Transport Corporation of India Ltd v Oriental Insurance Company & South India Produce Co., Regular First Appeal No. 213 of 2003, High Court of Kerala at Ernakulam

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** # **PRESENT** **THE HONOURABLE MRS. JUSTICE C.S. SUDHA** **FRIDAY, THE 17[TH] DAY OF NOVEMBER 2023 / 26TH KARTHIKA, 1945** **RFA NO. 213 OF 2003** **(DECREE AND JUDGMENT DATED 3/2/2003, IN O.S.NO.97/2001 OF** **PRINCIPLE SUB JUDGE,KOCHI)** ## **APPELLANT/DEFENDANT:** M/S.TRANSPORT CORPORATION OF INDIA LTD, TRANSPORT HOUSE,VI/1285, KOTTUKULAM ROAD, MATTANCHERRY, COCHIN, REP. BY ITS AREA MANAGER, SARVAJEETH SUKLA, T.D. ROAD, ERNAKULAM. BY ADV SRI.T.V.GEORGE ROOPA RANI ## **RESPONDENTS/PLAINTIFFS:** 1 ORIENTAL INSURANCE COMPANY, REP. BY ITS DIVISIONAL MANAGER, DIVISIONAL OFFICE, BUILDING NO.6/990, 1ST FLOOR, SHAN COMPLEX, BAZAR ROAD, MATTANCHERRY, COCHIN-2. 2 SOUTH INDIA PRODUCE CO, JEW TOWN, COCHIN-2. BY ADV SRI.T.J.LAKSHMANAN IYER- R1 THIS REGULAR FIRST APPEAL HAVING COME UP FOR FINAL HEARING ON 17/11/2023, THE COURT ON 10/11/2023 DELIVERED THE FOLLOWING: R.F.A.No.213 of 2003 2 **C.S.SUDHA, J. -------------------------------------R.F.A.No.213 of 2003 ----------------------------------------------------** ## **Dated this the 17[th] day of November, 2023** ## **J U D G M E N T** This appeal under Order XLI Rule 1 C.P.C. has been filed by the defendant in O.S.No.97/2001 on the file of the Subordinate Judge's Court, Kochi against the judgment and decree dated 03/02/2003 in O.S.No.97/2001. The respondents herein are the plaintiffs in the suit. The parties in this appeal will be referred to as described in the suit. 2. The case of the plaintiff as alleged in the plaint is thus- the first plaintiff, the Oriental Insurance Company, represented by its Divisional Manager is the power of attorney holder of the second plaintiff. The defendant is a common carrier engaged on hire for transporting goods from place to place. The second plaintiff despatched a consignment under invoice number-IND/107 dated 03/10/1998. The defendant agreed to transport the consignment from Cochin to Birgunj, Nepal under consignment note number FP-30351 dated 03/10/1998. The consignment R.F.A.No.213 of 2003 3 was entrusted to the defendant on the condition that the defendant shall deliver the goods intact to the consignee. The consignment was properly packed for transportation and the defendant had accepted the goods after being satisfied of the packing. The goods entrusted for carriage was delivered to the consignee on 03/11/1998. However, on delivery it was found that the consignment containing pepper weighing 3187.5 kg packed in 51 bags were water damaged. The loss caused was surveyed by an independent licensed surveyor and loss assessor. The consignee had by letter dated 11/11/1998 intimated the defendant of the loss and requested to settle the claim for the loss. The defendant on being convinced of the loss issued a damage certificate number - 064608 dated 26/08/1999. Though the defendant had admitted their liability, they did not settle the claim. Hence, the first plaintiff on 15/10/1999 being the insurer of the consignment settled the claim of the second plaintiff for an amount of ₹4,96,596/-. The second plaintiff in consideration of the payment of ₹4,96,596/- executed a letter of subrogation, whereby they have assigned and transferred all right, title and interest in respect of the goods carried and all right of claims against any person or persons in respect thereof in favour of the first plaintiff. The second plaintiff has also executed a power R.F.A.No.213 of 2003 4 of attorney in favour of the first plaintiff to act as their representative and to file a suit against the defendant for recovery of the claim money. The defendant being the carrier of the goods is under a statutory duty to take care of the consignment while in transit. The defendant is liable for all the loss to the second plaintiff. The defendant is also liable for the acts of omission and commission of its servants, employees and agents while acting in the course of their employment. Hence the defendant is liable to pay an amount of ₹6,38,125/- which includes the amount of ₹4,96,596/and ₹1,41,529/- being interest at the rate of 18% from 15/10/1999 till payment. Hence, the suit claiming the aforesaid amount. 3. The defendant filed written statement denying the plaint claim or the liability to pay the same. According to the defendant, the goods were accepted by the carrier on “as is on” condition and on “said to contain” basis. The defendant is not aware as to whether the goods consigned were insured with the first plaintiff. The goods entrusted with the defendant was delivered to the consignee in the very same condition as it was entrusted. No damage has been caused to the consignment till the delivery of the same to the consignee. If at all any damage has been caused, it was when the goods was under the custody of the consignee. The defendant has not R.F.A.No.213 of 2003 5 issued any damage certificate to the second plaintiff. The damage certificate relied on by the plaintiff is not a valid document. The defendant is not aware as to the survey conducted by the plaintiff as no notice of survey had been issued to the defendant. The defendant is not liable for any damage, if any, caused to the consignment while the same was in the custody of the consignee or the consignor. There was no loss or damage to the goods till the time of delivery. The defendant is not aware whether