JUDGMENT
D.S. Bajpai, J.
1. This First Appear is directed against the judgment and decree dt. 11th Aug. 1976 passed by the learned First Additional Civil Judge, Kanpur, decreeing the suit of the plaintiff-respondent, Messrs Indian and Overseas Trading Company, Kanpur, for a sum of Rs. 49139.64 P. as damages on account of loss of six cases of Indian Bristles of Messrs Indian & Overseas Trading Company entrusted for transit of the defendant-appellant.
2. The suit was filed on the allegations that the plaintiff firm, which was alleged to be a registered partnership firm, was carrying on business in Bristles with its Head Office at Kanpur and in pursuance to an order received by the plaintiff from N. Wagman & Company incorporated, Philadelphia Penns; had to supply 44 cases of Indian Dressed Bristles. In pursuance of the said order plaintiff 1 entrusted to the Railway Administration at
Kanpur Central Goods Shed, 44 eases of Indian Dressed Bristles under Railway Receipt No. 163326 on 30th Jan. 1968 for carriage to Wadibunder, Bombay, and the said consignment was consigned to the Chartered Bank, which was the beneficiary of plaintiff No. 1 at Kanpur and the endorsed consignees were Messrs. D. Abraham & Sons (P) Ltd., Bombay, who were the shipping agents of the said plaintiff. It was said that while in transit the wagon in which the consignment of 44 cases was in transit was pilfered on its way to Wadibunder at Bombay and on delivery being taken by the plaintiffs’ shipping agents the aforesaid Messrs. D. Abraham & Sons (P) Ltd., Bombay, the consignment was short delivered by six cases and a shortage certificate dt. 15th Feb. 1968 was issued by Railway Administration. Plaintiff 1 on account of shortage, detailed herein above, made a claim of Rs. 49139.64 P under Section 78B of the Indian Railways Act on 10th Feb. 1968 and on the failure of the Railway Administration to settle the claim further served upon them a notice dt. 12/26th December, 1968 under Section 80 of the Civil P.C. and after having failed to get any response thereon instituted the suit. Plaintiff 2 in the suit was a limited liability company with its Head Office at Calcutta since transferred and vested in National Insurance Co. Ltd., Calcutta, who were the insurer of the consignment sent by plaintiff 1.
3. The defendants in their written statement admitted that a consignment of 44 cases was entrusted to them for carriage to Wadibunder, Bombay, from the Central Goods Shed at Kanpur under the relevant Railway Receipt and that it was pilfered and the pilferage was detected by them at Lalpur Railway Station and even though a line search was made nothing could be found whereupon the wagon was re-sealed at Lalpur and consequently the six cases were found short. The factum of short delivery, as also the issuance of a shortage certificate, has not been denied. The pleas raised to resist the claim were many fold and consequently the learned trial Court framed as many as 13 issues and recorded a finding that plaintiff 1 was a registered firm and there was no bar of Section 69 of the Indian Partnership Act. The Court also recorded a finding that notices under Section 78B of the Indian Railways Act and under
Section 80 of the Civil P.C. were duly served arid were legal and valid notices. A further finding was returned by the Court below in favour of the plaintiffs to the effect that six cases of consignment were lost due to negligence and misconduct of the Railway Administration and that was due to lack of reasonable care in carriage. The Court also held that the suit could be filed by plaintiff 1, that plaintiff 2 has also a right to sue and that ownership of the goods in the consignment did not pass to the consignee who was the purchaser in the instant case, that is N. Wagman & Company incorporated Philadelphia, Penns, and that the Bristles contained in the six lost cases of the consignment were replaced by plaintiff 1 for which a claim had been paid by plaintiff 2 amounting to the sum of Rs. 49,139.64 P as claimed in the suit. The learned Civil Judge decreed the suit with costs, and aggrieved by the judgment and decree of the Court below the Union of India has filed the present First Appeal in this Court.
