Oriental Insurance Co Ltd vs M/S Pal Road Carriers And Anr

IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH

219 RSA-5174-2014
Date of Decision.:12.11.2026
Oriental Insurance Co. Ltd. …..Appellant
Vs.
M/s Pal Road Carriers and Another .….Respondents
CORAM:- HON'BLE MR. JUSTICE DEEPAK GUPTA
Present:- Mr. Ashwani Talwar, Senior Advocate with
Ms. Riya Kaushal, Advocate and
Ms. Vaishnavi Sikka, Advocate
for the appellant.
Ms. Leena Batta, Advocate for
Mr. Ajay Ghangas, Advocate
for the respondents.

DEEPAK GUPTA, J. (ORAL)
The plaintiff–Oriental Insurance Company Limited has filed the
present regular second appeal assailing the judgment & decree dated
05.07.2014 passed by learned Additional District Judge, Panipat, whereby
its first appeal against the judgment & decree dated 04.05.2012 passed by
learned Civil Judge (Senior Division), Panipat, dismissing its suit for recovery
of ₹19,10,105/- along with interest, has been dismissed.
2. Briefly, the plaintiff instituted the suit on the averments that
M/s Kapoor Industries, Samalkha, District Panipat, had obtained a Marine
Cargo Inland Transit Insurance Policy from it for the period 01.04.2004 to
31.03.2005. The insured was stated to have received an order for supply of
cotton towels from M/s Sheriden Pty Limited, Australia. For transportation
of the consignment, services of the defendants were allegedly engaged.
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RSA-5174-2014
According to the plaintiff, an empty container bearing No.TTNU9103224
was brought to the factory premises of the insured on 22.12.2004 through
truck No.HR-38B-4445. After loading the consignment, the container was
sealed by the Central Excise authorities and transported to Inland
Container Depot, Tughlakabad, New Delhi, from where it was forwarded to
Mumbai for shipment to Australia.
3. It was further pleaded that upon arrival of the consignment in
Australia, the consignee reported through an e-mail dated 02.02.2005 that
bags containing stones had been found in place of cotton towels. Criminal
cases were registered and, according to the plaintiff, 631 cartons out of the
total 950 cartons were subsequently recovered. The surveyor appointed by
the insurance company assessed the loss, whereupon the plaintiff
indemnified the insured to the extent of ₹15,40,408/-. Claiming to have
acquired the rights of the insured through subrogation, the plaintiff
instituted the suit for recovery of ₹19,10,105/, along with interest, against
the defendants.
4. The defendants contested the suit, specifically denying that
they had undertaken transportation of the loaded consignment from
Panipat to Tughlakabad. Their stand was that they had merely been
engaged for providing an empty container and that the truck in question
belonged to Harish Malik, under whom driver Ashok Kumar and cleaner
Umesh were employed. They also disputed their liability for the alleged
loss.
5. Upon appreciation of the oral and documentary evidence,
learned trial Court dismissed the suit, primarily holding that the plaintiff
had failed to establish any contractual arrangement between the insured
and the defendants for transportation of the goods, or that the alleged loss
had occurred while the consignment was in the custody of the defendants.
These findings were affirmed by learned First Appellate Court, which
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RSA-5174-2014
noticed that the Central Excise seal affixed at Panipat was found intact,
when the container reached Tughlakabad; the invoice Ex.P3 and bill of
lading Ex.P5 did not establish transportation through the defendants; and
the alleged e-mail received from Australia, forming the basis of the claim
regarding substitution of goods, had not been proved. It was further
noticed that the surveyor had not inspected the consignment at the place,
where the alleged shortage was discovered and that no reliable evidence
connected the defendants with the alleged loss.
6. Assailing the concurrent findings, Learned counsel for the
appellant contends that both the Courts below have failed to appreciate
the material evidence, particularly goods receipt No.10849 dated
22.12.2004, which, according to the appellant, establishes that the
defendants had undertaken transportation of the consignment. It is
submitted that the mere fact that the truck belonged to Harish Malik would
not absolve the defendants of liability, once the transportation
arrangement had been made through M/s Pal Road Carriers. It is further
urged that the registration of criminal cases, recovery of cartons and
assessment of loss by the surveyor sufficiently establish the loss suffered by
the insured. Having indemnified the insured and obtained the requisite
subrogation documents, the plaintiff was entitled to recover the amount
from the defendants.
