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2019 Supreme(Del) 1713
IN THE HIGH COURT OF DELHI AT NEW DELHI
Valmiki J. Mehta, J.
Container Corporation Of India - Appellant
Versus
United India Insurance Co. Ltd. And Anr. - Respondents
RFA No. 398 of 2006
Decided On : 14-01-2019
For the Appellant :Mr. S.C. Rajpal and Mr. Varun Rajpal, Advocates
For the Respondent: Mr. Sameer Nandwani and Mr. Junaidullah, Mr. Akhil Sachar and Ms. Sunanda Tulsyan, Advs.
The carrier has absolute liability for the goods in its possession. The carrier cannot escape liability if there is willful misconduct or criminal act/negligence. The carrier's liability ceases after seven days of termination of transit, but not if there is willful misconduct or theft by its employees.
Headnote:
Railways Act - Sections 93, 97, 99, 103 - The court analyzed the provisions of the Railways Act and their interpretation. It discussed the general responsibility of a railway administration as a carrier of goods, the liability of a carrier for goods carried at owner's risk rate, the responsibility of a railway administration after termination of transit, and the extent of monetary liability in respect of any consignment. The court interpreted these provisions in the context of the case and concluded that the carrier's liability ceases after seven days of termination of transit, but not if there is willful misconduct or theft by its employees.
Fact of the Case:
The plaintiff filed a suit against the defendant for the loss of goods during transit. The trial court decreed the suit in favor of the plaintiff. The defendant appealed the decision.
Finding of the Court:
The court analyzed the provisions of the Railways Act and the liability of carriers. It held that the carrier has absolute liability for the goods in its possession. The court referred to the judgment in Nath Bros. Exim International Ltd. v. BEST Roadways Ltd. which established the carrier's liability as that of an insurer. The court also discussed the provisions of Rule 22 and Rule 25 of the Schedule of the Carriage by Air Act, which limit the carrier's liability but do not apply if there is willful misconduct. The court concluded that the carrier cannot escape liability if there is willful misconduct or criminal act/negligence. The court further interpreted the provisions of Section 99 of the Railways Act and held that the carrier's liability ceases after seven days of termination of transit, but not if there is willful misconduct or theft by its employees. The court rejected the defendant's claim of protection under Section 99 and Section 103 of the Railways Act.
Ratio Decidendi: The carrier has absolute liability for the goods in its possession. The carrier cannot escape liability if there is willful misconduct or criminal act/negligence. The carrier's liability ceases after seven days of termination of transit, but not if there is willful misconduct or theft by its employees.
Result: The appeal is dismissed and the decretal amount is to be released to the plaintiff.
JUDGMENT :
Valmiki J. Mehta, J.
RFA No. 398/2006 and C.M. Appl. No. 9186/2006 (for stay)
1. This Regular First Appeal under Section 96 of the Code of Civil Procedure, 1908 (CPC) is filed by the defendant no. 1 in the suit impugning the Judgment of the trial court dated 03.03.2006 by which the trial court has decreed the suit filed by the respondent no. 1/ plaintiff/subrogee insurance company for an amount of Rs.10,56,347/- along with interest at 6% per annum on account of loss of goods being tin ingots, which were taken in transit for shipment by the appellant/defendant no. 1 from Bombay Port to Internal Container Depot (hereinafter 'ICD') Tuglakabad, New Delhi. The claim filed by the respondent no. 1/plaintiff is with respect to a delivery shortage of 4350 kgs of tin ingots.
2. The facts of the case are that respondent no. 1/plaintiff filed the subject suit pleading that the respondent no. 2/defendant no. 2/MMTC had shipped its consignment of tin ingots and this consignment was insured with the respondent no. 1/plaintiff vide Insurance Policy dated 12.10.1995 for a sum of Rs. 2,40,00,000/-. The consignment was kept in container No. UACU 2963769/20, which was originally dispatched form Penang Port and had reached the Bombay Port on 27.10.1995. After the arrival of the shipment in Bombay, it was loaded on to a train on 13.11.1995 with original Railway Seal no. 164901. The said consignment reached Delhi Station on 18.11.1995, and at the ICD Tuglakabad on 19.11.1995. When the container was inspected on 22.11.1995 at ICD Tuglakabad by surveyors M/s B. Ghose & Co. and M/s Ericson and Richards (Delhi), who were appointed by the respondent no. 1/plaintiff, it was found that the original seal of Railways was not existing and instead the container had the seal of the appellant/defendant no. 1 being Container Corporation of India (hereinafter 'CONCOR') Seal no. 023457. On inspection, 15 bundles of tin ingots were found in sound condition, whereas 22 pieces were found in loose condition thereafter the Container was re-sealed. The respondent no. 2/defendant no. 2 was informed by respondent no. 1/plaintiff for the loss of articles and thereafter another surveyor M/s P.L. Singhal & Company was appointed on 27.12.1995, who had also visited the site on 28.12.1995 and had found the shortage of tin ingots totaling to 4350 kgs. This shortage of the consignment by 4350 kgs is said as per the various surveys which took place between 19.11.1995 to 22.11.1995 at the ICD Tuglakabad Depot. The insured being respondent no. 2/defendant no. 2 lodged its claim with the insurance company being respondent no. 1/plaintiff and resultantly the amount of Rs. 10,06,260/- was paid to respondent no. 2/defendant no. 2. The said amount along with the surveyor’s fee was thereafter claimed in the subject suit by seeking a decree for recovery of Rs. 10,56,347 along with interest.
3. The suit was contested by the appellant/defendant no. 1. It was pleaded that the respondent no.1/plaintiff had no privity of contract with the appellant/defendant no. 1 and therefore the appellant/defendant no. 1 was not liable to make payment to the respondent no.1/plaintiff. The appellant/defendant no. 1 also denied its liability by giving a reference to the provision of Section 99 of the Railways Act, 1989. An alternative plea was also taken, that at best the liability of the appellant/defendant no. 1 under Section 103 of the Railways Act, was not more than Rs. 50 per kg. The suit was hence prayed to be dismissed.
4. The trial court framed the following issues:-
“1) Whether the plaint has been signed, verified and instituted by an authorized person? OPP
(2) Whether the suit is bad in the absence of any privity of contract between the plaintiff, defendant no. 2 and defendant no. 1?
OPD
(3) Whether there was shortage of 4350 Kgs of tin on arrival at ICD Tughlakabad and if so to what effect?
(4) Whether defendant no. 2 had received goods without any protest at the time of delivery, if so to what effec
