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  • sec. 75 of the Railways Act, IX of 1890,
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  • sec. 75 of the Railways Act, IX of 1890,
Smart Summary

Analytical Summary of the Opinion

Factual and Procedural Background

Plaintiffs sued the East Indian Railway Company for loss of a parcel consigned from Bombay to Bankipore, the parcel's total value stated as Rs. 516-5-7½. In a detailed statement submitted to the railway, Plaintiffs indicated that "fancy silk handkerchiefs" worth Rs. 138-2 had been lost. The railway denied liability relying on section 75 of the Railways Act, IX of 1890, and the Second Schedule thereto.

At first instance the Munsif and the Subordinate Judge held that the defendants were not liable for the silk items because they had not been declared or insured, but allowed recovery for other goods in the parcel that did not appear to fall within Schedule II. A second appeal came before Mr. Justice Teunon, who considered whether scheduled goods of value over Rs.100 in the parcel would relieve the railway of liability for the entire parcel. Mr. Justice Teunon remanded the case to the lower Court to determine the aggregate value of the silk handkerchiefs so as to decide whether silk amounted to the requisite value. On remand the Subordinate Judge reported himself unable on the evidence to decide the remanded issue, but relied on the plaint's statement and other findings to make a new decree in favour of the Plaintiffs. The matter then proceeded to the Divisional Bench which produced the present opinion.

Legal Issues Presented

  1. Whether, under section 75 of the Railways Act and the Second Schedule, the presence of scheduled goods (silk) of an aggregate value exceeding Rs. 100 in a parcel relieves the railway company from liability for the whole parcel.
  2. Whether the remand ordered by Mr. Justice Teunon to ascertain the aggregate value of silk in the handkerchiefs was a competent remand, or whether the Divisional Bench must treat the case as coming before it on appeal from the Subordinate Judge who heard the first appeal.
  3. Whether the factual findings of the lower courts (that the parcel contained silk handkerchiefs of sufficient value/proportion of silk to bring them within the Schedule) can be re-opened in second appeal.
  4. Whether the Plaintiffs' decree in respect of the non-silk articles in the parcel can be maintained once the silk items fall within the Schedule.

Arguments of the Parties

Plaintiffs' Arguments

  • The Plaintiffs contended that the lost handkerchiefs were not "real" silk but market-described "fancy silk" or sham silk, selling for only 5–6 pice each, and hence should not be treated as silk within the meaning of the Act.
  • They produced a witness with sample handkerchiefs alleged to be similar to the lost ones and relied on prior Indian decisions (Lakhmidas Hira Chand v. The Great Indian Peninsula Railway and Saminadha Mudali v. The South Indian Railway Company) to argue that such handkerchiefs should not be considered silk for the purposes of the Railways Act.
  • On remand, Plaintiffs' pleadings (the plaint) contained statements as to the value of silk and non-silk handkerchiefs (e.g., silk handkerchiefs worth Rs. 91, others Rs. 42 and odd) that the Subordinate Judge relied on to support a fresh decree in their favour.

Defendant (Railway Company's) Arguments

  • The railway company denied liability under section 75 of the Railways Act and the Second Schedule thereto, arguing that if the parcel contained silk (scheduled goods) to the value of Rs.100 or more the railway is not responsible for the contents of the parcel.
  • The railway's appeal before Mr. Justice Teunon rested solely on the contention that if scheduled silk goods of sufficient value were in the parcel, the company was not liable for anything in the parcel.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Hiatunnessa Bibi v. Kailash Chandra, Saha Authority on competency of remands and treatment of appeals following remand. The Court relied on this decision to hold that the remand ordered by Mr. Justice Teunon was incompetent and that the Divisional Bench must treat the matter as coming before it on appeal from the Subordinate Judge who heard the first appeal.
Ram Ratan Sukul v. Nandu (Judicial Committee) Principle that after factual decisions by both original and first appellate courts, the High Court cannot re-open soundness of those factual findings in a further appeal; the decision of the second Court of fact must stand. Applied to conclude the High Court (Divisional Bench) could not entertain a re-examination of the lower courts' factual findings and thus could not go behind the finding that the handkerchiefs contained sufficient silk to fall within the Schedule.
Lakhmidas Hira Chand v. The Great Indian Peninsula Railway Used (by Plaintiffs) as a precedent concerning whether particular articles are "silk" within the meaning of the Act. The Plaintiffs relied on it; the Munsif and the appellate courts considered the authority but ultimately treated the matter as one of fact (proportion/value test) and found the evidence did not exclude that the articles were silk for the purposes of the statute.
Saminadha Mudali v. The South Indian Railway Company Used (by Plaintiffs) to support the argument that the handkerchiefs should not be treated as silk under the Act. The Plaintiffs invoked it; the trial and appellate findings adopted a proportional-value test and found that the evidence did not establish that the silk element was less than half the value, so the courts treated the articles as within the schedule.
Brunt v. Midland Railway Company (English case) Principle that whether an article is "silk" (manufactured or otherwise) under a statute with language similar to the Indian Schedule is a question of fact; a judge must draw a line based on circumstances and decide if the article falls within it. Cited to support the view that the question of whether the handkerchiefs were silk was one of fact for the trial judge; used to justify upholding the lower courts' factual finding that the silk component was sufficiently predominant.
Pundalik Udaji Jadhav v. The Agent, Southern Mahratta Railway Company Authority regarding the effect on a plaintiff's recovery of the presence of scheduled goods in a consignment. Cited in support of the conclusion that once the handkerchiefs were held to be within the Schedule, any decree in favour of the Plaintiffs for other articles could not stand; reinforced the decision to dismiss the Plaintiffs' suit entirely.

