IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD FRIDAY, THE EIGHTH DAY OF OCTOBER TWO THOUSAND AND TEN PRESENT HON’BLE SRI JUSTICE G.V.SEETHAPATHY C.C.C.A.No.121 OF 1994 Between:- M/s Reach (Cargo Movers) Rep. by its Branch Manager. …Appellant A n d National Insurance Company Limited, Rep. by its Divisional Manager and another …Respondents HON’BLE SRI JUSTICE G.V.SEETHAPATHY C.C.C.A.No.121 OF 1994 JUDGMENT: This appeal is directed against the judgment and decree dated 10-12-1993 in O.S.No.898 of 1984, on the file of the II-Additional Judge, City Civil Court, Hyderabad, wherein the said suit filed by the respondents herein, the plaintiffs, for recovery of a sum of Rs.24,040-28 ps, was decreed with interest at 12% per annum from the date of suit till realization. 2. Arguments of both sides are heard. Perused the record. 3. The case of the plaintiff, in brief, is as follows:- M/s Real Food Products, Hyderabad, consignors, sent a consignment to the second plaintiff, the consignee, on 05-04-1982 comprising 1137 tins of 6.75 kgs each and 189 tins of 4.5 kgs each of real janatha glucose biscuits and 15 card board boxes each containing 84 tins of 80 gms each of real glucose biscuits. The said consignment was entrusted to the defendant, which is a common carrier for safe carriage from Hyderabad to Kolkatta to be delivered to the consignee. The defendant, having been satisfied with the package condition, accepted the consignment for transport and issued LR.No.13120, dated 05-04-1982. The consignee insured the consignment with the first plaintiff-National Insurance Company under marine land transit policy in favour of the consignor. It was reported that the truck bearing No.OSU 1507 of the defendant carrier in which the consignment was loaded met with an accident on 06-04-1982 near Srikakulam, en route to Kolkatta. The consignment was transported in another truck bearing No.WGD 3487 belonging to the defendant and it was delivered to the consignee on 13-04- 1982 in a damaged condition. The said damage was caused due to the negligence of the employees of the defendant. The consignee lodged a claim under registered letter dated 15-04-1982 against the defendant for the damage sustained, claiming reimbursement of Rs.84,178-50 Ps being the value of the goods. The consignee also preferred a claim to the insurer under letter dated 09-09-1982. The defendant by their letter dated 20- 04-1982 repudiated the claim of the consignee on the ground that the damage was due to accident and, therefore, they are not liable to pay any damages. The defendant carrier also endorsed the fact of accident in the presence of J.R.Puram Police, Srikakulam District. The SHO issued a certificate dated 09-04-1982 that the tins were damaged due to the accident. The insurer appointed independent surveyors who have assessed the loss and damage of the consignment and submitted a report. One Anil Sarogi, representative of the defendant was also present at the time of assessment of the damage. On 29-04-1982, the surveyors submitted their final report classifying the damage under five categories. On 07-06-1982, the consignee issued a registered notice to the defendant-carrier claiming damages. On 11-06- 1982, the defendant gave a reply repudiating the liability. On 03-07-1982, the consignee also issued another notice to the defendant-carrier for recovery of the amount. The consignors authorized the consignee to negotiate, settle and accept the claim for damages. The consignors addressed a letter dated 09-09-1982 to the insurer stating that they have no objection for making the payment to the consignee. The insurer settled the claim of the consignee by paying Rs.20,040-28 ps, taking into consideration the loss assessed by the surveyors by way of cheque dated 25-01-1983 and the consignee received the same. By virtue of the said payment, the insurer stands subrogated to the rights and remedies of the consignee against the defendant-carrier. The consignee also executed a letter of subrogation and special power of attorney dated 22-01-1983 in favour of the insurer. As the defendants did not pay the amount in spite of notices, the suit is filed, as the defendant is bound to indemnity the insurer. 4. The defendant-carrier filed written statement contending that the suit filed by the second plaintiff, which is not a registered firm, is not maintainable under Section 69 of the Partnership Act and the consignee has no locus standi to file the suit and that the suit claim is barred by limitation and as per the terms and conditions contained on the back of the lorry receipt, the Courts at Kolkatta alone has got jurisdiction and the subrogation pleaded by the insurer is neither true nor valid. It was further contended by the defendant that the goods were not properly and securely packed by the consignor and the marine insurance does not cover any kind of risks on land in transit, that there was no negligence or misconduct on the part of the defendant or its employees and the accident was beyond the control of the driver and the alleged survey report is not binding on the defendant. It was further contended that Mr.Anil Kumar Sarogi had been to the consignee for receipt of freight charges and the consignee made him to sign on some papers and he was not authorized to be present at the time of survey or sign any papers. It was also contended that no notice under Section 10 of the Carriers Act was served on the defendant and the plaintiff is not entitled for the suit amount. 