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Manilal Raghavji Kothari v. Union Of India

Patna High Court
Mar 22, 1956
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Structured Summary of the Provided Opinion

Factual and Procedural Background

This is a second appeal by the plaintiff (a firm trading at Bermo) whose suit against the Union of India was dismissed by both lower courts. The plaintiff alleged that on 21-5-1948 his agent delivered to employees of the Oudh Tirhut Railway at Darbhanga station a consignment of ghee (630 this), weighing 203 maunds 20 seers, for delivery to the plaintiff's employees and agent at Bermo.

The consignor's agent received a railway receipt and an endorsed invoice. The goods reached Bermo in two instalments (first on 11-6-1948; second on 31-7-1948). On arrival some tins of ghee were damaged or cut open; weighment showed a shortage of 10 maunds 25 seers 8 chhataks.

The plaintiff alleged he served notices on the railways for compensation but was not compensated and therefore sued. The trial court and the Court of Appeal dismissed the suit; the plaintiff pursued this second appeal.

Legal Issues Presented

  1. Whether the defendant (railway administration) could successfully rely upon Risk Notes in forms A and B as a defence when those Risk Notes were not produced and their due execution was not proved.
  2. Whether, given the Courts' factual findings that the shortage was due to defective packing and not misconduct by railway servants, absence of proof of execution of Risk Notes benefits the plaintiff.
  3. Whether the suit was barred for non-joinder of the Oudh Tirhut Railway and/or for failure to serve the notice required by Section 77 of the Railways Act, and whether the East Indian Railway could be held liable under Section 80 where the loss occurred on another railway.

Arguments of the Parties

Plaintiff's Arguments (Mr. Katriar)

  • The onus lay on the defendant to prove that the consignor had executed Risk Notes in forms A and B; absent proof of their execution, the defendant could not take up that defence.
  • Risk Notes were never produced at any stage; a mere notation on the railway receipt (exhibit B) indicating "Risk Note Form A B" could not substitute for proof of execution.
  • Relied on the case Ramdas v. Dominion of India to distinguish existence of Risk Note documents from their due execution and to emphasize the requirement under sub-section (2) of Section 72 of the Railways Act for proof of execution (and that secondary evidence is permissible where originals are lost, but such evidence was not given in this case).

Defendant's Arguments (Mr. P.K. Bose)

  • Even if the defendant did not produce the original Risk Notes, the Courts below had found on facts that the shortage/damage was due to defective packing and not due to misconduct or negligence of railway servants; therefore absence of proof of execution of Risk Notes would not assist the plaintiff.
  • Pointed out non-joinder and notice defects: the goods had been consigned to Oudh Tirhut Railway at Darbhanga, but the plaintiff did not make that railway a party nor serve the notice required by Section 77 upon it; notice was served only on the East Indian Railway.
  • Under Section 80 the plaintiff has an alternative remedy (against railway consigned or railway on which loss occurred); because the Court of Appeal found that loss occurred on Oudh Tirhut Railway, the East Indian Railway could not be made liable.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Ramdas v. Dominion of India, 1950 Pat 215 (AIR V 37) Distinction between existence of Risk Notes in forms A and B and the due execution of such Risk Notes; requirement to prove execution (reference to sub-section (2) of Section 72 of the Railways Act); secondary evidence is permissible if originals are lost but must be provided. The Court acknowledged that Ramdas supports the plaintiff's contention that mere reference on a railway receipt does not dispense with proof of execution; however, the Court held that even accepting that principle, the plaintiff could not succeed because the Courts below found on facts that the loss was not due to misconduct by railway servants.
Governor-General of India in Council v. Sukhdev Ram, 1949 Pat 329 (AIR V 36) Where goods are consigned to a railway for delivery at a station on another railway, the latter railway (on which delivery is to be made) cannot be held liable for loss occurring on the former railway on the basis of agency or partnership. The Court applied this principle to hold that the East Indian Railway could not be made liable because the finding of fact was that the loss occurred while the goods were with the Oudh Tirhut Railway (discovered at Mokamah Ghat).

