Case: Governor General In Council Vs. Musaddi Lal

Shah, J.1. 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. I. Rly. 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 for the loss suffered by him, the respondent served a composite notice under S. 77 of the Indian Railways Act and S. 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 II Munsif, Bulandshahr, for a decree for Rs. 782-3-6 being the "price of the bale" and Rs. 200 for loss on account of non delivery. The railway administration resisted the claim on the pleas among others that the suit was not maintainable without an effective notice under S. 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 Art. 31of 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 Art. 133 (1) (c) of the Constitution, this appeal has been preferred by the Union of India.2. 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 with the railway administration within six months from the date of delivery of the ......goods for carriage by railway".3. 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 was for compensation not for loss, destruction or 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 S. 77 is not a condition precedent.4. 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 S. 152 and S. 161 of the Indian Contract Act, 1872. Sections 151 and 152 of the Indian Contract Act deal with the duties of a baliee. 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 balied to him, in the absence of a special contract, he is not responsible for loss, destruction or deterioration of the goods bailed. By Ss. 160 and 161 of the Indian Contract Act, the balilee is under an obligation to return or deliver according to the bailors direction the goods bailed as soon as the time for which the goods 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. 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.5. 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 S. 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 thereof. 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 S. 72 of the Railways Act.6. There are undoubtedly two distinct articles, Arts. 30 and 31 in the first schedule of the Indian Limitation Act dealing with limitation for suits for compensation against carriers. Art 30 prescribes the period of limitation for suits against a carrier for compensation against loss or injury to goods and Art 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 Arts, 30 and 31 of the Limitation Act upon Ss. 72 and 77 of the Railways Act and to hold that a suit for compensation for loss because of non-delivery of good does not fall within S. 77. The view we have expressed is supported by a large volume of authority in the courts in India-for instance M. and S. M. Rly Co. Ltd v. Haridoss Banmalidoss, ILR 41 Mad 871 : (AIR 1919 Mad 140), Hill Sawyers and Co. v. Secretary of State, ILR 2 Lah 133: (AIR 1921 Lah 1) (FB) Martab Ali v. Union of India, 56 Bom LR 150: (AIR 1954 Bom 297 ) Union of India v. Minayagiri Pullappa, ILR (1958) Andh-Pra 323: (AIR 1958 Andh-Pra 475). Assam Bengal Railway Co., Ltd. v. Radhika Mohan Nath, AIR 1923 Cal 397 and B. N. Rly Co. v. Hamir Mull Chhagan Mull, ILR 5 Pat 106: (AIR 1925 Pat 727 ).7. The view expressed to the contrary in the Allahabad High Court in Governor-General in Council v. Mahabir Ram ILR (1953) 1 All 64: (AIR 1952 All 891 ) (FB) and by the Patna High Court in Jais Ram Ramrekha Das v. G. I. P. Railway. ILR 8 Pat 545: (AIR 1929 Pat 109 ), is in our judgment erroneous.

Decision reasoning: 1[ds]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. 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 similarThe view expressed to the contrary in the Allahabad High Court in Governor-General in Council v. Mahabir Ram ILR (1953) 1 All 64: (AIR 1952 All 891  ) (FB) and by the Patna High Court in Jais Ram Ramrekha Das v. G. I. P. Railway. ILR 8 Pat 545: (AIR 1929 Pat 109  ), is in our judgment erroneous.