IN THE HIGH COURT OF KERALA
A.S. No. 770 of 1999
Decided On: 14.12.2016
United India Insurance Company Ltd.
Surat Goods Transport Service
Hon’ble Judges/Coram:V. Chitambaresh and Anil K. Narendran, JJ.
Citation: AIR 2017(NOC)908 kerala
1. The impact of the Insurance Act, 1938 is seldom noticed in claims either under the Carriers Act, 1865 [‘the Act’ for short] or the Carriage by Road Act, 2007. The second plaintiff Company entrusted goods (caprolactum) with the defendant carrier for transportation from Udyogamandal in Kerala to Gwalior in Madhya Pradesh, it is alleged that the goods on delivery were found damaged on inspection by the approved surveyor on 25.2.1994 and 1.3.1994 evident by the survey report dated 29.8.1994. The second plaintiff laid a claim on 22.10.1993 and a revised claim on 9.11.1993 with the defendant for the loss of or injury to goods. The goods had been insured with the first plaintiff insurer who satisfied the claim of the second plaintiff to the tune of ` 1,36,021/-. The suit has been filed for compensation by the insurer and insured against the carrier on the strength of the letter of subrogation dated 31.1.1995.
2. The court below has found that the goods were delivered on 7.8.1993 and 23.9.1993 and that the suit filed only on 25.3.1997 is barred by limitation. The court below has opined that the suit ought to have been filed within three years after the loss or injury occurred under Article 10 of the Limitation Act, 1963. It is held that time would run from the date of knowledge of the loss or injury which in the instant case is the date of delivery or the date of inspection at least. The court below has drawn support from Associated Transport Corporation (P) Ltd. v. National Insurance Co. Ltd. (MANU/KE/0096/1989 : 1989 (1) KLT 386). The court below has dismissed the suit on the ground of the bar of limitation alone against which the plaintiffs have come up in appeal.
3. We heard Mr. P. Radhakrishnan, Advocate on behalf of the appellants/plaintiffs and Mr. P.V. Baby, Advocate on behalf of the respondent/defendant.
4. The date of knowledge of the loss or injury to the goods is relevant only to the notice in writing to be issued to the common carrier before the institution of the suit. Such a notice should be issued within six months of the time when the loss or injury first came to the knowledge of the plaintiff under S. 10 of the Act. The period of six months has to be reckoned from the date of knowledge only and not from the date of assessment of damages. The purpose of the notice is to facilitate the carrier to make good the loss occasioned (See Transport Corporation of India v. Veljan Hydrair Ltd. MANU/SC/0919/2007 : (2007) 3 SCC 142). S. 10 of the Act is as follows:-
“10. Notice of loss or injury to be given within six months:– No suit shall be instituted against a common carrier for the loss of, or injury to, goods (including container pallets or similar article of transport used to consolidate goods) entrusted to him for carriage, unless notice in writing of the loss or injury has been given to him before the institution of the suit and within six months of the time when the loss or injury first came to the knowledge of the plaintiff.”
The issue of notice under S. 10 of the Act within six months of the time when the loss or injury first came to the knowledge of the plaintiff should precede the suit. The claim and the revised claim for the loss or injury to the goods were made by the second plaintiff on 22.10.1993 and 9.11.1993 respectively. The same was obviously within the period of six months from the date of delivery of the goods on 7.8.1983 and 23.9.1983 in accordance with S. 10 of the Act.
5. But the period for filing a suit for compensation would run only from the date when the approved surveyor or loss assessor furnishes a report on the loss that has occurred. This is so in respect of a loss which has occurred in India and requiring to be paid or settled in India equal to or exceeding ` 20,000/- in value. No claim of such a nature can be admitted for payment or settled by the insurer unless a report from the approved surveyor or loss assessor is obtained. The mandatory provisions are contained in S. 64UM(2) of the Insurance Act, 1938 which applies even in the case of a claim arising out of the loss or injury of goods under the Act. S. 64UM(2) of the Insurance Act, 1938 is as follows :-
“64UM. Licensing of surveyors and loss assessors:–
(2) No claim in respect of a loss which has occurred in India and requiring to be paid or settled in India equal to or exceeding twenty thousand rupees in value on any policy of insurance, arising or intimated to an insurer at any time after the expiry of a period of one year from the commencement of the Insurance (Amendment) Act, 1968, shall, unless otherwise directed by the Authority, be admitted for payment or settled by the insurer unless he has obtained a report on the loss that has occurred, from a person who holds a licence issued under this section to act as a surveyor or loss assessor (hereafter referred to as “approved surveyor or loss assessor”.
Provided that nothing in this sub-section shall be deemed to take away or abridge the right of the insurer to pay or settle any claim at any amount different from the amount assessed by the approved surveyor or loss assessor.”
A report on the loss that has occurred from a person who holds a licence issued under: Section 64UM(2) of the Insurance Act, 1938 is essential for the claim to be even admitted or settled. The legal injury in the context of the Insurance Act, 1938 when the claim exceeds ` 20,000/- is discernible only from the report.
6. The period of limitation would obviously run only when a report on the loss that has occurred is obtained from an approved surveyor or loss assessor. The plaintiff can of course be non-suited on the ground of limitation if a suit for compensation is not filed within a period of three years therefrom. That does not however mean that a suit for compensation against a carrier for loss or injury of goods cannot be filed in the absence of such a report. S. 64UM(2) of the Insurance Act, 1938 has impact when the plaintiff or one of the plaintiffs is the insurer who sues on the strength of a letter of subrogation. The claim is settled and the insurer steps into the shoes of the insured on the strength of the letter of subrogation issued by the insured. It is only then can the insurer file a suit for compensation for the loss or injury of goods against the carrier as in the case on hand. The court below erred in holding that the period of limitation runs from the date of knowledge of the loss or injury of goods even for the first plaintiff. The decision in Associated Transport Corporation (P) Ltd.’s case (supra) is distinguishable since the claim therein was for a sum less than ` 20,000/-. There was no occasion therefore to consider the applicability of S. 64UM(2) of the Insurance Act, 1938 in the said decision relied on by the court below. The approved surveyor prepared the loss survey report on 29.8.1994 and the suit for compensation was filed on 25.3.1997 well within the period of three years. The period of limitation for filing a suit for compensation against a carrier for loss or injury of goods is three years when the loss or injury occurs. The suit filed by the insurer and the insured against the carrier is well in time and not barred by the law of limitation as has been erroneously held by the court below. The court below has dismissed the suit on that score only without entering into a finding on the other issues therefore necessitating a remand. The impugned judgment and decree of court below are set aside and the suit is remanded to the trial court for de novo consideration on merits on the other issues. The court fee paid on the memorandum of Appeal Suit shall be refunded to the appellants and the parties shall appear in the court below on 5.1.2017 for further evidence if any. The court below shall endeavour to dispose of the suit before the summer recess in the year 2017 taking note of the fact that two decades have rolled on by now.
The Appeal Suit is allowed. No costs.