Joint Director of Mines Safety Vs. Tandur and Nayandgi Stone Quarries (P) Ltd. - Court Judgment

Excerpt:
- [j.r. mudholkar,; k. subba rao,; r.s.bachawat,; raghuvar dayal and; v. ramasw, jj.] a firm doing business in bombay entrusted goods worth rs. 35,500 the railway for delivery in delhi. the goods were consigned to "self" and the firm endorsed the railway receipts to a bank against an advance of rs. 20,000 made by the bank to the firm. the firm also executed a promissory note in favour of the bank for that amount. when the goods reached the destination, the bank refused to take delivery, on the ground that they were not the goods consigned by the firm. the bank, thereafter filed a suit for the recovery of the value of the goods. the trial court dismissed the suit. on appeal by the bank, the high court allowed the appeal and decreed the claim for rs. 20,000 on the ground that as pledgee of the goods, the bank suffered loss only to the extent of the loss of its security. both the bank and the railway appealed to this court, and it was contended on behalf of the railway that the endorsement of the railway receipt in favour of the bank, did not constitute a pledge of the goods covered by the receipt and that the bank had no right to sue for compensation. held: (per subba rao, raghubar dayal and bachawat, j j): the firm by endorsing the railway receipts in favour of the bank, for consideration. pledged the goods covered by the said receipts, to the bank, and the bank being the pledgee could maintain the suit for the recovery of the full value of consignment amounting to rs. 35,500. [264 h; 265 d-e] on a reasonable construction of s. 178 of the contract act, 1872, ss. 4 and 137 of the transfer of property act, 1882, and ss. 30 and 53 of the indian sale of goods act, 1930, an owner of goods, can make a valid pledge of them by transferring the railway receipt representing the said goods. to the general rule expressed by the maxim nemo dat quod non habet (no one can convey a better title than what he had), to facilitate mercantile transactions. the indian law has grafted some exceptions, in favour of bonafide pledgees by transfer of documents of title from persons. whether owners of goods who do not possess the full bundle of rights of ownership at the time the pledges are made, or their mercantile agents. to confer a right to effect a valid pledge by transfer of document of title relating to goods on persons with defects in their title to the goods. and on mercantile agents, and to deny it to the full owners thereof, is to introduce an incongruity into the act. on the other hand, the real intention of the legislature will be carried out if the said right is conceded to the full owner of goods and extended by construction to persons with defects in their title to the goods or to mercantile agents. a pledge being a bailment of goods under s. 172 of the contract act, the pledgee, as a bailee. will have the same remedies as the owner of the goods would have against a third person for deprivation of the said goods or injury to them under s. 180 of the act. [264 a-c, h] ramdas vithaldas durbar v.s. amarchand and co., (1916) l.r. 43 i.a. 164 and the official assignee of madras v. the mercantile bank of india, ltd. (1934) l.r. 61 i.a. 416, referred to. per mudholkar and ramaswami jj. (dissenting): there was no valid pledge of the consignments of goods represented by the railway receipt in favour of the bank and the bank was not entitled to sue the railway for compensation for the loss of goods, relying upon the endorsements of the railway receipts in its favour. [272 g-h] after the passing of the indian contract (amendment) act, 1930, the legal position with regard to the pledge of railway receipts, is exactly the same in indian law as it is in english law, and consequently, the owner of the goods cannot pledge the goods represented by a railway receipt, by endorsing the railway receipt, unless the railway authorities were notified of the transfer, and they agreed to hold the goods as bailee of the pledgee. under the amended law a valid pledge can no longer be made by ever.v person "in possession" of goods. it can only be made by a mercantile agent as provided in s. 178 of the contract act (after amendment in 2930) or by a person who has obtained possession of goods under a contract voidable under s. 19 or s. 19a of the contract act, as provided by s. 178 0 the act. or by a seller or buyer in possession of goods, after sale. as provided in s. 30 of the indian sale of goods act. [271 f-g; 272 c-d] further, though a railway receipt and all other documents enumerated in s. 2(4) of the sale of goods act are assimilated to bills of lading for the purpose of the right to stoppage in transit and a pledge under s. 178 of the contract act, its legal position is the same as in english law, so that, no rights are created, merely by reason of the endorsement of a railway receipt by the consignee between the endorses and the railway company which had issued the receipt to the consignee the only remedy of the endorsee being against the endorser. the negotiation of the receipt may pass the property m the goods, but it does not transfer the contract contained in the receipt or the statutory contract under s. 74e of the indian railways act. negotiability is a creature of a statute or mercantile usage, not of judicial decisions apart from either. so, in the absence of any usage of trade or any statutory provision to that effect, a railway receipt cannot be accorded the benefits which flow from negotiability under the negotiable instruments act, so as to entitle the endorsee, as the holder for the time being of the document of title, to sue the carrier --the railway authority--in his own name. if the claim of the bank was as an ordinary assignee of the contract of carriage, then it had to prove the assignment. in the absence of proof of such assignment, or of the existence of any practice of merchants treating a railway receipt as a symbol of goods making a pledge of the receipt a pledge of goods, and in view of cl. (3) of the notice printed at the back of the receipt that an endorsement made on the face of the receipt by the consignee was only meant to indicate the person to