Union of India (Uoi) Vs. India Cements Ltd. - Court Judgment

K.K. Usha and B.N. Patnaik, JJ.

1. All these appeals under Section 23 of the Railway Claims Tribunal Act, 1987, have been preferred by the Union of India owning Southern Railway, represented by its General Manager against the order dated 16.1.1995 passed by the Railway Claims Tribunal, Ernakulam Bench, in O.A. No. 469 of 1994, and other similar cases. By the impugned order, the Tribunal rejected the contention of the appellant on the question of bar of the claim made by the respondent herein on the ground of limitation. Since common questions of law in all the appeals have been raised, this common judgment is being passed in all the cases.

2. The respondent herein filed applications before the Railway Claims Tribunal, Ernakulam, claiming various sums of money as compensation towards damages said to have been caused to the consignment of cement sent through railway from Thalaiyuthu to Kottayam on 27.6.1991. The respondent stated that notice of claim of compensation under Section 78-B of the Indian Railways Act, 1890, corresponding to Section 106 of the Railways Act, 1989, was sent to the railway authorities on 6.1.1992. The appellant, however, states that it was received on 24.1.1992. It was contended by the appellant that since no claim notice within six months of booking of the consignment was sent to the railway authorities, the applications before the Tribunal are liable to be dismissed under Section 106 of the Railways Act, 1989 (for short 'the Act'). The Railway Claims Tribunal framed an issue regarding the maintainability of the claim and heard it as a preliminary issue. The Tribunal, by the impugned order, had held that the joint survey report of the damaged cement by the consignee and the railway official at the Kottayam Railway Station at the time of taking delivery of the goods on 6.7.1991 is sufficient compliance of requirement of the claim notice as envisaged in Section 106 of the Act. It, therefore, held that no separate notice is necessary. The mere fact that the formal claim notice was sent subsequently beyond six months from the date of booking the goods will not be a bar to the maintainability of the proceeding on the ground of limitation.

3. The issue No. 1, which reads as 'Is the claim preferred by the applicant time-barred?' was answered by holding that the same is not time-barred. The appellant challenges the above finding.

4. It is contended by the appellant that the Tribunal has failed to take note of the provisions contained in Sections 2(32) and 192 of the Act. A joint survey report which has been signed in a routine manner by the consignee's representative and the surveying officials at the destination station at the time of taking delivery on 6.7.1991 which was endorsed as 'it is one without prejudice' cannot be construed as a notice under Section 106 of the Act.

5. It is contended by learned Counsel for the respondent that the Assistant Commercial Superintendent was requested for conducting a joint survey at the time of taking open delivery of the goods. The joint survey report having been signed by responsible officers of the Railways admitting the damage on 6.7.1991, no formal notice is required. Since there is sufficient compliance of requirement of Section 106 of the Act, the contention of the appellant that it is barred by limitation is not well founded. It is further contended by the learned Counsel for the respondent that the impugned order being an interlocutory one, no appeal lies against it under Section 23(1) of the Railway Claims Tribunal Act, 1987.

6. In view of the aforesaid rival contentions, the only points that arise for consideration are: (i) whether the appeals are maintainable and (ii) whether the finding of the Tribunal that the claim is not barred by limitation on the facts and under the circumstances of the case is correct.

7. Section 23 of the Railway Claims Tribunal Act, 1987, reads as follows:

23. Appeals.-(1) Save as provided in Sub-section (2) and notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908), or in any other law, an appeal shall lie from every order, not being an interlocutory order, of the Claims Tribunal, to the High Court having jurisdiction over the place where the Bench is located.

(2) No appeal shall lie from an order passed by the Claims Tribunal with the consent of the parties.

(3) Every appeal under this section shall be preferred within a period of ninety days from the date of the order appealed against.

