JUDGMENT

1. The question which arises in this civil revision petition is whether a consignor of goods can recover the value of the goods from the carrier who has failed to deliver the goods to the consignee or to return them to the consignor. The plaintiff entrusted a consignment of tiles with 1st defendant who is the driver of a lorry owned by the 2nd defendant. The goods were to be carried by the 1st defendant to a named consignee at Karaigudi in Tamil Nadu. The goods were not taken to Tamil Nadu, but were taken to the premises of the 2nd defendant where they were sold. The plaintiff sued the defendants for damages arising from the breach of contract. The 1st defendant was declared ex-parte. The 2nd defendant filed a written statement in which he contended that the suit was not maintainable for the reason that the plaintiff was not entitled to realise any amount from the 2nd defendant; that there was no agreement between the 1st defendant and the plaintiff to carry the goods to Tamil Nadu; even if their was an agreement it was not valid as the lorry did not have a route permit to go to Tamil Nadu; the only agreement between the 1st defendant and the plaintiff was to carry the goods upto Walayar on the border of Kerala and there to await another lorry for onward despatch to Tamil Nadu; since that lorry did not arrive, the 1st defendant returned with the goods to the 2nd defendant's premises and unloaded them there; and as the freight had not been paid, the 2nd defendant sold the goods and appropriated the amount towards freight and other charges.

2. The value claimed by the plaintiff for the consignment was Rs. 563/-. The 2nd defendant raised a counter-claim for a sum of Rs. 239.50 and paid the court-fee thereon. This amount, according to him, was the balance hire and warehouse charges due to him after giving the plaintiff credit for Rs. 362.50 which was realised on sale of the goods.

3. The trial court held that the property in the goods had passed from the plaintiff to the consignee and therefore the plaintiff who had no title was not competent to sue. It was further held that since the lorry had no route permit to carry goods to Tamil Nadu, the 2nd defendant was not liable in respect of the alleged contract between the plaintiff and the 1st defendant. The suit was accordingly dismissed. The court also rejected the 2nd defendant's counter-claim. On appeal by the plaintiff, the learned Subordinate Judge held that he property in the goods remained with the consignor and that he was entitled to sue. However, the appeal was dismissed as against the 2nd defendant on the ground that 1st defendant had exceeded his authority as an agent or servant of the 2nd defendant in entering into a contract for the carriage of goods to Karaikudi in Tamil Nadu without a valid permit, and that the 2nd defendant could not be saddled with liability under such contract. A decree was thus passed against the 1st defendant alone for the value of the goods together with costs. Aggrieved by the dismissal of the appeal as against the 2nd defendant, the plaintiff has approached this Court under section 115 of the Code of Civil Procedure.

4. The only averment relating to the maintainability of the suit appearing in the written statement of the 2nd defendant is in the following words:

There is no specific plea as regards want of title. There is no suggestion that the property in the goods had passed from the consignor to the consignee. It is true that the court is entitled to draw apresumption as to the passing of the property but it is equally true that delivery of the goods to a carrier does not necessarily vest the property in the goods in the consignee. (Benjamin's Sale of Goods, (1974 ed). paras. 376-382; Halsbury's Laws of England, 4th edn., Vol. 5, para. 453). The question of title has to be determined with reference to the terms of the contract of sale, the intention of the parties and on the basis of the relevant plea as well as the evidence on record. A true construction of the contract for this purpose is a matter of considerable difficulty. Although the trial court, in the absence of any specific plea and without discussing the relevant evidence, came to the conclusion that the property in the goods had passed from the consignor to the consignee the lower appellate court, after taking into account the terms of the contract and the evidence adduced by the plaintiff and the fact that the 2nd defendant did not make any attempt either to cross-examine the plaintiff's witness on the point or to adduce evidence to the contrary came to the conclusion that the title remained with the consignor at the relevant time. It was however held, as stated earlier, that since the lorry had no permit to take the goods to Karaikudi in Tamil Nadu, the 2nd defendant was not liable under the contract.

5. Although the 2nd defendant raised the alternative plea that any agreement to carry the goods to Tamil Nadu was invalid, his positive case was that the 1st defendant did not agree to carry the goods beyond Walayar, and, since no one appeared there as agreed to take charge of the goods, they were brought back to the premises of the 2nd defendant where he had them sold. If that is the contention of the 2nd defendant, and the 1st defendant having failed to enter appearance in the proceedings, one fails to see how the learned Judge could have come to the conclusion that the 1st defendant exceeded his authority. If the contention of the 2nd defendant is upheld, there was no illegality to invalidate the contract as the agreement was to carry the goods upto Walayar for which the lorry held a valid permit. And if the goods could not be delivered to the consignee at Walayar, the goods ought to have been returned to the consignor.

