Case ID: 800

Judgment:
Civil Appeal No. 478 of 1957. Appeal from the judgment and decree dated August 17	 1954	 of the Punjab High Court	 Circuit Bench at Delhi	 in Regular First Appeal No. 76 of 1952	 arising out of the judgment and decree dated December 15	 1951	 of the Court of Sub Judge	 1st Class	 Delhi in Suit No. 169 of 1949/409 of 1950. 77 Ganapathy Iyer and D. Gupta	 for the appellant. Gurbachan Singh and Harbans Singh	 for the respondent. October 28. The Judgment of the Court was delivered by SUBBA RAO J. This appeal on a certificate granted by the High Court of Judicature for Punjab at Chandigarh is directed against its judgment confirming that of the Subordinate Judge	 First class	 Delhi	 in a suit filed by the respondent against the appellant for the recovery of compensation in respect of non delivery of goods entrusted by the former to the latter for transit to New Delhi. On August 15	 1947	 India was constituted into two Dominions	 India and Pakistan; and soon thereafter civil disturbances broke out in both the Dominions	 The respondent and others	 who were in government employment at Quetta	 found themselves caught in the disturbances and took refuge with their household effects in a government camp. The respondent collected the goods of himself and of sixteen other officers	 and on September 4	 1947	 booked them at Quetta Railway Station to New Delhi by a passenger train as per parcel way bill No. 317909. Under the said bill the respondent was both the consignor and consignee. The N. W. Railway (hereinafter called the Receiving Railway) ends at the Pakistan frontier and the E. P. Railway (hereinafter called the Forwarding Railway) begins from the point where the other line ends; and the first railway station at the frontier inside the Indian territory is Khem Karan. The wagon containing the goods of the respondent and others	 which was 'duly seated and labelled indicating its destination as New Delhi	 reached Khem Karan from Kasur	 Pakistan	 before November 1	 1947	 and the said wagon was intact and the entries in the " inward summary." tallied with the entries on the labels. Thereafter it traveled on its onward march to Amritsar and reached that place on November 1	 1947. There also the wagon was found to be intact and the label showed that it was bound to New Delhi from Quetta. On November 2	 1947	 it reached Ludhiana and remained 78 there between November 2	 1947 and January 14	 1948; and the " vehicle summary " showed that the wagon bad a label showing that it was going from Lahore to some unknown destination. It is said that the said wagon arrived in the unloading shed at New Delhi on February 13	 1948	 and it was unloaded on February 20	 1948; but no immediate information of the said fact was given to the respondent. Indeed	 when the respondent made an anxious enquiry by his letter dated February 23	 1948	 the Chief Administrative Officer informed him that necessary action would be taken and he would be addressed again on the subject. After further correspondence	 on June 7	 1949	 the Chief Administrative Officer wrote to the respondent to make arrangements to take delivery of packages lying at New Delhi Station	 but when the respondent went there to take delivery of the goods	 he was told that the goods were not traceable. On July 24	 1948	 the respondent was asked to contact one Mr. Krishan Lal	 Assistant Claims Inspector	 and take delivery of the goods. Only a few articles	 fifteen in number and weighing about 61 maunds	 were offered to him subject to the condition of payment of Rs. 1	067 8 0 on account of freight	 and the respondent refused to take delivery of them. After further correspondence	 the respondent made a claim against the Forwarding Railway in a sum of Rs. 1	62	123 with interest as compensation for the non delivery of the goods entrusted to the said Railway	 and	 as the demand was not complied with	 he filed a suit against the Dominion of India in the Court of the Senior Subordinate Judge	 Delhi	 for recovery of the said amount. The defendant raised various pleas	 both technical and substantive to non suit the plaintiff. The learned Subordinate Judge raised as many as 15 issues on the pleadings and held that the suit was within time	 that the notice issued complied with the provisions of the relevant statutes	 that the respondent had locus stand to file the suit and that the respondent had made out his claim only to the extent of Rs. 80	000; in the result	 the suit was decreed for a sum of Rs. 80	000 with proportionate costs. 