A. Rafeeq Ahmed and Co. vs The Union of India and Another

The plaintiff in O.S. No. 450 of 1964 on the file of the City Civil Court, Madras, who succeeded before the trial Judge but lost before the first

appellate Judge, is the appellant herein. The facts are not really in controversy. Under invoices Nos. 12 and 13 dated 19th November, 1962, 13

and 20 bags respectively of wet salted goat skins were despatched to the appellant from Raipur to Madras Salt Cotarus by the Orissa Hides

Trading Co. Raipur, Madhya Pradesh. The said goods were booked from Raipur on 19th November, 1962 and Exs. B.1 and B.2 are the relevant

railway receipts. Exs. B.14 and B.15 contain the relevant forwarding notes. The goods actually reached Madras on 4th January 1963. The

appellant herein demanded and obtained open delivery on 11-1-1963. Exs. A.3 & A.4 dated 11-1-1963 are copies of open delivery certificates

issued by the Southern Railway officers for the two consignment in question and the contents of those certificates are almost identical and they are

as follows:

The bags were outwardly sound. The bags were opened and contents were found damaged, emitting bad smell due to deterioration. The hairs

were coming off causing hair slips and the colour of the skins also appear changed to red"".

In Ex. A.3 the damage was assessed at 45 per cent, of the pattial value in respect of 13 bags and in Ex. A.4 the damage was assessed at 40 per

cent of the pattial value in respect of twenty bags. After taking delivery and after notices passed between the parties, the suit was instituted by the

appellant for recovery of a sum of Rs. 2840-74 as damages in respect of these two consignments, based upon Exs. A.3 and A.4. The case of the

appellant in the plaint was that the consignments should have reached Madras normally within 12 to 15 days, but in the instant case the goods

arrived after more than 50 days and consequently there had been negligence on the part of the railway authorities inasmuch as there had been delay

in transit and the goods became damaged as a result of such delay. As against this, the respondent herein contended in the written statement that

the goat skins were not properly cured at the time of loading and they were found to be wet and packing also was defective, not conforming to the

rules relating to packing of the goods; the respondents had also warned the consignor of the defective packing condition and informed him that the

goat skins were not cured properly and were liable to be damaged in transit.

It is on this basis the respondents disputed their liability to pay damages to the appellant herein. The learned trial Judge who went into the

controversy held that there had been delay on the part of the respondents herein in the carrying of the goods, that proper ventilation facilities were

not present in the wagons in which the goods were carried and therefore the respondents were liable to pay damages to the appellant herein. A

point that was urged before the learned trial judge was that there had been an endorsement in Exs. B.1 and B.2 as well as in Exs. B.14 and B.15

as to the condition of the goods and the defective packing at the time of loading itself and that will absolve the respondents from their liability for

and damages in this behalf. The learned trial Judge rejected this contention on the ground that the endorsements in Exs. B.14 and B.15 were not

recorded on that side of the forwarding note which had to be signed by the consignor or consignor''s representative, but only on the other side and

therefore on the basis of the endorsements, the respondents cannot escape their liability.

Yet another point urged before the learned trial Judge was that the goods were consigned at owner''s risk rate and consequently u/s 74(3) of the

Indian Railways Act. the respondents are not liable unless the appellant established that the deterioration or damages to the goods was the result of

the negligence on the part of the respondents. The learned trial Judge rejected this contention also on the ground that since the delay was

occasioned as a result of negligence on the part of the railways, the railways cannot escape liability even with reference to Section 74(3) of the

Railways Act. In view of these findings, the learned trial Judge decreed the suit as prayed for. As against this judgment and decree, the

respondents herein preferred of by the learned Principal Judge, City Civil Court, Madras on 17-9-1968 in A. S. 71 of 1968. The learned Principal

Judge held, following the judgment of this Court in A. S. 193 of 1960, that the appellant had not established that the condition of the goods at the

time of despatch was such that deterioration was not due to inherent vice in the goods.

The learned Principal Judge also pointed out that the only allegation in the plaint having been with regard to the delay, the learned trial Judge was

not correct in going into the question whether the wagon had proper ventilation facilities or not. With regard to the reliance of the respondents on

Exs. B.14 & B.15, respectively, the learned Principal Judge rejected the contention of the respondents on the ground that the endorsement was

not made by the consignor and the signatures of the consignor are not found on the reverse of the forwarding notes where the above endorsement

has been made. Consequently, the learned Principal Judge, relying upon the decision of this Court in A. S. 193 of 1960, allowed the appeal

preferred by the respondents herein; it is against this judgment and decree of the learned Principal Judge the present second appeal has been filed

by the plaintiff in the suit.

