Chunilal Rikhabchand and Co. Vs. the Union of India and anr. - Court Judgment

Tarkunde, J.

1. The petitioners in these revision applications had filed suits in the Poona Small Cause Court against the Unionof India representing one or more of the Railway Administrations for damages caused by loss or injury to goods carried by railway. The suits having been dismissed by the Trial Court the petitioners have approached this Court in revision. When the revision applications reached hearing before Mr. Justice Abhyankar, the learned Judge felt some doubt on whether such suits could be entertained by a Court of Small Causes. The learned Judge, therefore, referred these revision applications for the decision of a Division Bench.

2. Before dealing with these revision applications on the merits, It Is desirable to consider whether the suits were rightly entertained by the Poona Small Cause Court. The jurisdiction of the Court to try these suits was not questioned on behalf of the Union of India at the trial. To bur knowledge suits of this nature have been always entertained by Courts of Small Causes when - the suits lay within the Courts' pecuniary jurisdiction.

3. Section 32 of the Bombay Civil Courts Act, 1869 provides in Sub-section (1) that no subordinate Court other than the Court of a Civil Judge, Senior Division, and no Court of Small Causes shall receive or register any suit in which the Government or any officer of the Government in his official capacity Is a party. Sub-section (3) of Section 32, however, lays down certain exceptions to this rule, Sub-section (3) says inter alia that nothing in Section 32 shall be deemed to apply to a suit against the administration of a Government railway. Consequently, the question whether the present suits were , rightly filed in the Poona Small Cause Court depends on whether they fell within the cognizance of that Court under the relevant provisions -of the Provincial Small Cause Courts Act, 1887.

4. Section 15 of the Provincial Small Cause Courts Act lays down that a Court of Small Causes shall not take cognizance of the suits specified in the Second Schedule of the Act. Section '16 of the Act provides that a suit cognizable by a Court of Small Causes shall not be tried by any other Court having jurisdiction within the local limits of the jurisdiction of the Court of Small Causes. Since the suits before us lay within the pecuniary jurisdiction of the Poona Small Cause Court, they could be tried only by that Court unless they fell within the Second Schedule of the Act as suits excepted from the cognizance of a Court of Small Causes.

5. Articles (1) and (3) of the Second Schedule are the only articles which can possibly cover suits filed against the Union of India in respect of loss or injury to goods entrusted to one of the Railways as a public carrier. Articles (1) to (3) of the Second Schedule read as follows:

'(1) A suit concerning any act done or purporting to be done by or by order of the Central Government, the Government Representative or the State Government;

(2) a suit concerning an act purporting to be done by any person in pursuance of a judgment or order of a Court or of a judicial officer acting in the execution of his office;

(3) a suit concerning an act or order purporting to be done or made by any other officer of the Government in his official capacity, or by a Court of Wards, or by an officer of a Court of Wards in the execution of his office.'

6. A suit for compensation for loss or injury to goods entrusted to a Railway as a carrier Is essentially a suit for damages for breach of contract. This Is made clear by Section 77 (1) of the Indian Railways Act, 1890, which says that the Railway Administration shall be responsible as a bailee under Sections 151, 152 and 161 of the Indian Contract Act, 1872, for the loss, destruction, damage, deterioration or non-delivery of goods carried by a railway within a period of thirty days after the termination of transit. The question Is whether such a suit for breach of contract Is covered by either Article (1) or Article (3) of the Second Schedule of the Provincial Small Cause Courts Act, 1887.

7. It does not appear to us that Article (1) of the Second Schedule covers a suit of this type. A breach of contract committed by a Railway Administration cannot be regarded as an 'act done or purporting to be done by or by order of the Central Government.' In the first place, It Is difficult to look upon a breach of contract as an act. Secondly, supposing It Is an act, It cannot be held to be an act of the Central Government, If the language used in Article (1) Is compared with the language in Article (3), It seems clear that Article (1) applies to acts of the Central Government as such, and not to acts of an officer of the Central Government in his official capacity.

8. We are of the view that Article (3) also does not cover a suit on a breach of contract by a Railway Administration. This Is because a breach of contract cannot be regarded as an act purporting to be done by an Officer of the Central Government in his Official capacity. No specific act of an officer of the Central Government Is required to be alleged by a plaintiff who files a suit for compensation for loss or injury to his goods entrusted to a Railway as a public carrier.

