Lindsay, J.:— The suit which has given rise to this appeal was brought against the East Indian Railway Company by the Sri Gangaji Cotton Mills Company Limited carrying on business at Mirzapur and the claim was for Rs. 23,980-8-6 plus interest at Rs. 6 p.c per annum making a total of Rs. 25,363-6-6.

2. The suit has been dismissed in toto by the Sub-ordinate Judge and the plaintiff Company appeals. The facts of the case are that in May 1918 a consignment of 108 bales of cotton was booked at Jaipur on the Bombay Baroda and Central Indian Railway for delivery to the plaintiff Company at Mirzapur. A portion of this consignment consisting of 54 bales was delivered to the plaintiff Company at Mirzapur on the 22nd May 1918.

3. On that date it appears the plaintiffs handed over to the E.I.Ry the railway receipt for the entire consignment of 108 bales and paid the full freight due amounting to Rs. 437-1-0.

4. The rest of the consignment 54 bales was delayed in transit and did not arrive at Mirzapur till the 2nd of July 1918 on which date notice of arrival was given to the plaintiffs. The latter after some inspection of the goods on the railway premises objected to take delivery on the ground that the bales were damaged, and on the 3rd July they sent a latter (Ex. Q) to the goods clerk at Mirzapur station canceling a letter written the previous day in which they had requested that the goods should be unloaded at their private siding. In this letter (Ex. Q) they asked the goods-clerk to keep the goods at the Railway goods shed pending inspection by a Railway officer. A telegram to the same effect was sent by the plaintiffs to the District Traffic Manager at Cawnpore on the same date and this was confirmed by letter (Exs. 10 and 22 respectively).

5. In this letter they informed the District Traffic Manager that from outward appearance it seemed that the bales had been neglected and exposed to rain and that each bale had been more or less damaged. Plaintiffs said they wanted inspection before taking delivery.

6. The Railway Company agreed to have an inspection made and this was carried out on the 21st July by a Traffic Inspector Mr. Robinson. It is not denied that Robinson after inspection offered the plaintiffs Rs. 10 per bale by way of compensation an offer which the plaintiffs rejected as inadequate (see their letter to the District Traffic Manager dated 30th July 1918, Ex. 11).

7. The plaintiffs pressed their claim for compensation at a higher rate and the Railway Company then deputed an Assistant Traffic Manager Mr. Dyer who examined the goods on the 9th August 1918 and made an offer of compensation at the rate of Rs. 20 per bale. This second offer the plaintiffs also refused by their letter of the 7th August (Ex. 4). The plaintiffs in that letter said they were willing to accept Rs. 30 per bale and would take delivery if damages were paid at that rate. The Railway Company then arranged with the Upper India Chamber of Commerce for inspection by an expert Mr. Vernon the Superintenant of the Elgin Mills at Cawnpore. He proceeded to Mirzapur and examined the goods on the morning of the 19th August. No representative of the plaintiffs was present at this inspection though notice had reached the plaintiffs on the evening of the 17th August.

8. Vernon who has been examined as a witness in the case reported that the damage was insignificant, that 48 out of the 54 bales were in good condition and that 6 bales were slightly damaged. He estimated the damage at 10 lbs of cotton per damaged bale and recommended compensation on this scale.

9. There is no evidence on the record to show that this report was actually communicated to the plaintiffs though it was stated in para 34 of the defendant's written statement that an offer in accordance with Vernon's report was made to the plaintiffs on the 7th September which was refused. The matter is not of much importance for as the plaintiffs had already refused compensation at Rs. 20 per bale it can hardly be imagined that they would have been willing to accept the much lower rate of damages which Vernon had assessed.

10. The next thing we find is that on the 9th September 1918 the plaintiffs sent in a claim to the agent of the Railway in a letter Ex. 14. They demanded the cost of the 54 bales, at the rate of Rs. 80 a maund a, total of Rs. 20-837. To this was added a claim for Rs. 2925 for damages caused by the delay in delivery which had led to the closing down of the plaintiffs Mills on account of shortage of cotton. This claim it may be observed was the reiteration of a claim put forward on the 28th June 1918 and related to the delay which had taken place in the carriage of the goods prior to the 2nd of July 1918. The third item of the claim made on the 9th September 18 was for Rs. 218-8-6 this being one half of the freight of the whole consignment. The plaintiffs had paid the whole sum due for freight on 22nd May.

