vil Appeal No 536 of 1962
Appeal from the judgment and decree dated March 26
1958 of the High Court at Patna in First Appeal No 340 of 1951
147 Niren De Additional Solicitor General ND Karkhanis and BRGK Achar for the appellant
Bishan Narain P D Himmatsinghka section Murthy and BP Maheshwari for the respondent
The judgment of the Court was delivered by Wanchoo J
This is an appeal on a certificate granted by the Patna High Court
The respondent sued the Union of India as representing GIP Railway Bombay and EIR Calcutta for recovery of damages for non delivery of 31 bales of piece goods out of 60 bales which had been consigned to Baidyanathdham from Wadibundar
This consignment was loaded in wagon No 9643 on December 1 1947
It is not in dispute that the consignment reached Mughalsarai on the morning of December 9 1947 by 192 On goods train
After reaching Mughalsarai the wagon was kept in the marshaling yard till December 12 1947
It wag sent to Baidyanadham by 214 On goods train from Mughalsarai at 6 40 pm on December 12 1947 and eventually reached Baidyanathdham on December 21 1947
The respondent who was the consignee presented the railway receipt on the same day for delivery of the consignment
Thereupon the railway delivered 29 bales only to the respondent and the remaining 31 bales were said to be missing and were never delivered
Consequently on August 311948 notice was gyen under section 80 of the Civil Procedure Code and this was followed by the suit out of which the present appeal has arisen on November 20 1948
The consignment had been booked under risk note form Z which for all practical purposes is in the same terms as risk note form B
The respondent claimed damages for non delivery on the ground that the non delivery was due to the misconduct of the servants of the railway and the claim was for a sum of Rs 3646112 
The suit was resisted by the appellant and a number of defences were taken
In the present appeal we are only concerned with two defences
It was first contended that the suit was barred by section 77 of the Indian Railways Act No IX of 1890 hereinafter referred to as the Act inasmuch as notice required therein was not given by the respondent
Secondly it was contended that the consignment was sent under risk note form Z and under the terms of that risk note the railway was absolved from all responsibility for loss destruction or deterioration of goods consigned thereunder from any cause whatsoever except upon proof of misconduct of the railway of its servants
and that the burden of proving such misconduct subject to certain exceptions was on the respondent and that the respondent had failed to discharge that burden
Further in compliance with the terms of the risk note the railway made a disclosure in the written statement as to how the consignment was dealt with throughout the period it was in its possession or control
The case of the railway in this connection was that there was a theft in the running train between Mughalsarai and 148 Buxar on December 12 1947 and that was how part of the con signment was lost
As the loss was not due to any misconduct on the part of the railway or its servants and as the respondent had not discharged the burden which lay on him after the railway had given evidence of how the consignment had been dealt with there was no liability on the railway
On the first point the trial court held On the basis of certain decisions of the Patna High Court that no notice under section 77 was necessary in a case of non delivery which was held to be different from loss
On the second point relating to the responsibility of the railway on the  basis of risk note form Z the trial court held that it had not been proved that the loss was due to misconduct of the railway or its servants
It therefore dismissed the suit
Then followed an appeal by the respondent to the High Court
The High Court apparently upheld the finding of the trial court on the question of notice under s77
But on the second point the High Court was of opinion that there was a breach of the condition of disclosure provided in risk note Z under which the consignment had been booked and therefore the appellant could not take advantage of the risk note at all and the liability of the railway must be assessed on the footing of a simple bailee
It therefore went on to consider the liability of the railway as a simple bailee and held on the  evidence that the railway did not take proper care of the wagon at Mughalsarai and that in all probability the seals and rivets of the wagon had been allowed to be broken there and all arrangements had been completed as to how the goods would be removed from the wagon when the train would leave that station and this could only be done either by or in collusion with the servants of the railway at Mughalsarai
In this view of the matter the High Court allowed the appeal and decreed the suit with costs As the judgment was one of reversal and the amount involved was over rupees twenty thousand the High Court granted a certificate
and that is how the matter has come up before us
We shall first deal with the question of the notice
We are in this case concerned with the Act as it was in 1947 before its amendment by Central Act 56 of 1949 and Central Act No 39 of 1961 and all references in this judgment must be read as applying to the Act as it was in 1947
Now section 77 inter alia provides that a person shall not be entitled to compensation for the loss destruction or deterioration of animals or goods delivered to be carried  by railway 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 animals or goods for carriage by railway
