M/S. Lakshmi Narayan Gauri Shankar v. Union Of India .

R.K Choudhary, J.:— This is an appeal by the plaintiff whose suit for recovery of a sum of Rs. 2,895-14-6 by way of damages, interest and certain other charges has been dismissed by the Courts below 25 bales of cotton twist yarn were consigned at Rajapalayam Railway Station of the South Indian Railway for being delivered to the appellant at Gaya Railway Station of the East Indian Railway on 16-9-1947. Out of the above 25 bales, only 20 bales were delivered to the plaintiff at Gaya on 18-10-1947, and the remaining 0 bales remained undelivered. On 29-12-1947, the appellant sent notices under Section 77 of the Indian Railways Act to the General Manager of the above two railways. On 26-1-1948, the Chief Commercial Manager of the South Indian Railway, Trichinopoly, gave a reply to the above notice by his letter (Exts. 3) that, inasmuch as the destination station was situated on the East Indian Railway, the Chief Commercial Manager of that railway at Calcutta was the proper authority to dispose of the matter in question and the said officer at Calcutta had been advised to dispose of the matter, and requested the pleader of the plaintiff, through whom the above notice had been sent, to address the Chief Commercial Manager, East Indian Railway, Calcutta, on the subject.

2. On 15-4-1948, a notice under Section 80 of the CPC was sent to the Governor General of India in Council through the Secretary, Railway Board. On 24-7-1948, the Chief Commercial Manager, of the East Indian Railway, Calcutta, wrote a letter (Ext. 3.b) to the plaintiff in which reference was made to the above notice under Section 80 of the CPC. The claim not having been settled, the plaintiff instituted a money suit, out of which the present appeal arises, for recovery of a sum of Rs. 2,225/- as being price of the non-delivered bales, Rs. 56-4-0 as quota holders, charges, Rs. 34-3-6, as commission and expenses, Rs. 163-3-0 as railway freight realised for the non-delivered bales, Rs. 131-4-0 as clearing agents' profits, Rs. 242/- as interest at the rate of 9 per cent per annum and Rs. 44/- as cost of notices sent under Section 77 of the Indian Railways Act and Section 80 of the CPC, all amounting to Rs. 2,895-14-6. The suit was contested by the only defendant in the suit, namely, the Dominion of India (now the Union of India) by filing a-written statement which is more or less in the nature of a formal written statement usually filed by a guardian ad litem. No plea of loss was taken in defence and it was only alleged that the loss, if any, was beyond the control of the Railway Administration. As appears from the judgment of the trial court, apart from the legal pleas, the claim of the plaintiff was not disputed except as to interest. The trial Court held that if the plaintiff was to be given a decree, he was entitled to interest from 29th of December, 1947, till, the institution of the suit at 6 per cent per annum and at the same rate from the date of institution of the suit till the date of the decree.

3. It also found that the shortage was due to misconduct of the railway servants and apart, from that, the plaintiff could also be entitled to realise the damages on the ground of non-delivery. It however, held that the suit was barred by time and that there had been no valid service of notice under S. 80 of the Code of Civil. Procedure nor was the proper party before the court. Accordingly, it dismissed the suit. On appeal by the plaintiff, the lower appellate court-reversed the findings of the trial court with regard to the question of limitation and the proper party not being before the court.

4. It also reversed the finding of the trial court with respect to the validity of the notice under Section 80 of the CPC so far as the East Indian Railway was concerned and held that there had been a sufficient compliance of the provision of that section so far as that railway was concerned. Since, however, there was nothing before that court as regards the loss or destruction of the undelivered bales having occurred ever the East Indian Railway, it held that railway could not be made liable. As regards the South Indian Railway, its finding was that notice under Section 80 of the CPC was not served on the administration of that railway and therefore, though in law that railway was liable, no decree could be passed against it. In view of the above findings, it affirmed the order of dismissal of the suit passed by the trial court. The plaintiff being thus aggrieved has come up to this Court in second appeal.

5. In support of the appeal, Mr. Lalnarayan Sinha has put forward two contentions. His first contention is that the Union of India being the owner of both the railways was liable under the terms of the contract to deliver the goods, to the plaintiffs and on account of non-delivery of the 5 bales a breach in the contract occurred at Gaya for which it was liable, the cause of action, having arisen to the plaintiff at Gaya on non-delivery, and the suit should have therefore, been decreed.

6. His second contention is that the Union of India, as the plaint shows, has been sued as being the owner of both the railways and even if no notice under Section 80 of the CPC has been served on the railway administration of the South Indian Railway, a decree-should have been passed against it inasmuch as the administration of the South Indian Railway in the circumstances of the case will be deemed to have waived the requirement of the service of notice under that section. In my opinion, both the contentions are well founded and must prevail.

