IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 09.06.2010 CORAM: THE HON'BLE MR.JUSTICE V.PERIYA KARUPPIAH A.S.No.298 of 2000 S.R.C.Industries rep. By its Managing Partner Ravi Prakash .. Appellant / Plaintiff Vs. The Oriental Insurance Company Limited, .. Respondent / Defendant Prayer:- Appeal filed under Section 96 of the Civil Procedure Code against the Judgment and Decree of the learned VI Additional Judge, City Civil Court, Chennai in O.S.No. 3793 of 1996, dated 23.08.1996. For Appellant : Mrs. K.Banumathi For Respondents : Mr. G.Guruswaminathan For M/s.Nageswaran & Narichana JUDGMENT This appeal has been preferred by the plaintiff against the judgment and decree passed in O.S.No.3793 of 1996 dated 23.08.1996 by the learned VI Additional Judge, City Civil Court, Chennai. The plaintiff before the lower Court is the appellant and the defendant in the suit is the respondent herein. 2. The brief facts in the plaint which are necessary for the disposal of the case would be as follows:- 2(1). The plaintiff is an exporter and importer. The defendant is an Insurance Company dealing in general insurance like fire, marine, etc., The Plaintiff was exporting by sea their handloom and other goods to foreign countries including free Town in West Africa and almost all such shipments were covered under the policy of insurance, insured with the defendant. 2(2). In respect of a consignment of fifteen bales containing cotton 2/20s yarn in sulphur black colour, each bale containing 100 packets of 2.4 pounds each, totaling 3,600 pounds valued at U.S. Dollar 12,700/- is equivalent to Rs.1,02,870/- as per invoice No.SRC/Exp/954 of lading issued by INDIAFRICA LINE by their local https://hcservices.ecourts.gov.in/hcservices/ agents in India intended to be delivered to M/s. Mambolo Store, 40, Little East Street, Free Town, Sierra Leone, the defendant issued the policy No.4130/1/772/M/6221 dated 22.04.1981 insuring the goods against all risks. The plaintiff further states that the foreign buyer M/s.Mambolo Stores, to whom the said goods were intended to be delivered, had the goods examined and found the goods damaged. The foreign buyer M/s. Mambolo Stores had the goods examined by ports Authority and obtained a Survey Report from the Ports Authority showing the damages and made a claim on the defendant under the said policy and also authorised the plaintiff herein to receive the amount claimed under the said policy. The claim amount was for fifteen bales of 100 packets each at the rate of U.S.Dollar 650 per packet and thus the claim amount came to U.S.Dollar 9750/-. The said claim was made on the defendant on 28.06.1982. On 17.07.1982 the said foreign buyer M/s.Mambolo Stores sent all the necessary documents in support of their claim for all the fifteen bales and also requested the defendant to make a speedy settlement. The plaintiff followed it up by addressing their letter dated 10.08.1982 to the defendant asking the defendant to settle the claim directly with the plaintiff as per the authority given to the plaintiff by the said foreign buyer. 2(3) On 09.08.1982, the original survey report together with the photo copies, covering the claim made by the said foreign buyer on the defendant, were also furnished to the defendant by the plaintiff as per the request made by the defendant. 2(4) In respect of another consignment of Diesel Oil Engine and Rice Huller Spare Parts viz., connecting Rod bearings 2 halves 2 ½ '' bore No.LD 2-139 numbering 500 pairs and Oil Seal for Grankshaft Main bearing Housing Joint LD 2-127 numbering 500 and covers for Rice Huller numbering 100 and frames for Rice Huller No.1 numbering 100, the total value of the said goods being 25,700 of U.S. dollars equivalent to Rs.2,08,427/- Indian money. As per invoice No.SRC/Exp/969, dated 30.04.1981 shipped and as per the bill of lading issued by Indiafrica Line by their local agents in India intended to be delivered to M/s. Mambolo Stores at No.40, Little East Street, Free Town, Sierra Leone, the defendant issued the policy No.4130/1/694 M/6294 dated 30.04.1981 insuring the goods against all risks. The plaintiff further states that the foreign buyer M/s. Mambolo Stores to whom the said goods were intended to be delivered had the goods examined by its proprietary concern Toufic Huballa & Sons with the help of the Ports Authority and obtained a Survey Report from the Ports Authority showing that the oil cases were empty and made a claim on the defendant under the said policy and authorised the plaintiff herein to receive the amount claimed under the said policy. The claim made by the said foreign buyer was for the consignment of eight cases valued at 25,700 of U.S. dollars. The claim was made on the defendant on 08.06.1982 and the said foreign buyer's proprietary concern Toufic Huballa & Sons sent all the necessary documents in support of their claim for all the eight cases of consignment and also requested the defendant to make a https://hcservices.ecourts.gov.in/hcservices/ speedy settlement. The plaintiff had followed it up by addressing their letter dated 28.06.1982 to the defendant asking the defendant to settle the claim directly to the plaintiff as per the authority given by the said foreign buyer. 