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Judgment
N.V. Balasubramanian, J.—This appeal is filed by the plaintiff in the suit against the judgment and decree passed in O.S. No. 224 of 1982
on the file of the Subordinate Judge, Dindigul, dated 12.2.1985. The defendant in the suit is the respondent in the appeal. The parties are referred
to as arrayed in the plaint.
The suit was filed for recovery of a sum of Rs. 62,042.61 being the damages suffered by the plaintiff No. 2 in respect of a consignment
entrusted with the defendant on 17.2.1982 at Dindigul. The plaintiff No. 1 is the insurer who had compensated the plaintiff No. 2 and the suit was
filed for recovery of the amount from the defendant with subsequent interest. On 17.2.1982, the plaintiff No. 2 had entrusted total number of 115
bags of 140 special hosiery cone yarn intended to be delivered to the consignee Yarn Syndicate Limited, 7, Jambu-nath Malik Lane, Calcutta. The
defendant had issued a consignment note in G.C. No. 15/1197 dated 17.2.1982. The plaintiff No. 2 has duly insured the goods with the plaintiff
No. 1 to compensate the plaintiff No. 2 for any loss sustained by plaintiff No. 2 while the consignment is in transit from Dindigul to Calcutta. The
value of the invoiced goods as per the stock transfer challan was Rs. 1,92,600. The plaintiff No. 2 came to know that the vehicle with the goods
met with an accident while proceeding to Calcutta at Chandramara on 7.3.1982. It appears that 108 bags loaded in the lorry got completely
damaged and the carrier has delivered seven bags alone in good condition and the carrier has delivered 108 bags subsequently on 11.3.1982 and
a survey was arranged and the surveyor inspected the goods on 19.3.1982, 20.3.1982, 27.3.1982 and 28.3.1982. The defendant has also issued
a certificate of damage and shortage on 1.4.1982 and accepted the estimated value of the loss as per the survey report. It was the case of the
plaintiffs that the loss resulted on account of continuous carelessness and negligence on the part of the defendant and after the issue of a notice on
21.4.1982, the plaintiff No. 1 settled the amount due and on the basis of the special power of attorney executed by the plaintiff No. 2, the plaintiff
No. 1 filed the suit on the ground that it has been subrogated into the right of the entire claim.
The defendant filed a written statement admitting the fact that the defendant carrier was engaged to deliver the goods of 115 bags of hosiery
cone yarn to the consignee, Yarn Syndicate Limited, but the defendant had not weighed the goods and the defendant did not know the number of
cones in each bag. It was the further case of the defendant that the goods were intended to be delivered at the owner''s risk and the goods were
insured with the plaintiff No. 1 and hence, the defendant was not responsible for any leakage and breakage. According to the defendant, the
defendant had delivered 115 bags on 3.3.1982 and 11.3.1982 and the consignee also accepted the goods without any complaint. It was the case
of the defendant that the lorry of the defendant had met with an accident at Chandramara and the defendant arranged another vehicle and loaded
the goods and delivered the same on 11.3.1982. The defendant has pleaded that the defendant did not know anything about the survey conducted
by the surveyor and no notice was issued to the defendant prior to the survey and the survey was not conducted in the presence of the defendant.
The defendant denied that the accident had occurred due to misconduct and negligence of its employees. According to the defendant, it had taken
all proper care and the goods were also delivered and received without any protest. The defendant has also raised other contentions, like, power
of attorney was not valid, etc., however, the ultimate case of the defendant was that the defendant was not liable for the suit claim. Insofar as the
certificate of damage is concerned, that was not issued voluntarily, but it was issued on compulsion and in the certificate, it is mentioned that it was
issued strictly without prejudice. According to the defendant, the loss was not due to negligence or misconduct of the defendant. The defendant
also raised the question of jurisdiction of the trial court to try the suit, however, that issue went against the defendant and hence, it is not necessary
to consider the same.
The trial court, on the basis of the pleadings, framed as many as 8 issues for consideration and held that the plaintiff No. 1 is not entitled to
recover any amount from the defendant. According to the trial court, the loss or damage to 108 bags of goods was attributable to the accident and
hence, the plaintiff No. 1 is not entitled to the damages and the plaintiffs have not established that the loss occurred due to negligence on the part of
the defendant. The trial court was also of the opinion that there was no valid subrogation and the suit is also bad for non-joinder of the party, viz.,
Yarn Syndicate Limited, Calcutta. It is, in this view of the matter, the trial court dismissed the suit. As against the judgment and decree, the present
appeal has been preferred by the plaintiffs in the suit.
