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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO. 126 OF 2009
Shiv Ganga Transport Private Limited,
a company incorporated and registered
under the Companies Act, 1956, having
its corporate office at 318, Mahinder Chambers,
3rd floor, 619, 28, W.T.Patil Marg, Opp.Pepsi
(Dukes Unit), Chembur, Mumbai400071 ...Petitioner.
Vs.
The President of India through the
Commandant, Embarkation Headquarters
2nd Floor, Nav Bhavan Building, 10,
R. Kamani Marg, Ballard Estate,
Mumbai 400038 ...Respondent.
Mr.Mannadiar i/by M/s.Mannadiar & Co. for the Petitioner.
Mr. S. J. Shah for the Respondent.
CORAM :- ANOOP V. MOHTA, J.
DATED :- 10th March, 2010.
ORAL JUDGMENT:-
1 The petitioner has invoked Section 34 of the Arbitration and
Conciliation Act, 1996 (for short, the Act) and thereby challenged the
Award dated 19th May, 2008 whereby the Arbitrator has directed the
petitioner to pay the entire loss of Rs.13,53,763/- with 8% interest with
effect from 12.08.2006 till payment and also cost of Rs.25,000/- by
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holding as under:
“7 Award. After a passionate consideration of all
issues mentioned above I have arrived at the conclusion that
the said accident cannot be termed as an act of God or due to
actions of the enemy of the Government of India and even
though the contractor had taken adequate precautions with
respect to the type of vehicle provided, loading and lashing of
the equipment and speed of the vehicle during transit, but
since the contractor was bound to deliver the consignment
entrusted to him safely to the consignee vide para 19(a) of the
Contract Deed, it is my considered view that entire loss of
13,53,763/- (Rupees thirteen lac fifty three thousand seven
hundred sixty three only) be borne by the contractor with 8%
per annum wef 12 Aug 2006 till payment. I also award Rs.
25,000/- (Rupees twenty five thousand only) against the
contractor as costs of the arbitration proceedings.”
2 There is no dispute that there is an Arbitration clause between the
parties. The parties proceeded accordingly and participated before the
Arbitrator and led their respective evidence.
3 The basic facts are as under:
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On 20.02.2004, pursuant to tender dated February 17, 2004 floated
by the respondent, the petitioner entered into a contract for supply of
transport for despatch of defence stores by road to various consignees.
4 On 19.05.2004, the petitioner called upon to furnish to respondent
seven trailers having certain specifications. On 20.05.2004, the petitioner
by letter pointed out to the respondent that trailer requisitioned was not fit
for the kind of consignment to be transported and told to avoid
transportation by the kind of trailer requisitioned. The petitioner also
pointed out that if the goods were carried in the kind of trailer
requisitioned then it would be at the risk and cost of the respondent.
Despite the said letter, the respondent insisted on despatch of consignment
by the trailer ordered.
5 On 21.05.2004, the trailer carrying consignment involved in
accident. The consignment damaged.
6 On 8.10.2004, the respondent demands Rs.1,03,38,750/- as
damages. On 18.10.2004, the petitioner protested the said claims and
denied liability.
7 On 17.05.2005, a letter is written by the petitioner to refer the
matter to the arbitration.
8 On 31.03.2008, the learned Arbitrator after considering the claim
forwarded to the petitioner a copy of Award dated March 31, 2008.
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9 On 28.04.2008, the Arbitrator amended the Award.
10 On 8.5.2008, the Arbitrator requested that the amendment note
dated April 28, 2008 be treated as cancelled.
11 On 10.5.2008, the learned Arbitrator called for a fresh meeting in
view of recommendation of reduction of claims not brought before the
Arbitrator earlier.
12 On 19.05.2008 the Arbitrator proceeded to pass a fresh Award.
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On 4.6.2008, the impugned Award received by the petitioner.
14 On 4.9.2008, the petitioner filed the petition for challenging the
Award.
15 The relevant findings so arrived at are as under:
“6 (d) Precaution Taken by the Contractor/Consignor
with Regards to Type of Vehicle Provided and Loading of the
Consignment. As per the evidence on record the consignment
was loaded and lashed properly and cause of accident cannot
be attributed to the same. The carrying capacity of the veh
used was also higher than was demanded. Although the
demand was placed for 20 T 40 trailer, however, a trailer of
carrying capacity 25 T 40 was provided by the contractor.
(e ) Cause of the Accident. The evidence on record
confirms that the accident occurred due to material failure of
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5the fish wheel and/or the pin attaching the prime mover to the
trailer resulting in the separation of the two causing
overturning of the trailer and the Prime Mover. This was not
due to any lapse or acts of negligence on the part of the
personnel who carried out/supervised the loading and lashing
of the consignment at Embarkation HQ. In the opinion of Col
Saurabh Gupta then Comdt of the Embarkation HQ, the
accident does not legally qualify as “an act of God” as the
accident occurred due to material failure of a link between the
trailer and the Prime Mover which cannot be detected by visual
insp even by an expert. The accident was also not due to rash
and negligent driving as per the evidence on record.”
16 The findings so given with regard to the cause of accident, based
upon the evidence of the petitioner and appreciated by the Arbitrator and
as recorded above shows that the accident occurred due to material failure
of the fish wheel and/or the pin attaching the prime mover. It is opined
that the prime mover which cannot be detected by visual inspection even
by an expert. There is a clear finding that the accident was not due to
rash and negligent driving. It is clear that the petitioner took all necessary
precaution and care which is required for a carrier/transport to see that the
goods/consignment should be delivered at appropriate place as agreed.