I may immediately mention one thing. A.S. No. 193 of 1960 (Mad) is a decision of this Court dealing with a consignment of wet salted sheep

skins and in that judgment a Bench of this Court has elaborately gone into the curing and other precautions that have to be taken for the purpose of

preserving the hides and skins and preventing them from deterioration during the period of transit. The learned Judges have pointed out, whether

the skins will deteriorate during transit or not will depend upon, when the skins were salted and cured and what was the interval between flaying

and salting. It is with reference to this judgment the learned Principal Judge held that the appellant had not established the various factors referred

to in that judgment--A.S. 193 of 1960 (Mad). In para 12 of his judgment, the learned Principal Judge says--

A careful perusal of the evidence of these two witnesses (P.Ws. 1 and 2) shows their evidence is really not helpful to the plaintiff. All that they

have asserted is that the goods consigned were all best qualify that they were fresh and that they had been properly wet salted. But their evidence

does not disclose when the goat skins were wet salted, what was the interval between the flaying and wet salting, and what was the interval

between wet salting and the date of consignment. From their evidence that the goods were fresh, one cannot come to the conclusion that they had

been wet salted just prior to the consignment. All that the witnesses have meant is that the goods had not deteriorated when they were consigned.

But there is nothing to indicate when really the goat skins were wet salted. We will take it that a wet salted goat skin would preserve its quality

without deterioration for 60 days, as observed by the High Court in the case referred to above. Supposing the wet salting of goat skins in this case,

had taken place about 60 days prior to the consignment, there might not have been actual deterioration of the goods due to putrefactive action on

the date of the consignment but such deterioration would have started immediately after the despatch. There is no evidence even about the time

when the goat skins were purchased by P.Ws. 1 and 2. Therefore, even accepting their evidence, it must be held that there is nothing to show that

the deterioration of the goods was not due to inherent vice in the goods.

The argument of the learned counsel for the appellant before me is that once the Courts below have found negligence on the part of the

respondents herein, it is not open to the respondents to rely upon the absence of these particulars to escape from their liability and the respondents

having dealt with the goods and being in possession of all necessary information as to how the goods in transit had been dealt with, it is for them to

place all the materials before the Court and it is not the duty of the appellant to show as to when the skins were salted, what was the interval

between the flaying and wet salting and what was the interval between wet salting and the date of consignment. In view of one crucial feature

present in this case, whose significance has been missed by the Courts below, it is not really necessary for me to pronounce anything finally on this

aspect of the matter, one way or the other.

Recently, Ramamurti, J. had occasion to consider the scope and effect of the judgment of this Court in A.S. 193 of 1960 in A. Abdul Shukoor

and Co., by pertner A. Abdul Shukoor Sahib Vs. The Union of India (UOI) and Another, . The learned Judge has expressed his view that the

decision of the Bench referred to already only indicated certain guidelines in the case of consignment of hides and skins and did not lay down any

proposition of law to be applied in abstract irrespective of the particular facts of a case. After referring elaborately to the facts of that case, namely,

A.S. No. 193 of 1960 (Mad), the learned Judge pointed out--

While this Bench judgment--A.S. 193 of 1960--indicated certain guidelines as to how the problem should be solved in the light of the information

furnished by the leading journals and books on leather industry, it rested its decision on two points: (a) The railway had satisfactorily accounted for

the delay; the railway had accounted as to how the consignment was dealt with from stage to stage and the railway was not guilty of any negligence

or want of care and that several railway employees were examined to give evidence on all the aspects.

(b) The evidence adduced on the side of the plaintiff was wholly insufficient, there was no evidence that the goods were cured and salted

immediately after the purchase and that the packages were (sic) despatched long after curing. There was also no evidence about the precautions

taken by the consignor. In my view this Bench decision is only authority on the question as to the precautions and careful steps that the consignor

should take before consigning the goods of this description and (2) that there must be evidence in every case that these precautions were taken by

the consignor, that there was no time lag or interval between the purchase of the goods and the curing and salting and that no interval was allowed

to lapse for any deterioration to set in. In other words, the consignor must adduce positive evidence on these aspects and the railway also should

adduce evidence as to how it dealt with the consignment during all the stages of the journey"".

Even if the Bench decision is applied in the way indicated by Ramamurti, J., it must be held that the appellant herein had not adduced positive

evidence on these aspects of the case. However, as I have pointed out already, it is not necessary for me, as far as the present case is concerned,

to express any final opinion on this aspect.

The crucial and very significant feature referred to by me is the endorsement in Exs. B.1 and B.2 themselves. As I have already mentioned. Exs.