Court's Reasoning and Analysis

The Court's analysis proceeded along several interconnected lines strictly based on the material before it:

  1. Interpretation of section 75 and the Second Schedule: The Court emphasized that section 75 of the Railways Act differs from the former Act because it states that the railway administration shall not be responsible for the loss, destruction or deterioration of "the parcel" and not merely of "the articles" mentioned in the Second Schedule. On this textual basis the Court reasoned that if a parcel contained silk (manufactured or unmanufactured, whether mixed with other materials) whose value reached Rs.100, the railway would not be responsible for anything contained in that parcel.
  2. Effect of the lower courts' factual findings: The Munsif and the Subordinate Judge had found, on the plaintiffs' statement and the evidence, that the parcel contained silk handkerchiefs of sufficient value/proportion to bring them within Schedule II. The Divisional Bench treated those factual findings as conclusive and refused to re-open them in second appeal, relying on established authority (Ram Ratan Sukul and related decisions) that the High Court cannot entertain a second appeal on the soundness of factual findings after they have been decided by the courts below.
  3. Competency of the remand: The Court examined Mr. Justice Teunon's remand, which asked the lower court to determine the aggregate value of the silk component in the handkerchiefs. The Divisional Bench held the remand was incompetent: once two courts (original and first appellate) have made factual findings, the High Court sitting in second appeal cannot order further fact-finding on the same matter. The Court relied on the decision in Hiatunnessa Bibi v. Kailash Chandra and the principle from Ram Ratan Sukul to support this conclusion.
  4. Onus and factual character of the "silk" question: The Court observed that Mr. Justice Teunon did not actually find a misplacing of the burden of proof and that the issues Teunon raised (possibility of equality in value and the value of each silk handkerchief) are questions that fall within the ambit of factual findings. The Court reiterated that the question whether a particular manufactured article is to be regarded as silk is essentially a question of fact, as explained in Brunt v. Midland Railway and as applied in the Indian cases cited.
  5. Application of proportional-value test and market description: The Munsif applied a test (drawing on the India cases and Brunt) that looked to whether the silk component's value was more than half the article's value. He found that evidence did not establish that the silk element was less than half; he also noted the articles were sold and described as "silk" in the market. The Divisional Bench treated this as a sufficient factual finding that the handkerchiefs fell within the Schedule and therefore the railway was exonerated as to the parcel.
  6. Consequence for recovery of other articles: Having concluded that the silk handkerchiefs were within the Schedule and that the remand was incompetent, the Court accepted Mr. Justice Teunon's view (and the supporting authority Pundalik Udaji Jadhav) that any decree in favour of the Plaintiffs for the other articles could not be sustained once the parcel was excluded from liability under the Schedule.

Holding and Implications

Holding: APPEAL ALLOWED; THE PLAINTIFFS' SUIT IS DISMISSED.

Implications and direct effects:

  • The Divisional Bench held that, as a matter of statutory interpretation and on the facts found by the lower courts, the presence of handkerchiefs treated as silk within the meaning of the Second Schedule relieved the railway of liability for the entire parcel.
  • The remand ordered by Mr. Justice Teunon to re-determine the aggregate value/proportion of silk in the individual handkerchiefs was held to be incompetent; the Court treated the matter as coming before it by appeal from the Subordinate Judge who heard the first appeal and declined to re-open the factual findings of the lower courts.
  • Because the scheduled goods fell within the Schedule and the remand was incompetent, any decree in favour of the Plaintiffs for other articles could not stand; accordingly, the Plaintiffs' suit was dismissed with costs in all courts.
  • The opinion applies and reinforces existing principles about the finality of lower courts' factual findings in second appeals and about the factual nature of the question whether a composite article is "silk" within the Schedule; the Court did not purport to lay down a novel legal rule or depart from the precedents it cited.

