, therefore, binding on the plaintiffs and the defendant No. 1. 16. I would have examined this issue in depth and detail and also gone into the question whether the consignment in question had been booked under the agreement Exhibit DW-1/1 as it is the case of the plaintiffs that the consignment in question was not booked under a contract Exhibit DW-1/1, but I find that the way bill PW-1/3 does not contain any special conditions relied upon by defendant No. 1 CS(OS) No. 78/2002 Page 11 restricting the claim of damages or prescribing special conditions. Learned counsel for the defendant No. 1 when confronted with the above situation obviously had to accept that there were no special terms and conditions mentioned in the way bill and, therefore, Section 6 of the Carriers Act, 1865 has no application. It was, however, submitted that there could be printing error in the original way bill Exhibit PW-1/3 and, therefore, special terms and conditions had not been printed. If that be so, still the defendant No. 1 cannot rely upon conditions not mentioned in the way bill Exhibit PW-1/3. Defendant No. 1, after arguments had been partly heard, had filed an application being I.A. No. 10932/2008 under Order XI, Rule 14 stating, inter alia, that three copies of the way bill were prepared at the time of booking of the consignment and the plaintiff No. 2 being the consignor may be directed to produce the second copy. I may note here that as per defendant No. 1 himself, the third copy of the way bill was retained by them. The said application was dismissed by order dated 9th September, 2008 pointing out that Exhibit PW-1/3 was an admitted document and at the time of admission/denial of documents was marked Exhibit P-1. It was also pointed out that there is no question of primary or secondary evidence as the document in question is an admitted document. Further, the defendant No. 1 themselves had not produced their copy of the carriage way bill. CS(OS) No. 78/2002 Page 12 17. In these circumstances, the above issues are decided in favour of the plaintiffs and against the defendant No.1 holding, inter alia, that there were no special terms and conditions limiting the liability of defendant No. 1 under Section 6 of the Carriers Act, 1865. ISSUE NOS. 7 AND 8 18. These issues are inter-connected. Counsel for the defendant relied upon the Way bill exhibit PW1/3 and signature of the consignee below the printed acknowledgment on PW1/3 that the shipment had been received in a good condition. 19. The said contention of defendant No.1 over-looks the clear and categorical written admission made by defendant No.1 in their certificate dated 9.8.1999, exhibit PW1/7 that one package out of 52 packages was delivered in a slightly damaged condition. Therefore, the contention of defendant No.1 that damage had occurred after delivery at the time of installation is contrary to their certificate and is an afterthought. DW-1, Mr. Satyanarayana has admitted issue of damage certificate exhibit PW1/7, by defendant No.1, and he has stated that the said certificate was issued for the sole purpose of enabling the consignor to claim insurance. The certificate exhibit PW1/7 does not mention that the goods were damaged due to negligence and deficiency in service on the part of defendant No.1, CS(OS) No. 78/2002 Page 13 but it is clearly stated that at the time when goods were delivered, one package was in a slightly damaged condition. Damage had, as per certificate of defendant No.1 Exhibit PW1/7 occurred before delivery and was noticed at the time of delivery on 10th December, 1998. DW-1, Mr. Satyanarayana has not disputed and questioned the CS(OS) No. 78/2002 Page 14 said statement made in certificate exhibit PW1/7. In the light of the said admission, the printed lines that the shipment had been received in good condition mentioned in the carriage way bill Exhibit PW1/3, is to be disregarded and is held to be an incorrect statement. 20. We also have evidence of PW-2, Mr. Gopal Chandra Nath Hazarika, who has deposed that the consignment was not be opened by the consignee and installation was to be done in the presence of expert personnel from the M/S. Rolta India Limited, plaintiff No.2. He has stated that on external inspection, one box was found to be damaged and thereafter when box was opened in the presence of the service engineer of plaintiff No.2, it was found that the photo scanner was damaged beyond repair. Manufacturer M/s. Intergraph Corporation as per PW-2 had confirmed that the photo scanner had been damaged beyond repair and required complete replacement. The Photographs of damaged photo scanner were also taken and these have been placed on record and marked exhibit PW2/2. The photographs of photo scanner show that the sealed packages were not opened till photographs were taken. Damage is also visible. Thus it is not possible to accept the contention of the defendant No.1 that the shipment was damaged after delivery. CS(OS) No. 78/2002 Page 15 21. Contention of defendant No.1 that the goods could have been damaged before they were loaded at Delhi is without merit. The way bill exhibit PW1/3 issued by defendant No.1, does not state that any of the packages was damaged. This is also not stated in the certificate exhibit PW1/7, issued by defendant No.1. No evidence and material has been placed on record by defendant No.1 that the consignment was damaged before it was handed over and came in their custody. 