79 The appellant carried the matter on appeal to the High Court of Punjab	 which practically accepted all the findings arrived at by the learned Subordinate Judge and dismissed the appeal. In this Court the appellant questions the correctness of the said decree. Learned Counsel for the appellant raised before us the following points: (1) there was no privity of contract between the respondent and the Forwarding Railway	 and if he had any claim it was only against the Receiving Railway; (2) the suit was barred by limitation both under article 30 and Art 31 of the Indian Limitation Act and it was not saved by any acknowledgement or acknowledgements of the claim made within section 19 of the Limitation Act; and (3) the notice given by the respondent under section 77 of the Indian Railways Act	 1890	 did not comply with the provisions of the said section inasmuch as the claim for compensation made thereunder was not preferred within six months from the date of the delivery of the goods for carriage by the Railway. The third point may be taken up first and disposed of shortly. Before the learned Subordinate Judge it was conceded by the learned Counsel for the defendant that the notice	 exhibit P 32	 fully satisfied the requirements of section 77 of the Indian Railways Act	 and on that concession it was held that a valid notice under section 77 of the said Act bad been given by the respondent. In the High Court no attempt was made to question the factum of this concession; nor was it questioned by the appellant in its application for special leave. As the question was a mixed one of fact and law	 we would not be justified to allow the appellant at this very late stage to reopen the closed matter. We	 therefore	 reject this contention. The learned Counsel for the appellant elaborates his first point thus : The Receiving Railway	 the argument	 proceeds	 entered into an agreement with the respondent to carry the goods for consideration to their destination i.e.	 New Delhi	 and in carrying out the terms of the contract it might have employed the agency of the Forwarding Railway	 but the consignor was not in any way concerned with it and if loss was 80 caused to him by the default or neligence of the Receiving Railway	 he could only look to it for compensation and he had no cause of action against the Forwarding Railway. This argument is not a new one but one raised before and the Courts offered different solutions based on the peculiar facts of each case. The decided cases were based upon one or other of the following principles: (i) the Receiving Railway is the agent of the Forwarding Railway; (ii) both the Railways constitute a partnership and each acts as the agent of the other; (iii) the Receiving Railway is the agent of the consignor in entrusting the goods to the Forwarding Railway: an instructive and exhaustive discussion on the said three principles in their application to varying situations is found in Kulu Ram Maigraj vs The Madras Railway Company (1)	 G. I. P. Railway Co. vs Radhakisan Khushaldas (2 )	 and Bristol And Exeter Railway vs Collins (3); (iv) the Receiving Railway	 which is the bailee of the goods	 is authorized by the consignor to appoint the Forwarding Railway as a sub bailee	 and	 after such appointment	 direct relationship of bailment is constituted between the consignor and the sub bailee; and (v) in the case of through booked traffic the consignor of the goods is given an option under 'section 80 of the Indian Railways. Act to recover compensation either from the Railway Administration to which the goods are delivered or from the Railway Administration in whose jurisdiction the loss	 injury. destruction or deterioration occurs. Some of the aforesaid principles cannot obviously be applied to the present case. The statutory liability under section 80 of the Indian Railways Act cannot be invoked	 as that section applies only to a case of through booked traffic involving two or more Railway Administration in India; whereas in the present case the Receiving Railway is situated in Pakistan and the Forwarding Railway in the Indian territory. India and Pakistan are two independent sovereign powers	 and by the doctrine of lex loci contractus	 section 80	 cannot (1) I.L.R. (2) I.L.R. (3) VII H L.C. 194. 81 apply beyond the territories of India; nor can the respondent rely upon the first two principles. There is no allegation	 much less proof	 that there was any treaty arrangement between these two states governing the rights inter se in the matter of through booked traffic. This process of elimination leads us to the consideration of the applicability of principles (iii) and (iv) to the facts of the present case. The problem presented can only be solved by invoking the correct principle of law to mould the relief on the basis of the facts found. We shall first consider the scope of the fourth principle and its applicability to the facts of this case. Section 72 of the Indian Railways Act says that the responsibility of a railway administration for the loss	 destruction or deterioration of animals or goods delivered to the administration to be carried by railway shall	 subject to the other provisions of the Act	 be that of a bailee under sections 151	 152 and 161 of the . Section 148 of the defines " bailment " thus: " A 'bailment ' is the delivery of goods by one person to another for some purpose	 upon a contract that they shall	 when the purpose is accomplished	 be returned or otherwise disposed of according to the directions of the person delivering them." G.W. Patson in the book "Bailment in the Common Law" says	 at p. 42	 thus: " If a bailee of a res sub bails it by authority	 then according to the