Madras High Court
M/S.Madras Cements Ltd vs M/S.Union Roadways Pvt. Ltd on 11 August, 2022
A.S.Nos.15 and 933 of 2001
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 11.08.2022
CORAM :
THE HONOURABLE MR.JUSTICE P.VELMURUGAN
A.S.Nos.15 and 933 of 2001
and
CMP.No.15748 of 2001
A.S.No.15 of 2001:-
1. M/s.Madras Cements Ltd.,
through its Power Agent,
The Oriental Insurance Co. Ltd.
2. The Oriental Insurance Co. Ltd.,
Divisional Office No.1,
Madurai through their
Divisional Manager. ... Appellants
vs.
1. M/s.Union Roadways Pvt. Ltd.,
Calcutta.
2. M/s.Union Roadways Pvt. Ltd.,
Trichy. ... Respondents
Appeal Suit filed under Section 96 of the Code of Civil Procedure,
against the judgment and decree dated 27.06.2000 made in O.S.No.105
of 1995 on the file of the Subordinate Judge, Srivilliputhur.
https://www.mhc.tn.gov.in/judis
A.S.Nos.15 and 933 of 2001
For A1 : Mr.J.A.B.Swaroop
For A2 : Mr.E.Chandrasekaran
For R2 : No appearance
A.S.No.933 of 2001:-
1. M/s.Union Roadways Private Ltd.,
Registered under the Companies Act,
P.9, New CIT Road, Calcutta-73.
2. M/s.Union Roadways Pvt. Ltd.,
Registered under the Companies Act,
Branch Office at 235, Kamaraj Nagar,
Trichy-10. ... Appellants
vs.
1. M/s.Madras Cements Ltd.,
Ramasamy Raja Nagar, by its
Power of Attorney Oriental
Insurance Company Ltd., (the said
company is registered under the
Companies Act and having its
Registered office at Rajapalayam).
2. The Oriental Insurance Company Ltd.,
having its Divisional Office-1 at
108, T.P.K. Road, Madurai represented
herein by its Principal Officer-cum-
Senior Divisional Manager. ... Respondents
Appeal Suit filed under Section 96 of the Code of Civil Procedure,
against the judgment and decree dated 27.06.2000 made in O.S.No.105
of 1995 on the file of the Subordinate Judge, Srivilliputhur.
https://www.mhc.tn.gov.in/judis
A.S.Nos.15 and 933 of 2001
For Appellants : No appearance
For R1 & R2 : Mr.E.Chandrasekaran
COMMON JUDGMENT
M/s.Madras Cements Limited and its power of attorney
namely, Oriental Insurance Co. Ltd, have filed a suit in O.S.No.105 of
1995 against the defendants namely, M/s.Union Roadways Pvt Ltd.,
Calcutta and Trichy, before the Sub Court, Srivilliputhur, for directing the
defendants to pay jointly and severally a sum of Rs.5,99,294/- with
interest at 12% per annum from the date of plaint till the date of
realisation with costs of the suit. After trial, the trial Court, by judgment
and decree dated 27.06.2000, partly decreed the suit. Aggrieved by the
said judgment and decree, the plaintiffs in the suit as appellants have
filed A.S(MD)No.15 of 2001 and the defendants as appellants have filed
A.S(MD)No.933 of 2001.
As pleadings and submissions are common, both the appeals are
heard together and disposed by this common judgment.
https://www.mhc.tn.gov.in/judis
A.S.Nos.15 and 933 of 2001
2. Brief facts stated in the plaint are as follows:-
The first plaintiff purchased procelain and shaft insulations from
M/s.Flait India Ltd., Calcutta. The basic value of the goods was Rs.
2,64,800.75 and the landed cost was Rs.6,05,614.99 which is inclusive
of import duty, customs duty, central sales tax and transport charges
etc. M/s.Flait India Ltd., Calcutta, transported the goods packed in
wooden cases from Calcutta to Ramasamy Raja Nagar under
Consignment Note No.002041 dated 16.04.1992 of the first defendant to
be delivered to the first plaintiff. The first plaintiff duly insured the
consignment with the second plaintiff under Marine Policy No.
