Union of India Vs. Amar Singh [1959] INSC
128 (28 October 1959)
SUBBARAO, K.
GAJENDRAGADKAR, P.B.
SHAH, J.C.
CITATION: 1960 AIR 233 1960 SCR (2) 75
CITATOR INFO :
F 1962 SC1879 (23) E&D 1974 SC 923 (51) E
1980 SC 431 (9)
ACT:
Contract-Implied contract of bailment--Goods
entrusted to Pakistan Railway for delivery in India-Pakistan Railway handing
over goods to Indian Railway-Loss of goods-Liability of Indian Railway to
consignor-Limitation for suit for compensation for loss -Indian Contract Act,
1872 (IX of 1872), ss. 148 and 194-Indian Limitation Act, 1908 (IX of 1908)
Schedule 1, arts. 30 and 31.
HEADNOTE:
The respondent booked certain goods on
September 4, 1947, with the N. W. Railway at Quebec in Pakistan to New Delhi.
The wagon containing the goods was received
at the Indian border station of Khem Karan on November 1, 1947, duly sealed and
labelled indicating its destination as New Delhi.
It reached New Delhi on February 3, 1948, and
was unloaded on February 20, 1948, but no immediate information was sent to the
respondent. On June 7, 1948, the respondent was asked by the E. P. Railway to
take delivery of the goods lying at New Delhi station but when the respondent
went there the goods were not traceable. Again, on July 24, 1948, the
respondent was asked to take delivery of the goods when only a small portion of
the goods 76 were offered to him subject to the payment of Rs. 1,067-8-0 as
freight but the respondent refused to take delivery. On August 4,1949, the
respondent filed a suit for Rs. 1,62,123 with interest as compensation for
non-delivery of goods against the Dominion of India. The trial court found that
the E. P. Railway was guilty of negligence in handling the goods and decreed
the suit for Rs. 80,000, and on appeal the High Court confirmed the decree. The
appellant contended that there was no privity of contract between the
respondent and the E. P. Railway and he could only have a claim against the N.
W. Railway in Pakistan, and that the suit was barred by limitation.
Held, that there was an implied contract of
bailment between the respondent and the E. P. Railway and that Railway was
liable for the loss. The conduct of the parties indicated that the respondent
delivered the goods to the N. W. Railway with an authority to create the E. P.
Railway as his immediate bailer from the point the wagon was put on its rails.
The N. W. Railway must be deemed to have had implied authority to appoint the
E. P. Railway to act for the consignor during the journey of goods by the E. P.
Railway and by force of S. 194 of the Indian Contract Act, the E. P. Railway
became an agent of the consignor. The N. W. Railway left the wagon with the E.
P. Railway and the latter consciously took over the responsibility of the
bailer, carried the wagon to New Delhi and offered to deliver the goods to the
respondent. The respondent also accepted this relationship. From these facts,
even if an agency could, not be implied, a tacit agreement between the two
Railways to carry the respondents goods to New Delhi could be implied resulting
in a contract of bailment between the E. P.
Railway and respondent.
Kulu Ram Maigraj v. The Madras Railway
Company, I.L.R. 3 Mad. 240, G.I.P. Railway Co. v. Radhakisan Kushaldas, I.L.R. 5
Bom. 371, Bristol and Exeter Railway v. Collins, VII H.L.C. 194 and De Bussche
v. Alt, (1878) L.R. 8 Ch. D. 386, referred to.
Held, further that the suit was not barred by
limitation.
Even if art. 30 of the Indian Limitation Act
applied, as contended for by the appellant, the burden was on the appellant,
who sought to non-suit the respondent, to establish that the loss occurred
beyond one year from the date of the suit. Thus the appellant had failed to
establish by any clear evidence.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 478 of 1957.
Appeal from the judgment and decree dated
August 17, 1954, of the Punjab High Court, Circuit Bench at Delhi, in Regular
First Appeal No. 76 of 1952, arising out of the judgment and decree dated
December 15, 1951, of the Court of Sub-Judge, 1st Class, Delhi in Suit No. 169
of 1949/409 of 1950.
77 Ganapathy Iyer and D. Gupta, for the
appellant.
Gurbachan Singh and Harbans Singh, for the
respondent.
