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  • Section 25 of the Small Cause Courts Act,
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  • Section 25 of the Small Cause Courts Act,
Smart Summary

Structured Summary of the Provided Legal Opinion

Factual and Procedural Background

This matter was heard in revision under Section 25 of the Small Cause Courts Act. The suit originated from a Small Cause Court judgment awarding the plaintiff damages for the non-delivery of 11 pairs of dhotis from a consignment of cloth goods. Facts as found by the Small Cause Court Judge (and summarized by the appellate court) are: there were 11 bales in the consignment; one bale (a single package) was weighed at the station of despatch and appeared normal and properly packed; it remained in the custody of the Railway Company's servants, stored in the godown, and later placed in a wagon which was sealed for transit. On arrival at destination the wagon seal remained intact but the bale in question had been opened, re-stitched, was short in weight and 11 pairs of dhotis were missing. The trial judge inferred pilferage after receipt by the booking clerk and found misconduct by railway servants; the railway filed a revision challenging liability, in particular arguing that Risk Note Form H absolved it of liability for nondelivery of a part of a consignment that did not consist of one or more complete packages. Mr. Justice Lindsay referred the matter to a Division Bench; the Division Bench considered the earlier decision of Mr. Justice Daniels (Secretary of State v. U.P. Glass Works of Chandausi, A.I.R. 1926 All. 565) which had been relied upon by the railway.

Legal Issues Presented

  1. Whether the disappearance of 11 pairs of dhotis from one bale in a larger consignment constitutes "loss, destruction or deterioration of, or damage to, all or any such consignments" under Risk Note Form H.
  2. If the disappearance does so constitute "loss, etc.," whether that loss arose from the misconduct of the Railway Administration's servants (i.e., whether the plaintiff has established misconduct or whether misconduct can be inferred from the evidence disclosed by the railway under the proviso to the Risk Note).
  3. Whether the railway is absolved from liability under Risk Note Form H for non-delivery of a part of a consignment not consisting of one or more complete packages (as held by Mr. Justice Daniels in the cited decision).

Arguments of the Parties

Railway Company's (Appellant's) Arguments

  • The railway relied on Risk Note Form H (new) and contended that the note absolved it from liability for nondelivery of a part of a consignment that does not consist of one or more complete packages; accordingly the railway claimed it was not liable for the missing 11 pairs of dhotis.
  • The railway suggested, faintly, that the shortage in weight might be attributable to evaporation of moisture rather than pilferage by servants.
  • The railway relied to some extent on the decision of Mr. Justice Daniels in Secretary of State v. U.P. Glass Works of Chandausi (A.I.R. 1926 All. 565) to support the contention that partial non-delivery did not fall within the main clause of the Risk Note liability.

Plaintiff's (Respondent's) Arguments

  • The plaintiff established, and the trial court found, that the disappearance of the 11 pairs of dhotis was due to misconduct by the Railway Company's servants; accordingly the railway was liable under the Risk Note which excepts loss only when proved not to have arisen from misconduct of the railway servants.
  • The plaintiff relied upon the evidence produced both by himself and the evidence disclosed by the railway under the proviso to show the history of dealings with the package and to justify an inference of misconduct without requiring the consignor to produce direct evidence of the servants' misconduct.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Secretary of State v. U.P. Glass Works of Chandausi, A.I.R. 1926 All. 565 (Mr. Justice Daniels) Held that the term "loss" in the Risk Note includes "nondelivery"; went further to hold that non-delivery must be of the whole of a consignment or one or more complete packages (i.e., that loss of part of a consignment not consisting of complete packages did not fall within the main clause). The court agreed with Daniels that "loss" includes "nondelivery" but disagreed with his additional holding that partial loss (not consisting of whole packages) is excluded. The present court held Daniels' broader proposition to be inapplicable to the facts before it and declined to follow the view that the railway is protected from liability for loss of part of a consignment.

Court's Reasoning and Analysis

The court's analysis proceeds step by step as follows:

  1. Preliminary procedural note: The matter was argued in revision under Section 25 of the Small Cause Courts Act and referred to a Division Bench because of reliance on the Daniels decision.
  2. Fact-finding: The court accepted and summarized the Small Cause Court Judge's findings: the bale was weighed and appeared normal on dispatch; it then remained in railway custody (in godown/storage) and was placed into a sealed wagon; on arrival the wagon seal was intact but the bale had been opened, resewn, and was short 11 pairs of dhotis. There was no suggestion of defective weighing scales or other packing defect.
  3. Inference of misconduct: Given the sequence of custody and the intact wagon seal, the court concluded (as did the trial judge) that pilferage must have occurred while the parcel was in the custody of the railway servants and before the wagon was sealed. The court found this the only reasonable inference from the evidence called by the railway and regarded suggestions of evaporation or accidental loss as implausible.
  4. Legal framework in Risk Note Form H: The Risk Note primarily places the burden on the claimant to prove misconduct by railway servants. However, two provisos (clauses (a) and (b)) require the railway to disclose its dealings with the package in specified cases; if, after such disclosure, misconduct can fairly be inferred from that evidence, the claimant need not prove misconduct further. The provisos therefore govern the method of proof, not the substantive issue of liability.
  5. Framing of the issues: The court identified two primary issues—(1) whether the disappearance of 11 pairs of dhotis constitutes "loss, destruction or deterioration of, or damage to, all or any such consignments," and (2) if so, whether that loss arose from misconduct of railway servants. The court noted the second issue had been answered in the plaintiff's favour by findings of fact.
  6. Interpretation of "loss" and analysis of Daniels: The court agreed with the portion of Daniels' decision that "loss" includes "nondelivery." However, the court rejected Daniels' additional conclusion that "loss" must be of the whole of a consignment or of one or more complete packages, finding that such a reading would render the phrase "pilferage from a package" inconsistent and that loss of part of a package or consignment commonly constitutes pilferage. The court emphasized that the new Risk Note form had been recast and that decisions on the older form should not automatically control its interpretation.
  7. Application of proviso (b) and burden of proof: The court held that the present circumstances fell within proviso (b) obliging the railway to disclose information. On the evidence thus produced, a fair inference of misconduct could be drawn; therefore, the consignor was not required to produce additional proof of misconduct. The court treated the finding of misconduct as sufficient to dispose of the case in the plaintiff's favour.
  8. Disposition: Because the inference of misconduct was legitimate and supported by the evidence, the court found no ground to interfere with the trial court's decree. Accordingly, the revision was dismissed with costs.

Holding and Implications

Holding: The court DISMISSED the revision (the railway's application) and affirmed the trial court's decree for the plaintiff, awarding costs against the railway.

Implications and immediate consequences:

  • The railway was held liable for the missing 11 pairs of dhotis because the court accepted the inference that the loss arose from misconduct by railway servants.
  • The court construed Risk Note Form H to include loss of a portion of a consignment (or a portion of a package) within the main provision "loss, destruction or deterioration of, or damage to, all or any such consignments," and rejected the narrower proposition that only loss of whole packages or entire consignments is covered.
  • The court emphasized the role of the provisos (particularly clause (b)) in determining the method of proof: where the railway is required to disclose dealings with the package, an inference of misconduct may be drawn from that disclosure without further proof by the consignor.
  • The decision directly results in a decree for the plaintiff and costs against the railway in this case. The opinion notes disagreement with the broader application of Mr. Justice Daniels' earlier ruling but does not purport to set a broader binding precedent beyond its interpretation of the new form in this case.

Judge(s) noted in the opinion: Boys, J. (opinion dismissing the revision) and the additional division bench opinion that reached the same result and would dismiss the application.

    Secretary Of State For India In Council v. Bhagwan Das

    1. This case has been argued in revision or rather under Section 25 of the Small Cause Courts Act, and having regard to a decision of Mr. Justice Daniels, reported in Secy of State v. U.P. Glass works of Chandausi A.I.R. 1926 All. 565. and relied upon to some extent by the railway, Mr. Justice Lindsay has referred the matter to two Judges, apparently feeling that unless he differed from the decision he ought to allow the revision, but that, on the other hand, he was not prepared to follow the decision.