4. I have heard Sri S.N. Bhattacharya, learned counsel for the defendants-appellant and Sri V.K.S. Chaudhary, learned counsel for the plaintiffs-respondent at some length and have also examined the documents on
record. The main thrust of the arguments of the learned counsel for the appellant was two-fold; firstly, that the suit was not maintainable at the instance of the plaintiff who was a seller and it could only be maintained by buyer in whom the interest in the property passed the moment the goods in
the consignment were entrusted to the appellant, the Indian Railways for carriage. It was contended that since the domain of the property was of the buyer, the seller had no interest left to sue for damages secondly, and lastly it was urged that the damages awarded by the Court below were excessive which was clarified to mean that the amount payable could be the same as the value declared for the purposes of levy of custom duty. At one stage it was said that there was no negligence on the part of the Railways but on a further consideration that it was hardly material the point was not pursued.
5. The learned counsel for the appellant brought to my notice the provisions of Section 23 of the Sale of Goods Act which is as under : —
“23(1) “Where there is a contract for the sale of unascertained or future goods by description and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be express or implied, and may be given either before or after the appropriation is made.
(2) Where, in pursuance of the contract, the seller delivers the goods to the buyer or to a carrier or other bailee (Whether named by the buyer or not) for the purpose of transmission to the buyer, and does not reserve the right of disposal, he is deemed to have unconditionally appropriated the goods to the contract.”
6. It is also pertinent to consider the provisions of Section 39 of the said Act which are reproduced below : —
39(1). “Where, in pursuance of a contract of sale, the seller is authorised or required to send the goods to the buyer, delivery of the goods to a carrier, whether named by the buyer or not, for the purpose of transmission to the buyer, or delivery of the goods to a wharfinger for safe custody, is prima facie deemed to be a delivery of the goods to the buyer.
(2) Unless otherwise authorised by the buyer, the seller shall make such contract with the carrier or wharfinger on behalf of the buyer as may be reasonable having regard to the nature of the goods and the other circumstances of the case. If the seller omits so to do, and the goods are lost or damaged in course of transit or whilst in the custody of the wharfinger, the buyer may decline to treat the delivery to the carrier or wharfinger as a delivery to himself, or may hold the seller responsible in damages.
(3) Unless otherwise agreed, where goods are sent by the seller to the buyer by a route involving sea transit, in circumstances, in which it is usual to insure, the seller shall give such notice to the buyer as may enable him to insure them during their sea transit, and if the seller fails so to do, the goods shall be deemed to be at his risk during such sea transit.”
7. That the relevant provisions for consideration in the instant case would also be Section 73 of the Indian Railways Act, as also Sections 5 and 8 of the Carriers Act, 1865 and Section 19 of the Transfer of Property Act. Section 73 of the Indian Railways Act which replaces the old Section 72 of the Indian Railways Act of 1890, the responsibility of the Railway Administration in cases of loss, destruction, damage, deterioration, or non-delivery, in transit of animals or goods delivered to the administration is absolute and even in the cases of exception contained in the said Section the onus to establish that the Railway Administration has used reasonable foresight and care in the carriage of the animals or goods would lie on the party trying to claim the benefit from the said exception. In the case before me none of the exceptions applies and as such the Railway Administration rightly did not press issue No. 11 pertaining to the factum of having taken reasonable care for safe carriage on which a finding has been recorded by the learned Civil Judge to the effect that there was a lack of reasonable care on the part of the defendants and that the six cases of consignment were lost due to the negligence of the Railway Administration.
8. Coming to Sections 5 and 8 of the Carriers Act, 1865 it will be seen that it provides that in case of the loss or damage to the property exceeding in value one hundred rupees and of the description aforesaid, delivered to such carrier to be carried, when the value and description thereof shall have been declared and payment shall have been required in manner provided for by this Act, the person entitled to recover in respect of such loss or damage shall also be entitled to recover any money actually paid to such carrier in consideration of such risk as aforesaid; and Section 8, inter alia, provides for the extent of liability of a common carrier which in this case is the Union of India wherein the ownership and Administration of the Northern Railway, as also Central Railway vest.