The expression 'interlocutory order' has not been defined in this Act. However, the meaning of the said expression may be ascertained by referring to the relevant provisions contained in the Code of Civil Procedure and Code of Criminal Procedure and the various decisions rendered by the Supreme Court and this court. It may be pointed out at the outset that the expression has to be understood in the context of the meaning of the expression 'case decided' in Section 115 of the Civil Procedure Code. Where during the proceedings some order is passed which adjudicates for the purpose of the suit some rights or obligations of the parties in controversy, it can be construed as case decided. An interlocutory order which did not adjudicate upon or determine any question relating to the rights of the parties does not amount to a case decided.

8. In Baldevdas v. Filmston Distributors, AIR 1970 SC 406, it is laid down that a case may be said to be decided, if the court adjudicates for the purposes of the suit some right or obligation of the parties in controversy. Every order in the suit cannot be regarded as a 'case decided'. In S.S. Khanna v. F.J. Dillon, AIR 1964 SC 497, it has been laid down that where manifestly a decision having a direct bearing on the rights of the plaintiff and a finality is given thereto in the proceeding, it cannot be said to be a mere interlocutory order. In both the Supreme Court cases it has been held that the expression 'case decided' is not limited in its import to the entirety of the matter in dispute in an action. Case includes a part of the case. The expression 'case' does not always mean the whole suit. It means any state of facts judicially considered. It includes decisions on any substantial question in controversy affecting the rights of the parties even though such order is passed in course of trial.

9. In this context, Sub-clauses (a) and (b) of the proviso to Sub-section (1) of Section 115 of the Code of Civil Procedure may be referred to for the purpose of interpretation of the expression 'interlocutory order'. It would not be an interlocutory order, if the order deciding an issue in the course of a suit had been made in favour of a party applying to set it aside in revision would have occasion of a failure of justice or cause an irreparable injury to the party against whom it was made. A Bench of this court in Prabha karan v. Excise Circle Inspector, 1992 (2) KLT 860, while considering the scope of revisional jurisdiction under Section 397(2) of the Code of Criminal Procedure observed that if by upholding an objection against an order would result in the termination of the proceeding, then it cannot be said to be a mere interlocutory order. Again a Bench of this court in Thankappan Nair v. Prasannakumari, ILR 1995 (3) Kerala 638, while considering the scope of Section 19 of the Family Courts Act, 1984, observed as follows:

In Webster's New World Dictionary the word 'interlocutory order' has been defined as an order other than final decision. This expression 'interlocutory order' has appeared differently in different statutes and received different construction by the courts depending upon the contexts and setting in which the expression has been used. Under Section 397(2) of the Code of Criminal Procedure, revisional jurisdiction is excluded in relation to an interlocutory order. However, the expression 'interlocutory order' appearing in the said section has received wider meaning in a number of decisions. [Vide Amar Nath v. State of Haryana, 1977 (4) SCC 137, Madhu Limaye v. State of Maharashtra, 1977 (4) SCC 551 and Haryana Land Reclamation and Development Corporation Ltd. v. State of Haryana, 1990 (3) SCC 588].

It is advantageous to see how a similar interdict contained in Section 11(1) of the Special Courts Act, 1979, was interpreted. As per it, the appellate jurisdiction is taken away in respect of an interlocutory order. Supreme Court has held in V.C. Shukla v. State, AIR 1980 SC 962, while construing the scope of that expression in the said context that if the order does not terminate the proceedings or if the objection against the order is upheld and consequently the proceedings would come to an end such an order is interlocutory order.

A larger Full Bench of this court has considered the same question in the light of Section 5(1) of the Kerala High Court Act, 1958, in K.S. Das v. State of Kerala, ILR 1993 (1) Kerala 1 and held that interlocutory order may purely be procedural orders and not the orders which affect or touch upon the rights of the parties or matters of moment, though the main case is not disposed of.

10. A decision that terminates a part of the controversy involving the question of jurisdiction is a case decided and is not an interlocutory order. Though there is no precise meaning of the expression 'interlocutory order', yet the broad meaning of the expression can be interpreted in terms of the following propositions:

(1) A decision on a preliminary issue relating to maintainability of the suit or a civil proceeding is not an interlocutory order, but a final order.

(2) Where during the proceeding some order is passed which adjudicates for the purpose of the suit or civil proceeding some rights or obligations of the parties in controversy, it cannot be said to be an interlocutory order. Such an order should be construed as a final order.

