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Shanmuga Sundaram Pi... v. National Insurance C...
Structured Summary of the Opinion
Factual and Procedural Background
The plaintiffs (first and second plaintiff; the first being the insurer and the second the goods-owner) brought a suit in O.S. No. 131 of 1982 in the sub-Court, Srivilliputhur for recovery of Rs. 63,500 with interest for loss of goods entrusted to the defendant for carriage. The suit arose from three consignments of match bundles booked on 27.8.1979 for delivery to consignees in Andhra Pradesh. The consignments were loaded into the defendant's lorry (Reg. No. TNR 4524). On 31.8.1979 the lorry capsized near Vadlapedeu (Yadlapedu) and caught fire; the match bundles and the lorry were burnt. The plaintiffs alleged the accident resulted from rash and negligent driving by the defendant's driver. The second plaintiff had insured the goods with the first plaintiff; the insurer conducted a spot survey and estimated loss. The insurer (first plaintiff) settled the insured claim and obtained a letter of subrogation from the second plaintiff, and then sued the defendant in the stead of (and as agent for) the second plaintiff.
At trial, the suit was decreed on merits. The defendant (judgment-debtor) appealed. The appeal was heard with learned counsel for both sides appearing. Evidence at trial included one plaintiff witness (P.W.1) and exhibits A.1–A.29 for the plaintiffs; the defendant testified as D.W.1 and tendered exhibits B.1–B.3. Several issues were framed at trial; some were not pressed by the defendant. The trial court found for the plaintiffs on the substantive issues and entered a decree. The appellate court considered the appeal and confirmed the trial court's findings, dismissing the appeal with costs.
Legal Issues Presented
- Whether the defendant as a common carrier can avoid liability to the plaintiffs on the basis of a special contract (contained in Exs. B.1 to B.3) stating that the goods were carried at "owner's risk".
- Whether there is evidence to substantiate the trial court's finding that the driver of the defendant's lorry acted with rashness and negligence.
- Whether the plaintiffs established the actual damages (value) suffered by them as a result of the loss in transit.
Arguments of the Parties
Appellant's (Defendant's) Arguments
- There existed a special contract between the second plaintiff and the defendant by which the goods were carried at "owner's risk" — as evidenced by the terms printed on the reverse of the forward note/waybill (Exs. B.1 to B.3) and the signature of the consignor accepting those terms. This special contract overrides the statutory duties of a common carrier and absolves the defendant of liability for loss.
- The accident was not caused by rash or negligent driving by the defendant's driver. The defendant's case was that another lorry, coming in the opposite direction without dimming headlights, forced the defendant's driver to swerve to avoid collision; due to poor road conditions the lorry capsized and the loss was unavoidable (not due to defendant's fault).
- The plaintiffs failed to prove the value of the goods lost; the defendant does not admit the claimed valuation or the alleged survey estimate.
Respondents' (Plaintiffs') Arguments
- Even if Exs. B.1–B.3 amount to a special contract, the clause that the goods were carried at "owner's risk" does not absolve the carrier of liability; the liability of a common carrier is absolute.
- It was for the defendant to prove absence of negligence; since the defendant did not produce the driver (who was the competent person to speak about the accident), the defendant failed to discharge the burden of proof. The evidence of D.W.1 (who was not in the vehicle) is of little or no value.
- The plaintiffs produced primary documents (invoices Exs. A.26–A.28) and insurance/valuation documents (Exs. A.1–A.3 and Ex. A.21 — subrogation letter) which establish the value of goods lost and support the damages claimed.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Thiruppathi Venkatachalapathy Lorry Service v. New India Assurance Company Ltd., 1988 (I) MLJ 64 | Affirmation that the liability of a common carrier is absolute and a contractual clause shifting risk to the owner does not absolve the carrier of statutory obligations. | The court relied on this decision to hold that the "owner's risk" clause in Exs. B.1–B.3 did not relieve the defendant (a common carrier) of liability; therefore the special contract did not avail the defendant. |
| The Divisional Manager, The New India Assurance Company Ltd v. Murugan, 1996 TLNJ 127 | Reinforcement of the principle that a common carrier's liability is absolute despite contractual attempts to limit responsibility. | The court cited this case alongside the earlier decision to support the conclusion that the defendant could not escape liability by relying on the "owner's risk" clause in the transport documents. |
Court's Reasoning and Analysis
The appellate court confined the appeal to three central issues (see Legal Issues Presented). Its analysis proceeded as follows:
- On the effect of the "owner's risk" clause (issue (a)): the court held that existing decisions of the same court (the two precedents cited) established that the liability of a common carrier is absolute. Consequently, a special contract purporting to shift the risk to the owner does not override the statutory duties of a common carrier. The court therefore rejected the defendant's contention that Exs. B.1–B.3 absolved it of liability.
