Carriers Act, Negligence, Subrogation, Insurable Interest, Second Appeal, Madras High Court, Insurance Claim, Goods Damage, Lorry Accident, Trial Court
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The Oriental Insurance Company Limited Vs. K.Srinivasan

  Madras High Court S.A.No.1687 of 2003
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Case Background

As per case facts, safety matches were dispatched and insured. The goods were destroyed in a road accident involving the appellant's lorry and another vehicle. The insurance company (plaintiff) settled ...

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Document Text Version

2026:MHC:1818S.A.No.1687 of 2003

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

Date of reserved : 13/03/2026

Date of Pronounced : 01/06/2026

CORAM

THE HON'BLE MS.JUSTICE R.POORNIMA

S.A.No.1687 of 2003

and

C.M.P.No.15413 of 2003

K.Srinivasan : Appellant/2

nd

Respondent/

2

nd

Defendant

Vs.

1.The Oriental Insurance Company Limited,

Divisional Office,

6-A, North Cotton Road,

Tuticorin-628 001.

Rep. By its Divisional Manager.

: 1

st

Respondent/Appellant/Plaintiff

2.M/s.L.P.L. Lorry Agencies,

No.5,Main Road, Sattur

through its Branch Office,

947, ANAG Building,

Main Road, Kovilpatti.

3.M/s/Jayaprakash Match Works

through its Partner,

M.Chandrasekar,

Kovilpatti.

4.L.P.Lakshmanan (Died) : Respondents 2 to 4/

Respondents 1, 3 and 4

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S.A.No.1687 of 2003

5.L.Karuthapandiyan

6.L.Arumugam

7.L.Ravichandran

8.L.Vigneswaran : Respondents 5 to 8

(R5 to R8 are brought on record

as Lrs of the deceased 4

th

respondent,

vide Court order, dated 06/04/2017

made in CMP(MD)No.12103 to

12105 of 2016 in SA No.1687 of 2003)

PRAYER : Second Appeal filed under Section 100 C.P.C., against the

judgment and decree, dated 12/12/2001 made in AS No.103 of 2000 on

the file of the Principal District Judge, Tuticorin, reversing the

judgement and decree dated 28/04/2000 made in OS No.11/1998 on the

file of the Sub Court, Kovilpatti.

For Appellant: Mr.M.P.Senthil

For 1

st

Respondent : Mr.C.Jawahar Ravindran

For R2 and R3 : No appearance

For 4

th

Respondent : Died (Steps Taken)

For R5, R6 and R8 : Mr.Michael Bharathi

For 7

th

Respondent : Dispensed with

(vide Court order, dated 31/01/2024)

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S.A.No.1687 of 2003

JUDGMENT

This second appeal is filed against the judgment and decree,

dated 12/12/2001 made in AS No.103 of 2000 on the file of the Principal

District Judge, Tuticorin, reversing the judgement and decree dated

28/04/2000 made in OS No.11/1998 on the file of the Sub Court,

Kovilpatti.

2.The appellant is the second defendant in the suit.

3. The case of the plaintiff in brief is that, on 07/03/1985,

750 bundles of safety matches value of Rs.78813-75/- were despatched

by the third defendant to Jodhpur vide Invoice No. B-127, dated

07/03/1985 to M/s.Minesh and Co., Jodhpur (Rajasthan). The goods

were despatched in a lorry bearing registration No.TDL-6465 belonging

to the 2nd defendant/appellant, vide consignment Note No.2251, dated

07/03/1985. Insurance was effected by the third defendant with the

plaintiff/Insurance Company, vide Policy No.41322/6/153/M/162/OPL,

dated 31/03/1984.

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S.A.No.1687 of 2003

4. On 12/03/1985, the lorry of the 2nd defendant was met

with an accident near Polapur on Bombay-Konkan-Goa Highways in

Raigad District (Maharashtra) colliding with the another vehicle bearing

registration No.MWT-9293. Due to the collision, the Lorry No.TDL

6465 with match bundles engulfed by fire resulting in total loss of the

goods, for which, FIR was registered by the Poladpur police. The first

defendant who had carried the safety transportation of the goods on

behalf himself and on behalf of the 2

nd

defendant issued a letter to the

third defendant's Insurance Company informing about the damages to the

consignment. Surveyor was appointed and the Surveyor also visited the

place and submitted a Survey report on 19/03/1985 along with the

photographs about the accident. On 27/03/1985, the third defendant

issued a registered letter with the Acknowledgement Card to the

defendants 1 and 2, on 28/03/1985 and 30/03/1985 making out a claim

for damages.

