National Insurance Company Ltd. vs LUDHIANA TRAILOR SYNDICATE

VIDE this complaint, the complainants National Insurance Company Limited and M/s. V.M.T. Spinning Co. have prayed that the opposite party, Ludhiana Trailor Syndicate, Focal Point, Ludhiana be directed to pay a sum of Rs. 9,38,608/- with interest @ 24% p.a. and costs. The brief relevant facts as stated in the complaint may be noticed.

M/s. V.M.T. Spinning Company Ltd., V.P.O. Kalyanpur, Baddi, Distt. Solan (H.P.) complainant No. 2 insured machinery with complainant No. 1 vide Policy No. 21/6/3/141/ 95 dated 21.8.1995 for a sum of Rs. 15,80,000/- (Annexure C-l). The complainant No. 2 vide Lorry Receipt Nos. 5369 to 5674 dated 27.3.1996 got the consignment/machinery transported from Ludhiana to Baddi through opposite party, vide Annexures C-2 to C-8. The machinery was damaged in transit due to mishandling and negligence of opposite party. Thereafter the complainant No. 2 filed a claim with the complainant No. 1 vide letter dated 11.4.1996 and also with the opposite party vide notice dated 6.6.1996 vide Annexures C-9 and C-10 respectively. The complainant No. 1 appointed a Surveyor who after through investigation assessed the loss at Rs. 9,38,608/- vide his report dated 7.3.1997 (Annexure C-11). The complainant No. 1 approved the claim (C-12). On completing the formalities, complainant No. 1 vide letter dated 20.3.1997 made the payment of Rs. 9,38,608/- to complainant No. 2. As stated in consideration of having received the said amount of its claim, complainant No. 2, VMT Spinning Company Limited executed a letter of subrogation and Special Power of Attorney in favour of National Insurance Company- complainant No. 1. Thus, the present complaint was filed. Before filing this complaint complainant No. 1 wrote a letter dated 10.3.1997 (C-l) to the opposite party and asked for payment made to the complainant No. 2 being insurer. After having not received any reply from the opposite party, complainant No. 1 sent a registered notice to the opposite party asking to make the payment of the said amount. The opposite party ignored the notice and choose not to reply. Although the claim was lodged by the complainant No. 1 oh 6.6.1996 and survey was got done by the opposite party on 7.6.1996 and short certificate/ open delivery damage certificate was also issued to this effect that the complainant No. 2 has suffered the loss and the machinery was totally damaged, but the opposite party did not make the payment. A copy of the open delivery damaged/short certificate issued by the Ludhiana Trailor Syndicate is at Annexure C-14. As asserted inspite of the claim lodged and survey conducted by the opposite party, no payment has been made which amounts to deficiency in rendering service on the part of the opposite party. As the complainant No. 2 has suffered the loss due to sheer negligence and mishandling of the goods by the opposite party due to which the machinery reached the destination in a damaged condition, thus, the opposite party is liable to make the payment of damages/claim amounting to Rs. 9,38,608/- claimed by the complainants. Notice was issued to the opposite party on 4.7.1998 for 2.9.1998 received back without any report. Fresh notice was issued on 28.9.1998 for 9.11.1998, not received back. Presumed to have been received. Opposite party was absent on 9.11.1998 and proceeded ex-parte. Third time opposite party was informed by ordinary post about the date of hearing i.e., 21.12.1998. Opposite party did not file any written reply or evidence. Again for hearing on 10.2.1999, the respondent was informed by ordinary post, the opposite party did not appear even on 10.2.1999. Complainant No. 1 produced evidence on affidavit and documents. The complainant has not produced any direct evidence to show the negligent act of the opposite party.

Before we go into the merits of the case, we first take up the legal propositions as referred below: Point No. 1 : Whether complainant No. 1 is a consumer and the complaint is maintainable ? The consumer has been defined under Section 2(1)(d) of the Consumer Protection Act asunder : " ''consumer'' means any person who - (i) buys any goods for a consideration which has been paid or promised or partly paid and party promised, or under any system: of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not includes a person who obtains such goods for resale or for any commercial purpose; or (ii) {hires or avails of} any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary or such services other than the person who {hires or availsof} the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payments, when such services are availed of with the approval of the first-mentioned person."

COMPLAINANT No. 2 hired the services of the opposite party, the carrier, for consideration and is thus a consumer as defined above. The complaint has been filed on behalf of complainant No. 2 also and is, therefore, maintainable. Though complainant No. 1 may not be a consumer as defined. The complainant cannot be thrown away. It would be immaterial as to who ultimately receives the payment made by the opposite party- VMT Spinning Co. Ltd. It has been laid down by the National Commission in Krishan Roadways v. National Insurance Company Ltd. & Anr., III (1996) CPJ 51 (NC)=1997 CCJ 1098 (NC). That the complaint has been filed by the consignee and the Insurance Company on subrogation letter the same could be maintainable. The loss suffered by the consignor/ complainant No. 2 having been reimbursed by the complainant No. 1, the Insurance Company per se would not absolve the opposite party- Ludhiana Trailor Syndicate from liability for the loss suffered on account of their negligent act, if any, under their contract of carriage of goods. On proof of negligent act, they would be liable to indemnify the consignor or the consignee as the case may be for the loss suffered, as it would amount to deficiency in rendering service.

ANNEXED with Affidavit of K.K. Mittal filed on behalf of the Insurance Company is a letter of subrogation dated 19.3.1997, executed on behalf of the complainant No. 2 in favour of complainant No. 1-National Insurance Company. Complainant No. 2 is a consumer as referred to above and on execution of the subrogation letter, their rights stand transferred to the Insurance Company. Letter of Subrogation and Power of Attorney duly signed by the complainant No. 2 are sufficient to prove that on behalf of the complainant No. 2, complainant No. 1 could file the complaint. Under the Consumer Protection Act, a short procedure is prescribed to complete the proceedings. The technicalities of procedure prescribed under the Civil Procedure Code are not applicable. The documents can be proved on oral evidence or on affidavits. In the instant case, the letter of subrogation has been proved on affidavit of K.K. Mittal, the Admn. Officer of the Insurance. We hold the letter of subrogation to be valid and that- the complaint is maintainable. As per contract, it was the duty of the opposite party to deliver the goods at the station booked for and since the goods were not delivered, there was deficiency in service on their part.

FROM a perusal of records of the case, we are of the opinion that to give benefit of the report dated 7.3.1997 given by the Surveyor/ Investigator of the complainant, M/s. B.K. Sharma & Associates and M/s. Adarsh Associates (C-11) quantifying the claim of loss at Rs. 9,38,608/- is a piece of evidence. In the absence of any other evidence to the contrary, the same can be relied upon to determine the value of the goods lost, for which the complainants are to be compensated.

FOR the reasons recorded above, we direct the opposite party to pay the aforesaid amount of Rs. 9,38,608/- with interest @ 12% per annum from 7.5.1997, the date two months after the submission of the report by the Surveyor. This complaint is allowed. In the facts and circumstances of the case, there will be no order as to costs. Complaint allowed. ______________