There was a conflict between the High Courts on the question whether non delivery of goods carried by railway amounted to less within the meaning of section 77
Some High Courts including the Patna High Court held that a case of non delivery was distinct from a case of loss and no notice under section 77 was necessary in the case of non delivery
Other High Courts however took a contrary view and held that a case of non delivery also was a case of loss
This conflict has now been resolved by the decision of this Court in Governor General in Council vs Musaddilal 1 and the view taken by the Patna High Court has been overruled
This Court has held that failure to deliver goods is the consequence of loss or destruction and the cause of action for it is not distinct from the cause of action for loss or destruction and therefore notice under section 77 is necessary in the case of non delivery which arises from the loss of goods
Therefore notice under section 77 was necessary in the present case
It is true that the respondent stated in the plaint in conformity with the view of the Patna High Court prevalent in Bihar that no notice under s77 was necessary as it was a case of non delivery
But we find in actual fact that a notice was given by the respondent to the railway on April 10 1948 to the Chief Commercial Manager EIR in which it was stated that 60 bales of cloth were booked for the respondent but only 29 bales had been delivered and the balance of 31 bales had not been delivered
Therefore the respondent gave notice that if the bales were not delivered to him within a fortnight he would file a suit for the recovery of Rs 3646112  and the details as to how the amount was arrived at were given in this notice
It is true that the notice was not specifically stated to be a notice under section 77 of the Act but it gave all the particulars necessary in a notice under that section
This notice or letter was sent within six months of the booking of the consignment
A similar case came up before this Court in Jetmull Bhojraj vs The Darjeeling Himalayan Railway Co Ltd2 and this Court held that the letter to the railway in that case was sufficient notice for the purpose of section 77 of the Act Following that decision we hold that the letter in the present case which is even more explicit is sufficient notice for the purpose of S 77 of the Act
We may add that the learned Additional Solicitor General did not challenge this in view of the decision in Jetmull Bhojraj s case2
This brings us to the second question raised in the appeal
We have already indicated that the High Court held that as the burden of disclosure which was on the railway had not been discharged there vas a breach of one of the terms of the risk note Z and therefore the risk note did not apply at all and the responsibility of the railway had to be assessed under  section 72 1 of the Act
This view of the law has been contested on behalf of the appellant and it is urged that after the risk note is executed either in form Z or in form B the responsibility of the railway must be judged in accordance with the risk note even if there is some breach of the condition as to disclosure
It may be mentioned that risk note form Z and risk note form B are exactly similar in their terms insolar as the responsibility of the railway is concerned for risk note 150 form B applies to individual consignment while form Z is executed by a party who has usually to send goods by railway in large numbers
Risk note form Z is general in its nature and applies to all consignments that a party may send after its execution
It is proved that the consignment in this case was covered by risk note form Z
The main advantage that a consignor gets by sending a consignment under from Z or form B is a specially reduced rate as compared t3 the ordinary rate at which goods are carried by the railway and it is because of this specially reduced rate that the burden is thrown on the consignor in a suit for damages to prove misconduct on the part of the railway or its servants in the case of loss etcof the goods subject to one exception
On the other hand the argument on behalf of the respondent is that the view taken by the Patna High Court is right and it is the duty of the railway administration under the risk note as soon as there is non delivery and a claim is made on the railway for compensation to disclose how the consignment was dealt with throughout while it was in its possession or control and that its failure to do so results immediately in breach of the contract with the result that the responsibility of the railway has to be judged solely on the basis of section 72 1 of the Act ignoring the risk note altogether
Section 72 1 defines the responsibility of the railway administration for the loss destruction or deterioration of animals or goods delivered to the administration to be carried by railway to be the same as that of a bailee under sections 152 and 161 of the  subject to other provisions of the Act
Sub section 2 of section 72 provides that an agreement purporting to limit the responsibility under section 72 1 can be made subject to two conditions namely i that it is in writing signed by or on behalf of the person sending or delivering to the railway administration the animals or goods and ii that it is in a form approved by the Governor General
Sub section 3 of section 72 provides that nothing in the common law of England or in the Carriers Act 1865 regarding the responsibility of common carriers with respect to carriage of animals or goods shall affect the responsibility as in this section defined of the railway administration
So the responsibility of the railway for loss etc is the same as that of a bailee under the Indian Contract Act
