PETITIONER: STATE OF KERALA Vs. RESPONDENT: GENERAL MANAGER, SOUTHERN RAILWAY, MADRAS DATE OF JUDGMENT30/08/1976 BENCH: KHANNA, HANS RAJ BENCH: KHANNA, HANS RAJ UNTWALIA, N.L. SINGH, JASWANT CITATION: 1976 AIR 2538 1977 SCR (1) 419 1976 SCC (4) 265 ACT: Code of Civil Procedure, Ss. 79 and 80, suit for compen- sation against railway administration. whether impleading Union of India as a party necessary. The Indian Railways Act, 1890, S. 3(6), Railway Adminis- tration, whether a separate legal entity. HEADNOTE: The appellant booked rice for being transported by train, from Bareilly railway station to Trivandrum railway station. On delivery, the rice was found to be damaged and short in quantity. The appellant claimed damages from the respondent, who resisted the claim on the grounds that the suit was not maintainable as the Union of India had not been impleaded as a defendant, and that a suit by a State against the Union of India could only be instituted in the Supreme Court under Art. 131 of the Constitution. The suit was dismissed by the Trial Court, and an appeal from it was dismissed by the High Court. Dismissing the appeal, the Court, HELD: The Southern Railway is owned by the Union of India. As such, a suit dealing with the alleged liability of that railway should have been brought against the Union of India. Section 80 of the C.P.C. contemplates institution of a suit against the Central Government even though it relates to a railway. [422 E-FI] Sukhanand Shamlal v. Oudh Rohilkhand Railway AIR 1924, Born. 306; Hirachand Succaram Gandhy & Ors. v.G.I.P. Rail- way Co., AIR 1928 Born. 421; Shaikh Elahi Bakhsh v.E.I. Railway Administration, AIR 1941 Patna 326: Chandra Mohan Saha & Ant. v. Union of India & Anr. AIR 1953 Assam 193 and P.R. Narayanaswami lyer & Ors. v. Union of India AIR 1960 Madras 58, Approved. (2) Neither the definition of the "railway administra- tion" in Section 3(6) of the Indian Railways Act, nor the language of sections 72 to 80 of the Act, lends support for the view that the railway administrations are to be treated as separate personalities, entries or separate juridical persons. [423 B-C] Dominion of India v. Firm Musaram Kishunprasad AIR 1950 Nagpur 85. overruled. (3) The demarcation of the different State-owned rail- ways as distinct units for administrative and fiscal pur- poses cannot have the effect of conferring the status of juridical person upon the respective railway administrations or their General Managers for the purpose of civil suits. JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1367 of 1968.
(Appeal by Special Leave from the Judgment and Order
dated 25-3-1965 of the Kerala High Court in A.S. No. 487 of
1961).
S.V. Gupte and K.M.K. Nair, for the appellant.
Mrs. Shyamla Pappu, B.B. Sawhney, Raju Ramachandran and
Girish Chandra, for the respondent.
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The Judgment of the Court was delivered by
KHANNA, J.–This appeal by special leave by the State of
Kerala is against the Full Bench decision of the Kerala High
Court affirming on appeal the judgment and decree of the
trial court whereby the suit for recovery of Rs. 28,208.70
filed by the appellant against the General Manager, Southern
Railway respondent was dismissed.
The appellant booked 2,000 tons of rice in 21,310 bags
from Bareilli railway station for being transported to
Trivandrum central railway station as per 10 railway re-
ceipts during the period from June 25 to July 5, 1950.
According to the case of the appellant, the rice delivered
at Trivandrum central railway station was short by 79,378
lbs. It was also averred that the rice in 327 bags was
found to be damaged. The appellants accordingly claimed Rs.
28,208.70 as damages from the respondent.
The respondent resisted the claim of the appellant,
inter alia, on the ground that the suit was not maintainable
as the Union of India had not been impleaded as a defendant
to the suit and that a suit by a State against the Union of
India could be instituted only in the Supreme Court of India
under article 131 of the Constitution. It is not necessary
to set out the other pleas of the respondent. As many as
nine issues were framed by the trial court. Two of the
issues, namely, issue Nos. 1 and 3, were treated as prelimi-
nary issues and arguments were heard on those issues. Issue
Nos. 1 and 3 read as under:
“1. Is the suit maintainable ? Can a decree be passed
against the defendant as now impleaded ?
2. Will the suit lie in this Court ? Is the suit barred
by the provisions of the Constitution of India ?”
On issue No. 3 it was held by the trial court that since the
Union of India had not been made a party to the suit, clause
(a) of article 31 of the Constitution had no application.
