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Judgment
The plaintiffs in O.S. No. 2762/1977 on the file of the 8th Asst. Judge, City Civil Court, Madras are the appellants in this appeal against the
dismissal of the suit. The said suit for recovery of a sum of Rs. 16,787.16 was preferred on the basis that the tractors sold by Messrs. Tractors
and Farm Equipment Limited, Madras to the first plaintiff were sent from Madras to Sambalpur through the defendant railways for being delivered
to the first plaintiff at Sambalpur and that at the time of delivery of goods at Sambalpur, there was shortage in the goods delivered. The first plaintiff
is the consignee of the goods and he claimed loss sustained due to the above said shortage. The second plaintiff is the insurance company with
whom the said tractors were insured. The second plaintiff had already paid the loss sustained by the first plaintiff based on the shortage certificates
issued by the defendants under Ex. B.1 and Ex. B.2 in respect of the two consignments of the abovesaid tractors. Hence the second plaintiff is also
making the suit claim.
The court below has held that the abovesaid shortage was due to the negligence on the part of the defendants (railways) but negatived the suit
claim only on the basis that the consignee, the first plaintiff, cannot maintain the present action and only the consignor namely the abovesaid
Tractors and Farm Equipment Limited, Madras can maintain an action. Then court below came to the abovesaid conclusion on the footing that the
first plaintiff became the owner of the consignments of the above said tractors only after the abovesaid shortage in transit was found.
So, the only question to be decided in this appeal is whether the first plaintiff and Consequently, the second plaintiff on the footing of subrogation
could maintain this action. Now, the facts necessary to resolve this question may be seen. As already indicated, there were two consignments of
the abovesaid tractors. The first consignment was despatched on 17-1-1974 as per Ex. B.6 railway receipt and the second consignment was
despatched on 21-6-1974 as per Ex. B6 railway receipt. The Railway Receipts were in favour of ""selves"" i.e., in favour of the consignor himself.
The Railway Receipts were sent to the consignee (First Plaintiff) through the bank as deposed by P.W. 2 the packing supervisor of the consignor,
Tractors and Farms Equipment Limited, Madras. As per the evidence of P.W, 2, with reference to the first consignment the consignee has taken
delivery of the relevant railway receipts from the Bank of 14-2-1974 after making necessary payment to the Bank. His further evidence is that with
reference to the second consignment, the first plaintiff has taken delivery of the relevant railways receipt from the Bank in August 1974 after paying
the necessary amounts to the Bank. The evidences of P.W. 2 further shows that with reference to the first and second consignment, the goods
were unloaded at Sambalpur on 7-2-1974 and 14-7-1974 respectively and at the time when the goods were unloaded, open delivery was given.
The learned counsel for the appellants argues that the court below erred in holding that the first plaintiff consignee and consequently the second
plaintiff are not entitled to maintain this action on the ground that the shortage in question was caused prior to the dale when the first plaintiff
became the owner of the consignments in question. (According to the court below, the first plaintiff became the owner of the first, and second
consignments only on 14-2-1974 and in August, 1974 respectively while the respective shortages were found at time of unloading even earlier i.e.,
on 7-2-1974 and 14-7-1974 respectively). The said counsel, relied on J.K.M. Yacob Rowther Sons, Mettypalayam Vs. Union of India, to point
out that the Court below erred in holding that the first plaintiff cannot maintain this action. He also drew my attention to the fact that there was no
cross-examination of P.W. 2 on the question of passing of title from the consignor to the consignee.
The learned counsel for the respondents relied on Md. Jaffer Haji Ebrahim Vs. The Union of India (UOI) and Others, which was relied on by
the court below, and argued that the court below was right in having held that the first plaintiff could not maintain this action.
5A. I have considered the rival submissions J. K.M. Yacob Rowther Sons v. Union of India. In J.K.M. Yacob Rowther Sons, Mettypalayam Vs.
Union of India, a Division Bench of this Court has held as follows (Paras 7,8, 10 and 12)
It is settled law that where under a contract of sale, goods are delivered by the seller to the railway for carriage in order to effect delivery, the
railway is ordinarily treated as the agent of the buyer to receive the goods from the seller. As has been stated in Benjamin on sales, 8th Edn. page
737, it was well established as common law that delivery to a common carrier, and a fortiori to one specially designated by the buyer, would be
deliver to the buyer himself; the carrier being in contemplation of law, the bailee of the person to whom, not of the person by whom, the goods are
sent.
This principle is embodied in Section 39 of the Indian Sale of Goods Act.
Therefore, it can be taken that where property in the goods had passed to the buyer, on delivery to the railway, the letter should have to be
regarded as bailee to the owner of the goods, namely the cqnsignee"" ....
A Railway receipt will no doubt entitle the person who is named in it as the consignee or an endorsee to receive the goods, by the terms of the
contract of bailment such a person could even relieve the railway of all liability. But where he has not so done and where the question of suing for
loss arises, the principle must be that he who sustamed the loss must sue .........
