Jyoti Flour Mills vs Union of India (UOI) and Others

K.N. Saikia, J.—This Plaintiff''s second appeal is from the judgment and decree of the District Judge, Nowgong affirming those of the Assistant District Judge partly dismissing the suit for compensation for shortage and loss of goods carried by railway.

The Plaintiff-Appellant, a registered partnership firm of Haibargaon, Nowgong, Assam, dealing in wheat products, was despatched through railway four wheat consignments by the Food Corporation of India containing 3359 bags weighing Q. 2988.78 K.G. under invoices in the name of its banker, Union Bank of India, Gauhati. When it retired the documents from the banker and took weighment delivery of the consignments at destination Haibargaon station it found some bags torn, cut and loose and some bags missing resulting in shortage of Q. 53.70 K.G. 815 grams worth Rs. 4189.22 p. only for which the railway duly granted shortage and damage certificate. The amount not being paid in time the Plaintiff instituted Money Suit/Case No. 8 of 1974 in the Court of Assistant District Judge, Nowgong claiming Rs. 4,189.22 p. being shortage value and Rs. 410.78 p. as compensation. The Defendants filed joint written statement wherein they, inter alia, did not admit negligence and misconduct on their part and contended that the consignments concerned were booked by the sender without adhering to the prescribed packing conditions and so the Defendants were not liable for the shortage.

On the pleadings seven issues were framed of which issues No. 3, namely, whether the loss occured due to negligence of the Defendants, and No. 6, namely, whether the Plaintiff was entitled to compensation would be material in this appeal.

Before the trial Court, at the paremptory hearing, the Plaintiff examined two witnesses and cited some documents: but the Defendants did not examine any witness.

On issues No. 3 and 6 the trial Court found from the shortage and damage certificates (Exts. 1 to 4 ) that 5 bag of wheat were lost and 70 bags were torn and loose and consequential total loss amounted to 53.70815 Qtls. It also found that the concerning Railway Receipts (Exts. Ka, Ga and Gha) bore seals to the following effect:

Single gunny bags hook marks and weak at seems liable to tear or burst and cause wastage in transit.

It was also found that all the 4 Railway Receipts bore the remarks that (the packing conditions of) "P--7 not complied with and dunnage not supplied". The Forwarding Notes were not cited in evidence but the Plaintiff witness No. 1, Anil Ranjan Bose, a railway employee, stated that the Railway Receipts were prepared on the basis of the Forwarding Notes. It was therefore, presumed that the aforesaid remarks about defective packing wore in the forwarding notes though P.W. 2, partner Nagarmal More, did not know anything about defective packing. The trial Court on that basis, fixed responsibility for the shortage and damage purportedly in accordance with Section 77C(1)(b) of the Indian Railways Act and apportioned it equally between the Plaintiff and the Defendants.

The Plaintiff appeal was dismissed by the District Judge, Nowgong, before whom only issues No. 3 and 6 were pressed, holding that it was the Plaintiff''s burden to prove that there was no defective poking of the consignments at the forwarding station and they having failed to discharge that obligation, there was no other alternative but to attribute the loss to the negligence on the part of the employees of the Defendants and, as such, the equal apportionment of the loss was just and appropriate, Hence this second appeal.

Mr. K. Sarma, the learned Counsel for the Appellant, submits, inter alia, that the learned Courts below were wrong in placing the burden of proof on the Plaintiff instead of on the Defendants, and that even if the Railway Receipts were taken to have been the same as the forwarding notes, the consequences of defective packing were not written in the Railway Receipts and the forwarding notes having not been produced, the Courts were wrong in apportioning the loss.

Mr. P.P. Duarah, the learned Counsel for the Railways submits that there is no evidence to show that the bags were cut; and the Railway Receipts having recorded defective packing the burden shifted and the learned Courts below were correct in placing the burden on the Plaintiff and In apportioning the loss equally.