5. On the strength of the pleadings, the trial Court framed the following issues: i) Whether the Divisional Manager of the 1st plaintiff is not competent to file the suit? ii) Whether the suit is barred by limitation? iii) Whether the suit is bad for misjoinder of the parties? iv) Whether this court has no jurisdiction to try the suit? v) Whether the suit consignment was booked entirely at owner’s risk and as such the defendant is not liable for any damages? vi) Whether the loss of goods was on account of an accident and an act of God and that, therefore, the defendant is not liable to answer the suit claim? vii) Whether the 2nd plaintiff has suffered any loss and if so, whether the amount of damages claimed is true and correct? viii) Whether the suit is bad for want of notice under Section 10 of the Carriers Act? ix) To what relief? 6. During trial, P.W.1 was examined and Exs.A-1 to A-22 were marked on behalf of the plaintiff. D.W.1 was examined and no document was marked on behalf of the defendant. 7. On a consideration of the evidence available on record, the trial Court held that the suit is maintainable and it is not bad for misjoinder of parties and the suit claim is within time and the trial Court has got jurisdiction to adjudicate the dispute. The trial Court further held that the defendant failed to discharge the burden of showing absence of negligence on their part and is, therefore, liable to compensate for the damage and, therefore, the insurer-first plaintiff is entitled to recover the amount with future interest. Accordingly, the suit was decreed. Aggrieved by the same, the defendant-carrier filed the present appeal. 8. The first contention of the appellant is that the second plaintiff, being unregistered firm, the suit filed by the second plaintiff is not maintainable in view of Section 69 of the Partnership Act. Sub-section (2) of Section 69 states as follows: “No suit to enforce a right arising from a contract shall be instituted in any court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of Firms as partners in the firm”. A perusal of the above provision discloses that the bar contained therein is against filing the suit to enforce a right arising from a contract when the plaintiff is an unregistered firm. In the present case, the second plaintiff is not seeking any relief against the appellant/ defendant nor seeking to enforce any right arising under a contract with the defendant. The first plaintiff, the insurer, is seeking to recover the amount of Rs.24,040-28 Ps towards damages from the defendant, the carrier, by virtue of the letter of subrogation Ex.A-1 executed by the second plaintiff, the consignee, in favour of the first plaintiff, the insurer. The consignor had issued a letter Ex.A-18 stating no objection for settlement of the claim by the first plaintiff-insurer in favour of the second plaintiff, as can be seen from Ex.A- 19, the receipt issued by the second plaintiff. As the insurer had settled the claim of the second plaintiff in respect of the damages, the first plaintiff-insurer filed the suit for recovering the said amount from the defendant, the carrier, by virtue of the letter of subrogation-Ex.A-1 executed by the second plaintiff-consignee in favour the first plaintiff-insurer. The second plaintiff joined the suit only as a proper party and as no relief is claimed by the second plaintiff, the suit is also decreed only in favour of the first plaintiff. In fact, the second plaintiff is also represented by the first plaintiff through its Divisional Manager. Sri P.Nair, who signed and verified the plaint, is authorised to do so by virtue of the power of attorney Ex.A-22. 9. The learned counsel for the respondent relied on a decision in UNITED INDIA FIRE AND GERNERAL INSURANCE CO. LTD., V. PELANIAPPA TRANSPORT CARRIERS AND ANOTHER[1], wherein this Court held as under:- “From the ratio of the above decisions, the necessary conclusion is that sub-sec (2) of S. 69 prohibits filing of a suit on the basis of a contract by an unregistered partnership firm or a partner thereof on its behalf. But there is no prohibition for acquiring property by an unregistered firm or its transferring property in the third parties and the right acquired by the third parties pursuant to the assignment made by the unregistered partnership firm is not defeated. The embargo would not apply to cases of suits filed by a person or a registered firm to whom the unregistered firm may have assigned the rights under an assignable contract entered into by it with third parties. Under those circumstances, the necessary conclusion is that the assignment is not illegal and the suit can be maintained individually by the assignee alone. In this view, it is not necessary for me to consider the decisions cited by Sri Mohan Reddy, the learned counsel for the appellant, since they do not directly cover the point.” In the present case also, the first plaintiff, the insurer, who is a third party has acquired the right to recover the suit amount by virtue of assignment by the second plaintiff in favour of the first plaintiff under the letter of subrogation- Ex.A-1. As such, there is no prohibition for assignment of the right by the second plaintiff, an unregistered firm in favour of the first plaintiff, and the prohibition contained in Section 69(2) does not extend to the case of a suit filed by the assignee, the first plaintiff. In fact, the second plaintiff is impleaded only as a proforma party to the suit. Hence, the suit is maintainable and the bar contained under Section 69(2) of the Partnership Act is not attracted to the facts of the present case. 10. The next contention of the appellant is that it is a case of marine insurance covered by the provisions of the Marine Insurance Act and hence the question of subrogation does not arise, as there was no sea voyage. 