9. The most pervading question to be considered is, as urged by the learned counsel for the appellants, as to whether under the provisions of Sub-section (2) of Section 23 of the Sale of Goods Act (supra) the important rule that, where goods are delivered to a carrier for
transmission to a buyer, the carrier is presumed to be the buyer’s agent not only to take delivery, but to assent to the appropriation to the contract of the goods so delivered would be applicable in the case in hand. This has further to be considered in the light of the provisions contained in Section 39 of the Sale of Goods Act (supra) Sub-section (1) of the said Section provides that where, in pursuance of a contract of sale, the seller is authorised or required to send the goods to the buyer, delivery of the goods to a carrier would be prima facie deemed to be a delivery of the goods to the buyer. The rule enunciated is a general rule subject to exception and intention of the buyer which can only to interpreted and clearly brought out from the terms of the contract Sub-section (2) further lays down that the seller has to make a contract with a carrier on behalf of the buyer as may be reasonable, and if the seller omits to do so, and the goods are lost or damaged in the course of transit, the buyer may decline to treat the delivery to the carrier as a delivery to himself, or may hold the seller responsible in damages. It will thus be seen that in the case in hand the buyer never indicated the mode of transit to the seller and the goods were entrusted by the seller to the appellant for transmission to Wadibunder and in course of this transmission six cases were lost. The learned counsel for the appellant in this connection cited the decision of the Supreme Court in the case of Mahabir Commercial Co. Ltd. v. CIT West Bengal, AIR 1973 SC 430 wherein Hon’ble Supreme Court observed : —
“What is to be considered in this case therefore is, under the terms of the contract and the dealings between the parties, where did the property in the goods pass? If it is in Pakistan where the seller pursuant to an irrevocable letter of credit placed the goods on board the ship, drew the bills of exchange and invoices and along with the bill of lading etc., negotiated them through a constitutent of the buyer’s bank in Pakistan, or as held by the High Court having regard to Clauses (7) and (9) of the contract no unconditional appropriation of the goods was effected in India even though the goods were placed on board the steamer on C.I.T. terms.”
10. In the said case the Supreme Court was pleased to lay down and hold :
“Where, however, the intention is clearly indicated and the carrier assents it is immaterial by what document the consignment is effected? In cases where the seller bears the freight for the transmission of the goods free of cost to the buyer, the property in the goods passes to the buyer as soon as they are sent to the carrier though there may be a provision that they are to be paid for by the buyer on behalf of the seller after the arrival of the goods. But where, however, the seller exercises a right of disposal or where he agrees to deliver the goods at their destination the carrier is the seller’s agent and the delivery is not a final appropriation. The intention of the parties is therefore one of the important elements in determining the situs where the property passes to the buyer in pursuance of the contract. The decided cases are of little help and are only illustrative of the principles which are applicable for determining when the goods are unconditionally appropriated to the contract.”
11. The Hon’ble Court was further pleased to consider the judgment of Kennedy, L. J. in Biddell Brothers v. E. Clemens Horst Company, (1911) 1 KB 934 on the provision of Section 32 of the Sale of Goods Act (corresponding to Section 38 of the Indian Sale of Goods Act) wherein at page 956 it has been observed that in certain cases only the right in the property would pass to the vendee and that would depend upon the interpretation of the terms of the contract. The decision of their Lordships of the Supreme Court would thus be on the question as to the title in the goods passed to the buyer as soon as the seller entrusted the consignment herein to the appellant; stated otherwise whether under the provisions of Sub-section (2) of Section 23 of the Sale of Goods Act (supra) the delivery of the consignment to the Appellants for transmission to the buyer amounts to unconditional appropriation of the goods to the contract. In this connection the decision of their Lordships of the Supreme Court in Union of India v. W.P. Factories, AIR 1966 SC 395 is very clear. Their Lordships were pleased to hold : —
“It is true that a railway receipt is a document of title of goods covered by it, but from that alone it does not follow, where the consignor and consignee are different, that the consignee is necessarily the owner of
goods and the consignor in such circumstances can never be the owner of the goods. The mere fact that the consignee is different from the consignor does not necessarily pass title to the goods from the consignor to the consignee, and the question whether title to goods has passed to the consignee will have to be decided on other evidence. It is quite possible for the consignor to retain title in the goods himself while the consignment is booked in the name of another person.”