B.1 and B.2 are the relevant railway receipts. In Ex. B.1, the endorsement is:--

Not properly cured I. P. (insufficiently packed); liable to be damaged in transit"".

In Ex. B.2 the endorsement is:--

PC (packing conditions) not complied with. Liable to be damaged in transit; nor properly cured"".

The observations that were made by the Courts below with regard to the endorsements in Exs. B.14 and B.15 will not apply to the endorsements

in Exs. B.1 and B.2 The Courts below had explained the endorsements in Exs. B.14 and B.15, by stating that the signature of the consignor or his

representative was not obtained to the endorsement and that the signature was not found on the reverse of the forwarding notes where the said

endorsement has been made. But the same thing cannot be said of Exs. B.1 and B.2. Exs. B.1 and B.2 were handed over to the consignor and

from the consignor the appellant obtained them. So, the consignor as well as the appellant knew the presence of the endorsement in Exs. B.1 and

B.2. Either the endorsements represented the correct state of affairs or they were not correct.

If the endorsements represented the correct state of affairs, it must follow that the consignments had the defects mentioned in the endorsement. On

the other hand, if the endorsements were incorrect, it was the duty of the consignor as well as the appellants, as soon as they have come to know

of the same, to have protested against the presence of such incorrect endorsements in the railway receipts and to have taken steps to bring to the

notice of the respondents herein the incorrectness of the endorsements. As I have pointed out already, the railway receipts were given to the

consignor from whom the appellant obtained the same and it is on the strength of these railway receipts the appellant ultimately obtained delivery of

the consignments at Madras.

I have already referred to the fact that prior to the institution of the suit, notices passed between the parties. The appellant herein claimed

damages from the respondents by his letters dated 6-2-1963, marked as Exs. B.3 and B.4. Ex. B.5 dated 28-2-1963 and Ex. B.6 dated 15-3-

1963 are the replies sent by the respondents to the appellant. In Ex. B.5. the respondents pointed out that the railway receipt contained the

endorsement referred to above and the same was accepted by the senders. Similarly in Ex. B.6 the stand taken by the respondents was that the

railway receipt contained the endorsement referred to already and the same was accepted by the senders. Based on these endorsements, the

contention of the respondents was that the alleged damage to the consignment was due to the skin not being cured properly to prevent

deterioration in transit. Notwithstanding this specific stand taken by the respondents in Exs. B.5 and B.6, there is not a single averment in the plaint

that the endorsements in Exs. B.1 and B.2 were incorrect and therefore the stand of the respondents based upon the said endorsements was

untenable. As against this, in paragraph 5 of the plaint, all that the appellant stated was:

The plaintiffs learn that the goods when booked by the consignors above mentioned had been properly cured and salted that they were in a sound

condition at the time of booking at Raipur and that the damage to the goods should have been caused on account of the long delay in transit and of

the railway servants being negligent in not having taken proper and due care of the goods during transit.

Therefore, having regard to the presence of the endorsements in Exs. B.1 and B.2, and the conduct of the parties, I must proceed on the basis that

the endorsements in Exs. B.1 and B.2 represent the correct state of affairs. If so, the question for consideration is when the goods had been sent in

such a condition, what exactly is the nature of the liability on the part of the respondents.

Mr. Habibullah Badsha, learned counsel for the appellant, put forward his contentions from two different angles. The first contention was that

even when the goods were in such a defective condition, still it was for the respondents to prove that they had used necessary foresight and care in

the carriage of goods as contemplated by Section 73 of the Indian Railways Act and that the respondents had not established the same. The

alternative contention was that while assuming that in view of the fact that the goods were consigned at owner''s risk rate, Section 74(3) of the

Indian Railways Act applied, still the respondents being the persons in the possession of information as to how they dealt with the goods from the

moment the goods were consigned till they were actually delivered to the consignee, it is for them to establish that there was no negligence on their

part and in this case negligence in the form of delay having been found, the respondents cannot escape their liability. I shall deal with both these

contentions and before I do so, I would like to mention one thing.

There appears to have been some confusion in the judgments of the Courts below as regards the duration of the delay. The learned Principal

Judge proceeded on the basis that there had been a delay of 46 days. As against this, Mr. Habibullah Badsha contends that there had been a delay

of 53 days. As I have already pointed out, the consignments were booked on 19-11-1962 and they reached Madras on 4-1-1963. Therefore, the

total time taken for the arrival of the goods was 46 days. The appellant had contended in his plaint that the normal time that would have been taken

for the carriage of the goods was 12 to 15 days. This was denied by the respondents contending that where an entire wagon has been booked 12

to 15 days may be the proper time, but in the case of small packages which have to be sent along with other packages, the normal time would be

much more than 12 to 15 days.