- On negligence and burden of proof (issue (b)): the court examined sections 8 and 9 of the Carriers Goods Act. Reading section 8 (the carrier's liability for loss/damage arising from negligence or criminal act of the carrier, agent or servant) and section 9 together, the court concluded that once a suit is brought against a common carrier for loss or damage to goods entrusted for carriage, it is not necessary for the plaintiff to prove that the loss was due to negligence or criminal act; rather the burden shifts to the carrier to prove that there was no negligence or criminal act by the carrier or by its servants/agents. The court observed that the driver (the primary witness who could explain how the accident occurred) was not examined by the defendant; instead D.W.1, who was not in the vehicle at the time, gave evidence which the court characterized as hearsay and not of probative value. On the materials available, the court concluded the carrier had not discharged the onus of proving absence of negligence. Accordingly, the court found in favour of the plaintiffs on the negligence issue.
- On proof of damages (issue (c)): the court considered the documentary evidence tendered by the plaintiffs — invoices (Exs. A.26–A.28), insurance documents (Exs. A.1–A.3) and the subrogation letter (Ex. A.21) — and found that these primary documents satisfactorily established the value of the goods lost. The court contrasted the plaintiffs' documentary proof with the defendant's evidence and found the defendant's evidence not worthy of acceptance on valuation. Thus, the court upheld the trial court's finding on the amount of loss.
On the combined consideration of these matters — the binding effect of the precedents on common-carrier liability, the statutory import of sections 8 and 9 of the Carriers Goods Act shifting the onus to the carrier, the failure of the defendant to produce the driver or otherwise discharge that onus, and the sufficiency of the plaintiffs' documentary proof on value — the appellate court agreed with the trial court's findings and conclusions and dismissed the appeal.
Holding and Implications
APPEAL DISMISSED WITH COSTS
Direct effect on the parties: The appellate court affirmed the trial court's decree in favour of the plaintiffs (the insurer in subrogation and the goods-owner), thereby upholding the judgment awarding recovery for the loss of the goods entrusted to the defendant for carriage. The defendant, a common carrier, remains liable notwithstanding the presence of clauses in the transport documents purporting to carry the goods at the "owner's risk".
Broader implications: The court applied established authority (the two cited decisions) and statutory provisions (sections 8 and 9 of the Carriers Goods Act) to reaffirm that a common carrier's statutory liability is absolute and that the burden to show absence of negligence lies on the carrier once loss is pleaded. The opinion does not purport to set a new legal precedent beyond applying these existing authorities; it affirms the trial court's ruling on the particular facts of this case.
1. The judgment-debtor/defendant and the decree holders/plaintiffs in O.S No. 131 of 1982 on the file of the sub-Court, Srivilliputhur are the appellant and the respondents respectively in this appeal. In this judgment the parties to the appeal would hereinafter be referred to as the ‘plaintiffs’ and the ‘defendant’. The plaintiffs filed the suit for the recovery of a sum of Rs 63,500 with interest representing the loss of goods entrusted to the defendant for carriage. On merits the suit was decreed. Hence the present appeal. Heard Mr. S. Sethuraman, learned counsel appearing for the defendant and Mr. Rosi Naidu learned counsel appearing for the plaintiffs.
2. The allegation in the plaint are as hereunder:
On 27.8.1979 the second plaintiff booked 100 bundles of match boxes with the defendant to be delivered to their consignee at Vijayavada in Andhra Pradesh. The second plaintiff had paid Rs 150 as freight charges and the defendant also issued lorry receipt No. 4837, dated 27.8.1979 evidencing the said payment. Again on the same day the second plaintiff booked 500 bundles of match boxes with the defendant to be delivered to their named consignee at Guntur in Andhra Pradesh. A sum of Rs 750 was paid towards freight charges and the defendant also issued lorry receipt No. 4836 dated 27.8.1979 evidencing the same. Another 400 bundles of match boxes were again booked on the same day with the defendant for onward carriage to be delivered at Vijayawada. For this also freight charges of Rs 640 was paid and the defendant issued lorry receipt No. 4835 dated 27.8.1979 The three consignments were loaded in the defendants lorry bearing registration No. TNR 4524 and the lorry was in the custody of the driver of the defendant. It appears that on 31.8.1979 when the lorry was nearing Vadlapedeu in Andhra Pradesh, it was driven rashly and negligently and consequently the lorry capsized and fell down on the left side of the road. The lorry caught fire. Since the goods were match boxes all the match bundles caught fire. The entire goods including the lorry were burnt down to ashes. The accident was solely due to negligence on the part of the driver of the defendant. Had the driver of the defendant been little more careful and slow in driving the vehicle the accident would have been avoided. The defendant informed the accident to the second plaintiff. Since the goods were insured with the first plaintiff under a valid policy the second plaintiff reported the matter to the first plaintiff. Therefore the first plaintiff arranged for a spot survey and on the completion of the inspection the surveyor estimated the loss at Rs 66,363.80. The second plaintiff by his three letters each dated 17.9.1979 claimed a sum of Rs 7,338.80, Rs 30,375 and Rs. 28,600 from the defendant. But the defendant by his reply dated 28.9.1979 reputed his liability. So, the second plaintiff made a claim for that sum on the first plaintiff. The first plaintiff therefore settled the claim of the second plaintiff and got a letter of subrogation. Now, the first plaintiff is subrogated to the right of the second plaintiff and the defendant under law is liable to pay the amount to the first plaintiff. The first defendant's liability as public carrier is absolute and total. The defendant is vicarioulsy liable for the conduct of the driver for rashly and negligently driving the vehicle. The plaintiff issued a notice on 30.4.1982 to the defendant calling upon him to settle the claim. The defendant sent a reply dated 18.5.1982 by a registered letter stating the claims as intenable. Hence the suit.
