The Singareni Collieries Co. Ltd., vs T.Subrahmanyeshwar Rao
2025 Latest Caselaw 4916 Tel

Telangana High Court

The Singareni Collieries Co. Ltd., vs T.Subrahmanyeshwar Rao on 17 April, 2025

       THE HONOURABLE SMT. JUSTICE K. SUJANA


                APPEAL SUIT No.913 of 1999


JUDGMENT:

Challenging the order dated 07.12.1998 passed in

O.S.No.13 of 1992 by the learned Senior Civil Judge, Asifabad,

the present appeal suit is filed.

2. The brief facts of the case are that the plaintiff is a coal

transport contractor for the defendant company under a

contract from July 1991 to July 1993. He owns a tipper

vehicle bearing No.AEK-2298 which was damaged on

November 19/20, 1991, when a coal bunker unexpectedly fell

on it while stationed under the bunker for coal loading. The

plaintiff reported the incident to the defendant, and both

parties assessed the damages. The plaintiff claims that the

defendant neither repaired the vehicle nor compensated him

for waiting charges, which caused a daily loss of Rs.1,500/-

from November 19, 1991, until repairs were completed on

December 27, 1991. The plaintiff spent Rs.1,67,219/- on

repairs and sustained additional losses due to waiting charges

of Rs.55,500 for 37 days. He sold damaged parts as scrap for

SKS,J

Rs.5,000 and is now claiming a total amount of Rs.2,17,719/-

from the defendant.

3. However, the defendant acknowledges the plaintiff's

contractor status and ownership of the vehicle but denies

responsibility for the accident. They claim the coal bunker fell

accidentally and the damage was assessed at Rs.40,000/-.

The defendant offered to repair the vehicle at its workshop,

but the plaintiff refused and chose to repair it himself. The

defendant disputes the repair cost claimed by the plaintiff and

denies any obligation to pay waiting charges. He argued that

the plaintiff's claim is excessive and that, per the contract

agreement, the defendant is not liable for accidents beyond its

control. The defendant asserts that the plaintiff should seek

compensation from his insurance company and requests the

dismissal of the suit.

4. Basing on the above pleadings, the trial Court framed

two issues and on behalf of the plaintiffs i.e., PWs.1 and 2

were examined and Ex.A1 to A27 are marked. DWs.1 and 2

are examined and Exs.B1 to B7 were marked on behalf of the

defendants.

SKS,J

5. After examining the evidence, the trial Court, vide order

dated 07.12.1998, partly allowed the suit holding that the

damage caused to the plaintiff's vehicle was a direct

consequence of the defendant company's negligence in

maintaining the bunker on its premises. Relying on exhibits

such as Ex. A-2, A-25 to A-27 and joint inspection reports, the

trial Court concluded that the damage was not remote but

arose during the discharge of contractual obligations. It was

observed that the defendant did not fail to respond to multiple

notices sent by the plaintiff, nor did it protest the quotations

issued for repairs. The oral offer to get the vehicle repaired or

pay Rs.40,000/- was unsubstantiated by written

communication and was therefore considered insufficient to

refute the plaintiff's claim.

6. Further, the trial Court accepted the claim of the

plaintiff of Rs.1,67,219/- towards actual repairs, supported by

a series of bills (Ex. A-7 to Ex. A-22), as genuine and

unrebutted. Waiting charges for 37 days were also awarded at

Rs.1,200/- per day, amounting to Rs.44,400/-, based on

prevailing transportation rates. After deducting Rs.5,000/-

realized from selling damaged parts, the trial Court held the

SKS,J

plaintiff entitled to Rs.2,06,619/- as total damages. Interest

at 12% p.a. from the date of the suit till realization was also

granted, considering the silence of the defendant and failure

to challenge the claim. Aggrieved by the said judgment, the

appellant/defendant preferred the present appeal suit.

7. Heard Sri P. Sri Harsha Reddy, learned Standing

Counsel for Singareni Collieries Co. Ltd., appearing on behalf

of the appellant as well as Sri L. Harish, learned counsel

appearing on behalf of the respondent.