Result: Appeal allowed; Plaintiffs' suit dismissed with costs in all Courts.

    The East Indian Railway Company v. Changai Khan & Ors

    This second appeal arises out of a suit brought by the Plaintiffs against the East Indian Railway Co. for the loss of a certain parcel consigned to the company for conveyance from Bombay to Bankipore, the value of which is ??? to be Rs. 516-5-7½. After a prolonged correspondence about the claim the Plaintiffs submitted to the Defendants a detailed statement of the goods contained in the parcels, and it appears from that statement that fancy silk handkerchiefs of the value of Rs. 138-2 had been lost with the parcel. The Defendants thereupon denied their liability relying on sec. 75 of the Railways Act, IX of 1890, and Sch. II thereto annexed. The Munsif and the Subordinate Judge in concurrence held that the Defendants were not liable for the silk inasmuch as it had not been declared or insured. But they held that the Plaintiffs can recover the value of the other goods contained in the parcel, which did not appear to have come within Sch. II of the Act.

    The second appeal came before Mr. Justice Teunon sitting alone and he was of opinion and rightly in our view that the whole case of the Plaintiffs must fail if scheduled goods of the value of over 100 rupees were in the parcel, and for this reason, that sec. 75 of the present Act differing in that respect from the former Act says that the railway administration shall not be responsible for the loss, destruction or deterioration of the parcel and not of the articles mentioned in the Second Schedule. It is therefore clear that if this parcel contained silks in a manufactured or unmanufactured state and whether wrought up or not wrought up with other materials of the Value of Rs. 100, the railway company are not responsible for anything contained in the parcel; and that was the sole ground upon which the railway company came before Mr. Justice Teunon in appeal. Mr. Justice Teunon, as we have seen, decided that point in favour of the railway company, and there we should have thought would have been an end of the matter, inasmuch as the Plaintiffs did not file any cross-objection and did not say anything about the question of silk. But Mr. Justice Teunon appears to have thought that the company could not recover anything unless there really was silk to the value of over Rs. 100 in the parcel and he therefore remanded the case to the lower Court for a fresh hurling as to the particular items of silk handkerchiefs and their respective values directing that the Subordinate Judge in the first Court of Appeal should come to a finding on the following issue, namely, what is the aggregate value of the handkerchiefs in which on the evidence adduced it may be found that the value of silk exceeds the value of the other materials.

    The learned Subordinate Judge on remand expressed himself wholly unable on the evidence to decide this issue. But he said that he was satisfied with the statement in the plaint that the silk handkerchiefs were worth Rs. 91 and the other handkerchiefs which were not silk were worth Rs. 42 and odd and this was a sufficient basis for making a new decree.

    It is there that the principal question in this appeal arises. It is obvious even if the remand which was made was a competent remand with which we shall deal presently; the Subordinate Judge could not make a new case for the Plaintiffs. The finding of fact of the first two Courts before remand was at any rate conclusive that the Plaintiffs had admitted to the railway company that they had consigned 138 rupees silk goods for them to carry; and the only question that was remanded was, what was the proportion of silk in each kind of handkerchief so as to show whether the aggregate amounted to Rs. 100 or not. We are of opinion relying on the decision in Hiatunnessa Bibi v. Kailash Chandra, Saha that the remand itself was in competent and that we dealing with it as a Divisional Bench are bound to treat the case as coming before us on appeal from the Subordinate Judge who heard the first appeal. It is unnecessary to go into the considerations which induced the late Chief Justice and Mr. Justice Mitra to hold in a similar case that the remand was incompetent. It is clear as a matter of principle that after there has been a decision of fact in the two Courts of original and first appellate jurisdiction, the High Court cannot entertain a second appeal upon any question as to the soundness of findings of fact by the lower Appellate Court. If there is evidence, to be considered, the decision of the second Court however unsatisfactory it might be when examined must stand final. These are the words of their Lordships of the Judicial Committee in the well-known case of Ram Ratan Sukul v. Nandu.