whom the consignee wished delivery of goods to be made if he himself did not attend to take delivery, the bank had no right to sue the railway. [273 e-g; 274 d-g] since the language of s. 178 of the contract act is clear and explicit, if any hardship and inconvenience is felt because such a practice of treating the receipt as a symbol of goods were not recognised. it is for parliament to take appropriate steps to amend the law and it is not for courts to legislate under the guise of interpretation. [275 g] - the inspector was therefore well within his powers to serve a notice under section 22 read with section 17 of the act calling upon the respondents to appoint a qualified manager for the mine.order1. after hearing smt. kitty kumaramangalam, learned counsel for the appellant and shri a. subba rao, learned counsel for the respondents, we are inclined to the view that the high court was not right in its interpretation of the word 'and' used at the end of paragraph (b) of sub-clause (ii) of the proviso to clause (b) of sub-section (1) of section 3 of the mines act, 1952 as being conjunctive.2. in the present case, admittedly the respondents are engaged in working an open cast mine. after an inspection, the inspector of mines found that the respondents were engaged in the open cast mining and the number of persons employed on any one day exceeded 50. that being so, the respondents fell within the mischief of the proviso to clause (b) of section 3(1) of the act and became subject to the provisions of the act. the inspector was therefore well within his powers to serve a notice under section 22 read with section 17 of the act calling upon the respondents to appoint a qualified manager for the mine. the high court on an erroneous interpretation of the word 'and' occurring at the end of paragraph (b) of sub-clause (ii) of the proviso to clause (b) of sub-section (1) of section 3 of the act held that the use of the word 'and' made the three paragraphs conjunctive and unless the conditions specified in paragraphs (a), (b) and (c) co-existed, the inspector had no authority to serve the impugned notice. it accordingly allowed the writ petition filed by the respondents and quashed the impugned notice.3. in order to appreciate the point involved, it is necessary to refer to a few statutory provisions. the object and purpose of the act, as reflected in the long title, is that it is an act to amend and consolidate the law relating to the regulation of labour and safety in mines. by section 2(h) of the act, a person is said to be 'employed' in a mine who works under appointment by or with the knowledge of the manager, whether for wages or not, in any mining operation. sub-section (1) of section 3 of the act provides that the provisions of the act, except those contained in sections 7, 8, 9, 44, 45 and 46 shall not apply to (a) any mine or part thereof in which excavation is being made for prospecting purposes only and not for the purpose of obtaining minerals for use or sale, (b) any mine engaged in the extraction of any of the minerals specified therein, including lime stone. there is a proviso under each of the clauses (a) and (b) and they set forth three conditions on the happening of any one of which the proviso would be attracted, that is to say, the provisions of the act would be made applicable to such a mine. the provision of sub-section (1) of section 3 of the act insofar as relevant for purposes of this case reads as follows:3. act not to apply in certain cases-(1) the provisions of this act, except those contained in sections 7, 8, 9, 44, 45 and 46 shall not apply to-(a) x x(b) any mine engaged in the extraction of kankar, murrum, laterite, boulder, gravel, shingle, ordinary sand (excluding moulding sand, glass sand and other mineral sands), ordinary clay (excluding kaolin, china clay, white clay or fire clay), building stone, road metal, earth, fuller's earth and lime stone:provided that-(i) x x x(ii) where it is an open cast working-(a) the depth of the excavation measured from its highest to its lowest point nowhere exceeds six meters; (b) the number of persons employed on any one day does not exceed fifty; and(c) explosives are not used in connection with the excavation.4. according to the plain meaning, the exclusionary clause in sub-section (1) of section 3 of the act read with the two provisos beneath clauses (a) and (b), the word 'and' at the end of paragraph (b) of sub-clause (ii) of the proviso to clause (b) of section 3(1) must in the context in which it appears be construed as 'or'; and if so construed, the existence of any one of the three conditions stipulated in paragraphs (a), (b) and (c) would at once attract the proviso to clauses (a) and (b) of sub-section (1) of section 3 and thereby make the mine subject to the provisions of the act. the high court overlooked the fact that the use of the negative language in each of the three clauses implied that the word 'and' used at the end of clause (b) had to be read disjunctively. that construction of ours is in keeping with the legislative intent manifested by the scheme of the act which is primarily meant for ensuring the safety of workmen employed in the mines.5. we accordingly allow the appeal, set aside the judgment of the high court and dismiss the writ petition. however, it was represented by learned counsel for the respondent that it is difficult to find a duly qualified person to come and serve as manager of a mine in rural areas and we should call upon the appellant to find a suitable person for appointment as manager. learned counsel for the appellant was however gracious enough to suggest that the department will find a qualified person and depute him to work as manager, and the respondents shall be liable to pay his salary and allowances as may be stipulated by the joint director of mines safety. the joint director will select and depute a proper person to serve as manager of the respondents' mine within thirty days from the receipt of this order.6. in view of this, the appellant will consider the feasibility of not launching a prosecution against the respondents for their past failure to appoint a duly qualified manager as required under section 17 of the mines act, 1952.