intention of the parties	 the third person may become the immediate bailee of 'the owner	 or he may become a sub bailee of the original bailee". At p. 44 the learned author illustrates the principle by giving as an example a carrier of goods entrusting them to another carrier for part of the journey. One of the illustrations given by Byles J. in Bristol. And Exeter Railway vs Collins (1) is rather instructive and it (1) VII H.L.C. 194	212	 11 82 visualises a situation which may be approximated to. the present one and it is as follows: The carrier receiving the goods may	 therefore	 for the convenience of the public or his customers	 adopt a third species of contract. He may say	 We do not choose to undertake responsibilities for negligence and accidents beyond our limits of carriage	 where we have no means of preventing such negligence or accident; and we will not	 therefore	 undertake the carriage of your goods from A. to B.	 but we will be carriers as far as our line extends	 or our vehicles go	 and we will be carriers no further; but to protect you against the inconveniences and trouble to which you might be exposed if we only undertook to carry to the end of our line of carriage	 we will undertake to forward the goods by the next carriers	 and on so doing our liability shall cease	 and our character of carriers shall be at an end; and for the purpose of so forwarding and of saving the trouble of two payments	 we will take the whole fare	 or you may pay as one charge at the end; but if we receive it we will receive it only as your agents for the purpose of ultimately paying the next carriers. " We may add to the illustration the further fact that the Forwarding Railway is in India	 a foreign country in relation to the country in which the Receiving Railway is situate. Relying upon the said passages	 an argument is advanced to the effect that the consignor i.e.	 the respondent	 authorised his bailee	 namely	 the Receiving Railway	 to entrust the goods to the Forwarding Railway during their transit through India to their destination and the facts disclosed in the case sustain in the said plea. There is no document executed between the respondent and the Receiving Railway hereunder the Receiving Railway was expressly authorized to create the Forwarding Railway the immediate bailee of the owner of the goods. exhibit P 50	 the railway receipt dated September 4	 1947	 does not expressly confer any such power. But the facts found in the case irresistibly lead to that conclusion. There 83 was no treaty between the two countries in the matter of through booked traffic; at any rate	 none has been placed before us. What we find is only that the Receiving Railway received the goods of the respondent and delivered the wagon containing the said goods to the care of the Forwarding Railway	 and the latter took over charge of the wagon	 carried it to New Delhi and offered to deliver the goods not lost to the respondent on payment of the railway freight. In the absence of any contract between the two Governments or the	 Railways	 the legal basis on which the conduct of the respondent and the Railways can be sustained is that of the respondent delivered the goods to the Receiving Railway with an authority to create the Forwarding Railway as his immediate bailee from the point the wagon was put on its rails. The same result could be achieved by approaching the case from a different perspective. Section 194 of the says : " Where an agent	 holding an express or implied authority to name another person to act for the principal in the business of the agency	 has named another person accordingly	 such person is not a sub `agent	 but an agent of the principal for such part of the business of the agency as is entrusted to him. " The principle embodied in this section is clearly stated by Thesiger L. J. in De Buasche vs Alt (1) at p. 310 thus : " But the exigencies of business do from time to time render necessary the carrying out of the instructions of a principal by a person other than the agent originally instructed for the purpose	 and where that is the case	 the reason of the thing requires that the rule should be relaxed	 so as	 on the one hand	 to enable the agent to appoint what has been termed " a sub agent " or " substitute " ; and	 on the other hand	 to constitute	 in the interests and for the protection of the principal	 a direct privity of contract between him and such substitute. " The aforesaid facts clearly indicate that the respondent appointed the Receiving Railway as his agent to 1. 	 310. 