Even though the Courts below had noticed this controversy, they had not actually decided the controversy except to say that there had been a

delay. The learned trial Judge in paragraph 9 of his judgment has referred to the fact that the wagon left Raipur on 19-11-1962 and it arrived at

Vijayawada on 10-12-1962, and the period in between was 21 days, which was more than the normal time taken for the transit of goods from

Raipur to Madras Salt cotaurs. Even taking that the contention of the appellant, namely, the normally time is 12 to 15 days, is correct, the actual

delay will be 46 minus 12 or 15 days, that is, 34 or 31 days and certainly not 45 days, as pointed out by the Courts below, or 53 days, as

contended by the learned counsel for the appellant. Having regard to the facts of this case, this difference in the actual delay may not matter much,

and in view of the conclusion I have come to, this does not affect the final decision.

I shall now refer to Ss. 73 and 74 of the Indian Railways Act and deal with the contentions of the learned counsel for the appellant. Section 73

is the section dealing with the general liability of the railway administration with reference to carriage of goods and it must be noticed in this context

that the entire basis of this liability has been altered by the Indian Railways (Amendment) Act, 1961 (Act 39 of 1961) by which in the place of the

old set of sections, entirely new set of sections has been introduced, and Section 73 is one such section, and it is as follows--

Save as otherwise provided in this Act, a railway administration shall be responsible for the loss, destruction, damage, deterioration or non-

delivery, in transit, of animals or goods delivered to the administration to be carried by railway, arising from any cause except the following,

namely--

(a) act of god;

(b) act of war;

(c) act of public enemies;

(d) arrest, restraint or seizure under legal process;

(e) orders or restrictions imposed by the Central Government or a State Government or by way any officer or authority subordinate to the Central

Government or a State Government authorised in this behalf;

(f) act or omission or negligence of the consignor or the consignee or the agent or servant of the consignor or the consignee;

(g) natural deterioration or wastage in bulk or weight due to inherent defect, quality or vice of the goods;

(h) latent defects;

(I) fire, explosion or any unforeseen risk;

Provided that even where such loss, destruction, damage, deterioration or non-delivery is proved to have arisen from any one or more of the

aforesaid causes, the railway administration shall not be relieved of its responsibility for the loss, destruction, damage, deterioration or non-delivery

unless the railway administration further proves that it has used reasonable foresight and care in the carriage of the animals or goods"".

The point to be noticed is that Section 73 has changed the character of the liability of the railways from that of a bailee into that of an insurer.

Therefore, a combined reading of the principal provision along with the proviso makes it clear that once the goods are carried by the railways, the

administration cannot escape liability for loss, destruction, damage, deterioration or non-delivery of the goods, unless it is established that the

railway administration has used reasonable foresight and care in the carriage of the animals or goods in question. Even if the loss, destruction,

damage, deterioration or non-delivery results from any one of the cause enumerated therein, still the railway administration will be liable the owner

of the goods unless it proves that it has used reasonable foresight and care in the carriage of the animals or goods. In other words, so long as there

is a failure to use reasonable care and foresight on the part of the railways, the railways cannot escape their liability by pointing out that such loss,

destruction, damage, deterioration or non-delivery was the result of the causes enumerated in the section. In complete contrast to this section is

Section 74 of the Act. Section 74 deals with risk rates. Sub-section (1) states--

When any animals or goods are tendered to a railway administration for carriage by railway and the railway administration provides for the

carriage of such animals or goods at the ordinary tariff rate (in this Act referred to as the railway risk rate) or in the alternative at a special reduced

rate (in this Act referred to as the owner''s risk rate) the animals or goods shall be deemed to have been tendered to be carried at owner''s risk

rate, unless the sender or his agent elects in writing to pay the railway risk rate"".

Sub-section (2) states that where the sender or his agent elects in writing to pay the railway risk rate under sub-section (1). the railway

administration shall issue a certificate to the consignor to that effect. Sub-section (3) is as follows:--

When any animals or goods are deemed to have been tendered to be carried, or are carried, at the owner''s risk rate, then, notwithstanding

anything contained in Section 73, the railway administration shall not be responsible for any loss, destruction, damage, deterioration or non-

delivery, in transit of such animals or goods, from whatever cause arising, except upon proof that such loss, destruction, damage, deterioration or

non-delivery was due to negligence or misconduct on the part of the railway administration or of any of its servants"".

In the present case, it is not disputed before me that the goods were consigned at owner''s risk rate. Consequently, Section 74(3) applies. Section

74(3) contains the following important features.

