GAUHATI HIGH COURT
P.K.Goswami, M.C.Pathak, JJ.
Shree Shyam Stores -Appellant
Versus
Union of India, New Delhi -Respondent
Second Appeal No. 75 of 1966
Decided On : 17-06-1970
RAILWAY RECEIPT - ENDORSEMENT - RIGHT TO SUE - OWNERSHIP OF GOODS - RAILWAY ACT - SALE OF GOODS ACT - TRANSFER OF PROPERTY ACT - NEGOTIABILITY - CUSTOM - INTERPRETATION.
Fact of the Case:
The plaintiff, an endorsee of a railway receipt, filed a suit against the railway administration for compensation for short delivery of oil. The trial court decreed the suit, but the lower appellate court dismissed it on the ground that the plaintiff had no right to sue as he had not established that the consignor had endorsed the railway receipt for valuable consideration to him or to any of the endorsees from whom he had claimed.
Finding of the Court:
The court held that the railway receipt is not negotiable in the sense that the bill of lading is under the Indian Bills of Lading Act, 1856, or a negotiable instrument is under the provisions of the Negotiable Instruments Act, 1881, according to the rules of the Law Merchant. The railway receipt cannot, therefore, confer on the endorsee such rights as are available under the provisions of the above two Acts.
Issues: 1. Whether the plaintiff, as an endorsee of a railway receipt, has the right to sue the railway administration for compensation for short delivery of goods? 2. Whether the endorsement of a railway receipt is sufficient to transfer the ownership of the goods represented by the receipt?
Ratio Decidendi: 1. The court held that the mere endorsement of a railway receipt does not confer on the endorsee the right to sue the railway administration for compensation for short delivery of goods. The endorsee must establish that the ownership of the goods has also passed in his favor and that he is the owner of the goods to enable him to institute a suit against the railway. 2. The court held that the endorsement of a railway receipt is not sufficient to transfer the ownership of the goods represented by the receipt. The endorsee must establish his title to the goods by other usual methods and procedures de hors the endorsement.
Final Decision: The court allowed the appeal and remanded the suit to the trial court for disposal in accordance with law and in the light of the decision.
2. The material facts which are necessary for the purpose of deciding this second appeal are as follows: Messrs Sarita Oil Mills booked a consignment of one tank linseed oil at Indpre station of Western Railway under Railway Receipt No. 77904 dated 30/31-3-52 (Ext. 1) for carriage and delivery to self at Tezpur. The railway receipt was first endorsed to Messrs Bhojumal Sons who again endorsed the same in favour of Messrs Hiranand Rajaram. Messrs Hiranand Rajaram endorsed it in favour of the Bank of Bikaner who again endorsed it in favour of the State Bank of India and the State Bank of India endorsed it in favour of the plaintiff, Messrs Shree Shyam Stores. Messrs Hiranand Rajaram issued a demand draft (Hundi, Ext. 2) on the plaintiff for the sum of Rs. 26,077.25 being the value of the R. R. No. 77904 through the State Bank of Bikaner to be paid on demand to the order of the State Bank of Bikaner and the plaintiff released the R. R. by paying the said amount plus other bank charges from the State Bank of India, Tezpur, in whose favour the State Bank of Bikaner endorsed the R. R. The plaintiff took delivery of the consignment which arrived in damaged condition at Tezpur sometime in May 1962 and he received 803 Kgs. linseed oil short as per certificate of shortage dated 9-6-62 (Ext. 4). It appears that the consignment from the original tank wagon, which was found damaged at Katihar due to mechanical defects, was transhipped into another tank wagon in which it arrived at the destination station.
3. The plaintiff claims in the suit a sum of Rs. 1700/- as compensation for short delivery of the oil. The trial court decreed the suit, but the learned Subordinate Judge dismissed it on three grounds: firstly, that the plaintiff being a firm has not proved the Certificate of Registration - a point which has not been pressed here by the respondent as indeed a Certificate of Registration was filed in the trial court-; secondly, and this is the main ground, that the plaintiff has no right to sue as he has not established that the consignor has endorsed the R. R. for valuable consideration to him or to any of the endorsees from whom he has claimed; thirdly, the plaintiff has not proved the short delivery. The third ground may not be of importance if the plaintiff fails on the second ground. We will, therefore, take this first.
4. The question that arises for consideration is whether the plaintiff, who is not admittedly the endorsee of the consignor, is entitled to bring his action against the defendant. There is conflict of decisions of the various High Courts on this point. The learned counsel for the appellant laid great stress on a decision of the Nagpur High Court in AIR 1957 Nag 31, Mulji Deoji v. Union of India, where Hidayatullah, C. J., as he then was, with whom Tambe, J. agreed, differing from Rao J., held in the following terms:
"It is, in my opinion, not correct to say that the endorsement is always merely a right to obtain delivery. In cases of sale of goods with delivery to the buyer through a carrier the railway receipt is not a mere record of the terms on which goods are being carried but represents the goods themselves. The fact that the endorsement has to be written on the document of title to goods clearly shows that all the rights in the goods together with all the benefits arising from any contract in respect of those goods are transferred to the endorsee. There is nothing further to it than the maxim "assignatus utitur jure auctoris" (an assignee is clothed with the right of his principal). In my judgment, the endorsement carries with it not only the title to the goods but also any right or interest in the carriage of those goods, together with the remedies available in respect of those goods against the carrier."
Tambe, J. agreeing with the abo
(1966) AIR 1966 SC 395 (V 53) : 1966-1 SCR 580
(1966) AIR 1966 Guj 6 (V 53) : ILR (1964) Guj 928
(1965) AIR 1965 SC 1954 (V 52) : 1965-3 SCR 254
(1961) AIR 1961 SC 426 (V 48) : 1961-2 SCR 9
(1955) AIR 1955 SC 182 (V 42) : 1955 SCJ 168
(1954) AIR 1954 All 747 (V 41) : 1954 All LJ 288
(1916) AIR 1916 PC 7 (V 3) : ILR 40 Bom 630, Ramdas Vithaldas v. Amarchand and Co. 5
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