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Tuesday, June 3, 2014

Whether a Suit against the Freight Broker is maintainable ? – Road Carriage

On 11th Nov 2011, a judgment was pronounced at the Madurai Bench of Madras High Court which has learning for Insurer, cargo owners, transporters and in short all those connected with the transport industry.  It was an appeal filed u/s 100 of Code of Civil Procedure against the Judgment and Decree of the Learned Principal District Judge,  Tuticorin confirming the Judgment and Decree by the Sub-Court.

The appellant was a manufacturer of coconut oil who had sent 30 tins of coconut oil of their own brand; each tin comprised of 16 kilograms of branded coconut oil and were consigned from Tuticorin to Thirumangalam, in Madurai As it happens to the unfortunate, the goods were  not delivered at destination – the sale depot in Thirumangalam.   The owner of the goods issued a legal notice seeking delivery or payment of the value of the goods with interest.  The consignor subsequently filed a suit seeking a relief for the costs.

As it happens, many times, the carriage was arranged by a broker and the suit was made against the broker.  In the counter, the respondents filed that they had arranged for lorry MDU 7629 belonging to one Kamatchi Pillai and received a brokerage commission.  The lorry was reportedly involved in an accident between Kovilpatti and Nalli – the facts of which were informed to the appellant also.  Reportedly the consignor visited  came to the accident spot, inspected the damaged oil.  The coconut oil was filled up in different tins brought by the plaintiff – it was contended that even after due  notice of arrival, delivery was never taken. 

The Respondent [the broker] averred that the carrying vehicle was involved in an accident and that the respondent was not responsible and hence the suit was sought to be dismissed for not impleading the owner of the lorry as non-joinder of necessary and proper party.

The trial Court, on an appreciation of oral and documentary evidence on record, came to a clear conclusion that the Respondent/Defendant was only a lorry broker with whom, the goods were not entrusted and further, the owner of the lorry was not joined as a party to the suit proceeding and resultantly, dismissed the suit with costs.
Aggrieved by this order, the owner of the goods filed an appeal before the First Appellate Court viz., the Learned Principal District Judge, Tuticorin.   The First Appellate Court, viz., Principal District Judge, Tuticorin, also concluded that the  Defendant is only a 'broker' and he has no connection with the goods  loaded in the lorry etc., and dismissed the appeal with costs, thereby confirmed the Judgment and Decree of the trial Court.  Being dissatisfied with the Judgment and Decree of the First Appellate Court in Tuticorin, there was another appeal.

Before  the High court the oil manufacturer averred that both the lower courts have erred in  adverting to the admission of D.W.1 in the reply notice and contended that the Appellant / Plaintiff entrusted the goods to  the Respondent/Defendant for the purpose of transport and delivery and therefore, he alone is squarely responsible for the loss in issue.

It is settled law that the liability of a common carrier is that of an insurer.  It  therefore, follows that notwithstanding the fact that there is no negligence on the part of the  common carrier he is liable to compensate the owner of the goods, for the loss of the goods that occurred during transit thereof by the lorry belonging to the carrier, in the considered opinion of this Court.  The Common carrier is responsible for safety of the goods except losses caused by 'Act of God' or 'King's Enemies'.  The absolute liability of the carrier  is  however subject to exceptions, viz:-   Any special contract that the carrier may choose to enter with the consumer and  the   'Act of God'.

Petitioner’s witness deposed that he signed and has also seen the signature of the lorry driver and submitted records establishing delivery of goods to the respondents.   The respondents continued their submission that they were only lorry brokers and not carriers / owner of the vehicle and even in the absnce of a privity of contract between the owner of lorry and owner of the goods, the owner of the lorry should be made liable in law for loss / damage and the non-impleading of the owner should go against the plaintiff.

The Hon’ble High Court held that upon going through the judgments of Trial court and First Appellate Court, the suit was not filed against the owner of the lorry but instead against the broker.  The lower courts had held that the suit is not maintainable.  The High Court felt that in their considered opinion that it does not warrant any interference at this distance of time, for the reason that the judgments of lower Courts  do not suffer from any material irregularity or patent illegality.

In the result, the Second Appeal was dismissed, leaving the parties to bear their own costs.  Resultantly, the Judgment and Decree passed by the First Appellate Court viz., the Learned District Principal Judge, Tuticorin and the Judgment and Decree passed by the Learned Sub-Judge, Tuticorin are confirmed by  the High Court,  for the reasons assigned in this appeal.

The learning is simple – Suit has to be filed against the Carrier / owner of the lorry and not merely against the freight broker. The following facts were held back :
1)    the cause of action – the impugned transit of coconut oil took place on 18/12/1979 from Tuticorin to Thirumangalam
2)    the value of the consignment was Rs.8000/-
3)    the lorry freight was Rs.22.50/-
4)    the brokerage commission was Rs.1.80/-
5)    the date of accident was 18/12/1979
6)    the matter was decreed in  Aug 1992
7)    the first appeal was filed at Principal Dist Judge, Tuticorin in
8)   the Judgment of the Appellate Court was on 31.3.2004.
9)   the second appeal was preferred before the High Court in 2006
10)                       the value of the consignment was Rs.8000/-
11)                       the verdict of the High Court was on Nov 2011.

Now you may wish to read the post once again from the start….

With regards – S. Sampathkumar.

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