Per contra
7. , learned counsel appearing for the respondents–
defendants has supported the concurrent judgments and decrees passed
by the Courts below. It is contended that the appellant has failed to
establish any contractual relationship between M/s Kapoor Industries and
the respondents regarding transportation of the loaded consignment from
Panipat to Tughlakabad. The respondents were engaged only for providing
an empty container, whereas truck No.HR-38B-4445 belonged to Harish
Malik, under whom driver Ashok Kumar and cleaner Umesh were
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RSA-5174-2014
employed. Mere reliance upon goods receipt No.10849 dated 22.12.2004
does not establish that the respondents had undertaken responsibility for
transportation of the insured goods. Neither any agreement regarding
carriage of the consignment nor any receipt evidencing payment of freight
to the respondents has been proved. Even the invoice Ex.P3 and bill of
lading Ex.P5 do not establish that the goods were transported through the
respondents.
8. Learned counsel further submits that the appellant has failed
to establish that the alleged theft or substitution of goods occurred during
transportation from Panipat to Tughlakabad. Admittedly, the container was
sealed by the Central Excise authorities at the factory premises and the seal
was found intact when the container reached Tughlakabad. Thereafter, the
consignment was transported to Mumbai and subsequently shipped to
Australia. The alleged shortage was reported only after the consignment
reached Australia. Thus, in the absence of any reliable evidence
establishing the stage at which the alleged loss occurred, no liability can be
fastened upon the respondents.
9. It is further argued that the alleged e-mail dated 02.02.2005,
purportedly received from M/s Sheriden Pty Limited, Australia, has not
been proved. Neither any representative of the Australian consignee nor
the concerned Investigating Officer was examined to establish the alleged
substitution of cotton towels with stones. The driver, officials of the Excise
and Customs Departments and other persons connected with the
transportation and handling of the consignment were also not examined.
The surveyor admittedly did not inspect the consignment in Australia,
where the alleged shortage was discovered, and his opinion regarding the
stage at which the loss occurred was based upon information and
documents supplied to him. Such opinion, in the absence of independent
corroboration, cannot establish the respondents' liability.
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RSA-5174-2014
10. Learned counsel has also submitted that registration of
criminal cases and recovery of certain cartons cannot, by themselves,
establish that the respondents committed any breach of their contractual
obligations. The burden to prove entrustment of the goods, their loss
during the period of carriage undertaken by the respondents and the
resultant liability rested upon the plaintiff. The said burden has not been
discharged. Merely because the appellant insurance company settled the
claim of its insured and obtained subrogation documents, no enforceable
liability can arise against the respondents in the absence of proof of the
underlying claim. It is, therefore, submitted that both the Courts below
have correctly appreciated the evidence and recorded concurrent findings
of fact, which do not warrant interference under Section 100 CPC. Dismissal
of the appeal is accordingly prayed for.
11. Having heard learned counsel for the parties and examined the
judgments and decrees passed by both the Courts below, this Court finds
no merit in the present appeal for the reasons recorded hereinafter.
12. The controversy essentially revolves around whether the
defendants had undertaken carriage of the insured goods and whether the
alleged loss occurred during the period when such goods were entrusted to
their custody. The burden to establish these foundational facts rested upon
the plaintiff. Mere proof of issuance of an insurance policy, settlement of
an insurance claim or execution of subrogation documents would not, by
itself, establish the liability of the defendants.
13. It is significant that the defendants specifically disputed having
undertaken transportation of the loaded consignment. Their stand was that
their engagement was confined to providing an empty container. Although
the plaintiff relied upon goods receipt No.10849 dated 22.12.2004, the
Courts below, upon examining the evidence, found that the alleged
arrangement for transportation of the loaded consignment through the
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RSA-5174-2014
defendants had not been satisfactorily established. The invoice Ex.P3 and
bill of lading Ex.P5 also did not connect the defendants with the carriage of
the goods. The truck bearing registration No.HR-38B-4445 was proved to
be owned by Harish Malik, but no reliable evidence was produced to
establish that the defendants had engaged the said vehicle for transporting
the loaded consignment or had assumed responsibility as carriers thereof.
14. No doubt, ownership of the vehicle is not, by itself,
determinative of the liability of a carrier. A transport operator may be liable
for loss of goods entrusted to it even where the actual transportation is
undertaken through a vehicle belonging to another person. However, such
liability necessarily presupposes proof of entrustment or an arrangement
under which the transport operator undertook responsibility for carriage of
the goods. In the present case, both the Courts below have concurrently
found that this foundational requirement remained unproved.
