Union of India Vs. M/S. Chaturbhai M.
Patel & Co [1975] INSC 309 (9 December 1975)
FAZALALI, SYED MURTAZA FAZALALI, SYED MURTAZA
MATHEW, KUTTYIL KURIEN
CITATION: 1976 AIR 712 1976 SCR (2) 902 1976
SCC (1) 747
ACT:
Fraud-must be established beyond reasonable
doubt-Mere suspicion- If proof of fraud.
HEADNOTE:
The resondent filed a suit against the Union
of India alleging that due to negligence of the railways a consignment of
tobacco dispatched by him to Gaya was substituted in transit and that in its
place inferior tobacco was delivered at Gaya. The railways on the other hand
alleged fraud and collusion between the respondent and his father, also a bidi
tobacco merchant in Gujarat, because by deliberate manipulation, the respondent
consigned inferior goods to Gaya and superior goods to Gujarat.
The trial court dismissed the respondent's
suit. The High Court allowed the suit for damages but refused refund of excise
duty said to have been paid by the respondent.
Dismissing the appeal to this Court,
HELD: (1) The appellant had not been able to
make out a case of fraud. The High Court was justified in negativing the plea
of fraud and in decreeing the suit. [904-FG] (2) Fraud, like any other charge
of criminal offence, whether made in civil or criminal proceedings must be
established beyond reasonable doubt. However suspicious may be the
circumstances, however strange the coincidences and however grave the doubts,
suspicion alone can never take the place of proof. [904-FG] A. L. N. Narayanan
Chettyar v. Official Assignee, High Court Rangoon, A.I.R. 1941 P.C. 93,
referred to.
In the instant case there is absolutely no
evidence to show any prior meeting of the minds between the respondent and his
father before the consignment was sent either to Gujarat or Gaya so as to raise
an inference that these two persons had hatched up a conspiracy in order to
defraud the appellant. [904-EF]
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 972- 973 of 1968.
From the Judgment and Decree dated the 1st
December 1961, of the Allahabad High Court in First Appeal No. 285 of 1958.
Gobind Das and S. P. Nayar for the appellants
in Appeal 972 and for Respondents in C.A. 973/68.
S. M. Jain, J. P. Goyal, S. K. Jain and
Shripal Singh for Respondent in Appeal 972 and for the Appellant in C.A.
973/68.
The Judgment of the Court was delivered by
FAZAL ALI J. This is a defendant's appeal by certificate granted by the High
Court of Allahabad under Art. 133(1) of the Constitution of India. The
plaintiff which is a registered partnership firm at Banaras dealing in Bidi
tobacco filed the present suit for damages against the defendant Union of India
on the allegation that it had 903 despatched a consignment containing tobacco
at Banaras for Gaya in Bihar for delivery to the firm Chaturbhai M. Patel &
Co. at Gaya. This consignment was booked under Invoice No.
107 Railway Receipt No. 89551 dated July 9,
1954. The plaintiff's allegation was that due to negligence of the Railway the
identical goods dispatched by the plaintiff did not reach the consignee at Gaya
but the goods containing inferior type of tobacco reached their which caused
serious loss to the plaintiff. The suit was filed after notice under s. 80 of
the Code of Civil Procedure was given. The plaintiff also claimed refund of the
excise duty which was paid by the plaintiff. The suit was resisted by the
defendant mainly on the ground that due to fraud and collusion between the
plaintiff in Banaras and his father's firm in Gujarat, the consignment at
Benaras was interchanged by manipulation and deliberation so that the inferior
goods were sent to Gaya and the superior goods were sent to Gujarat which were
sold by the firm at Gujarat and huge profit was earned by the aforesaid firm.
The Trial Court framed a number of issues and
accepted the defence and accordingly dismissed the suit. The plaintiff then
filed an appeal in the High Court of Allahabad which reversed the judgment and
decree of the Trial Court and decreed the plaintiff's suit for damages but
refused to pass a decree regarding the amount of the excise duty said to have
been paid by the plaintiff.
Mr. Gobind Das appearing for the appellant
submitted that there were number of suspicious circumstances which clearly went
to show that some amount of fraud had been played on the defendant by the
collusion of the plaintiff with his father at Gujarat whose firm was known as
Mangal Bhai Prabhu Das. In support of his contention he has relied on three or
four circumstances which have been fully discussed by the High Court.
