1960 Supreme(All) 3

IN THE HIGH COURT OF ALLAHABAD
S. S. Dhavan, J.
UNION OF INDIA (UOI) - Appellant
Versus
FIRM RAM GOPAL HUKUM CHAND - Respondents
Civil Revn 777 Of 1952
Decided On : 01/01/1960

The relationship between the sender of a V.P.P. Parcel and the Post Office is not governed by contract. The Post Office Act provides for insurance of postal article, but the same section imposes a liability on the Post Office to pay the value of the article in case of loss. The Supreme Court in P. M. Rathods case, AIR 1959 SC 1394, declared the law that in respect of carriage of goods sent by the sender of an article under the V. P. P. system the Post Office becomes an agent of the seller for the recovery of the price and if it fails to recover it and delivers the goods, it is liable in damages to the seller. This enunciation of law is binding on this Court under Article 141 of the constitution.

Headnote:

POST OFFICE - LIABILITY - SCOPE AND EXTENT - CONTRACTUAL OR STATUTORY - POST OFFICE ACT, 1898, SECTIONS 6, 33, 34 - INDIAN EVIDENCE ACT, 1872, SECTION 114 - CONSTITUTION OF INDIA, ARTICLE 141 - SUPREME COURT'S DECLARATION OF LAW - BINDING ON ALL COURTS - INTERPRETATION OF ARTICLE 141 - POST OFFICE AS AN AGENT OF THE SELLER FOR RECOVERY OF PRICE - LIABILITY FOR LOSS OR DAMAGE TO INSURED ARTICLES - LIABILITY FOR NON-DELIVERY OF V.P.P. ARTICLES - ONUS OF PROOF - PRESUMPTION OF LOSS OR MISAPPROPRIATION - POST OFFICE'S FAILURE TO DISCLOSE FACTS - MAXIMUM PRESUMPTION AGAINST POST OFFICE - LIABILITY FOR VALUE OF ARTICLE AND INTEREST.

Fact of the Case:

Two connected applications under Section 25 of the Small Causes Court Act raised an important question of law relating to the scope and extent of the liability of the Post office for articles delivered to it for transmission by Value Payable Post (V.P.P.). In one case, the firm claimed the amount due on a V.P.P. parcel, which the addressee had paid to the Post Office but the Post Office denied liability. In the other case, the plaintiff alleged that the Post Office had neither delivered the V.P.P. parcel to the addressee nor returned it to the sender, and that the failure to deliver was due to wilful neglect and gross misconduct of the Post Office department.

Finding of the Court:

1. The Post Office does not perform a commercial function nor does it enter into any contract with the sender of an article. The charge on articles transmitted by post is in the nature of duty imposed by the State for enjoyment of the facilities provided by this department and not a consideration for any contract. The Post Office is not a common carrier. It is a branch of the two departments of Government -- Revenue and Police -- created by Statute. 2. The relationship between the sender of a V.P.P. Parcel and the Post Office is not governed by contract. There is no liability under contract without consideration, and if the postage is a tax and not consideration, one of the essential elements of an enforceable agreement would be lacking in a suit against the Post Office for breach of contract. 3. The Post Office Act provides for insurance of postal article, but the same section imposes a liability on the Post Office to pay the value of the article in case of loss. This is significant. If the statute had recognised the transaction as a contract, the provision for liability in case of loss was redundant for the Post Office would be liable under the contract of insurance in any case. . But the legislature was aware of the constitutional difficulty in making the Post Office liable under any contract and included a special provision in the Post Office Act imposing a liability for loss of insured articles. 4. The Supreme Court in P. M. Rathods case, AIR 1959 SC 1394, declared the law that in respect of carriage of goods sent by the sender of an article under the V. P. P. system the Post Office becomes an agent of the seller for the recovery of the price and if it fails to recover it and delivers the goods, it is liable in damages to the seller. This enunciation of law is binding on this Court under Article 141 of the constitution. 5. Section 6 of the Post Office Act, providing that Government shall not be liable for loss, damage, non-delivery or misdelivery of postal articles entrusted to its charge was intended by the legislature to serve as shield for the protection of the Post Office and its officials in the legiti-mate discharge of their functions, but the shield cannot be converted into a weapon of inequity in the hands of a Government Department enjoying a monopoly of an essential service. 6. The disappearance of a postal article raises no presumption that it has been "lost" within the meaning of Section 6. The Court shall not presume, in defiance of grim reality, that the conditions in the post office and the standard of integrity of its officials is so perfect, that the disappearance of an article can only mean that it must have been lost by accident. In the absence of further evidence, the Court will hold that it is just as likely as not that the missing article has been misappropriated by some one within the department. 7. The onus is on the Post Office to disclose all the facts which entitle it to the protection of Section 6. The post office must give a detailed account of what happened to the article from the date when it was entrusted to its custody to the date when it claims to have lost possession of it.

Issues: 1. Whether the relationship between the sender of a V.P.P. Parcel and the Post Office is governed by contract. 2. Whether the Post Office is liable for loss or damage to insured articles. 3. Whether the Post Office is liable for non-delivery of V.P.P. articles. 4. Whether the onus of proof lies on the Post Office to prove loss or damage to postal articles.

Ratio Decidendi: 1. The Post Office does not perform a commercial function nor does it enter into any contract with the sender of an article. The charge on articles transmitted by post is in the nature of duty imposed by the State for enjoyment of the facilities provided by this department and not a consideration for any contract. The Post Office is not a common carrier. 2. The relationship between the sender of a V.P.P. Parcel and the Post Office is not governed by contract. There is no liability under contract without consideration, and if the postage is a tax and not consideration, one of the essential elements of an enforceable agreement would be lacking in a suit against the Post Office for breach of contract. 3. The Post Office Act provides for insurance of postal article, but the same section imposes a liability on the Post Office to pay the value of the article in case of loss. This is significant. If the statute had recognised the transaction as a contract, the provision for liability in case of loss was redundant for the Post Office would be liable under the contract of insurance in any case. . But the legislature was aware of the constitutional difficulty in making the Post Office liable under any contract and included a special provision in the Post Office Act imposing a liability for loss of insured articles. 4. The Supreme Court in P. M. Rathods case, AIR 1959 SC 1394, declared the law that in respect of carriage of goods sent by the sender of an article under the V. P. P. system the Post Office becomes an agent of the seller for the recovery of the price and if it fails to recover it and delivers the goods, it is liable in damages to the seller. This enunciation of law is binding on this Court under Article 141 of the constitution. 5. Section 6 of the Post Office Act, providing that Government shall not be liable for loss, damage, non-delivery or misdelivery of postal articles entrusted to its charge was intended by the legislature to serve as shield for the protection of the Post Office and its officials in the legiti-mate discharge of their functions, but the shield cannot be converted into a weapon of inequity in the hands of a Government Department enjoying a monopoly of an essential service. 6. The disappearance of a postal article raises no presumption that it has been "lost" within the meaning of Section 6. The Court shall not presume, in defiance of grim reality, that the conditions in the post office and the standard of integrity of its officials is so perfect, that the disappearance of an article can only mean that it must have been lost by accident. In the absence of further evidence, the Court will hold that it is just as likely as not that the missing article has been misappropriated by some one within the department. 7. The onus is on the Post Office to disclose all the facts which entitle it to the protection of Section 6. The post office must give a detailed account of what happened to the article from the date when it was entrusted to its custody to the date when it claims to have lost possession of it.

Final Decision: 1. Both revisions are dismissed with costs. 2. The decree passed by the trial court shall stand.