the first plaintiff had settled the claim of the second plaintiff. On the basis of the Marine insurance policy, the first plaintiff might have settled the claim with the second plaintiff as referred to in the plaint. However, the same is only an internal arrangement between the plaintiffs for which the defendant cannot be made liable. On the basis of the Marine policy, no amount can be claimed as damages from the defendant. The plaintiff have no right or authority to institute the suit against the defendant. No notice of loss or damage has been issued to the defendant. The defendant is unaware of the execution of any power of attorney or letter of subrogation by the second plaintiff to the first plaintiff. There is no valid execution of power of attorney. The first plaintiff cannot sue on the basis of the alleged power of attorney. The letter of subrogation is also not a valid document. On the R.F.A.No.213 of 2003 6 basis of the alleged power of attorney and letter of subrogation, the plaintiffs are not entitled to prefer any suit against the defendant or claim any damages. The second plaintiff had no right or authority to execute a power of attorney in favour of the first plaintiff in respect of the goods insured and consigned through the defendant. There is also no valid assignment of policy by the insured. The defendant has discharged his duty with utmost care and caution. There was never any negligence on the part of the defendant in handling the consignment that had been entrusted to the defendant. Moreover, the amount claimed by the plaintiffs is exorbitant and without any basis. The interest rate claimed is also highly excessive. The suit is bad for non-joinder and mis-joinder of necessary parties. The consignee is a necessary party to the suit. Only the consignee will be aware as to the condition of goods that had reached the destination. However, the consignee has not been made a party to the suit and hence the suit is liable to be dismissed for non- joinder of necessary parties. The defendant is not liable to pay any compensation and therefore the defendant contended that the plaintiff is not entitled to the relief prayed for. 4. On completion of pleadings, the parties went to trial. PW1 was examined and Exts. A1 to A11 were marked on the side of the R.F.A.No.213 of 2003 7 plaintiffs. No oral or documentary evidence was adduced on behalf of the defendant. The trial court on a consideration of the oral and documentary evidence and after hearing both sides, decreed the suit directing the defendant to pay a sum of ₹6,38,125/- with interest at the rate of 9% per annum from the date of suit till realisation and costs. Aggrieved, the defendant has come up in appeal. 5. The point that arises for consideration is whether there is any infirmity in the findings of the trial court calling for an interference by this Court. 6. Heard. 7. Following are the arguments advanced by the learned counsel for the defendant/appellant challenging the impugned judgment – (i) The plaintiffs have failed to prove the quantum of damages alleged to have been sustained. Ext.A4 report of the surveyor cannot be relied on as no notice has been issued to the defendant. The trial court therefore could not have relied on the same in awarding damages. In support of this argument, reference was made to the dictum in **Associated Transport Corporation Pvt. Ltd. v. National Insurance Company, 1989 (1) KLT 386** . (ii) The power of attorney relied on by the first plaintiff has not been executed in R.F.A.No.213 of 2003 8 compliance with Section 85 of the Evidence Act and hence the first plaintiff has no authority to file the suit. In support of this argument, reference was made to the dictum in **Jugraj Singh v. Jaswant Singh, AIR** **1971 Supreme Court 761** and (iii) The consignee is a necessary party in the suit. As the consignee has not been made a party, the suit is not maintainable. 8. The fact that the second plaintiff had entrusted the defendant with the consignment referred to in the plaint is an admitted fact. The fact that the goods were delivered to the consignee in Nepal in a damaged condition has also been admitted by the defendant in Ext. A6. In the written statement defendant does take up a contention that Ext.A6 was not issued by the defendant and that it is not a valid document. Ext.A6 was marked through PW1. No objection is seen raised by the defendant then. In the cross-examination of PW1 also this aspect has not been discredited. Therefore the trial court rightly accepted the document in evidence. This is so especially when no evidence has been let in by the defendant to substantiate their contentions. 9. It is true that no notice is seen issued to the defendant by the surveyor who prepared Ext. A4. The surveyor who prepared Ext.A4 report R.F.A.No.213 of 2003 9 has also not been examined to prove the contents of the same. That being the position, in the light of the dictum in **Associated Transport Corporation** ( _supra_ ), the plaintiffs or the trial court could not have relied on the same to assess the quantum of damages. However, I refer to Ext.A6 dated 26/08/1999 issued by the defendant in this case. The column dealing with 'Fact of loss' reads thus - “ _At the time of delivery out of 140 bags of black pepper (TGEB) delivered, 3187.5 kgs packed in 51 bags in Water Damage condition. Value of damages as per Invoice comes Rs.7,49,062.50 as per Survey report No.ILAS/OIC/BRJ/3086/98. Dt.03.11.98 recommended 60% of total claim amount Rs.4,49,438/- and survey fee Rs.2185/-. Total Rs.4,51,623/-_ ”. In the light of Ext.A6, to the said extent, the defendant can certainly be held liable. 