HIGH COURT OF CALCUTTA
BIJAYESH MUKHERJI, J.
Snow White Food Product
Versus
Sohanlal Bagla
Suit No. 597 of 1961
Decided On : 10-01-1964
CONTRACT - INSURANCE - POLICY - CONSTRUCTION - INTEREST INSURED - LIABILITY OF INSURANCE COMPANY - TRUST - CONVERSION.
Fact of the Case:
The plaintiff, Snow White Food Product Company Limited, entrusted two consignments of goods to the third defendant, Shree Hanuman Transport Company, a common carrier, for carriage by road to Raiganj and Islampur respectively in the district of West Dinajpur. The Transport Company insured the goods with the fourth defendant, the New Assurance Company Limited, against loss and damage, among other things, during transit. The insurance was had "on account of and for the benefit of" Snow White. The consignments were not delivered to Snow White and the goods consigned were wrongfully disposed of and converted "to their own use" by all the defendants. Snow White filed a suit for recovery of Rs. 13,031.87 nP. from all the four defendants.
Finding of the Court:
1. The Transport Company did not hold out as a partner of the firm at all material times. 2. The Transport Company insured the consignments in suit with the Insurance Company on account of itself and not on account of Snow White. 3. The Insurance Company is liable to pay Rs. 5,053.63 nP. to Snow White. 4. The Transport Company and the first two defendants are liable to pay Rs. 7,056.54 nP. to Snow White.
Issues: 1. Has the first defendant Sohanlal Bagla been a partner at all material times of Shree Hanuman Transport Company, the third defendant ? 2. Did the aforesaid first defendant hold out ever at all material times as a partner of the aforesaid Company ? 3. Were the consignments in suit insured by the third defendant with the fourth one, namely, the New India Assurance Co. Ltd., on account of and for the benefit of the plaintiff ? 4. Have the goods in controversy here damaged in transit been wrongfully converted by the defendants or any one or more of them ? 5. Is the fourth defendant liable for the amount claimed ? 6. What reliefs, if any, is the plaintiff entitled to ?
Ratio Decidendi: 1. The Transport Company insured the consignments in suit with the Insurance Company on account of itself and not on account of Snow White. The policy itself and the surrounding circumstances show that the Transport Company insured for itself and itself only, for the loss it may sustain in carrying the goods from anywhere in India to anywhere in India, the limit of the loss being the limit of the net invoice value of the goods sent. 2. The Insurance Company is liable to pay Rs. 5,053.63 nP. to Snow White. By the very terms of the policy, the sendings are declared for their nett invoice value which is Rs. 16,610.17 nP. only. The Insurance Company is still liable to pay Rs. 16,610.17 nP. minus Rs. 11,556.54 nP. which is equal to Rs. 5,053.63 nP. 3. The Transport Company and the first two defendants are liable to pay Rs. 7,056.54 nP. to Snow White. The Transport Company has misappropriated Rs. 11,556.54 nP. and is contented with that. It has done nothing to get the residue from the Insurance Company.
Final Decision: The plaintiff is entitled to a decree for Rs. 5,053,65 nP. from defendant No. 4 and for Rs. 7,058.54 nP. from defendants Nos. 1-3, with costs, a moiety of which will be paid by defendants 1-3 and the remaining moiety by defendant No. 4 only.
On April 20, 1960, or thereabouts, the plaintiff Snow White Food Product Company Limited (shortened hereafter, as far as possible, into "Snow White") entrusted, in Calcutta, the third defendant Shree Hanuman Transport Company, a firm doing the business of "a common carrier of goods for reward", with two consignments one containing 25 tins of S/c refined groundnut oil and the other containing 400 tins of S/c Balloon Brand Vegetable Product - for carriage by road to self (Snow White) at Raiganj and Islampur respectively in the district of West Dinajpur. The Transport Company - that is how I call the third defendant hereafter, as far as possible - "received and accepted" the two consignments "for reward" with a view to reaching them to their destination and to Snow White too, as desired. The contracts of carriage are evidenced by two consignment notes one bearing the number A 1202 for despatch to Raiganj, and another bearing the number A 1203 for despatch to Islampur. Dated April 20, 1960, both were issued by the Transport Company. At the trial, they have been marked exhibit B collectively. The Transport Company insured with the fourth defendant, the New Assurance Company Limited, the goods covered by the two consignment notes against loss and damage, among other things, during transit. But these insurances were had "on account of and for the benefit of" Snow White. Leaving aside the permutation of "alternatives" in which the plaint seems to revel, the pith of Snow Whites case comes to this. The consignments were not delivered to Snow White - the Raiganj one at Raiganj and the Islampur one at Islampur. Worse, the goods consigned so were wrongfully disposed of and converted "to their own use" by all the defendants the Transport Company (the third defendant), its two partner - Sohanlal Bagla and Madanlal Poddar - the first two defendants and the Insurance Company (as I call now and hereafter, as far as possible, the fourth defendant).
For the Raiganj consignment the claim is laid at Rupees 16,000, and for the Islampur one at Rs. 931.87 nP., the total thus coming to Rs. 17,531.87 nP. To that is credited Rs. 4,500 paid by the Transport Company and its two partners (the third, the first and the second defendants) in part satisfaction of Snow Whites full claim. This leaves a residue of Rs. 13,031.87 nP., for recovery of which from all the four defendants, or for recovery of "such other sum as may be found due" from the first three defendants, the instant action has been raised on April 20, 1961.
2. Of the four defendants, two only - Sohanlal Bagla, the first one, and the Insurance Company, the fourth one - resist the suit. The remaining two, Madanlal Poddar, the second one, and the Transport Company, the third one, do not.
3. The common plea taken by the two contesting defendants - Sohanlal and the Insurance Company - is that the insurance money is payable by the Insurance Company to the Transport Company. The insurance company adds that the Transport Company had taken out an open policy, but not on account of, or for the benefit of, Snow White, and that there is no privity of contract between the two - the Insurance Company and Snow White - thus affording no scope for its liability in any manner to Snow White.
4. Sohanlal denies that he had been a partner ever of the Transport Company of which, he admits, he was a mere assistant. He admits too the two consignments having been made over to the Transport Company for despatch to Raiganj and Islampur (Aluabari Road). And he pleads an accident the lorry carrying the goods met with near Lalgola in the district of Murshidabad by falling into a ditch - an accident which culminated in the driver of the lorry being killed and the tins (full of Snow Whites goods) being damaged and leaky. The surveyor deputed by the Insurance Company, he concludes, sold the damaged goods.
5. The issues struck at the trial
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