The suit was accordingly held to be not liable to be dis-
missed on that ground. On issue No. 1 the trial court held
that the Union of India was a necessary party to the suit
and as the Union of India had not been impleaded as a
party, the suit was incompetent. As a result of its find-
ings on issue No. 1 the trial court dismissed the suit. The
decision of the trial court on issue No. 1 was affirmed in
appeal by the High Court. An application was also filed at
the hearing of the appeal before the High Court for implead-
ing the Union of India as a party to the suit. The High
Court rejected that application on the ground that no
useful purpose would be served by allowing that application.
It was observed that if the application was allowed and the
Union of India was made a party, the suit would have to be
dismissed as under article 131(a) of the-Constitution a suit
by one State against the Union of India could only lie in
the Supreme Court. In the result, the High Court dismissed
the appeal filed by the appellant.
In appeal before us Mr. Gupte on behalf of the appel-
lant has invited our attention to the definition of “railway
administration” in
421
section 3(6) of the Indian Railways Act, 1890 (Act 9 of
1890) (hereinafter referred to as the Act) which reads as
under:
“railway administration or ‘administration’ in the
case of a railway administered by the Government
means the Manager of the railway and includes the
Government and, in the case of a railway adminis-
tered by a railway company, means the railway
company,”
He has further referred to sections 72, 74, 76 and 80 of
the Act. According to section 72, the responsibility of a
railway administration for the loss, destruction or dete-
rioration of animals or goods delivered to the administra-
tion to be carried by railway shall, subject to other provi-
sions of the Act, be that of a bailee under sections 151,
152 and 161 of the Indian Contract Act, 1872. Section 74
absolves the railway administration of any responsibility
for the loss, destruction or deterioration of any luggage
belonging to or in charge of a passenger unless a railway
servant has hooked and given a receipt therefor. Section 76
deals with burden of proof in suits for compensation against
a railway administration for any delay, loss, destruction,
deterioration or damage. Section 80 at the relevant time
read as under:
“80. Suits for compensation for injury to
throughbooked traffic.—Notwithstanding anything
in any agreement purporting to limit the liability
of a railway administration with respect to traffic
while on the railway of another administration, a
suit for compensation for loss of the life of, or
personal injury to, a passenger, or for loss, de-
struction or deterioration of animals or goods
where the passenger was or the animals or goods
were booked through over the railway of two or more
railway administrations, may be brought either
against the railway administration from which the
passenger obtained his pass or purchased his tick-
et, or to which the animals or goods were deliv-
ered by the consignor thereof, as the case may be,
or against the railway administration on whose
railway the loss, injury, destruction or deteriora-
tion occurred.”
It is urged by Mr. Gupte that as, according to section 3
(6) of the Act, railway administration means a Manager of
the railway and as some of the sections 72 to 80 make ex-
press reference to suits against railway administration, a
suit against the General Manager of the railway concerned is
competent. The trial court and the High Court, according to
the learned counsel, were in error in holding that the suit
was not maintainable because of the Union of India having
not been impleaded as a party to the suit.
The above argument has the quality of being ingenious,
attractive and not lacking in apparent plausibility. A
closer examination, however, reveals its infirmity and after
giving the matter our earnest
422
consideration, we find it difficult to accept it. The Act
deals with and specifies, inter alia, the rights and liabil-
ities which arise in case the goods consigned to the rail-
ways are not delivered to the consignee. It likewise deals
with short delivery of those goods as well as the cases in
which the goods get damaged during transit. Most of the
railways in India are owned by the Union of India, but there
were some minor railways which till recently were owned by
railway companies. The definition of “railway administra-
tion” as given in section 3(6) is comprehensive and deals
with both types of railways. i.e., railways administered by
the Government as well as those administered by railway
companies. The words “railway administration” have been
used in sections 72 to 80 because those sections pertain to
rights and liabilities of the parties in both types of
cases, i.e., cases where liability is incurred by Government
administered railways as well as cases in which liability is
incurred by railway administered by railway company. The
Act, however, does not deal with, the question as to who
should be impleaded as a defendant when a suit is brought
against the railway. administration. This is essentially a
matter relating to the frame of suits, and is dealt with by
the Code of Civil Procedure. According to section 79 of the
Code, in a suit by or against the Government, the authority
to be named as plaintiff or defendant, as the case may be,
shall be (a) in the case of a suit by or against the Central
Government, the Union of India, and (b) in the case of a
suit by or against a State Government, the State. This
section is in accordance with article 300 of the Constitu-
tion, according to which the Government of India may sue or
be sued by the name of the Union of India and the Government
of a State may sue or be sued by the name of the State. It
is not disputed that Southern Railway is owned by the Union
of India. As such, a suit dealing with the alleged liabili-
ty of that railway should have been brought against the
Union of India.
Section 80 of the Code of Civil Procedure provides inter
alia that no suit shall be instituted against the Government
until the expiration of two months next after the notice in
writing has been delivered to or left at the office of, in
the case of a suit against the Central Government where it
relates to a railway, the General Manager of that railway.
