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1987 Supreme(Pat) 298
PATNA HIGH COURT
L.P.N.Shahdeo, J.
National Coal Development Corpn.Ltd.
Versus
Union Of India
Appeal from Original Decree No. 192 of 1976 ;
Decided On : SEPTEMBER 16, 1987
The limitation period for filing a suit for compensation for short delivery of goods by railway starts from the date of delivery or service of notice, whichever is earlier. The period of limitation for serving notice under Section 80 CPC runs concurrently with the general limitation period. Failure to serve notice within 10 days of delivery as per insurance policy condition terminates insurance coverage.
Headnote:
LIMITATION ACT - SECTION 9, 15(2) - RAILWAY RECEIPT - INSURANCE POLICY - Limitation period for filing suit for compensation for short delivery of goods by railway starts from date of delivery or service of notice, whichever is earlier. Period of limitation for serving notice under Section 80 CPC runs concurrently with general limitation period. Failure to serve notice within 10 days of delivery as per insurance policy condition terminates insurance coverage.
Fact of the Case:
National Coal Development Corporation (NCDC) sued Eastern Railways and Life Insurance Corporation of India (LIC) for compensation for short delivery of goods transported by railway. NCDC alleged that the consignment was damaged and there was a shortage of goods upon arrival at the destination railway station. NCDC served a notice under Section 78 of the Railways Act and later filed a suit under Section 80 of the Civil Procedure Code (CPC). The defendants contested the suit, arguing that the claim was barred by limitation and that the insurance policy was terminated due to failure to serve notice within 10 days of delivery.
Finding of the Court:
The court held that the claim was barred by limitation. It found that the limitation period started from the date of delivery of the goods, which was earlier than the date of issuance of the short certificate. The court also held that the period of limitation for serving notice under Section 80 CPC runs concurrently with the general limitation period. Therefore, the plaintiff could not get the benefit of the two-month period under Section 15(2) of the Limitation Act. The court further held that the insurance policy was terminated due to the failure to serve notice within 10 days of delivery, as required by the policy condition.
Issues: 1. Whether the claim was barred by limitation? 2. Whether the insurance policy was terminated due to failure to serve notice within 10 days of delivery?
Ratio Decidendi: 1. The limitation period for filing a suit for compensation for short delivery of goods by railway starts from the date of delivery or service of notice, whichever is earlier. 2. The period of limitation for serving notice under Section 80 CPC runs concurrently with the general limitation period. 3. Failure to serve notice within 10 days of delivery as per insurance policy condition terminates insurance coverage.
Final Decision: The court dismissed the appeal and confirmed the judgment and decree of the trial court. The parties were directed to bear their own costs.
1. This appeal is directed against the judgement dated 28th August, 1976, passed by the Second Addl. Subordinate Judge, Dhanbad, in Money Suit No. 157 of 1970. The learned Subordinate Judge has dismissed the suit on contest with cost, against the defendants.
2. The plaintiff, National Coal Development Corporation (for short the N.C.D.C.) had instituted a suit alleging that it carries on business of producing and winning coal through its various collieries and Sudamdih Colliery under Sudamdih Project, within Jorapokhar P.S., within the district of Dhanbad was one of such units engaged in production of coal. It is claimed that the plaintiff had placed orders with Centrozap Enterprises and in pursuance of the said order, Centrozap Enterprises, through M/s. Kpoex, a Mining Construction Overseas Company had despatched the consignment intended for Sudamdih Colliery to Pathardih Railway Station and the consignment arrived at Khiddirpur Dock, Calcutta and there it was loaded in three wagons covered in wooden boxes. That consignment was despatched from Khiddirpur Dock to Pathardih Railway Station for the plaintiffs Sudamdih Colliery Project. The consignment was being carried by the Eastern Railways under Railway Receipt No. 066908, dt. 26 (16?)-9-67. The aforesaid consignment was also ensured by defendant 2, the Life Insurance Corporation of India, for safe arrival and delivery to the plaintiff at Sudamdih Colliery, via Pathardih Railway Station, under Insurance Policy No. SB/CDN/3039/3/67 for a sum of Rs. 680,288/-.
3. The aforesaid consignment ultimately reached at Pathardih Railway Station on 20-10-67. The plaintiffs representative along with the Polish experts were present. They found that the consignment was in broken condition and heavy shortage of goods was also detected. In the circumstances, they prayed for open delivery and open delivery was taken. It was found that 451 pieces of bearings, 3 pieces of fire Damp Detectors (SJZ type/3) and two pieces of cover type MOMG Will were short and one box containing machine parts was found empty. Thereafter a short delivery certificate was granted by the Yard Master of Pathardih Railway Station, through Ext. 9, on 20-9-67. Thereafter the plaintiff sent the required notice under S.78 of the Railways Act and ultimately when the matter was not settled by negotiation with the Railway Administration, the plaintiff issued a notice under S.80 of the Civil P.C. and instituted the suit.
4. The allegation is that the short delivery of the consignment was due to wilful negligence, misconduct and lack of proper care on the part of the Railway, as a result of which, the plaintiff had to sustain the loss to the extent of rupees one lac.
5. The defendants filed the written statement and contested the suit. Their main defence is on the technical aspect and on the law points.
6. It was alleged that the notice under S.78-B of the Indian Railways Act was not validly served upon the Railway Administration. The notice under S.80 of the Civil P.C. was also illegal and barred by time. It was alleged that the whole claim of the plaintiff was barred by the general and special provisions of the law of limitation, as prescribed under S.78-B of the Indian Railways Act and the Limitation Act. It was further submitted that the consignment was not booked under Railway risk nor the freight was paid for the same, nor freight was agreed to be paid at the destination and as such the plaintiff is not entitled to claim any relief. It is further alleged that the shortage has not properly been stated and items of short certificate does not tally with the plaint.
7. Similar is the defence of the Life Insurance Corporation. It was claimed by it that Khiddirpur Dock is owned and possessed by C.P.C. Railway and that haying not been made a party to the suit, the suit was bad for non-joinder of parties.
8. The further defence is that the shortage, if any, had occurred because of non-compliance of the package condition P/70
