Balasore Textile Distributors Association v. Indian Union (B.N. Rly.)

Narasimham, C.J:— This is an appeal from the judgment of the Additional Subordinate Judge, Balasore, dismissing a suit brought by the appellant-plaintiff for recovery of compensation from the respondent — railway administration—for short delivery of goods. The plaintiff-appellant is a partnership firm.

2. On 25-10-48 a consignment of 20 bales of cotton waste blankets was despatched by a firm in Bombay known as Sukhdeolal Ramnibas from Wadi Bandar addressed to the District Magistrate of Balasore, under Invoice No. 18 and R.R No. 8117/58 dated 28-10-48 (Ext. A). This was despatched in Wagon No. 5999 E.I Railway which in due course arrived at Balasore. The R/R was handed over to the plaintiff by the District Magistrate and, on its production, the plaintiff obtained delivery of the consignment on 15-11-48 from the Goods Office of the Railway at Balasore.

3. It was noticed, however, that 11 bales wales missing from the consignment. Thereupon, on 8-12-48 the plaintiff informed the Claims Officer, B.N Railway, Calcutta about the non-delivery of the consignment and claimed compensation of Rs. 9031-11-0 (Ex. 3). The Railway acknowledged receipt of the claim (Ex. 1 dated 14-1-49) and stated that “the matter is receiving its attention”. After some reminders, the plaintiff was informed by the Superintendent of Claims, B.N Railway, on 17-6-49 (Ex. 4) that the loss of goods booked took place during a running train theft and consequently the railway was not liable to make good the loss. Hence the Railway repudiated the claim for compensation. The plaintiff brought the present suit on 15-3-50. Before the lower Court the parties went to trial on the following main issues:

(i) The claim of the plaintiff is barred by Section 69(2) of the Partnership Act as the plaintiff-firm was admittedly not registered under that Act.

(ii) There was no valid assignment of the R/R in favour of the plaintiff by the District Magistrate and consequently the plaintiff had no right to sue.

(iii) The suit was barred under Article 31 of the Limitation Act inasmuch as the time would run from the date of which the remaining portions of the consignment were delivered (15-11-48) and

(iv) The loss was due to theft from a running brain and not due to misconduct on the part of the railway staff.

4. The trial Court decided all these issues in favour of the plaintiff except issue No. (i). On the question of limitation he held that time would run not from the date (15-11-48) on which short delivery took place but from the date on which the Railway finally repudiated the claim by their letter Ext. 4 dated 17-6-49.

5. Mr. Pal on behalf of the respondent while supporting the judgment of the lower Court so far as the bar of Section 69(2) of the Partnership Act was concerned, further urged that the view taken by the lower Court on the question of limitation was wrong and that time would run from the date on which short delivery took place, namely, 15-11-48. But on all other questions counsel for both sides fairly did not challenge the findings of the lower Court and it is unnecessary to refer to them here.

6. Section 69(2) of the Partnership Act: The plaintiff's clerk (P.W 1) admitted that the plaintiff is a firm of partners and that the partnership deed was drawn up in due course. He was, however, unable to say if the firm was duly registered but it appears from the judgment of the lower Court that the counsel for the plaintiff conceded before that Court that no such registration had, in fact, taken place. In view of this concession on facts, the trial Court held that the plaintiff's claim is absolutely barred by Section 69(2) of the Partnership Act. Section 69(2) prohibits the enforcement of any right arising from a contract by way of suit in any court by or on behalf of the firm unless the firm is registered.

7. On the facts found the view taken by the lower Court is unarguable and Mr. Das Gupta for the appellant had therefore to content himself with raising a technical objection to the effect that as no specific issue was raised on this question the trial Court was not justified in either allowing evidence to be adduced on this point or in permitting counsel for the plaintiff to make any concession of facts. He relied on the provisions of O. 6 R. 6, and O. 8 R. 2 of the CPC and urged that it was the duty of the defendant to raise a specific issue regarding the bar of S. 69(2). One of the important issues raised in the lower Court was issue No. (ii) which was as follows: “Is the suit maintainable in its present form?” This issue is doubtless defective and” does not conform to the requirements of O. 6 R. 6 or O. 8 R. 2 of the CPC. The defendant ought to have stated in the pleadings about the ground on which he considered that the suit was not maintainable.

