Supreme Court

Essemm Logistics Vs. Darcl Logistics Limited and Ors.

MANU/SC/0503/2023

01.05.2023

Civil

Section 16 of the Carriage by Road Act, 2007 applicable only in respect of suit or legal proceeding instituted against common carrier for any loss of, or damage to, the consignment

The Appellant (ESSEMM Logistics), who was the first Defendant in the suit, has preferred this appeal against the rejection of its counter-claim in exercise of power available Under Order VII Rule 11 of the Code of Civil Procedure, 1908 ("CPC") by the Court of first instance which order has been upheld by the High Court.

It is well recognized that in view of Order VIII Rule 6-A (4) of CPC, a counter-claim is a virtually a plaint and an independent suit. It is also a settled proposition of law that, a plaint which falls within the teeth of the conditions laid down under Rule 11 of Order VII of CPC is liable to be rejected at the threshold for which the plaint allegations alone are required to be considered and nothing else.

A plain reading of Section 16 of the Carriage by Road Act, 2007 (new Act) reveals that, it 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. 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 of CPC as barred by Section 16 of the new Act. Accordingly, the impugned judgment and orders are set aside. Appeal allowed.

Tags : Counter-claim Rejection Legality

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