5. Since the defendants 1 and 2 did not choose to honour the

claim amount, on 17/04/1985 the third defendant submitted his claim bill

for Rs.79,914-75/- with the plaintiff Insurance Company. The plaintiff

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S.A.No.1687 of 2003

honoured the claim and settled the claim of Rs.79,914-75/- after

obtaining letter of Authority dated 13/06/1985 and letter of subrogation

on the same day. The plaintiff, on 07/10/1985 authorised M/s.Bhaichand

Amoluk Co., Insurance Consultants and brokers to recover the amount of

Rs.79,914-75/- from the carriers who in turn wrote a letter, dated

28/10/1985 to the defendants 1 and 2 calling upon them to pay the

amount. On 23/11/1985, the second defendant replied through their

counsel denying the claim. Even subsequent letter, dated 04/12/1985

issued by the plaintiff they did not invoke any response or paid cash.

Hence, the plaintiff filed the present suit for recovery of money.

6.The first defendant disputed the liability. It is the

contention of the first defendant is that there is no privity of contract

between them with the third defendant. The rule of subrogation is

applicable only between the plaintiff and the third defendant. The

consignee M/ s Minesh and co., has purchased the entire goods. The

third defendant has no insurable interest in the goods. If there is a loss, it

is the consignee M/s.Minesh and Co., who has to suffer. The suit is bad

for non-rejoinder of necessary party. The third defendant cannot

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S.A.No.1687 of 2003

authorise the present plaintiff, who is not a Power of Attorney

M/s.Minesh and Co., The third defendant after receipt of the entire sale

consideration in respect of 750 bundles of safety matches passed to the

title to M/s.Minesh and Co. If there is a loss, it is for the consignee

M/s.Minesh and Co., who has to suffer and has to claim for the loss.

7. They further contended that this defendant is not a lorry

movement or Coordinator, but is only a transport broker. He has no

control over any vehicle. He only accommodates lorry for transportation

of the goods. The job of this defendant will be over on bringing the

consignor and the lorry driver to contract. He was paid only for a meager

commission. No contract of carriage was entered between this defendant

and the third defendant. No goods were entrusted to him. He only

arranged the second defendant/appellant to negotiate the freight. The

second defendant/appellant is also a Transport Broker. This defendant

issued a lorry receipt on behalf of the second defendant. The contract of

carriage was entered into between the third defendant and the driver of

the 2

nd

defendant directly. This defendant did not aware about the

accident. If the accident is arising due to the negligence of the driver of

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S.A.No.1687 of 2003

the second defendant, this defendant cannot be held responsible for the

same. The letter of subrogation stated in the plaint even if it is true, it is

not held valid in law. This defendant is not liable to pay any cost to the

plaintiff and the suit is liable to be dismissed.

8.The second defendant/appellant disputed the claim of the

plaintiff. The second defendant states that as Carrier he had taken all

precautions and care in respect of the goods during transit. But the

accident was occurred unexpectedly due to reasons beyond the control

of the carrier and the driver who drove the vehicle. The certificate was

given without prejudice and was given at the request of the party to

record their protect and mark open delivery. The certificate and the loss

alleged in the plaint cannot in any way confer any benefit on the part of

the plaintiff by way of proof regarding the alleged damage. There has

been no reason for claiming any damages by the third defendant.

9. The trial Court, after receipt of the written statement

framed the following issues:-

1.Whether the third defendant has got title over the

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S.A.No.1687 of 2003

goods at the time of the accident?

2.Whether the 1st defendant acted as a lorry arranger?

3.To what relief, the plaintiff is entitled to?

10.The following additional issues were framed by the trial

Court on 27-04-2000:-

1.Whether the suit as framed is maintainable in law?

2.Whether the claim amount paid by the plaintiff on the

basis of the insurance policy to the third defendant is proved

by the plaintiff?

3.Whether the suit is bad for mis-joinder and non-

joinder of parties?