8. But I cannot agree with Mr. Das Gupta that merely because the pleadings are defective and the issue is too general and not specific, the Court was not entitled to examine the applicability of Section 69(2) of the Partnership Act, when the necessary facts have been admitted either by the plaintiff's witness or by the plaintiff's counsel. Mr. Das; Gupta relied on some observations of the Privy Council in Siddiq Mohammad v. Mst. Savan, AIR 1930 PC 57 (1). In that case a party claimed certain lands as having been transferred to him by one Hote Khan. But having failed in this contention, in the lower Courts, it was urged before the Privy Council that the transfer was by way of gift by Hote Khan's widow. Their Lordships of the Privy Council rejected this contention in these terms:

“That claim was never made in the defence presented and the learned Judicial Commissioner, therefore, very truly find that no amount of evidence can be looked into upon a plea that was never put’ forward.”

It will be noticed that in that case the plea dealt with a question of fact as to whether there was a transfer by way of gift either by Hote Khan or by his widow and no question of contravening a statute arose. Here, however, Section 69(2) of the Partnership Act expressly forbids any Court from entertaining any suit by or on behalf of the unregistered partnership firm. When the necessary facts, for the application of that section have been brought to the notice of the Court, it cannot be a party to the perpetration of an illegality. This was made clear in the well known decision of the Privy Council reported in Suraj Mull v. Triton Insurance Co., AIR 1925 PC 83 in the following terms:

“No Court can enforce as valid that which competent enactments have declared shall not be valid nor is obedience to such an enactment, a thing from which a Court can be dispensed by consent of parties or by failure to plead or to argue a point at the outset…. The enactment is prohibitory. It is not confined to affording a party protection of which he may avail himself or not as he pleases.”

They allowed a question of law to be raised for the first time when the matter was pending in the Privy Council. In Mohanlal Jagannath v. Kashiram Gokul, AIR 1950 Nag 71 (74) this view was followed and it was observed that no Court can perpetrate an illegality once the necessary facts have come to its notice. The following observations of Lindley, L.J in Scott v. Brown, Doering Mc Nab and Co., (1892) 2 QB 724 (728) were quoted with approval:

“It matters not whether the defendant has pleaded the illegality or whether he has not. If the evidence adduced by the plaintiff proves the illegality, the Court ought not to assist him.”

9. To a similar effect is the observation of the Calcutta High Court in Gopinath Motilal v. Ramdas, AIR 1936 Cal 133, where it was held that a question which goes to the root of a suit can be raised an any stage and it is question of which a Court must take cognizance when brought to its notice.

10. Mr. Das Gupta relied on some observations of the Supreme Court in Kalyanpur Lime Works v. State of Bihar, AIR 1954 SC 165, to the effect that no mixed question of fact or law can be permitted to be raised at the appellate stage. This decision has no application to the facts of the present case. Here the question was raised in the trial stage itself and during the cross-examination of the plaintiff's clerk (P.W 1) the defendants made it clear that the non-registration of the partnership firm would be one of the points on which they would rely. The plaintiff was therefore not taken by surprise and if in fact, the firm had been duly registered they could have easily proved the registration before the close of the plaintiff's evidence. On the other hand no evidence about such registration was adduced and the plaintiffs advocate fairly conceded before the lower Court that the firm had not been registered as a partnership.

11. I must, therefore, in agreement with the lower Court, hold that though the issue regarding the maintainability of the suit as framed was defective timely notice was given to the plaintiff and no prejudice was caused. The evidence bearing on non-registration of the partnership was rightly permitted to be adduced and the concession of the advocate for the plaintiff was also rightly taken into consideration. The plaintiff's suit is clearly barred by Section 69(2) of the Partnership Act and is not maintainable.

