United India Insurance Company ... vs M/S. Blue Dart Express Ltd. & ...
2008 Latest Caselaw 1895 Del

CS(OS) No. 78/2002                  Page 1



                                                       REPORTABLE

*        IN THE HIGH COURT OF DELHI AT NEW DELHI

+                 CS(OS) NO. 78 OF 2002


%                          Date of Decision :   24th October, 2008.


UNITED INDIA INSURANCE COMPANY LTD.&ANR.                   ...Plaintiffs.
                        Through Mr. R.K. Ram, Advocate.


                                VERSUS


M/S BLUE DART EXPRESS LTD. & ANR.                      .... Defendants.
                        Through Mr. Jay Savla, Ms. Meenakshi Ogra
                        & Mr. Arundhati Das, Advocates.
CORAM:
HON'BLE MR. JUSTICE SANJIV KHANNA


1.

Whether Reporters of local papers may be allowed to see the judgment?

2. To be referred to the Reporter or not ? Yes.

3. Whether the judgment should be reported Yes.

in the Digest ?

SANJIV KHANNA, J:

1. Plaintiff No. 1, United India Insurance Company Limited and

plaintiff No. 2, M/s Rolta India Limited have filed the present suit for

recovery of Rs.23,53,476/- against M/s Blue Dart Express Limited, CS(OS) No. 78/2002 Page 2

the defendant No. 1. Plaintiff No. 1 claims that it is entitled to file the

present suit under Letter of Subrogation and Special Power of

Attorney dated 10th September, 1999 executed by plaintiff No. 2.

2. The defendant No. 1, M/s Blue Dart Express Limited is a

common carrier and had transported consignment of imported

computers and computer peripherals in 52 boxes from Delhi to

Military Intelligence Headquarters, 4 Corps, Tejpur, Assam vide

carriage way bill dated 1st December, 1998. The delivery was taken

on 10th December, 1998 and the consignee viz. Directorate of Military

Intelligence, Tejpur, Assam at that time had noticed damage to box

No. 2.

3. The plaintiffs claim that the said box was opened on 15th April,

1999 in the presence of the experts of the plaintiff No. 2 and it was

found that photo scanner had been damaged and required complete

replacement.

4. Plaintiff No. 2 had taken an inland transit insurance policy from

plaintiff No. 1 and on account of damage, Rs.23,53,476/- including

survey fee of Rs.3,505/- and excluding Rs.2,25,000/- recovered by

plaintiff No. 1 from sale of the damaged goods, was paid by plaintiff

No. 1 to the plaintiff No. 2.

5. On the basis of Letter of Subrogation and Special Power of

Attorney executed by plaintiff No. 2, the plaintiff no.1 insurance CS(OS) No. 78/2002 Page 3

company has filed the present suit for recovery of Rs.23,53,476/-

along with interest against the defendant No. 1. It is claimed that the

defendant No. 1 was negligent and had caused damage to the goods

when they were within their custody and is liable as a transporter.

6. Pursuant to objection taken by defendant No. 1 in their written

statement, that the consignor and the consignee as per the carriage

way bill were Directorate of Military Intelligence, the plaintiffs had filed

an application under Order I, Rule 10 and Directorate of Military

Intelligence was impleaded as defendant No. 2. Written statement

has been filed on behalf of the said defendant stating, inter alia, that

they had no role to play as the goods had been insured by plaintiff

No. 2 with the plaintiff No. 1 and plaintiff No. 2 had settled the claim

with the insurance company and received payment. They have also

stated that when the consignment had reached Tejpur, one box being

box No. 2 out of 52 boxes, was found to be damaged. It is also

stated that the photo scanner, which was damaged was incapable of

repair and had to be replaced.

7. On the basis of the pleadings of the parties, on 24th January,

2006 following issues were framed:-

(1) Whether the plaintiff No. 1 can maintain a suit on the basis of

letter of subrogation cum Special Power of Attorney dt. 10/9/99 CS(OS) No. 78/2002 Page 4

