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2006 Supreme(All) 376

ALLAHABAD HIGH COURT
O.P. SRIVASTAVA, J.
RAYMOND CEMENT WORKS
Versus
UNION OF INDIA
Decided On : 07 February 2006

The main legal point established in the judgment is the passing of property in goods covered by Railway Receipts under Section 74 of the Indian Railways Act, 1989, and the consequent transfer of rights and liabilities from the consignor to the consignee or endorsee upon delivery of the railway receipt.

Headnote:

RAILWAY CLAIMS - PROPERTY RIGHTS - Indian Railways Act, 1989, Section 74 - The court discussed the property rights of consignors and the passing of property in goods covered by Railway Receipts under Section 74 of the Indian Railways Act, 1989. It held that the rights and liabilities of the consignor pass on to the consignee or endorsee upon delivery of the railway receipt, and the consignor ceases to be the owner of the consignment after endorsement in favor of the consignee or endorsee.

Fact of the Case:

The appellant, M/s Raymond Cement Works, booked cement bags through railway receipts for delivery at Alam Nagar Railway Station. The consignment reached the destination in good condition, but some bags were damaged due to rains after being unloaded from the wagons. The appellant's claim for damages was contested by the railways, citing the passing of property under the Indian Railways Act, 1989.

Finding of the Court:

The court found that the appellant ceased to be the owner of the consignment after endorsement in favor of the consignee or endorsee, as per Section 74 of the Indian Railways Act, 1989. It also held that the railway administration was not responsible for the damage to the goods, as the liability of the railways as bailee ceased after the delivery of the goods to the consignee or endorsee.

Issues: The issues included the ownership rights of the consignor, the applicability of the Indian Railways Act, 1989, the liability of the railway administration for the damage, and the responsibility for unloading and protecting the goods after delivery.

Ratio Decidendi: The court's decision was based on the interpretation of Section 74 of the Indian Railways Act, 1989, which determined the passing of property in goods covered by Railway Receipts. It also considered the responsibilities of the consignor, consignee, and railway administration after the delivery of goods.

Final Decision: The appeals were dismissed, and the court held that the appellant did not have the right to sue for claim, and the railway administration was not responsible for the damage to the goods.

O. P. SRIVASTAVA, J.

( 1 ) THE above F. A. F. Os. arise out of common judgment and order dated 27. 2. 1997 passed in 11 claim cases by Railway Claims Tribunal, lucknow Bench, Lucknow, dismissing the claims.

( 2 ) SINCE the facts of the above ten cases are almost similar and relevant law to be considered is also same and the common arguments have been advanced from either side, they are being disposed of by this common judgment.

( 3 ) THE facts, in brief, are that M/s Raymond Cement Works, the appellant booked various quantities of cement bags through railway receipts, details whereof are given in the claim petitions as also in the judgment of Tribunal at akaltara Railway Station for delivery at Alam Nagar Railway Station, lucknow. The consignment in covered wagons reached the destination (Alam nagar Railway Station) in good condition. Out of the ten consignments of the above appeals, M/s. East India Steels, Lucknow were named as consignee in eight consignments while they were endorsee in the remaining two M/s. East india Steels, Lucknow made endorsement in favour of two different persons who received the goods and got them unloaded from the wagons. Some of the bags were removed from the railway station. However, before the remaining cement bags could be removed, there were rains and goods got damaged. The matter was reported to the railway authorities. The assessment was carried out. The appellant preferred claim for damage as per assessment. The claim was repudiated by the Railway Authorities. The appellant approached the Railway claims Tribunal for damages.

( 4 ) THE claims of the appellant before Tribunal were contested by the railways. In the written statement filed, title of appellant and its right to prefer the claim petitions was challenged on the ground that due to endorsement on the railway receipts, the ownership passed on to the authorized endorsee. It was also denied that there was any negligence or carelessness on the part of railway administration in dealing with the consignment. Rather it was alleged that all possible facilities such as providing of tarpaulin were available to the person getting delivery of the goods. Carelessness, negligence and misconduct on the part of endorsee or its agent after obtaining the delivery was alleged by the respondent. Railways took the defence that the damage was caused due to sudden and unexpected rains which according to them was an act of God and, therefore, protection of sections 83 (a) (f) (i) and 102 (c) (i) of the indian Railways Act, 1890 was sought.

( 5 ) THE following issues were framed by the Tribunal:-

1. Whether the petitioners are the owners of the subject consignment and have right to sue? 2. Whether the claim is barred under section 78-B of the Indian Railways Act? 3. Whether the respondents are protected under section 83 (a) (f) (i) and 102 (c) (i) of the Indian Railways Act? 4. Whether the reasonable foresight was taken by the railways for the carriage of the goods, if not, its effect? 5. Whether respondents have committed any negligence or misconduct in dealing with the subject consignment, if so, its effect?

( 6 ) TO what relief, if any, the applicant is entitled to? 6. Finding of the Tribunal was against the appellant on all the five issues and, therefore, Tribunal held that appellant was not entitled to any relief resulting in dismissal of claim petitions.

( 7 ) FEELING aggrieved of the judgment and order of the Tribunal, the appellant has come up before this Court through the above appeals.

( 8 ) I have heard learned Counsel for the parties who addressed the Court at considerable length. They submitted written submissions also.

( 9 ) THE following questions arise for determination in these appeals:-

1. Whether the appellant/claimants had right to sue? 2. Whether the Railway Administration is responsible for the damage?

Point No. 1

( 10 ) THE appellant claimed to be unpaid vendor and on the basis of this contention, learned Counsel urged that the appellant cont















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