(3) An order which did not adjudicate upon or determine any question relating to the rights of the parties or the maintainability of the proceeding is an interlocutory order.

(4) If the order that has been made in favour of the party applying for it would have finally disposed of the suit or

proceeding, the same is not an interlocutory order, but a final order.

(5) If the impugned order would occasion a failure of justice or cause an irreparable injury to the party challenging the same, it cannot be said to be an interlocutory order.

(6) A final order includes a decision on any substantial question in controversy affecting the rights of a party even though such an order is passed in course of trial. It is not limited in its import to the entirety of the matter in dispute in an action.

11. When the impugned order is judged in the light of the above propositions of law, we are of the opinion that it is not an interlocutory order. The question relating to limitation was decided as a preliminary issue by the Tribunal and it has been finally decided that the claim is not barred by limitation. This, in our opinion, is a final adjudication of a valuable right of the parties. If it had been decided in favour of the appellant, the entire proceeding would have come to an end. In view of the final decision on that issue, it would not be open to the parties to agitate the same in course of the trial once again. Therefore, we hold that the present appeals are maintainable against the impugned order which is not an interlocutory order under Section 23 of the Railway Claims Tribunal Act, 1987.

12. Section 106 of the Act reads as follows:

Notice of claim for compensation and refund of overcharge.-(1) A person shall not be entitled to claim compensation against a railway administration for the loss, destruction, damage, deterioration or non-delivery of goods carried by railway, unless a notice thereof is served by him or on his behalf,-

(a) to the railway administration to which the goods are entrusted for carriage; or

(b) to the railway administration on whose railway the destination station lies, or the loss, destruction, damage or deterioration occurs,

within a period of six months from the date of entrustment of the goods.

(2) Any information demanded or enquiry made in writing from, or any complaint made in writing to, any of the railway administrations mentioned in Sub-section (1) by or on behalf of the person within the said period of six months regarding the non-delivery or delayed delivery of the goods with particulars sufficient to identify the goods shall, for the purpose of this section, be deemed to be a notice of claim for compensation.

(3) A person shall not be entitled to a refund of an overcharge in respect of goods carried by railway unless a notice therefor has been served by him or on his behalf to the railway administration to which the overcharge has been paid within six months from the date of such payment or the date of delivery of such goods at the destination station, whichever is later.

It corresponds to Section 78-B of the Indian Railways Act, 1890, after its amendment by Act 39 of 1961 and Section 77 of the Indian Railways Act, 1890, prior to its amendment.

13. Admittedly, the notice of claim under Section 106 of the Act of 1989 was sent to the concerned railway authorities beyond a period of six months from the date of entrustment of the goods to the Railways. Sub-section (32) of Section 2 of the Act of 1989 lays down that railway administration in relation to a Government railway means the General Manager of a Zonal Railway; and a non-Government railway means the person who is the owner or lessee of the railway or the person working the railway under an agreement. Section 192 of the same Act says that a notice required to be served on a railway administration may be served, in the case of Zonal Railway, on the General Manager or any of the railway servants authorised by the General Manager and in the case of any other railway on the owner or lessee of the railway or the person working the railway under an agreement.

14. Learned Counsel for the appellant contends that the railway servants not authorised by the General Manager are not competent persons to receive the notice. Merely because a survey report was signed by some railway servant, who has not been authorised to represent the General Manager, the same cannot be said to be an acknowledgement of receipt of a notice under Section 106 of the Act. It is true that the respondent has not shown that the persons who signed the survey report had been duly authorised by the General Manager to represent the General Manager or not. It is not in dispute that the survey report was prepared on a joint inspection by the competent officers of the Railway Department and representatives of the respondent on the said date which is within six months from the date of consignment of the goods. Such a question came up for consideration in a number of decisions before the High Courts and the Supreme Court. In Jetmull Bhojraj v. D.H. Railway, AIR 1962 SC 1879, while approving the observations in various decisions of the High Courts, the Supreme Court has held as follows:

