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Bengal And North Western Railway Company v. Maharajadhiraj Kameshwar Singh Bahadur
Court Opinion Summary — Courtney Terrell, C.J.
Factual and Procedural Background
This suit was instituted by the plaintiff on 4 October 1923 for compensation for short delivery of goods. The original defendants were the Agents of the Bengal and North Western Railway (B&NWR) and of the East Indian Railway (EIR). Before the Subordinate Judge the plaintiff sought leave to amend the plaint to substitute the railway companies in place of their Agents. The Subordinate Judge heard evidence but, without deciding the merits, dismissed the suit as against both Agents and refused leave to amend.
On appeal, this Court dismissed the appeal as regards the Agent of the East Indian Railway but remanded the case to the Subordinate Judge to allow amendment substituting the Bengal and North Western Railway company as defendant and for a decision on the merits against that company. The East Indian Railway and its Agent were thereby removed from proceedings. No application was made to call further evidence; after considering the evidence already before him and allowing the directed amendment, the Subordinate Judge gave judgment for the plaintiff against the Bengal and North Western Railway company. The railway company appealed.
The operative facts are: James Duke & Company of Calcutta consigned to the plaintiff on 27 August 1922 a consignment of 3,229 bundles of round steel rods totalling 851 maunds and four wooden frames from Ramkristapur (EIR) to Muktapur (B&NWR). A Risk Note A was signed by the consignor's agent; the contract was with the East Indian Railway, which acknowledged receipt. On three separate dates in September portions of the consignment arrived at Mokameh Ghat (EIR). EIR staff unloaded into the EIR godown; B&NWR staff took charge and loaded into closed trucks on B&NWR. A B&NWR official signed an EIR register for each portion; that register showed weight "as per invoice" totalling 851 maunds and contained no entry of reweighing nor any mention of the four wooden frames.
Deliveries to Muktapur occurred on 14, 20 and 21 September 1922. On the first delivery the plaintiff's clerk signed the B&NWR register acknowledging receipt of the full 851 maunds. The trucks were taken to the plaintiff's siding, unloaded and weighed over two days, revealing a shortage of 248 maunds. The four wooden frames were delivered by road van on 5 October 1922.
Legal Issues Presented
- Whether the plaintiff complied with the statutory notice requirement (section 77 of the Indian Railways Act) and, relatedly, whether the plaintiff's letters to the District Traffic Superintendent at Samastipur constituted valid service on the railway administration in view of section 140 of the Indian Railways Act.
- Whether the suit was barred by limitation under Articles 30 or 31 of the Limitation Act — i.e., when the period of limitation began to run for the claim for non-delivery.
- Whether, as a matter of fact and law, the District Traffic Superintendent at Samastipur was a duly authorised agent of the railway administration for receiving notices of claims.
Arguments of the Parties
Railway Company's Arguments (Appellant)
- The plaintiff failed to make a written claim within six months of delivery as required by section 77 of the Indian Railways Act; therefore the claim should be barred.
- By reference to section 140 of the Indian Railways Act, service authorized by the Act may be effected on the Agent of the railway company; the company argued that the word "may" in section 140 should be read as "must", so that notices must be served on the Agent in India, and the plaintiff's letters to the District Traffic Superintendent do not comply.
- On limitation grounds, they relied on Article 30 of the Limitation Act, contending the loss occurred when the last delivery was made (21 September 1922) and that the suit (instituted 4 October 1923) was therefore outside the one-year period under Article 30.
- Alternatively, under Article 31 (for non-delivery), they contended the relevant date is the date of last delivery of the iron rods, i.e., 21 September 1922, rendering the suit time-barred.
Plaintiff's Arguments (Respondent)
- The plaintiff wrote to the District Traffic Superintendent at Samastipur on 23 October 1922 submitting particulars of the claim; the Superintendent acknowledged receipt and later personally inspected the goods (3 April 1923), and further correspondence and conduct show the matter "received attention."
- The course of business and conduct of the railway administration and the failure of the Agent to repudiate his subordinate's handling of claims meant that service on the District Traffic Superintendent was service on the administration; the District Traffic Superintendent was effectively authorised to receive notices.
- On limitation, Article 30 concerns loss or injury to the goods (not loss to the consignee), and the railway company bears the onus of proving when any loss to the goods actually occurred. The claim is more properly governed by Article 31 (non-delivery), and the date for limitation is when the goods ought to have been delivered — assessed by contract terms or reasonableness.