in its favour by plaintiff No. 2 as alleged in para 2 of the

plaint?OPP

(2) Whether the present suit is barred by law of limitation? OPD

(3) Whether the claim of the plaintiff No. 1 based on a Letter of

Subrogation-cum-Power of Attorney from the plaintiff No. 2 is

maintainable against the present Defendant when the shipment

in question recorded Military Intelligence, New Delhi, i.e.,

Defendant No. 2 as Consignor amd(sic)Military Intelligence,

Tejpur as Consignee as stated in para 2 of the written

statement? OPP

(4) Whether the Plaintiff& Defendant No. 1 are governed by the

terms & conditions of the contract dt. 2-12-1994 wherein the

liability of the Defendant for any loss or damage to the shipment

shall be strictly regulated by the limitation of liability clause and

other relevant terms & conditions as mentioned on the Way

Bill? OPD

(5) Whether this Court has the jurisdiction to adjudicate upon the

present dispute between the parties wherein the Way Bill limits

the settlement of all disputes and claims subject to Mumbai

jurisdiction? OPD CS(OS) No. 78/2002 Page 5

(6) Whether the Plaintiff has forfeited its right by not lodging its

claim in writing within 30 days of acceptance of shipment as per

clause 11.1 of the Way Bill? OPD

(7) Whether the goods were loaded in sound condition and

whether they were damaged enroute due to carelessness and

mishandling by the Defendant as alleged by Plaintiff in paras 4,

6, 8 of the Plaint? OPP

(8) Whether goods were delivered in sealed condition by

Defendant No. 1 as alleged by the Defendant No. 1 in para 14

of written statement? OPD

(9) Whether the Plaintiffs are entitled to the decree as prayed for?

(10) Relief.

8. For the sake of convenience, these issues are being dealt with

together.

9. The plaintiffs have filed affidavit of Mrs. R.K. Kala, PW-1, who

has placed on record the original insurance policy Exhibit PW-1/1

dated 4th August, 1998. The inland transit insurance policy was taken

out by plaintiff No. 2 for transportation of computers and computer

peripherals from Delhi by lorry. The said policy is under Marine

Insurance Act, 1963. The list of material covered by the policy is CS(OS) No. 78/2002 Page 6

enclosed with Exhibit PW-1/1. Mrs. R.K Kala, PW-1 has further

stated that after report of damage was received, Shri Gopal Chandra

Kath Hazarika was appointed as a surveyor and loss assessor to

assess quantum of damage. Periodical consultations were held with

the plaintiff No. 2 and the supplier M/s Intergraph Corporation and

thereafter the Surveyor had assessed complete loss of the photo

scanner. The survey report has been proved on record as Exhibit

PW-1/5. Plaintiff No. 2 had served loss notice dated 19th April, 1999

under Section 10 of the Carriers Act, 1865 marked Exhibit PW-1/6

and the defendant No. 1 had also executed a damage certificate

dated 9th August, 1999 marked Exhibit PW-1/7. Plaintiff No. 2 had

filed a claim note with the plaintiff no.1 dated 9th September, 1999,

marked Exhibit PW-1/8. The plaintiff No. 1 has also proved payment

disbursement voucher marked Exhibit PW-1/9 and it has been stated

that payment of Rs.23,53,476/- was made by the plaintiff No. 1 to

plaintiff No. 2 under the insurance policy. Ms. R.K. Kala, PW-1, has

also proved on record the Letter of Subrogation and Special Power of

Attorney executed by plaintiff No. 2 in favour of plaintiff No. 1, which

has been marked Exhibit PW-1/10. Plaintiff No. 1 had also issued

legal notice to defendant No. 1 being notice dated 10th February,

2001, which has been proved as Exhibit PW-1/11. The said legal

notice was sent by registered post. In view of Section 79 read with

Section 90 of the Marine Insurance Act, 1963 the plaintiff No. 1 has CS(OS) No. 78/2002 Page 7

been able to establish and prove that in view of Letter of Subrogation,

Exhibit PW-1/10, they are entitled to file the present suit for recovery

against the defendant No. 1.

10. Learned counsel for the defendant No. 1 had submitted that in

the Carriage Way Bill, which has been marked Exhibit PW-1/3, name

of the consignor has been mentioned as Director General of Military

Intelligence, Army Headquarters, New Delhi and, therefore, plaintiff

No. 2 was not the consignor. It was stated that Letter of Subrogation

and Special Power of Attorney, Exhibit PW1/10, executed by plaintiff

No. 2 in favour of the plaintiff No. 1 was of no value and does not

furnish right of subrogation to the plaintiff No. 1 to file the present suit

as plaintiff No. 2 was not the consignor. The said contention of the

defendant No. 1 cannot be accepted in view of the clear stand taken

by the defendant No. 2, Director General of Military Intelligence in

their written statement stating that they had no role to play and goods

had been transported by plaintiff No. 2. Further, plaintiff No. 2 had

written notice dated 19th April,1999, Exhibit PW-1/6, to defendant No.

1 in respect of the said damaged consignment. Receipt of the said

notice has been admitted by the defendant No. 1. The said defendant

also admits that the fare and transport charges were paid by plaintiff

no.2 and not by defendant no.2. The stand of Defendant No. 1, is

contrary to their taken in I.A. No. 10932/2008 under Order XI, Rule 14

stating, inter alia, that plaintiff No.2 was the consignor. Even in the CS(OS) No. 78/2002 Page 8

written statement defendant No.1 has relied upon agreement dated

2nd December, 1994, Exhibit DW-1/1, executed between them and

plaintiff No.2 and claimed that carriage way bill PW No. 1/3 was

issued as per terms of agreement Exhibit DW-1/1.

