Union of India and Northern Railway v United India Insurance Co. Ltd. & Tata Fone

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE K.HARILAL & THE HONOURABLE MR. JUSTICE SATHISH NINAN** **MONDAY, THE 14TH DAY OF AUGUST 2017/23RD SRAVANA, 1939** **MFA.No. 98 of 2007 ( ) -----------------------** **AGAINST THE ORDER IN OA 51/2003 of RAILWAY CLAIMS TRIBUNAL, ERNAKULAM DATED 03-08-2006** ## **APPELLANT(S)/RESPONDENTS:** **------------------------** **1. UNION OF INDIA, REPRESENTED BY THE GENERAL MANAGER, SOUTHERN RAILWAY,, MM COMPLEX, CHENNAI.** **2. THE GENERAL MANAGER,** **NORTHERN RAILWAY, HEADQUARTERS OFFICE,, NEW DELHI.** **BY ADVS.SRI.S.K.MURALEEDHARAN KAIMAL, SC,RAILWA SRI.TOJAN J.VATHIKULAM,SC,RAILWAYS** ## **RESPONDENT(S)/APPLICANTS:** **-------------------------** **1. UNITED INDIA INSURANCE CO. LTD., BRANCH OFFICE, 10/290,G.B.ROAD, PALAKKAD, REPRESENTED BY THE DEPUTY MANAGER,, UNITED INDIA INSURANCE CO. LTD., REGIONAL OFFICE,, HOSPITAL ROAD, KOCHI-11.** **2. TATA FONE, DIVISION OF TATA TELECOM LTD. KANJIKODE, PALAKKAD REPRESENTED BY ITS, SPECIAL POWER OF ATTORNEY, THE 1ST RESPONDENT/1ST APPLICANT.** ## **R1 BY ADV. SRI.P.K.MANOJKUMAR** **THIS MISC. FIRST APPEAL HAVING COME UP FOR ADMISSION ON 1408-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **“CR”** ## **K.Harilal & Sathish Ninan, JJ.** ==================================== M.F.A.No.98 of 2007 ==================================== Dated this the 14[th] day of August, 2017. ## **JUDGMENT** ## **K.Harilal, J.** 1.The appellants are the respondents in O.A.No.51 of 2003 of the Railway Claims Tribunal, Ernakulam Bench. They are confronting with an award granting an amount of Rs.17,000/- with interest to the applicants, the respondents herein, as compensation for the loss sustained by them. The parties are referred to as in the O.A. - 2.The applicants have filed the above case, praying for an ## M.F.A.No.98 of 2007 ## -:2:- award of Rs.83,544/- with interest at the rate of 12% per annum from the date of filing of the application, till recovery and cost from the respondents as compensation for the short delivery of ten carton boxes, containing 300 telephone instruments. It is alleged in the application that the 2[nd] applicant, as per Ext.A3, had despatched 4500 numbers of telephone instruments in 150 cartons with 30 telephone instruments in each carton from Palakkad Railway Station to H.Nizamuddin consigned to M/s.MTNL, New Delhi vide Ext.A4. But the Railway Authorities delivered only 140 cartons in three instalments and remaining 10 carton boxes, containing 300 nos. of telephone instruments were not delivered at all. The 2[nd] applicant had insured the above M.F.A.No.98 of 2007 ## -:3:- consignment, under Ext.A7 insurance policy with the 1[st] applicant. When the claim of the 2[nd] applicant was not considered by the Railway Authorities, the 2[nd] applicant preferred a claim on the 1[st] applicant, who admitted the claim and made payment of Rs.83,544/- against proper discharge and assignment of actionable claim of the 2[nd] applicant by Exts.A1 and 2. According to the 1[st] applicant, the Company is entitled to recover a sum of Rs.83,544/- with interest at the rate of 12% per annum on the principal amount from the respondents under the contract by virtue of Section 79 of the Marine Insurance Act, 1925. Hence, the application was filed, claiming an amount of Rs.83,544/- from the respondents. 3.The respondent Railway Administration, resisted the said ## M.F.A.No.98 of 2007 ## -:4:- claim, contending that the application is not maintainable, either in law or on facts. According to them, the consignee alone has the right to sue for shortage of consignment sustained by him on delivery of receipt by the consignor to the consignee. Secondly, it was contended that the application was barred by limitation. Thirdly, according to the respondents, the liability of the respondents is restricted to Rs.50 per kilogram, towards the alleged shortage as per Section 103 (1) of the Railways Act, 1989, read with Rule 3 (iii) of the Railways (Extent of Monetary Liability and Prescription of Percentage Charges) Rules, 1990 (hereinafter referred to as the “Rules”, for short). But the Tribunal, in violation of the aforesaid Rules, granted ## M.F.A.No.98 of 2007 ## -:5:- compensation at the rate of Rs.100/- per kilogram. Further, it was contended that the weight of the undelivered cartons were wrongly calculated at Rs.170/kilogram, instead of Rs.96 per kilogram. Hence, they prayed for dismissal of the application. 4.On the aforesaid rival contentions, the applicants adduced evidence, consisting of the oral testimony of P.W.1 and Ext.A1. No evidence was adduced by the respondents. After considering the aforesaid evidence on record, the Tribubnal passed the impugned award, granting an amount of Rs.17,000/- with interest at the rate of 8% per annum from the date of registration of the claim petition and a cost of Rs.3,000/- from the respondents. The legality and correctness of the findings M.F.A.No.98 of 2007 ## -:6:- of the Tribunal are challenged in this appeal. 5.Heard the learned counsel for the respondents and the learned counsel for the applicants. 