6. There is a total lack of evidence as to what happened to the goods after they left the premises of the plaintiff. Whatever happened to the goods, it was a matter entirely within the personal knowledge of the defendants, for the goods were in the custody of the 1st defendant for and on behalf of the 2nd defendant. The burden was upon the defendants to show that the goods were carried to Walayar and they were brought back to the premises of the 2nd defendant in the circumstances narrated in the written statement. In the absence of any such evidence and on the admitted failure on the part of the defendants to deliver the goods to the consignee, I am not able to see how one can conclude that the goods had been carried to Walayar or any other place. All that one can say is that the goods were taken to the premises of the 2nd defendant.

7. The question is not whether the lorry had a permit to go to Tamil Nadu, but whether the plaintiff knew that it had none. There is no evidence to suggest that the plaintiff had any such knowledge. In fact the evidence suggests that it was represented to the plaintiff by the 1st defendant that the lorry was capable of carrying goods for delivery to the named consignee in Tamil Nadu and it was on such representation that the goods were in good faith handed over to the 1st defendant. It is highly improbable that the plaintiff would have entrusted the goods with the 1st defendant had he known that the lorry did not have a valid permit to go to Tamil Nadu. The plaintiff appears to have honestly and reasonably believed that the 1st defendant acted in the course of his employment when he entered into a contract of carriage. The 2nd defendant cannot be heard to contend that his agent acted without authority when he at the same time claims the benefit of such act. He is fully accountable for the goods entrusted for carriage with the 1st defendant. The question however is, “is the plaintiff entitled to sue for the return of the goods or the refund of the value thereof?”

8. As I stated earlier, the lower appellate court came to the conclusion that the title to the goods had not passed from the plaintiff to the consignee at the relevant time and the plaintiff was therefore entitled to sue. It was to the plaintiff that the carrier turned for the balance amount claimed by it by way of hire and warehouse charges after appropriating the proceeds of the sale of the goods in exercise of the unpaid carrier's lien. The carrier, at all material times, regarded the plaintiff as the person with whom it was dealing in regard to the rights and obligations arising from the contract of carriage.

9. The question as to whether title has passed at the relevant time is a difficult question and the answer depends upon various circumstances and facts. In my view, however, the consignor is entitled to sue the carrier either on the basis of title, if the property in the goods has not passed from him, or on the basis of privity of contract between himself and the carrier for the carriage of goods. If the true owner of the goods has failed to bring an action against the carrier for the loss of or damages to the goods, the law is not without remedy in an action by the consignor merely because the property in the goods has passed from the consignor to the consignee. Courts have power to circumnavigate technical hurdles to prevent miscarriage of justice. The law merchant evolved the principle of allowing the consignor to sue the carrier on the contract of carriage, where the consignee having title to the goods failed to bring the action; but the plaintiff was accountable to the true owner for the proceeds of the decree. The consignor, though without title, had privity of contract with the carrier for the carriage of goods and so was allowed to sue on it. This principle was adopted and developed by eminent common law judges, Lord Mansfield, Lord Ellenborough and Lord Tenterden. As early as 1770 Lord Mansfield in Davis and Jordan v. James . 1770 5 Burr. 2680. which was a case of carriage by land, stated:

“The vesting of the property may differ according to the circumstances of cases; but it does not enter into the present question. This is an action upon the agreement between the plaintiffs and the carrier. The plaintiffs were to pay him. Therefore the action is properly brought by the persons who agreed with him and were to pay him.”

10. This principle was followed by Buller J. in Moore v. Wilson . 1787 1 Term Rep. 659. which was also a case of carriage by land. In Joseph v. Knox . 1813 3 Camp. 320. where the shippers sued the carrier on a bill of lading, though the property in the goods had passed to the consignee, Lord Ellenborough, C.J, stated:

“The plaintiffs are entitled to recover the value of the goods, and they will hold the sum retained as trustees for the real owner.”

11. In Dunlop v. Lambert . 1839 6 Cl and Fin. 600., which was a shipping case, Lord Cottenham L.C asserted that the consignor who had a special contract with the carrier could sue on that contract not-withstanding the absence of title.

12. These cases, it may be pointed out, arose prior to the passing of the Bills of Lading Act, 1855, and prior to that Act, the contract of carriage covered by a bill of lading was not treated differently from any other contract of carriage. Recently in Albacruz v. Albazero . 1976 3 W.L.R 419. Lord Diplock pointed out that the rule in Dunlop v. Lambert based on a principle derived from the law merchant and adopted into the common law by eminent judges had stood the test of time. Under that rule the consignor can recover substantial damages from the carrier if there is privity of contract between them for the carriage of goods, even though the property in the goods may have passed to the consignee. He stated:

“But the rule extends to all forms of carriage including carriage by sea itself where no bill of lading has been issued and there may still be occasional cases in which the rule would provide a remedy where no other would be available to a person sustaining loss which under a rational legal system ought to be compensated by the person who has caused it. For my part, I am not persuaded that your Lordships ought to go out of your way to jettison the rule.”