2(5) On 06.09.1982, the original survey report together with the photo copies covering the claim made by the said foreign buyer on the defendant were also furnished by the plaintiff as per the request made by the defendant. 2(6) The defendant though promised to settle the claim to the plaintiff and pay the amount claimed under the aforesaid two insurance policies to the plaintiff was postponing the settlement of the said claims. Hence the plaintiff was obliged to send a letter dated 08.06.1985 through their counsel to the Assistant General Manager asking the defendant to settle the claims arising out of the said insurance policies. The defendants sent a reply dated 20.07.1985 through their advocates stating that the defendant was processing the claims which are pending with them and communicated to the plaintiff that the claims would be processed in the very near future and disposed of subject to the conditions laid down in the policies in question. The plaintiff waited for more than six months and caused another legal notice dated 28.01.1986 to the defendant through their advocate calling upon them finally to settle all the pending claims in respect of which the legal notice dated 08.06.1985 was already issued to them. The plaintiff states that even after the receipt of the said legal notice, the defendant neither settled the said claims nor sent any reply thereto till date. The plaintiff is therefore, obliged to file this suit treating the failure of the defendant to settle the claims even after the receipt of the legal notices for a long time as denial of the plaintiff's claims. 2(7) The plaintiff is also entitled to claim interest by way of damages at the rate of 18% per annum on the amounts payable by the defendant from 01.08.1983 since the time the defendant had from the date of lodging the claim till 01.08.1983 is much more reasonable for investigation of claim. 2(8) The plaintiff states that therefore the claim now due and payable by the defendant to the plaintiff is a sum of Rs.3,11,297/- towards insured value of goods covered under the two policies viz., 4130/1/694/M/6294, dated 30.04.1981 and policty No.4130/1/772/M/6221, dated 22.04.1981 and a sum of Rs.1,72,302.80 towards damages by way of interest calculated at 18% per annum of Rs.3,11,297/- from 01.08.1983 till date, totalling in all Rs.4,83,599.80 which the defendant failed and neglected to pay despite repeated demands made by the plaintiff. 2(9) The plaintiff therefore, prays for judgment and decree against the defendant :- i.Directing the defendant to pay to the plaintiff the said sum of Rs.4,83,599.80 together with interest at 18% per annum on Rs.3,11,297/- from the date of plaint till date of realisation; https://hcservices.ecourts.gov.in/hcservices/ ii.Directing the defendant to pay to the plaintiff the costs of the suit ; 3. The contentions raised by the defendant in the written statement are briefly stated as follows:- 3(1) The suit claim is barred by limitation. It is submitted that at no point of time this defendant promised to settle the claim of the plaintiff as averred in paragraph 8 of the plaint. There was no promise to settle the claim, if any, made by the plaintiff herein and the plaintiff is put to strict proof of such averment as made in plaint paragraph 8. 3(2) The policies in question referred to in paragraph 4 of the plaint and paragraph 6 of the plaint were no doubt issued by them. It is learnt that the documents of title were negotiated through bank and endorsed in favour of the respective consignees at Free Town who became the owners of the consignment at all relevant times. It is therefore the endorsees of the policies in question are the persons competent to file and maintain this suit. Therefore the suit filed by the present plaintiff was without any right, title to the suit consignment at the relevant time and in the absence of any endorsement of the policy in their favour by the consignees, is liable to be dismissed in limine. This defendant submits that a mere letter of authority to receive payment under any claim cannot empower the present plaintiff to file and maintain a legal action in a Court of law. 3(3) As far as the claim in respect of cotton yarn as more particularly mentioned in plaint para 4 and covered under the policy No.4130/1/772/M/6221 dated 22.04.1981 from the