    It was argued that Mr. Justice Teunon remanded the case on finding that the onus had been wrongly placed and that was a point of law. But we find that he does not specifically find that there was any misplacing of the onus. He says the Courts below while placing upon the Plaintiffs the whole burden of proof have proceeded, it appears, solely upon the description “fancy silk” contained in the statement of claim, and he concludes by saying, even if the Courts below were right in throwing the whole burden on the Plaintiffs in view of the expression of opinion to be found in the cases which we shall presently deal with, the finding at which they had arrived is not sufficient; and why is it not ??? because the possibility of equality in value has been overlooked and also the ??? of the value of each silk handkerchief have not been gone into. Now these points surely come within the dictum of their Lordships of the Judicial Committee as to the soundness of the findings of fact rather than as to the findings of fact themselves.

    The learned Munsif found as a fact that from the list supplied by the Plaintiffs to the Defendants it appears that the lost box contained silk handkerchiefs worth more than Rs. 100. That primâ facie clearly relieved the Defendants from any burden. To avoid their liability to make a declaration and to insure the goods the Plaintiffs stated that the handkerchiefs were not real silk but were known as such in the market, though they sold for no more than 5 or 6 pice each, while real silk handkerchiefs sold at Rs. 12 or 13 a dozen. They did not ask the Court to go into the question of whether there were so many at 15 annas and so many at higher price so that the aggregate of the real silk would not amount to Rs. 100. They took the general statement that fancy silk meant sham silk. They then produced a witness with samples of handkerchiefs, which they alleged were similar to the lost handkerchiefs; and upon this evidence and relying on the case of Lakhmidas Hira Chand v. The Great Indian Peninsula Railway and on the case of Saminadha Mudali v. The South Indian Railway Company they sought to argue that such handkerchiefs could not be considered as silk within the meaning of the Act. The learned Munsif then said, in deciding whether a particular article when brought up with other article is to be regarded as silk or not within the meaning of the Railways Act, the proper test to apply according to these decisions was to ascertain whether the value of the silk was more than half of the whole article. He then gives his finding—“the evidence placed before me is not sufficient to show that the price of the silk contained in the handkerchiefs, if any, was less than half that of the whole article.” It is argued that if we deal with this finding on the strictest mathematical principles it is not the finding that he set himself to find, namely, that there was more than half of the value in silk in the handkerchiefs. But having regard to what he sets out to be the necessary finding it is obvious that he intends to find that there is a sufficient preponderance of silk in the handkerchiefs to bring them within the rulings he cites; and he fortifies his finding by saying that they go by the name of silk in the market and are sold as such; and this brings us to the consideration of the English case on which both the cases in India relied. It is the case of Brunt v. Midland Railway Company where Baron Pollock clearly says, that the question whether silk in manufactured or unmanufactured state is to be treated as silk within the meaning of the English Act, the words in which are precisely similar to those in Sch. II of the Indian Act, is a question of fact which very properly might be left to a jury. When it is left to a Judge the Judge must decide where the line should be drawn, that is to say, some test must be taken by the Court as to whether the case came within the definition or not. The line shifted according to the circumstances; but the question which a Judge of fact has to answer is not where to draw the line, but whether the particular article before him is within the line; and he found as a fact that in this particular case that was before him the silk did come within the line. In the judgment by another Judge, Baron Pigott, who also treats it as a simple question of fact, it is stated that in that case the ingredients of silk amounted to more in proportion and value to any other article. As a matter of fact it was a question of 2 pence in 2 shillings so that it was very near the dividing line of half and half.

    We do not and indeed we cannot bind all Courts to follow the exact test which was adopted by the Madras Court in one case and by the Bombay Court in another. Each case must depend upon its own circumstances. Where a Court has adopted a fair test and where upon that test it has found that the article is silk within the meaning of the section, that is in our opinion a clear finding of fact and the Court cannot go behind it in second appeal. The Subordinate Judge, though he has said less, has put the matter even more strongly. He says the Plaintiffs have failed to prove that the handkerchiefs were not silk handkerchiefs or rather that they contained less silk than cotton. This is sufficient to bring the case within the schedule, and we are therefore of opinion that in second appeal we cannot go behind that finding.

    Then comes the question whether the decree made in favour of the Plaintiffs with regard to the other articles can stand. We have already indicated that we agree with the view taken by Mr. Justice Teunon that it cannot, and we are fortified in that opinion by the clear decision in the case of Pundalik Udaji Jadhav v. The Agent, Southern Mahratta Railway Company.

    The result is that the appeal is decreed and the Plaintiffs' suit is dismissed with costs in all Courts.

    Appeal allowed.

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    Comments

    The East Indian Railway Company v. Changai Khan & Ors
    (Jan 13, 1915)