It has also been held that:
“Ordinarily, it is the consignor who can sue if there is damage to the consignment, for the contract of carriage is between the consignor and the railway administration. Where the property in the goods carried has passed from the consignor to someone else that other person may be able to sue.”
12. Their Lordships further considered as to what constituted delivery of goods to the party and held that till the goods were actually unloaded and handed over to the consignee even surrendering the Railway receipt would only constitute taking delivery and would not amount to real delivery by the Railway to the consignee. In pursuance to the provisions of Sections 72, 55 and 56 of the Railways Act 1890 the Court was pleased to hold that the responsibility of the Railway could not be cut down by any rule. I am inclined to hold that the provisions of the Indian Railways Act, as it presently stands after being amended by the Indian Railways (Amendment) Act 1961 does not in any way reduce the responsibility of the Railways on account of non-delivery of goods to the consignee, in as far as the general proposition of law that consignor is the person who has contracted with the Railway for the carriage of goods and he can sue the railway for compensation for damages to the goods; and it is only where title to the goods has passed that the consignee may be able to sue. Whether title to goods has passed from the consignor to the consignee will depend upon the facts of each case was (sic) upheld by this Court in the Judgment of Hon’ble S.S. Dhavan, J. in the case of Union of India v. S. S. Mills Ltd., 1967 All LJ 677, relying on the decision of their Lordships of the Supreme Court in the case of Union of India v. W. P. Factories (supra).
13. As discussed hereinabove by me the law is settled that the consignor has got a right to institute a suit against the Railways for loss, damage or non-delivery of goods in transit entrusted to it for delivery to the consignee unless the consignee actually takes the delivery at the destination. This rule, however, is subject to the well established exception contained in Sections 23 and 39 of the Sale of Goods Act (supra). To put in a different way the terms of the contract of sale have to be considered and whether they indicate that the moment the seller entrusts the goods to the carrier the ownership in the goods vests in the buyer and the carrier is presumed not only to be the buyer’s agent but to have assented to the appropriation to the contract of goods so delivered. In the instant case it is the terms of the contract that are to be found from the letter of credit, Ext. A 2 which has been issued by the Girard Trust Bank, Philadelphia (International Division) to the Chartered Bank, Kanpur for the benefit of Indian & Overseas Trading Company, Kanpur, plaintiff No. 1 firm and the said letter of credit has been issued by the Girard Trust Bank at the request of N. Wagman & Company incorporated, Philadelphia, the purchaser through its agent and Banker, the Girard Trust Bank to Chartered Bank, Kanpur, the Bankers and agents of plaintiff No. 1, firm at Kanpur. The conditions embodied in the letter of credit were as follows : —
“We hereby issue this Irrevocable Letter of Credit which is available by our draft(s) drawn at sight on Girard Trust Bank for any sum or sums not exceeding in all Eighty One Thousand Eight Hundred and 00/100 Dollars (US. $ 81, 800-00 United States Currency for invoice value).
Drafts must bear the clause “Drawn Girard Trust Bank Letter of Credit” No. 26402
Applicant N. Wagman & Company, Incorporated, Philadelphia, Pennsylvania Drafts must be accompanied by the following documents : (Marked X).
(X) Commercial Invoice in triplicate. (X) Special Customs Invoice in triplicate.
(X) Insurance policy/Certificate. Fully covering the merchandise issued to Girard
Trust Bank covering Marine including war risks. S.R.& C.C.
(X) Full set clean on-board Bills of Lading issued to the order of Girard Trust Bank Overseas Steamer; plus non-negotiable copy
Additional documentation indicated on the Annex, hereto.