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There is no contra-material on record. The accident occurred due to
material failure of the fish wheel and/or the pin attaching the prime mover
to the trailer resulting in the separation of th two causing overturning of
the trailer and the Prime Mover. This also means that there was no lapse or
acts of negligence on the part of the personnel who carried out/supervised
the loading and lashing of the consignment after loading the vehicle with
the trailer moved also. Merely because the accident so happened that itself
cannot be the reason o hold that the petitioner/contractor is liable in the
present facts and circumstances of the case, in spite of the above
observation.
17 The Agreement itself provides and as recorded in clause (b), as
under:
“b ) Responsibility of the Contractor in the Event of
Damage Caused to the Consignment During Transportation.
The contractor, vide Para 12 (a) of the Contract Deed, has
committed that the Officer operating the contract or his
successor in office can recover from him/them as compensation
such sums as he considers reasonable if any goods entrusted to
him/them under the contract be lost, damaged or depreciated
unless such loss, damage or depreciation was due to the act of
God or the enemies of the Government.”
18 The “act of God” as defined by the Supreme Court in Divisional
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Controller, KSRTC vs. Mahadeva Shetty & anr., (2003) 7 SCC 197 is
reproduced as under:
“9 The expression “act of God” signifies the operation
of natural forces free from human intervention, such as
lightning, storm etc. It may include such unexpected
occurrences of nature as severe gale, snowstorms, hurricanes,
cyclones, tidal waves and the like. But every unexpected wind
and storm does not operate as an excuse from liability, if there
is a reasonable possibility of anticipating their happening. An
act of God provides no excuse unless it is so unexpected that
no reasonable human foresight could be presumed to
anticipate the occurrence, having regard to the conditions of
time and place known to be prevailing. For instance, where by
experience of a number of years, preventive action can be
taken, Lord Westbury; defined the act of God (damnum fatale
in Scotch Laws) as an occurrence which no human foresight
can provide against and of which human prudence is not
bound to recognize the possibility. This appears to be the
nearest approach to the true meaning of an act of God. Lord
Blancaburgh spoke of it as “an irresistible and unsearchable
providence nullifying our human effort”.
19 In P. K. Kalasami Nadar v. K. Ponnuswami Mudaliar & ors., AIR 1962
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MADRAS 44, it is held as under :
“…. Under the common law of England, there were two
categories of bailees on whom the law imposed a greater
responsibility, viz., common carriers and innkeepers. These
were held liable for the safety of the goods entrusted to them in
all events, except where the loss or injury to them was
occasioned by an act of God, King’s enemies or from the fault of
the consignor or due to the inherent defect in the goods (vide
Indian Airlines Corporation v. Jothaji Maniram, ILR (1959)
Mad 439 at p. 446 : (AIR 1959 Mad 285 at p. 288) ).
20 In M/s. Caravan Goods Carriers vs. M/s. Corborandum Universal
Ltd., CDJ 2008 MHC 3252, it is held as under:
“6 (c ) The next decision on which reliance was
placed by the learned counsel for the appellant for the act of
God is AIR 2002 RAJASTHAN 157 (State of Rajasthan vs.
Mehta Transport Company and others), wherein the damage to
the consignment occurred due to an accident which resulted
due to burst of a type of the vehicle. The Court held that no
negligence can be foisted on the driver for the accident which
occurred due to busting of the tyre of the vehicle. The relevant
observation in the said judgment runs as follows:
“A common carrier is responsible for safety of goods except
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when loss is caused by an act of God. If the carrier wants
exoneration from the liability he has to prove that he had taken
such care which under the circumstances of the case, was
reasonably and practically possible to ensure the safety of the
goods.”
21 In view of the above and as there is no material and/or evidence on
record to show that the petitioner’s acted negligently and/or undue care or
without due diligence as required and as agreed and bound by the contract.
On the contrary, there is a clear finding in favour of the petitioner as noted
above.
22 The cause of the accident in the present case, in my view, if not the
cause of negligence and/or inaction and it happened, in the above
circumstances, inspite of due diligence and care taken by the petitioner,
that itself is quite akin to the concept for the act of God. In view of
uncontrolled circumstances and inspite of due diligence and care as done
in the present case and if accident happened, which was never thought of
at the time of loading the consignment and at any further stage. Merely
because the trailer was of no capacity i.e. 25 T 40 was provided instead of
20 T 40, that itself, cannot be the reason to hold the contractor liable for
the damages so ordered.
23 In view of the above, the case is made out by the petitioner. The
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view so expressed by the learned Arbitrator is not within the frame work of
law. It is not the question of appreciation of the evidence and/or the
material placed on record. Neither it is a question of giving of particular
opinion, based upon any clause of the Agreement. Having once observed
the cause of accident as recorded, but still awarded damages against the
petitioner, in my view, is incorrect and basically considering the concept of
“act of God” as defined and expressed by the Supreme Court and the High
Courts. Therefore, the Award so passed is bad, illegal and liable to be
quashed and set aside.
24 Resultantly, the Petition is allowed. The Award dated 19th May, 2008
is quashed and set aside. No costs.
(ANOOP V. MOHTA, J.)
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