JUDGMENT [ENTITY], J.
1. This is a plaintiff's appeal from an appellate judgment and decree of affirmance dismissing a claim against the Union of India awning and representing certain railways for compensation for non-delivery of a consign-
ment.
2. The sole appellant [ENTITY] and his brother [ENTITY] carry on business under the name and style of [ENTITY] and Brothers, a registered firm at [ENTITY] within the sub-division of Asansol. They deal in tobacco including what is called 'makha' (mixed) tobacco. With a view to manufacturing 'makha' tobacco of various qualities, they purchase scents from far and near.
3. On September 27, 1951 the Foreign Scent Supplying Syndicate (shortened in the railway receipt into F.S.S.S.) of Bombay despatched one case of chemical perfumery christened 'Satomala' from Borivli, a station the abbreviation of which in railway terminology is B.V.I. The case contained 112 Ibs. of 'Satomala'. The destination of this consignment despatched under a parcel way bill No. B/15751-2 dated September 27, 1951 was [ENTITY]. It was consignment to self. The railway receipt which is the parcel way bill just stated was endorsed in favour of [ENTITY] and Brothers and for consideration too, the appel-lants having paid the price thereof: Rs. 1642/- apart from the railway freight and other charges, to one [ENTITY], the proprietor of the consignor firm, Foreign Scent Supplying Syndicate. In terms of measure of weight prevailing here, the case of 'Satomala' including its own weight weighed 2 maunds 5 seers.
4. A consignment as that was not delivered at this end to the appellant and his brother. Hence, after observing the due formalities of law, they both of them - Instituted the suit on 25-11-1952 in the Court of Munsiff at Asansol praying for a decree of Rs. 1792/- with costs and interest : Rs. 1792/- as the price of 112 Ibs. of 'Sato-mala' at the rate of Rs. 167- a Ib.
5. The Union of India representing the four railways eastern, western, northern and central defended the suit on various grounds two of which need only be noticed: (i) neither being the consignor nor the consignee and there being no privity of contract with any one of the railways, the plaintiffs had no 'locus standi' to maintain the suit In absence of proof of ownership of the goods consigned and (ii) the defendant could not be mulcted in damages as the loss complained of was due to leakage of the container in circumstances beyond the control of the railways.
6. The learned munsiff held that the endorsement of the railway receipt passed title to the goods and that the plaintiffs having failed to establish negligence or misconduct on the part of the railway administrations, [SECTION] of the [ACT], made them immune from any liability for the loss. In that view, by a judgment and decree dated March 14, 1955 he dismissed the suit.
7. The litigation having been carried on appeal, the learned additional district Judge, Asansol, held that a simple endorsement of the railway receipt could not pass title to she goods ownership of which was not proved by evidence 'allunde' and that the consignment having been carried at the railway risk rate, [SECTION] would not protect the railways in absence of the requisite proof by them of the accrual of the loss for reasons beyond their control. The learned advocate for the railways before the Court of appeal conceded the second point. Be that as it may, in the view that the plaintiffs lacked title, the learned Judge by his judgment and decree dated March 13, 1957 dismissed the appeal.
8. [ENTITY], the first plaintiff, has therefore come up to this Court in second appeal, his brother and partner [ENTITY] figuring as a 'pro forma' respondent.
9. Mr. [ENTITY] appearing for the appellant addresses me mainly on the controversial point whether or not an endorsement 'simpliciter' of the railway receipt, a mercantile document of title to goods, is enough to pass title to the goods the receipt represents. Mainly, because he does not confine himself to that and that alone. He also contends that the finding of fact come to by the last Court of facts about no consideration having passed for the endorsement of the railway receipt is vitiated by errors of law. Mr. [ENTITY] appearing for the respondent contends just the opposite. An endorsement without more can never pass title to the goods. The finding of fact that no consideration passed for the endorsement is too good a finding to be disturbed by this Court in second appeal. This apart, Mr. [ENTITY] has a point of his own. A leaking container containing liquid perfumery a fact found by both the Courts absolves the respondent from all liability.