12. Article 31 of the Limitation Act: What is the date on which the goods ought to have been-delivered within the meaning of this article? Is it the date on which the short delivery took place, i.e, 15-11-1948 or is it the date on which the Railway Administration finally repudiated the claim, viz., 17-6-1949?

13. The case law on the subject is not uniform, but the following principle seems to be clear. In cases of non-delivery either in whole or part, if, in the subsequent correspondence with the claimant the Railway held out hopes to him that the goods would be traced out and duly delivered, then time would run from the date on which the Railway finally declined to deliver the goods. Thus, in South Indian Rly. Co. v. Narayana Iyer, AIR 1924 Mad 567, a Railway Company after some correspondence finally told the claimant that the bale said to have been consigned could, not be delivered. Time was held to run from the date of receipt of that letter. In Tugal Kishore v. G.I.P Rlv. Co., AIR 1923 All 22 (2) the Railway asked the claimant to appear at a particular railway station, on a specified date, to receive the goods but ultimately failed to deliver the same. Here also, in view of the clear assurance of the Railway to deliver the goods time was held to run from the date on which there was a final refusal.

14. In Jainarain v. Governor General of India, AIR 1951 Cal 462 the Railway held out hopes of delivery of the missing goods and went to the length of informing the claimant that the goods were lying at a particular station and calling upon him to take delivery of the same on payment of heavy demurrage, but ultimately the goods were not delivered. Hence, it was held that time would run from the date on which the Railway finally expressed its inability to deliver the goods and repudiated the claim.

15. See also in this connection, the recent decision of the Calcutta High Court reported in R.K Kanodia v. Union of India, AIR 1959 Cal 701.

16. But in most of the cases we seldom notice an assurance from the Railway Administration to the effect that the goods, would be delivered. As a matter of general practice, as soon as there is non-delivery or short delivery of a consignment booked through a Railway, the claimant intimates the fact to the Railway and registers his claim for compensation. The Railway while acknowledging his claim sends him an ambiguous reply to the effect that “the matter is receiving attention”. It is difficult to say whether by the expression “the matter is receiving attention” the Railway means at the settlement of the claim, if found on enquiry to be admissible, is receiving attention or that a search is being made for the missing goods and that they would be delivered to the claimant in the course, Eventually the Railway may repudiate the claim altogether, without saying that they are unable to deliver the goods.

17. In such cases it may be difficult to say what will be the date on which the goods “ought to have been delivered”. Will it be the date on which the goods may be reasonably expected to reach the place of destination, or will it be the date on which the Railway finally repudiated the claim? The latter view is supported by B. and N.W Rlv. Co. Ltd. v. Kameswar Singh, AIR 1933 Pat 45 and Mutsaddilal v. Governor General in Council, AIR 1952 All 897 (FB). In Kisansao v. Dominion of India, AIR 1953 Nag 270 a subtle distinction was drawn between a claim for delivery of goods on the one hand, and a claim for the price of goods; on the other, and it was observed that where the claimant does not ask for delivery of the goods but merely asks for the value of the goods lost, limitation cannot be extended to the date on which the claim was finally repudiated by the Railway. This distinction was criticised in Madanlal v. Dominion of India AIR 1959 Pat 165 where at p. 170 the learned Judge made the following observation:

“If after non-delivery of the goods the plaintiff does not make a demand for delivery of goods, but makes a claim for compensation for the goods in accordance with Section 77 of the Railways Act it cannot be said that because the plaintiff had made no demand for delivery of the non-delivered goods but only a claim for compensation which resulted in long and protracted correspondence between him and the Railway authorities, ending ultimately in the Railway expressing its inability to accede to the claim of the plaintiff, limitation should run, not from the date when the Railway finally refused to accept the claim of the plaintiff, but from the date when the goods, in the ordinary course ought to have been delivered.”

The learned Judge held relying on earlier Patna decisions, that it is essentially a question of fact bearing in mind all the circumstances —and too much importance need not be attached to the language used by the claimant while putting forward his claim before the Railway, but that the “substance” of the correspondence between the claimant and the Railway should be considered.

