State of Kerala Vs. General Manager,
Southern Railway, Madras  INSC 203 (30 August 1976)
KHANNA, HANS RAJ KHANNA, HANS RAJ UNTWALIA,
CITATION: 1976 AIR 2538 1977 SCR (1) 419 1976
SCC (4) 265
Code of Civil Procedure, Ss. 79 and 80, suit
for compensation against railway administration. whether impleading Union of
India as a party necessary.
The Indian Railways Act, 1890, S. 3(6),
Railway Administration, whether a separate legal entity.
The appellant booked rice for being
transported by train, from Bareilly railway station to Trivandrum railway
station. On delivery, the rice was found to be damaged and short in quantity.
The appellant claimed damages from the respondent, who resisted the claim on
the grounds that the suit was not maintainable as the Union of India had not
been impleaded as a defendant, and that a suit by a State against the Union of
India could only be instituted in the Supreme Court under Art. 131 of the
Constitution. The suit was dismissed by the Trial Court, and an appeal from it
was dismissed by the High Court.
Dismissing the appeal, the Court,
HELD: The Southern Railway is owned by the
Union of India. As such, a suit dealing with the alleged liability of that
railway should have been brought against the Union of India. Section 80 of the
C.P.C. contemplates institution of a suit against the Central Government even
though it relates to a railway. [422 E-FI] Sukhanand Shamlal v. Oudh Rohilkhand
Railway AIR 1924, Born. 306; Hirachand Succaram Gandhy & Ors. v.G.I.P. Railway
Co., AIR 1928 Born. 421; Shaikh Elahi Bakhsh v.E.I.
Railway Administration, AIR 1941 Patna 326:
Chandra Mohan Saha & Ant. v. Union of India & Anr. AIR 1953 Assam 193
and P.R. Narayanaswami lyer & Ors. v. Union of India AIR 1960 Madras 58,
(2) Neither the definition of the
"railway administration" in Section 3(6) of the Indian Railways Act,
nor the language of sections 72 to 80 of the Act, lends support for the view
that the railway administrations are to be treated as separate personalities,
entries or separate juridical persons. [423 B-C] Dominion of India v. Firm
Musaram Kishunprasad AIR 1950 Nagpur 85. overruled.
(3) The demarcation of the different
State-owned railways as distinct units for administrative and fiscal purposes
cannot have the effect of conferring the status of juridical person upon the
respective railway administrations or their General Managers for the purpose of
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 1367 of 1968.
(Appeal by Special Leave from the Judgment
and Order dated 25-3-1965 of the Kerala High Court in A.S. No. 487 of 1961).
S.V. Gupte and K.M.K. Nair, for the
Mrs. Shyamla Pappu, B.B. Sawhney, Raju
Ramachandran and Girish Chandra, for the respondent.
420 The Judgment of the Court was delivered
by KHANNA, J.--This appeal by special leave by the State of Kerala is against
the Full Bench decision of the Kerala High Court affirming on appeal the
judgment and decree of the trial court whereby the suit for recovery of Rs.
28,208.70 filed by the appellant against the General Manager, Southern Railway
respondent was dismissed.
The appellant booked 2,000 tons of rice in
21,310 bags from Bareilli railway station for being transported to Trivandrum
central railway station as per 10 railway receipts during the period from June
25 to July 5, 1950.
According to the case of the appellant, the
rice delivered at Trivandrum central railway station was short by 79,378 lbs.
It was also averred that the rice in 327 bags was found to be damaged. The
appellants accordingly claimed Rs.
28,208.70 as damages from the respondent.
The respondent resisted the claim of the
appellant, inter alia, on the ground that the suit was not maintainable as the
Union of India had not been impleaded as a defendant to the suit and that a
suit by a State against the Union of India could be instituted only in the
Supreme Court of India under article 131 of the Constitution. It is not
necessary to set out the other pleas of the respondent. As many as nine issues
were framed by the trial court. Two of the issues, namely, issue Nos. 1 and 3,
were treated as preliminary issues and arguments were heard on those issues.
Issue Nos. 1 and 3 read as under:
"1. Is the suit maintainable ? Can a decree
be passed against the defendant as now impleaded ?
2. Will the suit lie in this Court ? Is the
suit barred by the provisions of the Constitution of India ?" On issue No.
