Macleod, C.J:— This is an appeal from the decision of Kajiji J. dismissing the plaintiffs' suit with costs.

On the 19th August 1918, the plaintiffs delivered to the defendant company at Nagpur fifty-seven bales of piece-goods to be conveyed from Nagpur to Amritsar and the defendant company issued a railway receipt for the said bales to the plaintiffs. The goods were booked under a risk note in Form H, whereby the plaintiffs, in consideration of the consignment being charged for at the special reduced or owner's risk rates, agreed and undertook to hold the Railway Administration and all other Railway Administrations working in connection therewith, and also all other transport agents or carriers employed by them respectively over whose railways or by or through whose transport agency or agencies the said goods might be carried in transit harmless and free from all responsibility for any loss, destruction or deterioration of or damage to all or any of the said consignments from any cause whatever except for a loss of the complete consignment or of one or more complete packages forming part of the same consignment, due either to the wilful neglect of the Railway Administration or to theft by or to the wilful neglect of its servants, transport agents, or carriers employed by them before, during or after transit over the said railway or other railway lines working in connection therewith or by any other transport agency or agencies employed by them respectively for carriage of the whole or any part of the said consignment provided that the term “wilful neglect” should not be held to include fire, robbery from a running train or any unforeseen event or accident.

The said goods were carried over the railway of the defendant company from Nagpur to Delhi, then over the railway of the East India Railway Company from Delhi to Umballa, and lastly over the railway of the North-Western Railway Company from Umbala to Amritsar. The goods arrived at Amritsar on or about the 6th September but only fifty-four out of the fifty-seven bales were delivered to the plaintiffs' consignees.

A lengthy correspondence ensued in which the defendant company at first contended that the loss had not occurred on their railway and therefore they were not liable, disregarding the provisions of section 80 of the Indian Railways Act. Finally, on the 31st July 1919, the defendants wrote that for the reasons already stated in the previous correspondence they were not liable for the claim. The suit was filed on the 5th September claiming the sum of Rs. 1,582-7-0, the value of the three missing bales and interest.

The defendants in their written statement admitted the short delivery but denied that the loss of the three bales was due either to the wilful neglect of the defendant company or to theft by or to the wilful default of their servants as alleged.

At the hearing the following issues were raised:—

(1) Whether the loss of the three bales was due to the wilful neglect of the defendant company?

(2) Whether the loss of the said bales was due to theft by or wilful default of the defendant company's agents or servants?

The third issue was immaterial.

Leave was then granted to amend the plaint so that the following issue might be raised:— Whether the goods were not conveyed over the East Indian Railway Company and the North-Western Railway Company at railway risk, and clause 10-A was added to the plaint, claiming that if the goods were lost after they left Delhi the defendants were liable in any event.

The defendant company replied that they were not liable for the claim made on the assumption that the bales were lost on a line of railway other than the defendants'. The evidence shows that the plaintiffs' goods “were loaded at Nagpur in one waggon the doors of which were sealed with a seal bearing the following description: N.G P./8. When the waggon arrived at Amritsar the unloading clerk noticed that the seal on one side bore the inscription N.G.P in large characters without any figure and so the Police were sent for. The seals were broken in the presence of Khairuddin of the Government Railway Police and on the waggon being unloaded three bales were found to be missing. Smith who was Station Master at Nagpur in August-September 1918 said that during his time no such seal as N.G.P (Exhibit J) was used. Mr. Schofield, Assistant Traffic Superintendent (Claims), North-Western Railway Company, deposed that, when goods were booked on a foreign line to their line, and the waggon arrived at Umballa, the train clerk in conjunction with the guard of the incoming train and the Chowkidar examined the seals of the waggon and reported if they were defective. No such report was made in this case. He made inquiries and was informed that there were no foot-boards on the waggon in the suit so that it would not be possible to substitute the seals while the train was running. The witness also stated that the seals bearing different types were discovered after the waggon had been unloaded, i.e, after one of the seals had been removed.

The defendants called no evidence.

Some of their servants were present and were offered for examination by plaintiffs' counsel but Mr. Mulla said they ought to have been called by the defendants. The learned Judge thought that as a matter of fact if the defendants had called them they would not have thrown any further light on the question how the loss occurred. Clearly the onus lay on the plaintiffs who had signed the risk note in Form H either to prove that the defendants were liable under the terms of the note, or to satisfy the Court that the proper inference to be drawn from the facts proved was that the defendants were liable. It is not suggested the theft was from a running train. The learned Judge says Mr. Mulla advanced two theories. The first was that the loss occurred when the goods were still in the goods-yard at Nagpur Station. The goods were booked on the 19th August, the waggon being sealed at 11-15 a.m As the waggon remained for thirty hours in the Nagpur goods-yard the theft must have been committed by the defendants' servants or it must have occurred owing to their wilful neglect.