4.Whether the plaintiff is entitled to the amount claimed

in the plaint?

11. On the side of the plaintiff, PW1 and PW2 were

examined and documents Exs.A1 to A11 were marked. On the side of the

defendants, no oral and documentary evidence was adduced.

12. The suit was dismissed by the trial Court by its

judgement and decree on 28/04/2000. Aggrieved over the same, an

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S.A.No.1687 of 2003

appeal was filed by the plaintiff before the Principal District Judge

Tuticorin, vide AS No.103 of 2000. The first appellate court allowed the

appeal, by reversing the judgement of the trial court. Against which, the

present appeal is filed by the appellant/2nd defendant.

13. At the time of admission of the second appeal, the

following substantial questions of law were framed:-

(a)Whether the findings of the lower appellate

court are vitiated by its failure to consider the absence

of any documentary evidence regarding the claim on

the basis of subrogation except Ex.A9 which is not

binding on the appellant and the admissions of PW1's

and 2?

(b)Whether the lower appellate court is right in

granting a decree as claimed in the absence of any

evidence regarding the alleged loss suffered? And

(c)Whether the lower appellate court is right in

granting interest at 18% per annum from the date of

plaint overlooking the provisions under Section 34 of

the Civil Procedure Code?

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S.A.No.1687 of 2003

14.The following additional substantial questions of law are

formulated by this Court for consideration of this Court:-

(1)Whether the learned First Appellate Court is right

in law in fixing negligence on the part of the appellant/2nd

defendant without adverting to the very document filed by

the plaintiff himself viz., the surveyor report marked as

Ex.A8?

(2)The learned First Appellant Court has committed

a serious error in law in reversing the well-considered

judgment and decree of the trial court, thereby fixing

liability upon the appellant, without adverting to the scope

and purpose of Section 8 of the Carriers Act?

(3)Whether the learned First Appellate Court is right

in law in decreeing the suit merely on the basis of Ex.A9,

the letter of subrogation given by the 3rd respondent,

completely overlooking the fact that the 1st

respondent/plaintiff had failed to produce the contract of

carriage as well as the original insurance policy entered

by the 3rd respondent?

15. The learned counsel appearing for the appellant/2nd

defendant during his argument contended that the following documents

have been omitted to be marked namely (i)Doc.3-Panchanama issued

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S.A.No.1687 of 2003

under Poladpur Police Station; (ii)Doc.4- Crime Registration Certificate

(in Marathi); (iii)Doc.5-FIR Copy (in Marathi) issued at Poladpur Police

Station; (iv)Doc.6-Statement issued at Mahada Municipality (Marathi);

(v)Doc.7-Receipt issued at Mahada Municipality (Marathi); (iv)Doc.10-

Photographs 8 nos; (vii)Doc.17-07.10.1985, Appointment letter issued to

recovery Agent M/s.BhaichandAmoluk& Co., by the plaintiff; (vii)Doc.

18-28/10/1985, Letter issued to Recovery Agent of the Plaintiff to the

defendants 1 and 2; (ix)Doc.20-04/12/1985, Letter issued by the

Recovery Agent of the Plaintiff to the 1st defendant.

16. Ex.A3 is the letter, dated 27/03/1985 issued by the 3rd

defendant to the defendants 1 and 2 intimating about the accident and

also demanded to compensate the damages I.e., sum of Rs.78,813.75.

17. He further contended that per the very document filed

along with the plaint i.e., Doc. Nos.17 and 18, which were not marked

for the reasons best known to the plaintiff), one M/s.Baichand Amoluk &

Co., was appointed as a recovery agent for the plaintiff. The said

M/s.Baichan Amoluk & Co., has sent a letter, dated 28/10/1985 to the

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S.A.No.1687 of 2003

defendants 1 and 2 claiming damages. For the said letter, the appellant

through his counsel has sent a reply dated 23/11/1985 (Ex.A6). The said

reply dated 23/11/1985 is very crucial. At the earliest point, the appellant

has clearly denied and disputed about the negligence. The crucial portion

of the reply dated 23/11/1985 is extracted for easy reference:-

“1.....Unfortunately the bundles could not be

delivered as my client's lorry TDL 6465 was dashed

against by lorry MWT 9293 and the accident

happened due to the rash and negligent driving by the

driver of lorry MWT 9293. Inspite of the best efforts to

my client's driver nothing could be salvaged as my

client's lorry was reduced to ashes.