8. Learned counsel for the appellant submitted that the

judgment and decree passed by the trial Court is contrary to

law, based on a wrong reading of the evidence, and ignores the

actual terms of the contract between the parties and that the

contract does not mention payment of any compensation or

damages in case of an accident. The vehicle involved was

insured, and the insurance company was not made a party to

the suit, making the suit defective. The accident was not

intentional or due to negligence but purely accidental and

beyond the control of the appellant. He further submitted that

according to Clause 14 of the agreement, the appellant is not

SKS,J

liable for any loss or damage caused due to factors beyond its

control.

9. Learned counsel for the appellant argued that both

parties had mutually agreed during a joint inspection to settle

the matter by paying Rs.40,000/-. Despite this, the trial

Court awarded a much higher amount, which goes against the

agreement. There is no proper evidence to show that the

bunker was in bad condition or that the appellant was

negligent. In fact, the respondent did not check the condition

of the bunker before using it, which any responsible person

should have done. Both parties believed the bunker was in

working condition, so blaming the appellant alone is

unjustified. He contended that the claim for waiting charges

is baseless as the contract does not provide for any such

payment. The repair bills produced by the respondent are

inflated, not supported by proper evidence, and were wrongly

accepted by the trial Court. The trial Court shifted the burden

of proof to the Appellant and assumed negligence without any

solid proof. The appellant had even offered to repair the

vehicle out of goodwill, which was not an admission of fault or

liability. The learned Judge misread the intention behind this

SKS,J

offer and wrongly concluded that the Appellant had a role in

causing the accident.

10. He further contended that the trial Court relied on

unrelated judgments and misapplied the law under Section 73

of the Contract Act. The trail Court also wrongly excluded the

appellant's documents and accepted exaggerated credit bills

from the respondent without proper verification. The award of

Rs.2,06,619/- with interest at 12% and costs is not justified

in light of the contract terms, especially Clause 14. Therefore,

he prayed the Court to set aside the judgment of the trial

Court by allowing this appeal suit.

11. On the other hand, learned counsel for the respondent

submitted that the appellant himself admitted that a joint

inspection was conducted and that the respondent agreed to

accept Rs.40,000/- towards damages. When there was no

negligence on the part of the appellant, there would be no

reason to offer Rs.40,000/- as compensation. On the one

hand, he admitted his negligence by offering Rs.40,000/-, and

on the other hand, he claims that the negligence lies with the

respondent. He cannot take such a contradictory stand. With

regard to negligence, the trial Court elaborately discussed the

SKS,J

documents filed by the plaintiff and also examined the

concerned witness, P.W.2 - professional mechanic, who

deposed about the damage to the vehicle, the repairs carried

out, and the accident involving the said vehicle. Based on the

evidence and the documents filed by the respondent, the trial

Court rightly delivered its judgment. There is no illegality in

the judgment of the trial Court, and hence, the learned

counsel prayed for dismissal of the appeal suit.

12. The points that arise for consideration in this appeal

are:

i. Whether the respondent/plaintiff is entitled to damages to the tune of Rs.2, 11,619/-?

ii. Whether the appellant is liable to pay the said compensation?

iii. Whether the judgment of the trial Court warrants any interference?

Point Nos.i and ii:

13. In light of the submissions made by both the learned

counsel and upon perusal of the material available on record,

it is the case of the plaintiff that he entered into a contract

with the Defendant-Company for transportation of coal. In

pursuance of the said contract, the plaintiff deposited an

SKS,J

amount of Rs.25,000/- with the Defendant-Company and

commenced transportation work. On the alleged date of the

incident, while the plaintiff's tipper was stationed under the

bunker at SRP-2 incline for loading coal, the coal bunker

suddenly collapsed, causing substantial damage to the tipper.

14. There is no dispute regarding the collapse of the coal

bunker and the resultant damage to the plaintiff's vehicle.

The appellant/defendant has admitted the said incident. The

primary contention raised by the appellant is that, in view of

Clause 14 of the agreement, the company is not liable for any

compensation. A perusal of Clause 14 reveals that the

company shall not be liable for compensation in the event of

losses suffered by the contractor due to reasons such as

strike, lock-out, shortage of labour, fire, breakdown or road

accidents, riots, war, insurrection, restraints imposed by

Governmental Acts or Legislation, or any other causes beyond

the control of the company.

