In the High Court of Judicature at Madras
Dated: 17/05/2006
Coram
The Hon'ble Miss Justice K. SUGUNA
CMA. No. 416 of 1999
M/s. Shah Jayantilal
Jivraj & Co.,
No.85, Mint Street,
Chennai 79. ... Appellant
-Vs-
The Union of India
owning Southern Railway
rep. by its General Manager,
Chennai 3. .. Respondent
Civil Miscellaneous Appeal preferred against the judgment and decree
dated 28.12.1998 passed by the Railway Claims Tribunal, Chennai Bench in
O.A.I/1078/90.
!For appellant : Mr.T.Rajamohan
^For respondent : Mr.V.G.Suresh Kumar
:J U D G M E N T
This Civil Miscellaneous Appeal has been filed challenging the order
dated 28.12.1998 passed in O.A. No: I/1078 of 1990 on the file of the
Railway Claims Tribunal, Chennai Bench. The facts of this appeal are that a
consignment of 171 bundles were booked from Shilong Out Agencies to the Salt
Cataurs under R.R. No: 697667 dated 20.06.1988. After a delay of 42 days,
the said consignment has reached the destination point. When the goods were
unloaded, it was found that 70 bundles are being received in a good condition
and 86 bundles were damaged by water and 15 bundles were missing. The
appellant has received the 70 bundles. With regard to the 86 bundles, which
has been damaged by water and found to be unfit for any use, the appellant
sought for open delivery for assessment of the damage. Hence, on 02.08.1988
after verification and finding that 70 bundles were in sound condition, the
claimant took delivery of the 70 bundles. Since the other 86 bundles were
completely damaged and unfit for any use, the appellant did not take delivery
of the same and sought for assessment of damages. Since the respondent has
not assessed the damage properly, the appellant refused to take delivery of
the same. Subsequently, the respondent had conducted an auction with regard
to these 86 bundles on 05.12 .1988. In the auction for the 86 bundles, the
respondent was able to fetch a sum of Rs.4,748/-. Since the appellant has
suffered a loss to the tune of Rs.1,12,817/-, with regard to the damaged
bundles and loss of 15 bundles, he had filed a claim petition before the
Railway Claims Tribunal, Chennai, claiming a sum of R s.1,12,817/-.
2. The claim petition was taken up on file in O.A. No: I/1078-90.
Originally, the matter was heard by the Judicial Member as well as the Member
(Technical) and an order has been passed on 01.05.1998 whereby the Judicial
Member has given a judgment that the appellant is entitled for a sum of
Rs.1,08,272/- as compensation whereas the Member (Technical) has differed from
the view of the Judicial Member on certain issues and gave a finding that the
appellant is not entitled for any compensation since he has refused to take
delivery of the 86 bundles. Hence the matter was referred to the Hon’ble
Chairman of the Railway Claims Tribunal, Delhi, who appointed Member
(Technical) of the Secunderabad Bench, as the third member for deciding the
issue. The third member, after providing an opportunity for both the
appellant as well as the respondent, passed an order on 14.12.1998 totally
negativing relief to the appellant. Challenging the same, the above C.M. A.
has been filed.
3. Learned counsel for the appellant has made the following
submissions :
1. As per the learned counsel normally when there is a difference
of opinion between the Judicial Member and the Member (Technical), the matter
would be referred to a Judicial Member and not a Member ( Technical).
2. Because of the negligence in not following the safeguard methods
by the respondent railway, 86 bundles were damaged due to which they cannot be
put to any use at all. Besides, 15 bundles were missing. Since this is due
to the carelessness and negligence on the part of the railway, it has to pay
damages as claimed by the claimant. That apart, the learned counsel for the
appellan t has argued that auction has taken place under Sections 54 and 55 of
the old Act wherein it was clearly stated that before conducting an auction,
the appellant should have been provided with a notice. But whereas no notice
has been issued as contemplated under Sections 54 and 55 of the Act and as
such, the order passed by the Tribunal is totally erroneous and the same has
to be interfered with.
4. On the other hand, learned counsel for the respondent has argued
that in the event of difference of views between the Judicial Member and the
Member (Technical), as per the provisions of the Act, the matter can be
referred to either a Judicial Member or a Member ( Technical). He would
contend that as per Section 81 of the Railways Act 19 89, where the
consignment arrives in a damaged condition or shows signs of having been
tampered with and the consignee or the endorsee demands open delivery, the
railway administration shall give open delivery in such manner as may be
prescribed. But, however, when the consignee refuses to take delivery of the
consignment, the question of paying for the damages does not arise at all.
That apart, the counsel for the respondent has argued saying that even in case
if the consignee is having any grievance with regard to the damages arrived
at, after taking delivery, he can have re-assessment of the damages through
the private agencies like Chamber of Commerce and other agencies. But in this
case, totally the appellant has refused to take delivery of the goods.