11. Section 3 of the Marine Insurance Act defines ‘Marine Insurance’ as – “A contract of marine insurance is an agreement whereby the insurer undertakes to indemnify the assured, in the manner and to the extent thereby agreed, against marine losses, that is to say, the loss incidental to marine adventure. Section 4 deals with Mixed Sea and Land Risks. Sub-section (1) of Section 4 states that a contract of marine insurance may be extended so as to protect the assured against losses on inland waters or any land risk, which may be incidental to any sea voyage. The learned counsel for the appellant/defendant would, therefore, contend that the goods were carried from Hyderabad to Kolkatta by road and no part of such transportation involve any voyage by sea or any land risk, which is incidental to any sea voyage. The said plea is not raised in the written statement nor any issue framed regarding the same. The suit is filed by the first plaintiff-insurer seeking to enforce a claim against the defendant under the provisions of the Carriers Act. Admittedly, the defendant is a carrier and the second plaintiff is the consignee. When once the letter of subrogation is found to be true and valid, the first plaintiff- insurer steps into the shoes of second plaintiff-consignee and, therefore, becomes entitled to recover the amount from the defendant-carrier. The provisions of the Marine Insurance have, therefore, no application. Even otherwise, the marine insurance policy covers the road risk and when the goods are damaged in transit, the insurance company after paying the amount to the insured has a right to recover the same from the carrier by virtue of the letter of subrogation, as held in GWALIOR TRANSPORT CO. (P) LTD., V.NATIONAL INSURANCE CO. LTD., AND ANOTHER[2]. 12. In UNION OF INDIA V. THE GREAT AMERICAL INS. CO. LTD. AND ANOTHER[3], it was held as follows: “The subrogation contemplated both under sub- section (2) and sub-section (3) of Section 135-A of the Transport of Property Act, 1882 entitles an insurance company to institute a suit in its own name. The essence of subrogation is substitution. On this statutory subrogation, the insurance on the wordings of the statute itself, becomes entitled to all rights and remedies of the insured person in respect of the lost goods, for which he has made the payment or indemnified the insured.” The insurance company is, therefore, entitled to institute the suit in its own name by virtue of the letter of subrogation executed by the second plaintiff, the consignee, for recovery of the amount paid to the consignee. 13. In a recent decision in D.H.T.C (INDIA) LTD. V. NEW INDIA ASSURANCE CO. LTD. AND OTHERS[4], the High Court of Punjab and Haryana held that in literal sense, subrogation is the substitution of one person for another. The doctrine of subrogation confers upon the insurer the right to receive the benefit of such rights and remedies as the assured has against third parties in regard to the loss to the extent that the insurer has indemnified the loss and made it good. In the present case, the evidence on record established that Ex.A-1 letter of subrogation was executed by the second plaintiff in favour of the first plaintiff. The evidence on record further established that goods were, in fact, got damaged while in transit, in the hands of the defendant-carrier. The representative of the defendant by name Anil Kumar Sarogi was also present at the time of assessment of damage and he also signed the surveyor’s report. The contention of the defendant that Anil Kumar Sarogi was present at the spot for receiving the freight charges and the consignee made him to sign some papers and he was not authorised to sign them, remains totally unsubstantiated and the same was rightly rejected by the trial Court. The fact that the surveyor is not examined is of no consequence, as held by a Division Bench of this Court in M/S ECONOMIC ROADWAYS CORPORATION, HYDERABAD V. NATIONAL INSURANCE COMPANY, HYDERABAD & ANOTHER[5]. In fact, the insurer is not called upon to prove negligence on the part of carrier for enforcing the claim under the provisions of the Carriers Act. Section 9 of the Carriers Act states that in any suit brought against a common carrier for the loss, damage or non-delivery of goods entrusted to him for the 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. 14. It is not disputed that the damage to the goods occurred on account of accident to the vehicle. The burden is on the defendant- carrier to show that the loss or damage was not on account of any negligence or criminal act on the part of carrier or its servants or agents. The plea of the defendant is that damage to the goods was occasioned due to the ‘act of God’. When the damage was caused on account of accident to the vehicle, the same cannot be attributed to an ‘act of God’. There is absolutely nothing on record to show that the accident was not on account of any rash or negligent driving of the vehicle by its driver. In the absence of any such evidence and the plea of the defendant that the accident was on account of ‘act of God’ remaining unsubstantiated and there being no call upon the plaintiff to prove any negligence on the part of the defendant by virtue of Section 9 of the Carriers Act, the contention of the defendant that they are not liable for the damage caused to the goods while in transit, is untenable. The defendant- carrier is certainly liable to compensate the loss occasioned to the goods while in transit and the first plaintiff-insurer, who has settled the claim of the second plaintiff-consignee, is entitled to recover the suit amount by virtue of the letter of subrogation-Ex.A-1. The judgment and decree passed by the trial Court do not, therefore, call for any interference. There are no merits in the appeal. 15. In the result, the appeal is dismissed. There shall be no order as to costs. ____________________ G.V.SEETHAPATHY, J 08th October, 2010 Lrkm [1] AIR 1986 AP 32 [2] 1984 ACJ 81 [3] 1971 ACJ 291 [4] 2010 ACJ 1031 [5] 2002(1) L.S. 128 (D.B)