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M/s. Sirmour Truck Operators Union (Regd.) v/s National Insurance Company Limited through Branch Manager, Paonta Sahib, District Sirmour


Company & Directors' Information:- NATIONAL UNION CORPN PVT LTD [Strike Off] CIN = U51909WB1940PTC010240

Company & Directors' Information:- NATIONAL UNION LTD [Not available for efiling] CIN = U74999KL1951PLC000818

    R.S.A. No. 57 of 1999

    Decided On, 29 November 2010

    At, High Court of Himachal Pradesh

    By, THE HONOURABLE MR. JUSTICE RAJIV SHARMA

    For the Appellant: Bimal Gupta, Advocate. For the Respondent: Ashwani K. Sharma, Advocate.



Judgment Text

Rajiv Sharma, J.

1. This Regular Second Appeal is directed against the judgment and decree dated 01.04.1998, passed by the learned Additional District Judge, Sirmaur, District at Nahan, H.P. in Civil Appeal No. 10-N/13 of 1996.

2. Material facts necessary for adjudication of this Regular Second Appeal are that the respondent-plaintiff (hereinafter referred to as 'the plaintiff' for convenience sake), had filed a suit in the Court of learned Sub Judge Ist Class (I), Paonta Sahib, Distirict Sirmaur, H.P. for recovery of ` 68,074/- against the appellant-defendant (hereinafter referred to as 'the defendant' for convenience sake). M/s. Himachal Milk Specialties Pvt. Ltd., Rampur, Paonta Sahib booked goods with the defendant vide G.R. No. 1185, dated 17.06.1991 for its delivery at Jaipur. The consignment was being transported in truck No. HP-A-2105. The goods were insured with the plaintiff. The defendant is a registered transport union, which deals in the transportation of goods to various parts of the country with its office located at Paonta Sahib. It was alleged that due to rash or negligent driving of the truck in question, it met with an accident on 18.06.1991. A total loss of ` 68,074/- was caused and the plaintiff had to pay this amount to M/s. Himachal Milk Specialties Pvt. Ltd.. According to the Insurance Company, the loss has been caused due to the negligence on the part of the defendant-Union, since it failed to send the consignment safely to its destination. Accordingly, the defendant was liable to pay the aforesaid amount to the plaintiff. A letter of subrogation has been issued in favour of the plaintiff by M/s. Himachal Milk Specialties Pvt. Ltd. and it has been authorized to claim the loss from the defendant. A notice was served upon the defendant.

3. The suit was contested by the defendant. It was admitted by the defendant that the accident took place. However, it was averred that the defendant was not liable to make good the loss caused in the accident. According to the defendant, it was the duty of the plaintiff to indemnify the loss caused to the vehicle in question. The subrogation of the authority by M/s. Himachal Milk Specialties Pvt. Ltd. to the plaintiff was also disputed.

4. The replication was filed by the plaintiff. The trial Court framed the issues. The suit was dismissed by the trial Court on 29.05.1996. The plaintiff preferred an appeal before the learned Additional District Judge, Sirmour. The same was allowed by the learned Additional District Judge, Sirmour on 01.04.1998. Hence, this Regular Second Appeal. This Regular Second Appeal was admitted on the following substantial questions of law on 18.03.1999:

1. Whether in view of Ext. PW1/A, the appellant is liable to pay any amount to the respondent under the Carriers Act, 1865.

2. Whether the suit is bad for want of necessary parties, namely, Shri Gurinder Singh, owner of Truck No. HPA-2105.

5. Mr. Bimal Gupta, learned counsel for the appellant has supported the judgment of the learned Trial Court dated 29.05.1996.

6. Mr. Ashwani K. Sharma, learned counsel for the respondent has supported the judgment of the appellate Court dated 01.04. 1998.

7. PW-1, Ram Rattan stated on oath that he was working as Branch Manager of Insurance Company at Paonta Sahib. According to him, the goods were transported in Truck No. HPA-2105 from Paonta Sahib to Jaipur. These goods belonged to M/s. Himachal Milk Specialties Pvt. Ltd. and the goods in question were insured. According to him, the value of the consignment was Rs.5,71,000/- and the truck in question met with an accident near Rohtak on 18.06.1991. The ‘Ghee’ being transported in the truck was damaged. According to him, M/s. Himachal Milk Specialties Pvt. Ltd. made a demand of insurance money and the said payment was settled to the tune of `68,074/-. The payment was made on 23.12.1991.