84 carrv his goods on the railway to a place in India with whom Pakistan had no treaty arrangement in the matter of through booked traffic. In that situation the authority in the agent must necessarily be implied to appoint the Forwarding Railway to act for the consignor during that part of the journey of the goods by the Indian Railway; and	 if so	 by force of the said section	 the Forwarding Railway would be an agent of the consignor. If no such agency can be implied	 in our view	 a tacit agreement between the Receiving Railway and the Forwarding Railway to carry the respondent 's goods to their destination may be implied from the facts found and the conduct of all the parties concerned. If the Receiving Railway was not an agent of the Forwarding Railway	 and if there was no arrangement between the two Governments	 the position in law would be that the foreign railway administration	 having regard to the exigencies of the situation obtaining during those critical days	 brought the wagon containing the goods of the respondent and left it with the Forwarding Railway; and the latter consciously took over the responsibility of the bailee	 carried the wagon to New Delhi and offered to deliver the goods to the respondent. The respondent also accepted that relationship and sought to make the Forwarding Railway responsible for the loss as his bailee. On these facts and also on the basis of the course of conduct of the parties	 we have no difficulty in implying a contract of bailment between the respondent and the Forwarding Railway. We may also state that section 71 of the permits the recognition of a contract of bailment implied by law under circumstances which are of lesser significance than those present in this case. The said section reads: A person who finds goods belonging to another and takes them into his custody	 is subject to the same responsiblity as a bailee. " If a finder of goods	 therefore	 accepts the responsibility of the goods	 he is placed vis a vis the owner of the goods in the same position as a bailee. If it be held 85 that the Railway Administration in Pakistan for reasons of policy or otherwise left the wagon containing the goods within the borders of India and that the Forwarding Railway Administration took them into their custody	 it cannot be denied that their responsibility in regard to the said goods would be that of a bailee. It is true there is an essential distinction between a	 contract established from the conduct of the parties and a quasi contract implied by law; the former	 though not one expressed in words	 is implied from the conduct and particular facts and the latter is only implied by law	 a statutory fiction recognized by law. The fiction cannot be enlarged by analogy or otherwise. As we have held that the Receiving Railway was authorized by the respondent to engage the Forwarding Railway as his agent or as his bailee	 this section need not be invoked. But we would have had no difficulty to rely upon it if the Forwarding Railway was equated to a finder of goods within the meaning of the section. If so	 the next question that arises is what is the extent of the liability of the appellant in respect of the goods of the respondent entrusted to it for transit to New Delhi. We have held that	 in the circumstances of the present case	 the application of the provisions of section 80 of the Indian Railways Act is excluded. If so	 the liability of the Forwarding Railway is governed by section 72 of the said Act. Under that section the responsibility of a railway administration for the loss	 destruction or deterioration of animals or goods delivered to the administration to be carried by railway shall	 subject to the other provisions of the Act	 be that of a bailee under sections 151	 152 and 161 of the . Under section 151 of the 	 the bailee is bound to take such care of the goods bailed to him as a man of ordinary prudence would under similar circumstances take of his own goods of the same bulk	 quality and value of the goods bailed; and under section 152 thereof	 in the absence of any special contract	 he is not responsible for the loss	 destruction or deterioration of the thing bailed	 if he has taken such amount 86 of care of it as described in section 151. In other words	 the liability under these sections is one for negligence only in the absence of a special contract. Generally goods are consigned under a risk note under which the Railway Company is absolved of all liability or its liability is modified. No such risk note is forth coming in the present case. The question	 therefore	 reduces itself to an enquiry whether	 on the facts	 the Forwarding Railway observed the standard of diligence required of an average prudent men. The facts found by the High Court as well as by the Subordinate Judge leave no room to doubt that the Forwarding Railway was guilty of negligence in handling the goods entrusted to its care. The wagon reached Khem Karan intact. D. W. 4 deposed that he received from the guard of the train that brought the wagon to the station the inward summary and that on checking the train with the aid of that summary he found that the wagon was intact according to the summary. He also found the seals and labels of the wagon intact and that the 'inward summary ' tallied with the entries on the labels. It may	 therefore	 be taken that when the Forwarding Railway took over charge of the goods they were intact. The evidence of P. W. 1	Thakar Das	 establishes that even at Amritsar the wagon was intact. But	 thereafter in its onward march towards New Delhi it does not appear on the evidence that the necessary care was bestowed by the railway authorities in