Niranjanlall Agarwalla Vs. Union of
India  INSC 61 (7 March 1968)
07/03/1968 MITTER, G.K.
CITATION: 1969 AIR 23 1968 SCR (3) 415
Indian Railways Act (9 of 1890), ss. 3(6), 77
and 140 (before amendment by Act 39 of 1961)--State-owned Railway--Service of
s. 77 notice on Chief Commercial Manager (Claims and Refunds)--If sufficient
Indian Limitation Act (9 of 1908), s.
The appellant booked goods at Sealdah, which is
on the border of the territorial limits of the Original Jurisdiction of the
Calcutta High Court, to be transported by the Bengal and Assam Railway, owned
by the, State and having its head office at Calcutta. There was short delivery
of the goods anti the railway authorities issued the necessary certificates of
shortage. The appellant Wrote a letter to the Chief Commercial Manager (Claims
Refunds) of the Railway within six months
from the date of delivery of goods for carriage as required by s. 77 of the Act
before its amendment by Act 39 of 1961, claim in the value of the goods short
delivered. Failing to get any redress, he filed a suit on the Original Side of
the High Court at Calcutta in 1946, within the period of limitations In 1954,
the suit was dismissed on the ground that the Court had no jurisdiction to try
the suit. Then the appellant filed a second suit in the Subordinate Judge's
Court having jurisdiction, and prayed for exclusion of the time taken between
the dates of institution and dismissal of the earlier suit, under s. 14 of the
Limitation Act, 1908.
The trial Court dismissed the suit. The High
Court in appeal, held against the appellant on the ground that the appellant's
letter addressed to the Chief Commercial Manager (Claims and Refunds) could not
be treated as the notice required under s. 77 of the Railways Act, 1890, as
that officer was not the authority to receive the notice under the section.
In appeal to this Court,
HELD : (1) The requirement of compliance with
the terms of s. 77 should be liberally construed as the object of the notice
was only to enable the railway administration to make an enquiry and
investigate into the cause of the loss of the goods consigned to it. Section
140, before its amendment by Act 39 of 1961 provided that a notice required to
be served on a State-owned Railway Administration may be served on the Manager.
The Bengal and Assam Railway Administration did not have -in authority known as
the Manager. It had a General Manager in over all charge but its Chief
Commercial Manager (Claims and Refunds) was a high ranking office specially
engaged in enquiring into claims by consignors and consignees against the
Railway administration. He was therefore an officer competent to deal with such
claims and the requirements -of s. 77 are satisfied by serving a notice on him;
and it does not behove 'he State to contest a good claim on unsubstantial
technical pleas. [418 DE; 419 C-D, FH; 421 D] Governor-General in Council v.
Musaddi Lal,  3 S.C.R.
647, 651 and Jetmull Bhojraj v. The
Darjeeling Himalayan Railway Co. Ltd. 2 S.C.R. 832, 845, followed.
416 Governor-General in Council v.G.S. Mills
Ltd. I.L.R. 28 Pat. 178 (F.B.) -approved.
(2) On the facts, the appellant was entitled
to the benefit of S, 14 of the Limitation Act. because, lie was prosecuting the
earlier Suit with due diligence and the mistake in choosing the Original Side
of the, High Court for filing the first suit was made bona fide. [421 A]
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 577 of 1965.
Appeal from the judgment and decree dated
June 9, 1961 of the Calcutta High Court in Appeal from Original Decree No. 133
B. C. Misra and S. S. Shukla for the
V. A. Seyid Muhammad, K. L. Hathi and R. N.
Sachthey, for the respondent.
The Judgment of the Court was delivered by
Mitter, J. This-is an appeal by certificate under Art.
133(1)(c) of the Constitution of India from a
judgment and decree of the High Court of Calcutta confirming a decree of
dismissal of the suit of the appellant herein instituted in the court of the
Subordinate Judge, 8th Court at Alipore, District 24 Parganas, West Bengal.
The only two points canvassed in the appeal
to this Court are: (1) whether notices under section 77 of the Indian Railways
Act were properly served on the Railway Administration in this case, and (2)
whether the suit was barred by limitation ? The relevant facts are as follows.
The appellant was entitled to delivery of two lots of goods booked at Sealdah,
Calcutta on June 9, 1945 and September 24, 1945 respectively. The goods were
for delivery at Cooch Behar.
They were to be transported by Bengal and
Assam Railway owned by the State and having its Head Office at the relevant
time at No. 3 Koilaghat Street, Calcutta. In respect of the first lot, there
was a short delivery of 104 umbrellas and a certificate of shortage was issued
to the plaintiff on July 20, 1945. The appellant wrote a letter to the Chief
Commercial Manager (Claims and Refunds) of the Bengal and Assam Railway at No.
3 Koilaghat Street on August 11, 1945 claiming the value of the goods short
delivered i.e. Rs.