3. The defendant filed a written statement contending inter alia as follows:
It is true that the second plaintiff entrusted 1000 bundles of safety matches to be transported and delivered to the consignee at Vijayavada and Guntur under the lorry receipts mentioned in paragraph 6 of the plaint. However the plaintiffs have suppressed the existence of a special contract between the second plaintiff and the defendant. Under the contract the goods were carried at owner's risk. At the time of booking the second plaintiff had known all the terms and conditions and in token of having accepted the terms has signed in the forward note that the goods were booked subject to all the terms and conditions printed at the back of the way bill. The second plaintiff appears to have insured the goods to safeguard their own interest. It is denied that the lorry was driven rashly and negligently and consequently capsized, fell down and caught fire. The truth is that the accident to the vehicle is not due to rash and negligent driving of the vehicle. When the lorry was proceeding near Yadlapedu in a normal speed of 35 K.M per hour another lorry was coming in the opposite direction in the middle of the road and without dimming the head light. The driver of the defendant's lorry to avoid collision turned the vehicle to the extreme left side of the road. Due to the very bad condition of the road the lorry TNR 4524 capsized and as a result of which the vehicle as well as the goods caught fire and they were totally damaged. The accident was not due to any fault on the part of the defendant or his employee and the accident was due to unavoidable and unforeseen circumstances as stated above. As the contract of carriage is by a special contract and the damage to the goods was not due to any negligence or rashness or any other fault of the driver of the vehicle the defendant is not liable or answerable to the plaintiff's claim. The defendant is not aware of the survey stated to have been arranged and the report of the surveyor on the completion of the survey. The defendant does not admit the value of the goods alleged to have been damaged. Though the liability of the defendant as a owner of the public carrier is absolute and total, the defendant cannot be termed as a public carrier burdened with the responsibility stated in the plaint a in this case the goods were carried by the defendant only under a special contract. Hence the suit may be dismissed.
4. On the side of the plaintiffs one witness was examined as P.W 1. 29 exhibits were marked as Ex. A. 1 to A. 29. On the side of the defendant, the defendant was examined as D.W 1 and three exhibits were marked as Ex. B. 1 to B. 3. On the pleadings and on the materials available, the learned trial judge framed the following issues:
(1) Is not the description of the defendant in the short cause title and in the long cause title erroneous?
(2) Whether the person who had verified had authority and necessary authorisation to verify the plaint?
(3) Whether the first plaintiff would be a legally constituted agent of the second plaintiff?
(4) Is not the plaint liable to be rejected in the absence of the prior permission from the court enabling the first plaintiff to sue as the agent of the second plaintiff.
(5) Whether the second plaintiff had issurable interest on the date of taking insurance in the goods?
(6) Is there not a special contract between the second plaintiff and the defendant?
(7) Is there not rashness and negligence on the part of the driver of the lorry belonging to the defendant?
(8) Whether the letter of subrogation given by the second plaintiff in favour of the first plaintiff are in accordance with law?
(9) Whether the amount claimed in the plaint is correct?
(10) Whether the goods were carried by the defendant in his capacity as a common carrier?
(11) Whether the first plaintiff is entitled to the amount claimed in the plaint?
(12) Whether the alleged consignees are necessary parties to the suit?
(13) To what are the reliefs the plaintiff are entitled to?
It appears from the judgment under challenge that issues 1, 5 and 12 were not pressed by the defendants and therefore they were taken out of consideration. On issues 2, 3, 4 and 8 the answer went in favour of the plaintiffs. On issue 6 the learned trial Judge found that there was a special contract between the second plaintiff and the defendant. On issues 7 and 10 the answers went against the defendant. On issues 9and 11 the answer went in favour of the plaintiffs. Accordingly the suit came to be decreed.