8. PW-2 is Shri B.R. Kanwar. He was working as an Administrative Officer in M/s. Himachal Milk Specialties Pvt. Ltd., Paonta Sahib. According to him, ‘Deshi Ghee’ was sent to Jaipur. The name of the driver was Raghuvir Singh. The consignment never reached Jaipur and the truck met with an accident at Rohtak. He also admitted that the employer got claim of Rs.68, 074/-. He was put a suggestion on the basis of the conditions enumerated in Ex. PW-1/A. However, he has shown his ignorance whether his firm was aware of the terms and conditions mentioned in Ex.PW-1/A or not.

9. PW-3 is Shri Suresh Garg. He was the Managing Director of M/s. Himachal Milk Specialties Pvt. Ltd.. According to him, the consignment was sent through truck No. HPA-2015. The truck met with an accident near Rohtak. It could not reach Jaipur. He has also admitted that a sum of `68,074 was paid by the plaintiff –Company towards the claim. He has admitted the execution of subrogation letter ex PW-1/F and Power of Attorney Ex. PW-1/G. He was also put a suggestion on the basis of terms and conditions mentioned in Ex. PW-1/A.

10. PW-4 is Shri Sakshi Braham Datt. He has assess the damage caused to consignment.

11. Defendant has produced Shri Rajender Singh as DW-1. He has admitted that truck No. HPA-2105 was registered with the Union. The Union transports the goods. The terms and conditions are mentioned on the reverse of G.Rs. He has admitted that the consignment was handed over by the M/s. Himachal Milk Specialties Pvt. Ltd. for transportation vide Ex.PW-1/A. The same was sent by truck No. HPA-2105. According to him, as per conditions No. 8 and 9, the Union is not liable. The truck met with an accident near Rohtak. The matter was reported to the Police. According to him, the plaintiff could not institute a suit against the Union. He has admitted in his cross-examination that a case was registered against the driver of the truck under Sections 279, 337 and 338 of the Criminal Procedure Code and the same was pending in the Court of competent jurisdiction. He has denied the suggestion that the accident has taken place due to the negligence of the driver.

12. Ex. PW-1/A is the copy of G.R. No. 1185, dated 17.06.1991, Ex. PW1/B is the copy of receipt dated 23.12.1991, Ex.PW-1/C is the copy of notice dated 13.07.1991, Ex.PW-1/D is the copy of postal receipt, Ex.PW-1/E is the copy of acknowledgement, Ex. PW-1/F is the copy of letter of subrogation, Ex. PW-1/G is the copy of power of attorney, Ex.PW-1/H is the copy of letter and Ex,. PW-1/K is the copy of receipt.

13. According to Mr. Bimal Gupta, learned counsel for the appellant, the owner of the truck was a necessary party. The learned trial Court has framed issue No. 5 to this effect. The learned trial Court has observed that the learned counsel appearing on behalf of the defendant was not able to urge as to who was the necessary party required to be arrayed in the suit.

14. Now, the Court will advert to what is the true import of Ex. PW-1/A. Mr. Bimal Gupta, learned counsel for the appellant, on the basis of terms and condition No. 8 enumerated in Ex. PW-1/A, submitted that his client cannot be held liable. Condition No. 8 of Ex.PW-1/A reads thus:

'8. The Union does not take responsibility for an leakage, shortage, solace by sun, water and accident, dacoity, theft or any other unforeseen cause throughout the action of enomy.'