9. Mr. B. H. Naik, who appeared on behalf of the respondents (the Union of India representing one or more of the Railway Administrations), argued that the word 'act' in Article (3) of the Second Schedule means an act as well as an illegal omission and that therefore, Article (3) covers a suit for A breach of contracts. Mr. Naik relied on Section 3(2) of the General Clauses Act, 1897, which lays down that the word 'act', used with reference to an offence or a civil wrong, shall include a series of acts, and that words which refer to acts done extendalso to illegal omissions', According to Mr. Naik a breach of contract amounts to an illegal omission on the part of the concerned officers of the Central. Government and a suit for compensation of such a breach of contract falls within the ambit of Article (3) of the Second Schedule of the Provincial Small Cause Courts Act. Mr. Naik referred to Section 80 of the Civil Procedure Code which applies to suits instituted against the Government as well as to suits 'against a public officer in respect of any act purporting to be done by such public officer in his official capacity.' In Revati Mohan Das v. Jatindra Mohan Ghosh , the Privy Council observed that breach of contract committed by a public officer in his official capacity may amount to an 'act' and may entitle the officer to a notice under Section 80, although their Lordships held in that case that the default of the officer concerned did not amount to an illegal omission and that the officer was, therefore not entitled to a notice. It was observed in the judgment:

'Their Lordships do not suggest that a claim based upon a breach of contract by a public officer may not in many cases be sufficient to entitle him to notice under the section, but they are unable, for the reasons already given, to agree, with the learned Judges that the omission by the first respondent to pay off the mortgage was such a breach'.

10. We have carefully considered the above argument of Mr. Naik, but are unable to accept It. In the first place, the Provincial Small Cause Courts Act was passed in 1887, prior to the General Clauses Act of 1897. Section 3 of the General Clauses Act, - which includes the definition of the word f'act', says in terms that the section applies to words used in the General Clauses Act Itself and 'all Central Acts and Regulations made after the commencement of this Act'. The definition of the word 'act' in Section 3(2) of the General Clauses Act has, therefore, no direct application in the interpretation of the word 'act' in Article (3) of the Second Schedule of the Provincial Small Cause Courts Act. Secondly, the word 'act' in Article (3) of the Second Schedule occurs in association with the word 'order' and hence it appears from the context that the word 'act' Is used for a positive and distinct act, and not for a mere omission. Finally the filing of such suits in a Court of Small Causes Is supported by old precedents and a uniform practice of long standing and It Is not desirable to discard those precedents and disregard that practice in the absence of compelling reasons.

11. The oldest precedent Is Bunwari Lal v. The Secretary of State for India ILR (1890) Cal 290. The case decided by a Division Bench of the Calcutta High Court in 1889, within two years of the passing of / the Provincial Small Cause Courts Act, 1887.

There a suit was brought in a Small Cause Court against the Secretary of State for India for damages caused to an oil mill while It was being carried on a State Railway, Accepting the reference made by the trial Judge, the High Court held that the suit was not covered by Article (3) of the Second Schedule of the Provincial Small Cause Courts Act, and that It was cognizable by the Small Cause Court. The decision does not appear to have been questioned in any subsequent case.

12. In Mothi Rungaya Chetty v. The Secretary of State for India ILR (1905) Mad 213, the plaintiff had delivered a parcel to Postal authorities for transmission as avalue-payable article. By the mistake of a clerk the parcel was delivered to the addressee without Its value being collected from him. The suit was filed to recover the value of the article from the Government. An argument was addressed to the Madras High Court in revision that the suit was not cognizable by a Small Cause Court. The argument was rejected on the ground thatthe case was one of contract and not of tort.

13. In the Secretary of State for India v. A. Rambrahman ILR 37 Mad 333 : AIR 1914 Mad 578 the plaintiff sued for an amount due to him under a contract with the Government. The plaintiff claimed that he had performed his part of the contract but was not paid the amount due to him. The suit was dismissed by the trial Court but was decreed in appeal. In a second appeal filed by the Secretary of State for India an objection was taken on behalf of the defendant that the amount sought to be recovered was less than Rs. 500/-, that the suit was of a small cause nature and that, therefore, the second appeal was not maintainable. The High Court upheld the contention and in doing so held that the suit was not covered by Article (3) of the Second Schedule of the Provincial Small Cause Courts Act and was, therefore of a small cause nature. Referring to Article (3) of the Second Schedule of the Provincial Small Cause Courts Act the Court said:

'The article applies to a suit relating to some distinct act done by an officer of Government. We do not think that a mere failure to carry out a contract can be regarded as such an act,'

14. An illustration of a suit which was held to be covered by Article (3) of the Second Schedule of the Provincial Small. Cause Courts Act and therefore to be outside, the cognizance of Small Cause Court, Is provided by Sital Prasad Nigam y. United Provinces, AIR 1940 Oudh 245. The plaintiff in that case had tendered for the 'supply of grass to the jails of the United ^Provinces and had deposited some money by way of security for the performance of the contract. The Inspector-General of Prisons cancelled the acceptance of the tender and ordered forfeiture of the security amount. The plaintiff sued in a Small Cause Court for dama-ges for the cancellation of the tender andFor return of the security amount. It washeld in appeal by the Oudh High Court thatthe suit was not maintainable. In doing sothe Court relied on a previous decision where It was held that the ' act' mentioned in Article (3) of the Second Schedule must be 'someparticular act of some particular official'.The suit was held to be covered by Article (3) of the Second Schedule because Itconcerned a specific act or acts of the InsInspector-General of Prisons of the United Province. '