5. Mr. Sethuraman, learned counsel mainly argued two points and they are as follows:
Exs. B1 to 3 are the documents evidencing the entrustment of the goods by the second plaintiff to the defendant for onward transfer to a destination in the state of Andhra Pradesh. The terms and conditions printed at the reverse of the documents contain the clause that the goods are carried at ‘owner's risk’ and therefore for loss are damage to the goods the defendant cannot be held liable, as the said contract has the overriding effect on the statutory duties of the common carrier as contemplated under the Carrier's Act. The second point argued by the learned counsel for the appellant is that there is absolutely no evidence to support the findings of the learned trail Judge that the vehicle was driven in a rash and negligent manner. The doctrine of Resipsa Loquiter would not apply to the case on hand and the burden is on the plaintiffs to establish rashness and the negligence on the part of the driver of the lorry of the defendant. Lastly, the learned counsel would also contend that the plaintiff have not proved the actual damage sustained by them, in that the value of the goods damaged as to been established. Contending contra the learned counsel for the respondents would state that even though Exs. B1 to B3 may amount to special contract between the parties, yet the incorporation of the condition that the goods were carried at the owner's risk will not absolve the carrier's liability. As far as the proof of negligence is concerned, the learned counsel would contend that it is for the defendant to establish that there was no negligence and the plaintiff is to expected to prove the same. Inasmuch as the driver of the defendant lorry had not been examined the evidence of D.W 1 is not worth the paper on which it is written. As far as the value of the goods is concerned, the learned counsel would contend that the invoiced of the goods in question Ex. A. 26 to Ex. A. 28 establish the value of the goods lost in the accident. He would also state that the insurance policies, namely Exs. A1 to A3 the estimated value of the goods is mentioned. Even in Ex. A. 21 the subrogation letter the value of the goods is mentioned.
7. In the background of the arguments advanced by the learned counsel on either side on the pleading and on the evidence available on record. I am of the opinion that the following issues alone arise for consideration in this appeal:
(a) Whether the defendant as a common carrier can avoid his liability to the plaintiffs based on the special contract Exs. B. 1 to B. 3 containing a clause that the goods are carries at owner's risk?
(b) Whether there, is any evidence to substantiate the finding of the learned trial Judge that there was negligence and rashness on the part of the driver of the lorry belonging to the defendant?
(c) Whether the plaintiffs had established the actual damages suffered by them?
As far as issue (a) is concerned it should not detain this court even for a minute more than it is required. This issue is covered by two judgments of this court in Thiruppathi Venkatachalapathy Lorry Service v. New India Assurance Company Ltd., 1988 (I) MLJ 64 and The Divisional Manager, The New India Assurance Company Ltd v. Murugan, 1996 TLNJ 127. In these cases a similar argument has been raised and this court had repelled the argument of the common carrier and held that the liability of the common carrier is absolute. Therefore this issue goes against the defendant. As far a the issue (b) is concerned under section 9 of the Carriers Goods Act, any suit brought against the common carrier for loss, damage, etc. etc. entrusted to the carrier for carriage, it shall nor be necessary for the plaintiff to prove that such a loss or damage etc. was due to negligence or criminal act of the carrier his servant or agent. Therefore it is clear that the burden is on the carrier to prove that there was no negligence or nay criminal act. Under section 8 of the Carriers Act the common carrier is made liable to the owner for loss or for damage to any property delivered to such a carrier to be carried when such loss or damage shall have arisen from the criminal act or negligence of the carrier or of his agent or servants. Reading sections 8 and 9 of the Carriers Act together it is clear that the burden is on the carrier to prove that there was neither a criminal act nor any negligence committed by either the carrier or by his agent or his servant. In this case, the driver of the vehicle had not been examined at all and he would be the competent person to speak about the accident. The evidence of D.W 1 who was not in the vehicle at the time of the accident is no use. At best his evidence regarding the manner in which the accident took place would be only hear-say. Going by the materials available on record I am of the opinion that the carrier had not discharged the onus or proved that there was neither negligence nor any criminal act on his part or on the part of his servant or agent. The issue of negligence goes against the carrier. As far as the last issue namely the value of the goods is concerned Ex. A. 26 to A. 28 being the primary documents, namely invoices and Exs. A. 1 to A. 3 and A. 21 clinchingly establish the value of the goods lost in the transit. The evidence available on the defence side is not worthy of acceptance in preferring to the evidence of the plaintiffs on the value of the goods. Accordingly this issue also goes against the defendant. As a result of the finding on the three issues framed by this Court I am in entire agreement with the learned trial judge who held against the defendant. Accordingly I find no merits in this appeal and it is dismissed with costs.
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