11. PW-1, Mrs. R. K. Kala along with her affidavit has filed letter

dated 26th March, 2006 Exhibit PW-1/12 written by plaintiff No. 2 that

the goods were transported by defendant No. 1 in view of the

transaction entered into between plaintiff No. 2 and defendant No. 1.

Moreover, the plaintiffs had summoned Major Kapil Yadav, Station

Workshop, EME, Delhi Cantt., Delhi and his statement was recorded

as PW-3. He has categorically stated that the subject matter i.e. the

consignment was imported from abroad and was transported by M/s

Rolta India Limited, the plaintiff No. 2, as a consignor as per records

of Directorate of Military Intelligence. In the cross-examination, he

has stated that Directorate of military intelligence was not the owner

of the consignment at the time of loading of the goods by defendant

No. 1, rather M/s Rolta India Limited, plaintiff No. 2 was the owner.

He has stated that in the carriage way bill it was wrongly mentioned

that Directorate of Military Intelligence was a consignor and instead

M/s Rolta India Limited, plaintiff No. 2, should have been recorded as

a consignor in the said way bill Exhibit PW-1/3.

CS(OS) No. 78/2002 Page 9

12. In view of the above discussion, issue Nos. 1 and 3 are decided

in favour of the plaintiffs and against the defendant No. 1. Plaintiff

No. 1 is entitled to file the present suit in view of Letter of Subrogation

and Special Power of Attorney, Exh.PW1/10, executed by the plaintiff

No. 2.

13. These issues being interconnected are being dealt with

together.

14. Learned counsel for the parties in connection with these issues

had drawn my attention to Section 6 of the Carriers Act, 1865, which

reads as under:-

"6. In respect of what property liability of carrier not limited or affected by public notice. Carriers, with certain exceptions, may limit liability by special contract-

The liability of any common carrier for the loss of or damage to any property delivered to him to be carried, not being of the description contained in the Schedule to this Act, shall not be deemed to be limited or affected by any public notice; but any such carrier, not being the owner of a railroad or tramroad constructed under the provisions of Act 22 of 1863 (to provide for taking land for works of public utility to be constructed by private persons or Companies, and for regulating the construction and use of works on land so taken) may, by special contract, signed by the owner of such property so delivered as last aforesaid or by some person duly authorized CS(OS) No. 78/2002 Page 10

in that behalf by such owner, limit his liability in respect of the same."

15. The defendant No. 1 relying upon the said Section had

submitted that the plaintiff No. 2 and defendant No. 1 had entered

into an agreement dated 2nd December, 1994, Exhibit DW-1/1 and

under the said agreement they had agreed that all shipments would

be subject to terms and conditions of carriage mentioned in the way

bill and these terms and conditions would be deemed to be part of the

said written contract. My attention is also drawn to the wording of the

said clause wherein it is mentioned that liability of defendant No. 1 for

any loss or damage to the shipment would be strictly regulated by the

limitation of liability clause and other terms and conditions thereto as

mentioned in the way bill. On the basis of this document Exhibit DW-

1/1, it was submitted that terms and conditions mentioned on the

back side of the way bill Exhibit PW-1/3 are special terms and

conditions as stipulated in Section 6 of the Carriers Act, 1865 and

are, therefore, binding on the plaintiffs and the defendant No. 1.

16. I would have examined this issue in depth and detail and also

gone into the question whether the consignment in question had been

booked under the agreement Exhibit DW-1/1 as it is the case of the

plaintiffs that the consignment in question was not booked under a

contract Exhibit DW-1/1, but I find that the way bill PW-1/3 does not

contain any special conditions relied upon by defendant No. 1 CS(OS) No. 78/2002 Page 11

restricting the claim of damages or prescribing special conditions.

Learned counsel for the defendant No. 1 when confronted with the

above situation obviously had to accept that there were no special

terms and conditions mentioned in the way bill and, therefore, Section

6 of the Carriers Act, 1865 has no application. It was, however,

submitted that there could be printing error in the original way bill

Exhibit PW-1/3 and, therefore, special terms and conditions had not

been printed. If that be so, still the defendant No. 1 cannot rely upon

conditions not mentioned in the way bill Exhibit PW-1/3. Defendant

No. 1, after arguments had been partly heard, had filed an application

being I.A. No. 10932/2008 under Order XI, Rule 14 stating, inter alia,

that three copies of the way bill were prepared at the time of booking

of the consignment and the plaintiff No. 2 being the consignor may be

directed to produce the second copy. I may note here that as per

defendant No. 1 himself, the third copy of the way bill was retained by

them. The said application was dismissed by order dated 9th

September, 2008 pointing out that Exhibit PW-1/3 was an admitted

document and at the time of admission/denial of documents was

marked Exhibit P-1. It was also pointed out that there is no question

of primary or secondary evidence as the document in question is an

admitted document. Further, the defendant No. 1 themselves had not

produced their copy of the carriage way bill.