We find force in the contention of Mr. Sarma, in view of the provisions of the Indian Railways Act (shortly, ''the Act'') Chapter VII of the Act deals with responsibility of Railway Administration as carriers. Section 72 provided for execution of forwarding notes. Any person delivering to a railway administration any goods to be carried by railway shall, if the goods are to be carried by a train intended solely for the carriage of goods, or if the goods are to be carried by any other train and consist of articles of any of the following categories, namely, articles of perishable nature and articles in a defective condition or defectively packed, execute a forwarding note in such form as may be prescribed by the railway administration and approved by the Central Government, in which the sender or his agent shall give such particulars in respect pf the goods so delivered as may be required. Section 73 fixes the general responsibility of a railway administration as a carrier of animals and goods. Save as otherwise provided in the Act a railway administration shall be responsible for the loss, destruction, damage, deterioration or non-delivery, in transit, of goods delivered to the administration to be carried by railway, arising from any cause except those narrated in Clauses (a) to (i) of the Section. Under Clause (f) of Section 73, act or omission or negligence of the consignor or the consignee or the agent or servant of the consignor or the consignee is excepted. Under the proviso to that section even where such loss, destruction, damage, deterioration or non-delivery is proved to have arisen from any one or more of the excepted clauses, 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 goods. Section 73 has changed the character of the liability of the Railways from that of a bailer under the old Section 72 to that of an insurer. In order to be absolved from such absolute responsibility the railway administration will have to prove that the loss etc. have arisen from any of the causes in Clauses (a) to (i) of Section 73. The burden to prove that the loss etc. occurred due to any of the causes enumerated in the Section is on the Railways. The Railway administration in such cases will remain liable until it has proved that it has used reasonable foresight and care and 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 loss etc. was a result of causes enumerated in the Section. What is reasonable care and foresight is a question of fact to be decided in each case on its particular circumstances on the basis of evidence produced by the Railway. It was so held in T.M. Veerappa v. Union of India AIR 1972 Mys 164 and in K.R. Rajamanickam Chettiar and Others Vs. The Union of India, with which I respectfully agree. In Union of India (UOI) Vs. Laduram Fakirchand, it has been held that in order that the railway administration may be absolved for its liability u/s 73 it is necessary that in the forwarding note not only there should be a recording about the defective or improper packing of the goods but also it should be further recorded that as a result of such defective or improper paoking the goods are liable to damage, deterioration, leakage or wastage. Where in the forwarding note only the fact of defective or improper packing has been recorded, but the consequence of such defective or improper packing has not been recorded, Section 77C(1)(b) is not available to the railway administration.

Section 77C deals with responsibility of a railway administration for damage, deterioration, etc., of goods is defective condition or defectively packed. Under Clause (b) of Sub-section (1) of that Section when any goods tendered to a railway administration to be carried by railway are either defectively packed or packed in a manner not in accordance with the general or special orders, if any, issued under Sub-section (4) and as a result of such defective or improper packing are liable to damage, deterioration, leakage or wastage, and the fact of such condition or defective or improper packing has been recorded by the sender or his agent in the forwarding note, then, notwithstanding anything contained in the foregoing provisions of Chapter VII, the railway administration shall not be responsible for any damage, deterioration, leakage or wastage, or for the condition in which such goods are available for delivery at destination, except upon proof of negligence or misconduct on the part of the railway administration or any of its servants. Under Sub-section (2) thereof when any goods delivered to a railway administration to be carried by a railway are found on arrival at destination to have been damaged or to have suffered deterioration, leakage or wastage, then, notwithstanding anything contained in the foregoing provisions of Chapter VII, the railway administration shall not be responsible for the damage deterioration, leakage or wastage of the goods on proof by the railway administration-(a) that the goods were, at the time of delivery to the railway administration in a defective condition or were at that time either defectively packed or packed in a manner not in accordance with the general or special order, if any, issued under Sub-section (4) and as a consequence of such defective condition or defective or improper packing, and (b) that such defective condition or defective or improper packing was not brought to the notice of the railway administration or of any of its servants at the time of delivery of the goods to the railway administration. Provided that the railway administration shall be responsible for any such damage, deterioration, leakage or wastage if negligence or misconduct on the part of the railway administration or of any of its servants proved. Uuder Sub-section (3) a railway administration shall not be responsible under Sub-section (1) or Sub-section (2) for any damage, deterioration, leakage or wastage occurring after the expiry of the period of seven days after the termination of transit as defined in Sub-section (5) of Section 77.