3 it was held by the trial court that since the Union of India had not been
made a party to the suit, clause (a) of article 31 of the Constitution had no
The suit was accordingly held to be not
liable to be dismissed on that ground. On issue No. 1 the trial court held that
the Union of India was a necessary party to the suit and as the Union of India
had not been impleaded as a party, the suit was incompetent. As a result of its
findings on issue No. 1 the trial court dismissed the suit. The decision of the
trial court on issue No. 1 was affirmed in appeal by the High Court. An
application was also filed at the hearing of the appeal before the High Court
for impleading the Union of India as a party to the suit. The High Court
rejected that application on the ground that no useful purpose would be served
by allowing that application.
It was observed that if the application was
allowed and the Union of India was made a party, the suit would have to be
dismissed as under article 131(a) of the-Constitution a suit by one State
against the Union of India could only lie in the Supreme Court. In the result,
the High Court dismissed the appeal filed by the appellant.
In appeal before us Mr. Gupte on behalf of
the appellant has invited our attention to the definition of "railway
administration" in 421 section 3(6) of the Indian Railways Act, 1890 (Act
9 of 1890) (hereinafter referred to as the Act) which reads as under:
"railway administration or
'administration' in the case of a railway administered by the Government means
the Manager of the railway and includes the Government and, in the case of a
railway administered by a railway company, means the railway company," He
has further referred to sections 72, 74, 76 and 80 of the Act. According to
section 72, 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 other provisions of the Act, be that of a
bailee under sections 151, 152 and 161 of the Indian Contract Act, 1872.
Section 74 absolves the railway administration of any responsibility for the
loss, destruction or deterioration of any luggage belonging to or in charge of
a passenger unless a railway servant has hooked and given a receipt therefor.
Section 76 deals with burden of proof in suits for compensation against a
railway administration for any delay, loss, destruction, deterioration or
damage. Section 80 at the relevant time read as under:
"80. Suits for compensation for injury
to throughbooked traffic.---Notwithstanding anything in any agreement
purporting to limit the liability of a railway administration with respect to
traffic while on the railway of another administration, a suit for compensation
for loss of the life of, or personal injury to, a passenger, or for loss, destruction
or deterioration of animals or goods where the passenger was or the animals or
goods were booked through over the railway of two or more railway
administrations, may be brought either against the railway administration from
which the passenger obtained his pass or purchased his ticket, or to which the
animals or goods were delivered by the consignor thereof, as the case may be,
or against the railway administration on whose railway the loss, injury,
destruction or deterioration occurred." It is urged by Mr. Gupte that as,
according to section 3 (6) of the Act, railway administration means a Manager
of the railway and as some of the sections 72 to 80 make express reference to
suits against railway administration, a suit against the General Manager of the
railway concerned is competent. The trial court and the High Court, according
to the learned counsel, were in error in holding that the suit was not
maintainable because of the Union of India having not been impleaded as a party
to the suit.
The above argument has the quality of being
ingenious, attractive and not lacking in apparent plausibility. A closer
examination, however, reveals its infirmity and after giving the matter our
earnest 422 consideration, we find it difficult to accept it. The Act deals
with and specifies, inter alia, the rights and liabilities which arise in case
the goods consigned to the railways are not delivered to the consignee. It
likewise deals with short delivery of those goods as well as the cases in which
the goods get damaged during transit. Most of the railways in India are owned
by the Union of India, but there were some minor railways which till recently
were owned by railway companies. The definition of "railway administration"
as given in section 3(6) is comprehensive and deals with both types of
railways. i.e., railways administered by the Government as well as those
administered by railway companies. The words "railway administration"
have been used in sections 72 to 80 because those sections pertain to rights
and liabilities of the parties in both types of cases, i.e., cases where
liability is incurred by Government administered railways as well as cases in
which liability is incurred by railway administered by railway company. The
Act, however, does not deal with, the question as to who should be impleaded as
a defendant when a suit is brought against the railway. administration. This is
essentially a matter relating to the frame of suits, and is dealt with by the
Code of Civil Procedure. According to section 79 of the Code, in a suit by or
against the Government, the authority to be named as plaintiff or defendant, as
the case may be, shall be (a) in the case of a suit by or against the Central
Government, the Union of India, and (b) in the case of a suit by or against a
State Government, the State. This section is in accordance with article 300 of
the Constitution, according to which the Government of India may sue or be sued
by the name of the Union of India and the Government of a State may sue or be
sued by the name of the State. It is not disputed that Southern Railway is
owned by the Union of India. As such, a suit dealing with the alleged liability
of that railway should have been brought against the Union of India.
Section 80 of the Code of Civil Procedure
provides inter alia that no suit shall be instituted against the Government
until the expiration of two months next after the notice in writing has been
delivered to or left at the office of, in the case of a suit against the
Central Government where it relates to a railway, the General Manager of that
The above provision clearly contemplates
institution of a suit against the Central Government even though it relates to
a railway. A suit against the Central Government in terms of section 79 of the
Code would necessarily have to be brought against the Union of India.