Court's Reasoning and Analysis

The Court proceeded by addressing two principal strands of defence relied upon by the defendant and the corresponding contentions of the plaintiff:

  1. Regarding Risk Notes:
    • The Risk Notes in forms A and B were not produced at any stage. The Courts below relied on the railway receipt (exhibit B) which bore the printed words "Risk Note Form" and the carbon notation "A B".
    • The plaintiff argued (relying on Ramdas) that such a notation only establishes the existence of such forms and does not prove their due execution; under sub-section (2) of Section 72 of the Railways Act execution must be proved and secondary evidence is permissible where originals are lost.
    • The Court accepted the legal principle that execution must be proved, but then examined whether the absence of such proof would benefit the plaintiff in this particular factual matrix.
    • Section 72(1) of the Railways Act makes railway responsibility akin to that of a bailee under Sections 151, 152 and 161 of the Contract Act, 1872; these Contract Act sections were summarized (duty of care, standard of care, and liability for loss by bailee's fault).
    • On facts, the Court of Appeal had found that the shortage/damage arose from defective packing (tins not wrapped in gunny bags, denting, bursting, leakage) and that there was "apparently no misconduct on the part of the Railway employees". The plaintiff had not adduced evidence indicating misconduct.
    • Because the loss could not be attributed to railway servant misconduct, the protective effect of a Risk Note in form B (which absolves the railway except where loss is shown to arise from misconduct of railway servants) meant that the plaintiff had to prove misconduct; he did not. Hence the omission to prove execution of Risk Notes did not help the plaintiff.
  2. Regarding non-joinder and statutory notice:
    • The goods had been consigned to the employees of the Oudh Tirhut Railway at Darbhanga, while delivery occurred at Bermo (on the East Indian Railway).
    • Section 77 of the Railways Act requires serving a claim-notice within six months on the railway to which the goods were consigned in order to seek compensation; no such notice was served on the Oudh Tirhut Railway in this case (the notice was served on the East Indian Railway).
    • Section 80 gives an alternative remedy: the plaintiff may claim against the railway administration to which goods were consigned or against the railway administration on which the loss occurs; the remedy is alternative, not cumulative.
    • The Court relied on the factual finding that the loss was discovered at Mokamah Ghat while the goods were with Oudh Tirhut Railway; therefore the East Indian Railway (on which loss had not occurred) could not be made liable for the shortage under the authorities cited.

The Court emphasized that the quoted findings of fact by the Court of Appeal (regarding defective packing and absence of misconduct) are binding in the second appeal and controlled the outcome.

Holding and Implications

DISMISSED. The second appeal was dismissed and the judgment and decree of the Court of Appeal (dismissing the plaintiff's suit) were upheld; the appeal was dismissed with costs.

Implications:

  • The direct effect is that the plaintiff's suit remains dismissed and the defendant (East Indian Railway / Union of India as represented) is not ordered to pay compensation for the shortage.
  • The Court's decision rests on (a) binding factual findings that the loss was due to defective packing and not railway servant misconduct, and (b) statutory and procedural consequences of non-joinder and failure to serve the required notice on the railway to which the goods were consigned. Because the opinion does not develop or announce a broader rule beyond applying the cited authorities and statutory provisions to the facts, no new precedent was set by this decision beyond its application to the facts of the case.

Order delivered by: D.R.R. — "Appeal dismissed." (as recorded in the opinion)

Show all summary ...

1. This second appeal is by the plaintiff whose suit has been dismissed by both the Courts below. The suit was brought by a firm carrying on business at Bermo, a station on the East Indian Railway, against the Union of India as the defendant. The plaintiff's case was that, on 21-5-1948, his agent had delivered to the employees of the Oudh Tirhut Railway at Darbhanga railway station 630 this of ghee, weighing 203 maunds 20 Seers, for being delivered to the employees and agent of the plaintiff at Bermo station.

2. The plaintiff's agent was given a railway receipt and an invoice which was endorsed in favour of the plaintiff. The goods were delivered to the plaintiff at Bermo in two instalments, the first instalment having been delivered on 11-6-1948, and the second on 31-7-1948. It was discovered that some of the this of ghee were in a damaged condition while some other this had been cut open.