13. Lord Diplock thus rejected the request of the carriers to jettison the rule; although the rule itself was not applied in The Albazero for the reason that it was a case of contract of carriage covered by bills of lading issued pursuant to a Charter party. Lord Diplock further pointed out:

“It has however been uniformly treated ever since by text book writers of the highest authority, Abbott, Maude and Pollock, Blackburn and (implicitly) by Scrutton on Charterparties in each of its successive editions, as authority for the broad proposition that the consignor may recover substantial damages against the shipowner if there is privity of contract between him and the carrier for the carriage of goods; although, if the goods are not his property or at his risk, he will be accountable to the true owner for the proceeds of his judgment.”

14. Mercantile law, particularly in regard to carriage of goods, bailment and insurance has benefited much from the rule in Dunlop v. Lambert which (except in regard to contract of carriage under bills of lading where different considerations arise) is an exceptional remedy which the law has devised for an exceptional situation caused by the failure or inability of the true owner to initiate legal action for the enforcement of contractual rights.

15. The property in the goods might or might not have passed from a consignor to a consignee upon delivery of the same to carrier but if the goods are lost or destroyed or damaged while in the custody of the carrier or his agent or servant, the carrier in an action by the consignor, has no immunity, although the consignor himself might be accountable to the consignee. In an action by the consignor having privity of contract, the carrier cannot evade liability by seeking shelter behind the difficult doctrine of passing of property. Assuming that the property is vested in the consignee, the carrier is sued by the consignor not on the contract of sale or on the basis of title, but upon the contract of carriage and it is the latter which binds the carrier to the consignor. The fact that the consignee to whom the ownership in the goods has passed can also sue the carrier on the basis of title, does not debar a suit by the consignor on the basis of the contract of carriage.

16. I am fortified in this conclusion by what is stated by Shah J. in Chhangamal Harpaldas v. Dominion of India. Speaking for the Court, he stated:

“Two propositions appear to be well-settled. The right of action to recover compensation for loss or damage to the goods ordinarily vests in the consignor. Where the goods lost or damaged in transit are the subject-matter of a contract of sale, the owner of the goods may in the absence of a contract to the contrary sue the railway administration. Therefore, a consignee who is in possession of a railway receipt duly endorsed by the consignor may maintain an action for compensation for loss of the goods covered thereby, but he can do so not because he is the consignee but owner of the goods. A consignor may sue for compensation for loss relying upon the breach of contract of consignment. An owner of goods covered by a railway receipt may sue for compensation relying upon his title, and the loss of goods by misconduct of the railway administration. But a bare consignee, who is not a party to the contract of consignment and who is not the owner of the goods, cannot maintain a suit for compensation for loss or damage to the goods. He has no cause of action ex contractu nor ex dellcto.”

[italics supplied]

17. The decision affirms the view that the consignor can sue on the contract of carriage and the consignee to whom the property in the goods has passed can sue on the strength of title. In Union Of India v. West Punjab Factories, Ltd.. , the Supreme Court observed:

“Ordinarily, it is the consignor who can sue if there is damage to the consignment for the contract of carriage is between the consignor and the railway administration.”

18. The Supreme Court held in that case that the consignee having title to the goods was entitled to sue the carrier, but left open the question whether in such an event both the consignor and the consignee could be permitted to sue the carrier.

19. Counsel appearing for the carrier has drawn my attention to J.K.M Jacob Rowther Sons v. Union of India where the question was whether a consignee under a contract of carriage governed by section 72 of the Railway Act, 1890, was entitled to sue if property in the goods had passed to him on delivery of the goods to the railway. Speaking for the Court, Ramachandra Iyer, C.J observed that the consignee alone was entitled to sue and the consignorh ad no locus standi. In the light of the principles enunciated by the above mentioned authorities, with great respect, I am not in a position to accept, the view that the consignor has no locus standi

20. As I stated earlier, the finding of the lower appellate court is that the property in the goods at all material times remained with the plaintiff. Is ??? no reason to disagree with that finding, and in the light of that finding, it has to be held that the consignor is entitled to sue the carrier on the basis of title. In the alternative, I am of the view that the consignor having privity of contract with the carrier is entitled to maintain an action on the contract of carriage even if the property in the goods is vested in the consignee. In the circumstances I hold that the suit is maintainable and, for the reasons stated earlier, the plaintiff is entitled to recover the damages as decreed by the appellate court, together with its costs here and in the courts below, from the 2nd defendant also. The Civil Revision Petition is accordingly allowed.

21. Allowed.