Consequently, he lost his right to ask for any damages. With regard to the
procedure contemplated under Sections 84 and 85 of the Railways Act, 1989 is
concerned, the learned counsel for the respondent would contend that in fact
from Ex.A.7-letter from the respondent, it is clearly established that notice
has been given and the appellant consignee has refused to take delivery of the
goods. Hence, the procedure contemplated under the Act is not only followed
but also when the consignee refused to take delivery of the goods, the
respondent is left with no other option except to dispose of the goods through
auction sale. Even assuming without admitting that the procedure contemplated
under Sections 84 and 85 of the Act has not been followed, at the most the
appellant can be compensated with the value of the money which has been
received in the auction sale namely Rs.4,748 /-. In this connection, learned
counsel for the appellant has relied on the judgment reported in A.I.R. 1973
Allahabad 303 (Niranjan Lal vs. Union of India) and A.I.R. 1983 Rajasthan
200 (Union of India vs. Mohan Raj). Hence, the learned counsel for the
respondent has argued that the award passed by the Tribunal has to be
confirmed in all respects.
5. I have considered the submissions made on both sides. Before the
Tribunal, originally when the matter has been referred, the following issues
were framed :
“1. Whether the consignor entrusted 171 bundles to railways for
carriage at the forwarding station ?
2. Whether there was short delivery of 15 bundles at the
destination?
3. Whether packing conditions had not been complied with by the
consignor and whether it resulted in the damage to 86 bundles found at the
destination ?
4. Whether the railways used reasonable foresight and care in the
carriage of the goods ?
5. Whether the petitioner refused to take delivery of the damaged 8 6
bundles ?
6. Whether there were valid notices under Sections 55 and 56 of the
Railways Act and whether the sale held by the railways is valid?
7. Whether the petitioner is entitled to any compensation and if so,
how much ?
8. What relief are the parties entitled to ?”
With regard to issue Nos: 1 to 5 both the Judicial Member and the Member
(Technical) have taken a same view. But with regard to Issue No: 6 is
concerned, the Judicial Member has given a finding that as required under
Section 55 of the Railways Act due notice was not given to the appellant and
hence, the sale of goods in the auction conduced by the respondent railways is
invalid one. Besides, he has given a finding that the auction sale of 86
bundles of broom which was held on 05.12.1988 is bad in law. On this issue,
viz. issue No: 6, the Member (Technical) has given a finding that the
appellant was not justified in refusing to take delivery of 86 bundles.
6. As far as issue No: 7 is concerned, the Judicial Member passed an
order directing payment of Rs.1,08,272/- as compensation for non delivery of
101 bundles of broom (i.e. 86 bundles damaged and 15 bundles missing). On
this issue, the Member (Technical) has concluded that as the claimant had not
taken delivery, he is not entitled for any compensation. Since the Judicial
Member and the Member (Technical) took a different view on certain issues as
stated supra, the matter was referred to a third Member.
7. With regard to the first contention of the counsel for the
appellant that in the event of a difference of opinion between the Judicial
Member and the Member (Technical) the matter should have been referred to
another Judicial Member, as per Section 21 of the Railway Claims Tribunal Act
1987 if the Members of a Bench differ in opinion on any point, the matter can
be referred for hearing on such point or points by one or more of the other
Members and such point or points shall be decided according to the opinion of
the majority. There is no specific provision in the Act that in the event of
difference of opinion, the matter has to be referred only to a Judicial
Member. Therefore, the first contention of the learned counsel for the
appellant fails.
8. With regard to the second contention of the learned counsel for
the appellant, Section 82 (1) of the Railways Act states that the consignee
should take delivery of the consignment or part thereof nothwithstanding that
such consignment or part thereof is damaged. Under Section 84 of the Railways
Act if a person fails to take delivery of any consignment or any part thereof,
such consignment shall be treated as unclaimed and the railway can take
recourse to other methods of disposal such as auction after giving due notice
to the consignee. But in this case, though the appellant made a demand for
open delivery, the Railway refused to agree to record cent percent damage. As
such, basing on the refusal of the railway alone, the appellant refused to
take delivery of the consignment.
9. Whether the act of the appellant in not taking delivery of the
entire consignment or part thereof dis-entitle him to claim the damages is the
issue in question. As far as this aspect is concerned, as per the arguments
of the counsel for the appellant, on
the arrival of the goods at the destination point, when the goods were
unloaded 86 bundles of brooms were found to be in a damaged condition and that
damage has been caused due to the non-adoption of safety methods by the
Railway administration. That too, the goods have been unloaded after a delay
of 42 days. Damages have been caused to the goods because of the failure on
the part of the Railway to give adequate protection to the goods is proved as
the goods were damaged because of the flow of water into the wagon wherein the
goods have been stored. To say in other words, since the Railway has refused
to give cent percent damage certificate, the appellant refused to take
delivery of the goods. But, as per Section 82 of the Railways Act 1989 the
consignee shall, as soon as the consignment or part thereof is ready for
delivery, take delivery of such consignment or part thereof notwithstanding
that such consignment or part thereof is damaged. Besides, as per sub section
(3) of the same Section, if the consignee refuses to take delivery under
sub-section (1), the consignment or part thereof shall be subject to wharfage
charges beyond the time allowed for removal. Basing on this, the appellant
company, even in the event of not being satisfied with the assessment of
damages done by the railway administration, can always go for an alternative
method of assessment of damages like assessment by Chamber of Commerce or
independent surveyors or even assessment by a local Panchayat. Instead of all
these things, the appellant in this case has refused to take delivery of the
goods.