41320/0/0/M/039/92 to be compensated and indemnified against any
loss or damage that may be caused to the consignment during transit.
The normal transit period is 5 to 7 days. However the defendants have
taken more than one month to deliver the consignment at the
destination. The second defendant delivered the consignment at the
factory premises of the first plaintiff on 19.05.1992. At the time of
delivery, four cases were found damaged and the first plaintiff has taken
delivery under protest. Thereafter, the first plaintiff referred the matter
to the second plaintiff, who in turn, appointed a surveyor to inspect the
https://www.mhc.tn.gov.in/judis
A.S.Nos.15 and 933 of 2001
damaged consignment and submit a report. Mr.S.V.Krishnamoorthy, a
licenced surveyor cum loss assessor of Madurai, inspected the damaged
goods and submitted his report dated 23.01.1993, assessing the loss at
Rs.5,95,614/-. The damage caused to the consignment during transit
was only due to the carelessness, negligent and improper handling of the
goods by the men and servants of the defendants and hence they are
legally liable to compensate the loss. On the demand of the first
plaintiff, the second defendant had issued an open delivery certificate
dated 20.05.1992, confirming the damage caused to the consignment.
The first plaintiff sent a registered claim notice dated 17.06.1992,
demanding the second defendant to make good the loss. The second
defendant having acknowledged the same, has not chosen to settle the
claim nor sent any reply. The defendants have not responded even to the
reminder dated 03.07.1992 of the first plaintiff. Thereafter, the second
plaintiff, settled the claim of the first plaintiff, in pursuance of the
contract of insurance at Rs.5,99,294/- which is inclusive of the survey
fees paid. The first plaintiff in consideration of the payment made,
executed a letter of subrogation and a special power of attorney both
dated 07.07.1993 in favour of the second plaintiff. Apart from that, on
https://www.mhc.tn.gov.in/judis
A.S.Nos.15 and 933 of 2001
payment of the said amount, the second plaintiff has got statutorily
subrogated to the rights of the first plaintiff. Now the entire claim is due
only to the second plaintiff. The first plaintiff has no objection in passing
a decree only in favour of the second plaintiff. However in order to set at
rest any possible objection raised in future regarding the rights of the
second plaintiff to file the suit, the first plaintiff has also been arrayed as
a party in this suit. The damage caused to consignment and consequent
pecuniary loss sustained by the first plaintiff and indemnified by the
second plaintiff is only as a result of failure on the part of the
defendants/common carriers to discharge the statutory obligation by
virtue of their public employment for gain. Further, the damage caused
to the plaintiffs during the transit ought to have been only as a result of
misfeasance on the part of the defendants/common carriers. Thus, the
defendants are liable under the law of tort for damages. Hence both the
defendants are jointly and severally liable for the suit claim.
3. Brief facts in the written statement are as follows:-
The first plaintiff booked the goods of 13 wooden cases with the
first defendant under consignment Note in 002041 dated 16.04.1992.