1,284/as per bill enclosed and the short
delivery certificate issued to him. On November 12, 1945 the plaintiff sent a
letter to the Governor-General in Council representing the Bengal and Assam
Railway through the Secretary, Government of India, New Delhi giving full
particulars of the claim and stating that the Chief Commercial Manager had
already been approached for payment. This' letter was replied to by the Secretary,
Railway Board on November 27, 1945 to the effect that the plaintiff's letter
had been for417 warded for disposal to the General Manager, Bengal and Assam
Railway. In respect of the second lot of goods, the plaintiff made a similar
claim to the Chief Commercial Manager of Rs. 12,742-7-4 as per the short
delivery certificate of October 10, 1945. The plaintiff also wrote a letter to
the Governor-General in Council on February 14, 1946 giving full particulars
about the two invoices and the railway receipts covering the consignments
despatched on September 24, 1945 and mentioning further that a claim had.
been preferred on October 24, 1945 enclosing
the plaintiffs bill. It was stated expressly in this letter that notice to the
Chief Commercial Manager had been given under s. 77 of the Railways Act. It
does not appear that this particular claim of the plaintiff was referred to the
General Manager, Bengal and Assam Railway by the Secretary to the Railway Board
as in the previous case.
Failing to get any redress the plaintiff
served a notice under s. 80 of the Code of Civil Procedure on February 14, 1946
on the Governor-General in Council through the Secretary to the Railway Board
and on the 14th August 1946 filed a suit on the Original Side of the High Court
at Calcutta for recovery of the two sums of money for non delivery of the goods
and alternatively for damages for wrongful conversion or detention of the said
goods. It was defended by the Governor-General in Council and one of the pleas
,taken was that the Court had no jurisdiction to entertain the suit as no part
of the cause of action for the suit had arisen within the said jurisdiction. On
July 16, 1954, the suit was dismissed on the ground that the Court had no
jurisdiction to try the same. Thereupon the appellant filed a suit out of which
the present appeal arises on August 5, 1954. In the plaint of the second suit,
it was stated that the earlier suit had been filed on the Original Side of the
High Court on a bona fide mistake on the part of the plaintiffs solicitor and
prosecuted with due diligence by the plaintiff till it was dismissed on July
16, 1954. The plaintiff prayed for exclusion of the time taken between the date
of the institution of the earlier suit and the dismissal thereof under s. 14 of
the Limitation Act. A defence similar to that taken in the High Court suit was
put up by the Union of India, the defendant in the later suit.
The Subordinate Judge who tried the suit
dismissed. it on various grounds, inter alia that the notice served upon the
Chief Commercial Manager was not in terms of the Railways Act and that the
first suit had not been pursued bona fide and with diligence on the Original
Side of the Calcutta High Court.
In appeal to the High Court, it was argued
that (a) no notice under s. 77 was necessary in the case of non-delivery of
(goods (b) alternatively, notice in terms of the said section had been served
by the appellant and (c) the plaintiff was entitled to 418 the benefit of s. 14
of the Limitation Act. The greater part of the judgment of the High Court was
devoted to the first question which was answered against the appellant.
The second contention was summarily turned
down by the observation that there was nothing on the record to show that the
Chief Commercial Manager had been held out as the authority competent to
receive notice under S. 77 of the Act. The question of limitation was not
decided in view of the above although the learned Judges felt inclined to allow
the appellant the benefit of S. 14 of the Limitation Act.
The relevant portion of s. 77 of the Indian
Railways Act (IX of 1890) provided that " a person shall not be entitled
compensation for the loss, destruction or
deterioration of animals or goods delivered to be .... carried unless his claim
to the refund or compensation has been preferred in writing by him or on his
behalf to the railway administration within six months from the date of the
delivery of the animals or goods for carriage by railway" Section 140 of
the Act provided that "any notice or other document required or authorised
by the Act to be served on a railway administration may be served, in the case
of a railway administered by Government .... on the Manager.....
by delivering the notice or other documents
to the Manager... or by leaving it at his office or by forwarding it by post in
a pre-paid letter addressed to the Manager....
at his office." Under S. 3 cl. (6) of
the Act, unless there is something repugnant in the subject or context
"railway administration or "administration" in the case of a
railway administered by the Government means "the manager of the railway
and includes the Government. . . ." In this case, there can be no dispute
that if notices to the Chief Commercial Manager (Claims and Refunds) complied
with the terms of section 77 of the Act the most serious obstacle to -the
appellant's success in this appeal would be overcome. It therefore becomes
necessary to consider the ambit and effect of the said section.
The scope of section 77 has come up for
consideration by various High Courts at different times. It -is not necessary
to refer to the same; but we may refer to a decision of this Court in Governor
General in Council v. Musaddi Lal(1). It was there observed that :
"Section 77 of the Railways Act is
enacted with a view to enable the railway administration to make en(1) 
419 .lm15 quiries and if possible to recover
the goods and to deliver them to the consignee and to prevent stale claims. It
imposes a restriction on the enforcement of liability declared by s. 72. The
liability declared by s. 72 is for loss, destruction or deterioration. Failure
to deliver is the consequence of loss or destruction of goods; it does not
furnish a cause of action on which a suit may lie against the railway administration,
distinct from a cause of action for loss or destruction." This aspect of
s. 77 was again referred to in Jetmull Bhojraj v. The Darjeeling Himalayan
Railway Co. Ltd.(').
