AS/1667/1993 of The New India Assurance Comp. Ltd., rep.by its Divisional Vs M/s.Raju Oil Mills, Hindupur rep.by its proprietor on 31 December 2010

JUDGMENT:-

The second defendant in O.S.No.18 of 1986 on the file of the court of Additional District Judge, Hindupur is the appellant herein.

The suit was filed for recovery of an amount of Rs.1,71,052-50paise being the value of the goods lost in transit. The allegations in theplaint goes to show that the plaintiff has despatched 53 drums of groundnut oil at the request of the M/S.Sha Some Chand Kanji & Company atBombay on 08-02-1983. The goods were insured with second defendantfor a sum of Rs.1,30,000/-. The necessary premium was also paid andthe policy covered road risks, theft, non-delivery etc. The first defendantis the transport company and a common carrier was engages totransport the above goods. One Balbirsingh was driver along withanother cleaner by name Sivadesan Vidyullatha. The property wasentrusted on 08-02-1983 under an invoice and necessary bills wereissued and loaded in the truck MHB 4424 from Hindupur to consignee.The goods should have reached Bombay within two or three days but didnot reach the consignee and by letter dated 11-02-1983 the consigneeinformed the goods have not reached. Thereafter, a police report wasgiven by the plaintiff to Hindupur police on 12-02-1983 and the plaintiffcame to know that the truck was found empty and abandoned nearDevpadu Taluq, Penvel District, Rajgad, Maharastra and driver andcleaner was absconding. Consequently, a second complaint was alsogiven on 18-02-1983. Subsequently, one Ranjit driver of the firstdefendant went to the place where truck was abandoned and gave acomplaint to the police. The plaintiff also reported the matter to thesecond defendant on several times and claim forms were sent on 02-05-1983 and first defendant was also called upon to make goods the lossand as both defendants did not respond, the suit was filed.

The first defendant remained ex parte and second defendant filedthe written statement contending that the suit is not maintainable andsecond defendant is not aware of the transaction and the loss of thegoods. Issue of the policy in favour of the plaintiff is admitted and theliability is subject to conditions. The second defendant is not aware asto the truck MHB 4424 belonging to the first defendant. The plaintiff hasentrusted the goods to the driver of the truck and not to the commoncarrier. The second defendant further contended that as per their information collected by the Surveyor the first defendant has noknowledge about entrustment of the goods by the plaintiff and the driverhad been specifically instructed to bring back the tanker empty afterunloading the chemicals at Ranipet and the act of the driver in acceptingthis consignment is not valid. Therefore, there is no contractualobligation enforceable against the second defendant. The value of thegoods is also disputed. The information from the first defendantgathered by the Surveyor shows that there was no branch for them atHindupur and the documents produced by the plaintiff are not true andthere is no liability for the second defendant and therefore pleaded fordismissal of the suit.

On the basis of the above pleadings, the following issues havebeen framed for trial.

1. Whether the entrustment of 53 drums of weighing 9540 Kgs ofground nut oil to D-1 to be transported to Bombay at theinstance of M/s Krishna & Co. Bangalore is true?ground nut oil to D-1 to be transported to Bombay at theinstance of M/s Krishna & Co. Bangalore is true?

2. Whether the plaintiff entered into any contract of carriage withD-1 for transport of goods?D-1 for transport of goods?

3. Whether the plaintiff contracted with the driver of D-1 companyand if so, whether he had no authority to transport the goods?and if so, whether he had no authority to transport the goods?

4. Whether the hired tanker carried the ground nut oil drums asalleged by the plaintiff to be delivered to M/s Sha Some ChandKanji & Company, Oil and Oil Seeds Merchants andCommission Agents, Bombay?alleged by the plaintiff to be delivered to M/s Sha Some ChandKanji & Company, Oil and Oil Seeds Merchants andCommission Agents, Bombay?

5. Whether the suit is bad for non-joinder of parties viz., driver ofthe vehicle?the vehicle?

6. Whether the value of the ground nut oil transported isRs.1,25,928/- as claimed by the plaintiff?Rs.1,25,928/- as claimed by the plaintiff?

7. Whether D-2 is liable for the suit claim?

8. Whether the plaintiff is entitled to a decree for the suit amount?

9. To what relief?

On behalf of the plaintiff PWs. 1 to 3 were examined and markedExs.A-1 to A-5. On behalf of the second defendant, legal officer wasexamined as DW.1 and marked Exs.B-1 to B-5.

After considering the evidence on record, the learned District Judgedecreed the suit of the plaintiff for Rs.1,25,928/- with proportionate costs.Aggrieved by the said judgment the present appeal is filed. The points that arise for consideration are:-

(1) Whether the plaintiff is entitled for the value of the goodswhich were lost in transit?which were lost in transit?

(2) Whether the second defendant is liable to make goods the loss under the policy of the insurance?

(3) Whether the judgment and decree passed by the learned District Judge is legal and sustainable?

(4) To what relief?