CS(OS) No. 78/2002 Page 12

17. In these circumstances, the above issues are decided in favour

of the plaintiffs and against the defendant No.1 holding, inter alia, that

there were no special terms and conditions limiting the liability of

defendant No. 1 under Section 6 of the Carriers Act, 1865.

18. These issues are inter-connected. Counsel for the defendant

relied upon the Way bill exhibit PW1/3 and signature of the consignee

below the printed acknowledgment on PW1/3 that the shipment had

been received in a good condition.

19. The said contention of defendant No.1 over-looks the clear and

categorical written admission made by defendant No.1 in their

certificate dated 9.8.1999, exhibit PW1/7 that one package out of 52

packages was delivered in a slightly damaged condition. Therefore,

the contention of defendant No.1 that damage had occurred after

delivery at the time of installation is contrary to their certificate and is

an afterthought. DW-1, Mr. Satyanarayana has admitted issue of

damage certificate exhibit PW1/7, by defendant No.1, and he has

stated that the said certificate was issued for the sole purpose of

enabling the consignor to claim insurance. The certificate exhibit

PW1/7 does not mention that the goods were damaged due to

negligence and deficiency in service on the part of defendant No.1, CS(OS) No. 78/2002 Page 13

but it is clearly stated that at the time when goods were delivered,

one package was in a slightly damaged condition. Damage had, as

per certificate of defendant No.1 Exhibit PW1/7 occurred before

delivery and was noticed at the time of delivery on 10th December,

1998. DW-1, Mr. Satyanarayana has not disputed and questioned the CS(OS) No. 78/2002 Page 14

said statement made in certificate exhibit PW1/7. In the light of the

said admission, the printed lines that the shipment had been

received in good condition mentioned in the carriage way bill Exhibit

PW1/3, is to be disregarded and is held to be an incorrect statement.

20. We also have evidence of PW-2, Mr. Gopal Chandra Nath

Hazarika, who has deposed that the consignment was not be

opened by the consignee and installation was to be done in the

presence of expert personnel from the M/S. Rolta India Limited,

plaintiff No.2. He has stated that on external inspection, one box

was found to be damaged and thereafter when box was opened in

the presence of the service engineer of plaintiff No.2, it was found

that the photo scanner was damaged beyond repair. Manufacturer

M/s. Intergraph Corporation as per PW-2 had confirmed that the

photo scanner had been damaged beyond repair and required

complete replacement. The Photographs of damaged photo scanner

were also taken and these have been placed on record and marked

exhibit PW2/2. The photographs of photo scanner show that the

sealed packages were not opened till photographs were taken.

Damage is also visible. Thus it is not possible to accept the

contention of the defendant No.1 that the shipment was damaged

after delivery.

CS(OS) No. 78/2002 Page 15

21. Contention of defendant No.1 that the goods could have been

damaged before they were loaded at Delhi is without merit. The way

bill exhibit PW1/3 issued by defendant No.1, does not state that any

of the packages was damaged. This is also not stated in the

certificate exhibit PW1/7, issued by defendant No.1. No evidence

and material has been placed on record by defendant No.1 that the

consignment was damaged before it was handed over and came in

their custody.

22. The plaintiffs have examined PW-3, Major Kapil Yadav, Station

Work Shop EME, Delhi Cantt., who has deposed on the basis of

official records maintained by the Directorate of Military Intelligence.

He has stated that as per official records, Lieutenant Colonel D.K.

Gurung was present when the consignment was loaded at Delhi

Airport for Tejpur, Assam and at that time no damage was noticed

nor anything to that effect was recorded. In fact Lieutenant Colonel

D.K. Gurung had recorded in the official books that the consignment

when loaded was in sound and perfect condition.

23. In view of the above findings, it is established that

damage was caused to the goods after they were loaded in Delhi

and before they were delivered at Tejpur, Assam. Admittedly, at that

time the consignment was in custody of defendant No.1. I may here

refer to Section 9 of the Carrier Act, 1985, which reads as under:-

CS(OS) No. 78/2002 Page 16

"Section 9 Plaintiffs, in suits for loss, damage, or non-delivery, not required to prove negligence or criminal act.--

In any suit brought against a common carrier for the loss, damage or non-delivery of goods [including containers, pallets or similar articles of transport used to consolidate goods] entrusted to him for carriage, it shall not be necessary for the plaintiff to prove that such loss, damage or non-delivery was owing to the negligence or criminal act of the carrier, his servants or agents."