But this responsibility can be limited as provided in section 72 2
For the purpose of limiting this responsibility risk notes form B and form Z have been approved by the Governor General and where goods are booked under these risk notes the liability is limited in the manner provided thereunder
It is therefore necessary to set out the relevant terms of the risk note for the decision of this case will turn on the provisions of the risk note itself
The risk note whether it is in form B or form Z provides that where goods are carried at owner s risk on specially reduced rates the owner agrees or undertakes to hold the railway administration 151 harmless and free from all responsibility for any loss deterioration or destruction of or damage to all or any of such consignment from any cause whatever except upon proof that such loss destruction deterioration or damage arose from the misconduct on the part of the railway administration or its servants
thus risk notes B and Z provide for complete immunity of the railway except upon proof of misconduct
But to this immunity there is a proviso and it is the construction of the proviso that arises in the present appeal
The proviso is in these terms Provided that in the following cases a Non delivery of the whole of a consignment packed in accordance with the instruction laid down in the tariff or where there are no instructions protected otherwise than by paper or other packing readily removable by hand and fully addressed where such non delivery is not due to accidents to train or to fire b    The railway administration shall be bound to disclose to the consignor how the consignment was dealt with throughout the time it was in its possession or control and if necessary to give evidence thereof before the consignor is called upon to prove misconduct but if misconduct on the part of the railway administration or its servants cannot be fairly inferred from such evidence the burden of proving such misconduct shall lie upon the consignor
It is not in dispute that the present case comes under cla of the risk note
An exactly similar provision in risk note form B came up for consideration before the Privy Council in Surat Cotton Spinning  Weaving Mills vs Secretary Of State for India in Council   and the law on the subject was laid down thus at pp181 182 The first portion of the proviso provides that the Rail way Administration shall be bound to disclose to the consignor how the consignment was dealt with through out the time it was in its possession or control and if necessary to give evidence thereof before the consignor is called upon to prove misconduct 
In their Lordships  opinion this obligation arises at once upon the occurrence of either of cases a or b and is not confined to the stage of litigation
Clearly one object of the provision is to obviate if possible the necessity for litigation
On the other hand the closing words of the obligation clearly apply to the litigious stage
As to the extent of the disclosure it is confined to the period during which the 1 1927 LP LXIV 152 consignment was within the possession or control of the Railway Administration it does not relate for instance to the period after the goods have been the fatuously removed from the premises
On the other hand it does envisage a precise statement of how the consignment was dealt with by the Administration or its servants
The character of what is requisite may vary according to the circumstances of different cases but if the consignor is not satisfied that the disclosure has been adequate the dispute must be judicially decided
As to the accuracy or truth of the information given if the consignor is doubtful or unsatisfied and considers that these should be established by evidence their Lordships are of opinion that evidence before a Court of law is contemplated and that as was properly done in the present suit the Railway Administration should submit their evidence first at the trial
At the close of the evidence for the Administration two questions may be saidto arise which it is important to keep distinct
The first question is not a mere question ofprocedure but iS whether they have discharged their obligation of disclosure  and in regard to this their Lordships are of opinion that the terms of the Risk Note require a step in procedure which may be said to be Unfamiliar in the practice of the Court if the consignor is not satisfied with the  disclosure made their Lordships are clearly of opinion that is for him tO say so and to call on the Administration to fulfill their obligation Under the contract and that the Administration should then have the opportunity to meet the demands of the consignor before their case is closed any question as to whether the consignor s demands go beyond the obligation should be then determined by the Court
If the Administration fails to take the opportunity to satisfy the demands of the consignor so far as endorsed by the Court they will be in breach of their contractual obligation of disclosure
The other question which may be said to arise at this stage is whether misconduct may be fairly inferred from the evidence of the Administration if so the consignor is absolved from his original burden of proof
But in this case the decision of the Court may be given when the evidence of both sides has been completed
It is clearly for the Administration to decide for themselves whether they have adduced all the evidence which they consider desirable in avoidance of such fair inference of misconduct
They will doubtless keep in mind the provisions of s114 of the Indian Evidence Act
With respect we are of opinion that this exposition of the law relating to risk note B applies also to risk note Z and we accept it 153 as correct