documents submitted by the endorsed consignee, it is clear that the consignment in question was shipped and boarded in the Vessel 'LA ROCHELLE' at Madras under B.L.No.53 dated 30.04.1981. The consignment transshipped into vessel 'ANASTASIA' arrived at Free Town on 05.07.1981 as evident from the documents submitted by the consignee. Though the consignment was discharged by the vessel which arrived at the port as early as 05.07.1981, examination by the port authority took place only on 23.03.1982 when it was confirmed that the cases were empty. This defendant submits that such an examination has taken place after a lapse of 8 months or 240 days after the arrival of the vessel at the port of discharge/destination. It is not made clear as to when the consignment was discharged and what was its condition at the time of discharge. Further the owner of the consignment has not established the loss during the currency of the policies. This defendant submits that under both the policies of insurance referred to herein above, the originals of which are filed in support of the contentions of this defendant, the said contract of insurance as evidenced in the said policy is subject to the terms and conditions attached thereto and forming part of the policies. Under Institute Cargo Caluse (All Risks) and under Transit Clause (incorporating warehouse to warehouse clause) the insurance attaches as more particularly set out thereunder which is reproduced hereunder. https://hcservices.ecourts.gov.in/hcservices/ 3(4) This insurance attaches from the time the goods leave the warehouse or place of storage at the place named in policy for the commencement of the transit, continues during the ordinary course of transit and terminates either on delivery or on the expiry of 60 days after completion of discharge of the goods hereby insured from the over sea vessel at the final port of discharge, whichever shall first occur. 3(5) This insurance shall remain in force (subject to termination as provided for and above the provisions of Clause 2) during delay beyond the control of the Assured, any deviation, forced discharge, reshipment or transshipment and during any variation of the adventure arising from the exercise of a liberty granted to ship owners or characters under the contract of a freighment. 3(6) Notwithstanding such storage which resulted in termination of transit, even assuming for argument sake, the insured shall be entitled for a period of 60 days as mentioned under Clause (c) of the said clauses. Even then examination of the cargo took place much after the lapse of 60 days and therefore there was no valid cover at the time when the loss ought to have taken place. This defendant submits that it is the burden of the owner of the consignment to establish the loss during the currency of the policy which burden having not been discharged by the owner of the consignment, the plaint claim is liable to be dismissed. 3(7) This defendant further submits that under the Bailee Clause, it is the duty of the assured and their agents in all cases to take such measures as may be reasonable for the purpose of awarding or minimising their loss and to ensure that all rights against carriers, bailies or other third parties are properly preserved and exercised. This defendant submits that evidently the owner of the consignment/ assured failed to comply with this Clause and therefore disentailed themselves from claiming any indemnity under this policy for breach of the said condition. 3(8) It is further submitted by this defendant that the policy of insurance is also subject to the reasonable despatch clause as found under the Institute Cargo Clauses under which it is a condition of the insurance in question that the assured shall act with reasonable despatch in all circumstances within their control. The assured and / or their assigns / the owner of the consignment failed to act with reasonable despatch inasmuch as there was an inordinate delay in the process of examination of the Cargo in question at the port premises after discharge by the carrying Vehicle. 3(9) The averment in paragraph 11 to the effect that on 20.07.1985, the defendant sent a reply to the counsel requesting the plaintiff to wait for the compliance of the demand is erroneous and an act of misinterpretation of the letter of the defendant's counsel dated 20.07.1985, wherein it is clearly stated that the said letter was addressed to and all the representations therein are without prejudice to the rights and contentions of the defendant under law. In the said letter there was no admission of liability or a promise https://hcservices.ecourts.gov.in/hcservices/ to pay as demanded by the plaintiff in respect of various claims which were pending at the relevant time. 3(10) The plaintiff is also not entitled to any amount much less the principal as well as the interest claimed and reflected in paragraph 10 of the plaint. The suit claim being in the nature of damages for breach of contract, it is submitted that no past interest could be claimed and hence it is prayed that such a claim to be rejected. 