24. In view of Section 9 of the Carrier Act, 1985, the

plaintiffs are not required to specifically prove negligence or

criminal act on the part of defendant No.1, its servants or agents.

25. Counsel for defendant No.1 had relied upon

Judgment of Supreme Court in New India Insurance Company

Limited Vs. Economic Transport Corporation (1998) 8 SCC

541. In this decision it was noticed that there was no direct

evidence and the litigation had been fought on the basis of

inferences on the question of loss and damage. Question of when

and who was responsible for the loss or damage was in issue. It

was observed that liability could not be passed on the carrier as

there was no evidence to establish that the goods had been

damaged during transit. The Supreme Court in view of evidence

on record did not accept that damage had occurred during

transportation. In view of the above findings and peculiar facts as CS(OS) No. 78/2002 Page 17

noticed by the High Court and referred to by the Supreme Court in

paragraph 4 of their judgment, it was held that the presumption

under Section 9 of the Carriers Act, 1865 relating to negligence

did not arise. Presumption of negligence under section 9 arises

when loss or damage during carriage is established and in such

cases plaintiff need not prove negligence. Damage or loss

indicates and establishes negligence. (Refer, Patel Roadways

Ltd versus Birla Yamaha Ltd. reported in AIR 2000 SC 1461

wherein it was held that liability of the carrier on loss or damage to

goods is extensive and is that of an insurer).

Issue No.2

26. Articles 10 and 11 of the Limitation Act, 1963 read as

under:

Article           Nature of Suit     Period of          Time from
                                     Limitation         when period
                                                        begins to run
Article 10        Against a          Three years        When the loss
                  carrier for                           or injury occurs
                  compensation
                  for losing or
                  injuring goods
Article 11        Against a          Three Years        When the
                  carrier for                           goods ought to
                  compensation                          have been
                  for non-                              delivered.
                  delivery of, or
                  delay in
                  delivering
                  goods
 CS(OS) No. 78/2002                 Page 18

Article 11 of the Limitation Act, 1963, applies to cases where

there is non-delivery or delay in delivering goods and in such

cases cause of action for filing of a suit for damages begin when

the goods ought to have been delivered. Article 10 applies to

cases where damage or loss is caused to goods during carriage.

It is a case of both parties that Article 10 of the Limitation Act,

1963, is applicable to the present case. Under Article 10 of the

Limitation Act, 1963, period of limitation for filing a claim against a

carrier for compensation is three years and the time begins from

the date when the loss or injury occurs.

Counsel for the Plaintiffs had relied upon the judgment of

Supreme Court in the case of Bootamal Vs. Union of India,

Reported in, AIR 1962 SC 1716. The said decision interprets

Article 31 of the Limitation Act, 1908 (corresponding to Article 11

of the Limitation Act, 1963). Article 31 of the Limitation Act, 1908

applies to cases of non-delivery or delay in delivery of goods. In

such cases, Supreme Court has held that cause of action would

arise when goods were not received at the place of destination

within reasonable time. Article 31 of the Limitation Act, 1908 is

not applicable to the facts of the present case.

27. The starting point of limitation under Article 10 is the date

when the loss or damage occurs and not the date on which loss CS(OS) No. 78/2002 Page 19

or damage comes to the knowledge of consignee or consignor.

Knowledge as such is not relevant for Article 10. Date of

knowledge of such loss or damage is not made, starting point of

limitation for proceedings covered by Article 10 of Limitation Act,

1963. Plaintiffs have not invoked Section 17 of Limitation Act,

1963, which deals with fraud or mistake. In cases were section 17

applies, limitation does not begin to run until the plaintiff or the

claimant has discovered fraud or mistake. Further once limitation

period begins/starts it does not stop on account of any

subsequent disability or inability to institute a suit or make an

application and continues to run irrespective of such disabilities.

