Case Note & Summary
The case arose from a special leave petition filed by P. Rama Rao, a registered contractor with Indian Oil Corporation for transportation of petroleum products within Andhra Pradesh from Visakhapatnam to Hyderabad. He engaged P. Nirmala, owner of truck No. DHL 2182, and entrusted 12,000 litres of oil for delivery at Hyderabad on July 9, 1982. Due to an accident, there was leakage and only 1,755 litres were delivered, resulting in shortage of 10,245 litres. The petitioner filed a suit for recovery of Rs. 66,212.36 with interest against P. Nirmala (truck owner) and Oriental Fire and General Insurance Company Ltd. (respondent No.4). The trial court decreed the suit and the learned single judge confirmed on appeal. However, the Division Bench of the Andhra Pradesh High Court allowed the appeal and set aside the decree against respondent No.4 (insurer) on the ground that notice under Section 10 of the Carriers Act, 1865 was not issued, and therefore the suit against the insurer would not lie. The petitioner then approached the Supreme Court. The main legal issue was whether notice under Section 10 of the Carriers Act, 1865 is required to be issued to the insurance company within six months from the date of knowledge of loss or injury before instituting a suit against the insurer as the party liable for the common carrier's liability. The petitioner's counsel contended that since the petitioner is not the carrier, the need to issue notice does not arise; and even if required, notice was issued within six months by the Indian Oil Corporation marking a copy to the insurance company, so the suit is within limitation. The Supreme Court rejected this contention. Section 10 of the Act states that no suit shall be instituted against a common carrier for loss or injury to goods unless notice in writing is given to him before 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 court noted that admittedly notice was issued by the petitioner on July 5, 1983, after expiry of six months from the accident on July 9, 1982. The court held that when liability is sought to be fastened on the insurance company as insurer for the liability of the common carrier, notice under Section 10 must be issued to the insurance company within six months from the date of knowledge of the injury or loss. The appellant-petitioner stepped into the shoes of the carrier (P. Nirmala), and the notice issued by the Indian Oil Corporation to the petitioner, common carrier, and insurance company would not be construed as a notice under Section 10. Accordingly, the Supreme Court held that the suit against the insurance company would not lie, though a suit may lie against the common carrier. The special leave petition was dismissed.
Headnote
A) Carriage of Goods - Notice Requirement - Section 10 Carriers Act, 1865 - Section 10 requires written notice of loss or injury to common carrier within six months of knowledge before institution of suit. The petitioner contractor issued notice on July 5, 1983, after expiry of six months from July 9, 1982 accident, making notice invalid; suit against insurer fails as insurer is sought to be liable only as insurer of common carrier (Paras 1-3). Held that notice after six months cannot validate suit. B) Insurance Law - Liability of Insurer - Section 10 Carriers Act, 1865 - When liability is sought to be fastened on insurance company as insurer for common carrier's liability, written notice under Section 10 must be issued to insurer within six months from date of knowledge of loss. No such notice was given within six months; only notice on July 5, 1983 after expiry. Held that suit against insurer would not lie though suit may lie against common carrier (Paras 1-3). C) Legal Standing - Stepping into Shoes - Section 10 Carriers Act, 1865 - The appellant-petitioner, a registered contractor with Indian Oil Corporation, engaged truck owner to transport oil and stepped into shoes of carrier; notice issued by Indian Oil Corporation to contractor, common carrier, and insurance company does not constitute notice under Section 10. Held that notice must be issued by the person who suffers loss or injury within six months (Paras 1-3).
Issue of Consideration
Whether notice under Section 10 of the Carriers Act, 1865 is required to be issued to the insurance company within six months from the date of knowledge of loss or injury before instituting a suit against the insurer as the party liable for the common carrier's liability
Final Decision
Special leave petition dismissed. Supreme Court held that suit against insurance company would not lie due to failure to issue valid notice under Section 10 of Carriers Act, 1865 within six months; suit may still lie against common carrier.
Law Points
- Section 10 of Carriers Act
- 1865 requires written notice to common carrier within six months of knowledge of loss or injury before institution of suit
- when liability is sought to be fastened on insurance company as insurer of common carrier notice must be issued to insurer within six months
- notice issued after expiry of six months invalid
- notice by third party does not satisfy Section 10
- contractor stepping into shoes of carrier must issue notice himself