    2. Under the circumstances we do not think it necessary to discuss in detail the decision of Mr, Justice Daniels beyond holding that it does not, in our opinion, apply to the facts of the case before us and that if the true interpretation of it is that in the case before us the Railway Company would be exempt from liability, unless the consignor proved actual misconduct, we should be unable to agree with it, leaving it to other tribunals in other cases which may arise to decide how far our decision is actually inconsistent with that Mr. Justice Daniels decided. In this case the matter seems to us to be perfectly clear. The facts have been found in a very clear and ably stated passage in the judgment of the Small Cause Court Judge. We may summarise his findings in this way. There was one package or bale. It contained dhotis. When it was received at the station of despatch it was weighed in by the weighing clerk, and its weight was correct, and was entered on the forwarding note as being 4 maunds and 26 seers. There was no suggestion that the scales were but of order. The bale when received into custody of the railway servants at the station of despatch and weighed appeared to be in a normal condition, that is to say, it appeared to have been properly packed and showed no signs of slackness in the sewing up or of interference. It then passed into the custody of the servants of the Railway Company for storage in the godown or warehouse or other place where such goods are kept awaiting transport. When the wagon for transport was ready, the bale which had not left the custody of the Railway Company's servants Was then placed in a wagon and the wagon was sealed for transit. On arriving at the destination it was found that although the seal of the wagon was intact the bale Was quite the reverse. It had been opened, it had been re-stitched, it was short in weight, and there were 11 pairs of dhotis missing from it. The seal of the wagon appeared not to have been tampered with, and, therefore, unless some mischievous and dishonest servant had discovered some method of removing the seal and replacing it without leaving any indication of such an operation, it must be assumed that the pilfering undoubtedly took place before the wagon was sealed. A faint suggestion seems to have been made by the Railway Company that the shortage in weight was due to evaporation of moisture. The learned Judge evidently experienced great difficulty in treating this suggestion seriously and we are not surprised, because, whatever evaporation of moisture there may have been, and it is surprising to hear that dhotis can be sold in such a condition, it would be necessary to infer that the 11 pairs of dhoties had leaked out of the hole or restitching and somehow escaped from the parcel-a perfectly ridiculous suggestion. The result, therefore, is that on the evidence called by the Company, because the whole of the facts which we have just summarised constitute the history of the Company's dealings with the parcel from the moment when it was received into their custody, it follows that the leakage or pilfering must have taken place after the goods were weighed while they were in the custody of the Company and before the wagon was sealed. The material provision which relieves the consignor from the burden of proving misconduct is the following sentence:

    If misconduct on the part of the Railway servants cannot be fairly inferred from such evidence.

    3. The learned Judge has inferred that the pilferage took place after the goods were received by the booking clerk, and, therefore, as a result of misconduct by the railway servants. We agree and we hold, as no doubt he held that it is the only possible inference to be drawn because even if the railway servants did not themselves commit the pilfering and share the loot, which they probably did, it would have been impossible for anybody to have obtained access to the package in such a way as to extract 11 pairs of dhotis and to sew the package up again without a breach of duty on the part of the Railway Company's servants which would amount to misconduct, because even if it might not be criminal, though in most cases it would be, a railway servant, who is placed as a kind of guardian over the goods of the public in transit, is undoubtedly guilty of misconduct if he allows a trespasser to obtain access to such goods. In our view the risk note creates no difficulty. Where the inference, which the learned Judge in this case has drawn has been drawn and may legitimately be drawn, it is not necessary to call upon the consignor to give evidence of misconduct. Therefore, it Was unnecessary in this case. We think the inference was legitimate and there is no ground for interference with the decision. The head-note of Mr. Justice Daniels' judgment undoubtedly purports to deal with C1. B. This case before us arises under C1. B. To take the view that the Railway is protected from liability where it is only a part of a consignment, not consisting of one complete package, which has been lost "seems to us to do violence to the expression" pilferage from a package and to be inconsistent therewith. Pilferage from a package must in nearly every case be of a part of that package, however, many packages there are in the consignment and, therefore, we can only say that if the learned Judge intended his ruling to apply to that provision in C1. B. we are unable to agree with it.

    4. This revision must be dismissed with costs.

    Boys, J.

    5. This revision raises a question of the interpretation of Risk Note form H. one of the new forms provided for the despatch of goods by Railway. It is to be found on page 651 of Part I of the Gazette of India of the 12th of July, 1924, I need not repeat the facts. They amount to this, that out of 11 bales of cloth goods it was found on arrival that one of the bales had been tampered with and 11 pairs of dhotis were missing. The suit is to recover from the Railway Company the value of these dhotis. It may be taken as found in fact that the evidence in the case proves up to the hilt, that the disappearance of the 11 pairs of dhotis was due to the "misconduct of the railway servants." The trial Court held the Railway Company liable.

    6. The defendant came to this Court in revision on three grounds, of which the only one that we have to consider is:

    Because the consignment having been made under Risk Note Form H (new) the petitioner Railway Company is absolved from liability to the plaintiff for non-delivery of a part of the consignment not consisting of one or more complete packages.

    7. The Risk Note set out that the consignor agreed to hold the Railway Administration:

    free from all responsibility for any loss, destruction, or deterioration of, or damage to, all or any of such consignments from any cause whatever, except upon proof that such loss, destruction, deterioration or damage arose from the misconduct of the Railway Administration's servants.