Mr. Nageswaran, learned counsel appearing for the appellants submitted that under the provisions of the Carriers Act, it is not necessary for the
plaintiffs to prove that the loss or damage was due to negligence of the carrier and it is for the carrier to prove that the loss or damage or
nondelivery of the goods was not due to negligence of the carrier. The learned counsel submitted that there is no proof or evidence to show how
the accident had occurred and the burden of proof is on the defendant to prove how the accident had occurred. Learned counsel submitted that
the agent of the defendant in Calcutta was not examined and only the booking clerk at Coimbatore was examined and there is no proof that there
was heavy rain and the lorry skidded due to the heavy rain. The learned counsel submitted that the accident due to heavy rain cannot be regarded
as an act of God and the case of the defendant that no notice was given before the survey was conducted is incorrect as is evident from the
damage certificate and the survey report. He referred to the provisions of Section 64-UM(2) of the Insurance Act, 1938 and submitted that the
survey was conducted in compliance with the said provisions and there is no evidence let in to prove that there was any rain. The learned counsel
referred to the decision of this court in Thiruppathi Venkatachalapathy Lorry Service v. New India Assurance Co. Ltd. 1988-I-LW 327 and
submitted that it is not open to a public carrier to say that it is carrying goods at the owner''s risk. He, therefore, submitted that the negligence is not
attributable to the owner. He referred to the decision of the Madhya Pradesh High Court, Gwalior Bench in Gwalior Transport Co. Ltd. Vs.
National Insurance Co. Ltd. and Another, and submitted that the claim of the consignor was settled by the plaintiff No. 1 and on the basis of the
settlement and on the basis of the authorisation, the suit was filed. Learned counsel for the appellants also submitted that the trial court went wrong
in placing the burden of proof on the plaintiffs to prove the negligence and the other reasonings given by the learned trial Judge are not correct and
hence, he prayed that the suit may be decreed as prayed for.
Mr. V. Bhiman, the learned counsel appearing for the respondent, on the other hand, submitted that the goods were transported at the owner''s
risk and in the consignment note, it has been clearly stated that the defendant was not responsible for leakage and breakage and the report from
the police clearly shows that the lorry skidded into a roadside ditch as a result of which the cargo fell in the ditch. Learned counsel, therefore,
submitted that it was not due to negligence on the part of the defendant that the accident had occurred, but it was an act of God due to the heavy
rain that the lorry skidded which resulted in the accident and, therefore, the defendant is not liable to make good the loss. Learned counsel further
submitted that the survey report was prepared without giving prior notice to the defendant and the certificate of damages given by the defendant
was given without prejudice to its right. He also submitted that the plaintiffs have not produced the police report enclosed along with the certificate
of damages and the report would show that there was no negligence on the part of the defendant and the plaintiffs have to discharge the burden of
proof as required in Section 9 of the Carriers Act. Learned counsel also referred to various averments made in the written statement and the police
report and submitted that it was due to the accident, the goods were damaged. The learned counsel for the respondent also submitted that the suit
is bad for non-joinder of necessary party as Yarn Syndicate Limited is not impleaded as a party. He, therefore, submitted that there is no infirmity
in the judgment of the trial court calling for interference of this court.
I have carefully considered the submissions of the learned counsel for the appellants as well as learned counsel for the respondent. Exh. A-1 is
the copy of the insurance policy taken by the plaintiff No. 2. The yarn carried by the defendant was insured against road/rail risks, theft, pilferage
and non-delivery risks including the risks of the rain and/or fresh water damages, subject to conditions attached thereto. The said policy was valid
from 18.4.1981 and it remained in force for a period of 12 months from that date. Exh. A-2 is the declaration statement for February, 1982 for the
voyage transit with relevant particulars regarding invoice number, etc. Exh. A-5 is the stock transfer challan of the plaintiff No. 2 wherein it is
specifically stated that 115 bags of special combed cotton hosiery cone yarn were transferred to the account of Yarn Syndicate Limited, Calcutta
with instructions to sell at the best price as per the terms of agency. Exh. A-6 is the Goods Consignment Note issued by the defendant dated
17.2.1982. The goods were damaged and the certificate of damages was given by the defendant in Exh. A-9 and in the certificate, it is mentioned
that the value of the loss was estimated as stated by the party, as per the survey report and police report. In the certificate of damages, it has been
stated that the contents were found damaged, torn and de-shaped due to the accident of the lorry and out of 115 bags booked, the defendant
delivered 7 bags on 8.3.1982 and 108 bags on 11.3.1982. It is also seen from Exh. A-10, that the plaintiff No. 1 settled the claim by the plaintiff
No. 2. It is seen from Exh. A-11, letter of subrogation that the plaintiff No. 2 subrogated in favour of the plaintiff No. 1 all rights in respect of the
loss or damage. The report of the surveyor is marked as Exh. A-4. The survey was done by one S.C. Mazumdar, licensed surveyor. It is seen that
u/s 64-UM(2) of the Insurance Act, 1938, if the claim exceeds Rs. 25,000, for settlement of the claim by the insurer, a report should be obtained
on the loss that has occurred from a person who holds a licence issued under this section to act as a surveyor or loss assessor. Accordingly, report
(Exh. A-4) of the licensed surveyor was obtained.