2.The driver of the lorry MWT 9293 has been

prosecuted for his rash and negligent driving. As such

my client is not at all bound to pay any amount

towards the alleged loss of the bundles. A Xerox copy

of the proceedings of the police is herewith sent.

3.........Your client Sri Raja Rajeswari Wax

Matches has to book to the owner of lorry MWT 9293

and the Insurance Company only. My client is not

bound to make any payment to your client.”

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S.A.No.1687 of 2003

18. The learned counsel further contended that in the written

statement filed by both the defendants 1 and 2, they have specifically

disputed about the negligence. :- “In Para 4........ Page 3 of the written

statement, it was specifically stated as follows :

“The fact of the case and circumstances cannot in

anyway afford any right on the part of the plaintiff to claim

damages and foist the liability against this defendant as

accident was due to the criminal act of the driver who

dashed against the company of this defendant, the same

cannot be the reason for imposing the liability on the

defendant.”

19. Immediately after the accident, even as per the plea in

the plaint, the Insurance Company has appointed a surveyor (Para 7 of

the plaint) which reads as follows:-

“Para 7:- On 18.03.1985, the 1st defendant issued a

letter to the 3rd defendant informing the accident and

damages to the consignment. A surveyor was appointed

and he gave his survey report dated 19.03.1985 along with

the photographs depicting the accident.”

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S.A.No.1687 of 2003

20. The said surveyor's report dated 19/03/1985 is marked

as Ex.A8. The very own document filed by the plaintiff would clinch the

issue relating to the manner in which the accident had happened, as well

as whether the driver of the 2nd defendant/appellant was cause for the

accident. Besides whether the driver of the 2nd defendant has drove the

vehicle in a rash and negligent manner.

21. The report filed by the Surveyor, Ex.A8 dated

19/03/1985 would lead to an irresistible conclusion that the entire

accident has caused only due to the rash and negligent driver of the other

vehicle bearing No.MWT 9293.

22. As such the above contents of Ex.A8, the Surveyor's

report, itself would suffice to hold that the entire accident has happened

only due to the rash and negligent driving of the other vehicle bearing

No.MWT 9293. The corollary is that the driver of the appellant's vehicle

bearing No.TDL 6465 is not the cause for the accident and there is no

negligence on his part.

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S.A.No.1687 of 2003

23. The learned counsel, therefore, contended that the report

under Ex.A6 as well as the specific evidence of PW1 both in the chief

examination as well as in the cross examination would only lead to an

irresistible conclusion that the driver of the appellant's vehicle bearing

Registration No.TDL 6465 is not the cause for accident. On the other

hand, it is only the other driver of vehicle bearing Registration No.MWT

9293 is the cause for accident. As such, the corollary is that there is

absolutely no negligence in taking care of the goods, much less any rash

and negligent driving on the part of the appellant's vehicle.

24. He referred the provisions of the Carriers Act, 1865 and

stated that it decides the liability to pay compensation. He further relied

upon Section 8 of the Act, which is relevant to decide the issue.

25. Section 8 of the Carriers Act reads as follows:-

“Section-8: Common Carrier liability for loss or

damage caused by neglect or fraud of himself of his

agent:- Notwithstanding anything herein before contained,

every common carrier shall be liable to the owner for loss

of or damage to any [property (including container, pallet

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S.A.No.1687 of 2003

or similar article of transport used to consolidate goods)

delivered] to such carrier to be carried where such loss or

damage shall have arisen for the [***] Criminal Act of the

carrier or any of his agents or servants and [shall also be

liable to the owner for loss or damage to any such property

other than property to which the provisions of section 3

apply and in respect of which the declaration required by

that section has not been made, where such loss or damage

has arisen from the negligence of the carrier or any of his

agents or servants].”

26. The learned counsel for appellant, therefore, concluded

that reading of the above Section, it would reflect that every common

carrier is not straightaway liable to the owner for the loss or damage of

goods irrespective of the cause of accident. The said provision clearly

states that the carrier is liable only when via such loss or damage have

arisen from the criminal act of the carrier or any of its agents or servants.

