R.MANI vs KARUMARI ENTERPRISE

THIS is an appeal against the order dated 3rd August, 1994 passed by Consumer Disputes Redressal Commission, Tamil Nadu at Madras in complaint Number O.P. No. 458/93 filed by the present respondent No. 1 Karumali Enterprise. By the impugned Order the State Commission directed the present appellant R. Mani who was opposite party No. 3 in the complaint to pay Rs. 41,433/- the value of the consignment damaged/lost. The said amount is to carry interest at the rate of 18% per annum from 7th June, 1992 till payment. The present appellant was also directed to pay Rs. 10,000/- to the complainant as compensation for mental pain and agony. The complaint as against opposite party Nos. 1,2, 4 & 5 who are respondents Nos. 2,3,4 & 5 herein was dismissed.

THE case of the complainant-Company before the State Commission was that they are manufacturer of chalk crayons and despatches goods to various parts of India. They have taken Marine Open Policy with the first opposite party New India Assurance Company Ltd. on 31st January, 1992 for a sum of Rs. 3.00 lakhs. As soon as the consignment is despatched a declaration is made to the Insurer. On 7th June, 1992 the complainant sent a consignment of 405 cartons of chalk crayons to Rajamundry and Vijayawada in Andhra Pradesh through lorry No. TDJ 7666 belonging to the Appellant i.e. the third opposite party through his Agent, second opposite party M/s. Jothi Transport. The fifth opposite party was the driver of the vehicle. Due to rash and negligent driving of the driver, the lorry fell into a lake near Gopalapuram bridge on 8th June, 1992 and the entire consignment got wet and their value and utility was lost. The driver was prosecuted and fined. The complainant lodged a claim with the first opposite party-Insurer for the value of the consignment namely for Rs. 60,000/-. The complainant also sent notices to second, third and fourth opposite party. Fourth opposite party is said to be insurer of the lorry under a comprehensive policy of insurance. The first opposite party did not settle the claim on the ground that at the time of despatch of the consignment in question the cash balance of premium paid by the complainant was not sufficient to cover the risk. The complainant prayed for the award of a sum of Rs. 60,000/- with interest at the rate of 24% against the opposite parties jointly and severally. He also claimed Rs. 1.00 lakh as compensation. Opposite Party Nos. 2 and 5 did not file any counter and remained absent and were proceeded ex-parte.

THE first opposite party admitted the open Marine Insurance Policy but pleaded that the insured had to declare the value and the details of the consignment at the time of transit and obtain endorsement on the declaration. The corresponding premium dependent upon the value of declaration is adjusted. The premium amount for the sum insured has to be replenished periodically. On 16.4.92 the first opposite party informed the complainant that the credit balance of the deposit premium available was only Rs. 69.00 which would cover a corresponding sum insured to the extent of Rs, 24,500/-only. The complainant did not pay any premium to replenish the sum insured. On 10th June, 1992 the complainant sent a declaration to the first opposite party with a deposit of Rs. 840/- but as by that time the accident in question had already taken place, the first opposite party declined to accept the declaration and thus the policy did not cover the risk in respect of the consignment in question and hence the claim of the complainant was rejected.

THE third opposite party i.e. the appellant is the owner of the lorry through which the goods were despatched for Andhra Pradesh. It was contended by him that the lorry was insured with the 4th opposite party and the complainant should proceed against that fourth opposite party. It was also pleaded that out of 405 cartons 126 were recovered in good condition and handed over to the complainant and this fact has been deliberately suppressed by the complainant. The fourth opposite party flatly denied that the lorry TDJ 7666 was insured with them.

THE State Commission believed the plea of the Insurance Company i.e. the first opposite party and held that the repudiation of the claim by it did not amount to any deficiency in service. The second opposite party was also exonerated on the ground that it was only transport agent of the third opposite party who is the owner of the lorry and the consignment had been entrusted to the third opposite party for transport through the agent and, therefore, it was held that the second opposite party was not liable for the loss. The third opposite party i.e. the appellant was held liable for the loss on the ground that the loss of the consignment had occurred due to rash and negligent act of driver of that party. As 126 cartons had been recovered undamaged the State Commission calculated the cost of the remaining consignment at Rs. 41,333/-. As the fourth opposite party has denied the comprehensive insurance of the ill fated lorry and there was no evidence in support of the alleged insurance the State Commission held that the claim against the fourth opposite party must fail on that account. As far as the 5th opposite party i.e. the driver is concerned it was held that the complainant was not a consumer as far as the said opposite party was concerned as the complainant had not hired or availed of the services of that party who was merely driver of the third opposite party. As noticed above third opposite party was held vicariously liable for the rash and negligence driving of the 5th opposite party. Hence the State Commission held that no reliefs can be granted against the 5th opposite party. In view of the above finding the State Commission happened to pass the impugned order against which the third opposite party has come before us in appeal.

WE have heard learned Counsel for the parties present and have gone through the record. None appeared for respondents Nos. 3, 4 and 5. It was urged on behalf of the Appellant that there was no privity of contract between the Appellant and the consignor. This argument has no force. The agent of the appellant i.e. second opposite party arranged for the transport of consignment through the lorry of the appellant. The lorry was of the appellant. The driver who drove the lorry was also in the employment of the appellant. The loss had occurred due to the rash and negligent driving by the driver. Therefore it can be safely held that the complainant had hired the services of the appellant through the agent of the appellant. It was urged that the driver was in fact of the second opposite party i.e. the agent as his address has been given care of the second opposite party. As is clear from the reply filed by the complainant to the memorandum of appeal, the appellant is based in Madras and his agents are situated at various places in Tamil Nadu and it is not a common practice in trade to lend lorry for hire without a driver. As the appellant''s Driver is based in Trichy so far the purposes of service of the process on the driver, the address of the driver is given as care of the agent of the appellant at Trichy. Moreover the complainant is not expected to know the terms of employment of the driver i.e. whether he is a driver engaged by the agent or is of the appellant. The fact remains that the lorry which carried the consignment belonged to the appellant and it was driven by the respondent No. 5 herein.

A novel argument has been advanced on behalf of the appellant. It was urged that the complainant had Open Marine Insurance Policy and at the relevant time Rs. 69/- were in credit balance with the Insurance Company and therefore the consignment could have been insured up to the value of Rs. 24,500/-. This argument has been noticed only to be rejected. When under the policy consignment worth Rs. 60,000/- was despatched the Insurance Company could not cover the risk for part of the amount to the extent of credit balance. The risk had to be covered either for the whole amount or not at all if full payment is not paid for the risk. Admittedly in the present case the declaration with the due premium was sent to the Insurance Company after the accident and the Insurance Company was within its right not to accept the risk. Therefore, the argument of the appellant that the Insurance Company should be made liable to the extent of Rs. 24,500/- has no force.

LASTLY , it was argued that the lorry was comprehensively insured with respondent No. 4 herein. Certificate of insurance has been filed though it was not produced before the State Commission. The policy shows that the risk covered was only with respect to the vehicle. There was no risk cover for the goods in the vehicle. We have gone through the judgment of the State Commission and the records and we find that the findings recorded by the State Commission are correct and do not require any interference. Accordingly, we do not find any force in the present appeal and dismiss the same with costs which we assess at Rs. 2,000/- which will be shared equally by the complainant i.e. respondent No. 1 and the Insurance Company i.e. respondent No. 2 herein.