In this connection, it is also relevant to notice the decision of the Madhya Pradesh High Court in Gwalior Transport Co. Ltd. Vs. National
Insurance Co. Ltd. and Another, , wherein R.C. Lahoti, J. (as his Lordship then was) has made the following observations which are pertinent to
the facts of the case:
The surveyor is an expert in the field of survey and unless there be something positive to discredit him, his assessment has to be accepted. It would
have been better if he had assessed the quantum of damages in the presence of the appellant or would have at least noticed the appellant.
However, the plaintiff would not be non-suited and the survey conducted by C.P. Sarwahi would not be discarded solely for this reason. A civil
case has to be decided on preponderance of probabilities. The goods were delivered from the custody of the carrier to the consignor who was
also the consignee and there was nothing which prevented the carrier from employing a surveyor for assessment of damages specially when an
open delivery was being insisted upon. The carrier could also have insisted on a survey being conducted in his presence which was not done, In the
matter of assessment of partial loss to the goods, some guesswork has to be allowed. The price of the contents of bales is based on the invoices.
Discount has been given for the value of the salvage. Primarily, the payment was to be made by the insurance company because the consignor was
claiming from it. There is no reason to assume that any extra or unreasonable assessment would have been acceptable to the insurance company.
It is no doubt true that the defendant has pleaded that the defendant was not given any prior opportunity before the survey was conducted by
the licensed surveyor. However, it is seen from the survey report, Exh. A-4, a letter dated 18.3.1982 was issued wherein the carrier was asked to
attend the survey and even on the first day of survey, the representative of the carrier left without endorsing the survey result. Survey was
conducted on 19.3.82, 20.3.1982, 27.3.1982 and 28.3.1982 and the survey report clearly shows that all the bags produced for survey were
badly water stained and 20 bags partly burst while other bags were de-shaped and outer packing of many bags were torn. In the survey report,
the amount of loss was determined and the extent of damage was noticed. As already noticed, the plaintiff No. 1 settled the claim of the plaintiff
No. 2 and on the basis of subrogation in favour of the plaintiff No. 1, plaintiff No. 1 instituted the suit. Moreover, the defendant has not examined
anyone from Calcutta Office to disprove the statement in survey report. Further, the damage certificate issued by the defendant also refers to the
survey report and it means that the defendant was aware of the survey report and its contents and there were no remarks on the question of
absence of prior notice in the damage certificate issued by the defendant.
The reasoning of the trial court that it is for the plaintiff No. 1 to establish that the loss or damage was due to the accident of the lorry is not
sustainable in law. The trial court has completely overlooked the provisions of Section 9 of the Carriers Act, 1865 which reads as under:
Plaintiffs, in suits for loss, damage, or non-delivery, not required to prove negligence or criminal act.-In any suit brought against a common carrier
for the loss, damage or non-delivery of goods entrusted to him for 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.
A bare reading of the provisions of Section 9 of the Carriers Act clearly shows that there is no duty cast on the plaintiff No. 1 to prove the
negligence against a common carrier for the loss or damage and it is not necessary for the plaintiff No. 1 to prove that the loss or damage or
nondelivery was due to negligence or criminal act of the carrier, his servants or agents. In other words, it casts a burden on the common carrier to
prove that it was not due to its negligence, but it was due to act of God, the loss had occurred. It is curious to note that the agent in the Calcutta
Office has not been examined, but the person who gave evidence as DW 1 was from Coim-batore and he has also admitted that there is no
documentary evidence to show that there was rain. It is also relevant to notice that the defendant has not examined the driver. DW 1 has also not
produced the records indicating who was the driver of the lorry at the time of accident. Though he has denied the suggestion that the accident had
occurred not due to negligence of the driver, except the ipse dixit of DW 1, there is absolutely no evidence that there was rain at the time of
accident and it was not due to the fault of the defendant that the accident occurred. The conclusion of the trial court that the plaintiff No. 1 is not
entitled to the suit claim, arrived at by placing onus of proof on the wrong shoulder of the plaintiff No. 1 is not sustainable in law. The trial court has
also overlooked the important fact that in the certificate of shortage/damages given by the defendant, Exh. A-9, the defendant has stated that the
defendant was not responsible for the loss of profit, late delivery, non-delivery, part delivery, damage and shortage due to fire in godown and/or
accident with the lorry carrying the goods, war, civil commotion, riot, iabour trouble, damage due to absence of special instructions for carrying
and storing of the goods and/or God''s act or the act which is/was beyond the control of the company, its agents and servants. The trial court has
completely overlooked that the case pleaded by the defendant did not come within the excepted clauses found in the terms and conditions. The
defendant has also not proved that it was due to act of God that the accident had occurred beyond the control of the defendant. The trial court has
focused attention only on the earlier part of the terms and conditions, but has completely overlooked the latter part which clearly provides that the
defendant company is exempt from liability where the loss or damage was caused due to the act beyond the control of the defendant, its servants
and agents. The defendant has not established that the accident had occurred beyond its control. There is absolutely no evidence from the
defendant to show that the case of the defendant fell within the excepted clauses.