10. These are the three points for decision. I take up the second one first. The learned trial Judge apparently stresses, among other things which are of little relevance, that part of the evidence of [ENTITY], the only witness of the plaintiffs where he says :
"This is the railway receipt endorsed by [ENTITY], "malik" of the consignor firm : initialled by him in my presence marked Ex. 1 and endorsement Ext. 1 (a). We paid consideration for the goods to [ENTITY] in our 'gadi'."
and finds:
"And Ex. 1 (a) is the endorsement on the railway receipt made by the consignor in favour of the plaintiff firm the endorsement being initialled by the 'malik' of the Foreign Scent Supplying Syndicate, the consignor, with the seal of that firm ('vide' evidence of P.W. 1), I am satisfied that the plaintiff firm is the owner of the suit consignment and decide the issue accordingly".
the issue being : is the plaintiff firm the owner of the suit consignment?
11. The learned appellate Judge upsets this finding for two reasons. First : none of the two plaintiffs pledge their oaths. Second : it is incredible that a registered firm will pay a sum of over Rs. 1600/- without entering it in its accounts.
12. The first reason betrays an error of law. True It is that non-appearance of a party (personally knowing the whole of the circumstances) as a witness discredits the truth of his case. That is a salutary principle resting on illustration (g) to [SECTION] of the [ACT]. But when one like [ENTITY], a trusted 'Karmachari' of the firm, knowing all about the payment, deposes on oath that he did pay Rs. 1642/- etc. to [ENTITY] who had done a business trip from Bombay to [ENTITY], it will be wrong to make the presumption the learned appellate Judge does only because of non-examination of any one of the two plain-tiffs. Then, there is hardly any evidence that they personally knew about this payment. On the other hand, the following has been elicited in [ENTITY]'s cross-examination:
"I have given the price as prevailing at [ENTITY]. I paid Rs. 1642/- as price apart from the railway freight and ether charges."
The accent is on 'I', i.e., [ENTITY], not on any of the two plaintiffs. Under [SECTION] 'ibid' the Court may presume the existence of a fact (here non-payment of the sum of Rs. 1642/-). Not that the Court shall. The evidence of [ENTITY] being what it is, the learned Judge does fall into an error of law in drawing an adverse presumption from non-examination of either of the two plaintiffs. This error is only heightened by failure on his part to consider that [ENTITY], one to be the worst hit by non-payment, has apparently been making no pother about it a consideration which makes payment look so probable. Failure to weigh this constitutes another error of law.
13. The leading case on the effect of non-examination of a party as a witness is [PRECEDENT] . But there [ENTITY] having borne to her husband a posthumous son was the issue of all issues. The very reasonable challenge to her to submit to medical examination in order to find out the truth of the condition of her advanced pregnancy was not met. Worse, she was spirited away to foreign territories (as native states then were) and brought back long after the alleged birth of a son too long for the birth or absence of birth being detected on medical examination. With odds so heavy against her, at the trial she did not go to the witness-box, though she had been present in Court. Non-examination of such a one depriving her adver-sary of the crucible of cross-examination must necessarily be the strongest possible circumstance going to discredit the truth of her case. Nothing like that can be said of the case in hand.
14. The second reason appears to be abrupt and dogmatic evincing little consideration to what [ENTITY]'s evi-dence bears in cross-examination :
"I did not enter this (payment of Rs. 1642/-) in our 'khata' : the transaction was kept pending till delivery of the goods."
Had the learned Judge considered this and rejected it, I could not have touched his finding, a pure question of fact as it is. Since he has omitted to consider it and, worse, proceeded instead on an 'a priori' assumption, a cherished prejudice the incredibility of a registered firm paying over Rs. 1600/- with no entry in the accounting books without considering the evidence of the transaction having been kept pending for good reasons, here is another error of law which gives me Jurisdiction to interfere with the finding of fact And I interfere by upholding the finding of the learned munsiff that the appellant's firm is the owner of the consignment in controversy and by upsetting the finding of the learned additional district Judge to the contrary. On this determination alone, the appeal is bound to succeed substantially. (More of which hereafter).
15. I now proceed to discuss the question of a mere endorsement of the railway receipt passing title to the goods, though it is scarcely necessary to do so in view of what I have just found. At the same time I owe it to Mr. [ENTITY] and Mr. [ENTITY] and to their able arguments to record what I think about this problem.