The above provision clearly contemplates institution of a
suit against the Central Government even though it relates
to a railway. A suit against the Central Government in terms
of section 79 of the Code would necessarily have to be
brought against the Union of India.
The Act no doubt makes provision for the liability of
the railway administration, but from that it does not follow
that the railway administration is a separate legal entity
having a juristic personality capable of being sued as such.
The definition of “railway administration” in section 3(6)
of the Act that it would mean the Manager of the railway
does not warrant the inference that a suit against the
railway administration can be brought against the Manager of
that railway. We have to bear in mind the distinction
between the owner of the railway, namely, the Union of
India, and the authority which actually runs the railway and
to whom duties have been assigned for
423
this purpose by the Act. The manager of the railway under
the Act is such authority. When, however, liability is
sought to be fastened on the railway administration and a
suit is brought against it on that account, the suit, in
our opinion, would have to be brought against the Union of
India because it is the Union who owns the railway and who
would have the funds to satisfy the claim in case decree is
awarded in such suit.
The scheme of the Act, even though there are now hardly
any company-owned railways in India, is to treat different
railway administrations as different units, although all of
them may be owned by the Union of India. Neither the defi-
nition of the “railway administration” in section 3(6) of
the Act nor the language of sections 72 to 80 of the Act
lends support for the view that the railway administrations
are to be treated as separate personalities, entities or
separate juridical persons as seems to have been observed in
the case of Dominion India v. Firm Museram Kishunprasad(1).
Yet the treatment of the different railway administrations
as different units for the purpose of fastening liability on
the Union of India has got significance and relevance.
Viewed in that light, it would follow that the definition of
the “railway administration” given in section 3(6) of the
Act does not make the railway administration or its General
Manager a legal entity or a corporate body or a juridical
person to represent the railway administration as such in
suits. The claim in a suit for recovery of money under the
Act against the different railway administrations owned by
the Central Government in accordance with the general prin-
ciple of law contained in Order 1 Rule 3 of the Code of
Civil Procedure has got to be made against the person
against whom the right to relief is alleged to exist.
The significance of creating the various railway administra-
tions as separate units, even though they may be State-
owned, is to be found in section 80 of the Act, and
section 80 of the Code of Civil Procedure. For claiming a
decree against the Union of India under the Act the plain-
tiff has got to specify the railway administration or admin-
istrations on account of which liability is sought to be
fastened upon the Union of India, as contemplated by section
80 of the Act. The institution of the suit has to be preced-
ed by service of notice under section 77 of the Act and
section 80 of the Code to the appropriate authority which is
the General Manager of the railway concerned. The require-
ment of clause (b) of section 80 of the Code that a notice
in the case of a suit against the Central Government where
it relates to a railway must go to the General Manager of
the concerned railway or railways is also based upon the
assumption that it is primarily the liability of the railway
administration of the said railway or railways to satisfy
the claim of the suitor in accordance with section 80 of the
Act. The demarcation of the different State-owned railways
as distinct units for administrative and fiscal purposes
cannot have the effect of conferring the status of juridical
person upon the respective railway administrations or their
General Managers for the purpose of civil suits.
(1) A.I.R. (1950) Nagpur 85. 11 –1104SCI/76
424
The Bombay High Court in two cases, Sukhanand Shamlal v.
Oud, h & Rohilkhand Railway(1) and Hirachand Succaram Gandhy
& Ors. v.G.I.P. Railway Co.(2) has held that a suit against
a State railway should be brought against the Government.
Similar view was pressed by Patna High Court in Shaikh Elahi
Bakhsh v.E.I. Railway, Administration(3) and a Full Bench of
Assam High Court in the case Chandra Mohan Saha & ,Anr.
v. Union of India & Anr.(4) The observations of a Division
Bench of the Madras High Court in the case of P.R. Nara-
yanaswami lyer & Ors. v. Union of India(5) also lend support
to the above view. It may be stated that the reasoning
employed in the eases mentioned above was different and not
identical, but whatever might be the nature of that reason-
ing the fact remains that the learned Judges deciding those
cases were all at one on the point that such a suit should
be brought against the Government, which means in the
present case the Union of India. Any contrary view would be
against the well-established practice and procedure of law,
as evidenced by various decisions of the High Courts, and as
such, must be rejected.
Submission has also been made on behalf of the appellant
that the High Court should have allowed the appellant to
amend the plaint. We agree with the High Court that the
present is not an appropriate case in which permission to
amend the plaint should have been granted.
The appeal consequently fails and is dismissed but in
the circumstances without costs.
M-R. Appeal dismissed.
(1) A.I.R. 1924 Bombay 306. (2) A.I.R. 1928 Bombay 421.
(3) A-I.R. 1931 Patna 326. (4) A.I.R. 1953 Assam 193.
(5) A.I.R. 1960 Madras 58.
425