7. It appears that a confusion has been made in the present case as if there is no difference between a claim on the basis of non-delivery & a claim on the basis of loss of goods. But the authorities are clear that the two claims stand on different footing. For example, Section 77 of the Indian Railways Act requires a claim being preferred in writing before the railway ad ministration for compensation for the loss, destruction or deterioration of the goods, but where a claim is made on the ground of non-delivery of the goods consigned, it is not necessary in law for preferring such a claim.

8. If any authority is needed for this proposition, reference, may be made to the Bench decisions of this Court in Jaisram Ramrekh Das v. Great Indian Peninsular Railway*, AIR 1929 Pat 109 (A) and The Governor General in Council v. Kasiram Marwari, AIR 1949 Pat 268 (B). In both these cases it has been held that the word ‘loss’ in Section 77 of the Indian Railways Act does not include a claim for non-delivery. The claim in this case, as appears from the plaint, is based purely on non-delivery of the 5 bales in question and not on their loss. This is also manifest from a passage in the judgment of the lower appellate court which runs as follows:

“Now the plaintiffs in this case have based their suit on non-delivery and it is common ground that no notice under Section 77 of the Railways Act was necessary in this case. The only dispute is regarding the validity of the notice under Section 80 of the CPC.”

9. As already stated, the Union of India has been sued as being owner of both the railways. While the consignment was booked on the South Indian Railway, it (the Union of India) undertook to deliver the same to the plaintiff at Gaya, on the East Indian Railway line. Ordinarily, under the law of contract, therefore, it was bound to compensate the plaintiff if it failed to deliver whole or part of the consignment, at Gaya. Undisputedly, in this case notice under Section 80 of the CPC was served on the administration of the East Indian Railway and if the Union of India as being owner of that railway is liable to pay the damages, there is no technical difficulty. Counsel for the Union of India, has, however, drawn our attention to Section 80 of the Indian Railways Act, which is in the following terms:—

“Notwithstanding anything in any agreement purporting to limit the liability of a railway administration with respect to traffic while on the railway of another administration, a suit for compensation for loss of the life, or of or personal injury to a passenger or for loss, destruction, or deterioration of animals or goods where the passenger was or the animals or goods were booked through over the railways of two or more railway administrations, may be brought either against the railway administration from which the passenger obtained his pass or purchased his ticket, or to which the animals or goods were delivered by the consignor thereof, as the case may be or against the railway administration on whose railway the loss, injury, destruction or deterioration occurred.”

10. It is contended by him that the right of the plaintiff to sue for damages under the above section was undisputedly and without any restriction against the railway administration of the South Indian Railway where the consignment was made and he was also entitled to realise his claim from the railway of destination, namely, the East Indian Railway in this case, if the loss had occurred in that railway. In other words, the contention, raised is that, no less having occurred, within the East Indian Railway the Union of India as owner of that railway could not be made liable. But as already, observed, the present case not being a case of loss, but purely, a case of non-delivery, the principles of this section cannot be made applicable to the present case so as to entitle the defendant to have the suit dismissed on that ground.

11. In Muhammad Abdul Kadur v. E.I Rly. Co., ILR 1 Mad 375 (C), it was held, that, where a consignment was booked with one railway company but it was to be delivered on the line of another railway company, the cause of action to sue for breach of contract will arise at the station of destination if there has been a breach in delivering the consignment at that station. The same view has been taken in Union of India v. Adam Hajee Peer Mohammad Essack, AIR 1954 Trav. Co. 362 (D). Under the law of contract itself, the cause of action for damages for breach of contract arises even at the place where the breach has occurred.

12. Applying the above principle to the facts of the present case it is manifest that in the present case cause of action arose to the plaintiff at Gaya on the line of the East Indian Railway as the breach in the contract by non-delivery of the bales in question occurred there. The Union of India, therefore, as being the owner of the East Indian Railway where the breach occurred was liable for damages. In that view of the matter, the suit should have been decreed against it.

13. Several decisions have been placed before us by learned counsel for the Union of India in support of the contention that, without a notice, under Section 80 of the CPC having been served on the Manager of the South Indian Railway, the suit could not have been decreed. They are E.I Rly. Co. Ltd. v. Kedarnath Seth, ILR 6 Pat 105 : (AIR 1927 Pat 344) (E), Governor-General Of India v. Sukhdeo*, AIR 1949 Pat 329 (F), Dominion of India v. Firm Museram Kishunprasad, AIR 1950 Nag 85 (G) and Chandra Mohan Sana v. Union of India, AIR 1953 Assam 193 (FB) (H). These cases, in my opinion, do not apply to the facts of the present case and I will deal with them briefly. The case of ILR 6 Pat 105 : (AIR 1927 Pat 344) (E), no doubt, was a case of non-delivery, but the actual argument advanced was on the basis of loss.