16. What, after all, is the railway receipt I see here?
It is a receipt for 112 Ibs. of liquid perfumery received.
That apart, it is a document embodying a contract of carriage of the said 112 Ibs. of liquid perfumery from Borivli to [ENTITY]. Yet it is still more. It is a mercantile document of title to goods (the aforesaid 112 Ibs. of perfumery again), as the explanation to [SECTION] of the [ACT], substituted by the [ACT], explains. It is a document of title to goods, as [SECTION] of the [ACT], defines the expression. The benefit receivable under such a railway receipt 'qua' a contract of carriage is an action able claim within the meaning of [SECTION] of the [ACT]. That being so, it is assignable but without the fetters [SECTION] and [SECTION] 'ibid', for example, impose; [SECTION] providing a particular mode of transfer (only by the execution of an instrument in writing) and [SECTION] making the transfer subject to all the liabilities and equities to which the transferor was subject on the date of the transfer. Without these fetters because these are two amongst other sections which forego [SECTION] in [SECTION] 'ibid'. And in terms of [SECTION] and [SECTION] do not apply to any mercantile document of title to goods which a railway receipt is. The benefit is therefore capable of being assigned in any manner and the question of privity of contract Mr. [ENTITY] stresses cannot necessarily bulk large. In the circumstances, an endorsement 'simpliciter' on the railway receipt, the endorsement here reading:
Please deliver To Illegible [ENTITY] and Brothers. Seal of the Foreign Scent Supplying Syndicate, Bombay 28 Within the space in the seal Is reiterated:
To [ENTITY] and Brothers Sc (the initials of [ENTITY] going by [ENTITY]'s evidence), clearly shows the intention of the transferor ([ENTITY] of Foreign Scent Supplying Syndicate of Bombay) to transfer the rights under the contract of carriage the railway receipt embodies, to the plaintiff firm. 'Qua' a document of title to goods, the endorsement without more conveys the title to 112 Ibs. of liquid perfumery to the endorsee the plaintiff firm.
17. This is one way of looking at the problem. But there is another way still. True, the railway receipt is not a negotiable instrument. It is neither a promissory note nor a bill of exchange nor a cheque. And these are the only types of negotiable instruments within the meaning of [SECTION] of the [ACT]. But [SECTION], [ACT] comes full circle back. So does [SECTION] along with [SECTION] 'ibid' Result, the load of [SECTION] and [SECTION] is not there on the assignment of the railway receipt here. An assignee in good faith which the plaintiff firm is the holder of the railway receipt in due course (to emulate the language associated with negotiable instruments) is not subject to any of the liabilities and equities to which his translator, the Foreign Scent Supplying Syndicate, was subject as res-pects the said railway receipt on the date of transfer. How far is that from negotiability? Not very. So, though not a negotiable instrument under the [ACT], it is negotiable all the same, thanks to [SECTION] of the [ACT]. Say, it is a quasi-negotia-ble instrument. Again, how the mercantile community treats a railway receipt is such a notorious fact that I can take judicial notice of it. A mercantile document of title to goods the statutes proclaim a railway receipt to be that it passes from one to another by a mere endorse ment. To take an example from one out of so many reported decisions, [ENTITY] v. North Westers Railway Co. (where [ENTITY], J., as his Lordship then was, does not think an endorsement without more good enough to pass title : more of which hereafter) reveals four endorsements one, by [ENTITY], the plaintiffs, to National Cotton Trading Co., two by National Cotton Trading Co. to Messrs. [ENTITY]; three, by Messrs. [ENTITY] to [ENTITY]; four, by [ENTITY] back to the plaintiffs. All these endorsements were in 1942. The endorsement under consideration in this appeal was in 1951, The trading community has not remained static all these years. On the contrary, it Is forging ahead. Te quote [ENTITY], C. J. (as his Lordship then was) from [ENTITY], a Firm v. Union of India, [PRECEDENT] at p. 41:
"I may point out that the trading community is some-times ahead of the law and tries to invest with negotiability other and new documents."
