UNION OF INDIA Vs. VULCAN INSURANCE CO LTD

JUDGEMENT

(1.) This appeal is directed against the judgment of the learned Judge, City Civil Court, Ahmedabad decreeting the plaintiff's suit for Rs. 4050 with future interest at the rate of 6% from the date of the suit till payment, against the Union of India, representing Western Railway, Central Railway and Eastern Railway.

(2.) The facts giving rise to this appeal in a nut-shell are as under:-

(3.) The plaintiff - Vulcan Insurance Company Limited filed a suit for recovering Rs. 4050 against defendant No. 1 viz. Union of India representing the Railways alleging that defendant No. 2 R. K. Dhand, owner of Arkay Traders had put an order with the Asiatic Machinery Corporation Private Limited i.e. defendant No. 4 in the suit to send five boxes of case iron plates by rail to defendant No. 3 Ambica Mills Limited, Ahmedabad. Defendant No. 4 accordingly despatched from Howrah as per railway receipt No. D-018605, invoice No. 173 of 5th December, 1956, goods worth Rs. 4000 of which defendant No. 2 was the owner. Defendant No. 4 Asiatic Machinery Corporation Private Limited had despatched the said goods under the railway receipt which was assigned to self viz, in favour of the consignee itself with a blank endorsement. The said receipt was received by Arkay Traders which was in turn endorsed to Shree Ambika Mills Limited authorising it to take delivery of the goods at Ahmedabad Railway station. It transpires that the goods had not arrived at Ahmedabad and after making necessary inquiry and waiting for several days, it was ultimately found that the goods were lost in transit. Shree Ambica Mills Limited therefore returned the railway receipt to Arkay Traders informing them that the goods were not received. It may be noted that after the goods were despatched by Asiatic Machinery Corporation from Howrah, defendant No. 2 Arkay Traders had insured the goods with the plaintiff - company for the full amount that is for Rs. 4000. As the goods were not received and it was totally lost. Arkay Traders under the terms of the policy of insurance, recovered the said amount from the plaintiff - company, after recovering the said amount for the plaintiff - company, Arkay Traders in consideration of the amount of Rs. 4000 received from the plaintiff - company in full settlement of their claim for nondelivery of the goods under the policy of insurance, assigned and transferred all their rights against the railway administration and granting full power to the plaintiff - company to take all lawful ways and means in their own name and at their own risk and responsibility, to recover the said amount of damage or loss. Subsequently, Arkay Traders also informed the railway authorities about the transfer of their rights to the insurance company. The said letter was addressed to the Chief Commercial Superintendent, Western Railway informing him that Arkay Traders has received Rs. 4000 from the Vulcan Insurance Company Bombay in full and final settlement of their claim for non-delivery of the consignment and, therefore, they had no objection to their paying the amount of compensation to the said insurance company. The Vulcan Insurance company thereafter served a notice on the Union of India under section 77 of the Indian Railways Act and also under Section 80 of the Civil Procedure Code as the railway failed to pay the said amount, it filed a suit to recover the said amount in the City Civil Court at Ahmedabad.