Admittedly the instant case does not come under Sub-section (3). It would, therefore, be necessary to examine whether the fact of defective or improper packing in the instant case has been recorded by the sender or his agent in the forwarding note. Admittedly the forwarding note was not produced in evidence by the Railways. Mr. Duara submits that the forwarding note was the Plaintiff''s document and the Plaintiff did not call for it. The Plaintiff would suffer if the burden of proof lay on it. When the burden of proof is on the Railways to show that the shortage or damage was due to defective packing and the condition of defective packing and the consequences thereof were recorded in the forwarding note then the adverse presumption would be against the railway administration for non-production of the forwarding note.

In T.M. Veerappa v. Union of India (supra) it has been held that when goods are sent at the Railway risk and there is shortage in delivery on account of pilferage in transit, the case comes within the general responsibility of the Railway administration u/s 73 and the onus lies upon them to prove that they had taken reasonable care even if the goods were proved to have been defectively packed by the consignor. Section 77C has no application to such a case. As was held in Union of India (UOI) Vs. Laduram Fakirchand, in order that the railway administration may be absolved of its liability u/s 73 it is necessary that in the forwarding note not only there should be a recording about the defective or improper packing of the goods but also it should be further recorded that us a result of such defective or improper packing the goods are liable to damage, deterioration, leakage or wastage. Where in the forwarding note only the fact of defective or improper packing has been recorded, but the consequence of such defective or improper packing has not been recorded, Section 77C(l)(b) is not available to the Railway Administration. Similarly in K.R. Rajamanickam Chettiar and Others Vs. The Union of India, it has been held that the railway administration cannot escape he liability for loss destruction etc. by pointing out that such loss was the result of any one of the causes enumorated in Section 73. Similar was the finding in Chabildas Manikdas v. The Union of India AIR 1980 Andhra Pradesh 78, that when any loss, destruction or damage is proved to have arisen from any omission or negligence of the consignor, the Railway Administration is not relieved of its responsibility for the loss, destruction or damage unless the railway administration further proves that it has used reasonable foresight and care in the carriage of the goods. u/s 73, as amended in 1961, the liability of the railway administration is the same as that of a common carrier of goods. Even when the railway administration can trace any loss, destruction, damage, deterioration or non-delivery to causes which have indisputably no reference to negligence or misconduction the part of the railway administration, it is necessary for the railway administration to further prove that the goods were handled by the administration with proper care and reasonable foresight during the transit. Even Section 77C does not completely absolve the railway administration of its responsibility, when any goodst endered to the railway administration to be carried by the railway are in a defective condition or are defectively reached or packed in a manner not in accordance with the general or special order issued under Sub-section (4) of Section 77C. The mere feet of defective or improper packing of the goods being recorded by the consignor or his agent in the forwarding note does not make any difference in regard to the general liability of the railway administration as provided in Section 73. The fact might amount to negligence on the part of the consignor as contemplated in Section 73(1) and it would be necessary for the railway administration to prove not only that the damage or deterioration arose on account of the negligent act or omission of the consignor or his agent but also that the railway administration and its servants used proper care and reasonable foresight in carrying the goods. If the railway administration seeks to take recourse to Section 77C so as to shift the burden of proving negligence of misconduct on its part on the consignor it becomes necessary for the railway administration to satisfy the Court that the requirements of Section 77C have been strictly complied with.

Admittedly in the instant case the forwarding note was not produced by the Railways and the burden of proving the negligence on the part of the Railways did not shift to the Plaintiff. The Plaintiff, therefore, could not lawfully be asked to share the loss equally. There was no evidence to show that the loss or damage claimed was not suffered by the Plaintiff. The shortage certificate proved the extent of shortage or damage which could not, therefore, be disbelieved.

For the reasons discussed above the impugned judgments are set aside, the appeal is allowed, and the suit decreed with costs.