Thus the responsibility of the railway
administration to disclose to the consignor how the consignment was dealt with thrOughOut the time it Was in its possession or control arises at once under the agreement in either of the cases a or b and is not confined to the stage of litigation
But we are not prepared to accept the contention on behalf of the respondent that this responsibility to make full disclosure arises immediately the claim is made by the consignor and if the railway immediately on such claim being made does not disclose all the facts to the consignor there is immediately a breach of this term of the contract contained in the risk note
It is true that the railway is bound to disclose to the consignor how the Consignment was dealt with throughout the time it was in its possession even before any litigation starts but we are of opinion that such disclosure is necessary only where the consignor specifically asks the railway to make the disclosure
If no such disclosure is asked for the administration need not make it before the  litigation
In the present case there is  no proof that any disclosure was asked for in this behalf by the consignor at any time before the suit was filed
Therefore if the railway did not disclose how the consignment was dealt with throughout before the suit was filed it cannot be said to have committed breach of this term of the contract
The disclosure envisages a precise statement of how the consignment was dealt with by the railway or its servants
if the disclosure is asked for before the litigation commences and is not given or the disclosure is given but it is not considered to be sufficient by the consignor the dispute has to be judicially decided and it is for the court then to say if a suit is brought whether there has been Ia breach of this term  of the contract
After this comes the stage where the consignor or the consignee  being dissatisfied brings a suit for compensation
At that stage evidence has to be led by the railway in the first instance to substantiate the disclosure which might have been made before the litigation to the Consignor or which might have been made in the written statement in reply to the suit
When the railway administration has given its evidence in proof of the disclosure and the plaintiff is not satisfied with the disclosure made in the evidence the plaintiff is entitled to ask the court to call upon the railway to fulfil its obligation under the contract and the railway should then have the opportunity of meeting the demands of the plaintiff before its case is closed
Thus in addition to the evidence that the railway may adduce on its own and in doing so the railway has necessarily to keep in mind the provisions of section 114 of the Indian Evidence Act the plaintiff can and should draw the attention of the court if he feels that full disclosure has not been made
 In that case he can ask the court to require the railway to make further disclosure and should tell the court what further disclosure he wants
It is then for the court to decide whether the further disclosure desired by the plaintiff should be made by the railway and if the court decides that such further disclosure 154 should be made the railway has to make such further disclosure as the court orders it to make on the request of the plaintiff
If the railway fails to take the opportunity so given to satisfy the demands of the plaintiff endorsed by the court the railway would be in breach of its contractual obligation of disclosure
It is at this stage therefore that the railway can be truly said to be in breach of its contractual obligation of disclosure and that breach arises because the railway failed to disclose matters which the court on the request of the plaintiff asks it to disclose
The question then is what is the effect of this breach
It is remarkable that the Privy Council did not lay down that as soon as the breach is made as above the risk note comes to an end and the responsibility of the railway is that of a bailee under section 72 l of the Act
In the observations already quoted the Privy Council has gone on to say that after this stage is over the question may arise whether misconduct may be fairly inferred from the evidence of the railway
It seems to us therefore that even if there is a breach of the term as to full disclosure it does not bring the contract to an end and throw the responsibility on the railway as if the case was a simple case of responsibility under section 721 of the Act the case is thus not assimilated to a case where the goods are carried at the ordinary rates at railway risk
The reason for this seems to be that the goods have already been carried at the reduced rates and the consignor has taken advantage of that term in the contract
Therefore even though there may be a breach of the term as to complete disclosure by the railway the consignor cannot fall back on the ordinary responsibility of the railway under section 72 1 of the Act as if the goods had been carried at railway s risk at ordinary rates for he has derived the advantage of the goods having been carried at a specially reduced rates
The risk note would in our opinion continue to apply and the court would still have to decide whether misconduct can be fairly inferred from the evidence of the railway with this difference that where the railway has been in breach of its obligation to make full disclosure misconduct may be more readily inferred and section 114 of the Indian Evidence Act more readily applied
But we do not think that the conditions in the risk note can be completely ignored simply because there has been a breach of the condition of complete disclosure