15. However, none of the contingencies enumerated in

Clause 14 are applicable to the present case. The collapse of

the bunker, which was under the control of the Appellant-

Company, cannot be said to be a circumstance beyond the

SKS,J

control of the company. Thus, the protection under Clause 14

does not extend to the facts of this case.

16. Furthermore, the appellant, in both the written

statement and the grounds of appeal, categorically admitted

that he offered to repair the vehicle and even proposed

payment of Rs.40,000/- towards damages after receiving legal

notice from the respondent/plaintiff. This itself is an

indication of implied admission of negligence on part of the

appellant.

17. The contention of the learned counsel for the appellant

that the respondent should have claimed compensation from

the insurance company is also without merit. The learned

counsel for the respondent rightly pointed out that the

incident did not constitute a road accident, and therefore, the

insurance company was not liable to pay damages. When the

negligence is attributable to the Company, the respondent is

not bound to proceed against the insurer. Thus, the

appellant's contention on this aspect is liable to be rejected.

18. With regard to the quantum of damages awarded by the

trial Court, the appellant contended that the amount is

SKS,J

exorbitant. However, the respondent/plaintiff produced

documentary evidence under Exhibits A1 to A27, including

repair bills under Exhibits A7 to A22, amounting to

Rs.1,71,000/-. To substantiate the said bills, the respondent

examined P.W.2, a professional mechanic, who corroborated

the extent of damage and the repair work undertaken. Nothing

substantial was elicited during the cross-examination of P.W.2

to discredit his testimony. Therefore, the trial Court rightly

concluded that the respondent/plaintiff spent an amount of

Rs.1,67,270/- towards repairs and mechanic charges.

19. The trial Court also awarded waiting charges at the rate

of Rs.1,200/- per day, based on prevailing market rates, for a

total of 37 days. The said claim is supported by the evidence

on record, and there appears to be no illegality in awarding

such damages.

20. However, with respect to the interest awarded, the trial

Court granted interest @ 12% per annum from the date of

filing of the suit till the date of realization. This needs

modification in light of Section 34 of the Code of Civil

Procedure, 1908 (for short 'CPC'), which reads as follows:

SKS,J

"Section 34 CPC - Interest

(1) Where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, 1 [with further interest at such rate not exceeding six per cent. per annum as the Court deems reasonable on such principal sum], from the date of the decree to the date of payment, or to such earlier date as the Court thinks fit :

2[Provided that where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed six per cent. per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions.

Explanation I.--In this Sub-section, "nationalised bank" means a corresponding new bank as defined in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970).

Explanation II.-- For the purposes of this section, a transaction is a commercial transaction, if it is connected with the industry, trade or business of the party incurring the liability.]

SKS,J

(2) Where such a decree is silent with respect to the payment of further interest 3[on such principal sum] from the date of the decree to the date of payment or other earlier date, the Court shall be deemed to have refused such interest, and a separate suit therefore shall not lie.

Correct the grammar and improve the sentences like the judgment of the Court and further insert section 34 of CPC in the judgment where it is relevant and improve the sentences with regard to section 34 of CPC."

21. In the present case, though the transaction is in the

nature of a commercial arrangement, no contractual rate of

interest has been established. Therefore, in the absence of a

specific contractual stipulation or evidence of prevailing

lending rates from nationalised banks, the interest rate must

be regulated within the permissible limits of Section 34 CPC.

22. Accordingly, the interest awarded by the trial Court is

modified to the following extent:

a) The respondent/plaintiff shall be entitled to

interest at the rate of 12% per annum from

the date of suit till the date of decree, as

adjudged by the trial Court.

SKS,J

b) However, from the date of the decree till the

date of realization, the interest shall be

limited to 6% per annum, in consonance with

the mandate of Section 34 CPC.

Point No.iii

23. In view of the above discussion, the appeal suit is liable

to be dismissed except to the extent of modification in the

interest component. The judgment and decree of the trial

Court are upheld, subject to the variation in interest as

indicated above.

24. In view thereof, this appeal suit is dismissed. There

shall be no order as to costs.

Miscellaneous applications, if any pending, shall stand

closed.

_______________ K. SUJANA, J Date: 17.04.2025 SAI

SKS,J

THE HONOURABLE SMT JUSTICE K. SUJANA

P.D. JUDGMENT

IN

Date: 17.04.2025

SAI