-POINTS:

The learned Additional District Judge after consideration of theevidence on record clearly found that there was entrustment ofconsignment to the first defendant and the second defendant has alsoissued a policy covering the risk. In fact after assessment of theevidence, the learned District Judge came to the conclusion that theSurveyor’s report clearly goes to show that tanker was abandoned by thedriver and it was loaded with the goods and there is no unnaturality of thetanker coming to Hindupur empty and the loading of the tanker therewhen it is going. The first defendant was not summoned by the InsuranceCompany to explain the circumstances as to how the tanker wasemployed. Therefore, the learned District Judge came to the conclusionthat the tanker was engaged with the knowledge of the first defendantand it is not a direct transaction between the plaintiff and the driver of thelorry. When once the claim of the plaintiff that there was a properauthorisation to the driver of the first defendant and it is not a privatetransaction is accepted, the appellant cannot escape the liability underthe insurance policy. In fact even the Surveyor’s report does not showthat there was any collusion between the plaintiff and the driver of thetanker. Further more, the tanker was found abandoned and Ex.A-2 isway bill and Ex.A-4 policy clearly shows that the consignment isdespatched to oil tanker bearing No.MHB 4424 on or about 06-02-1983.Having issued the policy and having accepted the transport under thesaid tanker, it is not open for the appellant to contend that the driver wasnot authorised and that there is a contract only between the plaintiff andthe driver excluding the carrier.

The learned counsel for the appellant contends that the policy was

Arguments

The learned counsel for the appellant contends that the policy was effective from 09-02-1983 and the despatch was on 06-02-1983 and ifreally the plaintiff is a bona fide the policy should have been taken whenthe goods were despatched. But it is also the duty of the appellantbefore the issuing the policy to know about the bona fides or mala fides ifany. In fact the policy Ex.A-4 clearly shows that the tanker left on 06-02-1983 from Hindupur and it covers the road risk, theft, non-delivery.The policy is evidently dated 09-02-1983 and there is no restriction aboutthe effectiveness of the policy. The evidence of DW.1 clearly goes toshow that Ex.A-4 policy was taken at Bangalore covering the vehicle. Healso admits that the policy shows that the goods were despatched on 06-02-1983. Therefore, it is quite clear that the insurance company hasentered into a policy of insurance after the despatch of the goods and itsintention to exclude the liability from 06-02-1983 is not clear. It is alsoadmitted by the appellant in letter dated 04-03-1985. In fact under thatletter the Divisional Manager requested the Insurance Company to settlethe claim early. Further, it is to be mentioned that when the issuance ofthe policy is not seriously disputed, the fraud if any has to be correctedby defendant. The defendant has failed.

Learned counsel for the appellant relied on a decision reported inM/s. Economic Roadways Corpn. Hyderabad Vs. National Insurance Company, Hyderabad and another ([[1]])and contends that there is noneed to examine the Surveyor and the report can be taken intoconsideration. It is true that the report of the Surveyor may be relevantbut in order to accept, it should be proved. It is not a verification of factshown by the Surveyor but is the investigation said to have been donefrom the statements of the witnesses who are not before the court. If theSurveyor is to estimate the loss etc., it is a different matter but opinionabout the particular fact said to have been gathered from the witnesseshas to be proved. Therefore, the facts in the decision relied on by thelearned counsel for the appellant are different from the facts of thepresent case.

Learned counsel for the appellant contends that under Section 10of the Carriers Act, 1865 notice also be given to the Insurance Companyand in the absence of notice, it is not valid. He relied on a decisionreported in P.Rama Rao Vs. P.Nirmala and others ([[2]])contending that mere marking of a copy of notice to the Insurance Company is notsufficient when it was not issued within six months as laid down inSection 10. Therefore, according to him, the suit is bad. On the otherhand, the learned counsel for the respondent contends that the plea nowsought to be canvassed was not pleaded before the lower court and itamounts to a waiver because it is a question of fact and it cannot bepermitted to be raised. Further more, according to him, the report of theSurveyor under Ex.A-4 clearly goes to show that on instructions of theappellant only the survey was conducted and the complaint was lodgedby the plaintiff about the loss. Therefore, it cannot be said that theappellant has no information or notice of the claim of loss to the appellantand on the other hand, matter was reported to the appellant by theplaintiff and thereafter only the survey investigation was taken up on 12-02-1983. Therefore, it is quite clear that the appellant had accepted thenotice of the loss and missing of the goods and further more on 02-05-1983 the notice was given to the first defendant under Ex.B-4 and copyof it was marked to the appellant which is a document filed by theappellant. Therefore, in view of the above circumstances, it is not correcton the part of the appellant to contend that there is no proper notice ascontemplated under Section 10 of the Carriers Act.

Sofar as the liability is concerned, evidently the policy clearlyshows that the goods were loaded on 06-02-1983 and the goods wereentrusted only on 08-02-1983 and evidently by the time they reach theplace where it was abandoned is on 10-02-1983 and by that time therewas a valid insurance coverage and the defendant cannot deny theliability. The acceptance of the policy even if it is to be taken has effectonly from 09-02-1983 the risk is covered and the decision relied by thecounsel for the appellant have no relevancy. Therefore, the learnedDistrict Judge has rightly decreed the suit of the plaintiff and it does notcall for any interference. Accordingly the points are answered.

The Appeal Suit is therefore dismissed with costs.

_______________________

N.R.L.NAGESWARA RAO,J

TSNR

[1]2002(1) LS 128(D.B)[2]1997(4) ALT 279 (S.C)