M/s Takur Sadekar and Company Limited, Nizamabad, (for short the ‘consignor’) consigned 454 bags of Beedies through the 1st appellant, M/s Gujrath Andhra Road Carriers Transport Contractors, (for short “the appellant”) for delivery at Sunderao (Rajasthan), on 30-07-1980. The appellant accepted the consignment and issued LRGAR C.No.87, dated 30-07-1980. The consignor insured the goods with the respondent herein. On 04-08-1980, the goods reached the destination, through a truck belonging to the appellant. 17 bags of the consignment were said to have been damaged, due to rain. The consignor made a claim with the respondent. An exercise of assessment for the damage was undertaken, and a sum of Rs.8,608=13 ps. was paid by the respondent, to the consignor.

2. On the basis of a letter of subrogation and power of attorney, issued to it, by the consignor, the respondent filed O.S.No.253 of 1983 in the Court of Principal District Munsif, Nizamabad, against the appellant and its driver, for recovery of a sum of Rs.8,694=13 ps. together with 12% interest per annum. It was pleaded that the damage to the goods occurred, on account of the negligence on the part of the appellant an