M/S NEW INDIA ASSURANCE CO. LTD. versus UNION OF INDIA AND ORS.

Citation: [1995] 1 S.C.R. 507 · Decided: 20-01-1995 · Supreme Court of India · Bench: J.S. VERMA · Disposal: Appeal(s) allowed

Judgment (excerpt)

y 
• 
MIS NEW INDIA ASSURANCE CO. LTD. 
A 
v. 
UNION OF INDIA AND ORS. 
JANUARY 20, 1995 
[J.S. VERMA, S.P. BHARUCHA AND K.S. PARIPOORNAN, JJ.] 
B 
Carriage of Goods-Railways--Damage to consignment during tran-
sit-Consignor's right to sue railway administration for recovery of 
damages-No dispute between consignor and consignee about ownership of 
goods or right to sue-Plea of railways to resist consignor's right to sue-Held C 
untenable. 
The Bi~ar State Electricity Board placed on order with Plantiff No. 
2 for supply of Transformer with accessories. The plaintiff tendered the 
consignment to the railway administration for carriage to Electricity 
Board. The consignment was covered by an open insurance policy issued D 
by Plaintiff No.1. The consignment reached the destination but was found 
to be damaged. The damage was caused to the consignment in transit 
during its transhipment. The claim made by the plaintiff, the consignor, 
under the insurance policy was settled by the insurer. The consignor 
authorised the insurer to recover the damages from the railway ad· E 
ministration. The insurer filed the suit ~or recovery of damages impleading 
the consignor as Plaintiff N;o. 2 and the consignee as the proforma Defen· 
dant No. 3. The suit was contested only by the. Union of India representing 
the railway administration. The Bihar State Electricity Board apart from 
not contesting the suit had also intimated the railway administration that 
it had no right or interest in the goods. There was thus no dispute of title F 
to the goods or right to sue between the consignor and consignee. 
It was alleged by the ra~lway administration that ownership of goods 
was in the consignee and, therefore, the consignor had nQ right to sue. The 
liability. for payment of compensation was also denied.· 
G 
The trial court decreed the suit and held that the consignor had title 
to the goods and, therefore, was entitled to maintain the suit. It was also 
held that the damage to the goods was caused during transit by the 
negligence of the railway administration. On appeal, the High Court 
reversed the Trial Court's judgment and decree. It was held that the H 
507 
508 
SUPREME COURT REPORTS 
[1995) 1 S.C.R. 
A property in goods had passed to the consignee when the consignment was 
booked and the consignor had no cause of action against the railway 
administration to make the claim for loss to the consignment during 
transit. The High Court held that the right to sue was only in the consignee. 
However, the finding of the trial court that the loss during transit was 
B occasioned by the negligence of the railway administration was confirmed. 
This appeal had been filed against the judgment of the High Court. 
Allowing the appeal, this Court 
HELD : 1.1. Ordinarily it is the consignor who can sue if there is 
C damage to consignment si~ce the contract of carriage is between the 
consignor and the railway. The mere fact that the consignee is different 
from the consignor does not necessarily pass title to the goods from the 
consignor to the consignee, and the question whether title of goods has 
passed to the consignee is a question of fact in each case and has to be 
decided on other evidence. (511-F] 
D 
Union of India v. West Punjab Factory, AIR (1966) SC 395, relied on. 
I 
1.2. In the instant case, there "'s no dispute between the con~ignor 
and consignee about the ownershjp, of goods or the right to sue. Letter of 
E the consignee handed over to the railway administration at the time of the 
open delivery of'the consignment clearly stated that the consignee had no 
right or interest in the consignment and that it had no objection to 
recovery of the claim by the consignor from the railway administration. In 
such a situation there was no scope or oc;casion to record a finding that 
the consignee had title to the goods. The finding recorded that it was the 
F consignee alone, and not the consignor, who had the right to sue, was 
against the admitted facts and the relevant pleadings. (511-C-D] 
G 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5060 of 
·1994. 
From the Judgment and Order dated 16.6.93 of the Karnataka High 
Court in R.FA. No. 153of1983. 
Ashwini Kumar and R.N. Keshw~ for the Appellant. 
H 
P .P. Malhotra and AK. Sharma for the Respondents. 
.J ~ 
NEW INDIA ASSURANCE CO. LID. v. U.0.1. [J.S. VERMA, J.] 
509 
The Judgmen~ of the Court was delivered by 
A 
J.S. VERMA, J. The suit giving rise to this appeal was filed b

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