A little below:
"In my opinion, the matter has become se settled that even if it was necessary to prove a custom that a railway receipt is a negotiable document, it is not necessary to prove such a custom today."
At page 42:
"The custom is established because it has been accept-ed for years in India by the Courts In India, and one single dissenting view against that proposition (his Lordship is referring to [PRECEDENT] cannot, in my opinion, destroy the law merchant which has developed in this country.
The law is made certain, if not from 1900, at least after 1930 and it is not necessary to go to custom any more."
1900 is the year when the present [SECTION] of the [ACT] was brought on the statute book by the amending Act 2 of 1900. And 1930 is the year when the [ACT], defining in Its [SECTION] the expression "document of title to goods", an expres-sion which includes a railway receipt became the law of the land.
18. In the same case : [ENTITY]'s [PRECEDENT], [ENTITY], J. to whom the matter is referred to, be-cause of difference of opinion between [ENTITY], C. J. and [ENTITY], J., observes at page 46:
"I agree with my Lord the Chief Justice's opinion that the matter has become so settled that it is no more necessary to prove such a custom by other evidence."
19. So whatever way the endorsement on the railway receipt before me may be viewed, whether as a transfer of the rights and benefits under a contract of carriage or at a transfer of ownership of goods which this mercantile document of title thereto stands for or as a step forward in the process of negotiability, the railway receipt possessing all the essential characteristics of negotiability provided for by [SECTION] of the [ACT] and the law merchant, the unqualified endorsement I see here does convey title to the appellant and does thereby confer on him the right to sue.
20. Of the number of authorities cited before me, those which take the view recorded above form the majority with varying emphasis on this nuance or that, though the view is rendered 'obiter' in some cases because of findings which precede or follow such a view. And one at least goes a vast deal more holding as it does that a consignee who is not even the owner of goods but to whom the goods are consigned for sale on commission basis is entitled to sue for loss caused by the damage to the goods in transit. This is the full bench decision of the Allahabad High Court in [PRECEDENT].
Other decisions coming under this majority group are [PRECEDENT] (where [ENTITY], J. holds that the endorsement on the back of the railway receipt by the Standard Vacuum Oil Company, both the consignor and the consignee, in favour of the plaintiff entitles him to claim delivery of the goods and, adequate delivery failing, to bring the suit for compensation); [PRECEDENT] (where [ENTITY], j. finds the bale of cloth not delivered actually purchased by the plaintiff and holds (an obiter) that, that apart, a railway receipt is a mercantile document of title and an endorsee thereof, the plaintiff being the second endorsee, has sufficient interest in the goods covered by it to maintain an action for damages against the railway company who issued it); [PRECEDENT] (where [ENTITY], C. J. and [ENTITY], J. observe that a railway receipt being a mercantile document of title to goods, it is possible to transfer the title in goods to the endorsee by mere endorsement, (another 'obiter'), but uphold the dismissal of the suit by the Judge, Small Cause Court, Allahabad, because of the admission that the title to the goods remained in the consignor and that the plaintiff endorsee is only the custodian for sale on commission a view (the latter one dismissing the action) which is upset by the Full Bench in (S) noticed already); [PRECEDENT] (where [ENTITY], J. holds, [ENTITY], J. agreeing, an endorsement 'simpliciter' conveying sufficient interest in goods to the endorsee and thereby conferring on him the right to file a suit); [PRECEDENT] (where [ENTITY], J. and [ENTITY], J. hold as much on a review of a number of authorities); [ENTITY]'s case, [PRECEDENT] supra (where [ENTITY], C. J. holds an assignment of a railway receipt creating a right in rem, the strongest title known to law, and therefore conferring on the assignee the right to sue) and two more Madhya Pradesh cases : [PRECEDENT] (in each of which a bench of two Judges, [ENTITY], C. J. being in both, holds an endorsement without more conferring on the endorsee the 'locus standi' to maintain a suit).