On a perusal of the judgment of the High
Court we find that the case is concluded by findings of fact and normally the
appellant could not have been granted the certificate for leave to appeal but
for the fact that the judgment of the High Court was one of reversal and the
valuation of the suit was over Rs. 20,000/-. Nevertheless the High Court has
discussed the suspicious circumstances relied upon by the defendant/appellant
and has held that there was no conclusive or reliable evidence to prove the
fraud or collusion as alleged by the defendant. One of the circumstances was
that on June 9, 1954 a consignment of 191 bags of tobacco was booked by Mangal
Bhai Prabhu Das the father of the plaintiff from Railway Station Vasad in
Gujarat to Indian Zarada Factory, Banaras which was owned by the plaintiff.
This consignment was taken delivery of by one Mohanlal an agent of the Indian
Zarada Factory at Benaras and was re-warehoused in the bonded warehouse of the
Factory at Benaras. On the same day the consignment of the plaintiff was also
warehoused at the same place. Thereafter a forwarding note was presented at
Benaras on June 24, 1954 on behalf of the Indian Zarada Factory for despatch of
174 bags of tobacco to his father Mangal Bhai Prabhu Das Patel in Gujarat on
the ground that the goods were of an inferior quality. It is said that the
goods of inferior quality were deliberately despatched to Gaya, 904 Whereas the
other consignment was sent to Gujarat by changing the marks on the bags. The
High Court, however, has pointed out that there was absolutely no evidence to
show that such a manipulation or changing the marks was done either by the
plaintiff or his agent at Benaras.
Similarly reliance was placed on the fact
that although the consignment reached Gaya on July 17, 1954 yet the delivery of
the aforesaid consignment was taken by the plaintiff cousin at Gaya more than a
month thereafter i.e.
on August 25, 1954 and that too after the
Railway authorities at Gaya wrote a letter to the consignee on August 23, 1954.
The High Court has pointed out that there is no evidence to show that the
consignee at Gaya knew that the goods had arrived there on July 17, 1954 and
the letter which was sent to the uncle of the plaintiff at Gaya was received by
him after a long time. There is no doubt that there was some amount of
negligence on the part of the Railway authorities because they wrote a letter
to the consignee at Gaya more than a month after the goods were received and if
they had sent the letter immediately after receipt of the consignment, and if
in spite of that there was delay in taking delivery, something could be said
for the plaintiff.
Lastly it was urged by Mr. Gobind Das for the
appellant that the plaintiff who was the owner of the Indian Zarada Factory at
Benaras and his father who was the owner of the firm in Gujarat appear to have
entered into a conspiracy to defraud the defendant in view of their close
relationship.
The High Court has rightly pointed out that
the plaintiff is a separated son and has nothing in common with his father,
except the business in tobacco which is carried on at two different places. It
has also been pointed out by the High Court that the father has married a
second wife and that shows that there is no close affinity between the
plaintiff and his father. Furthermore, there is absolutely no evidence to show
any prior meeting of minds between the plaintiff and his father before the
consignment was sent either to Gujarat or Gaya so as to raise an inference that
these two persons had hatched up a conspiracy in order to defraud the
defendant. This argument, therefore, has no force and must be overruled.
The High Court has carefully considered the
various circumstances relied upon by the appellant and has held that they are
not at all conclusive to prove the case of fraud.
It is well settled that fraud like any other
charge of a criminal offence whether made in civil or criminal proceedings,
must be established beyond reasonable doubt;
per Lord Atkin in A. L. N. Narayanan Chettyar
v. Official Assignee, High Court Rangoon. However suspicious may be the
circumstances, however strange the coincidences, and however grave the doubts,
suspicion alone can never take the place of proof. In our normal life we are
sometimes faced with unexplainable phenomenon and strange coincidences, for, as
it is said, truth is stronger than fiction. In these circumstances, therefore,
after going through the judgment of the High Court we are satisfied that the
appellant has not been able to make out a case of fraud as found by the High
Court. As such the High Court 905 was fully justified in negativing the plea of
fraud and in decreeing the suit of the plaintiff.
Cross objections have been filed by the
plaintiff/respondent for disallowing the amount of excise duty paid by the
plaintiff. After persuing the judgment of the High Court, we find absolutely no
merit in these cross objections.
The result is that the appeal and the cross
objections are dismissed, but in the circumstances of the case without any
order as to costs.
P.B.R. Appeals dismissed.
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