Essemm Logistics Vs. Darcl Logistics Ltd. & Anr.

Case Number: Civil Appeal No.________ of 2023 arising out of SLP (C) No. 24340 of 2019
Judges Name: Hon’ble Judges Mr. Justice V. Ramasubramanian J, Mr. Justice Pankaj Mithal J
Order dated: 01.05.2023.

Facts of the case: 

  1. The appellant – ESSEMM Logistics was the defendant first, preferred this appeal against the rejection of counterclaim by the High Court in the exercise of power under Order 7 Rule 11 of CPC, 1908.
  2. Respondent 1 – DARCL Logistics was the plaintiff first, instituted an original suit for recovery of Rs. 4,09,53,847 with 18% interest as the first defendant-appellant failed to pay 530 bills due from 14.11.2011 to 31.01.2012.
  3. The first defendant-appellant filed a counterclaim to the original suit for recovery of Rs. 13,04,00,000 with 24% interest.

Supreme Court observed/held as follows:

  • The plaintiff-Respondent is a common carrier, governed by the Carriage by Road Act, of 2007 which repealed the Carriers Act, of 1865. Section 10 of the old act is replaced by section 16 of the new act which more or less states the same. Apparently, the new act bars both suit and legal proceedings while the old act only bars the filing of the suit.
  • It is recognized that under Order 8 Rule 6-A (4) of CPC, a counterclaim is a plaint and an independent suit. Also, the plaint which falls under Rule 11 of Order 7 shall be rejected for the reason that the plaint allegations are required to be considered. 
  • Thus, the plaintiff-first defendant requested rejection of the counter-claim of the appellant as it was filed without issuing the notice as per section 16 of the Carriage by Road Act, of 2007.
  • The lower court and the High Court affirmed the rejection of the plaint. The courts below did not appreciate the literal sense of Section 16 of the new Act. This section is applicable for claims of loss or damage to the consignment and not in any other aspect. 
  • The counterclaim of the appellant was about the loss of business, reputation and not in consignment aspect. The below courts did not look well in the aspect of the matter and illegally rejected the counterclaim. Section 16 of the new act is not applicable in this case.
  • Thus, no notice was necessary before filing a suit for recovering the loss of business or reputation. The below courts erred by rejecting the counterclaim under Order 7 Rule 11 of CPC.
  • Thus, the impugned order and judgements are set aside. 
  • The appeal is allowed with the direction of the court to proceed with the suit and the counterclaim.

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