Supreme Court: Counter-Claim Not Barred by Notice Requirement under Carriage by Road Act, 2007
New Delhi, May 1, 2023: In a significant ruling, the Supreme Court of India has held that a counter-claim filed by the appellant, ESSEMM Logistics, in response to a recovery suit is not barred by the notice requirement under the Carriage by Road Act, 2007. The judgment was delivered by a Bench comprising Justice Pankaj Mithal and Justice V. Ramasubramanian.
The case pertained to an original suit filed by DARCL Logistics Limited, the plaintiff, seeking the recovery of a sum of Rs. 4,09,53,847/- with interest, alleging non-payment by ESSEMM Logistics as per 530 bills raised during a specific period. In its written statement, the appellant filed a counter-claim of Rs. 13,04,00,000/- with interest, citing losses incurred due to a business opportunity, damage to reputation, and idling of men, machine, and overheads.
The central issue before the Court was the applicability of the notice requirement for loss or damage to consignment under the Carriage by Road Act, 2007. The defendant argued that the counter-claim did not pertain to loss or damage to the consignment and therefore the notice requirement did not apply.
Analyzing the relevant provisions, the Court observed that Section 16 of the Carriage by Road Act, 2007 mandated a notice in cases of loss or damage to the consignment. However, the counter-claim in question did not involve loss or damage to the consignment but rather loss of business opportunity, reputation, and idling of resources.
The Court emphasized that Section 16 of the Act only applies to suits and legal proceedings relating to loss or damage to the consignment and not to claims of a different nature. It further held that the courts below had erroneously rejected the counter-claim under Order VII Rule 11 of the Civil Procedure Code, which deals with the rejection of a plaint, as being barred by Section 16 of the Carriage by Road Act.
Setting aside the impugned orders, the Supreme Court directed the lower court to proceed with both the suit and the counter-claim in accordance with the law. The Court also clarified that no costs would be awarded in the matter.
This judgment clarifies the scope of the notice requirement under the Carriage by Road Act, 2007 and ensures that counter-claims for losses unrelated to consignments are not unfairly barred. The ruling provides clarity and guidance to litigants and legal professionals dealing with similar issues under the Act.
ESSEMM LOGISTICS VS DARCL LOGISTICS LIMITED & ANR.
