Claim Bill/Voucher Not Akin To Notice Under Carriage By Road Act Which Is A Precondition For Instituting Legal Proceedings: Rajasthan HC

The Jaipur bench of the Rajasthan High Court has ruled that a claim bill (voucher) cannot be equated to a notice required under Section 16 of the Carriage by Road Act, as per which legal proceedings cannot be initiated against a common carrier unless a notice in writing was served on them. 

The Court was hearing a revision petition filed against an order of a senior civil judge wherein petitioner's application under Order 9, Rule 13 for rejection of the plaint was dismissed. A civil suit for recovery was filed by the Oriental Insurance Company against the petitioner–Amrit Transport Company, which was decreed ex-parte against the latter. As per the plaint respondent no.2-defendant M/s. K.S. Commodities Pvt. Ltd. booked a consignment through the petitioner company under a Marine Policy issued by respondent no.1-plaintiff Insurance company  for safe transportation of goods but before reaching Wagha Border (Punjab) for export, the goods were looted. Out of looted goods, some were recovered and some were not. As a result, M/s. K.S. Commodities Pvt. Ltd the original consignee claimed compensation from Insurance Company and same was allowed, pursuant to which the insurance company filed a recovery suit against petitioner. 

The petitioner filed an application under Order 9, Rule 13, CPC for setting aside the ex-parte decree and thereafter filed an application for rejection of the plaint on the grounds that no notice was served upon him as required under Section 16 of the Act.

Justice Ashok Kumar Jain observed that a notice was a demand for justice and if it did not fulfil basic purpose, then it could not be considered to be complying with the provision of law that required serving of such a notice.

“Ordinarily, notice herein means that on the basis of a particular cause of action a liability is fastened upon someone to demand particular amount in pursuant to cause of action and in failing to take steps legal proceedings has been suggested. A notice is for demand of justice and if, it does not fulfill the basic purpose then, the Court may observe that the notice does not comply with the provision of law. Herein, a claim bill which was issued by M/s. K.S. Commodities Pvt. Ltd. does not contain any of the essential ingredient to fulfil same and treat same as notice.”

The court also observed that under Section 16 the Carriage by Road Act provides that before institution of suit or legal proceedings, it is necessary to serve a notice of demand in writing. Thus, a suit or proceeding can be instituted, only after such notice, the court opined. 

The petitioner argued that an ex-parte decree was passed by the magistrate based on the claim bill that was exhibited as notice by the Insurance Company. However, it was submitted that a claim bill could not replace a notice.

After hearing the contentions, the high court highlighted the apart from the claim bill, no other document was presented by the Insurance Company for complying with Section 16 of the Act. The Court further referred to the Supreme Court case of Essemm Logistics v Darcl Logistics Limited and Ors. in which it was held that,

“in case of claim for loss of consignment, the invocation of principles under Section 16 is a mandatory provision and before complying the same the suit cannot be filed.”

In this background, the Court opined that the Insurance Company did not serve a specific notice to the petitioner setting out the cause of action, damage, loss and relief and a claim bill could not be treated same as a notice as it did not fulfil any of the essential ingredients.

Accordingly, the Court while allowing the revision plea, quashed the judgment of the trial court terming it a serious error and set aside the suit that was instituted.

Case Title: Amrit Transport Company v Oriental Insurance Company & Anr.

Citation: 2025 LiveLaw (Raj) 3

Counsel for the Petitioner(s): Mr. Abhishek Bhardwaj with Mr. Shantanu Sharma

Counsel for the Respondent(s): None

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