The goods were to be delivered to the first plaintiff at Ramasamy Raja
https://www.mhc.tn.gov.in/judis
A.S.Nos.15 and 933 of 2001
Nagar. As per the consignment Note, the declared value of goods was
only Rs.3,43,510/- and not as alleged in the plaint at Rs.2,64,800.75/-
towards basic value of goods and landed cost at Rs.6,05,614.99/-
inclusive of other charges. Further, the first plaintiff was uncertain about
the total value of the Consignment and the same would be borne out
from the first plaintiff's claim letter viz., letter No.GS.F.PRCJ/ESP dated
17.06.1992, in which, the claim was lodged for Rs.2,48,000/- and
another letter No.G.S.F.PROJ/ESP dated 03.07.1992, in which, the claim
was raised to Rs.10,00,000/- and in another letter No.GS.F.PROJ/ESP
dated 17.12.1992, the claim was changed to Rs.7,90,965.80. Thus, the
claim of the first plaintiff is contrary to its claim letters. As regards one
month time taken for delivery of the consignment, the defendants would
submit that the vehicle carrying the consignment developed some engine
defect which got repaired and therefore, the goods were delivered on
19.05.1992 to the first Plaintiff and at the time of delivery, four cases
were slightly in a damaged condition which was not due to carelessness,
negligence and improper handling of the goods by the men and servants
of the defendants, but due to improper packing and careless act of the
first plaintiff while entrusting the goods which resulted in damage while
https://www.mhc.tn.gov.in/judis
A.S.Nos.15 and 933 of 2001
jerking and jolting of goods on transit due to bad condition of roads. The
averment that the first plaintiff has taken delivery under protest is
denied and in fact, at the time of delivery, the first plaintiff has appended
remarks on signed acknowledgement and given a letter dated
19.05.1992 to the second defendant, against which, an open delivery
certificate was issued. The averment that appointment of surveyor by
the second plaintiff to inspect the damaged goods and the surveyor's
report dated 23.01.1993 are stoutly denied as false. None of the
defendants were invited to be present during the alleged survey and it is
only to get more money, intentional survey was arranged by the first
plaintiff and therefore, the surveyor's report cannot be the basis for the
suit claim. Since the damage to the goods was caused not at the
negligence and handling over by the defendants, they are not responsible
for the suit claim and further, the first plaintiff insured the goods with the
second plaintiff insurance company and therefore, it has to indemnify the
loss not the defendants. Only four cases were in slight damaged
condition at the time of delivery, whereas, the first plaintiff has claimed
compensation for the total 13 cases and hence, the suit is liable to be
dismissed.
https://www.mhc.tn.gov.in/judis
A.S.Nos.15 and 933 of 2001
4. Based on the above pleadings, the trial Court framed the
following issues:-
(i) Whether the plaintiffs are entitled to suit claim?
(ii) Whether the damage was caused due to the defendants and
their men?
(iii) Whether the execution of the letter of subrogation by the first
plaintiff is valid?
(iv) To what relief, the plaintiffs are entitled to?
5. In order to substantiate the case, on the side of the plaintiffs,
two witnesses were examined as PW1 and PW2 and 16 documents were
marked as Exs.A1 to A16. On the side of the defendants, no witness was
examined and two documents were marked as Exs.B1 and B2.
6. The trial Court, considering the pleadings oral and
documentary evidence, partly decreed the suit, by judgment and decree
dated 27.06.2000. Challenging the said judgment and decree, the
plaintiffs in the suit as appellants, have filed A.S(MD)No.15 of 2001 and
the defendants as appellants, have filed A.S(MD)No.933 of 2001.
https://www.mhc.tn.gov.in/judis
A.S.Nos.15 and 933 of 2001
7. The learned counsel for the appellants in A.S(MD)No.
15/2001/plaintiffs and respondents in A.S(MD)No.933/2001 would
submit that the trial Court failed to consider that the survey was
conducted by an independent licenced surveyor to assess the value of
loss of the consignment insured under the policy and the said surveyor
has submitted his report which was marked as Ex.A15 and the appellants
have also examined the surveyor as PW2. He would further submit that
the trial Court erred in ignoring the settled principle of law that the notice
of loss need not express the quantum and value of loss and erred in
fixing the monetary value of loss as stated in the notice of loss without
reference to the incidental import duty and other expenses incurred.