(see section 9 of the Limitation Act, 1963)

28. The date on which loss or injury occurs during

transit is within the knowledge of the carrier, unless there is

evidence that the consignor/consignee was also aware and had

knowledge of the said date. Carrier has to prove date of damage

or loss to shipment. (refer to the provisions of Sections 101 to 104

and Section 106 of the Evidence Act, 1872) Normally,

consignor/consignee will come to know about damage or loss

only upon delivery of the consignment or when notice of

loss/damage is given by the carrier. Keeping these aspects in

mind, Courts have interpreted Article 10 and held that the relevant

date is a date when the loss or injury is caused to the CS(OS) No. 78/2002 Page 20

consignment and not the plaintiff's date of knowledge, but when

the carrier is not able to establish and prove the specific date on

which loss or injury had occurred and thereby discharge onus, the

date of delivery should be taken as relevant date for the purpose

of Article 10 of the Limitation Act, 1963. Thus, where a carrier is

unable to prove the date on which loss or damage was caused to

the consignment, the date of delivery or the date on which carrier

informed the party about the loss/damage, whichever is earlier, is

regarded as the date of loss or damage for the purpose of starting

point of limitation under Article 10 of Limitation Act, 1963.

Division Bench of Calcutta High Court in the case of Union Of

India versus Gujarat Tobacco Company reported in AIR 1955

Cal 448, had occasion to interpret Article 30 of Limitation Act,

1908, which was identically worded as Article 10 of Limitation Act,

1963 and it was observed that the limitation period begins to run

when the loss or injury occurs. When such loss or injury occurs

while the goods were in custody of a carrier, the date thereof

would be within the knowledge of the carrier and accordingly, it is

for the carrier to establish and prove the date of loss or damage.

In the absence of satisfactory evidence on the point or on failure

to discharge the onus, the date of delivery to the party should be

taken as the relevant date of loss or injury and as the starting

point of limitation. The above view has been taken by the Division CS(OS) No. 78/2002 Page 21

Bench of Andhra Pradesh High Court in Oriental Silk Store Vs.

General Manager S.E. Railway, AIR 1961, AP 454

29. In the present case, the consignment was

dispatched from Delhi on 1st December, 1998 and received at

Tejpur, Assam on 10th December, 1998, vide way bill exhibit

PW1/3. Date of damage or loss is unknown. Defendant No.1 has

not discharged the onus. The starting point of limitation, therefore,

is 10th December, 1998. The limitation started running from the

said date and the suit should have been filed on or before 11th

December, 2001, in terms of the Article 10 of Limitation Act, 1963.

The suit in the present case was filed on 20th December, 2001

and was returned with the office objections and refiled on 03rd

January, 2002. The suit, therefore, is filed beyond period of

limitation in terms of Article 10 of the Limitation Act, 1963.

30. Counsel for the plaintiffs had submitted that the

goods were found to be damaged on 15.4.1999, when the box

was opened in the presence of the representatives of plaintiff

No.2 and subsequently when the manufacturer confirmed that the

goods were damaged. In this regard, he has referred to notice

dated 19.4.1999, exhibit PW1/6, written by the plaintiff No.2. The

language of Article 10 of Limitation Act, 1963, does not support CS(OS) No. 78/2002 Page 22

the stand of the plaintiffs. Article 10 does not postpone starting

point of limitation after delivery, till the date when the

plaintiff/claimant discovers loss or damage after investigation.

Quantification or exact extent of damage or loss suffered is not a

relevant consideration and not the starting point under Article 10

of Limitation Act, 1963. High Court of Madras in Madurai K.

Rengian Chettiar Versus Union of India reported in AIR 1971

Madras 34, has held that quantum or extent of damage/loss is not

relevant and only the date when the damage was caused or loss

was suffered has to be ascertained. In these circumstances, the

date 15.4.1999, cannot be taken as relevant date or the starting

point of limitation.

31. It is a case of the plaintiffs that damage to the

consignment was noticed at the time of delivery on 10.12.1998.

In paragraph 7 of the plaint, it is mentioned by the plaintiffs that

the said consignment reached Tejpur, Assam on 10.12.1998 and

consignee took delivery on the same date. At the time of delivery

of goods, the consignee had noted damage on box No.2 (pack

no.2-27/52, Sr. No.150363). In case contention of the plaintiffs is

to be accepted, it will mean that the starting point of the limitation

can be postponed to any date as per like and wishes of a party by

not opening or by delaying the opening of the damaged

consignment.

CS(OS) No. 78/2002 Page 23

32. Counsel for the plaintiff had further submitted that the

certificate exhibit PW1/7 dated 9.8.1999, amounts to an

acknowledgment under Section 18 of the Limitation Act, 1963,

and therefore the present suit, filed on 20.1.2001, is within

limitation.

33. The question whether exhibit PW1/7 dated 9.8.1999

amounts to acknowledgment of liability under Section 18 of the

Limitation Act, 1963, requires examination of the said document.

The same is produced as under:-

"This is to certify that on behalf of M/s Rolta India Limited, we have carried in our network a shipment containing 52 packages vide Airwaybill number 511692193 dated 1st December, 1998 through Truck No. MH04 AG 1260 from MI-17 Delhi to MI-17 Tejpur. The shipment was delivered at MI-17, Tejpur on 10.12.1998 and out of 52 packages, 1 package No.2 was delivered in slightly damaged condition."