11. It is evident from the language of this letter of the 9th September that the plaintiffs had made up their mind to claim compensation on a scale they had not hitherto, contemplated; in fact they were advancing a claim for the total loss of the goods. We find them stating that the goods had been seriously neglected that “they had been lying in the open rain water pouring upon them freely for months and weeks together.” The plaintiffs further stated that “after minute examination of the stuff” they had arrived at the conclusion that the quality of the cotton had become seriously deteriorated”.

12. It does not appear when this “minute examination was made and it seems rather to be the fact that no such examination was ever made by the plaintiffs.

13. The Agent of the Railway acknowledged receipt of the claim and promised inquiry and thereafter a good deal of correspondence passed between the parties without any settlement being arrived at.

14. On the 9th November 1918 the Railway Company served a notice on the plaintiffs to say that if the goods were not removed by a date mentioned in the notice they would be sold at the plaintiffs' risk. The plaintiffs refused to comply with this notice and eventually the Railway sold the goods at the rate of Rs. 117 per bale. At the hearing of the appeal we were told by the counsel for the Railway Company that this sale took place in March 1919 and this no doubt is correct.

15. The correspondence between, the parties closed with a letter from the Agent, to the Railway to the plaintiffs dated the 28th April 1919. The Railway Company refused to consent to further arbitration and offered payment to the plaintiffs of the sale proceeds of the, goods less any amount due to the Railway.

16. The plaintiffs filed their suit on the 18th June 1918 and this, as has been said, has been dismissed by the Court Below.

17. In substance the findings of the Sub-ordinate Judge are that the plaintiffs had no right to recover and that the Railway Company was justified in selling the goods. The Court held that the plaintiffs were in default that they had wrongfully refused to take delivery that the Railway Company had not refused delivery and that it had exercised its statutory right sell the goods in accordance with law.

18. The Sub-ordinate Judge also was of opinion that the plaintiffs had no right to compensation for damage to the goods as the plaintiffs had failed to prove that any damage took place on the defendant Company's line and had omitted to sue the B.B and C.I Railway Company to which the goods had been made over by the consignor.

19. He also held that the item of Rs. 2925 claimed by the plaintiffs on account of damages resulting from the closing of their Mills by reason of the delay in the carriage of the second installment of the goods could not be awarded, as this was a false claim on the part of the plaintiffs.

20. It may be observed here that this portion of the claim is no longer pressed nor indeed could it be for, the Railway Company defendant was able to establish conclusively in the Court below that if the plaintiffs mills Were closed down, the reason was that there was a shortage of coal and not because of any delay in the transit of he bales of cotton.

21. To come now to the appeal it is complained that the Court below did not rightly appreciate the nature of the plaintiffs' claim which, it is said, was in reality a claim based upon the wrongful conversion of the plaintiffs goods by the defendant Railway Company.

22. Speaking for myself I do not see that the judge of the Court below was under any misapprehension regarding the nature of the case which the plaintiffs set up though considering the manner in which the case was set out in the plaint he might with some excuse have been led into doubt.

23. He has however in my opinion dealt with the case on the right lines as a whole and has definitely found that the Railway Company was justified in selling the plaintiffs' goods in exercise of the power conferred by section 56 of the Indian Railways Act (IX of 1890) which authorises a railway administration in certain circumstances and on certain conditions to sell unclaimed goods.

24. In this connection the whole question is whether the Railway was in the circumstances entitled to treat the 54 bales of cotton as unclaimed goods.

25. The argument for the plaintiffs in substance is that it was not so entitled. It is contended that in the, first instance the Railway Company wrongfully put obstructions in the way of the plaintiffs taking delivery and it is further argued that because the plaintiffs had put in a claim for damages, the Company had no right to sell pending a settlement of the claim. In my opinion neither of these arguments can be accepted. To take first the plea that the Railway Company obstructed the taking of delivery.