Once the respondents/Carriers admitted the accident and loss of goods,
they are liable to pay for damages to the second appellant/insurance
company as held by the Delhi High Court in Best Roadways vs. New India
Assurance Co. Ltd. The trial Court also failed to note that in the absence
of market value, the cost of procurement is the proper measure of
damages as reflected in the survey report.
https://www.mhc.tn.gov.in/judis
A.S.Nos.15 and 933 of 2001
8. The learned counsel for the appellants would further submit
that Exs.A1 to A4 are sufficient proof of the value of consignment and
therefore, the trial Court ought to have considered those documents and
held that the loss ascertained by the surveyor on the basis of the invoice
value, customs duty and bank charges, was the measure of damages
which amount was paid by the insurance company to the first
appellant/first plaintiff. It is further submitted that the trial Court failed
to appreciate the insured value, Section 64 UM of the Insurance Act,
1938, and the sanctity of the survey report by a licenced surveyor. The
trial Court erred in restricting the appellants' claim to Rs.2,48,000/-
merely because that was the amount mentioned in the earliest notice,
ignoring the fact that there is no estoppel in the law of damages against
proper measurement of damages. The learned counsel would also
contend that the trial Court failed to appreciate the fresh cause of action
enured to the advantage of the second appellant on the execution of the
letter of subrogation and a special power of attorney from the date of
plaint till payment. Further, the trial Court ought to have awarded
interest from the date of plaint until payment, since it is a commercial
https://www.mhc.tn.gov.in/judis
A.S.Nos.15 and 933 of 2001
cause. Thus, he would pray for allowing the appeal in A.S(MD)No.15 of
2001.
9. None appeared for the respondents in A.S(MD)No.15 of 2001
and the appellants in A.S(MD)No.933/2001.
10. Heard the learned counsel for the appellants in A.S(MD)No.15
of 2001 and respondents in A.S(MD)No.933/2001 and perused the
records.
11. It is not in dispute that the defendants are the Carriers
insured with the second appellant/insurance company and the survey
report Ex.A15 also confirms the same. Though the appellants claimed a
sum of Rs.5,95,614/-, the trial Court decreed the suit only for Rs.
2,48,000/-. Therefore, aggrieved by the same, the plaintiffs have filed
A.S(MD)No.15 of 2001 for the balance amount and aggrieved by the
decreetal amount of Rs.2,48,000/-, the defendants filed A.S(MD)No.933
of 2001 to set aside the judgment and decree of the trial Court and to
dismiss the suit in toto.
https://www.mhc.tn.gov.in/judis
A.S.Nos.15 and 933 of 2001
12. The first appellant/consignee received the consignment at the
destination point in a damaged condition and the second appellant
insurance company received an intimation from the first
appellant/insured that the consignment was damaged and requested for
survey. The second appellant/insurance company appointed an
independent surveyor to assess the loss. Accordingly, the surveyor
inspected the damaged goods and assessed the loss and filed a report
which was marked as Ex.A15. The surveyor was also examined as PW2.
As per his report, the loss was assessed at Rs.5,95,614/-. The first
appellant issued a notice of loss as prescribed under the Carriers Act and
requested for compensation for the damaged consignment. The said
notice has been marked as Ex.A8 and the respondents also
acknowledged the receipt of that notice and the acknowledgment has
been marked as Ex.A9. Subsequently, the first appellant also sent
another letter to the respondents under Ex.A10. The second
appellant/insurance company after receipt of the documents, settled the
insurance claim to the first appellant. As per the valuation under Ex.P15,
a sum of Rs.5,95,614/- was also settled by the second appellant and the
said settlement has been marked as Ex.A11. Since the second appellant
https://www.mhc.tn.gov.in/judis
A.S.Nos.15 and 933 of 2001
settled the claim of the first appellant, the second appellant got
subrogation letter cum special power of attorney from the first appellant
and proceeded for recovery of the amount from the respondents through
the Court. Therefore, as per the subrogation letter, they filed the
present suit against the respondents/Carriers to pay the compensation of
Rs.5,95,614/-. The trial Court, after trial, ordered Rs.2,48,000/-.