(1) It applies notwithstanding anything contained in S. 73;

(2) It applies, whatever the cause may be from which the loss, destruction damage, deterioration or non-delivery has arisen; and

(3) If there has been such loss, destruction, damage, deterioration or non-delivery, the railway administration will not be liable except upon proof

that such loss, destruction, damage, deterioration or non-delivery was due to negligence or misconduct on the part of the railway administration or

of any of its servants. Therefore, for a person to claim damages for the railway administration in respect of goods consigned at owner''s risk rate he

must prove that the negligence or misconduct on the part of the railway administration or any of its servants was the cause for the loss, damage,

destruction, deterioration or non-delivery. Section 74(3) is an exception to Section 73 and the reason is, when the consignor or the owner of the

goods prefers to pay a lower rate, he undertakes a higher risk and correspondingly the risk of the railway is lessened or reduced. The result is, u/s

73, unless the railway administration established that it has used reasonable foresight and care in the carriage of the goods it will be responsible for

the loss, damage, destruction, deterioration or non-delivery referred to therein even when such loss, damage etc., arises from one or more of the

causes enumerated in the section. but on the other hand, u/s 74, the railway administration will not be liable unless such loss, destruction, damage,

deterioration or non-delivery is proved to be due to the negligence or misconduct on the part of the railway administration or of any of its servants.

Having regard to the facts of this case. namely, the endorsements present in Exs. B.1 and B.2, and those endorsements representing the correct

state of affairs, it cannot be held that it has been established that the delay on the part of the railway administration was the cause for the

deterioration of the goods. Mr. Habibullah Badsha attempted to get over this position by two submissions. The first submission was that the

respondents in the written statement had not taken refuge u/s 74(3) of the Act and the second was that the endorsements in Exs. B.1 and B.2

merely stated ""liable to be damaged in transit"" and did not state that they were damaged already.

As far as the first submission is concerned, though the point was not taken by the railway administration in the written statement, still that point

was argued before the learned trial Judge and the learned trial Judge has given his opinion on the question. But in the view the learned principal

Judge took on the principal question itself, he did not find it necessary to go into this question. Therefore, I am unable to hold that there is any

embargo or bar to the railway administration putting forward that plea and seeking to sustain the judgment of the learned Principal Judge on that

basis.

As far as the second submission is concerned, when the endorsements Exs. B.1 and B.2 stated that the goods were liable to be damaged in

transit, certainly they took note of the normal time that would be taken for the carriage of the goods. If the goods were liable to be damaged even

during the normal time, certainly they would have deteriorated because of the delay. But what I wish to point out is that the appellant had not

established that the deterioration in the goods was due to the delay on the part of the respondents. He could have shown this by producing

necessary evidence as to when the skins were salted or cured and what was the interval between flaying and salting. In the absence of any such

evidence to show that on the date when the skins were consigned they were in a position to withstand the transit of the normal period to withstand

the transit of the normal period it cannot be held that the appellant had proved or established that the deterioration was due to the delay on the part

of the railway administration in the carriage of the goods.

There is one other statutory provision which has to be noticed in this behalf. I am referring to Section 76 of the Indian Railways Act and that

section states--

A railway administration shall be responsible for loss, destruction, damage, or deterioration of animals or goods proved by the owner to have

been caused by delay or detention in their carriage, unless the railway administration proves that the delay or detention arose without negligence or

misconduct on the part of the railway administration or of any of its servants"".

Since this section deals specially and expressly with delay and detention in the carriage of the goods, it could be said that whenever an owner of

the goods comes to Court and claims damages on the basis of loss, destruction, damage, deterioration or non-delivery of the goods, on account of

delay in transit, it is only this section, Section 76, that will apply and not any other provision. If Section 76 is to apply, then the owner of the goods

will have to prove that such destruction, damage or deterioration of animals or goods was caused by the delay or detention in carriage and if he so

proves, the railway administration cannot escape liability unless it proves that the delay or detention arose without the negligence or misconduct on

the part of the railway administration or of any of its servants.

All that can be said in the present case in that the Courts below have found that the delay in the carriage of the goods arose as a result of

negligence on the part of the railway administration. But that will not enable the appellant to obtain damages from the railway administration unless

he proves that the deterioration of the goods was caused by such delay in the carriage of the goods. As I have pointed out already, that has not

been proved in the present case and consequently the appellant is not entitled to claim damages from the railway administration.

The result is, the conclusion of the learned Principal Judge is correct though for the different reasons mentioned by me. Hence, the second

appeal fails and is dismissed. Having regard to the course of the controversy, I think this is a proper case in which I should direct the parties to

bear their respective costs in all the Courts. No leave.

Appeal dismissed.