26. What is the case of the plaintiff company on this point. It is set out in paragraphs 7 and 8 of the plaint, where it is alleged that the plaintiffs sent their men to the Railway station and discovered that the bales were wet and damaged and that thereupon the plaintiff company “refused to take delivery without an inspection and a note as to the condition of the goods by the defendant Company's servants at the Mirzapur station which they refused to do. If this means that the inspection referred to was inspection by the plaintiffs themselves then the allegation is not true for it is clear on all hands that the plaintiffs had ample opportunity to inspect the goods and did as a matter of fact inspect them.

27. On the other hand if it means that the inspection was to be inspection by the Railway Company then the answer to the plaintiff' case is that they had no right to insist upon an examination of the goods by the defendant railway. There seems to have been some argument in the Court below about the right to what is called “open inspection” and the Sub-ordinate Judge seems to have thought that the plaintiffs were insisting upon some such right though that is decided in the third paragraph of the memorandum of appeal. It has been definitely settled in this Court that a consignee has no right to demand that the goods shall be opened and inspected on the railway premises before he can be called upon to take delivery (Jwala Prasad & Co. v. G.I.P Ry. (1)

28. But it is argued (see the plea in the 12th paragraph of the memorandum of appeal) that the plaintiff had a right to have a note made in the railway company's delivery register recording that the goods were in a damaged condition and that as the company's servants refused to make such an entry or allow such an entry to be made, there was an obstruction amounting to wrongful refusal to deliver. Much stress has been laid upon fie fact that the plaintiffs had handed over the railway receipt to the defendant company before the second lot of bales arrived and it is said that if the plaintiffs had signed the delivery register without recording that the goods were damaged they would have been precluded thereafter from claiming damages on the ground that they had given a clear receipt. This argument does not appeal to me. In the first place I have not been shown any provision of law or any statutory rule which obliges a Railway Company to make or to allow to be made in its delivery register any note alleging that goods are in a damaged condition. In the next place it has been definitely decided by a Bench of this Court that a plaintiff cannot refuse to take delivery because the Railway Company refuses to make an entry in their books. There the plaintiffs' case was that there was a shortage in the weight of the goods. The Bench held that the plaintiff could not insist upon an entry. If he had any complaint he was entitled to make his representation to the company in any other way. Koka Mal v. G.I.P Ry. (2). And lastly it is not correct to say that the plaintiff would have been debarred from a suit if they had signed the delivery register so as to constitute what is called a “clear receipt” (See E.I.Ry Co. v. Sispal Lal, (3). I am satisfied therefore that the plaintiffs cannot maintain that anything done by the defendant Railway Co's servants on the 2nd July 1918 amounted to a wrongful refusal to deliver the goods.

29. As for anything which happened after that date I can find no evidence of wrongful retention of the goods by the defendant Railway. It is true they kept the goods in their custody but that was at the plaintiffs' own request. The Railway Company in order to satisfy the plaintiffs, consented to have the goods inspected by their own officers and by Mr. Vernon but the plaintiffs cannot be heard to say that this was in any way a wrongful act on the part of the Railway Company. After the inspections had been made and compensation had been offered to the plaintiffs it was their duty to remove their goods and no hindrance to removal was placed in their way.

30. The argument put forward on behalf of the plaintiffs seems to imply they they had a right to call upon the Railway Company to warehouse their goods until such time as the Company was prepared to offer them damages which they would accept. There is in my opinion no warrant for such a proposition and it may be added that even if there were, the plaintiffs abandoned the position completely when they wrote to the agent on the 9th September 1918 claiming no damages, but the full price of the goods.

31. I hold therefore that the suit for damages for wrongful conversion fails and that the decision of the Court, below on this point is correct. The only question which remains to be considered is whether the plaintiffs should be awarded any compensation for damage to the goods.