The High Courts in India have taken the view that the object of service of notice under this provision is essentially to enable the railway administration to make an enquiry and investigation as to whether the loss, destruction or deterioration was due to the consignor's laches or to the wilful neglect of the railway administration and its servants and further to prevent stale and possibly dishonest claims being made when owing to delay it may be practically impossible to trace the transaction or check the allegations made by the consignor. In this connection we may refer to a few of the decisions. They are: Shamsul Huda v. Secretary of State, ILR Cal 1286 (Sic); Mahadeva Ayyar v. S.I. Rly. Co. ILR 45 Madras 135; Governor-General in Council v. Gouri Shankar Mills Ltd. AIR 1949 Pat 347; Meghraj Hirjee & Co. v. B.N. Rly. Ltd. AIR 1939 Nagpur 141. Bearing in mind the object of the section it has also been held by several High Courts that a notice under Section 77 should be liberally construed. In our opinion, that would be the proper way of construing a notice under that section. In enacting the section the intention of the legislature must have been to afford only a protection to the railway administration against fraud and not to provide a means for depriving the consignors of their legitimate claims for compensation for the loss of or damage caused to their consignments during the course of transit on the Railways.

15. In Niranjanlal Agarwalla v. Union of India AIR 1969 SC 23, the Supreme Court reiterated the earlier decision and held that the requirement of compliance with the terms of Section 77 should be liberally construed as the object of the notice was only to enable the railway administration to make an enquiry and investigate into the cause of the loss of the goods consigned to it. The Supreme Court also approved a Full Bench decision of the Patna High Court in Governor-General in Council v. G.S. Mills Ltd. ILR 28 Patna 178, which laid down the following dictum after examining the various authorities of the High Courts of Madras, Lahore, Bombay, Allahabad and Calcutta.

The requirements of Section 77 read with Section 140, Indian Railways Act, 1890, are satisfied by serving a notice within the prescribed time on the Chief Commercial Manager or any other subordinate officer of a railway owned by the Government of India, provided it is established as a fact that the railway company by its course of business or the terms of the contract between the parties has held a particular official as competent to deal with the claims on receipt of a notice to him.

16. A similar question also arose before the Karnataka High Court in State of Mysore v. Union of India 1982 ACJ 509 (Karnataka). A Division Bench of the Karnataka High Court has held thus:

Considered in the light of the object of Section 77 (renumbered as Section 78-B), viz., prevention of dishonest claims and enabling the railway to make an enquiry as to whether the damage was due to the consignor's own fault or due to the neglect of the railway administration, letter demanding open delivery of the goods believed damaged and the inspection report by the officers of the railway, insurance company and of the consignor noting the external damage to the goods should be taken to be an implied demand by the consignor for payment of damages and was sufficient compliance of the requirement as to notice under Section 77.

17. Thus on a conspectus of all the authorities referred to above, we are of the view that even though a formal notice of claim under Section 106 of the Act had not been sent to the designated railway authorities within six months, yet the demand of the respondent for taking open delivery of the goods in question after a joint survey of the damage to the goods which in fact was done by the competent railway officers as well as representatives of the respondent, amounts to a demand for enquiry regarding the non-delivery or damage to the goods.

18. The contention of the respondent that Assistant Commercial Superintendent was informed of this fact and that the survey report was prepared at his instance is not controverted. This information was sent to him within six months from the date of consignment. The purpose of service of a notice under Section 106 of the Railways Act, 1989, is to intimate the railway authorities about the loss, damage, etc., of the goods in transit on the railway. A demand for taking open delivery of the goods after due inspection by the railway officials and preparation of the survey report prepared by the railway officials regarding the claim of damages and compensation on account of loss and damage of the goods on transit (Sic.). In these cases, the respondent has adopted the same course. We, therefore, hold in agreement with the decision of the Railway Claims Tribunal that the survey report prepared by the competent railway servants within the statutory period of six months is deemed to be a notice under Section 106 of the Railways Act, 1989.

For the reasons stated above, we find that there is no merit in these appeals. The appeals are, therefore, dismissed.