{"id":218851,"date":"1976-03-11T00:00:00","date_gmt":"1976-03-10T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/union-of-india-and-ors-vs-sugauli-sugar-works-p-ltd-on-11-march-1976"},"modified":"2017-08-06T14:07:54","modified_gmt":"2017-08-06T08:37:54","slug":"union-of-india-and-ors-vs-sugauli-sugar-works-p-ltd-on-11-march-1976","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/union-of-india-and-ors-vs-sugauli-sugar-works-p-ltd-on-11-march-1976","title":{"rendered":"Union Of India And Ors vs Sugauli Sugar Works (P) Ltd on 11 March, 1976"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Union Of India And Ors vs Sugauli Sugar Works (P) Ltd on 11 March, 1976<\/div>\n
Equivalent citations: 1976 AIR 1414, \t\t 1976 SCR (3) 614<\/div>\n
Author: A Ray<\/div>\n
Bench: Ray, A.N. (Cj)<\/div>\n
           PETITIONER:\nUNION OF INDIA AND ORS.\n\n\tVs.\n\nRESPONDENT:\nSUGAULI SUGAR WORKS (P) LTD.\n\nDATE OF JUDGMENT11\/03\/1976\n\nBENCH:\nRAY, A.N. (CJ)\nBENCH:\nRAY, A.N. (CJ)\nBEG, M. HAMEEDULLAH\nSINGH, JASWANT\n\nCITATION:\n 1976 AIR 1414\t\t  1976 SCR  (3) 614\n 1976 SCC  (3)\t32\n\n\nACT:\n     Indian Railway's  Act as  it stood amended by Act 46 of\n1959 and  prior to 1961 amendment Ss. 72 and 74-Liability of\nthe Railway in respect of goods sent at Railways risk is the\nsame as\t that of a bailee under the Indian Contract Act 1872\nSs. 151,  152, 161-Enquiry  under Sections  83 and 84 of the\nRailways Act read with s. 2 of the Indian Railways Board Act\n(4 of  1905) and  rule 18  of the  Railway Board  Rules is a\nJoint Enquiry,\tadmissible  under  Ss.\t5,7  and  9  of\t the\nEvidence Act-Not  covered, for claim of privileges, under s.\n123  of\t  the  Evidence\t Act  read  with  Art.\t298  of\t the\nConstitution-Correct measure  of  damages  for\tpurposes  of\nawarding damages  for negligence under the Railways Act-What\nis.\n\n\n\nHEADNOTE:\n     The non-delivery  of the goods booked by the respondent\non September  5, 1955 to several destinations under \"Railway\nRisk\" due  to the  sinking of  \"Barge No.  6,  carrying\t the\nwagons containing the goods\" led to the filing of four suits\nwhich were  dismissed by  the Trial  Court holding  that the\naccident was  not due  to  the\tnegligence  of\tthe  Railway\nemployees. The\tHigh Court,  accepting\tthe  appeal  of\t the\nrespondent by  its judgment  dated April  13, 1966 held that\nthe sinking  of Barge  was not\tdue to \"inevitable accident\"\nbut due\t to the\t serious negligence of the Railway employees\nand their  failure of  duty to\ttake due  care which  it was\nrequired to  take as  a bailee\tas  revealed  by  their\t own\nEnquiry Committee  held with  reference to  Ss. 83 and 84 of\nthe Railways  Act read with section 2 of the Indian Railways\nBoard Act  (4 of  1905) and  rule 18  of the  Railway  Board\nRules. The  High Court\tremanded the suits for determination\nof the quantum of the decretal amount due to the respondent.\nThe trial  court after\tremand gave decrees in favour of the\nrespondent on  10th September, 1966 without interest claimed\nup to  the date of filing of the suit and interest \"pendent-\nlite\". The  High Court,\t on appeal  by the respondent by its\njudgment dated\t3-9-1968 allowed interest \"pendent-lite\" and\nfuture interest at the rate of 4 1\/2% per annum.\n     Dismissing the  two sets of appeal by the Union, one by\nSpecial Leave  against the order dated 13-4-1966 determining\nthe  liability\t and  another  by  certificate\tagainst\t the\njudgment dated 3-9-1968 awarding interest the High Court.\n^\n     HELD: (1)\tThe liability  of the  Railway was that of a\nbailee. The  consignments were\tbooked at  Railway risk. The\nonus  of   proving  that  the  Railway\temployees  took\t the\nnecessary amount  of  care  and\t they  were  not  guilty  of\nnegligence rested  on the  Railway Authorities. The question\nof onus\t is not important when the entire evidence is before\nthe court.  