27. On the other hand, the learned counsel for the first

respondent/plaintiff argued that it is the primary contention of the

appellant that the plaintiff is not entitled to maintain the suit on the basis

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S.A.No.1687 of 2003

of letter of subrogation (Ex.A9) and that there is no privity of contract

between the appellant and the plaintiff, however, in the final argument

before this Court, the appellant has not pressed the main ground.

Regarding the maintainability of the suit, the First Appellate Court

thoroughly examined the issue in para 21-22 of the judgment, discussing

several judgments of the Apex Court and held that the Insurance

Company's suit is maintainable. In the letter of subrogation and special

power of attorney, the insured clearly assigns all actionable rights to the

Insurance Company. This is not merely subrogation but also constitutes a

statutory assignment that allows the Insurer to sue in its own name. In

support of his contention, he relied upon the judgment of this court in

M/s.Ravichandran Transports, Mettur Dam Vs. United India

Insurance Company Limited, reported in 2000(1) CTC 748.

28. He further argued that it is the contention of the

appellant that the accident was not due to its lorry driver, but due to

another vehicle, this is purely a factual argument and the appellant failed

to plead or provide evidence to substantiate the contention in the trial

Court and no oral or documentary evidence was produced and that a

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S.A.No.1687 of 2003

second appeal cannot be used to rise new factual issue. In support of his

contention, he relied upon the following judgments namely (i)Kshitish

Chandra Purkait Vs. Santhosh Kumar Purkait, reported in 1997(5)

SCC 438; (ii)Kondiba Daguda Kadem Vs. Savitribai Sopam Gaja,

reported in 1999(3) SCC 722; (iii)Municipal Committee, Hosiarpur Vs.

Panjab SEB, reported in 2011(1) LW 525; and (iv)Umerkhan Vs.

Bismillah, reported in 2011(9)SCC 684.

29. It is further contended that Section 9 of the Carriers Act

imposes strict liability on carriers for loss, damage or non-delivery of

goods, that the burden of proving the absence of negligence lies on the

carrier, but not the plaintiff. In the present case the appellant has neither

produce the evidence nor pleaded that it was not negligent. Therefore,

the liability for the loss rests only on the appellant.

30. He also contend that the appellant contents that the

goods were already sold to the consignee (M/s.Manish& Co., Jodhpur)

and therefore, the 3rd defendant/consignor is not entitled to claim

damages. But it is not legally correct because at the time of the accident,

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S.A.No.1687 of 2003

the goods had not reached the consignee and the consideration was not

received. In this aspect the First Appellate Court correctly held that the

third defendant retained title to the goods at the time of the accident.

Ex.A1 is the invoice of the 3rd defendant and Ex.A2 is the lorry invoice

of the 1st defendant clearly establish that the 3rd defendant entrusted the

goods to the appellant for transport. The appellant admitted in the written

statement that he transported the goods which were damaged in the

accident. Therefore, the first appellate Court has given correct findings

and there is no merit in the second appeal and prayed for dismissing the

second appeal.

31. Heard the learned counsel on either side and perused the

materials available on record.

32. It reveals from the records that the loss of goods was

occurred due to a road accident. The plaintiff who is the insurance

company of third respondent claimed damages after receipt of letter of

subrogation. However the third respondent failed to produce any

documents to show that the accident occurred only due to the negligent

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S.A.No.1687 of 2003

act of the driver of the second defendant.

33. It is noted that the plaintiff/insurance company alone

engaged a surveyor to inspect the place of occurrence and to file a report.

The surveyor report, which was marked as Ex.A8, in which it was stated

as follows:

“In this accident which is consequently converted in

fire truck No.TDL-6465 and loaded goods (1992 bundles of

safety matches) are totally burnt down. The truck

No.MWT-9293, which has dashed on R/h side of truck

No.TDL-6465 was not available on the spot of accident,

when we had been to the spot of accident. However we

understand from the police that the truck driver of truck

no.MWT-9293, took his truck away from truck

No.TDL-6465 after accident and hence truck

No.MWT-9293 saved from the fire. The truck

No.MWT-9293 has sustained other damages in this

accident.