1959. October 28. The Judgment of the Court
was delivered by SUBBA RAO J.-This appeal on a certificate granted by the High
Court of Judicature for Punjab at Chandigarh is directed against its judgment
confirming that of the Subordinate Judge, First class, Delhi, in a suit filed by
the respondent against the appellant for the recovery of compensation in
respect of non-delivery of goods entrusted by the former to the latter for
transit to New Delhi.
On August 15, 1947, India was constituted
into two Dominions, India and Pakistan; and soon thereafter civil disturbances
broke out in both the Dominions, The respondent and others, who were in
government employment at Quetta, found themselves caught in the disturbances
and took refuge with their household effects in a government camp. The
respondent collected the goods of himself and of sixteen other officers, and on
September 4, 1947, booked them at Quetta Railway Station to New Delhi by a
passenger train as per parcel way bill No. 317909. Under the said bill the
respondent was both the consignor and consignee. The N. W.
Railway (hereinafter called the Receiving
Railway) ends at the Pakistan frontier and the E. P. Railway (hereinafter
called the Forwarding Railway) begins from the point where the other line ends;
and the first railway station at the frontier inside the Indian territory is
Khem Karan. The wagon containing the goods of the respondent and others, which
was 'duly seated and labelled indicating its destination as New Delhi, reached
Khem Karan from Kasur, Pakistan, before November 1, 1947, and the said wagon
was intact and the entries in the " inward summary." tallied with the
entries on the labels. Thereafter it traveled on its onward march to Amritsar
and reached that place on November 1, 1947. There also the wagon was found to
be intact and the label showed that it was bound to New Delhi from Quetta. On
November 2, 1947, it reached Ludhiana and remained 78 there between November 2,
1947 and January 14, 1948; and the " vehicle summary " showed that
the wagon bad a label showing that it was going from Lahore to some unknown
destination. It is said that the said wagon arrived in the unloading shed at
New Delhi on February 13, 1948, and it was unloaded on February 20, 1948; but
no immediate information of the said fact was given to the respondent.
Indeed, when the respondent made an anxious
enquiry by his letter dated February 23, 1948, the Chief Administrative Officer
informed him that necessary action would be taken and he would be addressed
again on the subject. After further correspondence, on June 7, 1949, the Chief
Administrative Officer wrote to the respondent to make arrangements to take
delivery of packages lying at New Delhi Station, but when the respondent went
there to take delivery of the goods, he was told that the goods were not
traceable.
On July 24, 1948, the respondent was asked to
contact one Mr. Krishan Lal, Assistant Claims Inspector, and take delivery of
the goods. Only a few articles, fifteen in number and weighing about 61 maunds,
were offered to him subject to the condition of payment of Rs. 1,067-8 0 on
account of freight, and the respondent refused to take delivery of them. After
further correspondence, the respondent made a claim against the Forwarding
Railway in a sum of Rs. 1,62,123 with interest as compensation for the
non-delivery of the goods entrusted to the said Railway, and, as the demand was
not complied with, he filed a suit against the Dominion of India in the Court
of the Senior Subordinate Judge, Delhi, for recovery of the said amount.
The defendant raised various pleas, both
technical and substantive to non-suit the plaintiff. The learned Subordinate
Judge raised as many as 15 issues on the pleadings and held that the suit was
within time, that the notice issued complied with the provisions of the
relevant statutes, that the respondent had locus stand to file the suit and
that the respondent had made out his claim only to the extent of Rs. 80,000; in
the result, the suit was decreed for a sum of Rs. 80,000 with proportionate
costs.
79 The appellant carried the matter on appeal
to -the High Court of Punjab, which practically accepted all the findings
arrived at by the learned Subordinate Judge and dismissed the appeal.
In this Court the appellant questions the
correctness of the said decree. Learned Counsel for the appellant raised before
us the following points: (1) there was no privities of contract between the
respondent and the Forwarding Railway, and if he had any claim it was only
against the Receiving Railway; (2) the suit was barred by limitation both under
Art. 30 and Art 31 of the Indian Limitation Act and it was not saved by any
acknowledgement or acknowledgements of the claim made within s. 19 of the
Limitation Act; and (3) the notice given by the respondent under s. 77 of the
Indian Railways Act, 1890, did not comply with the provisions of the said
section inasmuch as the claim for compensation made there under was not
preferred within six months from the date of the delivery of the goods for
carriage by the Railway.