3(11) This defendant submits that they are not liable to pay any amount to the plaintiff herein and therefore pray that this Honourable Court be pleased to dismiss the suit with costs. 4. The lower Court had considered the pleadings and had framed four issues and had examined the plaintiff's manager as PW1 and admitted Exs.A1 to A21 on the side of the plaintiff. No oral evidence nor any documents were produced on the side of the defendant. The lower Court after appraising the evidence adduced before it had come to the conclusion of dismissing the suit without cost. Aggrieved by the said finding of the lower Court, the plaintiff has preferred the present appeal. 5. Heard Mrs.K.Banumathi, the learned counsel for the appellant/plaintiff and Mr.Guruswaminathan for M/s.Nageswaran & Narichanay, the learned counsel for the respondent/defendant. 6. On perusal of the pleadings, evidence adduced before the lower Court, the grounds raised in the appeal and on hearing the arguments of both sides, this Court could see the emergence of the following points for consideration:- 1.Whether the suit is not maintainable in view of Section 69 (2) of the Indian Partnership Act ? 2.Whether the plaintiff has got due authorisation to file the suit and is the suit maintainable ? 3.Whether the suit is barred by law of limitation ? 4.Whether the plaintiff is entitled for the suit claim of Rs.4,83,599.80 with interest at 18% per annum on Rs.3,11,297/- ? 5.Whether the judgment of the lower Court is liable to be set aside and is the appeal allowable ? 6. To what relief the appellant is entitled for ? 7. The learned counsel for the appellant/plaintiff would submit in her argument that the plaintiff firm had taken over the assets and liabilities of the erstwhile firm under the deed of dissolution dated 07.11.1983, and as such the plaintiff is entitled to maintain the suit under Section 69(2) of the Indian Partnership Act and the lower Court was not correct in saying that the liability of the previous partnership firm was not undertaken by the plaintiff firm which only came into existence on 07.11.1983. She would further submit in her https://hcservices.ecourts.gov.in/hcservices/ argument that the certificate of registration, produced by the plaintiff in Ex.A21, would clearly give the names of the partners which is required under Section 69(2) of the partnership Act. She would further submit in her argument that the plaintiff's firm was entitled to maintain the suit as it was continuously registered under the Indian Partnership Act and the requirement under Section 69(2) has been complied with. She would also submit in her argument that the plaintiff was entitled to claim the damages from the defendant, stepping into shoes of the buyer, as it had authorised the plaintiff to receive the amount from the defendant and therefore, the filing of the suit before the lower Court is maintainable since the buyer was in foreign country and the plaintiff who acted as the agent of the said principal is entitled to maintain the suit. She would also submit in her argument that the finding of the lower Court that the insurance policies were not assigned to the plaintiff cannot be a true reason since the authorisation given by the buyer in the foreign country would itself be sufficient to hold that the insurance policies and the rights under the insurance policies were assigned to the plaintiff. She would also submit in her argument that the transactions had by the plaintiff with the foreign buyer M/s.Mambolo stores of Free Town Sierra Leone and the said cargo shipped by the plaintiff to the buyer on two consignments namely cotton yarn in one shipment and diesel engine and other accessories in yet another consignment were damaged and the port of destination had given certificate to that effect to the buyer and in turn it has produced before the defendant should have been considered and paid to the plaintiff. She would further submit in her argument the importer who has been admittedly benefitted by the insurance coverage had assigned its right to plaintiff and therefore, the plaintiff is entitled to maintain the claim. She would also submit that the damages caused to both the consignments and its value were not disputed and the policy covers the entire transactions and according to the said policy, the authorisation given by the importer / buyer to the plaintiff would automatically entitle the plaintiff for the damages caused to the cargos sent to