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Smart Summary

Factual and Procedural Background

The plaintiffs purchased cotton piece goods from Messrs Sagar Mall Subhkaran of Ahmadabad. A consignment of 108 bales was booked from Ahmadabad Railway Station to Kishangunj Railway Station on the O.T. Railway. At delivery it was found that three bales had been tampered with and partly emptied and one bale was completely empty.

Notices were served under Section 77 of the Railways Act and also under Section 80 (as referenced in the opinion). The Railway Administration failed to settle the claims. The plaintiffs sued for Rs. 3,100 from two defendants: (1) the O.T. Railway Administration (defendant No. 1) and (2) the B.B. and C.I. Railway Administration (the contracting railway).

Defendant No. 1 (O.T. Railway) contested the suit, contending notices were not properly served and that it was not responsible for the loss.

Both lower courts dismissed the suit. They held that the O.T. Railway was not the contracting railway and the plaintiffs had not proved that the loss occurred on the O.T. Railway, so the suit was not maintainable against it. As to the B.B. & C.I. Railway (the contracting railway), the lower courts found the notice under Section 77 of the Railways Act had not been served on that railway within the statutory six-month period; consequently the suit was not maintainable against that defendant either.

The plaintiffs appealed. In the present appeal the appellants did not challenge the finding that notice under Section 77 had not been served within the statutory period on the B.B. & C.I. Railway. Their principal contention was that the suit should nevertheless have been decreed against the O.T. Railway because that railway had failed to show that the loss did not occur while the goods were in its custody.

Legal Issues Presented

  1. Whether the plaintiffs could obtain a decree against the O.T. Railway in the absence of proof that the loss occurred while the consignment was in the custody of the O.T. Railway.
  2. Whether the failure to serve the statutory notice under Section 77 of the Railways Act on the contracting railway (B.B. & C.I.) within the six-month period rendered the suit not maintainable against that contracting railway.
  3. Whether, and to what extent, the onus of disclosure and proof shifts to a railway administration (here the O.T. Railway) to disclose documents showing how the consignment was dealt with, and whether the plaintiffs were required to seek discovery under the civil procedure rules when the railway did not disclose.

Arguments of the Parties

Appellants' Arguments (Plaintiffs)

  • They did not challenge the lower courts' finding regarding the contracting railway's statutory notice, but argued that the O.T. Railway should nevertheless be held liable because it had failed to demonstrate that the loss did not occur while the consignment was in its custody.
  • The appellants argued that the onus was upon the O.T. Railway to disclose all relevant documents in its possession and to show that the consignment was not lost or damaged while under its custody; by failing to do so the O.T. Railway should not escape liability.

O.T. Railway Administration (Defendant No. 1)

  • The O.T. Railway contested the suit on the ground that notices were not properly served and that it was not responsible for the loss of the consignment.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Governor-General in Council v. Sukhdeo Ram, AIR 1949 Pat 329 Illustrates that a non-contracting railway (where loss did not occur) cannot be made liable on the theory of agency or partnership for loss occurring on another railway. The court relied on this decision to affirm that the mere fact that goods were booked through over more than one railway does not make the non-contracting railway automatically liable where the loss occurred elsewhere; plaintiffs must prove loss occurred on the non-contracting railway to succeed against it.
Surat Cotton Spinning and Weaving Mills Ltd. v. Secretary of State, 41 Cal WN 837 (AIR 1937 PC 152) Sets out the procedure and obligations of a railway under the proviso to risk note B: immediate obligation to disclose dealings with consignment, railway should give evidence first at trial, consignor may request further disclosure, and failure to disclose may lead to inference of misconduct or presumption under Section 114(g) Evidence Act. The court quoted this passage at length and held it to be the correct procedure: when railway fails to disclose or give evidence, consignor must request disclosure in the trial court (and may rely on discovery procedures); absent such steps the consignor cannot claim a presumption of misconduct.
Governor-General in Council v. Visheshwar Lal, AIR 1947 Pat 84 Approves the procedure outlined in the Surat Cotton (Privy Council) decision regarding disclosure and the consequences of non-disclosure by the railway. The court noted that Rai J. quoted the Privy Council passage with approval and adopted the same procedure in the present case, thereby requiring plaintiffs to seek discovery rather than relying on an abstract shift of onus.
Firm Badridas of Purulia v. Governor-General in Council, AIR 1947 Pat 118 Holds that where a plaintiff did not call upon the railway administration in the trial court to disclose material facts relating to carriage and custody, the plaintiff cannot later complain in a higher court or obtain remand to fill gaps in evidence. The court applied this principle to deny the appellants' contention for remand or for drawing a presumption of loss on the O.T. Railway when no discovery application had been made in the trial court.
Governor-General in Council v. Thakursi Dass, AIR 1948 Pat 45 Supports the view that where plaintiffs do not seek disclosure from the railway, the court is not obliged to enforce the disclosure procedure; failure to call for disclosure precludes the drawing of an adverse inference. The court relied on this precedent to reinforce the point that the plaintiffs' failure to seek disclosure or production of documents in the trial court barred them from seeking remand or relying upon inferences of misconduct in the High Court.
AIR 1948 Pat 41 (case title not specified in opinion) Referenced by the opinion as laying down law consistent with the other Patna decisions cited concerning the need to seek disclosure and inability to seek remand where disclosure was not sought. The court cited this decision (along with AIR 1947 Pat 118) as supporting the rule that plaintiffs who failed to seek necessary disclosure cannot later obtain remand to fill evidentiary lacunae.