3. On weighment, there was found a shortage of 10 maunds 25 seers 8 chhataks of ghee. The plaintiff alleged that he had served notices upon the railways concerned for payment of compensation for the loss sustained by him; but, since the railway did not compensate him for the loss, he instituted the suit out of which the present appeal has arisen.

4. A number of defences were taken in the trial Court; but it is necessary only to state that part of the defence to which arguments in the present appeal have been confined. It was stated by the defendant that the consignor of the this of ghee had executed Risk Notes in forms A and B under which the defendant was not liable and had been absolved from any liability arising out of loss or damage or deterioration in respect of the consignment; and, in the same connection, it was alleged that the shortage, in the consignment had been due to bad and defective packing by the consignor himself, and that there had been no misconduct or negligence on the part of the railway administration or its servants.

5. The other defence, with which we are concerned in the present appeal, was that the suit was Bad for non-joinder of parties, as the plaintiff had not made the Oudh Tirhut Railway a party to the suit.

6. Mr. Katriar, who has appeared for the plaintiff-appellant, contended, in the first place, that the onus lay upon the defendant to prove that the consignor of the this of ghee had executed Risk Notes in forms A and B, but that, since the defendant had failed to prove that fact, he could not take up a defence of the kind which he has taken on the ground of the execution of those Risk Notes.

7. It may be stated at the outset that the Risk Notes in forms A and B were not produced at any stage of the case. The courts below, however, placed reliance upon the railway receipt (exhibit B) under which the consignment had been booked. Almost at the top of this receipt, there are printed these words “Risk Note Form”, and then there are the words in carbon “A B”.

8. From this note made on the railway receipt, an inference has been drawn in the Courts below that the receipt, on the face of it, shows that the consignment was booked subject to Risk Notes in forms A and B. Mr. Katriar has strongly contended that no such inference could be drawn merely upon the note made on the railway receipt, as it was the bounden duty of the defendant to prove the due execution of the Risk Notes in forms A and B.

9. Risk Note in form A is used when articles are tendered for carriage which are either already in bad condition or so defectively packed as to be liable to damage, leakage or wastage in transit; and the Risk Note in form B is used when the sender elects to despatch at a “special reduced” or “owner's risk” rate, articles or animals for which an alternative “ordinary” or “risk acceptance” rate is quoted in the tariff.

10. In this latter Risk Note, the consignor, in consideration of payment of a lower charge, undertakes to hold the railway administration harmless and free from responsibility for any loss, destruction or deterioration of, or damage to, the consignment from any cause whatever except “upon proof that such loss, destruction, deterioration or damage arose from the misconduct of the railway administration's servants”, with some provisos which need not be quoted.

11. In support of his contention, Mr. Katriar relied upon the case of — ‘Ramdas v. Dominion Of India*’, 1950 Pat 215 (AIR V 37) (A), in which their Lordships made a distinction between the existence of Risk Notes in forms A and B and the execution of such Risk Notes. In that case also, reliance had been placed upon some railway receipts which referred to Risk Notes in form B.

12. It was pointed out in that case that would merely prove that there were such documents which did not, however, relieve the railway administration from proving the due execution of the Risk Notes, with particular reference to the conditions which have to be fulfilled under sub-section (2) of Section 72 of the Railways Act.

13. It was further pointed out in that case that, the original Risk Notes having been lost, it was open to the railway administration to give secondary evidence of due execution; but this they failed to do. The case relied upon by Mr. Katriar supports his contention. The further question, however, which arises in this case is whether the absence of proof of due execution of Risk Notes in forms A and B is now a matter upon which the suit should succeed.

14. Mr. P.K Bose, appearing for the respondent, has argued that, upon the findings arrived at in the Courts below, the absence of proof that the two aforesaid Risk Notes had been executed will be of no assistance to the plaintiff. I have pointed out above that the execution of a Risk Note in form B relieves the railway administration from responsibility for loss, destruction or deterioration of or damage to, the consignment from any cause whatsoever except upon proof that such loss destruction, deterioration or damage arose from the misconduct of the railway administration's servants. The plaintiff had to prove that loss, destruction, deterioration or damage was due to the misconduct of the railway administration servants.