But, where under a contract of sale, the property in the goods has passed on delivery to the railway, the latter receives it as the agent of the buyer.
The bailor will then be deemed to be the buyer himself. The fact that the contract of carriage had been entered into by the seller or consignor,
would not in that case disentitle the consignee to sue, as in this country third party ""for whose benefit the contract had been made, could sue on it"".
5B. In the present case, regarding passing of title of the goods from consignor to the consignee it should be noted that when P.W. 2 the
consignor''s employee was examined, the defendants in the cross-examination did not suggest that only at a particular point of time, title to the
goods did pass to the consignee. So, the court below erred in holding that the ownership passed on to the consignee only on 14-2-1974 and in
August, 1974 in respect of the first and second consignments respectively. When there is no clear evidence as to when actually the title passed on
to the buyer consignee, in the light of the relevant provisions of the Sale of Goods Act (sic).
However, as per the abovesaid Bench Division where the question of suing for loss arises, the principle must be that he who sustains the loss must
sue. In the present case, it is the first plaintiff-consignee who has sustained the loss since even according to the counsel for the respondents, the first
plaintiff had already became the owner of the consignments at least before filing the suit.
In Union of India (UOI) Vs. West Punjab Factories Ltd., it has been no doubt held as follows (Para 10):--
Ordinarily it is the consignor who can sue if there is damage to te consignment, for the contract of carriage in between the consignor and the
railway administration where the property in the goods carried has passed from the consignor to some one else the other person may be able to
sue....... Whether title to goods has passed from the consignor to the consignee will depend upon the facts of each case.
However, it must be noted that, in the above decision of the Supreme Court it has not been held that only when the consignee becomes the owner
of the goods before the occurrence of shortage or damage, he is entitled to sue for compensation in terms of the shortage or damage.
6A. Further in Dominion of India as owner of G.I.P. Rly. and Another Vs. Gaya Pershad Gopal Narain, , *** a Full Bench of Allahabad High
Court has held that a consignee, who is not the owner of the goods but to whom the goods are consigned for purpose of sale on commission basis
is entitled to maintain the suit for loss in respect of the damage caused to the goods in transit.
6B. In 1990 Acc CJ 310 (AndhPra) (Globe Transport Corporation v. National Insurance Company) the goods transported through a common
carrier under self drawn consignment note (as in the present case), were damaged in transit and the carrier contended that purchaser who had
become the owner of goods subsequent to the occurrence of the loss could not sue the carrier for the, loss. Purchaser paid the invoice price, took
the way bil and obtained delivery of the goods from the carrier. The question was whether the suit by the purchaser against the carrier for shortage
of goods is maintainable. Thus, the facts'' in the abovesaid case are similar to the present case. The decision of the Andhra Pradesh High Court in
the said is that the said purchaser can maintain the suit. It has been held therein that, the purchaser became the owner of the goods by transfer,
before the contract of carriage came to an end, and the liability of the carrier is not contractual but based on public employment and he is liable to
the person who obtained the right to take delivery of the goods. In coming to the abovesaid conclusion, the High Court of Andhra Pradesh
followed the House of Lords case reported in (1916) I AC 189. The above said Andhra Pradesh decision squarely applies to the facts of the
present case. Further observation, in the abovesaid case is as follows:--
The test in this case is not the passing of ownership and the rules relating to passing of title in the goods under the Sale of Goods Act are not
relevant. The criterion is whether a person can demand delivery from the carrier. If so, he is entitled to sue the carrier in respect of his breach of
public employment for loss of goods or non-delivery.
Therefore, it is clear to me that the plaintiffs can maintain this action. The decision relied on by the Court below namely, Md. Jaffer Haji Ebrahim
Vs. The Union of India (UOI) and Others, turned on its own facts which are different from the present one. That decision was no doubt given in a
suit against the Railway where the consignment was made by the consignor at Hapur to be delivered to ""SELF"" at Cuttack. Further, the consignor
was to arrange delivery of the goods to the consignee at Cuttack and the consignor was authorised to sue the Railways if there is any damages or
shortages. But the consignee filed the suit claiming damages from the Railways for the loss caused to the consignment. Further, passing of title was
also intended to be deferred till arrival of the consignment at Cuttack. In the peculiar facts of the said case, it was no doubt held that the suit could
not be maintained by the consignee since the loss occurred to the consignment before it reached to Cuttack i.e., before the transfer of the
ownership right to the consignee. The said decision is not applicable to the present case in which the facts are different, as stated above.
The net result is that the Judgment and decree of the Lower court in so far it held that the plaintiffs cannot maintain this suit, is set aside and the
suit is decreed, as prayed for, with costs in favour of the plaintiffs and the appeal is allowed with costs throughout.
Appeal allowed.