Court's Reasoning and Analysis

The court proceeded by reference to the statutory framework and established authorities. It first examined Section 80 of the Railways Act, which (as quoted in the opinion) gives the consignor the choice of suing either the railway to which the goods were delivered by the consignor or the railway on whose line the loss occurred. The court emphasised that a non-contracting railway cannot be held liable for loss occurring on another railway simply on agency or partnership theories; it relied on Governor-General in Council v. Sukhdeo Ram for that proposition.

The court then analysed the plaintiffs' case against the O.T. Railway. It observed that the plaint contained no allegation that the loss occurred while the goods were in the custody of the O.T. Railway. The sole witness called (Lachmi Narain) did not testify that the loss or deterioration took place during custody by the O.T. Railway. On this factual basis the plaintiffs had failed to establish the primary fact necessary to maintain a claim against the non-contracting railway: proof that the loss occurred on that railway's line.

The appellants' argument that the O.T. Railway should have borne the onus to disclose how the consignment was dealt with was examined against the procedure set out by the Privy Council in Surat Cotton Spinning and Weaving Mills Ltd. That authority places an immediate contractual obligation on a railway to disclose the nature of its dealings with a consignment while under its control, and contemplates that the railway should lead evidence first at trial. However, the court emphasised that where the railway does not make the disclosure or lead evidence, the consignor must expressly demand further disclosure and, if necessary, ask the court for discovery (i.e., invoke the civil procedure rules to compel production).

Applying these principles, the court noted that the appellants admitted that after the suit was instituted the defendants did not give any evidence nor disclose how the consignment was handled. The court therefore held that it was the plaintiffs' duty to apply in the trial court for discovery of all relevant documents in the railway's possession (citing Order II, Rule 12 and Order XI, Rule 14 of the Civil Procedure Code as the appropriate procedural remedies). Because the plaintiffs made no application for discovery or production of documents in the trial court, they could not rely on the abstract doctrine of onus or ask the court to draw a presumption that the loss occurred while the goods were in the custody of the O.T. Railway.

The court further relied on decisions (including Firm Badridas and Thakursi Dass) which hold that a plaintiff who fails to call for disclosure in the trial court cannot seek remand or complain in the appellate court about the absence of such disclosure. On this combined statutory and precedential basis, the court concluded that the plaintiffs had not discharged the onus required to succeed against the O.T. Railway; accordingly the lower courts' dismissal on this point was correct.

Holding and Implications

HOLDING: APPEAL DISMISSED.

The court upheld the decisions of the two lower courts dismissing the plaintiffs' suit against both defendants. The dismissal against the contracting railway (B.B. & C.I.) stood because the requisite notice under Section 77 of the Railways Act had not been served within the six-month statutory period. The dismissal against the O.T. Railway stood because the plaintiffs failed to establish that the loss occurred while the consignment was in the custody of the O.T. Railway and failed to pursue available discovery procedures to obtain relevant documents or compel disclosure.

