Towels Allegedly Replaced With Stones: P&H HC Upholds Dismissal Of Insurer’s ₹19-Lakh Claim, Finds No Proof Carrier Took Charge Of Cargo

M/s Kapoor Industries held a marine cargo insurance policy with the appellant insurer.

After a consignment of cotton towels was transported for shipment to Australia, the consignee reportedly found bags of stones in place of some towels.

The insurer indemnified the insured and, claiming through subrogation, sued the respondents for recovery.

The respondents denied transporting the loaded consignment, maintaining that they had only supplied an empty container.

The trial court dismissed the suit for want of proof of the respondents’ contractual responsibility and of loss during their custody; the first appellate court affirmed.

The insurer’s regular second appeal challenged those concurrent findings.

Under Section 100 CPC, concurrent factual findings are not ordinarily disturbed in second appeal unless they are perverse, based on no evidence, or vitiated by a substantial error of law; Hero Vinoth (Minor) v. Seshammal, (2006) 5 SCC 545, and Kondiba Dagadu Kadam v. Savitribai Sopan Gujar, (1999) 3 SCC 722, were cited for this principle.

The Carriers Act, 1865 recognises a carrier’s responsibility for goods entrusted to it, but the carrier-consignor relationship and entrustment must first be established.

On subrogation, an insurer that indemnifies an insured may enforce the insured’s rights against a responsible third party, but acquires no independent or superior right; it stands in the insured’s shoes. The Court relied on Economic Transport Organization v. Charan Spinning Mills (P) Ltd., (2010) 4 SCC 114.

The goods receipt relied upon by the insurer did not, in the courts’ assessment, satisfactorily establish that the respondents undertook carriage of the loaded goods; nor did the invoice and bill of lading connect them to that carriage.

Although use of a vehicle owned by another person would not itself absolve a transport operator, the insurer still had to prove that the respondents had accepted responsibility for the consignment, which it failed to do.

The container’s seal was intact on arrival at Tughlakabad, and the alleged substitution was reported only after shipment to Australia.

The unproved email, the surveyor’s lack of inspection at the place where the alleged shortage was discovered, and the absence of other reliable connecting evidence left the stage of loss unestablished.

Payment under the policy and subrogation documents could not cure these failures of proof.

The appellant showed no perversity or substantial error of law in the concurrent findings.

No substantial question of law arose under Section 100 CPC.

The regular second appeal was dismissed, the judgments and decrees of the lower courts were affirmed, and no order as to costs was made; pending miscellaneous applications were also disposed of.