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PUNJAB & HARYANA HIGH COURT
Bhandari, D.Falshaw and Bishan Narain JJ.
Union Of India
Versus
Firm Balwant Singh Jaswant Singh
Second Appeal No. 75 of 1951,
Decided On : MARCH 5, 1956
INDIAN INDEPENDENCE (RIGHTS, PROPERTY AND LIABILITIES) ORDER, 1947 - ARTICLE 8(1)(A) - ARTICLE 9 - INTERPRETATION - LIABILITY FOR DAMAGES FOR NON-DELIVERY OF GOODS ENTRUSTED TO A STATE RAILWAY - NOT COVERED BY OTHER FINANCIAL OBLIGATIONS - JURISDICTION OF DELHI COURT - NOT CONFERRED BY ACT 47 OF 1948 - SERVICE OF NOTICE UNDER SECTION 80, CIVIL PROCEDURE CODE - NOT PART OF CAUSE OF ACTION.
Fact of the Case:
A Karachi firm consigned a case of sewing needles by the North Western Railway from Karachi to Peshawar City. The railway receipt was purchased by Messrs. Balwant Singh Jaswant Singh, then of Peshawar. The case of needles was never delivered and Messrs. Balwant Singh Jaswant Singh instituted a suit against the Dominion of India in a Court at Delhi claiming Rs. 2,500/- as damages for non-delivery. The suit was contested by the defendant who challenged the plaintiffs locus standi to bring the suit, denied the service of due notices under Section 11, Railways Act & Section 80, Civil P. C., and raised the plea that the Delhi Court had no jurisdiction to entertain the suit. The liability of the Government of India for any damages was also denied.
Finding of the Court:
1. The liability for damages on account of non-delivery of goods entrusted for consignment to a State Railway does not amount to one of the "other financial obligations" coupled with loans and guarantees in Art, 9 of the Indian Independence (Rights, Property and Liabilities) Order of 1947. 2. The contract in the present case is one which is covered by the provisions of Article 8 (1) (a) of the order and that therefore no liability remained with the Government of India in respect of the contract. 3. The mere fact that the proprietors of the plaintiff-firm had registered themselves in the first place as refugees at Delhi is of no importance, and in order to institute the suit at Delhi they had also to be either residing or carrying on business at Delhi when the suit was instituted, and clearly they were both residing and carrying on business at Dehra Dun. 4. The service of a notice under Section 80, Civil Procedure Code, at Delhi did not constitute a part of the cause of action and confer local jurisdiction on the Court where the office receiving the notice was located.
Issues: 1. Whether the liability for damages on account of non-delivery of goods entrusted for consignment to a State Railway amounts to one of the "other financial obligations" coupled with loans and guarantees in Art, 9 of the Indian Independence (Rights, Property and Liabilities) Order of 1947? 2. Whether the contract in the present case is covered by the provisions of Article 8 (1) (a) of the order? 3. Whether the mere fact that the proprietors of the plaintiff-firm had registered themselves in the first place as refugees at Delhi is of any importance in determining the jurisdiction of the Delhi Court? 4. Whether the service of a notice under Section 80, Civil Procedure Code, at Delhi constitutes a part of the cause of action and confer local jurisdiction on the Court where the office receiving the notice was located?
Ratio Decidendi: 1. The decision in The State of West Bengal v. Serajuddin Batley, AIR 1951 SC 193, which held that the liability to pay rent under a lease does not come within the expression "other financial obligations" in Article 9 of the Indian Independence (Rights, Property and Liabilities) Order of 1947, is applicable to the present case. 2. The contract in the present case is one for the carriage of goods sent by one private person to another, although the Railway on which the goods were sent is entirely situated in what is now Pakistan. This contract is not exclusively for purposes of the Dominion of Pakistan and therefore falls under Article 8(1) (b) of the Order, which provides for the residual liability of the Dominion of India. 3. The mere fact that the proprietors of the plaintiff-firm had registered themselves as refugees at Delhi is not sufficient to confer jurisdiction on the Delhi Court, as they were not residing or carrying on business in Delhi at the time the suit was instituted. 4. The service of a notice under Section 80, Civil Procedure Code, at Delhi does not constitute a part of the cause of action and therefore does not confer local jurisdiction on the Court where the office receiving the notice is located.
