Surat Goods Transport Service v United India Insurance Limited and Fertilizers and Chemicals Travancore Limited

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MRS. JUSTICE SHIRCY V.** **MONDAY, THE 18TH DAY OF MARCH 2019 / 27TH PHALGUNA, 1940** ## **AS.No. 256 of 2002** **AGAINST THE JUDGMENT AND DECREE IN OS 188/1998 of ADDITIONAL SUB COURT, NORTH PARAVUR** ## **APPELLANT/DEFENDANT:** **SURAT GOODS TRANSPORT SERVICE DL-970,KANAKANAT BUILDINGS,T.D.ROAD,ERNAKULAM, COCHIN-11, REPRESENTED BY POWER OF ATTORNEY HOLDER, G.VIJAYAN NAIR,MANAGER.** **BY ADV. SRI.P.V.BABY** ## **RESPONDENTS/PLAINTIFFS:** |**1**|**UNITED INDIA INSURANCE LIMITED DIVISIONAL**| |---|---| ||**OFFICE,PUTHUSSERY BLOCKS,IIND FLOOR,GOVT.HOSPITAL**| ||**JUNCTION,ALWAYE-683 101,REP.BY ITS DIVISIONAL**| ||**MANAGER.**| |**2**|**M/S.FERTILISERS AND CHEMICALS TRAVANCORE**| ||**LIMITED, UDYOGAMANDAL,REP.BY ITS POWER OF ATTORNEY,**| ||**HOLDER 1ST RESPONDENT.**| ## **BY ADV. SRI.RAJAN P.KALIYATH- FOR R1** **THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 18.03.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **AS.No. 256 of 2002** **2** ## **JUDGMENT** Challenging the judgment and decree dated 14.8.2001 in O.S.No.188/1998 on the file of the Additional Sub Court, North Parur, the defendant has come up with this appeal. 2. The facts relevant for disposal of the appeal are as follows; The first plaintiff is a subsidiary of General Insurance Corporation registered under the Indian Companies Act. (hereinafter referred to as the 'Insurance Company') The defendant is a firm engaged with the business of transporting goods (herein after referred to as the 'Transport Service'). The second plaintiff is the Fertilizers and Chemicals Travancore Ltd. ('FACT' for short). 3. On 17.6.1995 FACT, the consignor had entrusted 720 bags of caprolactum with the Transport Service so as to transport the same from Udyogamandal to Gwalior. The goods were insured with 3 insurance companies. The goods were delivered in a **AS.No. 256 of 2002** **3** damaged condition by the transport service and there was also shortage of 4 bags. It was informed to the transporting service on 11.10.1995 and claimed damages but claim was not settled. So the first plaintiff insurance company was constrained to settle the claim on 8.3.1996. Thereafter, FACT authorized the first plaintiff insurance company to realize the amount from the transport service and power of attorney and letter of subrogation were issued. Though notices were issued to the transport service by the the said insurance company the same was not honored. Hence, the suit for reimbursement of the said amount of Rs.6,89,430/- along with surveyor fees of Rs.5,368/- 4. The transport service inter alia contended that the suit is bad for non joinder of necessary parties as all the insurance companies were not in the party array. The goods were transported to C.E.A.T tyre company but they were also not made as a party in the suit. The further contention was that the allegation that 339 bags were damaged and there was shortage of four bags while delivering the same to the consignee is not correct. The value assessed by the Surveyor is not correct. But in fact the transport service has conducted a spot survey and only **AS.No. 256 of 2002** **4** 91 bags were found damaged and hence the allegation that 339 bags were damaged and four bags were lost in transit was not correct. So also, it was contended that they were not aware of the settlement of the claim between the plaintiffs so as to get reimbursement of the same from the transport service. There was no negligence on the side of the transport service hence not liable to pay any amount as claimed. 5. Before the court below, PW1 and PW2 were examined and Exts.A1 to A12 were marked on the side of the plaintiffs. No oral or documentary evidence was adduced by the defendant. The court below after evaluating the evidence decreed the suit for a sum of Rs.5,58,520/- with interest at the rate of 18% per annum from 8.3.1996 till realization. 6. Heard the learned counsel for the appellant/defendant and the learned counsel for the respondents/plaintiffs. 7. The second plaintiff/FACT ,the consignor of the goods on 17.6.1995 entrusted the same to the defendant/transport service to transport and deliver it to C.E.A.T at Gwalior. In total 720 bags of caprolactum were entrusted to be transported from Udyogamandal to Gwalior. The agreement was to transport the **AS.No. 256 of 2002** **5** entire goods in two separate trucks of 320 bags each. According to the plaintiffs the transport service on the way shifted the goods to one truck and transported to Gwalior and on the way the truck met with an accident. Hence, damages were caused to 339 bags and 4 bags were lost in transit. Thereafter FACT ,the insured had put a claim for Rs.6,89,430/- and Rs.5368/- to first plaintiff insurance company as the value of the goods and the fees of the Surveyor respectively, as assessed by the surveyor of the insurance Company and it was settled by the insurance company and FACT authorized the insurance company to realize the amount from the defendant. 8. Ext.A11 is the report of the surveyor engaged by the insurance company. Ext.A11 would show that the surveyor inspected and assessed the damages immediately on delivery of the goods to the consignee at Gwalior on 13.7.1995. Ext.A11 report was dated 27.12.1995. But a perusal of the report would reveal that the inspection was carried out on 13.7.1995 at the site of the consignee. Ext.A12 is the report prepared by the surveyor engaged by the transport service. Admittedly ,the truck met with the accident on 27.6.1995. Ext.A12 was prepared by **AS.No. 256 of 2002** **6** the surveyor engaged by the transport service. As per this report it could be seen that out of the 720 bags only 91 bags were found damaged in the accident that took place on 27.6.1995. 