The third point may be taken up first and
disposed of shortly. Before the learned Subordinate Judge it was conceded by
the learned Counsel for the defendant that the notice, Ex. P-32, fully
satisfied the requirements of s. 77 of the Indian Railways Act, and on that
concession it was held that a valid notice under s. 77 of the said Act bad been
given by the respondent. In the High Court no attempt was made to question the
factum of this concession; nor was it questioned by the appellant in its
application for special leave. As the question was a mixed one of fact and law,
we would not be justified to allow the appellant at this very late stage to
reopen the closed matter. We, therefore, reject this contention.
The learned Counsel for the appellant
elaborates his first point thus : The Receiving Railway, the argument,
proceeds, entered into an agreement with the respondent to carry the goods for
consideration to their destination i.e., New Delhi, and in carrying out the
terms of the contract it might have employed the agency of the Forwarding
Railway, but the consignor was not in any way concerned with it and if loss was
80 caused to him by the default or neligence of the Receiving Railway, he could
only look to it for compensation and he had no cause of action against the Forwarding
Railway.
This argument is not a new one but one raised
before and the Courts offered different solutions based on the peculiar facts
of each case. The decided cases were based upon one or other of the following
principles: (i) the Receiving Railway is the agent of the Forwarding Railway;
(ii) both the Railways constitute a
partnership and each acts as the agent of the other; (iii) the Receiving
Railway is the agent of the consignor in entrusting the goods to the Forwarding
Railway: an instructive and exhaustive discussion on the said three principles
in their application to varying situations is found in Kulu Ram Maigraj v. The
Madras Railway Company (1), G. I. P. Railway Co. v. Radhakisan Khushaldas (2 ),
and Bristol And Exeter Railway v. Collins (3); (iv) the Receiving Railway,
which is the bailee of the goods, is authorized by the consignor to appoint the
Forwarding Railway as a sub-bailee, and, after such appointment, direct
relationship of bailment is constituted between the consignor and the sub-bailee;
and (v) in the case of through booked traffic the consignor of the goods is
given an option under's. 80 of the Indian Railways. Act to recover compensation
either from the Railway Administration to which the goods are delivered or from
the Railway Administration in whose jurisdiction the loss, injury.
destruction or deterioration occurs. Some of
the aforesaid principles cannot obviously be applied to the present case.
The statutory liability under s. 80 of the
Indian Railways Act cannot be invoked, as that section applies only to a case
of through booked traffic involving two or more Railway Administration in
India; whereas in the present case the Receiving Railway is situated in
Pakistan and the Forwarding Railway in the Indian territory. India and Pakistan
are two independent sovereign powers, and by the doctrine of lex loci
contractus, s. 80, cannot (1) I.L.R. 3 Mad. 240. (2) I.L.R. 5 Bom. 371 (3) VII
H L.C. 194.
81 apply beyond the territories of India; nor
can the respondent rely upon the first two principles. There is no allegation,
much less proof, that there was any treaty arrangement between these two states
governing the rights inter se in the matter of through booked traffic.
This process of elimination leads us to the
consideration of the applicability of principles (iii) and (iv) to the facts of
the present case. The problem presented can only be solved by invoking the
correct principle of law to mould the relief on the basis of the facts found.
We shall first consider the scope of the
fourth principle and its applicability to the facts of this case. Section 72 of
the Indian Railways Act says that the responsibility of a railway
administration for the loss, destruction or deterioration of animals or goods
delivered to the administration to be carried by railway shall, subject to the
other provisions of the Act, be that of a bailee under ss. 151, 152 and 161 of
the Indian Contract Act, 1872.
Section 148 of the Indian Contract Act
defines " bailment " thus:
" A 'bailment' is the delivery of goods
by one person to another for some purpose, upon a contract that they shall,
when the purpose is accomplished, be returned or otherwise disposed of
according to the directions of the person delivering them." G.W. Patson in
the book "Bailment in the Common Law" says, at p. 42, thus:
" If a bailee of a res sub-bails it by
authority, then according to the intention of the parties, the third person may
become the immediate bailee of 'the owner, or he may become a sub-bailee of the
original bailee".
