Syal Auto Carriers (P) Ltd. vs National Insurance Co. Ltd. & Anr.
2011 Latest Caselaw 6087 Del

*        IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                               13th December, 2011

+                     RFA Nos.518/2010 & 523/2010

1.       RFA No.518/2010

SYAL AUTO CARRIERS (P) LTD.     ..... Appellant
                 Through: Mr. Sukhbir Singh, Advocate.

                      versus

NATIONAL INSURANCE CO. LTD. & ANR.              ..... Respondents

Through:

2.       RFA No.523/2010

SYAL AUTO CARRIERS (P) LTD.     ..... Appellant
                 Through: Mr. Sukhbir Singh, Advocate.

                      versus

NATIONAL INSURANCE CO. LTD. & ANR.              ..... Respondents
                 Through:



CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

    To be referred to the Reporter or not?





 VALMIKI J. MEHTA, J (ORAL)

1. These two Regular First Appeals under Section 96 of Code of

Civil Procedure, 1908 (CPC) are being disposed of by this common

judgment as they involve similar issues and facts. For the sake of

convenience, reference is being made to the facts in RFA No.518/2010.

2. The facts of the case are that the appellant/defendant is a

transporter/carrier. Plaintiff No.2 booked a consignment of 55 numbers of

Passion Plus motor cycles vide invoice No.2515003357 dated 6.5.2005 with

the appellant/defendant for being transported from Gurgaon to Pune. The

appellant/defendant accepted the contract of transportation and issued

consignment receipt dated 6.5.2005. The consignment which was being

carried from Gurgaon to Pune in truck No.HR-38L-6577 met with an

accident whereby the consignment was extensively damaged. An FIR was

lodged in the police station Thana Cantt, District Guna, M.P. on 8.5.2005.

The plaintiff No.2/respondent No.2 issued a notice under Section 10 of the

Carriers Act, 1865 upon the appellant/defendant on 21.6.2005 calling upon

the appellant/defendant to reimburse the loss caused to the plaintiff

No.2/respondent No.2 of ` 6,66,744.93/-. The appellant/defendant

acknowledged the loss being caused and the accident by issuing the damage

certificate dated 10.7.2005. Respondent No.1/insurance company had

insured the consignment and after making the payment of the claim of the

respondent No.2/plaintiff No.2, it got issued in its favour a power of attorney

and a letter of subrogation, and thereafter filed the subject suit for recovery

against the appellant/defendant/transporter/carrier.

3. The appellant/defendant contested the suit and denied its

liability. It was pleaded that there was no privity of contract with the

respondent No.1/plaintiff No.1 and that the suit was bad in terms of Sections

8 and 10 of the Carriers Act, 1865. Authority to file the suit and the

territorial jurisdiction of the Court was also challenged.

4. The trial Court has decreed the suit by holding that the loss was

caused by the accident and which was proved by the damage certificate,

Ex.PW1/10. The notice under the Carriers Act, 1865 was found to be served

which was Ex.PW1/8 and the postal receipt with respect to which is

Ex.PW1/9. The invoice by which the transportation was booked is

Ex.PW1/5. The police complaint and FIR was proved as Ex.PW1/7. The

letter of subrogation and the power of attorney in favour of the respondent

No.1/plaintiff No.1 were proved as Ex.PW1/4 and Ex.PW1/3 respectively.

The respondent No.1/plaintiff No.1 proved a total of 13 documents which

were exhibited as Ex.PW1/1 to Ex.PW1/13. The survey report with respect

to the loss was proved and exhibited as Ex.PW2/1 through the officer of the

Surveyors Sh. Rajiv Pal Singh Khurana, Director of the Surveyor Company

M/s. G.P.S. Miglani Surveyors Pvt. Ltd.

In view of the aforesaid facts, the trial Court came to the

conclusion that the appellant/defendant was guilty of causing loss as a

carrier and therefore the respondent No.1/plaintiff No.1 was entitled to

reimburse the loss caused as the same was paid by the plaintiff

No.1/respondent No.1 to the plaintiff no.2, the insured.

5. Learned counsel for the appellant/defendant argued before this

Court the following points:-

(i) Plaintiff No.2, the insured company, did not appear in the trial

Court and since the suit was only contested by the respondent No.1/plaintiff

No.1, the suit was liable to be dismissed inasmuch as the letter of

subrogation and the power of attorney were not proved and wrongly

exhibited. It was argued that the appellant/defendant had taken objection to

exhibition of the letter of subrogation and power of attorney which were

exhibited as Ex.PW1/4 and Ex.PW1/3 and therefore it should be held that

the suit was not validly instituted.