The second theory was that if the theft was not committed by the employees of the defendants it was due to the neglect of one of its servants, i.e, the Chowkidar. But it will be seen that this was only part of the first theory. The learned Judge thought that the probabilities were against the theft having been committed in the Nagpur goods-yard. Any servant of the defendants intending to commit the theft and taking the trouble to prepare a seal to re-seal the waggon would have taken the precaution to prepare a seal similar to the one used by the defendants, and further it would require great daring for any servant to commit a theft from the goods-yard.

With regard to the question of neglect, as Mr. Mulla had not called the Chowkidar who was available for examination, the Judge came to the conclusion that he was not satisfied that the loss was due either to theft by or to wilful neglect of a servant of the defendants.

Considerable light is thrown on the question how a case of this nature should be dealt with by the decision of the Court of Appeal in Smith, Ld. v. G.W Ry. Co.

Certain traders delivered to the defendant railway company a parcel containing six pairs of boots weighing 19 lbs. for carriage from Birmingham to Wilton, near Salisbury, on the terms that the company should not be liable for loss, & c., except upon proof that the loss, & c, arose from the wilful misconduct of the company's servants. The parcel was never delivered to the consignee. Eventually an action was brought to recover the value of the parcel. The defendant company offered no evidence. The County Court Judge decided in favour of the plaintiffs, saying (p. 241):—

“I must look at the whole of the circumstances which I may be equally consistent with one or more theories. If any one of these theories is adopted which would relieve the railway company from liability under the contract the claim certainly could not succeed, but if there is evidence strongly preponderating in favour of one of those theories which in the absence of reasonable explanation by the company would fix them with liability, I am entitled to act upon it. There is, in my opinion, evidence here which justifies me in finding as I do wilful misconduct on the part of the defendants.”

The Divisional Court reversed this judgment.

The plaintiffs appealed. Bankes L.J said (p. 243):—

“I pass now to consider the point which was taken in the County Court … whether the evidence laid by the appellants … was such as to justify an inference that the parcel was lost owing to the wilful misconduct of the railway company's servants. If there was evidence upon which the learned County Court Judge could properly draw that inference this Court cannot interfere with his decision. The learned Judge, in my opinion, directed himself quite correctly when.. he said: ‘If there is evidence strongly preponderating in favour of one of such theories which, in the absence of reasonable explanation by the company, would fix the defendants with liability I am entitled to act upon it.’ That legitimate inference from established fact is evidence for the purpose of applying the above direction to the present case is, I think, clear beyond doubt … Although the learned Judge … was undoubtedly entitled to draw inferences from the facts proved before him, the inferences must be such as could legitimately be drawn from the facts. If the facts are such that no reasonable man could draw a particular inference from them, or if the particular inference is such as to be equally consistent with non-liability and with liability, then the party who relies on the inference to discharge the onus of proof of establishing liability fails.”

After discussing the evidence the learned Lord Justice came to the conclusion that there were no materials in the case upon which a charge of bad faith could be sustained. In the absence of any evidence of bad faith the evidence adduced for the appellants was not in his opinion capable of the inference that the parcel must have been lost owing to the wilful misconduct of the defendants' servants. The evidence left the question entirely open as to the cause of the loss. Scrutton L.J said (pp. 249, 250, 251):—

“It is to be noted that the appeal being from a County Court Judge, who is the sole Judge of fact, the question is not whether this Court on such evidence as there was would have come to the same conclusion, but whether there is any evidence which could reasonably, if accepted, be the basis of such a conclusion … In my opinion it is impossible to lay down any general rule as to the facts from which one can infer in the absence of explanation of doss, ‘loss by wilful misconduct of the company's servants.’ It must depend on the nature of the subject matter and of the stage of the transit reached in each particular case. For instance, if the company were carrying an elephant and would say nothing as to why it was not delivered; as an elephant can hardly disappear without a company's servant knowing of it, one would easily find that it was loss either by wilful misconduct of the company's servants, or by their wilfully not at once informing some superior that it had disappeared when it could easily be traced and recovered. On the other hand if a small parcel disappeared from a place to which both the company's servants and outsiders had free access, in a time of a great pressure of business, it would be impossible to draw any inference as to what had really happened… In an action by the same goods owner against the Midland Railway Company this Court felt able to find wilful misconduct of the company's servants from the fact that part of the contents of a parcel had disappeared, the parcel having been opened, repacked with rubbish, and done up again. In such a case such an operation must have taken some time, and have been carried out on the company's train by a person who could calculate on being free from disturbance for the considerable time taken in unpacking and repacking, facts which pointed strongly to theft by a servant of the company.”