Learned counsel for the defendant also pleaded that the goods were carried at the owner''s risk and hence, the defendant is not liable. A
similar contention was raised before a Division Bench of this court in Thiruppathi Venkatachalapathy Lorry Service v. New India Assurance Co.
Ltd. 1988-I-LW 327 and this court has rejected the same and the Bench has held as under:
Under the law of public carriers, the public carrier is not entitled to say that he is carrying the goods at the owner''s risk. It is very specifically stated
that the goods transported through public carrier is only at the risk of the lorry owner and not at the risk of the owner of the goods.
The defendant has also not proved that there was a special contract entered into between the defendant and the plaintiff No. 2, The trial court has
completely overlooked the provisions of Section 9 of the Carriers Act that negligence is always attributable to the owner of the lorry. u/s 9 of the
said Act, it is not open to the carrier to say that goods were transported at the owner''s risk.
The other reasoning of the learned trial Judge that there is no subrogation is also not sustainable as the document Exh. A-11, clearly proves
that the plaintiff No. 1 settled the claim of the plaintiff No. 2 on the insurance policy taken by the plaintiff No. 2. The receipt given by the plaintiff
No. 2 and the letter of subrogation and special power of attorney were also produced before the court. Since the claim of the plaintiff No. 2 was
settled by the plaintiff No. 1, in view of the letter of subrogation wherein the plaintiff No. 2 transferred its every right and interest in respect of the
claim amount in favour of the plaintiff No. 1, the finding of the trial Judge that there was no valid subrogation is not sustainable in law.
Mr. V. Bhiman, learned counsel for the respondent submitted that though the certificate of damages given by the defendant to the plaintiff No.
2 was marked as Exh. A-9, the plaintiffs have not chosen to mark the police report attached to the certificate of damages and hence, an adverse
inference should be drawn against the plaintiffs. I am unable to accept the submission of the learned counsel for the respondent on two counts.
Firstly, no such objection was raised before the trial court when the certificate of damages was marked without the police report attached to the
said certificate. Secondly, the survey report is marked as document, Exh. A-4 and in the survey report, the police report has fully been extracted.
Moreover, the defendant has not chosen to summon the report of the police, if the defendant has found that the report of the police was in favour
of the defendant and the report of the inquiry conducted by the police on the basis of the police report was also not marked by the defendant as an
exhibit. That apart, defendant has also not chosen to mark the first information report given to the police soon after the alleged accident. Hence, I
am unable to accept the submission of the learned counsel for the respondent that an adverse inference should be drawn against the appellants for
their failure to enclose the police report along with the certificate of damages, Exh. A-9. As already observed by me, the entire police report is
found in trie survey report, Exh. A-4 and, therefore, for the failure to enclose the police report with the certificate of damages, no adverse inference
can be drawn against plaintiffs.
The trial court was also not correct in its view that the suit is liable to be dismissed on account of non-joinder of Yarn Syndicate Limited,
Calcutta. The trial court has overlooked Exh. A-5 wherein it has been clearly stated that the goods were transferred to the account of Yarn
Syndicate Limited which was required to sell the goods at the best price and as per terms of agency agreement. It is no doubt true that Yarn
Syndicate Limited is only an agent of the plaintiff No. 2 and, therefore, non-implicating of the agent as a party in the suit is not fatal as the agent is
not a necessary or proper party to the suit filed on the basis of the letter of subrogation of rights.
I find that all reasonings given by the trial court are not sustainable in law and the plaintiff No. 1 is entitled to the relief as prayed for. The result
is that the appeal is allowed and the plaintiff No. 1 is entitled to a decree as prayed for in the suit and the plaintiff No. 1 is also entitled to costs
throughout. The plaintiff No. 1 would be entitled to interest at the rate of 6 per cent per annum from the date of the plaint till the date of payment.