The Act no doubt makes provision for the
liability of the railway administration, but from that it does not follow that
the railway administration is a separate legal entity having a juristic
personality capable of being sued as such.
The definition of "railway
administration" in section 3(6) of the Act that it would mean the Manager
of the railway does not warrant the inference that a suit against the railway
administration can be brought against the Manager of that railway. We have to
bear in mind the distinction between the owner of the railway, namely, the
Union of India, and the authority which actually runs the railway and to whom
duties have been assigned for 423 this purpose by the Act. The manager of the
railway under the Act is such authority. When, however, liability is sought to
be fastened on the railway administration and a suit is brought against it on
that account, the suit, in our opinion, would have to be brought against the
Union of India because it is the Union who owns the railway and who would have
the funds to satisfy the claim in case decree is awarded in such suit.
The scheme of the Act, even though there are
now hardly any company-owned railways in India, is to treat different railway
administrations as different units, although all of them may be owned by the
Union of India. Neither the definition of the "railway administration"
in section 3(6) of the Act nor the language of sections 72 to 80 of the Act
lends support for the view that the railway administrations are to be treated
as separate personalities, entities or separate juridical persons as seems to
have been observed in the case of Dominion India v. Firm Museram
Yet the treatment of the different railway
administrations as different units for the purpose of fastening liability on
the Union of India has got significance and relevance.
Viewed in that light, it would follow that
the definition of the "railway administration" given in section 3(6)
of the Act does not make the railway administration or its General Manager a
legal entity or a corporate body or a juridical person to represent the railway
administration as such in suits. The claim in a suit for recovery of money
under the Act against the different railway administrations owned by the
Central Government in accordance with the general principle of law contained in
Order 1 Rule 3 of the Code of Civil Procedure has got to be made against the
person against whom the right to relief is alleged to exist.
The significance of creating the various
railway administrations as separate units, even though they may be Stateowned,
is to be found in section 80 of the Act, and section 80 of the Code of Civil
Procedure. For claiming a decree against the Union of India under the Act the
plaintiff has got to specify the railway administration or administrations on
account of which liability is sought to be fastened upon the Union of India, as
contemplated by section 80 of the Act. The institution of the suit has to be
preceded by service of notice under section 77 of the Act and section 80 of the
Code to the appropriate authority which is the General Manager of the railway
concerned. The requirement of clause (b) of section 80 of the Code that a
notice in the case of a suit against the Central Government where it relates to
a railway must go to the General Manager of the concerned railway or railways
is also based upon the assumption that it is primarily the liability of the
railway administration of the said railway or railways to satisfy the claim of
the suitor in accordance with section 80 of the Act. The demarcation of the
different State-owned railways as distinct units for administrative and fiscal
purposes cannot have the effect of conferring the status of juridical person
upon the respective railway administrations or their General Managers for the
purpose of civil suits.
(1) A.I.R. (1950) Nagpur 85. 11 --1104SCI/76
424 The Bombay High Court in two cases, Sukhanand Shamlal v. Oud, h &
Rohilkhand Railway(1) and Hirachand Succaram Gandhy & Ors. v.G.I.P. Railway
Co.(2) has held that a suit against a State railway should be brought against
Similar view was pressed by Patna High Court
in Shaikh Elahi Bakhsh v.E.I. Railway, Administration(3) and a Full Bench of
Assam High Court in the case Chandra Mohan Saha & ,Anr.
v. Union of India & Anr.(4) The
observations of a Division Bench of the Madras High Court in the case of P.R.
Narayanaswami lyer & Ors. v. Union of India(5) also lend support to the
above view. It may be stated that the reasoning employed in the eases mentioned
above was different and not identical, but whatever might be the nature of that
reasoning the fact remains that the learned Judges deciding those cases were
all at one on the point that such a suit should be brought against the
Government, which means in the present case the Union of India. Any contrary
view would be against the well-established practice and procedure of law, as
evidenced by various decisions of the High Courts, and as such, must be
Submission has also been made on behalf of
the appellant that the High Court should have allowed the appellant to amend
the plaint. We agree with the High Court that the present is not an appropriate
case in which permission to amend the plaint should have been granted.
The appeal consequently fails and is
dismissed but in the circumstances without costs.
M-R. Appeal dismissed.
(1) A.I.R. 1924 Bombay 306. (2) A.I.R. 1928 Bombay 421.
(3) A-I.R. 1931 Patna 326. (4) A.I.R. 1953
(5) A.I.R. 1960 Madras 58.