15. It will be noticed that out of the cases mentioned above Bunwari Lal Mookerjee v. The Secretary of State for India, 17. Cal 290, dealt directly with a suit for compensation for damage caused to an article which was being carried on a State Railway. After that decision, the Provincial Small Cause Courts Act has been amended several times. The words of Article (3) of the Second Schedule of the. Act have, however, remained unaltered. The word 'act' in that article has been interpreted to mean a positive or distinct act of an officer of the Government and not a mere omission, To our knowledge, suits for compensation for loss, destruction, damage, deterioration or non-delivery of goods carried by Railways have been always filed in the Courts of Small Causes If they fell within the pecuniary jurisdiction of those Courts. There being no adequate reason to disagree with the precedents and to disapprove of the practices. We must hold that suits of this nature do not fall within the ambit of Articles (1) or (3) of the Second Schedule and are cognizable by a Court of Small Causes.

16. We will next turn to the merits of the two Civil Revision Applications. Civil Revn. Appln. No. 247 of 1965.

17. - The plaintiffs in this case were the consignees of 240' bags of gramdal which were despatched from Ashoknagar to the Poona Railway Station. The goods arrived at the Poona Railway Station on 25th May, 1962. The plaintiff's carting agent observed on that day that out of the 240 bags of Dal, 160 were wet and 4 were torn. The carting-agent noted this observation in a letter (exhibit 29} and asked for an open delivery. - Open delivery was given on 1st June, 1962 and the damages suffered by the plaintiffs were assessed. After giving the requisite notices, the plaintiffs filed the present suit on 30th July 1963 for recovery of the damages suffered by them. The learned Trial Judge framed Issues on the pleadings of the parlies, recorded evidence, but dismissed the suit by deciding only the first Issue, which was whether the suit was within limitation. The learned Judge held that the suit was time barred.

18. For the purposes of limitation the Suit Is governed by Article SO of the Indian Limitation Act of 1908. That article provided a period of limitation of one year from the time when the loss or injury tothe goods occurred. The suit would have been within limitation If the period was counted from 1st June, 1962 when open delivery of the goods was given to the plaintiff and the damage to the goods was assessed. The Learned Trial Judge, however, held that the -damage to the goods had occurred on 25th May, 1962 when the carting agent of the plaintiffs observed that 160 bags of Dal were wet and 4 bags were torn, If the period of limitation commenced from 25th May, 1962, the suit was barred by time.

19. In holding that the suit was barred by time, the learned Trial Judge appears to have overlooked the principle that the burden was on the Railway Administration to establish that the injury to the goods had occurred more than one year before the institution of the suit. The principle Is illustrated by the decision of the Supreme Court in Jetmull Bhojraj v. Darjeeling Himalayan Railway Co. Ltd., : [1963]2SCR832 . The facts of that case were very similar to the facts of the present suit. In that case, after the goods had reached the station of destination, the plaintiff wrote to the Railway on 21st December, 1946, that the consignment had arrived in 'a very damaged condition' and requested that open delivery of the consignment should be given to him immediately. Open delivery was given to the plaintiff on 12th February, 1947, The plaintiff's suit, filed on 9th April, 1948, was within time If the period of limitation commenced from the date of open delivery (12th February, 1947), but was barred. If the period commenced from the plaintiff's letter of protest (21st December, 1943). The majority of the Supreme Court referred to the principle that the burden lay on the Railway Administration to establish that the loss or injury occurred more than one year before the institution of the suit and went on to say:

'No attempt has been made on behalf of the D. H. Railway to show that the damage in fact occurred more than one year before the suit was instituted. All that Is said on their behalf Is that the appellant know in . December 1946 that the consignment appeared to be damaged.' Their Lordships then referred to the plaintiff's letter dated 21st December, 1946 in-which he had stated that the consignment had arrived in 'a very damaged condition' and their Lordships went on:

'This has reference to the outer covering or the package and not to the contents. Moreover, delivery was given nearly two months after this and It Is not possible to say whether the damage which was noticed at that time had already been caused before December 21, 1946 or was caused thereafter. The D. H. Railway which had the custody of the goods could alone have been in a position to say, If at all, as to when- the damage was caused. Upon the material before us It Is not possible to say that thesuit was instituted beyond one year of the accrual of the cause of action. It is, therefore, not barred by time.'