On consideration of the evidence the learned Lord Justice came to the conclusion that there were too many suppositions and assumptions in the case for the goods owner, and that there was no ground on which it could reasonably be found as a fact that the goods were lost by wilful misconduct of the company's servants. Atkin L.J dissented. He considered that there was prima facie evidence of conversion or detention and the defendant's long continued failure to give any explanation as to what had happened to the goods coupled with the inadequate explanation of the delay afforded some evidence upon which the Judge could find that there was a prima facie case that the conversion or detention was not innocent but wilful.

We are not restricted to finding whether there was any evidence which could reasonably if accepted be the basis of the conclusion of the learned Judge in the Court below. It is competent to us to find that on the facts proved the inference drawn was not the right one.

Now it is admitted that the bales were packed in a waggon at Nagpur which was sealed. Thereafter the waggon would be on the railway line to which ordinarily the public would not have access unless they were travelling as passengers in passenger trains. Whoever committed the theft must certainly have taken some time over it and must have come prepared with the materials for re-sealing the waggon. Even after the bales were removed and the waggon re-sealed, the task of secretly removing three bales each weighing 245 lbs. was not an easy one, and several persons must have taken part in the theft. Therefore the whole operation must have been carried out on the train by persons who could calculate on being free from disturbance for a considerable time, and that points strongly to the theft being committed either by or with the connivance of the company's servants as pointed out by Scrutton L.J in considering the case of Smith Lim. v. Midland Railway. I do not follow the argument of the learned Judge in differentiating that case, because the parcel lost was a small one. The operation of unpacking and repacking a small parcel could not take so long or require so much preparation as the removal of these bales. In my opinion the facts proved strongly preponderate in favour of the theory which, in the absence of reasonable explanation by the defendants, would fix them with liability. Even assuming that there was a gang of train thieves operating somewhere between Nagpur and Amritsar, who had made preparations for breaking open waggons and re-sealing them with seals, resembling the original ones, it would make no difference, though if this were the case one would have expected that there would be evidence of similar thefts. In my opinion a legitimate inference is, that the waggon was broken open at Nagpur where the goods could be disposed of without exciting any suspicion, and, even if it occurred after the waggon left Nagpur, that either some of the defendants' servants were concerned in the theft or the theft occurred owing to the wilful neglect of the defendants' servants. They would be equally liable if the theft took place in this manner on the other lines, even if the plaintiffs' contention that the goods on those lines were not carried at owner's risk were held good. That point, however, need not be decided. I do not think that the fact that the difference between the seals was not discovered until the waggon reached Amritsar points inevitably to the conclusion that the theft must have taken place between Umballa and Amritsar. The inspection of the seals on the journey was probably superficial, and as long as the seal did not appear to have been tampered with, the fact that the seal on the opposite side of the waggon did not correspond would probably not be noticed, unless the two seals were inspected one immediately after the other. It would have been better if the original seal N.G.P as it was found on arrival at Amritsar had been produced before the Court.

There being a prima facie case against the defendants it was for them to offer some reasonable explanation in order to escape liability. They have offered no explanation. The learned Judge says:—

“It is inconceivable that the railway company, however careful and prudent, could have taken such care as to make it impossible for any thief to commit a theft.”

Put so widely this proposition may be accepted. But it is certainly conceivable that the railway company could have taken such care as to make it impossible for such a theft as occurred in this case to take place, and if they suggested that they could not have taken such care they should have led some evidence to support the suggestion. Their attitude throughout has been dilatory and unbusinesslike.

As Scrutton L.J pointed out in Smith, Ld. v. G.W Ry. Co. it is regrettable if railway companies take up the position of actively resisting all claims for information and assistance from those whose goods are stolen, instead of giving their consignors and consignees all possible information as to the disappearance of the goods. And I may refer to the words of Atkin L.J (p. 259):—

“If a bailee says, I have received your chattel; I have not delivered it in the terms of the bailment; and I will give you no information as to what I know about it, or what steps I have taken to find out about it, he suffers no hardship if unkind inferences are drawn against him. This judgment is far from throwing the onus upon him which rests upon the plaintiff, and it only requires the performance of very ordinary business obligations in the way of explanation to secure the very large measure of relief stipulated for in the contract of carriage.”

No doubt Bankes L.J acquitted the defendant company of bad faith, and I should not go so far as to impute bad faith to the present defendants, but I think they failed to recognise how strong the case was against them, and the necessity there was for some action on their part to rebut it.

In my opinion the appeal should be allowed, and there should be judgment for the plaintiffs for Rs. 1,582-7-0 with interest at six per cent from the 1st February 1919 till judgment with costs throughout and interest on judgment at six per cent.

Shah, J.:— I concur.

Solicitors for the appellants:— Messrs. Ardeshir, Hormusji, Dinshaw & Co.

Solicitors for the respondents:— Messrs. Little & Co.

Appeal allowed.

G.G.N