The Supreme Court Bench comprising Hon'ble Mr. Justice V. Ramasubramanian and Hon'ble Mr. Justice Pankaj Mithal, affirmed the mandatory notice requirement for cases involving the loss or damage to a consignment under Section 16 of the Carriage by Road Act, 2007.
It was held that the Appellant's counterclaim was rejected under Order VII Rule 11 of the Civil Procedure Code (hereinafter referred to as “CPC”) because it did not comply with the mandatory notice provision of Section 10 of the Carriers Act, 1865, even though it should have been guided by Section 16 of the New Act. Consequently, the Bench determined that no notice under Section 16 of the new Act was necessary for the counterclaim and that the rejection of the counterclaim under Order VII Rule 11 of the CPC was erroneous.
Brief Facts:
Darcl Logistics Limited, Respondent No.1 , is a common carrier and regulated by the Carriage by Road Act, 2007. Respondent No.1 initiated legal proceedings to recover a sum of Rs. 4,09,53,847/- with interest at 18%. This claim arose because Essemm Logistics, the first Defendant and Appellant, failed to pay 530 bills raised between November 14, 2011, and January 31, 2012. During the suit, the Appellant submitted its written statement and filed a counterclaim amounting to Rs. 13,04,00,000/- with interest at 24%. The counter-claim was rejected by the High Court and hence, the present appeal.
Observations of the Court:
The Supreme Court observed that Section 10 of the Carriers Act, 1865 prohibits the initiation of a lawsuit against a common carrier for the loss or injury to goods entrusted for carriage without providing written notice of the alleged loss within six months of the plaintiff becoming aware of it. This provision specifically applies to suits seeking damages for the loss or injury to the goods entrusted for carriage and does not restrict other types of suits or claims for amounts other than the loss or injury to the goods entrusted for carriage.
The Apex Court further emphasised that Section 16 of the new Carriage by Road Act, 2007 (hereinafter referred to as “New Act”), which replaced the Carriers Act, 1865, is similar to Section 10. It also requires written notice of loss or damage to a consignment before initiating a suit or legal proceedings against a common carrier. This provision extends to both suits and legal proceedings, which was not the case under the earlier Section 10. Additionally, the use of the term "consignment" replaces "goods entrusted."
The Top Court held that the Appellant's counterclaim was rejected under Order VII Rule 11 of the CPC because it did not comply with the mandatory notice provision of Section 10 of the Carriers Act, 1865, even though it should have been guided by Section 16 of the New Act. Consequently, the Bench determined that no notice under Section 16 of the new Act was necessary for the counterclaim and that the rejection of the counterclaim under Order VII Rule 11 of the CPC was erroneous.
The decision of the Court:
The Supreme Court allowed the appeal and quashed the order and judgement of the High Court.
Case Title: Essemm Logistics v Darcl Logistics Limited & Anr.
Case No.: Civil Appeal No. 3229 of 2023
Citation: 2023 Latest Caselaw 421 SC
Coram: Hon'ble Justice Mr. Justice V. Ramasubramanian and Hon'ble Justice Mr. Justice Pankaj Mithal
Advocates for Petitioner: Advs. Mr. Anand Sanjay M. Nuli, Mr. Agam Sharma, Mr. Suraj Kaushik, Ms. Nandini Pandey, Ms. Akhila Wali, Mr. Nanda Kumar K.B, Mr. Shiva Swaroop, and Mr. Dharm Singh
Advocates for Respondents: Advs. Mr. Manu Beri and Mrs. V. D. Khanna
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