At p. 44 the learned author illustrates the
principle by giving as an example a carrier of goods entrusting them to another
carrier for part of the journey. One of the illustrations given by Byles J. in
Bristol. And Exeter Railway v. Collins (1) is rather instructive and it (1) VII
H.L.C. 194,212, 11 82 visualises a situation which may be approximated to.
the present one and it is as follows:
The carrier receiving the goods may,
therefore, for the convenience of the public or his customers, adopt a third
species of contract. He may say, We do not choose to undertake responsibilities
for negligence and accidents beyond our limits of carriage, where we have no
means of preventing such negligence or accident; and we will not, therefore,
undertake the carriage of your goods from A. to B., but we will be carriers as
far as our line extends, or our vehicles go, and we will be carriers no
further; but to protect you against the inconveniences and trouble to which you
might be exposed if we only undertook to carry to the end of our line of
carriage, we will undertake to forward the goods by the next carriers, and on
so doing our liability shall cease, and our character of carriers shall be at
an end; and for the purpose of so forwarding and of saving the trouble of two
payments, we will take the whole fare, or you may pay as one charge at the end;
but if we receive it we will receive it only as your agents for the purpose of
ultimately paying the next carriers." We may add to the illustration the
further fact that the Forwarding Railway is in India, a foreign country in
relation to the country in which the Receiving Railway is situate.
Relying upon the said passages, an argument
is advanced to the effect that the consignor i.e., the respondent, authorised
his bailee, namely, the Receiving Railway, to entrust the goods to the
Forwarding Railway during their transit through India to their destination and
the facts disclosed in the case sustain in the said plea. There is -no document
executed between the respondent and the Receiving Railway hereunder the
Receiving Railway was expressly authorized to create the Forwarding Railway the
immediate bailee of the owner of the goods. Ex. P-50, the railway receipt dated
September 4, 1947, does not expressly confer any such power. But the facts
found in the case irresistibly lead to that conclusion. There 83 was no treaty
between the two countries in the matter of through booked traffic; at any rate,
none has been placed before us. What we find is only that the Receiving Railway
received the goods of the respondent and delivered the wagon containing the
said goods to the care of the Forwarding Railway, and the latter took over
charge of the wagon, carried it to New Delhi and offered to deliver the goods
not lost to the respondent on payment of the railway freight.
In the absence - of any contract between the
two Governments or the, Railways, the legal basis on which the conduct of the
respondent and the Railways can be sustained is that of the respondent
delivered the goods to the Receiving Railway with an authority to create the
Forwarding Railway as his immediate bailee from the point the wagon was put on
its rails.
The same result could be achieved by
approaching the case from a different perspective. Section 194 of the Indian Contract
Act says :
" Where an agent, holding an express or
implied authority to name another person to act for the principal in the
business of the agency, has named another person accordingly, such person is
not a sub `agent, but an agent of the principal for such part of the business
of the agency as is entrusted to him." The principle embodied in this
section is clearly stated by Thesiger L. J. in De Buasche v. Alt (1) at p. 310
thus :
" But the exigencies of business do from
time to time render necessary the carrying out of the instructions of a
principal by a person other than the agent originally instructed for the
purpose, and where that is the -case, the reason of the thing requires that the
rule should be relaxed, so as, on the one hand, to enable the agent to appoint
what has been termed " a sub-agent " or " substitute " ;
and, on the other hand, to constitute, in the interests and for the protection
of the principal, a direct privity of contract between him and such substitute."
The aforesaid facts clearly indicate that the respondent appointed the
Receiving Railway as his agent to 1. (1878) L.R. 8 Ch. D. 286, 310.
84 carrv his goods on the railway to a place
in India with whom Pakistan had no treaty arrangement in the matter of through
booked traffic. In that situation the authority in the agent must necessarily
be implied to appoint the Forwarding Railway to act for the consignor during
that part of the journey of the goods by the Indian Railway; and, if so, by
force of -the said section, the Forwarding Railway would be an agent of the
consignor.