- The contract related to the entire consignment (including the four wooden frames delivered on 5 October), so the plaintiff was justified in waiting until it was clear the company did not intend to complete delivery; the plaintiff's suit of 4 October 1923 was therefore within time.
- The defendants' repeated failure to deal with the plaintiff's claims misled the plaintiff into delaying suit; the company cannot now rely on alleged delay.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Martin and Co. v. Fakir Chand Sahu | Expressed the view (in Calcutta High Court cases) that "may" in section 140 should be construed as "must" (i.e., notices must be served on the Agent). | The Court refused to follow the expressions of opinion in these Calcutta High Court cases and explicitly declined to adopt the construction that "may" means "must". |
| Nadiar Chanda Shaha v. Wood | Cited as another Calcutta High Court case expressing that "may" in section 140 is to be read as "must". | The Court likewise declined to follow this line of authority. |
| A. Mahadeva Avyar v. The South Indian Railway Co. (Madras Full Bench) | Held that whether a particular officer is authorised by the Agent to receive notices is a question of fact; agency may be proved by direct evidence or by course of conduct. | The Court agreed with and applied this reasoning: it treated authorization of the District Traffic Superintendent as a question of fact capable of being established by the company's course of conduct. |
| East Indian Railway Co. v. Bhimraj Srilal | Decision on the facts of that case; it held no delegation of authority had been proved in those facts. | The Court observed this case was factual and did not decide the broader proposition that section 77 notices must be served on the Agent under section 140; therefore it is not authority for that broader proposition. |
| East Indian Railway Co., Ltd. v. Sowa Lal Sawan Lal | Referenced in relation to prior decisions on service/agency issues under the Railways Act. | The Court noted similar limitations in the use of that case as authority for the proposition that notices must be served on the Agent; it did not treat that case as controlling on the broader question here. |
Court's Reasoning and Analysis
The Court proceeded in two principal strands of analysis: (A) the statutory-service/agency point under sections 77 and 140 of the Indian Railways Act; and (B) the limitation point under Articles 30 and 31 of the Limitation Act.
A. Service/Agency (Sections 77 and 140)
- The Court construed section 140 as providing a safe and unanswerable method of service by specifying that service on the Agent in India is service on the company, but rejected the view that the word "may" in section 140 must be read obligatorily as "must." The Court declined to follow Calcutta High Court opinions that so construed "may."
- Section 77 requires service upon the railway administration. Because a company conducts business through authorised agents, the decisive question is whether the official upon whom notice was served is in fact, on the evidence and by the company's course of conduct, an authorised agent to receive such notices.
- The Court adopted reasoning from the Madras Full Bench (A. Mahadeva Avyar) that authorization may be proved by direct evidence or by course of conduct justifying the inference that a subordinate official was authorised to receive notices.
- Applying these principles to the facts, the Court found ample evidence of the company's course of conduct and of the Agent's behaviour (not repudiating the District Traffic Superintendent's handling of claims and not raising the section-140/section-77 point in earlier correspondence). The District Traffic Superintendent had acknowledged receipt of the plaintiff's letter, inspected the goods, and corresponded about forwarding the claim. On this factual foundation the Court held that service upon the District Traffic Superintendent constituted service upon the railway administration.
B. Limitation (Articles 30 and 31)
- The Court clarified that Article 30 concerns loss or injury to the goods themselves (not loss to the consignee). If the defendants wished to rely on Article 30 they bore the onus of proving when loss to the goods occurred and that more than one year had elapsed from that date.
- The Court held Article 31 (relating to compensation for non-delivery) was the applicable article. Limitation under Article 31 runs from the time when the goods "ought to have been delivered," which may be determined by contract terms or by what is reasonable in the circumstances.
- The contract covered the whole consignment (iron rods and the four wooden frames). Because the frames were delivered only on 5 October 1922, the plaintiff was entitled to treat the contract as incomplete until that delivery and to postpone suit until it was clear the company did not intend to complete delivery.
- The plaintiff's initial written claim (23 October 1922) and subsequent communications, together with the company's conduct (including inspection and forwarding of correspondence) justified the plaintiff's delay in suing; the company had misled the plaintiff into delaying. Consequently, the plaintiff's suit of 4 October 1923 was within the period required by Article 31.
Conclusion of Reasoning
The Court found the railway company's technical defences to be without merit: (i) the notice requirement of section 77 was satisfied by service on the District Traffic Superintendent in view of the company's course of conduct and the Superintendent's actions; (ii) the limitation defence failed because the applicable article was Article 31, and in any event the company had the onus to prove any earlier loss to the goods; and (iii) the company's conduct misled the plaintiff into delaying litigation. The Court concluded that the defendants' attitude lacked candour and their defences were unmeritorious.