15. He has also referred to condition No. 9, where it is mentioned that all goods are accepted at 'owner’s risk'.

16. Their Lordships of the Hon’ble Supreme Court in Nath Bros. Exim International Ltd. Versus Best Roadways Ltd., (2000) 4 Supreme Court Cases 553 have held that the liability of a carrier to whom the goods are entrusted for carriage is that of an insurer and is absolute in terms, in the sense that the carrier has to deliver the goods safely, undamaged and without loss at the destination, indicated by the consignor. So long as the goods are in the custody of the carrier, it is the duty of the carrier to take due care as he would have taken of his own goods and he would be liable if any loss or damage was caused to the goods on account of his own negligence or criminal act or that of his agent and servants. Their Lordships have also explained the term 'owner’s risk'. Their Lordships have held as under:

25. We have already reproduced the provisions of Sections 6, 8 and 9 above. Section 6 enables the common carrier to limit his liability by a special contract. But the special contract will not absolve the carrier if the damage or loss to the goods, entrusted to him, has been caused by his own negligence or criminal act or that of his agents or servants. In that situation, the carrier would be liable for the damage to or loss or non-delivery of goods. In this situation, if a suit is filed for recovery of damages, the burden of proof will not be on the owner or the plaintiff to show that the loss or damage was caused owing to the negligence or criminal act of the carrier as provided by Section 9. The carrier can escape his liability only if it is established that the loss or damage was due to an act of God or enemies of the State (or the enemies of the King, a phrase used by the Privy Council). The Calcutta decision in The British & Foreign Marine Insurance Co. v. The Indian General Navigation and Railway Co.Ltd. (supra), the Assam decision in River Steam Navigation Co. Ltd & Anr. v. Syam Sunder Tea Co. Ltd. (supra), the Rajasthan decision in Vidya Ratan v. Kota Transport Co.Ltd. (supra), the Kerata decision in Kerala Transport Co. v. Kunnath Textiles (supra), which have already been referred to above, have considered the effect of special contract within the meaning of Sections 6 and 8 of the Carriers Act, 1865 and, in our opinion, they lay down the correct law.

26. In the Madras decision in P.K. Kalasami Nadar v. K. Ponnuswami Mudaliar & Ors. (supra), it was held that an act of God will be an extraordinary occurrence due to natural causes, which is not the result of any human intervention, but it was held that an accidental fire, though it might not have resulted from any act or omission of the common carrier, cannot be said to be an act of God. Similarly, in Kerala Transport Co. v. Kunnath Textiles (supra), it was held that the absolute liability of the carrier was subject to two exceptions. One of them is a special contract that the carrier may choose to enter into with the customer and the other is the act of God. It was further held that an act of God does not take in any and every inevitable accident and that only those acts which can be traced to natural causes as opposed to human agency would be said to be an act of God. In Associated Traders & Engineers Pvt. Ltd. v. Delhi Cloth & General Mills Ltd. & Ors. ILR Delhi 1974 (1) 790, a fire which broke out in a bonded warehouse where the goods were kept was held not to be an act of God and, therefore, the carrier was held liable. This Delhi decision has been relied upon by the learned counsel for the appellant on another question also to which we shall presently come, to show that the agreement by which the liability of the carrier is sought to be limited must be signed by the owner of the goods, entrusted to the carrier for carriage.

27. From the above discussion, it would be seen that the liability of a carrier to whom the goods are entrusted for carriage is that of an insurer and is absolute in terms, in the sense that the carrier has to deliver the goods safely, undamaged and without loss at the destination, indicated by the consignor. So long as the goods are in the custody of the carrier, it is the duty of the carrier to take due care as he would have taken of his own goods and he would be liable if any loss or damage was caused to the goods on account of his own negligence or criminal act or that of his agent and servants.

28. Learned counsel for the respondent contended that the goods were booked at "OWNER'S RISK" and, therefore, if any loss was caused to the goods, may be on account of fire, which suddenly engulfed the neighbouring warehouse and spread to the godown where the goods in question were stored, the carrier would not be liable.