If no such agency can be implied, in our
view, a tacit agreement between the Receiving Railway and the Forwarding
Railway to carry the respondent's goods to their destination may be implied
from the facts found and the conduct of all the parties concerned. If the
Receiving Railway was not an agent of the Forwarding Railway, and if there was
no arrangement between the two Governments, the position in law would be that
the foreign railway administration, having regard to the exigencies of the
situation obtaining during those critical days, brought the wagon containing
the goods of the respondent and left it with the Forwarding Railway;
and the latter consciously took over the
responsibility of the bailee, carried the wagon to New Delhi and offered to
deliver the goods to the respondent. The respondent also accepted that
relationship and sought to make the Forwarding Railway responsible for the loss
as his bailee. On these facts and also on the basis of the course of conduct of
the parties, we have no difficulty in implying a contract of bailment between
the respondent and the Forwarding Railway.
We may also state that s. 71 of the Indian
Contract Act permits the recognition of a contract of bailment implied by law
under circumstances which are of lesser significance than those present in this
case. The said section reads:
A person who finds goods belonging to another
and takes them into his custody, is subject to the same responsiblity as a
bailee." If a finder of goods, therefore, accepts the responsibility of
the goods, he is placed vis-a-vis the owner of the goods in the same position
as a bailee. If it be held 85 that the Railway Administration in Pakistan for
reasons of policy or otherwise left the wagon containing the goods within the
borders of India and that the Forwarding Railway Administration took them into
their custody, it cannot be denied that their responsibility in regard to the
said goods would be that of a bailee. It is true there is an essential
distinction between a, contract established from the conduct of the parties and
a quasi-contract implied by law; the former, though not one expressed in words,
is implied from the conduct and particular facts and the latter is only implied
by law, a statutory fiction recognized by law. The fiction cannot be enlarged
by analogy or otherwise. As we have held that the Receiving -Railway was
authorized by the respondent to engage the Forwarding Railway as his agent or
as his bailee, this section need not be invoked. But we would have had no
difficulty to rely upon it if the Forwarding Railway was equated to a finder of
goods within the meaning of the section.
If so, the next question that arises is what
is the extent of the liability of the appellant in respect of the goods of the
respondent entrusted to it for transit to New Delhi. We have held that, in the
circumstances of the present case, the application of the provisions of s. 80
of the Indian Railways Act is excluded. If so, the liability of the Forwarding
Railway is governed by s. 72 of the said Act.
Under that section the responsibility of a
railway administration for the loss, destruction or deterioration of animals or
goods delivered to the administration to be carried by railway shall, subject
to the other provisions of the Act, be that of a bailee under ss. 151, 152 and
161 of the Indian Contract Act, 1872. Under s. 151 of the Indian Contract Act,
the bailee is bound to take such care of the goods bailed to him as a man of
ordinary prudence would under similar circumstances take of his own goods of
the same bulk, quality and value of the goods bailed; and under s. 152 thereof,
in the absence of any special contract, he is not responsible for the loss, destruction
or deterioration of the thing bailed, if he has taken such amount 86 of care of
it as described in s. 151. In other words, the liability under these sections
is one for negligence only in the absence of a special contract.
Generally goods are consigned under a risk
note under which the Railway Company is absolved of all liability or its
liability is modified. No such risk note is forth- coming in the present case.
The question, therefore, reduces itself to an enquiry whether, on the facts, the
Forwarding Railway observed the standard of diligence required of an average
prudent men. The facts found by the High Court as well as by the Subordinate
Judge leave no room to doubt that the Forwarding Railway was guilty of
negligence in handling the goods entrusted to its care. The wagon reached Khem
Karan intact. D. W. 4 deposed that he received from the guard of the train that
brought the wagon to the station the inward summary and that on checking the
train with the aid of that summary he found that the wagon was intact according
to the summary. He also found the seals and labels of the wagon intact and that
the 'inward summary' tallied with the entries on the labels. It may, therefore,
be taken that when the Forwarding Railway took over charge of the goods they
were intact. The evidence of P. W. 1,Thakar Das, establishes that even at
Amritsar the wagon was intact. But, thereafter in its onward march towards New
Delhi it does not appear on the evidence that the necessary care was bestowed
by the railway authorities in respect of the said wagon. The said wagon
remained in the yard of Ludhiana Station between November 2, 1947, and January
14, 1948 and also it appears from the evidence that when it reached that place
the label showed that its destination was unknown. What happened during these
months is shrouded in mystery. It is said that the said wagon arrived at New
Delhi on February 13, 1948, and that the Goods Clerk, Ram Chander, unloaded the
goods in the presence of the head watchman, Ramji Lal and head constable,
Niranjan Singh, when it was discovered that only 15 packages were in the wagon
and the rest were lost. The Goods Clerk, Ram Chander-(D.W, 4), the head
watchman, Ramji Lal (D. W. 7), 87 the Assistant Train Clerk, Krishan Lal (D. W.