There it was observed that the object of
service of notice under s. 77 being essentially to enable the railway
administration to make an enquiry and investigation as to whether the loss,
destruction etc. was due-to the consignor's laches or to the willful neglect of
the railway administration and its servants, the notice under s. 77 should be
liberally construed. To quote the words of the judgment of the majority Judges
"In enacting the section the intention of the legislature must have been
to afford only a protection to the railway administration against fraud and not
to provide a means for depriving the consignors of their legitimate claims for
compensation for the loss or damage caused to their consignments during the
course of transit on the railways." In the light of section 3(6) there
would be sufficient compliance with section 77 if the notice was served on the
Manager of the State owned railway. Section 140 only provides for the manner of
service of notice. The Bengal and Assam Railway administration did not have an
authority known as the Manager. It had a General Manager as also another high
ranking officer i.e. the Chief Commercial Manager (Claims and Refunds) working
in the head office of the company at Calcutta. As the said statutory provisions
do not make it obligatory to serve a notice under s. 77 on the General Manager
of a State-owned Railway, it is difficult to see why a notice served on the
Chief Commercial Manager (Claims and Refunds) would not be a proper notice
under the said section. The General Manager is in overall charge of many
departments of the railway administration and is not particularly or
immediately concerned with dealing with claims against the railway
administration. The Chief Commercial Manager (Claims and Refunds) is the
authority specially engaged in the enquiry into such claims and would therefore
prima facie appear to be competent to deal with the claims-by consignors or
consignees against the railway administration envisaged by s. 77 (1)  2
S.C.R. 832, 845.
420 of the Act. He is not a person of such
inferior status that it can be said that a claim preferred as regards non delivery
would not be properly investigated or looked into for finding out the truth or
falsity of the claim preferred.
Apart from any authority it seems to us that
a notice on the Chief Commercial Manager (Claims and Refunds) of a State owned
railway administration would be in terms of S. 77.
The question came up for consideration before
a Full Bench of the Patna High Court in Governor--General in Council V.G. S.
Mills Ltd.('). There are learned Judges of the Patna High Court examined the
various authorities of the High Courts of Madras, Lahore, Bombay, Allahabad and
On a conspectus of all the authorities
referred to, the answer to the question posed before the Full Bench was as
"The requirements of section 77 read
with S. 140, Railways Act, 1890 are satisfied by serving a notice within the
prescribed time on the Chief Commercial Manager or any other subordinate
officer of a Railway owned by the Government of India, provided it is established
as a fact that the Railway Company by its course of business or the terms of
the contract between the parties has held out a particular official as
competent to deal with the claims on receipt of a notice to him." There is
a current of authority in the Calcutta High Court which is in line with the
above Patna decision. We are in complete agreement with the view expressed by
the Full Bench of the Patna High Court. In our opinion, it is only in the case
of ,in authority subordinate or inferior in rank to the Chief Commercial
Manager that, proof of competence to deal with the claims would be called for.
The question has now become academic in view of the recent amendment of the
The second point about limitation is not of
The appellant had filed a suit in the
Calcutta High Court on its Original Side for recovery of compensation within
The despatch of the goods had taken place
from Sealdah which is on the border of the territorial limits of the
jurisdiction of the Calcutta High Court. It would appear from the plaint that
the plaintiff was under the impression that the head office of the Bengal and
Assam Railway administration being situated within the said limits, his suit
could properly be instituted in the High Court. The Subordinate Judge was not
right in holding that the suit had not been proceeded with bona fide. The
learned Judges of the Division Bench of the High Court were disposed to give
(1) I.L.R. 28 Patna 178.
421 the plaintiff the benefit of s. 14 of the
Limitation Act and nothing has been shown to induce us to take a different
The judgment and decree of the High Court are
therefore reversed. The appeal is allowed with costs throughout and the
plaintiff's suit decreed for the amount claimed and interest pendent lite at 6%
Before parting with the case, we however wish
to make a remark against the conduct of the authorities of the railway
administration concerned in the disposal of claims like the one in the present
appeal. There is no suggestion anywhere that the, plaintiff's claim was not
genuine. The railway authorities had promptly issued certificates of shortage
in respect of the consignments. There is nothing to show that the Chief
Commercial of Manager found any defect in the plaintiff's claim. If the claim
had been settled in good time, the public exchequer would have been spared not
only of its own costs of litigation which will be considerable but the costs
which will have to be paid to the appellant.
It does not behove the State to contest a
good claim on the off-chance of success on some unsubstantial technical plea.