Implications:

  • The direct effect is that the plaintiffs' claim for Rs. 3,100 against both the O.T. Railway and the B.B. & C.I. Railway is dismissed; there will be no order as to costs.
  • The decision underscores procedural obligations on consignors who seek to rely on non-disclosure by a railway: they must request disclosure and, where necessary, invoke discovery procedures in the trial court rather than rely on a later appellate presumption of misconduct. The court applied existing authority and did not purport to lay down a novel rule; it treated prior decisions as controlling and declined to remand the case for further evidence.

Judge/Bench notation in the opinion: M.K.S. — the judgment concludes with the statement "Appeal dismissed."

    Kannaiyalal Ram Narain And Co. v. The Union Of India And Others

    1. In the suit which is the subject-matter of this appeal the plaintiffs alleged that they had purchased cotton piece goods from Messrs Sagar Mall Subhkaran of Ahmadabad and the bales were booked from Ahmadabad railway Station to Kishangunj railway station on the O.T Railway. There were 108 bales which were securely and properly packed; but at the time of delivery it was found that out of the total consignment three bales were fund tampered with and the contents thereof partly missing while one of the bales was found completely empty. Notices were served under Section 77 of the Railways Act and also under Section 80 of the CPC, but the Railway Administration failed to settle their claims. The plaintiffs, therefore, claimed a sum of Rs. 3,100/- from the defendants, namely, the O.T Railway Administration and the B.B and C.I Railway Administration. The suit was contested by defendant No. 1, namely, the O.T Railway Administration, and it was contended that notices were-not properly served and defendant No. 1 was not responsible for the loss.

    2. Both the lower couts have held that the O.T Railway Administration was not the contracting railway and since the plaintiffs had not proved that the loss took place on the O.T Railway the suit was not maintainable. With regard to the claim against the B.B and C.I Railway, it appears that the suit was not maintainable because it was found that notice under Section 77 of the Railways Act was not served upon the B.B and C.I Railway Administration within the statutory period of six months as contemplated by the section. So the suit of the plaintiffs was dismissed as against all the defendants.

    3. In support of this appeal learned Counsel on behalf of the appellants did not challenge the finding of the lower courts that the notice served under the Railways Act was not served on the B.B and C.I Railway within the statutory period mentioned in S. 77, but the point taken on behalf of the appellants is that the suit should have been decreed as against the O.T Railway because it had failed to show that the loss did not occur while the goods were in course of transit over that railway.

    4. We are unable to accept this argument as right. Section 80 of the Railways Act gives the plaintiffs the choice of claiming their remedy either against the railway administration to which the goods were consigned or against the railway administration on which the loss occurred. Section 80 is in the following terms:

    “80. 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 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.”

    5. It is settled that where the goods are consigned to a railway for delivery at a railway station on another railway and the suit for damages for short delivery is brought against the Governor-General or the Union of India representing the latter railway where, however, the loss does not take place, the latter cannot be made liable for the loss on the theory of agency or partnership; see for instance the decision of this High Court of Sinha and Das JJ., in Governor-General in Council v. Sukhdeo Ram, AIR 1949 Pat 329.

    6. In the present case the suit of the plaintiffs against the B.B and C.I Railway, which is the contracting railway, is not maintainable since notice under Section 77 of the Railways Act was not served upon it within the statutory time imposed by that section. But if the plaintiffs were able to prove that the loss occurred while the consignment was in the custody of the O.T Railway, they could have substantiated their claim against the O.T Railway and got a decree under the provisions of Section 80 of the Railways Act.

    7. In the present case there is no allegation in the plaint that the goods were lost while they were in the custody of the O.T Railway. One witness, namely, Lachmi Narain, was examined in support of their case; but we have examined his evidence and we find no statement of his that the loss or deterioration took place while the consignment was in the custody of the O.T Railway.

    8. In these circumstances it is obvious that the claim of the plaintiffs against the O.T Railway must also fail and the order of dismissal of the suit made by the two lower courts is correct as a matter of law. But the argument on behalf of the appellants is that the onus was upon the O.T Railway to make a disclosure of all the relevant documents in their possession and to show that the consignment was not lost or damaged while it was in their custody. We do not think that this argument is right.

    9. In a case of this description the procedure to be followed is clearly laid down by the Privy Council in Surat Cotton Spinning and Weaving Mills Limited v. Secy, of State, 41 Cal WN 837 : (AIR 1937 PC 152), as follows:

    “In a dispute arising in a case coming under the proviso to risk note B, the procedure is the following: On the occurence of either of the cases, (a) or (b), the obligation on the part of the railway to disclose the nature of their dealings with the consignment, while under their control, arises immediately and is not postponed to the stage of litigation. If the consignor is not satisfied, recourse to a Court of law is contemplated and the railway should submit their evidence first at the trial.