15. Equally significant is the failure of the plaintiff to establish that
the alleged loss occurred during the period of transportation from Panipat
to Tughlakabad. As per the records, the container was sealed by the Central
Excise authorities at the factory premises and the seal was found intact
upon its arrival at Tughlakabad. Thereafter, the consignment passed
through further stages of transportation, including shipment from Mumbai
to Australia. The alleged substitution of towels with stones came to light
only upon receipt of information from Australia. In these circumstances,
the mere discovery of the alleged shortage at the destination cannot,
without further connecting evidence, establish that the loss occurred while
the goods were in the custody of the defendants.
16. The reliance placed upon the surveyor's report also does not
advance the appellant's case. The surveyor admittedly did not inspect the
consignment at the place where the alleged substitution of goods was
discovered. His assessment was based upon the documents and
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RSA-5174-2014
information made available to him. Although such a report may constitute
relevant evidence regarding the assessment of loss for insurance purposes,
it cannot, in the absence of independent supporting evidence, conclusively
establish either entrustment of the goods to the defendants or the stage at
which the alleged loss occurred. The Courts below have also noticed that
the e-mail dated 02.02.2005, allegedly received from the Australian
consignee, was not proved in accordance with law.
17. The appellant's reliance upon the registration of criminal cases
and recovery of certain cartons is equally insufficient to fasten civil liability
upon the defendants. Registration of an FIR or arrest of a person does not,
by itself, establish the truth of the allegations contained therein. Although
liability in civil proceedings is determined on the touchstone of
preponderance of probabilities, there must nevertheless be reliable
evidence connecting the defendants with the transaction and the alleged
loss. The Courts below have found such evidence lacking.
18. Insofar as the plea of subrogation is concerned, the legal
position is that an insurer, upon indemnifying the insured, may enforce the
rights of the insured against the person responsible for the loss, subject to
the nature and terms of subrogation. However, subrogation does not
create any independent or superior right against a third party. The insurer
merely steps into the shoes of the insured and cannot recover an amount
from a person against whom the insured itself has failed to establish an
enforceable claim. Reference in this regard may be made to Economic
Transport Organization v. Charan Spinning Mills (P) Ltd., (2010) 4 SCC 114 .
Thus, payment of ₹15,40,408/- by the appellant to the insured does not
dispense with the requirement of proving the defendants' liability for the
alleged loss.
19. The principle that a common carrier may be liable for loss of
goods entrusted to it, and that proof of specific negligence is not invariably
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RSA-5174-2014
necessary, is well recognised under the Carriers Act, 1865. However, the
said principle becomes applicable only upon establishment of the
relationship of carrier and consignor and the factum of entrustment of
goods for carriage. The presumption concerning a carrier's responsibility
cannot be invoked to supply the absence of proof regarding the very
entrustment of the consignment. The present case fails on this
foundational aspect.
20. Both the Courts below have appreciated the evidence and
returned concurrent findings that the plaintiff failed to establish the
transportation arrangement with the defendants and their responsibility
for the alleged loss. These findings are based upon consideration of the
material available on record. Merely because another inference may
possibly be drawn from certain documents would not justify interference in
second appeal. In Hero Vinoth (Minor) v. Seshammal, (2006) 5 SCC 545,
and Kondiba Dagadu Kadam v. Savitribai Sopan Gujar, (1999) 3 SCC 722,
the Hon'ble Supreme Court has reiterated that concurrent findings of fact
cannot be disturbed in second appeal unless they are shown to be
perverse, based on no evidence, or vitiated by a substantial error of law.
21. In the present case, learned counsel for the appellant has not
been able to demonstrate that any material evidence having a decisive
bearing on the controversy was ignored or that the findings recorded by
the Courts below suffer from perversity. The challenge essentially seeks
reappreciation of the evidence and substitution of another possible view,
which is impermissible within the limited scope of Section 100 CPC.
22. In view of the foregoing discussion, this Court finds that the
concurrent findings recorded by the Courts below are based upon
appreciation of the evidence and do not suffer from any perversity or
substantial error of law. No substantial question of law arises for
consideration under Section 100 CPC.
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23. Consequently, the present regular second appeal, being devoid
of merit, is dismissed. The judgments and decrees dated 04.05.2012 and
05.07.2014 passed by the learned Courts below are affirmed. There shall be
no order as to costs. Pending miscellaneous application(s), if any, shall also
stand disposed of.
( DEEPAK GUPTA )
JUDGE
November 12, 2026
Neetika Tuteja
Whether Speaking/reasoned Yes/No
Whether Reportable Yes/No
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