32. That the goods were damaged there is no reason to doubt. On the other hand it is clear that the damage was inconsiderable and that the claim put forward by the plaintiffs is grossly exaggerated. This is apparent from the fact that they were willing to accept compensation at the rate of Rr. 30 per bale.

33. In dealing with this matter it has to be borne in mind that the goods were carried over the systems of several railways. They were made over at Jaipur to the B.B and C.I Ry and they traveled first over the line under that railway's control, then over the lines of the Bengal North Western Railway and of the Oudh Rohilkhand Railway before they came upon the line of the defendant company at Moghal sarai which is only a short distance from Mirzapur.

34. The B.B and C.I Railway Company with which the goods were booked is no party to the suit nor has any other of the above named administrations been impleaded as a defendant; the sole defendant is the East Indian Railway. Coy.

35. In these circumstances the plaintiffs could only recover damages from the East Indian Railway Coy by proving that the damage was caused on its system. This is clear from the provisions of section 80 of the Indian Railways Act. (IX of 1890) and the law has been so interpreted in the case of G.I.P Ry. v. Sham Manohar (4).

36. The plaintiffs have not produced any direct evidence to show that the defendant Railway Company is responsible for the damage to their goods.

37. The only evidence which has any bearing on this question is the statement of Krishna Gopal Das, a witness called for the defendant. He is a clerk on the O. and R. Ry and deposes that the 54 bales were received at Benares Cantonment Station on the 26th June 1918 from the Bengal North Western Railway (a metre gauge line) and were transhipped the same day into a waggon on the broad gauge system of the O. and R. Ry for despatch to Mirzapur via Moghal Sarai. He deposes that the bales were in good condition at the time of transhipment and that they were placed in a sealed waggon.

38. If this statement be true then all that can be said is that any damage which was caused to the goods must have been caused between the 26th June and the 2nd July 1918 either on the O. and R.R system or on the system of the defendant company. That evidence would not suffice to fasten liability upon the East Indian Railway Coy. Apart from this there remains only the fact that the defendant company did on three occasions subsequent to the 2nd July 1918 offer compensation to the plaintiffs. I have stated above that Rs. 10 per bale was offered by Robinson one of the defendant Coy's inspectors. Later on another employee of the defendant railway Mr. Dyer offered Rs. 20 per bale and lastly there was the very much reduced offer made after the inspection by Mr. Vernon on the 18th August.

39. The question is whether these offers constitute an acknowledgment of liability on the part of the railway company which would justify an award of damages.

40. In paragraph 9 of the written statement the plea of the defendants company is that these offers were made in order to lead to a settlement out of Court, but neither Robinson nor Dyer has been examined so it is not possible to say whether the offers were made “without prejudice” nor have we been referred to any documentary evidence on the point. I have considered this point carefully and am disposed to hold that the railway company has acknowledged liability.

41. As to the amount of damages I think a fair sum is at the rate of Rs. 20 per bale offered by Dyer. It is true that the expert evidence of Mr. Vernon would, if accepted, show that this offer was in excess of what was really claimable. But Vernon's inspection was not made till the 18th August more than six weeks after the goods had arrived at Mirzapur, a fact which must be taken into account when estimating the value of his report.

42. I would therefore allow the plaintiffs damages to the extent of Rs. 1080.

43. The plaintiffs are not entitled to return of the freight for the goods were carried to their distinction. They are entitled to the sale proceeds of the goods at the rate of Rs. 117 per bale Rs. 6318.

44. There should therefore be judgment for Rs. 7398 in all but the plaintiffs having been in the wrong throughout must be made to pay the defendant Company's costs in both Courts.

45. Allowing the appeal in part I would substitute for the decree of the Court below a decree in plaintiffs' favour for Rs. 7398 and direct that the plaintiffs do pay the costs of the defendant company in both Courts including in this Court fees on the higher scale.

46. Kanhaiyalal, J.:— I agree in the order proposed.

47. By the Court:— The appeal is allowed. A decree for Rs. 7398 will be prepared in favour of the plaintiff Company. The plaintiff Company will pay the costs of the East Indian Railway Company in both Courts including in this Court fees on the higher scale.