9. The case of the insurance Company is that the delay in submitting A11 report though the surveyor inspected immediately on reaching the consignment at the site of the consignee on 13.7.1995, was because the consignee informed that there is every possibility of taking back the damaged goods by giving a reduction of 80% on the value of the consignment. Therefore, the surveyor had submitted the report only on 27.12.1995 awaiting for the salvage value. PW2 is the surveyor who prepared Ext A11 survey report and he deposed in tune with his report. Ext.A11 stands proved through PW2. He deposed that as instructed by the insurance Company he conducted the survey without delay, however filed the report later because of the discussion to fix the salvage value. Though he deposed that he was not aware whether salvage value was fixed and goods were taken by C.E.A.T, the consignee it has come out in evidence that there was a discussion with respect to the salvage value and hence, the argument of the learned counsel for the **AS.No. 256 of 2002** **7** defendant that the report cannot be accepted mainly for the reason of delay in submitting the same, is without merits. In fact the defendant had no case that the consignment was not inspected immediately on arrival of the same for delivery at the premises of the consignee. So also the transport service failed to adduce any evidence to substantiate its' case. The surveyor who prepared Ext A12 was not even examined. So the delay in submitting Ext A11 report is not at all fatal and it cannot be taken as a ground to discard the report as well the deposition of the witness before the court. 10. It is pertinent to note that when goods are entrusted with a transport company for transportation it is the bounden duty of the transport company to transport the same with care, without any damages or loss and to deliver it as such at the place of destination **.** 11 **.** It is held in **South Eastern Carriers (P) Ltd. v. Oriental Fire and General Insurance Co. Ltd. [2004 (1) KLT SN 1]** that under section 8 of the Carriers Act, the liability of a common carrier is absolute except for Act of God. A common carrier is not a mere bailee of goods entrusted to him. He is **AS.No. 256 of 2002** **8** answerable for the loss of goods even when loss is not caused by negligence or want of care on his part. 12. Here, it is to be noted that as per the consignment note issued at the time of loading the goods from the premises of the consignor at Udyogamandal, the goods were carried in two lorries. But later, the transport company had shifted it to one truck and the details regarding the same were not be divulged to the consignor. Actually the goods were entrusted to be transported in two trucks as the total number of bags carried was 720. But the entire goods were shifted to one truck by the transport service on the way without any information to the consignor and over load may be the reason for the accident. The burden to prove the reason/cause for the accident is on the side of the transport service but they did not care to explain how the accident had occurred. Therefore, how the accident occurred was not reported or informed by the Transport service though they are bound to do so. So it could only be presumed that it was because of the heavy/excess load carried by the transport service behind the back of FACT in one truck. 13. Damages were caused to the goods due to the accident **AS.No. 256 of 2002** **9** occurred while transporting the same stands proved beyond any doubt by the evidence on record. The first plaintiff being the insurer is bound to indemnify the insured. But when the insurance company indemnified FACT, definitely, the insurance Company is entitled to get the amount paid to the consignor on the basis of the insurance policy from the transport service who is responsible for the accident. 14. The policy of the consignor is not in dispute. The transport company has no case that the Insurance Company has not indemnified the insured. In **New India Assurance Co. Ltd** ## **v. Harners Transport and Shipping Pvt. Ltd. [2017 (1) KLT** **946]** it has been held that the term “insured” implies that he is the person entitled to the damages in case any loss is caused to the goods. It is also held that the right of subrogation is inherent in a contract of indemnify and the right arises automatically when the insurer settles the claims under the policy. Here the insurance Company has settled the damages on the strength of the insurance policy of the consignor. 15. Ext.A8 is the claim bill submitted by the insured/FACT to the insurer claiming an amount of Rs.6,89,430/-. The claim **AS.No. 256 of 2002** **10** was settled by the insurance Company. On receipt of the settlement of the claim FACT had issued Ext.A1 and A2 letter of subrogation admitting the receipt of the amount. Such being the case, the first plaintiff insurance Company is entitled to get reimbursement of the amount. After scrutinizing the relevant evidence,the learned trial court rightly allowed the insurance company to realize the amount from the transport service. Therefore, I find that there is absolutely no justifiable or reasonable ground to interfere with the findings of the court below directing the first plaintiff/Insurance Company to realize a sum of Rs.5,58,250/- from the transport service, the carrier (defendant). But the plaintiff can recover the amount with interest only at the rate of 12% from 8.3.1996 till realization with costs. Accordingly, the appeal is dismissed as above with costs. ## **Sd/-** SHIRCY V. JUDGE smm **AS.No. 256 of 2002 11**