8), and the head constable, Niranjan Singh (D. W. 16), speak to the said facts,
but curiously no contemporaneous relevant record disclosing the said facts was
filed in the present case. We cannot act upon the oral evidence of these
interested witnesses in the absence of such record. No information was given to
the respondent about the arrival at New Delhi of the said wagon. Only on June
7, 1948, i.e., nearly four months after the alleged arrival of the wagon, the
respondent received a letter from the Chief Administrative Officer asking him
to effect delivery of the packages lying in New Delhi Station; but to his
surprise, when the respondent went to take delivery no goods were to be found
there. Only -on August 18, 1948 the appellant offered to the respondent a
negligible part of the goods in a damaged condition subject to the payment of
the railway freight, and the respondent refuse to take delivery of the same.
From the said facts it is not possible to hold that the railway administration
bestowed such care on the goods as is expected of an average prudent man. We,
therefore, hold that the Forwarding Railway was guilty of negligence.
Then remains the question of limitation. The
relevant articles are arts. 30 and 31 of the Indian Limitation Act.
They read:
---------------------------------------------------------
Description of suit period of Time from limitation. wich period begins to run
----------------------------------------------------------- 30 Against carrier
for compensation for losing or injuring One year When the loss or injury goods.
occurs.
31. Against a carrier for compensation for
non-delivery of, or One year When the goods ought delay in delivering to be
delivered.
goods.
--------------------------------------------------------------
Article 30 applies to a suit by a person claiming com- pensation against the
railway for its losing or injuring his goods; and art. 31 for compensation for
nondelivery or delay in delivering the goods.
The learned Counsel for the appellant argued
that art. 30 would apply to the suit claim, whereas the 88 learned Counsel for
the respondent contended that art. 31 would be more appropriate to the suit
claim. We shall assume that art. 30 governed the suit claim and proceed to
consider the question on that basis.
The question now is, when does the period of
limitation under art. 30 start to run against the claimant ? The third column
against art. 30 mentions that the said claim should be made within one year
from the date when the loss or injury occurs. The burden is upon the defendant
who seeks to non-suit the plaintiff on the ground of limitation to establish
that the loss occurred beyond one year from the date of the suit. The
proposition is self-evident and no citation is called for.
Has the defendant, therefore, on whom the burden
rests to prove that the loss occurred beyond the prescribed period, established
that fact in this case ? The suit was filed on August 4, 1949. In the plaint
the plaintiff has stated that loss to the goods has taken place on the
defendant-railway, and, therefore, delivery has not been effected. Though in
the written statement there was a vague 'denial of this fact the evidence
already noticed by us established beyond any reasonable doubt that the goods
were lost by the Forwarding Railway when they were in its custody. But there is
no clear evidence adduced by the defendant to prove when the goods were lost.
It is argued that the goods must have been lost by the said Railway at the
latest on February 20, 1948, when the goods are alleged to have been unloaded
from the wagon at the New Delhi Station; but we have already discussed the
relevant evidence on that question and we have held that the defendant did not
place before the Court any contemporaneous record to prove when the goods were
taken out of the wagon. Indeed, the learned Subordinate Judge in a considered
judgment held that it had not been established by the Forwarding Railway that
the goods were lost beyond the period of limitation. The correctness of this
finding was not canvassed in the High Court, and for the reasons already
mentioned, on this material produced, there was every justification for the
findings. If so, it follows that the 89 suit was well within time. In this view
it is not necessary to express our opinion on the question whether there was a
subsequent acknowledgment of the appellant's liability within the meaning of
art- 19 of the Indian Limitation Act.
In the result, the appeal fails and is
dismissed with costs.
Appeal dismissed.
Back