Holding and Implications
HOLDING: Appeal dismissed.
Implications (direct effect on the parties):
- The judgment of the Subordinate Judge in favour of the plaintiff against the Bengal and North Western Railway company is upheld.
- The Court held that, on the facts, the District Traffic Superintendent was effectively authorised to receive notice of the claim and the plaintiff's statutory notice obligations were satisfied.
- The Court rejected the railway company's limitation defence and found the suit to be timely.
Broader legal observations recorded by the Court include a refusal to follow certain Calcutta High Court expressions construing "may" in section 140 as "must," and an explicit adoption of the Madras Full Bench approach that authorization to receive notices may be inferred from course of conduct. The Court treated the determination of whether a subordinate official was authorised as a question of fact.
Appeal dismissed.
This summary is based exclusively on the content of the provided opinion and does not add information beyond that text.
Courtney Terrell, C.J:— This suit was originally begun by the plaintiff on the 4th October, 1923, against the Agent of the Bengal and North Western Railway and also the Agent of the East Indian Railway for compensation for the loss by the plaintiff as the consignee of goods of which short delivery had been made. The case was heard by the Subordinate Judge and the plaintiff applied to amend his plaint by substituting the respective railway companies as defendants in place of their Agents. The Judge heard the evidence produced by the plaintiff and the defendants but without deciding on the merits dismissed the suit as against both Agents and refused leave to amend the plaint. On appeal by the plaintiff a Bench of this Court dismissed the appeal as regards the Agent of the East Indian Railway but remanded the case to the Subordinate Judge to allow an amendment of the plaint substituting the name of the Bengal and North Western Railway company as defendant for that of its Agent and for a decision of the suit on the merits as against that company. The East Indian Railway company and its Agent were accordingly eliminated from the proceedings. No application was made either by the plaintiff or by the Bengal and North Western Railway company to call fresh evidence and after considering the evidence already before him and allowing the amendment directed, the Subordinate Judge gave judgment for the plaintiff against the Bengal and North Western Railway company who now appeal from his decision.
The facts are simple. James Duke and Company of Calcutta despatched to the plaintiff on the 27th August, 1922, a consignment of 3,229 bundles of round steel rods weighing 851 maunds and also four wooden frames from Ramkristapur railway station on the East Indian Railway to Muktapur railway station on the Bengal and North Western Railway. Risk Note A was signed by the agent of the consignor, the contract was made with the East Indian Railway and the East Indian Railway acknowledged receipt of the goods. On three separate dates in September open wagons arrived at Mokameh Ghat station on the East Indian Railway company's line. Each of these contained a portion of the consignment of steel rods. It appears from the evidence called by the East Indian Railway company that in each case the goods were unloaded by the men of the East Indian Railway company from the trucks into the company's godown, and offence were taken over by the men of the Bengal and North Western Railway company and loaded into closed trucks on that company's line. An official of the Bengal and North Western Railway company in each case signed a register belonging to the East Indian Railway. In this register in the case of each portion of the consignment the station of origin (Ramkristapur) and the station of destination (Muktapur) are stated. The names of the consignor and consignee are indicated. Under the head of “description” the goods are variously stated to be “lot bundles round iron” or (5, 11, 4 as the case may be) bundles of rod. Then is stated “weight as per invoice.” Then there is a colunrn which is headed “Remarks as to condition, weight on reweighment, etc.” There is no statement as to the weight on reweighment and indeed there is nothing before us to show whether the goods were or were not reweighed by the Bengal and North Western Railway company and the observations in the column merely refer to the condition and packing of the goods. In the column beaded “weight as per invoice” the weight of the different lots which were received at Mokameh Ghat on the 8th, 19th and 20th September is set forth as totalling 851 maunds as stated in the invoice. It is perfectly clear that the Bengal and North Western Railway company had an opportunity to reweigh the goods and they might, if such was the fact, have entered in the register of the East Indian Railway company the statement that the weight of the goods so reweighed did not correspond with the weight in the invoice. They had ample opportunity to prove before the Subordinate Judge (if such had been the case) that not with standing that they had acknowledged receipt of 851 maunds from the East Indian Railway company, in fact the amount received by them was something less. In the absence of evidence it cannot be assumed that they took from the East Indian Railway company anything less than the amount acknowledged by them when signing the register. The register makes no mention of the four wooden frames which were part of the consignment despatched by the consignor to the consignee. The three closed wagons into which the iron is said to have been loaded by the Bengal and North Western Railway company were delivered at Muktapur railway station on three different dates. The first delivery was on the 14th September, 1922 the second on the 20th and the third on the 21st. On the occasion of the first delivery the clerk in the employ of the plaintiff signed the entry in the register of the Bengal and North Western Railway company and acknowledged the receipt of the entire amount of iron rod mentioned in the invoice, that is to say, 851 maunds. The closed trucks were taken to the plaintiff's siding, unloaded, and the iron rod was weighed. This operation took two days and it was found that there was a shortage of 248 maunds. The wooden frames were delivered by road van on the 5th October.