The view of the Patna High Court that as soon as there is breach of the condition relating to complete disclosure the risk note can be completely ignored and the responsibility of the railway judged purely on the basis of section 72 1 as if the goods were carried at the ordinary rates on railway s risk cannot therefore be accepted as correct
We may point out that in Surat Cotton Spinning and Weaving Mills Limited s case I the plaintiffs wanted the guard of the train to be examined and he was undoubtedly a material witness
Even so the witness was not examined by the railway
Finally therefore the Privy council allowed the appeal with these observations at p 189 While their Lordships would be inclined to hold that the respondent by his failure to submit the evidence of Rohead was in breach of his contractual obligation to give the evidence necessary for disclosure of how the consignment was dealt with they are clearly of opinion that the failure to submit the evidence of Rohead in the circumstances of this case entitles the court to presume in terms of section 114 g of the Evidence Act that Rohead s evidence if produced would be unfavorable to the respondent and that in consequence misconduct by complicity in the theft of some servant or servants of the respondent may be fairly inferred from the respondent s evidence
These observations show that even though there may be a breach of the obligation to give full disclosure that does not mean that the risk note form Z or form B can be ignored and the responsibility of the railway fixed on the basis of section 72 1 as a simple bailee
If that was the effect of the breach the Privy Council would not have come to the conclusion after applying section 114 g of the Evidence Act in the case of Rohead that misconduct by complicity in the theft of some servant or servants of the railway may be fairly inferred from the railway s evidence
The appeal was allowed by the Privy Council after coming to the conclusion that misconduct by the servant or servants of the railway might be fairly inferred from the evidence including the presumption under section 114g of the Evidence Act
It seems to us clear therefore that even if there is a breach of the obligation to make full disclosure in the sense that the railway does not produce the evidence desired by the plaintiff in the suit even though the request of the plaintiff is endorsed by the court the effect of such breach is not that the risk note is completely out of the way the reason for this as we have already indicated being that the consignor has already taken advantage of the reduced rates and therefore cannot be allowed to ignore the risk note altogether
But where there is a breach by the railway of the obligation to make full disclosure the court may more readily infer misconduct on the part of the railway or its servants or more readily presume under section 114 g of the Evidence Act against the railway
This in our opinion is the effect of the decision of the Privy Council in Surat Cotton Spinning and Weaving Mills Limited s case1
As we have already said we are in respectful agreement with the law as laid down there
So far as the present appeal is concerned there was no de by the consignor for disclosure before the suit
Even after the suit was filed there was no statement by the respondent at any 1 1937 LR 64 IA 176
156 stage that the disclosure made by the appellant in the evidence was in any way inadequate
The respondent never told the court after the evidence of the railway was over that he was not satisfied with the disclosure and that the railway be asked to make further disclosure by producing such further evidence as the respondent wanted
In these circumstances it cannot be said in the present case that there was any breach by the railway of its responsibility to make full disclosure
In the circumstances we are of opinion that the risk note would still apply and the court would have to decide whether misconduct on the part of the railway can be fairly inferred from the evidence produced by it
If the court cannot fairly infer misconduct from the evidence adduced by the railway the burden will be on the respondent to prove misconduct
that burden if it arises has clearly not been discharged for the respondent led no evidence on his behalf to discharge the burden
We therefore turn to the evidence to see whether from the evidence produced by the railway a fair inference of misconduct of the railway or its servants can be drawn on the facts of this case
It is not in dispute in this case that the wagon containing the consignment arrived intact at Mughalsarai on December 9 1947
Besides there is evidence of Damodar Prasad Sharma Assistant Trains Clerk Mughalsarai PW 14 who had the duty to receive trains at the relevant time that 192 Dn goods train was received by him on line No 4 and that there were two watchmen on duty on that line for examining the goods train and they kept notes of the same
He also produced the entry relating to the arrival of the train and there is nothing in the entry to show anything untoward withthis wagon when the train arrived at Mughalsarai
His evidence also shows that the train was sent to the marshaling yard on December 11 1947
Finally there is the evidence of Chatterji PW 8 who is also an Assistant Trains Clerk
It was his duty to make notes with respect to goods trains which left Mughalsarai
He stated that this wagon was sent by train No 214 on December 12 1947 in the evening
He also stated that the wagon was in good condition and produced the entry relating to this wagon