Credit amount covers;
Indian Dressed Bristles as indicated on the Annex hereto To be shipped to Philadelphia. Pa. Direct from Indian Port Freight is to be Prepaid, Partial shipments are permitted Shipments must be completed by April 30, 1968. And Drafts drawn and negotiated on or before April, 30, 1968.
Girard Trust Bank hereby agrees with the drawers, endorsers and Bona Fide owners of the bills drawn strictly in compliance with the terms of this credit that the same will be duly honoured on presentation.
The amount of each drawing must be endorsed on this credit is subject to the Uniform Customs and Practice for Documentary Credits (1962 Revision), International Chamber of Commerce Brochure No. 222.
Additional Documentation required;
Itemised Weight Lists or Packing Lists or Specifications, in triplicate.
Government “Agmark Grade Certificates” required, in triplicate.
“First set of documents must be in duplicate.
Bank charges outside U.S.A. are for the account of the beneficiary.
Transhipment permitted at New York, New York.
In lieu of clean on board ocean bills of lading there may be presented an official statement issued by the negotiating bank in India certifying that they are in possession of Railway Receipts and/or Motor Truck Receipts showing that merchandise has been shipped from Indian Inland point to Indian Port, consigned to order of negotiating bank in India, by First Class transportation as applicable to bristles, and that the negotiating bank will undertake to exchange Railway Receipts and/or Motor Truck Receipts for a full set of clean on board ocean bills of lading
issued to our order, and to forward these bills of lading to us.
I, Bratindra Nath Banerjee, Accountant
The Chartered Bank, Kanpur Branch, certify that it is a true copy of the documents showing transaction in the account of Indian & Overseas Trading Co., Kanpur with the Chartered Bank, Kanpur and that the entries are contained in one of the ordinary books of the bank and were made in the usual and ordinary course of business and that such book is still in the custody of the bank.”
Very truly yours,
Sd.
Authorized Signature.
14. It is thus apparent that the Letter of Credit required “Full set clean on board Bills of lading issued to the order of Girard Trust Bank Overseas Steamer, plus non-negotiable copy” which leaves no iota of doubt that the Letter of Credit was to be availed by plaintiff 1 firm only when they or their bankers, the Chartered Bank, Kanpur acting as their agent handed over clean on-board-non-negotiable bills of lading drawn in favour of Girard Trust Bank overseas Steamer, the Girard Trust Bank being the agent and Banker of the purchaser N. Wagman & Company (incorporated) Philadelphia. It is necessary to look to the terms and conditions of the Bill of Exchange and the Bill of Lading to ascertain the intention of the parties to throw light on the terms and conditions of the contract, and to determine at which point of time and domain in the property passed to the seller. ‘Bill of Exchange’ has been defined in Stroud’s Judicial Dictionary of Words and Phrases, Vol. I (Fourth Edition) as under :
“Bill of Exchange (1) “A bill of exchange is an Unconditional, order in writing, addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay, On Demand, or at a fixed or Determinable Future Time, & Sum Certain In money to, or to the order of a specified person, or to bearer”.
It has similarly been defined by Burrows in his Words and Phrases Judicially defined, Vol. I (1944 Ed.).
The Bill of Lading has been defined by Stroud’s Judicial Dictionary as under :
“Bill Of Lading. (1) “A bill of lading is the written evidence of a contract for the carriage and delivery of goods sent by sea for certain Freight. The contract, in legal language, is a contract of Bailment (2 Raym Ld 912). In the usual form of the contract, the undertaking is to deliver to the order, or assigns, of the shipper. By the delivery on board, the shipmaster acquires a special property to support that possession he holds in right of another, and to enable him to perform his undertaking. The general property remains with the shipper of the goods until he has disposed of it by some act, sufficient in law, to transfer property.”
Similar definition is given in Burrows Words and Phrases Judicially defined Vol. I at page 323. It is pertinent to note that the definition given by the two English Jurists is substantially the same as in Aiyar’s Judicial Dictionary, 9th Ed. 1984, page 160. The two documents construed in the light of these definitions clearly indicate that the letter of credit was pre-conditioned by the delivery of the complete consignment at the port of lading in India i.e. Bombay and thereafter a clean board of lading with a further condition that it would be delivered to the bankers of buyer, Girard Trust Bank, Philadelphia or their nominee at either of the twin ports in New York. This is supported by a decision of the Supreme Court in E & B Steamship Co. v. Sha Misrimal Bherajee, AIR 1966 SC 1892.
