HINDUSTHAN GENERAL INSURANCE Vs. ELECTRICAL EXECUTIVE ENGINEER

JUDGEMENT

(1.) This appeal by defendant No. 1, Messrs. Hindusthan General Insurance Society Ltd., arises out of a suit instituted on the 19th December, 1958, for recovery of Rs. 20,000 as price of electric transformers insured with the appellant -company which were lost in the Ganges at Manihari Ghat when they were being carried on a boat from Sahebganj to Baghmari Ghat for being taken to Katihar on the 2nd November, 1956, at about 4 p.m. and Rs. 600 as costs of salvaging operations. The plaintiff to the suit, who is respondent No. 1, before this court, is Electrical Executive Engineer, Electric Supply Division, Katihar, Purnea. Defendant No. 2 to the suit is Messrs. Easy Transport, a private firm, the carrier. Defendant No. 3 is the proprietor of defendant No. 2, The plaintiff claimed a decree against the defendant or defendants found liable. The court below has decreed the suit for Rs. 20,000 as against the appellant only with proportionate costs and dismissed it as against the other defendants.

(2.) Briefly stated, the plaintiff's case was that on 4th July, 1956, he entered into an agreement with defendant No. 2 for transporting electrical materials and other goods from Sahebganj to Katihar by boat and delivering them at the stores at Katihar, in accordance with the instructions issued from time to time by the Sub -Divisional Officer, Electricity, Katihar, or the plaintiff. Under the terms of the agreement, defendant No. 2 was required to get the consignments insured against all risks in transit and the insurance charges were to be paid extra against the original vouchers. Between the 20th September, 1956, and 2nd January, 1957, different kinds of electrical goods were insured with the appellants for different amounts under different policy numbers and in each case respondent No. 1 was the assured. On the 31st October, 1956, one consignment of seven electric transformers loaded on one boat by defendant No. 2 left Sahebganj Ghat and while proceeding to Katihar collided during storm with a jetty near Manihari Ghat and sank into the Ganges on the date and time as mentioned in the preceding paragraph. The said consignment was covered by Cover Note No. 1005E, which corresponded to Policy No. MPCB -2750, dated the 21st September, 1956. The appellant was informed of the accident soon after, and, after some correspondence, respondent No. 1 finally laid a claim for Rs. 20,000 at Calcutta office of the appellant by a letter dated the 13th November, 1956. Salvage operations were taken up by M/s. Landale and Clarke of Calcutta, who were appointed by the appellant for the purpose but without success. No written report of the salvaging operations was sent to respondent No. 1 by the appellant. After some further correspondence for the settlement of the claim on the 29th March, 1957, the appellant, in order to evade their liability falsely intimated respondent No. 1 that from information in its possession it had reasons to suspect that the claim was fraudulent in character, inasmuch as the said transformers were reported to have been smuggled out of Katihar and sold elsewhere by interested persons. The Patna branch office of the appellant also lodged a first information report at Manihari Ghat police station under Section 407 of the Indian Penal Code. After investigation, the police submitted a final report, holding that the transformers had actually sunk. By order dated the 24th September, 1957, the Sub -Divisional Magistrate, Katihar, passed final orders holding the complaint to be false.

(3.) The appellant, in its written statement, denied any liability. Pleas taken by it relevant for the decision of the present appeal were that respondent No. 1 had no right or title to the goods which formed the subject -matter of the suit and, therefore, had no locus standi and right to sue, nor to payment of any claim in respect of the goods. Any risk for the alleged goods was not covered by any policy of insurance of the appellant. Cover Note No. 1005E and other cover notes were issued by the appellant on the basis of an application of defendant No. 3, dated the 31st August, 1956, wherein it was specifically declared that the loading of the goods was to commence on the 1st September, 1956. According to warranty No. 3 of the policy issued on the basis of the said cover note, the loading was to be completed within seven days and the voyage to be commenced without delay, but as the loading was done long after 1st September, 1956, and the sailing notice given by defendant No. 2 in respect of the goods which formed the subject -matter of the suit was dated the 30th October, 1956, the said warranty was violated and the appellant was not liable. The appellant agreed to bear the cost of salvaging operations gratuitously and as a gesture of goodwill and it was without prejudice and without acceptance of any liability.