21. To this may be added [PRECEDENT] , which reveals an attempt to non-suit the plaintiff, the holder of the railway receipt as an endorsee, on the ground that assignment at 2 Hare Street, Calcutta of the said receipt, not negotiable nor a negotiable instrument confers no jurisdiction to this Court (in exercise of its ordinary original jurisdiction), the contract of carriage having been from Bangsabati to Delhi, both places failing outside of its jurisdiction. [ENTITY], J., however, considers such an approach "not fundamentally sound" and observes at page 811 (of Cal WN) : (at p. 565 of AIR) :
"But the point is that the railway receipts are themselves documents of title and can be negotiated and transferred."
22. It is indeed common learning that they are being negotiated and transferred everyday wherever merchants move about and do business. To use with adaptation the language of [ENTITY] L. J. on the legal effect of the transfer of a bill of lading in Sanders v. Maclean, (1883) 11 Q.B.D. 327 at p. 341, a cargo on land while in the hands of the carrier is necessarily incapable of physical delivery. During the period of transit, the railway receipt by the law merchant is universally recognized as its symbol, and the indorsement and delivery of the railway receipt operates as a symbolical delivery of cargo. Property in the goods passes by such indorsement and delivery of the railway receipt. The railway receipt is but a key which in the hands of a rightful owner is intended to unlock the door of the warehouse in which the goods may chance to be.
23. I have not hesitated to borrow this language on the law touching the transfer of a bill of lading to illustrate the law and its effect on the transfer of a railway receipt, because it (a railway receipt) now stands on the same footing with a bill of lading. To quote [ENTITY], J. again from [ENTITY]'s case, [PRECEDENT] (supra);
"I may add that the mercantile world had accepted the railway receipt along with a number of other documents as negotiable document even prior to the year 1900, and for that reason the Legislature assimilated them with negotiable instruments in [SECTION] of the [ACT] (former [SECTION]) The object and reasons for amending the former [SECTION] read:
'But the exceptions contained in the present [SECTION] require considerable extension. In [SECTION] of the [ACT], the definition of negotiable instrument includes only bills, notes and cheques and does not include the ever increasing class of negotiable instruments which the usage of the money market recognizes as such So, again, a saving is required for mercantile documents of title to goods, such as bills of lading etc. which form a class of quasi-negotiable instruments' (Gazette of India, July 15, 1899, p. 92).
In my opinion, these observations can be judicially noticed in proof of the custom which is of a public nature. By itself they are sufficient to establish negotiability of a railway receipt by custom."
24. To counter the effect of all these decisions Mr. [ENTITY] cites, Mr. [ENTITY] refers me, among others, to a decision of [ENTITY], J. sitting in ordinary original civil jurisdiction of this Court: [PRECEDENT] and to an unreported decision of [ENTITY], J. (as his Lordship then was) in [PRECEDENT]. The decision in each of these cases rests on what Lord [ENTITY] observes delivering the opinion of the Board in [PRECEDENT] :
"The railway receipt, though a document of title, was in form merely an authority to take delivery of the goods and the possession of such a document contained no representation that the holder had any implied authority or right to dispose of the goods. It was, at the best, an ambiguous document. Its possession no more conveyed a representation that the merchants ([ENTITY] and Sons are being referred to as such were entitled to dispose of the property than the actual possession of goods themselves would have conveyed any such representation. It is not like a negotiable instrument; the possession of the railway receipt is no more significant for this purpose than the possession of the goods would have been. It is clear that no plea of estoppel could be raised in the cases where the merchants pledged the goods themselves after having obtained delivery under the railway receipt."
25. I have reproduced from Lord [ENTITY]'s opinion a little more than what [ENTITY], J. or [ENTITY], J. reproduces, with a view to getting a clear idea of the context in which these observations have been made. The merchants pledged 35 railway receipts with the Central Bank of India Ltd. (hereinafter referred to as the first bank) and obtained advances on them. In accordance with the practice which had grown up, the first bank's godown keeper handed over the railway receipts back to the merchants in order to avail himself of their services. The merchants took delivery of the goods and pledging the goods themselves with the Mercantiie Bank of India Ltd. (hereinafter referred to as the second bank) obtained advances from the second bank. This was resorted to when the first bank started placing its stamp on the railway receipt at the time of the pledge. Before that the railway receipts were pledged twice over with the first band and thereafter with the second bank, absence of the first bank's stamp facilitating such a course. Fraud was out. The first bank sued the second for conversion. The plea of estoppel was set up to defeat such an action. The plea failed.