15. The Railway Receipt, Ex. A. 1 showing
the Chartered Bank as the consignee would not amount to appropriation of goods by the buyer at the time of handing over the goods at Kanpur Central Goods Shed, since the Chartered Bank was the agent of the seller, plaintiff No. 1, and the endorsement in favour of Messrs D. Abraham & Sons (P) Ltd. Bombay by the Chartered Bank was only an endorsement in favour of the shipping agent of plaintiff No. 1 firm, the seller, and unless the delivery was taken by Messrs. D. Abraham & Sons (P) Ltd. Bombay on behalf of plaintiff 1 respondent and the clean on board non negotiable bill of lading forwarded to the order of Girard Trust Bank Overseas Steamer, New York, the ownership could not pass in the buyer and the appropriation by the buyer could not take place. This being a case of international trade. The contention of the
learned counsel for the appellant does not appear to have force more so since there is a clear evidence on record to indicate that on 15th Feb., 1970 a shortage certificate, Ex, 18 was issued by the Railways pertaining to the loss of six packages in transit as claimed by plaintiff 1. This was issued to Messrs D, Abraham & Sons (P) Ltd., Bombay. It was on this basis that a claim was lodged by the plaintiff before the defendant claiming a sum of Rs. 49139.64 p. the amount in suit. Plaintiff 2, insurer of the consignment, also wrote and made a claim, with the authority of the plaintiffs shipping agent Messrs D. Abraham & Sons (P) Ltd. (Ex. 19). The Railway Administration, Northern Railway put off the matter (Ext.20) shelving for consideration of the Goods Superintendent Central Railway, Wadibandar, Bombay. Ultimately the claim for the amount continued — lingering and the defendants refused to settle the claim. Plaintiff 2 settled the claim and has thus joined plaintiff 1 in instituting the present suit as a co-plaintiff and I find that the decree of the learned Civil Judge under appeal directing recovery of Rs. 49139-64 P. in favour of plaintiff 1 deserves to be confirmed. Since the title in the goods sent by the disputed consignment vested in the seller, plaintiff 1, the finding of the trial court is confirmed.
16. Coming to the second point urged by the learned counsel for the appellant about quantum of damages awarded, I find that the plaintiff has tendered evidence to indicate that a sum of Rs. 49139-64 covering the price of the six cases of lost bristles plus replacement charge as indicated in its notice under Section 80 of the Civil P.C. (Ext, 33) was never repudiated by the defendant and so also the factum of plaintiff 2 as insurer, having settled the said claim and paid the said amount to the plaintiff No. 1 vide receipt of plaintiff 1 dt. 29th Feb., 1968 (Ext.51) was not disputed. The partner of plaintiff No. 1 Sri Sudershan Kumar came in the witness-box and deposed that the actual costs incurred by plaintiff No. 1 in replacing Bristless contained in the six lost cases was nearly the same as indicated in the plaint and the notice Ex. 33. He further stated on oath that custom invoice is based on the rules for levy of custom duty while the commercial invoice at which the claim was settled by the insurer was based on the market value as
stated by him. The defendant-appellant have not produced any oral or documentary evidence to controvert this testimony, and I have no reason to disbelieve the testimoney of Sri Sudarshan Kumar and I find no force in the submission of the learned counsel for the appellant that the damages awarded are excessive since they are based on the market value.
17. In the result the appeal fails and is dismissed with costs in favour of respondent 1 and the judgment and decree of the trial court in appeal decreeing the suit in favour of the plaintiff respondent 1 alone is confirmed. No order regarding inter se settlement between plaintiff 1 and plaintiff 2 need be passed since this was not the subject matter of the suit and the decree to that effect is set aside.