20. In the present case also the letter of the plaintiff's carting agent exhibit 29 merely referred to the external condition of the bags. It was stated in the letter that 160 bags were wet and 4 bags were torn. Nothing was said in that letter about the damage to the contents of the bags. No evidence was led on behalf of the Central Railway Administration to show that the damage had been caused prior to 25th May, 1962 and that It was not caused between that date and the 1st of June, 1962 when open delivery of the consignment was given. In the absence of any evidence by the Railway Administration, It must be held, following the above decision of the Supreme Court, that ''upon the material before us It Is not possible to say that the suit was instituted beyond one year of the accrual of the cause of action'. On this question the learned Trial Judge observed in his judgment that It was 'nobody's case' that the injury to the goods was caused between the period from 25th May to 1st June, 1962. This observation indicates that a wrong approach was adopted by the learned Judge, It was for the Railway Administration to prove that the damage to the goods had been caused prior to 25th May, 1962 and this the Railway Administration failed to do.

21. We, therefore, hold that the plaintiff's suit was within time. The decree passed by the learned Trial Judge dismissing the plaintiffs' suit Is accordingly, set aside. The suit Is remanded to the trial Court for giving findings on the remaining Issues and passing an appropriate decree in accordance with those findings. The respondents will pay the costs of the petitioner in this Court.

Civil Revn. Appln. No. 649 of 1965.

22. The plaintiffs in this suit were the consignees or 24.8 tons of coal despatched from the Barkakana Station on the Eastern Railway to the Poona Station on the Central Railway. The goods arrived at the Poona Station on 21st November 1962. On 24th November, 1962, the plaintiffs' agent wrote to the Chief Goods Clerk of the Poona Railway Station that the consignment should be reweighed. By a letter of 29th November, ,1962, the Chief Goods Clerk refused reweighment. By a subsequent letter dated 13th December, 1962, the Chief Goods Clerk asked the plaintiffs to take delivery and remove the goods from the Railway yard. The Chief Goods Clerk added that If the goods were not removed, they would be sold at the risk of the plaintiffs. The plaintiffs did not take delivery but the Railway, instead of selling the coal, transported It to Matunga and used It there. Thereupon, on 20th March, 1963, the plaintiffs filed the present suit for the value of the goods, after deducting therefrom the railway freight. It was found on the evidencelaid in the suit that the coal had been transferred from the wagon to another during the course of transit and that there was a shortage of 2.1 tons in the coal which was consumed by the Railway Administration tion after It was carried to Matunga.

23. The main findings given by the learned trial Judge in dismissing the plaintiffs' suit were that the plaintiffs had no right to claim reweighment of the coal before receiving delivery thereof and that the Railway Administration was entitled to call upon the plaintiffs to accept delivery without reweighment. We do not, however, find It necessary to consider whether any error of law was committed by the learned Trial Judge in giving these findings. It was not denied by Mr. Lalit that the goods were carried at owners risk. It was also not denied that the plaintiff's led no evidence whatever, though the necessary Issue was framed, to show that there, was any negligence or misconduct on the part of the officers of the Railway Administration in dealing with the consignment. The plain- . tiffs, therefore, are not entitled to any damages for the shortage of the coal which, as observed above, was 2.1 tons.

24. Mr. Lalit for the plaintiffs arguedthat the Railway Administration Is liable tothe plaintiffs for the coal appropriated andconsumed by It. In Its written statement,however, the Railway Administration claimed that, apart from the freight charge ofRs. 871.20 It Is entitled to receive from theplaintiffs Rs. 4.90 by way of demurrage andRs. 1,449.80 by way of wharfage. Thus atotal amount of Rs. 2,325/- and odd wasclaimed by the Railway Administration byway of set off to the plaintiffs; claim. Inview of this claim of the Railway Administration, the learned trial Judge came to theconclusion that nothing was due to the plaintiffs. Mr. Lalit argued before us that no evidence was led by the Railway Administration to show that It was entitled to Rs. 4.80by way of demurrage and Rs. 1,449.80 byway of wharfage. It Is true that no evidence was led by the Railway Administration with regard to these Items. Under thecircumstances, we would have set aside thedecree of the learned Trial Judge and reremanded the case for recording the evidencein regard to the demurrage and wharfageclaimed by the Railway Administration. We,however, adjourned the case to enable Mr.Lalit to find but whether the claim madeby the Railway Administration by way ofwharfage was a proper claim. After inquiry,Mr. Lalit informed us that the claim wasproper and that no useful purpose would beserved by setting aside the trial Court'sdecree and remanding the suit for furtherevidence.

25. In the result, we do not find It necessary to interfere with the decree passed by the Trial Judge . This Civil Revision Application is, therefore, dismissed, Under thecircumstances, there will be no order as to.costs.

26. Orders accordingly.