Judgment:
ORDER

1. After hearing Smt. Kitty Kumaramangalam, learned Counsel for the appellant and Shri A. Subba Rao, learned Counsel for the respondents, we are inclined to the view that the High Court was not right in its interpretation of the word 'and' used at the end of paragraph (b) of Sub-clause (ii) of the proviso to Clause (b) of Sub-section (1) of Section 3 of the Mines Act, 1952 as being conjunctive.

2. In the present case, admittedly the respondents are engaged in working an open cast mine. After an inspection, the Inspector of Mines found that the respondents were engaged in the open cast mining and the number of persons employed on any one day exceeded 50. That being so, the respondents fell within the mischief of the proviso to Clause (b) of Section 3(1) of the Act and became subject to the provisions of the Act. The Inspector was therefore well within his powers to serve a notice under Section 22 read with Section 17 of the Act calling upon the respondents to appoint a qualified Manager for the mine. The High Court on an erroneous interpretation of the word 'and' occurring at the end of paragraph (b) of Sub-clause (ii) of the proviso to Clause (b) of Sub-section (1) of Section 3 of the Act held that the use of the word 'and' made the three paragraphs conjunctive and unless the conditions specified in paragraphs (a), (b) and (c) co-existed, the Inspector had no authority to serve the impugned notice. It accordingly allowed the writ petition filed by the respondents and quashed the impugned notice.

3. In order to appreciate the point involved, it is necessary to refer to a few statutory provisions. The object and purpose of the Act, as reflected in the long title, is that it is an Act to amend and consolidate the law relating to the regulation of labour and safety in mines. By Section 2(h) of the Act, a person is said to be 'employed' in a mine who works under appointment by or with the knowledge of the manager, whether for wages or not, in any mining operation. Sub-section (1) of Section 3 of the Act provides that the provisions of the Act, except those contained in Sections 7, 8, 9, 44, 45 and 46 shall not apply to (a) any mine or part thereof in which excavation is being made for prospecting purposes only and not for the purpose of obtaining minerals for use or sale, (b) any mine engaged in the extraction of any of the minerals specified therein, including lime stone. There is a proviso under each of the Clauses (a) and (b) and they set forth three conditions on the happening of any one of which the proviso would be attracted, that is to say, the provisions of the Act would be made applicable to such a mine. The provision of Sub-section (1) of Section 3 of the Act insofar as relevant for purposes of this case reads as follows:

3. Act not to apply in certain cases-(1) The provisions of this Act, except those contained in Sections 7, 8, 9, 44, 45 and 46 shall not apply to-

(a) x x

(b) any mine engaged in the extraction of kankar, murrum, laterite, boulder, gravel, shingle, ordinary sand (excluding moulding sand, glass sand and other mineral sands), ordinary clay (excluding kaolin, china clay, white clay or fire clay), building stone, road metal, earth, fuller's earth and lime stone:

Provided that-

(i) x x x

(ii) where it is an open cast working-

(a) the depth of the excavation measured from its highest to its lowest point nowhere exceeds six meters;

(b) the number of persons employed on any one day does not exceed fifty; and

(c) explosives are not used in connection with the excavation.

4. According to the plain meaning, the exclusionary clause in Sub-section (1) of Section 3 of the Act read with the two provisos beneath Clauses (a) and (b), the word 'and' at the end of paragraph (b) of Sub-clause (ii) of the proviso to Clause (b) of Section 3(1) must in the context in which it appears be construed as 'or'; and if so construed, the existence of any one of the three conditions stipulated in paragraphs (a), (b) and (c) would at once attract the proviso to Clauses (a) and (b) of Sub-section (1) of Section 3 and thereby make the mine subject to the provisions of the Act. The High Court overlooked the fact that the use of the negative language in each of the three clauses implied that the word 'and' used at the end of Clause (b) had to be read disjunctively. That construction of ours is in keeping with the legislative intent manifested by the scheme of the Act which is primarily meant for ensuring the safety of workmen employed in the mines.

5. We accordingly allow the appeal, set aside the judgment of the High Court and dismiss the writ petition. However, it was represented by learned Counsel for the respondent that it is difficult to find a duly qualified person to come and serve as Manager of a mine in rural areas and we should call upon the appellant to find a suitable person for appointment as Manager. learned Counsel for the appellant was however gracious enough to suggest that the Department will find a qualified person and depute him to work as Manager, and the respondents shall be liable to pay his salary and allowances as may be stipulated by the Joint Director of Mines Safety. The Joint Director will select and depute a proper person to serve as Manager of the respondents' mine within thirty days from the receipt of this order.

6. In view of this, the appellant will consider the feasibility of not launching a prosecution against the respondents for their past failure to appoint a duly qualified Manager as required under Section 17 of the Mines Act, 1952.