POLICE ACTION:

Poladur police station has registered the accident. Their

accident case No. is 12/85. Police from Poladpur police

station attended the spot of accident on 12/03/85 and

carried out the panchanama. Xerox copy of police

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S.A.No.1687 of 2003

panchanama collected from the representative of consignor

is attached with this report. Police from Poladpur police

station has investigated the crime, and kept the charges on

the driver of the vehicle No.MWT-9293, Shri

SarjeraoGanpatiPatil, under I.P.C. 279 & 427 and MVC

116, and submitted the charge sheet in Mahad Court. The

crime registration No. of Poladpur police station is 14/85.

34. The Surveyor’s Report and the contents of the FIR

clearly reveal that the accident did not occur due to any negligent act on

the part of the 2

nd

defendant/appellant, as alleged by the Insurance

Company. On the contrary, the materials on record establish that the

accident occurred when a truck bearing Registration No. MWT-9293,

proceeding from the opposite direction, dashed against the right side of

the vehicle driven by the 2nd defendant while crossing. There is

absolutely no evidence to prove that the accident occurred solely due to

the negligence of the appellant. Therefore, the appellant cannot be

fastened with liability for the loss and is not liable to indemnify the

Insurance Company.

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S.A.No.1687 of 2003

35. In support of the above contention, the learned counsel

for the appellant relied upon the judgment reported in 2024 (2) CTC 452,

(particularly paragraphs 20 and 21).

36. With regard to the title over the damaged goods, the

appellant contended that the third respondent had no subsisting title or

insurable interest in the goods at the time of the accident, since the entire

stock had already been sold to M/s. Minesh& Co., Jodhpur. The third

respondent failed to produce any agreement or other document to

establish that he had retained responsibility for safe delivery of the goods

after the sale, though the Insurance Company contended that the carrier

remained liable as the goods had not been delivered to the consignee.

37. The learned counsel for the appellant relied upon the

decisions reported in L.W. 284 (paragraphs 12 to 14) and 2020 (1) CTC

646 (paragraphs 30 to 32).

38. Ex.A1, the invoice dated 07.03.1985 issued by the third

respondent in favour of the purchaser, discloses that the goods were

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S.A.No.1687 of 2003

supplied on the account and risk of M/s. Minesh & Co. In the absence of

any document showing that the seller retained responsibility for the safe

delivery of the goods, Ex.A1 clearly establishes that the risk in the goods

had passed to the purchaser from the moment the goods were entrusted to

the carrier for transportation. Consequently, any loss sustained during

transit was the loss of the purchaser and not that of the third respondent.

39. Admittedly, the purchaser, who alone had the subsisting

interest in the goods at the relevant point of time, was not impleaded as a

party to the suit. Therefore, the suit suffers from non-joinder of a

necessary party. Further, in view of Ex.A1, the third respondent had no

insurable interest in the goods at the time of the loss and, consequently,

the letter of subrogation executed in favour of the Insurance Company is

unenforceable in law.

40. The Trial Court, upon a proper appreciation of the oral

and documentary evidence, rightly held that the plaintiff was not entitled

to recover any amount from the defendants and dismissed the suit on the

ground of mis-joinder and non-joinder of necessary parties.

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S.A.No.1687 of 2003

41. This Court finds no perversity, illegality or infirmity in

the findings of the Trial Court. However, the First Appellate Court failed

to properly consider the factual and legal aspects involved in the matter

and confined its discussion mainly to the question of subrogation,

ultimately fastening liability upon the appellant. Such an approach is

unsustainable. Accordingly, the findings and decree of the First

Appellate Court are liable to be set aside and the judgment of the Trial

Court deserves to be restored.

42. In the result, this second appeal is allowed, the

judgment and decree dated 12/12/2001 passed in AS No.103 of 2000 on

the file of the Principal District Judge, Tuticorin, are set aside and the

judgment and decree dated 28/04/2000 passed in OS No.11/1998 on the

file of the Subordinate Court, Kovilpatti, are restored. No costs.

Consequently, connected miscellaneous petition is closed.

01.06.2026

NCC :Yes / No

Index :Yes / No

er

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S.A.No.1687 of 2003

To

1.The Principal District Judge,

Tuticorin.

2.The Subordinate Judge,

Kovilpatti.

3.The Section Officer,

VR Section,

Madurai Bench of Madras High Court,

Madurai.

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R.POORNIMA, J.

er

S.ANo.1687 of 2003

01.06.2026

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