Sree Sai Baba Textiles Proprietor P. Anandan Vs. Union of India (Uoi) and anr. - Court Judgment

Krishnamoorthy Iyer, J.

1. The plaintiff is the appellant The fads relevant for the purpose of this appeal are mentioned below. Two hales of cotton piece-goods were consigned on 4-10-1951 by the appellant from the Railway Station. Cannanore, on the Southern Railway to Howrah on the Eastern Railway Since the consignee did not take delivery of the goods at Howrah, the consignot wrote Ext. A-9 dated 21-4-1952 to the Station authorities at Howrah for sending back the goods to him at Cannanore at his risk. The appellant was informed by Ext. A-12 dated 5-5-1952, that the goods were sold in auction by the Railway authorities on 13-3-1952 presumably under Section 55 of the Indian Railways Act. 1890 The suit was therefore filed by the appellant in compel the first respondent the Union of India to return the goods and if it is found that the goods were sold, for the recovery of the invoice value of the goods The two main contentions raised by the respondent are that the suit is not maintainable as no claim was made by the appellant in writing to the Railway administration under Section 77 of the Indian Railways Act, 1890, as it stood before the amendment by Act 8 of 1961, hereinafter referred to as the Act, and that the suit is barred by limitation under the provisions of the Indian Limitation Act. The Courts below upheld these defence contentions.

2. The first question to be decided is the interpretation of Section 77 of the Act Section 77 is in the following terms:

'A person shall not be entitled to a re-fund of an overcharge in respect of animals or goods carried by railway or to compensation for the loss destruction or deterioration of animals or goods delivered to be so earned 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 deliv ery of the animals or goods for carriage by railway.'

The above Section prescribes a condition precedent for the institution of a suit against the railway administration for compensation on account of loss, deterioration or destruction of the goods while in the custody of the railway administration The learned advocate for the appellant relying on the decision in Sundarji Shivji v. Secretary of State. AIR 1934 Pat 507 at p. 510 submitted that Section 77 has no application to this case for two reasons One is that the suit is for recovery of the goods consigned on account of non delivery by the Railway administration. The second is that the claim for the recovery of the value of the goods is based on the wrongful conversion of the goods by the Railway administration and arises out of tort. According to the learned advocate. Section 77 applies only to a suit for compensation against the carrier in its capacity as a bailee for the carriage of goods and it has no application as the failure to deliver the goods due to wrongful sale under Section 55 of the Act.

3. Section 72 of the Act prescribed the general responsibility of the railway administration as a carrier of goods. The measure of responsibility for loss, destruction or deterioration of goods is defined by Section 72(1) of the Act to be that of a bailee under Sections 151, 152 and 161 of the Indian Contract Act, 1872, subject to the other pro-visions of the Act. Sections 72 and 77 are included in Chapter VII dealing with the responsibility of a Railway administration as a carrier of goods. Under the general law a bailee has no right to sell the goods bailed unless such right is conferred upon him either by contract or by any special statute. Section 55 of the Act confers on the Railway administration the power to self the goods, provided the conditions mentioned in the section are satisfied. The power conferred on the Railway administration by Section 5ft of the Act is in its capacity as a bailee in acting as a carrier of goods. A bailee selling the goods in violation of the provisions of Sections 55 and 56 of the Act will no doubt he guilty of wrongful conversion. In the appeal before us the sale held under Section 55 was found by the courts below to be not valid, Even then the failure to deliver the goods in consequence of such wrongful conversion will result in the loss of goods delivered to the railway administration within the meaning of Section 77 of the Act.