10. The second argument is that the power of attorney, namely, Ext.A8 is not in the proper form and that it has not been executed in compliance with Section 85 of the Evidence Act. Section 85 deals with the presumption relating to power-of-attorney. It says the Court shall presume that every document purporting to be a power-of-attorney, and to have been executed before, and authenticated by, a Notary public, or any Court, Judge, Magistrate, Indian Consul or Vice-Consul, or representative R.F.A.No.213 of 2003 10 of the Central Government, was so executed and authenticated. In support of this argument, reference is made to **Jugraj Singh** ( _supra_ ). The argument on the basis of this decision is that the authentication of the power of attorney has to be in a particular form and it is not sufficient that a witness should have signed the document be he a notary public or any other. The notary who is stated to have authenticated the power of attorney must have satisfied himself about the identity of the person executing or making the document. The authentication should have shown on its face that the notary public had satisfied himself that the person who had signed in the document was a real person who had signed the power of attorney before him. As that has not been done, the provisions of Section 85 have not been complied with and therefore the document cannot be relied on by the plaintiffs, goes the argument. However, it can be seen from the said decision itself that there is no prescribed form of authentication referred to in Section 85. Ext.A8 does say that it was signed, sealed and delivered by the party mentioned therein and then the seal and signature of the notary is seen below that. Hence I find sufficient compliance of the provisions of law. Moreover, there is a presumption of regularity of official acts. In addition to that, Ext.A9 letter of subrogation shows that all rights of the R.F.A.No.213 of 2003 11 second plaintiff have been transferred in favour of the first plaintiff. That being the position, it cannot be held that Ext.A8 is not a valid document as argued on behalf of the defendant. 11. The third argument is that the suit is bad for non-joinder of necessary parties as the consignee has not been made a party. In the plaint itself it is admitted that the goods had been delivered to the consignee. Once the goods were delivered to the consignee, the second plaintiff consignor, no longer had any right or title to the goods as the title passed to the consignee and hence it is only the consignee who could have moved the suit. In support of this argument, reference has been made to the dictum in **Transport Corporation of India Ltd. v. United India Insurance Company, AIR 2001 Kerala 44.** Here I refer to the dictum in **St. Joseph Union Tile works v. Rappai, 1978 KHC 23** . In the said case also, a similar issue had come up for consideration. The learned Single Judge held that consignor is entitled to sue the carrier either based on title, if the title in the goods has not passed from him, or on the basis of privity of contract between himself and the carrier for the carriage of goods. If the true owner of the goods has failed to bring an action against the carrier for the loss of or damages to the goods, the law is not without remedy in an R.F.A.No.213 of 2003 12 action by the consignor merely because the title in the goods has passed from the consignor to the consignee. Courts have power to circumnavigate technical hurdles to prevent miscarriage of justice. The law merchant evolved the principle of allowing the consignor to sue the carrier on the contract of carriage, where the consignee having title to the goods failed to bring the action; but the plaintiff was accountable to the true owner for the proceeds of the decree. The consignor, though without title, had privity of contract with the carrier for the carriage of goods and so can be allowed to sue on it. I am in respectful agreement with the aforesaid dictum. 12. As stated earlier, the fact that there was an agreement between the second plaintiff and the defendant and that the latter had agreed to transport the consignment under invoice number-IND/107 dated 03/10/1998 from Cochin to Birgunj, Nepal under consignment note number FP-30351dated 03/10/1998 is not disputed. Rather, the said fact is admitted. Hence I am of the view that the second plaintiff consignor having privity of contract with the defendant carrier is entitled to maintain an action on the contract of carriage, even if the title in the goods has vested in the consignee. Hence, the argument that the suit is bad for nonjoinder of necessary party and so the suit is not maintainable, is only liable R.F.A.No.213 of 2003 13 to be rejected. 13. As per Ext.A6 the defendant admits the loss sustained to be at ₹4,51,623/-. For reasons stated earlier, to that extent the plaintiffs are entitled to get the amount from the defendant. Hence I find that the plaintiff is entitled to recover an amount of ₹4,51,623/- with interest at the rate of 9% from 15/10/1999 till decree and thereafter at the rate of 6% per annum till realisation and costs from the defendant and its assets. The judgment and decree is modified to the aforesaid extent and the appeal is disposed of accordingly. Interlocutory applications, if any pending, shall stand closed. Sd/- **C.S.SUDHA JUDGE** Jms