14. There was no finding or allegation that the bale was in fact lost in course of transit on the railway which was sought to be made liable or that the non-delivery was by that railway company. In those circumstances, it was held that the railway of destination could not be made liable. In AIR 1949 Pat 329 (F), also the case was based on loss and there was a finding that the loss did not occur on the railway sought to be made liable, rather there was a definite finding that the loss occurred on the other railway administrations. The question as to what would be the result of a case which is purely based on non-delivery without there being any claim for loss was not considered and argued before their Lordships in that case. In the case of AIR 1950 Nag 85 (G), also the claim was based on loss. Moreover, as was pointed out by their Lordships themselves, the case related to the period before the Indian Independence Act was passed and their lordships themselves seem to have thought otherwise, if it had been subsequent to that Act.

15. The last case namely, AIR 1953 Assam 193 (FB) (E), is a Full Bench decision of that Court. That case, in my opinion, is of no assistance to the defendant, rather, it indirectly supports the contention of the appellants. In that case it was held that, in a case where the railway is administered by a Government or State, a suit under S. 80 can be brought against the Government or the State concerned, and where the railway administration to which the goods were consigned and the railway administration on which the loss occurred were both owned by the same Government or State, a suit can be brought against the State or Government which owns both the railways. It was further held that it was not necessary that the railway administration as such should be impleaded as a party defendant to the suit.

16. Section 3(6) defines, railway administration, or administration in these terms:—

“railway administration or administration, in the case of a railway administered by the Government or a State means the manager of the railway and includes the Government or the State and in the case of a railway administered by a railway company means the railway company.”

17. Section 80 of the CPC prescribed for service of notice in the case of a suit against the Central Government where it relates to a railway, on the General Manager of that railway, and S. 79 of that Code prescribes that in the case of a suit by or against the Central Government the Dominion of India shall be named as plaintiffs or defendant. The present case is against the Dominion of India (now the Union of India) and it does relate to a railway owned by the Union of India. Notice under Section 80 of the CPC having been served on the management of the East Indian Railway as owned by Government of India, is therefore, perfectly valid so as to make it liable for I the claim of the plaintiff.

18. So far as the second contention is concerned, reference may be made to the conduct of the management of the South Indian Railway, in this case. As already stated, a claim under Section 77 of the Indian Railways Act was made in writing before the General Manager of that railway on the 29th of December, 1947, in reply to which the plaintiff was asked to deal with the General Manager, of the East Indian Railway by letter dated 26th of January, 1948. In that reply it was clearly stated that the matter will be dealt with by the East Indian Railway and the plaintiff should address the Chief Commercial Manager of that Railway.

19. In face of that letter it could very well be said that the South Indian Railway waived to have been given any further notice required by any law. I may note here that it is permissible for a party, for whose advantage the provision of notice under Section 80 of the CPC has been made, to waive it (see Province Of Bihar… v. Kamakshya Narain Singh…., AIR 1950 Pat 366 (I). The Union of India which has undoubtedly been sued as also being the owner of the South Indian Railway is, therefore, liable for damages even though no notice under Section 80 of the CPC has been served on the management of this railway.

20. According to the decision of the trial court, as already observed, the plaintiff is entitled to have a decree for the entire claim if he succeeds in this suit with certain modification in the claim for interest. The view taken by the trial court was that in case of success the plaintiff was entitled to interest from 29th of December, 1947, that is to say, from the date on which notices under Section 77 of the Indian Railways Act were sent to the two railways. It is, however, well settled that no decree for interest can be given prior to the institution of the suit unless there be a contract for such interest.

21. It has, therefore, been contended by the counsel for the respondent that the plaintiff was not entitled to interest before the institution of the suit. This contention is correct. The plaintiff is not, therefore, entitled to any interest prior to the institution of the suit.

22. For the reasons given above, the appeal succeeds and is allowed. The decrees of the courts below dismissing the suit of the plaintiff are set aside and the suit is decreed in favour of the plaintiff with costs throughout except with regard to the claim of interest prior to the institution of the suit. The plaintiff, is, however, entitled to interest at 6 per cent per annum from the date of the suit till the date of the decree and future interest at the same rate on the amount of the decree till realisation of the same.

23. V. Ramaswaml, C.J:— I agree.

K.S.B

24. Appeal allowed.