13. According to the appellants, once the respondents/Carriers
admitted the damage of goods, they are liable to pay the damages to the
second appellant/insurance company and Exs.A1 to A4 are sufficient
proof for value of consignment. Though the respondents stated that
PW2-surveyor has not intimated to them at the time of inspection for
assessing the value of the damages and therefore, they are not liable to
pay the amount, perusal of Ex.A6-open delivery certificate issued by the
1st respondent clearly shows that the value declared in the goods
consignment was Rs.3,43,510/-. Thereafter, the first respondent issued
a letter dated 20.05.1992 which has been marked as Ex.A7. Reading of
Ex.A3-Debit note of M/s.Flait India Ltd., shows that the first appellant
also paid import duty against the Bill of Entry dated 07.01.1992.
https://www.mhc.tn.gov.in/judis
A.S.Nos.15 and 933 of 2001
14. A combined reading of Exs.A1 to A3 and also A6 coupled with
Ex.A15-surveyor's report, makes it clear that there was a damage to the
consignment to the tune of Rs.5,95,614/-, but without considering this
fact, the trial Court passed a decree only for a sum of Rs.2,48,000/-, for
which, it has given a reason that the first appellant in its initial claim
letter has claimed only Rs.2,48,000/-. The said approach of the trial
Court in the considered opinion of this Court, is erroneous. Even as per
Ex.A6-open delivery certificate issued by the 1st respondent, out of 13
wooden cases, four wooden cases were in a damaged condition and the
respondents have not denied the same. Therefore, as a consignee,
immediately after the delivery, the first appellant intimated the second
appellant and also to the respondents/Carriers about the damage of
goods and subsequently, the second appellant/insurance company also
deputed a licenced surveyor/PW2 and assessed the loss and the report of
PW2 has been marked as Ex.A15. If at all the respondents aggrieved
with the survey report-Ex.A15, since the survey was conducted ex parte
without intimation to the respondents, they ought to have appointed
their own surveyor or they should have submitted separate valuation
report or otherwise, they should have asked the surveyor/PW2 to
https://www.mhc.tn.gov.in/judis
A.S.Nos.15 and 933 of 2001
conduct survey in their presence, but in this case, the respondents have
not done the same. Except the denial that the surveyor/PW2 conducted
inspection unilaterally without intimation to the respondents, the
respondents have not offered any other acceptable reason as to how the
surveyor's report-Ex.A15 is wrong or not correct. Therefore, there is no
reason to discard Ex.A15. In order to substantiate Ex.A15, the
appellants also examined its author/PW2 and therefore, the said
document cannot be given dis-credence.
15. On a perusal of Exs.A1 to A3, A6 and A15, this Court finds
that the appellants are entitled to get the damages at Rs.5,95,614/- and
the trial Court failed to appreciate the same and erroneously fixed the
quantum of damages at Rs.2,48,000/-. This Court as a first appellate
Court which is a final Court of fact finding, has to re-appreciate and give
independent finding. This Court independently weighing the entire
materials and considering the admitted facts of both the parties and also
the damages caused to the appellants, is of the view that the
respondents/defendants are liable to pay the suit claim to the second
appellant.
https://www.mhc.tn.gov.in/judis
A.S.Nos.15 and 933 of 2001
16. In view of the above, the judgment and decree dated
27.06.2000 made in O.S.No.105 of 1995 on the file of the Subordinate
Judge, Srivilliputhur, is set aside and the suit is decreed for a sum of
Rs.5,95,615/- with 9% interest from the date of the suit till the date of
the realisation with costs. The said amount shall be paid by the
respondents within a period of three months from the date of receipt of a
copy of this judgment.
17. Accordingly, A.S.No.15 of 2001 is partly allowed and A.S.No.
933 of 2001 is dismissed. The parties are directed to bear their own
costs. Consequently, connected miscellaneous petition is closed.
bala 11.08.2022
Index : Yes / No
Internet : Yes
To
The Subordinate Judge,
Srivilliputhur.
https://www.mhc.tn.gov.in/judis
A.S.Nos.15 and 933 of 2001
P.VELMURUGAN, J.
bala
COMMON JUDGMENT MADE IN
A.S.Nos.15 and 933 of 2001
DATED : 11.08.2022
https://www.mhc.tn.gov.in/judis
