l Appeal No 3131956
Appeal from the judgment and decree dated July 251952 of the Allahabad High Court in Second Appeal No 2547 of 1946
B Ganapathy Iyer and T M Sen for the appellant K P Gupta for the respondent
January 31
The Judgment of the Court was delivered by SHAH J
On January 30 1943 Bhola Nath Sambhu Ram as agent of the respondent L Musaddilal delivered a bale of cloth to the railway administration E 1
at Agra railway station for carriage by railway to the Chola Station in the E I Rly
The consignment was accepted by the railway administration and a railway receipt was issued in the name of the consignor Bhola Nath Sambhu Ram
Bhola Nath Sambhu Ram endorsed the railway receipt in favour of the respondent and sent it by post to the respondent
The bale of cloth did not reach Chola and the railway administration was unable despite efforts to trace it
There was correspondence between the railway administration and the respondent about the consignment
Failing to obtain satisfaction 649 for the loss suffered by him the respondent served a composite notice under section 77 of the Indian Railways Act and section 80 of the Civil Procedure Code on December 7 1943 and thereafter on May 18 1944 filed suit No 283 of 1944 in the court of the 11 Munsif Bulandshahr for a decree for Rs 782 3 6 being the  price of the bale  and Rs 200  for loss on account of nondelivery The railway administration resisted the claim on the pleas among others that the suit was not maintainable without an effective notice under a 77 of the Railways Act and that the suit was barred because at the date of the institution of the suit the period of limitation prescribed by article 31 of the Limitation Act had expired
The trial court decreed the suit
In appeal the Additional Civil Judge Bulandshahr reversed the decree passed by the trial court and dismissed the suit
A Full Bench of the High Court of Allahabad reversed the decree passed by the first appellate court and restored the decree of the trial court
With certificate of fitness under article 1331c of the Constitution this appeal has been preferred by the Union of India
Section 77 of the Railways Act in so far as it is material provides A person shall not be entitled to compensation for the loss destruction or deterioration of goods delivered to be carried 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 goods for carriage by railway
 Section 77 manifestly prescribes a condition precedent to the maintainability of a claim for compensation for goods lost destroyed or deteriorated while in the custody of the railway administration
The notice prescribed was not served by the respondent upon the railway administration within six months from the date on which the goods were delivered for carriage and prima facie the suit would be barred for non compliance of a statutory condition precedent
But the respondent pleaded and the plea has found favour with the High Court that the suit filed by him 650 was for compensation not for loss destruction or it deterioration of the goods but  for non delivery of the goods
 In the view of the High Court a claim for compensation for non delivery of goods is a claim distinct from a claim for compensation for loss destruction or deterioration of goods and to the enforcement of a claim of the former variety by action in a court of law section 77 is not a condition precedent
The railway administration in India is not an insurer of goods it is merely a bailee of goods entrusted to it for carriage
Section 72 of the Railways Act prescribes the measure of the general responsibility of a railway administration as a carrier of goods
By that section the responsibility of a railway administration for loss destruction or deterioration of goods delivered to be carried by railway is subject to other provisions of the Act to be that of a bailee under section 152 and section 161 of the 
Sections 151 and 152 of the deal with the duties of a bailee
If a bailee takes as much care of the goods bailed to him as a person of ordinary prudence would under similar circumstances of his own goods of the same bulk quality and value as the goods bailed to him in the absence of a special contract he is not responsible for loss destruction or deterioration of the goods bailed
By sections 160 and 161 of the  the bailee is under an obligation to return or deliver according to the bailor s direction the goods bailed as soon as the time for which the good were bailed has expired or the purpose for which the goods were bailed has been accomplished and if on account of default of the bailee the goods are not returned delivered or tendered at the proper time he is responsible to the bailor for any loss destruction or deterioration of the goods The railway administration being a bailee of the goods delivered for carriage to it is therefore a bailee during the period when the goods remain in its custody for the purpose and in the course of carriage and for the purpose of delivery after the goods are carried to the destination