34. Section 18 of the Limitation Act, 1963, reads as under:-

                 18.      Effect   of    acknowledgment      in
           writing :
                 1) Where, before the expiration of the

prescribed period for a suit or application in respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed CS(OS) No. 78/2002 Page 24

from the time when the acknowledgment was so signed.

(2) Where the writing containing the acknowledgment is undated, oral evidence may be given of the time when it was signed;

but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received.

Explanation.--For the purposes of this section,--

(a) an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set off, or is addressed to a person other than a person entitled to the property or right,

(b) the word "signed" means signed either personally or by an agent duly authorised in this behalf, and

(c) an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right.

35. Section 18 of the Limitation Act, 1963, extends period of

limitation in cases where before expiry of the period of limitation

prescribed, a party acknowledges liability in respect of a property

or a right in writing. Writing to constitute acknowledgment under

Section18 should be for a liability in respect of a property or a

right claimed against the said party. Acknowledgement may be

express or even implied from the written text. Supreme Court in

the case of Shapoor Freedom Mazda versus Durga Prosad CS(OS) No. 78/2002 Page 25

Chamaria, reported in AIR 1961 Supreme Court 1236, while

interpreting corresponding identically worded provisions of

Section 19 of the Limitation Act, 1908, has held that three

conditions must be satisfied to constitute an acknowledgement:-

(i) Acknowledgment must be before period of limitation has expired.

(ii) It must be with regard to liability and in respect of right in question.

(iii) It must be in writing and signed by the party against whom such right has been claimed.

36. It was also observed that acknowledgment does

not create any new right of action but renews it. The statement

should be based and must relate to a present subsisting liability

though the exact nature or the specific character of the said

liability may not be indicated in words. The acknowledgment need

not be accompanied by a promise to pay expressly or by

implication. However, the words used in the acknowledgment

should indicate existence of a jural relationship between the

parties as that of a creditor and a debtor and the statement should

be made to admit such jural relationship. This admission need not

be express but must be made in words from which the Court can

reasonably infer that the person making the admission intends to

refer to the subsisting liability as on the date of the statement and CS(OS) No. 78/2002 Page 26

accept it. Whether any admission is made can be inferred when

the intention the maker of the statement is to admit jural

relationship between the parties of a debtor and a creditor. Courts

lean in favour of liberal construction but this does not mean that

where there is no admission it should be inferred. The instrument

or statement should be succinctly and tersely examined to find out

the substance and intention of the party executing the instrument,

whether intention was to acknowledge or admit that the party

owed a right or a debt to the receiver of the letter or to the person

to whom the letter is addressed. A fair construction has to be

made.

37. Recently, in Prabharam versus M. Azhargiri Pillai reported

in (2006) 4 SCC 486, while dealing with a case of

acknowledgement in a case of mortgage, it was observed that

words must indicate jural relationship between the parties and it

must appear that such a statement is made with the intention of

admitting such jural relationship. The term jural relationship refers

to legal relationship between the parties, with reference to their

rights and liabilities.

38. Several judgments of the Supreme Court were referred

and examined in detail in the case of Hansa Industries(P) CS(OS) No. 78/2002 Page 27

Limited Versus MMTC Limited reported in 2004, VI AD ( Delhi)

222, wherein the following principles were culled out:-

"19. We can deduce the following principles from the aforesaid judgments which shall have to be applied in a given case to ascertain as to whether writing constitutes an acknowledgment or not:

(a) Acknowledgment means an admission by the writer that there is a debt owed by him either to the receiver of the letter or to some other person on whose behalf it is received. It is not enough he refers to a debt as being due from somebody. He must admit that he owes the debt.

(b) The statement on which a plea of acknowledgment is based must relate to a present subsisting liability though the exact nature of the specific character of the said liability may not be indicated in words.

(c) Words used in the acknowledgment indicate the circumstances of jural relationship between the parties such as that of debtor and creditors.

(d) It must appear that statement is made with the intention to admit such jural relationship.

(e) Such intention can be implied and need not be expressed in words. In construing the words used in the statement, surrounding circumstances can be considered although oral evidence is excluded.

(f) Although liberal construction is to be given to such statement but where a statement was made without intending to admit the existence of jural relationship, the court cannot fasten such intention on the maker by an involved or far-fetched process of reasoning.

(g) In deciding the question in a particular case, it is not useful to refer to CS(OS) No. 78/2002 Page 28

judicial decision and one has to inevitably depend upon the context in which words are used."