(ii) With respect to the amount of loss caused, it was argued that

the survey report did not properly prove the amount of loss inasmuch as the

survey report contained as annexures the details of the bills, which details

mentioned were not of the plaintiff No.2/respondent No.2 but were of the

dealer of plaintiff No.2/respondent No.2.

(iii) It was also argued that the company which gave the survey

report was not duly licenced to conduct the survey.

6. I am afraid none of the arguments as advanced on behalf of the

appellant has any substance. Firstly, the special power of attorney and the

letter of subrogation were exhibited in the evidence by way of affidavit of

PW1 as Ex.PW1/3 and Ex.PW1/4, however, before commencement of the

cross-examination, this objection of incorrect exhibition of the power of

attorney and the letter of subrogation was not raised. It is necessary for such

objection to be raised at an appropriate time, because if such objection is

raised, as to the mode of proof of documents, the affected person can take

necessary steps to get the documents proved in a proper manner. Once there

is no objection to the exhibition of documents, then, subsequently the

exhibition of such documents cannot be challenged vide R.V.E.

Venkatachala Gounder v. Arulmigu Viswesaraswami & V.P. Temple &

Anrs. (2003) 8 SCC 752. In the present case, if the appellant/defendant had

before the commencement of the cross-examination raised this objection,

then, the respondent No.1/plaintiff No.1 would not have closed the

affirmative evidence but would have led other evidence to ensure proper

exhibition of the documents, however, since the appellant/defendant did not

object before the commencement of cross-examination, the respondent

No.1/plaintiff No.1 allowed cross-examination to begin without seeking to

lead any further evidence for exhibition of the special power of attorney and

the letter of subrogation.

In any case, this argument that the power of attorney and the

letter of subrogation are not proved and the subrogation is therefore not valid

is completely answered by a recent Constitution Bench judgment of the

Supreme Court in the case of Economic Transport Organization, Delhi Vs.

Charan Spinning Mills Private Limited and Anr. (2010) 4 SCC 114. In

this Constitution Bench judgment of Economic Transport Organization

(supra), the Supreme Court has held that the right of subrogation is an

equitable right of subrogation and it arises automatically by operation of law

without any need for evidence in writing once the insurer settles the claim of

the insured. On such settlement, the insurer, then, steps into the shoes of the

insured and can exercise rights against the transporter/wrong-doer/carrier.

The rights of subrogation have been equated basically to the right of

restitution. Once an insurer pays the amount of loss to the insured under the

insurance policy, then, the insurance company is entitled to the rights and

remedies of the insured against the third party who causes the loss, and

which rights of the insured against the third party stand transferred and

vested in the insurer/plaintiff No.1/respondent No.1.

I therefore hold that it cannot be held that the suit was not

validly instituted in the absence of alleged proof of power of attorney and

the letter of subrogation executed by the plaintiff No.2/respondent No.2 in

favour of plaintiff No.1/respondent No.1.

7. So far as the argument that the survey report does not properly

assess the loss as the details of the bills with respect to the damages are not

of plaintiff No.2 but are said to be of the dealer of the plaintiff

No.2/respondent No.2 viz. M/s. Sehgal Autoriders Pvt. Ltd., Pune, this

argument is without substance inasmuch as the survey report in detail

attaches the photographs with respect to the damages to the motor cycles and

also is based on the actual spot inspection of the damaged motor cycles. So

far as the damage is concerned, it cannot be disputed that damage was

caused by the accident of the truck of the appellant/defendant inasmuch as

the appellant/defendant itself had issued the damage certificate dated

10.7.2005, Ex.PW1/10. On the aspect of value of the loss, it is not open to

the appellant/defendant to argue with respect to alleged incorrect assessment

because a mere denial and dispute with regard to valuation of the damages,

cannot take the appellant/defendant any further because it was incumbent

upon the appellant/defendant to state if the loss were not caused as stated in

the survey report, then, what were the actual losses. After all, the loss was

caused when the consignment was in the custody and control of the

appellant/defendant, and therefore the appellant/defendant could very well

have got assessed the loss itself. A negative defence of a simple denial

cannot be a defence/denial in the eyes of law. The survey report therefore

rightly assessed the loss.

I also do not find any strength in the argument raised on behalf

of the appellant that the Surveyors were not properly licenced inasmuch as

the licence number is duly given in each page of the survey report which is

on the letter head of the surveyor. Once again, a mere denial or a suggestion

of there not existing a licence, is in fact a defence/stand of desperation and

futility, which cannot be positively looked at.

8. In view of the above, there is no merit in the appeals, which are

accordingly dismissed, leaving the parties to bear their own costs.

VALMIKI J. MEHTA, J DECEMBER 13, 2011 Ne