18. There can be no doubt that it is essentially a question of fact in each case as to what is the date on which the goods ought to have been delivered. But a case of non-delivery of the entire consignment may stand on different footing from a case of short delivery. In the latter case, the date when the major portion of the consignment was delivered, would, in the absence of peculiar circumstances, be the date when the rest of the consignment ought to have been delivered. In the instant case, admittedly the goods were all booked in one wagon and that wagon duly arrived at the place of destination on a specified date. Short delivery was noticed only on that date.

19. In all further correspondence the plaintiff never demanded the delivery of goods and the Railway never held out any hopes that they would be traced out and duly delivered to the claimant. In these circumstances I think it would be fair inference to say that the date of the short-delivery should be taken as the starting point of limitation under Article 31 of the Limitation Act. Thus in Gopiram Gouri Shankar v. G.I.P Rly. Co., AIR 1997 Pat 335; Gajanand Rajgoria v. Union of India, AIR 1955 Pat 182; Shamburam Agarwalla v. Union of India, AIR 1958 Pat 118 : Darjeeling Himalavan Rlv. Co. Ltd. v. Tetmull Bhojraj, AIR 1956 Cal 390; Union of India v. Meghraj, AIR 1958 Cal 434 and Dominion of India v. Aminchand Bhola Nath. (S) AIR 1957 Punj 49 which are all cases of short delivery, time was held to run from the data on which the short delivery actually took place. I see no essential distinction between the facts of those cases and the facts of the present case.

20. Mr. Das Gupta relied on AIR 1933 Pat 45 which was also a case of short delivery. But there were certain peculiar circumstances in that case which justified the extension of the period of limitation. The consignment consisted of 3229 bundles of steel rods and 4 wooden frames. Bud the consignment was not booked in one wagon but in separate wagons, and there was also transhipment of the goods from the wagons of E.I Rly. to those of B. and N.W Rly. at Mokamah Ghat. The goods reached the place of destination, viz., Mnktapur on the B. and N.W Rly., on 4 different dates. The steel rods were delivered of the 4th September, 20th September and 21st September, 1922. The wooden frames were delivered only on the 5th October 1922.

21. Then ensued the usual protracted correspondence with the Railway for short delivery of the steel rods and the B. and N. Rly., repudiated the claim on the 4th August, 1923. The suit was brought on 4-10-1923. The learned Judge held that the consignment must be taken as one consignment and that as the wooden frames were delivered only on the 5th October, 1922, the limitation under Article 31 of the Limitation Act would run from that date and that the suit was, therefore brought within time. They further held that it was clear from the correspondence that the Railway, by deliberate process of ignoring plaintiff's requests for attending to his claim, misled him into filing the suit at a late stage. Where a consignment is booked in different wagons and there is transhipment from the wagons of one Railway to those of another Railway, and the goods are also delivered on different dates, it may not be easy to say what will be the date on which the entire goods ought to have been delivered.

22. The probability of the goods remaining at the place of transhipment (from one railway to another) and their being eventually traced out and duly delivered later on is always there. It further appeal's that in that case the goods were booked in one wagon along with some other goods. Hence the claimant was perhaps justified in waiting until the-Railway finally repudiated his claim and impliedly refused to deliver the goods. That decision is therefore, based on the peculiar facts of that case and it cannot be taken as authority for the proposition that in all cases of short delivery the starting point for limitation under Article 31 of the Limitation Act will be the date on which the Railway finally repudiated the claim—irrespective of the nature of the consignment, the manner in which it was booked, the route through which the wagons travelled, and the nature of the correspondence between the claimant and the Railway.

23. On the facts admitted in this case, therefore, I must hold, in disagreement with the learned lower Court, that limitation would run from the date on which short delivery took place and as the) suit was brought more than one year from that date, it would be barred by limitation.

24. This finding is, however, academic in view of my decision on the question of maintainability.

25. The appeal fails and is dismissed, but there will be no order for costs as the Railway has succeeded on a purely technical point.

26. Das, J.:— I agree.

LC/V.S.B

27. Appeal dismissed.