6.The first question to be considered is, whether the Tribunal is justified in finding that the application is maintainable. As regards the maintainability of the application, it is the case of the respondents that the consignee alone has the right to sue for compensation. According to them, on delivery of the receipt by the consignor to the consignee and after the delivery of the receipt, the consignor has no right to sue for losses suffered by him due to the negligence of the carrier. The aforesaid issue centers around Section 74 of the Railways Act. The property in the consignment covered by a ## M.F.A.No.98 of 2007 ## -:7:- railway receipt shall pass to the consignee or the endorsee, as the case may be, on the delivery of such railway receipt to him and he shall have all the rights and liabilities of the consignor. 7.On an analysis of the aforesaid provision, we find that Section 74 of the Act, 1989 does not debar the consignor from filing a suit for compensation for the loss sustained by the short delivery of the goods, caused by the negligence of the carrier. It follows that if the consignor has a right to sue against the carrier for the loss suffered by him due to the negligence of the carrier, certainly, the Insurance Company will get right to sue the carrier, where the consignor has executed a letter of subrogation and Power of Attorney, in favour of the Insurance M.F.A.No.98 of 2007 -:8:- Company. 8.In the instant case, the 1[st] applicant has executed a letter of subrogation and Power of Attorney, in favour of the 2[nd] applicant and since both of them have jointly filed a suit, the claim application is perfectly maintainable and the 1[st] applicant has locus standi to prefer a claim. The above view is supported by the reported decision in _**New India Insurance Co.Ltd v. Okay Transport Corporaton**_ [1991 (1) KLT 262]. 9.The next point to be considered is, whether the application was barred by limitation. According to subsection (2) of Section 17, if the applicant satisfies the Claims Tribunal that he had sufficient cause for not making the application within the period prescribed ## M.F.A.No.98 of 2007 ## -:9:- under Section 17, an application may be entertained after the period specified in sub-section (1). Therefore, in view of sub-section (2) of Section 17, the Tribunal is justified in condoning the delay and we further find that the application is not barred by limitation. 10.The 3[rd] point to be considered is, whether the Tribunal is justified in awarding compensation at twice the rate prescribed, i.e. Rs.100/- per kilogram, instead of Rs.50/per kilogram, for short delivery, in terms of weight. It is not disputed that the 2[nd] applicant has not submitted a declaration, as required under sub-section (2) of Section 103 of the Act. Going by the aforesaid provision, it could be seen that the extent of monetary liability, in respect of any consignment, is subject to the declaration contemplated ## M.F.A.No.98 of 2007 ## -:10:- under Section 103 of the Railways Act. If such a declaration was not submitted in compliance with Section 103(2) of the Railways Act, it was obligatory on the part of the Tribunal in terms of Section 103(1) thereof, to grant compensation, as prescribed in Rule 3(iii) of the Rules. As per Rule 3(iii), in the case of any consignment other than that is referred to in Clauses (1) and (2), the amount must be calculated at Rs.50/- per kilogram only. 11.The learned counsel for the applicants invited our attention to Section 38 of the Railways Act and contended that as per Section 38 of the Act, the Tribunal shall have the power to pass such interim and final orders, as the circumstances may require, including orders for payment of cost. According to the learned ## M.F.A.No.98 of 2007 -:11:- counsel, the Tribunal can be justified in granting compensation at the rate of Rs.100/- per kilogram, instead of Rs.50/- per kilogram, as prescribed in the Rules, in view of the facts and circumstances specifically stated by the Tribunal. 12.We are unable to agree with the aforesaid argument in view of the statutory prescription under Section 103 of the Railways Act. Going by Section 103 of the Act, which prescribes the extent of monetary liability in respect of any consignment, it is specifically prescribed that the amount of liability of the Railway administration for the loss, destruction, damage, deterioration or nondelivery of the consignment shall, in no case, exceed such amount, calculated with reference to the weight of M.F.A.No.98 of 2007 ## -:12:- the consignment, as may be prescribed. 13.We are of the opinion that the expression “no case” signifies that notwithstanding anything contained in any other provision in the Act, in no case, the amount shall be calculated, in violation of the rates specifically prescribed in Rule 3 of the Rules. 14.In the above view, we find that the Tribunal has gone beyond the jurisdiction and power, granted under the Act and the Rules, in determining the quantum of compensation, by awarding the compensation at twice the rate prescribed, i.e. Rs.100/- per kilogram, instead of Rs.50/- per kilogram. Therefore, we set aside that portion of the judgment, which quantifies the amount and we find that the applicants are entitled to get an amount M.F.A.No.98 of 2007 ## -:13:- of Rs.8,500/- only (170x50) and the quantum of compensation granted to the applicants will stand modified to the above extent. We do not find any reason to interfere with the interest and cost awarded by the Tribunal. The M.F.A. will stand allowed in part. **K.Harilal, Judge** **Sathish Ninan, Judge** sl.