It appears however from his evidence that rivets and seals are examined by the watch and ward staff and they keep record of it
Apparently therefore he did not actually inspect the wagon before it left though he says that it was in good condition
The relevance of his evidence however is only this that in his register showing the dispatch of trains there is no entry to the effect that there was any thing wrong with this wagon when it was dispatched
The most important evidence however is of the guard of the train Ram Prasad Ram PW 2
He stated that before the train started from Mughalsarai he patrolled both sides of it and the place from where the train started was well lighted and watch and ward staff also patrolled the area
He also stated that the rivets and seals of all the wagons in the train were checked at Mughal sarai and there was apparently nothing wrong with them
Now if 157 the evidence of the guard is believed it would show that the wagon containing the consignment was intact at Mughalsarai upto the time 214 goods train including this wagon left Mughalsarai
If so there would be no reason to hold that anything was done to the wagon before the train left Mughalsarai
It may be mentioned that the trial court accepted the evidence of the guard while the High Court was not prepared to believe it
On a careful consideration of the evidence of the guard we see no reason why his evidence should not be believed
It is obviously the duty of the guard to see that the train was all right when he took charge of it
It appears that in discharge of his duty the guard patrolled the train on both sides and looked at rivets and seals to see that they were intact
It is however urged that the guard s evidence does not show that the seals which he found intact were the original seals of Wadibundar and the possibility is not ruled out that the original seals might have been tampered with and new seals put in while the train was in the marshaling yard at Mughalsarai for two days as the evidence of the watch and ward staff had not been produced
It would perhaps have been better if the evidence of the watch and ward staff had been produced by the railway but if the evidence of the guard is believed that the seals and rivets were intact when the train left Mughalsarai the evidence of the watch and ward staff is  not necessary
It is true that the guard does not say that the seals were the original seals of Wadibundar but it appears from the evidence of Jagannath Prasad PW 9 who was the Assistant Station Master at Dildarnagar that he found when the train arrived there that the northern flapdoors of the wagon were open while southern flapdoors were intact with the original seals
This evidence suggests that the original seals could not have been tampered with when the train left Mughalsarai and that the guard s evidence that seals and rivets were intact shows that nothing had happened to the wagon while it was at Mughalsarai
Further it is also in evidence that there is ample light in the marshalling yard at Mughalsarai and that watch and ward staff is posted there as well
So the chances of tampering with the seals and rivets in the marshalling yard in the circumstances are remote
As such the evidence of the guard that the seals and rivets were intact when he left with the train on the evening of December 12 would apparently exclude the possibility that there was any tampering with the wagon before it left Mughalsarai
It is true that on the last day when the evidence for the railway was recorded and the guard had been recalled for further cross examination it was suggested to him that the railway servants at Mughalsarai had removed the bales and were responsible for the theft
He however denied that
But it is remarkable that if the respondent was dissatisfied with the evidence of the guard which was to the effect that the wagon was all right when he left Mughalsarai with the train on December 12 it did not ask the court to order the railway to produce the evidence of the watch and ward staff with respect to this wagon while it was in the marshalling yard at Mughalsarai
The respondent could ask for such disclosure
If the court LBD2SCI 12 158 had accepted the request and the railway had failed to produce the evidence of the watch and ward staff it may have been possible to use section 114 of the Evidence Act and hold that the watch and ward staff having not been produced their evidence if produced would have gone against the railway
But in the absence of any demand by the respondent for the production of the watch and ward staff which he could ask for we see no reason why the statement of the guard to the effect that seals and rivets of the wagon were intact when he left Mughalsarai with the train should not be accepted
In the absence of any demand by the respondent for the production of watch and ward staff his mere suggestion that the railway servants at Mughalsarai might have committed the theft cannot be accepted
There is the further evidence of the guard as to what happened between Mughalsarai and Buxar
It appears between these two stations the train stops only at Dildarnagar
The evidence of the guard however is that the train suddenly stopped between the warner and home signals before it reached Dildarnagar
He therefore got down to find out what the trouble was
He found that the hosepipe between two wagons had got disconnected and this resulted in the stoppage of the train
The evidence further is that the hosepipe was intact when the train started from Mughalsarai
He made a note of this in his rough memo book which was produced
It is noted by him that the northern flap door of this wagon was open
He reconnected the hosepipe and went up to Dildarnagar