29. "Owner's Risk" in the realm of commerce has a positive meaning. It is understood in the sense that the carrier would not be liable for damage or loss to the goods if it were not caused on account of carrier's own negligence or the negligence of its servants and agents. In Burton v. English (1883) 12 Q.B.D. 218 and again in Wade v. Cockerline (1905) 10 Corn.Cas. 47, it was held that in spite of the goods having been booked at "OWNER'S RISK", it would not absolve the carrier of its liability and it would be liable for the toss or damage to the goods during trans-shipment or carriage. These decisions granted absolute immunity to the carrier, but they have lost their efficacy on account of subsequent decisions in Svenssons v. Cliffe S.S.Co. (1932) 1 K.B. 490, which was considered in Exercise Shipping Co. Ltd. v. Bay Maritime Lines Ltd. (The Fantasy) (1991)2 Lloyd's Rep. 391 [Queen's Bench Division], in which it was observed as under: "The question whether words such as "at charterer's risk" can operate as an exemption clause in favour of a party otherwise liable for negligence was decided by Mr. Justice Wright (as he then was) in Svenssons Travaruaktiebolag v. Cliffe Steamship Co. (1931) 41 LI.L.Rep.262; (1932) 1 K.B. 490. He considered the authorities in detail and concluded : It is quite clear, in my judgment, on the authorities as they now stand, that the words "at charterers' risk", standing alone and apart from any other exception in the charter-party, do not excuse the shipowner in the case of a loss due to the breach of warranty of seaworthiness... I think that the words standing by themselves have also to be read as limited to losses and damages where there has been no negligence on the part of the shipowner or his servants. He went on to consider the charter-party terms in that case which also included an exceptions clause, cl. 11. He held that that clause should have its full effect whereas if "at charterers' risk" had included an exception of negligence, it might not have done so. That judgment has been followed since 1932, for example in The Stranna (1937) 57 LI.L.Rep. 231; (1937) P.130 and East & West Steamship Co. v. Hossain Brothers, (1968) 2 Lloyd's Rep. 145 (Supreme Court of Pakistan) and it has not, so far as I am aware, been dissented from."

30. In Mitchell v. Lane. & Y.R., 44 UQB 107 = LR 10 QB 256, it was held that "OWNER'S RISK" only exempts the carrier from the ordinary risks of the transit and does not cover the carrier's negligence or misconduct. So also, in Lewis v. The Great Western Railway Company 3 Queen's Bench 195, the words "OWNER'S RISK", were held to mean, "at the risk of the owner, minus the liability of the carrier for the misconduct of himself or servants."

31. Thus the expression "at owner's risk" does not exempt a carrier from his own negligence or the negligence of his servants or agents.'

17. Similarly, their Lordships of the Hon’ble Supreme Court in Patel Roadways Ltd. Versus Birla Yamaha Ltd., (2000) 4 Supreme Court Cases 91 have held as under:

'47. From the conspectus of views taken in the decisions of different High Courts noted above it is clear that the liability of a common carrier under the Carriers Act is that of an insurer. This position is made further clear by the provision in S. 9, in which it is specifically laid down that in a case of claim of damage for loss to or deterioration of goods entrusted to a carrier it is not necessary for the plaintiff to establish negligence. Even assuming that the general principle in cases of tortious liability is that the party who alleges negligence against the other must prove the same, the said principle has no application to a case covered under the Carriers Act. Thi

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s is also the position notwithstanding a special contract between the parties. These principles have held the field over a considerable length of time and have been crystallized into accepted position of law. No good reason has been brought to our notice to persuade us to make a departure from the accepted position. Therefore were iterate the position of law noticed above. The consequential position that follows is that the contention of Shri Ashok Desai learned senior counsel, that the respondents herein having failed to establish negligence on the part of the appellant, their claim for damages should be rejected, cannot be accepted.' 18. In the instant case, a registered notice was served upon the defendant vide Ex. PW-2/A. The letter of subrogation was issued by the M/s. Himachal Milk Specialties Pvt. Ltd. In favour of the plaintiff-Company and the Special Power of Attorney was also executed in favour of the plaintiff-Company by the M/s. Himachal Milk Specialties Pvt. Ltd. In these circumstances, the suit filed by the plaintiff against the defendant was maintainable. It was not necessary for the plaintiff to implead the owner of the truck. It was the duty of the defendant to ensure that the goods reached at Jaipur safely. The accident has taken place at Rohtak. The consignment was damaged. The defendant could not be absolved of the liability only on the basis of the terms and conditions No. 8 and 9 incorporated in Ex. PW-1/A. The same and similar terms and conditions incorporated in Ex. PW-1/A have been explained by their Lordships of the Hon’ble Supreme Court in the judgments cited hereinabove. 19. Accordingly, in view of the observations made hereinabove, there is no merit in this Regular Second Appeal and the same is dismissed. No costs.
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