respect of the said wagon. The said wagon remained in the yard of Ludhiana Station between November 2	 1947	 and January 14	 1948 and also it appears from the evidence that when it reached that place the label showed that its destination was unknown. What happened during these months is shrouded in mystery. It is said that the said wagon arrived at New Delhi on February 13	 1948	 and that the Goods Clerk	 Ram Chander	 unloaded the goods in the presence of the head watchman	 Ramji Lal and head constable	 Niranjan Singh	 when it was discovered that only 15 packages were in the wagon and the rest were lost. The Goods Clerk	 Ram Chander (D.W	 4)	 the head watchman	 Ramji Lal (D. W. 7)	 87 the Assistant Train Clerk	 Krishan Lal (D. W. 8)	 and the head constable	 Niranjan Singh (D. W. 16)	 speak to the said facts	 but curiously no contemporaneous relevant record disclosing the said facts was filed in the present case. We cannot act upon the oral evidence of these interested witnesses in the absence of such record. No information was given to the respondent about the arrival at New Delhi of the said wagon. Only on June 7	 1948	 i.e.	 nearly four months after the alleged arrival of the wagon	 the respondent received a letter from the Chief Administrative Officer asking him to effect delivery of the packages lying in New Delhi Station; but to his surprise	 when the respondent went to take delivery no goods were to be found there. Only on August 18	 1948 the appellant offered to the respondent a negligible part of the goods in a damaged condition subject to the payment of the railway freight	 and the respondent refuse to take delivery of the same. From the said facts it is not possible to hold that the railway administration bestowed such care on the goods as is expected of an average prudent man. We	 therefore	 hold that the Forwarding Railway was guilty of negligence. Then remains the question of limitation. The relevant articles are articles 30 and 31 of the Indian Limitation Act. They read: Description of suit period of Time from limitation. wich period begins to run 30 Against carrier for compensation for losing or injuring One year When the loss or injury goods. occurs. Against a carrier for compensation for non delivery of	 or One year When the goods ought delay in delivering to be delivered. goods. Article 30 applies to a suit by a person claiming com pensation against the railway for its losing or injuring his goods; and article 31 for compensation for nondelivery or delay in delivering the goods. The learned Counsel for the appellant argued that article 30 would apply to the suit claim	 whereas the 88 learned Counsel for the respondent contended that article 31 would be more appropriate to the suit claim. We shall assume that article 30 governed the suit claim and proceed to consider the question on that basis. The question now is	 when does the period of limitation under article 30 start to run against the claimant ? The third column against article 30 mentions that the said claim should be made within one year from the date when the loss or injury occurs. The burden is upon the defendant who seeks to non suit the plaintiff on the ground of limitation to establish that the loss occurred beyond one year from the date of the suit. The proposition is self evident and no citation is called for. Has the defendant	 therefore	 on whom the burden rests to prove that the loss occurred beyond the prescribed period	 established that fact in this case ? The suit was filed on August 4	 1949. In the plaint the plaintiff has stated that loss to the goods has taken place on the defendant railway	 and	 therefore	 delivery has not been effected. Though in the written statement there was a vague 'denial of this fact the evidence already noticed by us established beyond any reasonable doubt that the goods were lost by the Forwarding Railway when they were in its custody. But there is no clear evidence adduced by the defendant to prove when the goods were lost. It is argued that the goods must have been lost by the said Railway at the latest on February 20	 1948	 when the goods are alleged to have been unloaded from the wagon at the New Delhi Station; but we have already discussed the relevant evidence on that question and we have held that the defendant did not place before the Court any contemporaneous record to prove when the goods were taken out of the wagon. Indeed	 the learned Subordinate Judge in a considered judgment held that it had not been established by the Forwarding Railway that the goods were lost beyond the period of limitation. The correctness of this finding was not canvassed in the High Court	 and for the reasons already mentioned	 on this material produced	 there was every justification for the findings. If so	 it follows that the 89 suit was well within time. In this view it is not necessary to express our opinion on the question whether there was a subsequent acknowledgment of the appellant 's liability within the meaning of art 19 of the Indian Limitation Act. In the result	 the appeal fails and is dismissed with costs. Appeal dismissed.

