Section 16 Carriage By Road Act Applicable To Suit/ Legal proceedings In Connection With Loss/Damage To Consignment Alone : Supreme Court

The Supreme Court observed that Section 16 of Carriage by Road Act, 2007, is applicable only where the claim is for any loss of, or damage to, the consignment and not in respect of any other claim of loss or damage.

The provision of Section 16 of the new Act does not come into play vis-à-vis the condition of giving a notice in respect of claims for damages for the loss of reputation, business opportunity etc. as such claims are not in connection with the damage or loss to the consignment, the bench of Justices V. Ramasubramanian and Pankaj Mithal observed.

In this case, ESSEMM Logistics, who was the first defendant in the suit, has preferred this appeal against the rejection of its counter-claim. The rejection was on the ground that the counter claim was preferred without issuing the mandatory notice as contemplated mistakenly by Section 10 of the Carriers Act, 1865.

The court, in this regard, noted that Section 16 of the new Act (2007 Act ) is applicable only in respect of institution of a suit or legal proceeding against a common carrier for any loss of, or damage to, the consignment.

"The use of the word “Consignment” in the said provision is very material. It denotes that the suit and legal proceedings in connection with the loss or damage to the consignment alone are covered by it for which purpose, a notice is mandatory. The said provision has no application in reference to loss of any other kind or the suit or legal proceedings instituted for recovery of damages in respect of loss of different nature.  A reading of the counter-claim clearly reveals that the damages claimed are in respect of loss set up by the appellant-first defendant in connection with the loss of business opportunity, loss of reputation and loss on account of idling of men, machine and overheads. It had not instituted any suit or legal proceedings such as counter-claim for any loss or damage to any consignment. The courts below have clearly lost sight of the above aspect of the matter and without making any distinction between the various kinds of claims otherwise arising other than claims for loss or damage to the consignment, illegally directed to reject the counter-claim.

The provision of Section 16 of the new Act does not come into play vis-à-vis the condition of giving a notice in respect of claims for damages for the loss of reputation, business opportunity etc. as such claims are not in connection with the damage or loss to the consignment. In view of the aforesaid facts and circumstances, we are of the opinion that no notice under Section 16 of the new Act was necessary for instituting any suit or legal proceedings much less counter-claim against the common carrier for recovering the loss other than the loss of or damage to the consignment and, therefore, the courts below manifestly erred in rejecting the counter-claim under Order VII Rule 11 CPC as barred by Section 16 of the new Act.", the court said while allowing the appeal,

Case details

ESSEMM Logistics vs DARCL Logistics Limited | 2023 LiveLaw (SC) 378 | SLP(C) 24340 of 2019 | 1 May 2023 | Justices V. Ramasubramanian and Pankaj Mithal

Headnotes

Carriage by Road Act, 2007 ; Section 16 - Suit and legal proceedings in connection with the loss or damage to the consignment alone are covered by Section 16 for which purpose, a notice is mandatory. The said provision has no application in reference to loss of any other kind or the suit or legal proceedings instituted for recovery of damages in respect of loss of different nature. (Para 17-19)

Code of Civil Procedure, 1908 ; Order VIII Rule 6–A (4) - A counter-claim is a virtually a plaint and an independent suit. (Para 12)

Code of Civil Procedure, 1908 ; Order VII Rule 11 - A plaint which falls within the teeth of the conditions laid down under Rule 11 of Order VII CPC is liable to be rejected at the threshold for which the plaint allegations alone are required to be considered and nothing else. (Para 12)

Click here to Read/Download Judgment