There he reported the matter to the station staff
His further evidence is that there were three escorts with the train and that they were guarding the train when the train was standing between the warner and the home signals before it reached Dildarnagar
Nothing untoward was reported to him by these escorts
It was at this stop between the two signals that the guard noticed that the rivets and seals of this wagon on one side had been broken
The case of the railway is that there was theft in the running train between Mughalsarai and Buxar and that is how part of the consignment was lost
The evidence of the guard does suggest that something happened between Mughalsarai and Dildarnagar and then between Dildarnagar and Buxar
In addition to this the evidence of the station staff at Dildarnagar is that the flapdoors of this wagon were found open when the train arrived at Dildarnagar
The contents were not checked at Dildarnagar as there was no arrangement for checking at that station
The wagon was resealed at Dildarnagar and the fact was noted in the station master s diary
It may be mentioned that the evidence of the station staff was that the wagon was resealed though the guard says that it was riveted also at Dildarnagar
The entry in the guard s rough memo however is only that the wagon was resealed
The guard certainly says that it was rivetted also at Dildarnagar but that is not supported by the station staff and the entry in the guard s rough memo
It seems that the statement of the guard may be due to some error on his 159 part
That may also explain why when the train arrived at Buxar the flapdoor again was found open for it had not been rivitted at Dildarnagar
Then the evidence of the Buxar station staff is that the northern flapdoors of this wagon were open when the train arrived at Buxar
It was then resealed and rivetted and was detached for checking
The checking took place on December 14th at Buxar
It was then found that one side had the original seals of Wadibun dar while the other side had the seals of Buxar
On checking the wagon 27 bales were found intact covering of one bale was torn and one bale was found loose and slack
This evidence asto what happened between Mughalsarai and Buxar thus makes it probable that there was theft in the running train between Mughalsarai and Buxar and that may account for the loss of part of the consignment
It is however contended on behalf of the respondent that no evidence was produced from Mughalsarai asto what happened while the wagon was in the marshalling yard and that the seal book which is kept at every railway station containing entries of resealing when a wagon is resealed was not produced from Mughalsarai and an adverse inference should be drawn from this non production
We are however of opinion that the evidence of the guard to the effect that the seals were intact when he left Mughalsarai with the train is sufficient to show that the wagon was in tact with the original seals when it left Mughalsarai and there fore it is not possible to draw any adverse inference from the non production of the watch and ward staff or the seal book of Mughalsarai in the circumstances of this case
It would have been a different matter if the respondent had asked for the production of the seal book as well as the evidence of the watch and ward staff
But the respondent contented itself merely with the suggestion that a theft might have taken place at Mughalsarai which was denied by the guard and did not ask the court to order the railway to produce this evidence
In these circumstances in the face of the evidence of the guard and the fact that one seal on the southernside of the door was of the original station
we do not think that it is possible to draw an adverse inference against the railway on the ground that the evidence of the watch and ward staff and the seal book at Mughalsarai were not produced
The seal book would have been of value only if the wagon had been resealed at Mughalsarai but there is in our opinion no reason to think that the wagon had been resealed at Mughalsarai after the evidence of the guard that he found the seals and rivets intact when he left Mughalsarai with the train
On a careful consideration of the evidence therefore we are of opinion that a fair inference cannot be drawn from the evidence of the railway that there was misconduct by the railway or its servants at Mughalsarai during the time when the wagon was there
If the evidence of the guard is accepted and we do accept it there can be no doubt that the loss of the goods took place be case of theft in the running train between Mughalsarai and 160 Buxar
There is no evidence on behalf of the respondent to prove misconduct and as misconduct cannot fairly be inferred from the evidence produced on behalf of the railway the suit must fail
We therefore allow the appeal set aside the judgment and decree of the High Court and restore that of the Additional Subordinate Judge
In the circumstances of this case we order parties to bear their own costs throughout
Appeal allowed


Summary:
Out of a consignment of 60 bales of piece goods despatched by the Railway under risk note Form Z only 29 bales were delivered to the respondent who was the consignee
By sending the consignment thus the consignor got a specially reduced rate but the burden was thrown on him of proving misconduct on the part of the railway or its servants if there was a loss of goods
The risknote also imposed an obligation on the Railway to disclose how the consignment was dealt with by it during the time the consignment was in its possession or control
The respondent wrote a letter to the Chief Commercial Manager of the Railway stating that 60 bales were booked but only 29 bales had been delivered and that a suit for damages would be filed