Summary:
The respondent booked certain goods on September 4	 1947	 with the N. W. Railway at Quebec in Pakistan to New Delhi. The wagon containing the goods was received at the Indian border station of Khem Karan on November 1	 1947	 duly sealed and labelled indicating its destination as New Delhi. It reached New Delhi on February 3	 1948	 and was unloaded on February 20	 1948	 but no immediate information was sent to the respondent. On June 7	 1948	 the respondent was asked by the E. P. Railway to take delivery of the goods lying at New Delhi station but when the respondent went there the goods were not traceable. Again	 on July 24	 1948	 the respondent was asked to take delivery of the goods when only a small portion of the goods 76 were offered to him subject to the payment of Rs. 1	067 8 0 as freight but the respondent refused to take delivery. On August 4	1949	 the respondent filed a suit for Rs. 1	62	123 with interest as compensation for non delivery of goods against the Dominion of India. The trial court found that the E. P. Railway was guilty of negligence in handling the goods and decreed the suit for Rs. 80	000	 and on appeal the High Court confirmed the decree. The appellant contended that there was no privity of contract between the respondent and the E. P. Railway and he could only have a claim against the N. W. Railway in Pakistan	 and that the suit was barred by limitation. Held	 that there was an implied contract of bailment between the respondent and the E. P. Railway and that Railway was liable for the loss. The conduct of the parties indicated that the respondent delivered the goods to the N. W. Railway with an authority to create the E. P. Railway as his immediate bailer from the point the wagon was put on its rails. The N. W. Railway must be deemed to have had implied authority to appoint the E. P. Railway to act for the consignor during the journey of goods by the E. P. Railway and by force of section 194 of the 	 the E. P. Railway became an agent of the consignor. The N. W. Railway left the wagon with the E. P. Railway and the latter consciously took over the responsibility of the bailer	 carried the wagon to New Delhi and offered to deliver the goods to the respondent. The respondent also accepted this relationship. From these facts	 even if an agency could	 not be implied	 a tacit agreement between the two Railways to carry the respondents goods to New Delhi could be implied resulting in a contract of bailment between the E. P. Railway and respondent. Kulu Ram Maigraj vs The Madras Railway Company	 I.L.R. 	 G.I.P. Railway Co. vs Radhakisan Kushaldas	 I.L.R. 	 Bristol and Exeter Railway vs Collins	 VII H.L.C. 194 and De Bussche vs Alt	 (1878) L.R. 8 Ch. D. 386	 referred to. Held	 further that the suit was not barred by limitation. Even if article 30 of the Indian Limitation Act applied	 as contended for by the appellant	 the burden was on the appellant	 who sought to non suit the respondent	 to establish that the loss occurred beyond one year from the date of the suit. Thus the appellant had failed to establish by any clear evidence.