JUDGMENT :

T. RAVINDRAN, J.

1. Challenge in this second appeal is made to the judgment and decree dated 20.09.2007 passed in A.S. No. 730 of 2006 on the file of the 7th Additional Judge, City Civil Court, Chennai, setting aside the judgment and decree dated 06.04.2006 passed in O.S. No. 5778 of 2000 on the file of the 1st Assistant Judge, City Civil Court, Chennai.

2. For the sake of convenience, the parties are referred to as per their rankings in the trial Court.

3. The plaintiffs in O.S. No. 5778 of 2000 are the appellants in this second appeal.

4. Suit for recovery of money.

5. Briefly stated, the case of the plaintiffs is that the first plaintiff placed an order with the German company viz., M/S. CEGKLEC ANLAGEN and ANTRIEES SYSTEM GMBH, Berlin, Germany, for the supply of one item of spare for KHIC crane vide order dated 21.07.1997 and opened an irrevocable L/C in favour of the German supplier and as per the invoice dated 04.06.1997, the value of the consignment on F.O.B. basis is DM 9300 at the exchange rate of Rs. 21.98 for 1 DM. The Rupee equivalent of which amounts to Rs. 2,04,600/-. The abovesaid consignment was entrusted to the defendant at Frankfurt to be safely delivered in the same apparent good order and condition at Madras Airport. The defendant acknowledged the receipt of the same vide their Master Airway Bill dated 18.06.1997 issued by the consolidator of the cargo and contrary to the undertaking given by the defendant, failed to deliver the consignment and thereby, committed breach of their statutory obligation. M/s. Balmer Lawrie and Co. Ltd. on behalf of the defendant, vide notice dated 21.06.1997, informed the first plaintiff about the alleged arrival of the consignment on 20.06.1997 by the defendant's flight lo.KU 2307 and demanded the freight amount of Rs. 1647/- which was duly paid, however, inasmuch as the cargo intended for the first plaintiff was not available for delivery on 28.08.1997, the local agents of the defendant, issued a short landing certificate and also confirmed that tracer action has been carried out on account of short landing of the cargo entrusted to the defendant. The first plaintiff suffered a pecuniary loss amounting to Rs. 2,03,256/- and demanded the payment of the said amount vide letter dated 10.09.1997 addressed to the defendant. On 18.10.1997, the defendant acknowledged the claim, admitted short landing and directed the first plaintiff to take up the issue with their underwriter. The short landing and the pecuniary loss sustained by the first plaintiff is only on account of the failure of the defendant to perform the statutory duty in not delivering the cargo entrusted to them and the defendant is not entitled to limit their liability inasmuch as they have not disclosed as to how the cargo in question was dealt with during the entire period when they had the exclusive custody of the same during the air carriage. Hence, the Court should presume that there was willful negligence and misconduct on the part of the defendant and thereby, liable to pay the entire value of the cargo short landed. The second plaintiff is the underwriter of the cargo. The cargo in question was insured with the second plaintiff vide policy dated 26.02.1997 and based on the same, the second plaintiff indemnified the insured i.e. the first plaintiff by paying a sum of Rs. 2,03,256/- and thus got subrogated to the first plaintiff's right of recovery of the amount and therefore, the second plaintiff is also entitled to maintain the suit by virtue of the letter of subrogation. The second plaintiff's agents, vide letter dated 09.02.1998, lodged a claim with the defendant and also submitted the original letter of subrogation and Special power of Attorney to the defendant as claimed by the defendant and the defendant's Bombay office on 12.06.1998 wrote a letter to the recovery agents offering a sum of Rs. 898/- allegedly the amount payable as per the airway bill conditions of contract. Thereby, the defendant has ad