The letter was sent within 6 months of the booking of the consignment and contained the details as to how the amount of damage was arrived at
Later on a notice was given under section 80 of the Civil Procedure Code 1908 and a suit was filed for damages
But before the filing of the suit there was no demand by the consignor for a disclosure as to how the consignment was dealt with by the Railway throughout the period it was in its possession or control
The Railway however made a disclosure in its written statement as
to how the consignment was dealt with throughout that period
Its defence was that there was a theft in the running train and that was how part of the consignment was lost and not due to any misconduct on the part of the Railway or its servants
Even after the suit was filed and evidence let in at the trial by the railway there was no statement by the respondent at any stage that the disclosure made by the Railway in the written statement or in the evidence was in any way inadequate
The resplendent never told the court after the evidence of the Railway was over that he was net satisfied with the disclosure and that the Railway should be asked to make a further disclosure
The suit was dismissed by the trial court but decreed on appeal by the High Court
In the appeal to the Supreme Court it was contended that i the suit was barred by section 77 of the Indian Railways Act 1890 inasmuch as notice required therein was not given by the respondent and ii under the terms of the risk note the Railway was absolved from all responsibility for the less of the goods consigned thereunder from any cause whatsoever
except upon proof of misconduct of the Railway or its servants that the burden of proving such misconduct was on the respondent and that the respondent had failed to discharge the burden
HELD i A notice under section 77 of the Act is necessary in the case of non delivery which arises from the loss of goods
Though the letter written by the respondent to the Chief Commercial Manager was not specifically stated to be a notice under the section it gave all the particulars necessary for such a notice and it was also given within time prescribed
Therefore the letter was sufficient notice for the purpose of the Act 149 D F 146 Governor General in Council vs Musaddilal 19613 SCR 647 and Jatmull Bhojraj vs The Darjeeling Himalayan Railway CoLtd   followed
ii The view of the High Court that there was a breach of the condition relating to complete disclosure and that on such breach the risk note could be completely ignored and the responsibility of the Railway judged purely on the basis of section 721 of the Act as if the goods were consigned at the ordinary rates on the Railway srisk was not correct
154 H The responsibility of the railway administration to disclose to the consignor as to how the consignment was dealt with throughout the time it was in its possession or control arises at once under the risk note in either of the cases referred to therein and is not confined to the stage of litigation
But such disclosure is necessary only where a consignor specifically asks the railway to make the disclosure
If no such disclosure is asked for the administration need not make it before the litigation
Therefore if the Railway did not make the disclosure before the suit was filed it could not be said to have committed a breach of the term of the contract 153 A D The disclosure envisages a precise statement of how the consignment was dealt with by the railway or its servants
If the disclosure is asked for before litigation commences and is not given or the disclosure is given but it is not considered to be sufficient by the consignor the dispute has to be judicially decided and it is for the court to say if a suit is filed whether there has been a breach of the term
At that stage evidence has to be led by the railway in the first instance to substantiate the disclosure which might have been made before the litigation to the consignor or which might have been made in the written statement
When the administration has given its evidence in proof of the disclosure if the plaintiff is not satisfied with the disclosure made in evidence he is entitled to ask the court to call upon the railway to fulfill its obligation under the contract and the railway should then have the opportunity of meeting the demands of the plaintiff
It is then for the court to decide whether the further disclosure desired by
the plaintiff should be made by the railway and if the court decides that it should be made the railway has to make such further disclosure as the court orders
If the railway fails to take that opportunity to satisfy the demands of the plaintiff endorsed by the court the railway at that stage would be in breach of its contractual obligation of disclosure
153 E 154 B The effect of the breach however is not to bring the contract to an end and throw the responsibility on the railway as if the case was a simple case of responsibility under s721
The risk note would continue to apply and the court would have to decide whether the misconduct can be fairly inferred from the evidence of the railway with the difference that where the railway has been in breach of its obligation to make full disclosure misconduct may be more readily inferred and section 114 of the Evidence Act more readily applied
But the conditions of the risk note cannot be completely ignored simply because there has been a breach of the condition of complete disclosure154 D G Surat Cotton Spinning  Weaving Mills vs Secretary of State for India in Council 1937 64 IA 176 applied