One of the defences relied upon by the railway company has been the familiar, and in the circumnstances, somewhat disingenuous contention, that the plaintiff failed within six months from the date of delivery of the goods to prefer a claim in writing to the railway administration as provided by section 77 of the Indian Railways Act, and it is necessary, therefore, to examine the correspondence which took place.
On the 23rd October, 1922, the plaintiff's manager wrote to the District Traffic Superintendent of the Bengal and North Western Railway at Samastipur submitting a claim for non-delivery and setting forth precise particulars and asking for an early settlement and also enclosed a copy of this letter to the Traffic Manager of the East Indian Railway company at Howrah.
On the 27th October, 1922, the District Traffic Superintendent of the Bengal and North Western Railway wrote acknowledging the receipt of this letter and stating
“The matter is receiving my attention.”
On the 30th October the Acting Traffic Manager of the East Indian Railway company acknowledged the receipt of the copy of the letter sent to him and stated that it was receiving his attention.
Nothing further seems to have happened until the 19th February, 1923, when the plaintiff's manager again wrote to the District Traffic Superintendent of the Bengal and North Western Railway again setting forth particulars of the claim and stating that his letter had not been acknowledged and that unless an immediate settlement was reached the matter would be placed in the hands of lawyers.
On the 3rd April, 1923, the District Traffic Superintendent of the Bengal and North Western Railway appears to have paid a personal visit to the plaintiff's mill and made an inspection of the goods which had been delivered.
On the 14th May the plaintiff's manager again wrote to him referring to the visit and asking if he had anything to communicate in connection with the plaintiff's claim.
On the 22nd May the District Traffic Superintendent replied that he had forwarded the plaintiff's letter dated the 22nd August, 1922, to the Traffic Manager at Gorakhpur for favour of disposal.
On the 23rd July the plaintiff's manager wrote direct to the Agent, Bengal and North Western Railway, at Gorakhpur, referring to the claim stating that his several letters addressed to the Traffic Department had received no attention and stating that the matter would have to be handed over to the plaintiff's solicitors.
On the 4th August, 1923, the Traffic Manager of the Bengal and North Western Railway at Gorakhpur wrote to the plaintiff's manager. After referring to the plaintiff's letter of the 27th August, 1922, he said
“The consignment was delivered to you as received from the East Indian Railway and I regret I can do nothing in this case.”
The defendants in support of their contention refer to section 140 of the Indian Railways Act the material parts of which are as follows:—
“Any notice or other document required or authorized by this Act to be served on a railway administration may be served…………….in the case of a railway administered by a railway company on the Agent in India of the railway company.”
They contend that the letters written by the plaintiff's manager to the District Traffic Superintendent at Samastipur do not comply with section 77 and that the words “may be served” in section 140 mean “must be served”. It is interesting to note that no such point is taken in the final letter of the 4th August, 1923, from the Traffic Manager and he such point was made in answer to the letter of the 23rd July from the plaintiff's manager to the Agent of the railway. The company have persisted in a course of business by which they have allowed their District Traffic Superintendent to deal with claims for compensation. The Agent has at no time until the written statement in this case, repudiated the action of his subordinate. A series of cases of the Calcutta High Court have been cited to us in which the opinion has been expressed that the word, “may” in section 140 is to be construed as “must” such, for example, as Martin and Co. v. Fakir Chand Sahu and Nadiar Chanda Shaha v. Wood. I am entirely unable to understand the reasoning which prompted these expressions of opinion and I decline to follow them. Section 140, in my opinion, merely provides a safe and unanswerable method for serving a claim upon the railway administration and enacts in effect that service upon the Agent is service upon the company, but section 77 enacts that the service, must be upon the administration and inasmuch as a company must conduct its business through its authorised agents the only question to be decided is whether the District Traffic Superintendent is in fact in the circumstances of the case the duly authorised agent of the railway company. If the company by its course of business hold up any particular official as competent to deal with claims, then service of notice upon such an official must be taken as against the company to be service upon the company. I agree with the reasoning of Mr. Justice Kumaraswami Sastri in the Full Bench decision of the Madras High Court in A. Mahadeva Avyar v. The South Indian Railway Co.. The learned Judge said “The question whether a particular officer is authorised by the Agent to receive such notices on his behalf is a question of fact to be determined in each case. Agency may be proved either by direct evidence of authority, or by a course of conduct which in the opinion of the Court would justify the inference that the subordinate official was authorised by the Agent to receive notices on his behalf.”