Final Decision: The appeal of the Union of India was accepted and the plaintiff's suit was dismissed. However, the parties were left to bear their own costs throughout.
Bhandari and Falshaw JJ.
1. Two contrary views appear to have been expressed in regard to the interpretation of paragraph 8 of the Indian Independence (Right, Property and Liabilities) Order 1947, one by the Calcutta High Court in Union of India v. Lake Nath Saha, AIR 1952 Cal. 140 (A) and the other in a decision this Court reported as Chaman Lal Loona & Co. v. Dominion of India, New Delhi, AIR 1954 Punj. 129 (B). In order to resolve the confict which has arisen it would be desirable to refer this case to a larger Bench. We would order accordingly. This case will be heard at Simla.
Falshaw, J.
2 The facts giving rise to this second appeal which has been referred to a Full Bench are as follows: On 25-2-1947 a Karachi firm consigned a case of sewing needles by the North Western Railway from Karachi to Peshawar City under Railway Receipt No. 152065. The consignor made himself the consignee but the railway receipt was ultimately purchased by the firm Messrs. Balwant Singh Jaswant Singh, then of Peshawar. The case of needles was never delivered and on 26-4-1948 Messrs. Balwant Singh Jaswant Singh, giving a Dehra Dun address, instituted the present suit against the Dominion of India in a Court at Delhi claiming Rs. 2,500/- as damages for non-delivery including the actual cost of the needles and also estimated profits.
3. The suit was contested on all possible-grounds by the defendant who challenged the plaintiffs locus standi to bring the suit, denied the service of due notices under Section 11, Railways Act & Section 80, Civil P. C., and raised the plea that the Delhi Court had no jurisdiction to entertain the suit. The liability of the Government of India for any damages was also denied.
4. The trial Court found that proper notices had been served, and also found that the Delhi Court had jurisdiction on account of the fact that the proprietors of the plaintiff-firm had registered themselves as refugees at Delhi and so were entitled to bring the suit in that Place under the provisions of Act 47 of 1948. On the merits it was found that the consignment of needles was valued at Rs. 2,135/10/- and that the plaintiff firm was the assignee for consideration of the railway receipt. The liability of the Dominion of India, for payment of the damages due was upheld under Article 9 of the Indian Independence (Rights, Property and Liabilities) Order of 1947. Only the plaintiffs claim for damages on account of estimated profits was disallowed and the suit was decreed for a sum Of Rs. 2,135/10/-.
5. The appeal of the Government was decided by the Second Additional District Judge, from whose judgment it would appear that only two points were raised, before him namely the question of the jurisdiction of the Delhi court and the liability of the Government of India. On the question of jurisdiction the learned Additional District Judge found that the proprietors of the plaintiff-firm were not residing or carrying on business at Delhi, but at Dehra Dun, and that the mere fact, that they had in the first instance registered themselves as refugees at Delhi did not give the Delhi Court jurisdiction under the provisions of Act 47 of 1948. He found, however, that the notice under Section 80 Civil P. C., had been served on the defendant at Delhi and held on the strength of a decision of the Calcutta High Court that this formed a Part of the cause of action and therefore gave the Delhi Court the jurisdiction. He agreed, however, with the trial court that the Government of India was liable under Article 9 of the Indian Independence (Rights, Property and Liabilities) Order of 1947; and he accordingly dismissed the appeal.
6. The case was primarily referred to the Full Bench for a decision on the proper interpretation of the appropriate portions of file Order of 1947. The relevant portions of Articles 8 and 9 read;
"8. (1) Any contract made on behalf of the Governor-General in Council before the appointed day shall, as from that day,-- (a) if the contra
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