    If the consignor be not even then satisfied with the disclosure made, he should say so and the Court will decide whether the consignor's demands go beyond the obligation of the railway. The railway should then have an opportunity of meeting the demands of the consignor, so far as endorsed by the Court before their case is closed; but if they fail to take this opportunity, they will be in breach of their contractual obligation of disclosure.

    The question that next arises is whether misconduct may fairly be inferred from the evidence of the railway; if so, the consignor is absolved from his original burden of proof. But in this case the decision of the Court may be given after both sides have closed their evidence. It is for the railway to decide whether they have adduced all the evidence they consider desirable in avoidance of a fair inference of misconduct. If they withhold any material evidence, they may either be in breach of the contractual obligation of disclosure or on the next question of a fair inference may expose themselves to the presumption under Section 114(g) of the Evidence Act. If the obligation of disclosure has been discharged and the evidence given by the railway does not lead to a fair inference of misconduct, the proviso will cease to operate and the consignor will be relegated to his original burden of proof of misconduct.”

    10. This passage is quoted with approval by Rai J., in Governor-General in Council v. Visheshwar Lal, AIR 1947 Pat 84 at p. 90, and we hold that this is the correct procedure to be followed. In the present case it is admitted by the appellants that after the suit was instituted the defendants did not give any evidence, nor did they disclose how the consignment was dealt with in the course of transit. It was, therefore, the duty of the plaintiffs to apply to the court that the defendants should be asked to discover all the documents in their possession with regard to the custody of the goods in the course of transit on the O.T Railway.

    11. The plaintiffs could have made an application under O. II, R. 12 of the CPC, for discovery of documents, and also under O. 11, R. 14 of the CPC, for the production of documents. In the present case no attempt was made on behalf of the plaintiffs to ask for discovery of the documents from the defendant railway and, therefore, the plaintiffs cannot rely upon the abstract doctrine of onus of proof and ask that a presumption should be drawn that the loss took place while the goods were in the custody of the O.T Railway. The onus of proof was certainly on the plaintiffs before they could succeed in their claim against the O.T Railway. The plaintiffs could discharge that onus by asking for discovery of the documents from the defendant railway under the provisions of O. 11, R. 12 or O. 11, R. 14.

    12. But the plaintiffs did not make any such application for discovery. It was observed by Sinha J., in a similar case, Firm Badridas of Purulia v. Governor-General for India in Council, AIR 1947 Pat 118, that in similar circumstances the plaintiffs cannot ask for a remand of the case to the lower court for filling up the lacuna in the evidence. In that case the plaintiff filed a suit for damages for loss incurred by him for short delivery, but did not call upon the railway administration in the trial court to furnish material facts relating to the carriage of the goods from stage to stage to make out a case of misconduct on the part of the railway administration. It was held by the High Court that the plaintiffs were not entitled to make a grievance in the High Court in the absence of any application made by him in the trial court calling upon the railway administration to make a discovery of the documents in their possession. A similar view was taken by Meredith J., in Governor-General in Council v. Thakursi Dass, AIR 1948 Pat 45, and it was held by him that where the plaintiff did not call for further disclosure from the railway, there was no onus on the court to see that the parties followed the proper procedure indicated in the Privy Council case; and where the plaintiff did not call for further disclosure from the railway administration in the lower court and thus failed to conduct his case properly and from the evidence either disclosed by the railway administration or led by the plaintiff an inference of misconduct could not be drawn, there was no case for remand by the High Court. We hold that the decisions in AIR 1948 Pat 41 and AIR 1947 Pat 118, lay down the correct law on the point, and for the reasons enunciated in those cases, the plaintiffs in the present case are not entitled to a remand in order to be able to produce further evidence with regard to the question whether the loss of consignment took place within the limits of the O.T Railway.

    13. In our opinion, there is no merit in this second appeal and it must accordingly be dismissed. There will be no order as to costs.

    M.K.S

    14. Appeal dismissed.

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    Kannaiyalal Ram Narain And Co. v. The Union Of India And Others
    (Aug 28, 1958)