The decision of this Court in East Indian Railway Co. v. Bhimraj Srilal* is a decision upon the facts of the particular case and it was held that no such delegation of authority had in fact been proved. The point that the notice required by section 77 must under section 140 be served on the Agent did not directly arise and, in my opinion, the case is no authority for that proposition. Similar observations may be made on the case of East Indian Railway Co., Ltd. v. Sowa Lal Sawan Lal. In my opinion in this case not only is it unnecessary in order to prove service on a railway administration to establish that the notice was served upon the Agent but there is ample evidence in this case in the course of conduct of the railway company and the behaviour of the Agent in not raising the point in reply to the letter of the 23rd July to establish that the District Traffic Superintendent at Samastipur was in fact authorised by the railway administration to receive notice of the claim.
The second contention on behalf of the railway company is to my mind as unattractive as the first. They rely upon Articles 30 and 31 of the limitation Act. It is contended that if the matter is to be considered as governed by Article 30 the suit has not been brought within one year of the loss incurred by the plaintiff. It is said that the last delivery of iron was made on the 21st September and it was then made clear that the whole of the iron which could be delivered had been delivered and the suit having been begun on the 4th October, 1923, a period of more than one year had elapsed. The answer to this contention is simple. The loss or injury referred to in Article 30 is the loss or injury to the goods and not the loss or injury to the consignee. If the defendants wish to take advantage of Article 30 the onus is upon them to prove when the loss or injury to the goods actually occurred and that more than one year, has elapsed from that date. In this particular case the defendants have throughout taken up the position that no loss in fact occurred and that the goods were delivered as received by the defendants from the East Indian Railway company. The Article of the Limitation Act which is applicable to this case is Article 31, that is to say, the claim is for compensation for non-delivery of the goods and the period of limitation is to be counted from the time when the goods ought to have been delivered. The defendant contend that even under Article 31 the date to be considered is that on which the last delivery of the iron rods was in fact made, that is to say, the 21st September. To this contention there are two answers. First, this is a suit under section 80 of the Act for compensation for loss. Such a suit may be brought either against the company with whom the contract for carriage was directly made or against the railway administration on whose railway the loss occurred. If the latter course be taken it does not follow that the suit is one founded in tort. The suit is founded on statutory liability which is attached to the contract though that contract be made with a railway other than the defendant to the suit. Reference may be had to the contract for carriage for the purpose of determining the date when the goods ought to have been delivered. If no particular date is specified it must be determined as a matter of what is reasonable having regard to the circumstances of the contract, and this criterion must be applied as much in favour of the plaintiff as in favour of the defendant. Now the contract referred not only to the delivery of iron but also to the delivery of the four wooden frames. It was a single contract in respect of a single consignment and the plaintiff might reasonably take the point of view that until the entire contract purported to have been fulfilled he was not in a position to complain of non-delivery of a part of the goods subject to the contract. As I have said, the wooden frames were delivered by road van on the 5th October and the suit was begun on the 4th October in the following year and is, therefore, in time. But there is another aspect of the case which is even more conclusive against the defendants' contention. The plaintiff on the 23rd October wrote to the defendants of the loss. He was justified in waiting to bring his suit until the defendants had made it clear that they had no intention of delivering the goods. Had the position been reverse the defendants would not have hesitated to contend that a suit was premature which did not give them a reasonable opportunity of fulfilling the terms of the contract. The defendants by a deliberate process of, ignoring the plaintiff's repeated requests for attention to his claim misled him into delaying his suit and it is not open to them now to contend that the suit has been brought too late. In my opinion the attitude of the railway company has throughout been lacking in candour and their defence to this suit even in its most technical aspects has no merit. I would, therefore, dismiss this appeal with costs.
Fazl Ali, J.:— I agree.
Appeal dismissed.
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