4. It has become unnecessary now to deal exhaustively with the case law showing the different interpretations of the word 'loss' occurring in Section 77 of the Act in view of the decision of the Supreme Court in Governor General in Council v Musaddi Lal AIR 1961 SC 725 Bill before dealing with this decision it is necessary to refer to the following observations of Chief Justice Mr. Subba Rao in Union of India v. M. Pullappa. AIR 1958 Andh Pra 475 at pp 177-478 :

'The word 'loss' has been interpreted in various English decisions, Lo mean loss by the carrier and not simply loss to the owner Those decisions were given in cases under the Carriers Act of 1830: but it has to be observed that in Section 72(3) of the Indian Railways Act it is staled 'nothing in the common law of English or in the Carriers Act of 1865 regarding the responsibility of common carriers with respect to the carriage of animals or goods, shall affect the responsibility as in this Section defined of a Railway administration. Under these circumstances the word 'loss' cannot bear a restricted meaning assigned to it in English cases The Acts are nol in pari materia as observed in ILR 41 Mad 871: AIR 1919 Mad 140. The word 'loss' has to be interpreted in the context in which it occurs.

The words are 'compensation for loss.....' They have to be given their plain and natural meaning. The words imply that the claimant would be entitled to compensation for theloss sustained by him whether such loss isoccasioned by non-delivery on account of thetortuous conduct of the Railway or its servants or by conversion of the goods or by 'hegoods being lost in transit.'

5. While approving the above decision their Lordships of the Supreme Court in AIR 1961 SC 725 observed:

' Section 77 of the Railways Act is en-acted with a view to enable the railway administration to make enquiries and if possible to recover the goods and to deliver them to the consignee and to prevent stab claims. It imposes a restriction on the enforcement of liability declined by Section 72. The liability declared by Section 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. By the use of the expression 'loss, destruction or doterioration, what is contemplated is loss or destruction or deterioration of the goods and the consequent loss to the owner thereof. If because of negligence or inadvertence or even wrongful act on the part of the employees of the railway administration, goods entrusted for carriage are lost, destroyed or deterioral ed, the railway administration is guilty of failing to take the degree of care which is prescribed by Section 72 of the Railways Act.'

The Supreme Bout'1 in The Union of India v. Mahadeolal Prabhu Dayal. AIR 1965 SC 1755 at p. 1757 following the decision in AIR 1961 SC 725 observed:

' No Section 77 inter alia provides that a person shall not be entitled to compensation for the loss, destruction or deterioration of animals or goods delivered to be carried by railway, unless his claim to 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 There was a conflict between the High Courts on the question whether non-delivery of goods carried by railway amounted to loss within the meaning of Section 77 Some High Courts (including the Patna High Court) held that a case of non-delivery was distinct from a case of loss and no notice under Section 77 was necessary in the case of non-delivery Other High Courts, however, took a contrary view and held that a case of non delivery also was a case of loss. This conflict has now been resolved by the decision of this Court in (1961) 3 SCR 647 (AIR 1961 SC 725), and the view taken by the Patna High Court has been over-ruled. This Court has held that failure to deliver goods is the consequence of loss or destruction and the cause of action for it is not distinct from the cause of action for loss or destruction, and, therefore, notice under Section 77 is necessary in the case of non-delivery which arises from the loss of goods. Therefore, notice under Section 77 was necessary in the present case.'

Though in the two decisions of the Supreme Court quoted above, the failure to deliver goods was occasioned by a sale purported to have conducted under Section 55 of file Railways Act the ratio of the decisions will include even loss occasioned by non-delivery of goods duo to a wrong hil sale within the meaning of Section 55 for the purpose of Section 77 of the Act. We therefore hold that the suit is barred under Section 77 of the Act In this view, it is unnecessary to consider the question whether the suit is barred under the provisions of the Indian Limitation Act. In the result, the appeal is without subtance Since the respondent has not disclosed in the written statement the price for which the articles were sold in auction and in view of the conflict on the question of the interpretation of the expression 'loss' in Section 77 of the Act until if was resolved by the decisions of the Supreme Court we feel that it is a fit case in which the parties are to be directed to bear their costs throughout. In the result, the appeal is dismissed but in the circumstances of the case the parties will bear their costs throughout.