39. We have to apply the above principles to the

certificate exhibit PW1/7, and decide whether the instrument is an

acknowledgment. The certificate exhibit PW1/7 states that out of

52 packages, one package No.2 was delivered in a slightly

damaged condition. The words used in certificate dated 9.8.1999,

exhibit PW1/7 do not show that defendant No.1 admitted any

subsisting liability as a debtor of the plaintiff No.2 or any third

person. The statement made do not show that the intention of

defendant No.1 was to admit jural relationship of a debtor and

creditor, who is liable to plaintiff No.2. Legal obligation to pay any

amount to the plaintiff No.2 is not admitted. The certificate records

statement of fact that at the time of delivery one package was

found to be slightly damaged. From this statement alone it cannot

be inferred that defendant No.1 had admitted jural relationship of

a debtor and a creditor between the defendant No.1 and plaintiff

No.2. There is no instrument or material to show that prior to

9.8.1999 defendant No.2 had accepted any claim or liability.

There is no such allegation nor has any evidence been produced

by the plaintiffs. There are not additional factors or circumstances

on the basis of which inference can be drawn that the intention of CS(OS) No. 78/2002 Page 29

defendant No.1 while issuing the said certificate exhibit PW1/7

was to admit any liability. The instrument itself does not admit

any liability.

40. DW-1, Mr. K. Satyanarayana in his statement by of

examination in chief has stated that the said certificate exhibit

PW1/7, was issued for the sole purpose to enable the consignor

to claim insurance money from the insurance company. The

relevant portion of the affidavit reads as under:-

"I state that Damage Certificate Exhibit PW1/7 is not issued to Plaintiff No.2 as the shipper in the present case is not plaintiff No.2. The Damage Certificate was issued in good faith, without admission of any negligence or deficiency in service and with the sole purpose of enabling the Consignor/shipper to claim the insurance money from its insurance company."

41. The said witness was not cross-examined by the plaintiffs with

regard to certificate exhibit PW1/7 and the above statement. The

explanation given by defendant No.1 that the said certificate exhibit

PW1/7 was issued only to enable plaintiff No.1 to get the insurance

claim, remains untouched and no questions were asked in cross

examination of DW-1. I may also note here that some High Courts

have held that issue of damage certificate by a carrier to

consignor/consignee is not an acknowledgment of liability. Calcutta

High Court in M/s Balchand Badriprasad Versus Union of India, CS(OS) No. 78/2002 Page 30

reported in, AIR 1957, Calcutta 666 and Orissa High Court in the

case of National Co-operative Consumer's Federation of India

Limited Vs. Union of India, Reported in, 1996 ACJ 491 have taken

the said view. In Balchand's case (supra), High Court of Calcutta has

observed that issue of damage certificate by the carrier does not

amount to acknowledgement or acceptance of existing liability.

42. Counsel for the plaintiffs during the course of arguments

wanted to rely upon photocopy of damage certificates, which had

been issued by defendant No.1 in 2005 in other cases. It was

highlighted that in the said certificates it was mentioned that they

were issued "without prejudice". It was accordingly stated that Exhibit

PW1/7 is not a damage certificate but an acknowledgment as the

words "without prejudice" were missing. I do not find any force in the

said submission and the distinction made. Lack of words "without

prejudice" does not make any difference. I am also not inclined

to go into and take on record photocopy of alleged certificates

issued by the defendant no.1 as they have not been proved and

further they are stated to be issued in the year 2005. Counsel for

the plaintiff had relied upon decision of Bombay High Court in South

Eastern Roadways, Bombay versus U.P. State Industrial

Corporation Limited, reported in AIR 1993 Bombay 300. In the said

case, in response to a claim letter, the carrier had written back, stating that CS(OS) No. 78/2002 Page 31

the matter "will be settled" by the General Manager, who was on visit

to Bombay (Mumbai). The Bombay High Court held that use of

words "will be settled" with reference to damage was sufficient to

indicate jural relationship between the parties as that of a debtor or a

creditor and the mere fact that the amount was not quantified or

clarified would not make any difference. The writing would constitute

acknowledgement in view of the explanation to Section 18 of the

Limitation Act, 1963. The factual position of the present case is

different. Defendant No.1 has not acknowledged or accepted liability

to pay any amount or jural relationship of debtor and creditor to

plaintiff No.2 in certificate exhibit PW1/7.

43. In view of the findings given above, it is held that the suit

of the plaintiffs is barred by the limitation.

Relief

44. In view of the findings on issue No.2, the suit of the plaintiffs is

dismissed as barred by the limitation. In the facts of the present case

there will be no order as to costs.

(SANJIV KHANNA) JUDGE

OCTOBER 24, 2008.

VKR/P