the shipment. She would further submit in her argument that the further finding of the lower Court that the claim was barred by limitation cannot be sustained in view of the fact that the defendant in its reply in Ex.A18 had admitted that it would consider the claim made by the plaintiff and therefore, the liability has been acknowledged and from the said date the period of limitation would commence and the suit claim is within time. She would draw the attention of the Court to the contents of Ex.A18, the reply sent by the defendant. She would bring it to the notice of the Court that the defendant did not reject the claim in the said letter itself and the reply to the effect that the claim was processed would be amounting to the acknowledgment of liability and therefore, the suit claim should have been considered as within time. She would sum up her arguments on the aforesaid three lines. She would submit that the lower Court had erroneously come to a conclusion that due https://hcservices.ecourts.gov.in/hcservices/ acknowledgment of the suit regarding the law of limitation and the right of the plaintiff accrued from the assignment to the letters Ex.A13 and A14 and therefore, the suit claim has to be decreed in favour of the plaintiff. She would therefore request the Court to set aside the judgment and decree passed by the lower Court and to allow the appeal. 8. The learned counsel for the respondent / defendant would submit in his argument that the plaintiff has not shown to the Court that the rights and liabilities of the erstwhile firm registered in the same name in the year 1971 had been carried over to the subsequent firm established under Ex.A20 and the evidence is lacking on this point and the legal requirement that document as to the plaintiff's partner who is representing the plaintiff was found to be one of the partners in the registered firm is not produced and the erstwhile partnership firm was different from the present partnership firm, despite the name is the same and therefore, the suit is not maintainable as launched by the plaintiff. He would draw the attention of the Court, to a judgment of the Hon'ble Apex Court reported in AIR 1998 SC 3085 between M/s.Raptakos Brett & Co. Ltd. v.Ganesh Property for the principle that the ingredients of Section 69(2) of Indian Partnership Act, has to be strictly construed for deciding the question of maintainability. He would further submit in his argument that the suit has been filed by the plaintiff for the period of 3 years from the date of right to sue the claim as per Article 44 a(b) and according to the said Article, the suit claim is out of time and therefore, the suit has to be dismissed as done by the lower Court. He would further submit in his argument that the claim should have been made from the date of occurrence or from the date of demand and the same was not made by the plaintiff. He further submit in his argument that the acknowledgment said to have been given by the defendant in Ex.A18 is not an acknowledgment attracted under Section 19 of the Limitation Act. The said notice was issued by the defendant's counsel to the plaintiff's counsel in which it has been categorically mentioned that the defendant is processing the claim made in Ex.A1 by the plaintiff through his counsel. He would further submit in his argument that the said reply will not in any way amounting to acknowledgment of liability as contemplated under Section 19 of the Limitation Act. He would draw the attention of the Court, to a judgment of the Hon'ble Apex Court reported in AIR 1961 SC 1236 for the principle that there should be some dual relationship with acknowledgment made under Section 19 of the Indian Partnership Act. He would further submit in his argument that the alleged assignment of right by the importer/buyer in favour of the plaintiff was not for claiming the damages from the defendant but it was only towards receiving the money on behalf of the importer/buyer at West Africa. He would further submit in his argument that there was no specific authorisation given by the buyer/importer to file the suit or legal proceedings on behalf of the buyer and the plaintiff who was https://hcservices.ecourts.gov.in/hcservices/ the Seller-cum-Exporter of the said goods cannot stand as the buyer/importer to claim the damages in the suit to be filed by the buyer/importer. 9. In such circumstances, the plaintiff cannot act as the agent of the buyer also and to launch a legal proceedings. He would further submit in his argument that the suit claim was also not made in time by the plaintiff, even though it is not entitled to claim such damages, after the period of 60 days from the date of completion of discharge at the final port of discharge. He would draw the attention of this Court