10. Under these circumstances, whether under Section 84 and 85 of the
the Railways Act, 1989, the appellant is entitled for a notice is the issue
next arises. Admittedly, as per Ex.B.7 dated 2.8.1988, the appellant left the
86 bundles for assessment of damages. On 08.08.1988 when he turned up to take
delivery on assessment, he refused to segregate the damaged goods from the
bundle which was in good condition. Therefore, the appellant was informed
that the consignment incurred wharfage charges from 2.8.1988 and the same will
be disposed off under Sections 55 and 56 A of the Indian Railways Act, 1890.
From the contents of Ex.B.7 it is clear that on 02.081988 the appellant has
left the goods for assessment and on 8.8.1988 when he went to take delivery of
the same on assessment, since assessment has not been made as per the damages
incurred, he did not take delivery of the same, though the appellant is aware
that after taking delivery of the goods if it is not satisfied with the
assessment made, it can follow the other methods of assessments such as
assessing the damages through the Chamber of Commerce or local surveyor or
otherwise. Having refused to do so, the appellant cannot now take a stand
that the procedure contemplated under Sections 55 and 56 A of the Indian
Railways Act 1890, i.e. before auction he has not been issued with a notice,
has not been followed. It is not the case of the appellant that he was
willing to take delivery of the goods and that the railway administration
refused to give delivery. On the other hand, it is the case of the appellant
himself that since the damages were not properly assessed, he refused to take
delivery of the consignment. But, as per the decisions which has been relied
on by the Tribunal in deciding the issue, viz. A.I.R. 1993 Rajasthan 200
(Union of India vs. Mohan Raj); A.I.R. 1966 Madhya Pradesh 52 (Union of
India vs. M/s. Ibrahim Gulaba) and A.I.R. 1959 Madhya Pradesh 276 (Managing
Agents (Martinn & Co.) vs. Seth Deokinandan, when the consignee had refused
to take delivery of the consignment, he had no right to claim damages from the
respondent for non delivery of the goods since there is default on the part of
the consignee / appellant in not taking delivery of the goods. On the other
hand, in the judgment reported in A.I.R. 1973 Allahabad 303 (Niranjan Lal vs.
Union of India), relied on by the learned counsel for the respondent, under
similar circumstances, the Allahabad High Court has taken a view that due to
the negligence on the part of the railway administration or its servants
damage had been caused to the consignment. Besides, as per the said judgment,
the responsibility of the railway as a carrier does end within a reasonable
time after the goods have reached the destination. Its responsibility as a
warehouseman, however, continues and that responsibility is also the same as
that of a bailee which must come to an end as provided by Sections 55 and 56
and the relevant rules framed under the Act. In the case before the Allahabad
High Court also the railway authorities were willing to deliver the
consignment and asked the plaintiff to unload the wagon and with regard to the
assessment of damages, the railway official dealing with the delivery of goods
stated that the matter would be referred to his higher authorities. But the
plaintiff had not taken delivery of the goods and continued with his request
for assessment of damages before taking delivery thereof. Hence, the railway
authorities disposed of the goods as per Section 55 of the Act wherein no
notice has been issued to the plaintiff in the above case. Consequently, the
Allahabad High Court has taken a view saying that since there is failure in
following the procedure contemplated under Section 55 of the Act, the sale is
invalid and as such the consignee is entitled for damages. But, in the case
on hand, from Ex.B.7 which has been marked as Ex.A.7 by the appellant himself,
it is clear that the railway administration has categorically stated that
since detention of the goods incurs wharfage charges from 2.2.1988 and they
have clearly brought to the notice of the appellant that unclaimed goods will
be disposed of under Sections 55 and 56 of the Act. This letter has been
issued on 09.08.1998. But the auction shall take place only on 5.12.1988. In
spite of the letter dated 09.08.1988, the appellant having failed to take
delivery of the goods now the appellant cannot claim damages since a liability
has been caused on the appellant to take delivery of the goods under Section
82 of the Act. Having failed to avail that, even if he is not satisfied with
the assessment of damages made by the Railways, he cannot claim damages.
Having failed to execute the liability which he ought to have done under the
Railways Act, now the appellant is estopped from claiming damages. Hence,
finding no ground to interfere with the order passed by the Tribunal, this
Civil Miscellaneous Appeal is dismissed.
Index : Yes
Website : Yes
gp
Copy to :
1.The General Manager,
Southern Railway,
Chennai 3.
2.The Railway Claims Tribunal,
Chennai.
3.The Record Keeper,
V.R. Section, High Court, Madras.