    8. This is the Only portion of the Note which declares the liability or otherwise of the railway. It is followed by a proviso divided into two parts, but that proviso merely provides, in two cases rules as to the production of evidence and as to how misconduct is to be proved and when it may be inferred. It is clear that primarily the burden of proof is on the claimant to establish misconduct. Recognising, however, that a private consignor cannot ordinarily be fairly expected to be able, by any means in his own power, to lay before the Court the history of the dealings with the consignment between the time he handed it over and the time, the consignee took delivery, it has been provided that in two cases (a) and (b) the Railway Administration shall be bound to disclose their dealings with the package in transit and to give evidence thereof, before the consignor is called upon to prove misconduct. If, when such evidence has been given, an inference of misconduct on the part of the Railway Company can fairly be drawn from that evidence, the claimant has proved his case of misconduct and need do nothing further. If such an inference cannot fairly be drawn, then he has to discharge the burden of proving the misconduct. This obligation is thrown on the Railway Company only in the two cases coming within Clauses (a) and (b) of the proviso. With what cases there may be not coming within those two clauses we are not here concerned, but alleged deterioration suggests itself as one such case. It has so far been necessary to refer to the proviso only in order to make it clear that the proviso does not deal with the primary issues in the case but only with the method of proof of such issues.

    9. The primary issues, in this case were two.

    (1) Did the disappearance in transit of 11 pairs of dhotis constitute "loss, destruction or deterioration of or damage to, all or any such consignments?"

    (2) If it did constitute "such loss, etc," did "such loss, etc," arise from the misconduct of the Railway Administration's servants?

    10. The second question has been answered in favour of the plaintiff and in this case at any rate the answer amounts to a definite finding of fact.

    11. As to the first issue it is contended in the ground of revision which we have set out that "nondelivery of part of a consignment not consisting of one or more complete packages" does not come within the terms "the loss, etc." It is contended that to bring the case within those terms there must have been loss of a whole of one or more packages forming part of a consignment. I am not concerned to consider decisions on the old form. It was notoriously a most unsatisfactory form, and it has in my view been wholly recast. It is obvious that many of the expressions that occurred in the older form must of necessity find a place in the new. But it is very far from being a necessary corollary that all decisions on the scope of particular words in the old form still hold good to assist us in interpreting the same words in the new form when the form has been wholly recast. I confine myself therefore to an interpretation of this form. We have been pressed with the decision of Mr. Justice Daniels in Secretary of State v. U.P. Glass Work of Chandausi A.I.R. 1926 All. 565. which is a decision upon the new form, and it is in consequence of that decision that Mr. Justice Lindsay has referred this matter to a Division Bench. In that case there was a disappearance in transit of 5 tons out of 15 tons of coal. Mr. Justice Daniels held that the existence of the term "nondelivery" in proviso (a) showed that "loss, destruction or deterioration of, or damage to, all or any of such consignments" must be held to include "non-delivery". He held "loss" must be held to include "nondelivery". In that finding and the reasons therefor I concur. He went further and held that the non-delivery must be non-delivery of the whole of a consignment or of one or more complete packages and there was in the case before him only non-delivery of a part of a consignment. He therefore dismissed the suit. While holding that the fact of the form being drawn up in the shape of a main provision, followed by a proviso (a) showed that the case in the proviso (a) was included in the circumstances set out in the main provision, he did not consider the proviso (b) at all. I have no materials to say why he did not consider that second clause of the proviso but possibly his reason was that the pilferage of 5 out of 15 tons coal, presumably loaded in bulk in a truck, could hardly be described as pilferage from a package. Applying, however, his reasoning to" the proviso (b) it is clear that "pilferage from a package must also be held to come within the main clause "loss, etc"; or conversely, the phrase "loss, etc." must include, at any rate in one case (i.e. pilferage of part of a consignment) loss of part of a consignment. While therefore, I am of opinion that Mr, Justice Daniels was, if he held that the loss of 5 tons of coal out of 15 tons could not be held to be pilferage from a package, right in holding that the proviso could not be applied when considering the question of burden of proof (for, it is clear that proviso (a) did not apoly) I am unable to agree with him when he goes further and holds that "loss" does not include loss of part of a consignment or packages and that the Railway Company is protected from liability for loss, including non-delivery, of a part of a consignment not consisting of one or more complete packages.

    12. In my view, if the case before him could not be held to amount to "pilferage from a package" the proviso as to the burden of proof had no application, as it certainly did not come within Clause (a) of the proviso. But, unless it can be held that "loss" includes some cases "of loss of part" and not others, which there seems no ground for suggesting, the Railway was liable for the "loss" of a portion of the consignment, if the plaintiff; could be held to have succeeded in proving misconduct, (and in proof of that he was entitled to rely upon any evidence that was actually produced by himself or by the Railway) even if the Railway had produced proof which in law they were not obliged by the proviso to produce. I hold therefore that loss of a portion of a consignment or of a package does come within the main provision of the form. In this case it is further clear that the circumstances dame within Clause (b) of the proviso, and the Railway were properly called upon to give information and evidence. On that evidence it has been found that there was misconduct, and these findings are sufficient to dispose of the case in the plaintiff's favour and he was rightly given a decree. I would dismiss the application.

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    Secretary Of State For India In Council v. Bhagwan Das
    (Apr 20, 1927)