15. Section 72(1) of the Railways Act provides that the responsibility of a railway administration for loss of goods shall, subject to the other provisions of the Act, be that of a bailee under Sections 151, 152 and 161 of the Contract Act, 1872, Under Section 151 of the Contract Act, a bailee is bound to take as much care of the goods bailed to him as a man of ordinary prudence would, under similar circumstances, take of his own goods and under S. 152 the bailee, in the absence of any special contract, is not responsible for the loss, destruction or deterioration of the things bailed, if he has taken the amount of care of it as described in S. 151.

16. And under S. 161 if, by the fault of the bailee, the goods are not returned, delivered or tendered at the proper time, he is responsible to the bailor for any loss, destruction or deterioration of the goods from that time. In this connection, the Court of Appeal below has given the following finding:

“……the alleged shortage in the consignment at the time of the delivery was due to the fact that some of the this got damaged during their journey from Darbhanga to Bermo. They also show that this damage was due to the defective packing since the this were not wrapped in gunny bags and the result was that during the course of their journey from Darbhanga to Bermo they struck against each other with the result that they got dented, some of them burst open, others were cut and some of them began to leak. There was apparently no misconduct on the part of the Railway employees to whom the aforesaid loss can be attributed. The plaintiff too has not adduced any evidence worth the name indicating any such misconduct or carelessness on the part of the employees of the E.I Railway.”

17. These are findings of fact which are binding upon me in second appeal. Clearly, the loss cannot be attributed to any misconduct on the part of the servants of the railway administration. This being so, I think that the plaintiff can take no advantage of the omission on the part of the defendant to prove the due execution of the Risk Notes in forms A and B.

18. Mr. P.K Bose then raised the point that there is another difficulty in the way of the plaintiff. The this of ghee had been consigned to the employees of the Oudh Tirhut Railway at Darbhanga. Their delivery was made at Bermo, a station on the East Indian Railway. The plaintiff has not made the Oudh Tirhut Railway, a party.

19. In order to entitle the plaintiff to a refund to compensation for the loss of the goods delivered it was necessary, under the provisions of Section 77 of the Railways Act, to serve a notice upon the Oudh Tirhut Railway preferring a claim to compensation within six months from the date of the delivery of the goods. Such a notice was not served upon the Oudh Tirhut Railway. This railway, therefore, could not be made liable to pay compensation. A notice Tinder Section 77 of the Railways Act, however, was served upon the East Indian Railway.

20. Now, under the provisions of Section 80 of the Railways Act, this latter railway, namely, the East Indian Railway, could be made liable if the loss had occurred on this railway. Section 80 of the Railways Act gives the plaintiff the choice of claiming his remedy either against the railway administration on which the goods are consigned or against the railway administration on which the loss occurs. The remedy is alternative, and not cumulative.

21. Where the goods are consigned to a railway for delivery at a railway station at another railway and the suit for damages for short delivery is brought against the defendant representing the latter railway, on which railway the loss has not taken place, the latter railway cannot be made liable for the loss either on the theory of agency or partnership (See the case of — ‘Governor-General of India in Council v. Sukhdev Ram’, 1949 Pat 329 (AIR V 36) (B)), and, so far as the East Indian Railway is concerned, this was not the railway administration to which the goods had been consigned. Therefore, this railway can only be made liable if it be found that the loss occurred on it.

22. Now, the goods were carried from Darbhanga up to Mokamah Ghat by the Oudh Tirhut Railway. The goods were then transhipped to the East Indian Railway to be taken to Bermo station. The finding of the final Court of fact is that the loss was discovered at Mokamah Ghat, that is to say, that the loss had taken place when the goods were with the Oudh Tirhut Railway. Such being the finding, the East Indian Railway cannot be made liable to compensate the plaintiff for the loss. For these reasons, I am of the opinion that the plaintiff's suit has been rightly dismissed. There is no ground for interference with the judgment and decree passed by the Court of appeal below. This appeal is, accordingly, dismissed with costs.

D.R.R

23. Appeal dismissed.