NATIONAL INSURANCE CO. LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) A nationalised insurance company is fighting a wing of the Government, the Railways, to realise its dues about which there is no dispute. It is an admitted position that out of 1680 pieces of brass tubes costing about Rs. 5,68,000/-, 178 pieces of brass tubes were not delivered to the consignee who is the Assam State Electricity Board, plaintiff No. 2. The short delivery being an admitted position, the Railways have taken recourse to the technicalities to defeat the just claim of the insurer, plaintiff No. 1, which had to pay the price of the goods short delivered to the Electricity Board pursuant to an agreement entered into between them. As it is technicalities on which ground the plaintiffs have lost at the hands of the trial court, Mr. Sharma has, at the threshold, brought to our notice certain observations made in Hindustan Sugar Mills v. State of Rajasthan AIR 1981 SC 1681, wherein the Apex Court stated that the Central Government should honour its legal obligation arising out of contract and not drive the citizen concerned to file a suit for recovery of the amount. In a democratic society governed by the rule of law, it is the duty of the State to do what is fair and just to the citizen, and the State should not seek to defeat the legitimate claim of the citizen by adopting a legalistic attitude but should do what fairness and justice demand. According to us, fairness and justice demand in the present case that the suit filed by the insurer ought to have been decreed and the plaintiff No. 1 should not have lost on the twin grounds of it having no right to sue and the suit having been barred by limitation.

(2.) AS , however, the plaintiff has lost on the above grounds, let us see whether the judgment and decree assailed can be sustained or not. A perusal of the impugned judgment shows that issue No. 2 which is relatable to the question whether the plaintiff has the right to sue and also cause of action, the learned trial court has stated that a joint claim was made by the two plaintiffs; but as plaintiff No. 2 had no longer any claim against the Railways as it has been paid the due amount by plaintiff No. 1, the question examined was whether plaintiff No. 1 can be said to have the right to sue. In this connection, it has been observed that the point to be examined is whether plaintiff No. 1 had acquired any valid title over the suit consignment. A perusal of Exh. 4 shows that out of the total amount of Rs. 5,68,083.83, 50 per cent of the same has been paid by way of advance. This would show that the plaintiffs had brought on record some materials to show that title in the goods had passed--may not be wholly, but definitely partly. The part-payment would show that the title in the goods no longer remained wholly in the consignor but had partly vested in the consignee. In view of this the decision cited by Mr. Duara, namely, Union of India v. West Punjab Factories Ltd. 1958-65 ACJ 602 (SC), has no application inasmuch as it has been stated in this decision that whether title to goods has passed from the consignor to the consignee depends on the facts of each case. It is agreed that the mere fact of somebody having been shown as consignee is not enough to conclude that the consignee had become the owner of the goods but then the payment of 50 per cent would definitely show that some steps had been taken by the consignee to get title of the goods passed in it. As the goods were ultimately delivered to the consignee, we are of the view that a right did accrue in the consignee to file the present suit. As the consignee had received the amount in question from plaintiff No. 1, we are satisfied that plaintiff No. 1 along with plaintiff No. 2 had inhered in them a right to sue. We would, therefore, hold that issue No. 2 was wrongly decided against the plaintiffs.

(3.) AS against the above submission of Mr. Duara, Mr. Sharma has brought to our notice a document on record which was sought to be exhibited in the case, which permission was denied. It is a document emanating from the Station Master of Namrup at which point delivery was taken which reads as below: Certified that the goods under RR 1/ 158371 dated 21.11.1972 has been delivered to the consignee, the Ex. Engineer ASEB/ NTPS on 23.3.1973 and there was a shortage of 178 pcs of tubes out of 872 pcs.