651 But the quantum of care which the railway administration is required to take is that care which it would take having regard to the bulk quality and value of its own similar goods
Section 77 of the Railways Act is enacted 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 stale claims
It imposes a restriction on the enforcement of liability declared by section 72
The liability declared by a 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 deterioration what is contemplated is loss or destruction or deterioration of the goods and the consequent loss to the owner tbereof
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 deteriorated the railway administration is guilty of failing to take the degree of care which is prescribed by section 72 of the Railways Act
There are undoubtedly two distinct articles articles 30 and 31 in the first schedule of the Indian Limitation Act dealing with limitation for suits for compensation against carriers
Article 30 prescribes the period of limitation for suits against a carrier for compensation against loss or injury to goods and article 31 prescribes the period of limitation for suits for compensation against a carrier for non delivery or delay in delivering the goods
The period of limitation under each of these articles is one year but the points of time from which that period is to be reckoned are different
But because the Indian Limitation Act provides different points of time from which the period of limitation is to run it is not possible to infer that the claim covered by either article is not for compensation for loss destruction or deterioration of the goods
We are unable to project the provisions of Art 30 and 31 652 of the Limitation Act upon sections 72 and 77 of the Railways Act and to hold that a suit for compensation for loss because of non delivery of goods does not fall within section 77
The view we have expressed is supported by a large volume of authority in the courts in India for instance The Madras and Southern Mahratta Railway Co Ltd vs Haridoss Banmalidoss 1 Hill Sawyers and Co vs Secretary of State 2 Martab Ali vs Union of India s Union of India vs Mitayagiri Pullappa 4 Assam Bengal Railway Co Ltd vs Radhika Mohan Nath 5 and Bengal Nagpur Railway Co Ltd vs Hamir Mull Chhagan Mull 6
The view expressed to the contrary in the Allahabad High Court in Governor General in Council vs Mahabir Ram 7 and by the Patna High Court in Jais Ram Ramrekha Das vs G 1
P Railway 8 is in our judgment erroneous
This appeal will therefore be allowed and the respondent s suit will stand dismissed
As the Union of India was permitted to appeal for obtaining the decision of this Court which may settle the conflict of views even though the amount involved is small we think that it is just and proper that there should be no order as to costs throughout
Appeal allowed


Summary:
The Managing Agents of the appellant company withdrew certain sums of money from its a count with the respondent 1 Mad 871
2 Lah
3 4 ILR 5 6 Pat 106 7 1953 ILR K All 64
8 Pat
653 Bank which the company had by a resolution authorised the Managing Agents to operate on
The Managing Agents had no other account with the said Bank
The company brought the suit out of which the present appeal arises against the Bank for recovery of the said amounts on the ground that the cheques issued by the Managing Agents had been wrongfully honoured by the Bank in that they were signed by them without describing themselves as Directors of the Managing Agents firm and on behalf of the company as required by the resolution
The trial judge decreed the suit except with regard to a part of the claim which he found to have actually been received by the company
The appeal court dismissed the suit holding that the Bank had paid in good faith and that the company was not entitled to rely on section 89 of the Indian Companies Act
Held that the court of appeal was right in holding that section 89 of the Indian Companies Act could not be invoked by the appellant in the present case
There can be no doubt that before a negotiable instrument can be enforced against a company under section 89 of the Indian Companies Act it must on the face of it show that it was drawn made accepted or endorsed by the company and this may be done either by showing the name of the company itself on the instrument or by statement of the person making the instrument that he was doing so on behalf of the company
Sadasuk janki Das vs Sir Kishan Pershad Cal
663 applied
The Bank of Bombay vs H R Cormack Born 275 and Miles  claim  referred to
But the said principle is applicable only to the claim made against a company on a negotiable instrument and cannot be extended to a dispute between a bank and its constituent where the claim is not so based and proceeds on the basis that in honouring the cheques wrongfully drawn the bank acted improperly
Mahony vs East Holiford Mining Co 1875 7 Eng
 Irish Reports 869 referred to
Held further that the object of the resolution as well as its effect was merely to conform to the requirements of section 89 of the Indian Companies Act 1913 and not to prescribe any condition precedent independently of that section