22. The plaintiffs have examined PW-3, Major Kapil Yadav, Station Work Shop EME, Delhi Cantt., who has deposed on the basis of official records maintained by the Directorate of Military Intelligence. He has stated that as per official records, Lieutenant Colonel D.K. Gurung was present when the consignment was loaded at Delhi Airport for Tejpur, Assam and at that time no damage was noticed nor anything to that effect was recorded. In fact Lieutenant Colonel D.K. Gurung had recorded in the official books that the consignment when loaded was in sound and perfect condition. 23. In view of the above findings, it is established that damage was caused to the goods after they were loaded in Delhi and before they were delivered at Tejpur, Assam. Admittedly, at that time the consignment was in custody of defendant No.1. I may here refer to Section 9 of the Carrier Act, 1985, which reads as under:- CS(OS) No. 78/2002 Page 16 “Section 9 Plaintiffs, in suits for loss, damage, or non-delivery, not required to prove negligence or criminal act.— In any suit brought against a common carrier for the loss, damage or non-delivery of goods [including containers, pallets or similar articles of transport used to consolidate 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 or criminal act of the carrier, his servants or agents.” 24. In view of Section 9 of the Carrier Act, 1985, the plaintiffs are not required to specifically prove negligence or criminal act on the part of defendant No.1, its servants or agents. 25. Counsel for defendant No.1 had relied upon Judgment of Supreme Court in New India Insurance Company Limited Vs. Economic Transport Corporation (1998) 8 SCC 541. In this decision it was noticed that there was no direct evidence and the litigation had been fought on the basis of inferences on the question of loss and damage. Question of when and who was responsible for the loss or damage was in issue. It was observed that liability could not be passed on the carrier as there was no evidence to establish that the goods had been damaged during transit. The Supreme Court in view of evidence on record did not accept that damage had occurred during transportation. In view of the above findings and peculiar facts as CS(OS) No. 78/2002 Page 17 noticed by the High Court and referred to by the Supreme Court in paragraph 4 of their judgment, it was held that the presumption under Section 9 of the Carriers Act, 1865 relating to negligence did not arise. Presumption of negligence under section 9 arises when loss or damage during carriage is established and in such cases plaintiff need not prove negligence. Damage or loss indicates and establishes negligence. (Refer, Patel Roadways Ltd versus Birla Yamaha Ltd. reported in AIR 2000 SC 1461 wherein it was held that liability of the carrier on loss or damage to goods is extensive and is that of an insurer). Issue No.2 26. Articles 10 and 11 of the Limitation Act, 1963 read as under: Article Nature of Suit Period of Limitation Time from when period begins to run Article 10 Against a carrier for compensation for losing or injuring goods Three years When the loss or injury occurs Article 11 Against a carrier for compensation for non- delivery of, or delay in delivering goods Three Years When the goods ought to have been delivered. CS(OS) No. 78/2002 Page 18 Article 11 of the Limitation Act, 1963, applies to cases where there is non-delivery or delay in delivering goods and in such cases cause of action for filing of a suit for damages begin when the goods ought to have been delivered. Article 10 applies to cases where damage or loss is caused to goods during carriage. It is a case of both parties that Article 10 of the Limitation Act, 1963, is applicable to the present case. Under Article 10 of the Limitation Act, 1963, period of limitation for filing a claim against a carrier for compensation is three years and the time begins from the date when the loss or injury occurs. Counsel for the Plaintiffs had relied upon the judgment of Supreme Court in the case of Bootamal Vs. Union of India, Reported in, AIR 1962 SC 1716. The said decision interprets Article 31 of the Limitation Act, 1908 (corresponding to Article 11 of the Limitation Act, 1963). Article 31 of the Limitation Act, 1908 applies to cases of non-delivery or delay in delivery of goods. In such cases, Supreme Court has held that cause of action would arise when goods were not received at the place of destination within reasonable time. Article 31 of the Limitation Act, 1908 is not applicable to the facts of the present case. 27. The starting point of limitation under Article 10 is the date when the loss or damage occurs and not the date on which loss CS(OS) No. 78/2002 Page 19 or damage comes to the knowledge of consignee or consignor. Knowledge as such is not relevant for Article 10. Date of knowledge of such loss or damage is not made, starting point of limitation for proceedings covered by Article 10 of Limitation