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1970 Supreme(All) 147
Allahbad High Court
S.D.KHARE,R.B.MISRA
The Union of India through the General Manager, Central Railway, Bombay - Appellant
Versus
L. R. Cotton Mills Ltd. - Respondent
Decided On : 11/20/1970
B.L. Gupta, D.K. Lahiri and D. Sanyal, for Appellant; Satyendra Nath Verma and Surendra Nath Verma, for Respondents.
Headnote:
RAILWAYS ACT - SECTIONS 72, 77, 80 - INDIAN CONTRACT ACT - SECTIONS 151, 152, 161 - BURDEN OF PROOF - RAILWAY ADMINISTRATION AS BAILEE - NOTICE UNDER SECTION 77 - SERVICE ON EASTERN RAILWAY ADMINISTRATION - SUFFICIENCY - ESTOPPEL - LIABILITY FOR LOSS OF GOODS IN TRANSIT.
Fact of the Case:
The plaintiff, a cotton merchant, booked two consignments of cotton at Raichur Station for being carried and delivered to Laxmi Rattan Cotton Mills Company Limited at Kanpur. The consignments were insured with Neptune Assurance Company Limited. The goods did not reach the consignee and correspondence ensued between the consignee and the Chief Traffic Manager, G. I. P. Railway, Bombay. It transpired that the goods had caught fire near Sarola Station. About 50 burnt bales were later delivered to the consignee. The consignee preferred its claim against the insurer and the insurer paid a sum of Rs. 92,966/- in full settlement of the claim. The Railway administration did not pay the damages. Accordingly, the Laxmi Rattan Cotton Mills Co. Ltd. And the Neptune Assurance Co. Ltd. Filed the suit, giving rise to the present appeal, against the Union of India for a sum of Rs. 99,906-6-9 as compensation for loss suffered by them, after serving notice under Section 80, C. P. C. through the General Manager, Eastern Railway, Calcutta, the General Manager, Northern Railway, Delhi and the General Manager, Central Railway, Bombay.
Finding of the Court:
The Court held that the plaintiff was entitled to bring the suit, that the suit was well within time, that the burden of proof lay on the defendant to show the negligence or misconduct of the railway administration, that the defendant had failed to discharge the initial burden of proving that the railway took the necessary care as was required of a bailee under Section 151 of the Indian Contract Act, that the amount of compensation arrived at by the Court below was correct, and that the suit was not bad for want of a valid notice under Section 77 of the Indian Railways Act.
Issues: 1. Whether the plaintiff was entitled to bring the suit. 2. Whether the suit was well within time. 3. Whether the burden of proof lay on the defendant to show the negligence or misconduct of the railway administration. 4. Whether the defendant had discharged the initial burden of proving that the railway took the necessary care as was required of a bailee under Section 151 of the Indian Contract Act. 5. Whether the amount of compensation arrived at by the Court below was correct. 6. Whether the suit was bad for want of a valid notice under Section 77 of the Indian Railways Act.
Ratio Decidendi: 1. The consignee, who is not the owner of the goods but to whom the goods are consigned for the purpose of sale on a commission basis, is entitled to maintain the suit for loss in respect of the damage caused to the goods in transit. 2. The responsibility of a railway administration as carrier of goods is that of a bailee under Sections 151, 152 and 161 of the Indian Contract Act. 3. The initial burden lies upon the railway administration to show that it took the requisite care as provided by S. 151 of the Indian Contract Act. 4. The service of notice under Section 77 of the Act on the Eastern Railway Administration would satisfy the requirements of the section although the station on which the goods were booked and the station on which the goods were lost both lay on the G.I.P. (now Central) Railway.
Final Decision: The appeal was dismissed with costs.
MISRA, J. :- The present appeal by the Union of India is directed against the judgment and decree of the First Additional Civil Judge, Kanpur, dated 9th November, 1956.
2. Messrs. Bruel and Company of Bombay is a cotton merchant and commission agent. On 2nd May, 1951 they booked two consignments of 100 bales each of fully pressed cotton at Raichur Station for being carried and delivered to Laxmi Rattan Cotton Mills Company Limited at Kanpur. They also got the two consignments insured with Neptune Assurance Company Limited of Bombay for Rs. 52,000/- and Rs. 51,000 respectively for the period from 2nd May, 1951 till the unloading of the bales at the destination station. Raichur Station fell on the G.I.P. Railway (now the Central Railway) as it was prior to the division of the Indian Railways into new zones. Two Railway Receipts bearing Nos. A-7263/96 and A-7263/97, dated 2nd May, 1951 were issued in respect of the two consignments mentioning Laxmi Rattan Cotton Mills Co. Ltd. As the consignees.
3. It appears that the consignments did not reach the consignee for a pretty long time and, therefore, correspondence ensued between the consignee and the Chief Traffic Manager, G. I. P. Railway, Bombay. Later on it transpired that the goods of the two consignments had caught fire on 9th May, 1951 near Sarola Station. About 50 burnt bales were later on delivered to the consignee. The consignee preferred its claim against the insurer and the Neptune Assurance Co. Ltd. Paid a sum of Rs. 92,966/- in full settlement of the claim of the consignee under the two policy Nos. 16744 and 16745. But in spite of repeated demands the Railway administration did not pay the damages. Accordingly the Laxmi Rattan Cotton Mills Co. Ltd. And the Neptune Assurance Co. Ltd. Filed the suit, giving rise to the present appeal, against the Union of India for a sum of Rs. 99,906-6-9 as compensation for loss suffered by them, after serving notice under Section 80, C. P. C. through the General Manager, Eastern Railway, Calcutta, the General Manager, Northern Railway, Delhi and the General Manager, Central Railway, Bombay.
4. It was alleged in the plaint that the said loss or non-delivery of the goods had arisen by reason of the default and negligence of the defendant railway administration and, therefore, the Union of India was liable for the loss or non-delivery of the 200 bales of fully pressed cotton.
5. Two separate written statements were filed in the case; one by the defendant as representing the Central Railway and the other by the Union of India as owners of the Northern Railways and Eastern Railways. But the defence in both the written statements is almost similar. It was pleaded that the claim was barred by Section 77 of the Indian Railways Act and also barred under the provisions of Section 80 of the Code of Civil Procedure, It was further pleaded that the suit was also barred under Section 72 of the Indian Railways Act as the defendant took as much care of the goods as is required of a bailee in law, and as the alleged loss to the goods was due to an accidental fire between Visapur and Sarola Stations on the G. I. P. (now Central) Railways. It was alleged that the consignments in question were properly despatched ex-Raichur, loaded in C. I. P. wagon No. 19374; when the train (NE 14 Dn.), to which this wagon was attached, arrived at Sarola Station on 9th May, 1951, it was noticed that the wagon holding the suit consignment was on fire. The wagon was immediately isolated and steps were taken to extinguish the fire. Fire brigades from Dhond and Ahmadnagar were summoned. They arrived and started fighting the fire, but in spite of best efforts on the part of the Railway Administration 144 bales were entirely gutted. The Railway Administration did all that was requried of a bailee to save the goods. In the written statement filed by the defendant as owners of the Northern Railways and Eastern Railways it was further alleged that the defendant, being a desti