26. Now, let the passage reproduced be re-read in this context. Estoppel connotes representation. The 35 railway receipts mere possession thereof without any endorsement in favour of any one of the two banks bore no representation one way or the other. The merchants were either the named consignors or endorsees from the named consignees. So nothing more can be read into this decision save failure of the defence of estoppel on the basis of possession in the usual course of business by the pledger of the railway receipts. A case, even though decided by the Privy Council, is an authority for the proposition it decides on facts before it. This case therefore is an authority for the plea of estoppel coming to little on the foot of mere possession of railway receipts, it is no authority for a railway receipt not being clothed with all characteristics of negotiability by endorsement in spite of [SECTION] of the [ACT], [SECTION] of the [ACT] and the law merchant. With great humility and greater respect, I shall not therefore go by the two decisions Mr. [ENTITY] cites. 1 shall not, because, with great humility and greater respect again, 1 do not find in the Privy Council decision what [ENTITY] and [ENTITY], JJ. find.
21. It now remains for me to notice two more cases Mr. [ENTITY] cites. [PRECEDENT], the decision of [ENTITY], J. (as his Lordship then was), appears to be distinguishable. The plaintiffs, [ENTITY], the consignors, became the last endorsee after successive endorsements. As consignors, they entered into the contract of carriage with the railway company and were therefore the only persons entitled to maintain the suit, endorsement or no endorsement. So what his Lordship says about a mere endorsement not good enough to pass title to the goods is an 'obiter dictum'. As a matter of fact, the suit culminated in a decree for Rs. 40,000/-.
28. In [PRECEDENT] , [ENTITY] and [ENTITY], JJ. no doubt lay down that a bare consignee, not a party to the contract and not the owner of the goods, cannot maintain 3 suit. But in 58 Bom LR 650 just touched already, [ENTITY] and [ENTITY], JJ. hold that the transferee as the owner of the goods or having some interest in the goods is entitled to file a suit. In the latter decision the emphasis is on a bare consignee as distinguished from a transferee. But are the consignees so bare as that? As commission agents of the consignors the plaintiffs as consignees had some interest at any rate. And according to the full bench decision of the Allahabad High Court : (S) , that is enough to confer 'locus standi' on the consignee to institute a suit. With respect, I prefer to go by that.
29. Upon a review of these cases and on principles of the law discussed above, the conclusion I have come to is that the endorsement I see on the railway receipt here entitled the appellant and his brother to institute the suit they did.
30. The point Mr. [ENTITY] raises admits of an easy answer, even though he relies on the following passages from [ENTITY] on the Law of Carriage by Railway, eighth edition. At page 8:
"Again, the carrier is not responsible for diminution of liquids caused by evaporation or leakage, which no ordinary and reasonable care on his part could prevent; "
At page 64:
"In order that a railway company may become respon-sible to the full extent of their contract for the goods entrusted to them, there are certain obligations which must be observed by the consignor. The first of these is to see that his goods, if they are of a nature to require packing, are properly and securely packed."
For one thing, the contract of carriage here has been at the railway risk rate, as found by the learned appellate Judge and as conceded before him by the learned advocate for the respondent For another thing, the forwarding note (exhibit D) does nowhere record the fact, if that, of defective or improper packing. Once these two facts railway risk rate and good packing are remembered, simply because the container is found leaking at the destination, the railway administration cannot take advantage of the doctrine of "inherent vice". Let them show first that they treated the consignment in transit as a prudent bailee would. Nothing of the hind has been disclosed. So their liability is there.
31. It appears from evidence that the appellant in a manner refused to take delivery of 12 Ibs. of liquid perfumery the container contained at [ENTITY]. Therefore, the price thereof (Rs. 16 x 12 : Rs. 192) he shall not recover. The residue (Rs. 1792 minus Rs. 192 : Rs. 1600) he shall.
32. In the result, the appeal succeeds so. Be it allowed. The judgments and decrees of both the Courts are set aside. And the suit be decreed in part for Rs. 1600/- with corresponding costs throughout. The respondent do satisfy this decree within six months from today.