In the  instant case there was no legal evidence\nto prove  \"inevitable accident\" but suppression of important\ndocuments and  non  production\tof  important  witnesses  in\ncharge of  the Barge.  The Barge sank because of the serious\nand gross  negligence  of  the\trailway\t employees  and\t the\nrailways did not take due care which it was required to take\nas a bailee. [617B-D; 618F-G]\n     (II) The  Enquiry Committee,  in the instant case, is a\nJoint Enquiry,\tunder the rules and the report is admissible\nunder Ss.  5, 7\t and 9\tof the\tEvidence Act.  The claim for\nprivilege is  not admissible  because no such claim was made\nbefore the  Courts below  and there  was no affidavit of the\nMinister incharge  or the  Secretary of\t the  Department  to\nsupport a claim for privilege. [616G-H]\n     (III) One\tof the\tprinciples for\taward of  damages is\nthat so\t far as\t possible he  who has  proved a\t breach of a\nbargain to  supply what\t he has\t contracted to\tget is to be\nplaced as  far as money can do it, in as good a situation as\nif the\tcontract had  been performed.  The fundamental basis\nthus is\t compensation for the pecuniary loss which naturally\nflows from the breach. Therefore,\n615\nthe principle  is that\tas far as possible the injured party\nshould be  placed in as good a situation if the contract has\nbeen  performed.   In  other   words,  it   is\tto   provide\ncompensation for  the loss  which naturally  flows from\t the\nbreach. The  market rate is a presumptive test because it is\nthe general  intention of  law that  in giving\tdamages\t for\nbreach of  contract, the party complaining should, so far as\nit can\tbe by  money, be  placed in  the same position as he\nwould have  been in  if the contract had been performed. The\nrule as\t to market  price is  intended\tto  secure  only  an\nindemnity to  the  purchaser.  The  market  value  is  taken\nbecause it  is presumed to be the true value of the goods to\nthe purchaser. In the instant case, the High Court correctly\napplied these  principles and  adopted the contract price in\nthe facts and circumstances of the case as the correct basis\nof compensation. [619-D]\n\n\n\nJUDGMENT:\n<\/pre>\n
     CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1562 to
\n1573 of 1971.\n<\/p>\n
     From the Judgment and Decree dated the 13-4-1966 and 3-
\n9-1968 of  the Patna  High Court  in Appeals  from  Original
\nDecree Nos. 127-130, 246 and 247 of 1958.\n<\/p>\n
     S. P. Nayar for the Appellants.\n<\/p>\n
     P. K.  Chatterjee and Rathin Dass for Respondents in C.
\nAs. 1566. 1567, 1572 and 1573 of 1971.\n<\/p>\n
     A. N.  Sinha and  P. K.  Mukherjee for  Respondents  in
\nC.As. 1562-65 and 1568-71 of 1971.\n<\/p>\n
     The Judgment of the Court was delivered by
\n     RAY, C.J.-These  appeals are  by certificate  from\t the
\njudgment and  decree of\t the High  Court at  Patna dated  13
\nApril, 1966 and 3 September, 1968.\n<\/p>\n
     Four suits\t were filed  by Sugauli\t Sugar Works Limited
\nfor  recovery  of  money  on  account  of  non\tdelivery  of
\nconsignments. Two  suits were filed by Majhaulia Sugar Works
\nfor recovery  of money\ton account  of non  delivery of\t two
\nconsignments. The  suits were  filed in\t the  Court  of\t the
\nSubordinate Judge, Motihari in Bihar.\n<\/p>\n
     The  plaintiffs   are  respondent.\t  The  case  of\t the
\nrespondents was\t that goods were booked on 5 September, 1955
\nto several  destinations under\trailway risk.  The goods did
\nnot reach the destinations. The respondents alleged that non
\ndelivery was  on account  of gross negligence and misconduct
\non the part of the Railways.\n<\/p>\n
     The defence was that the wagons containing the goods in
\nsuit along  with other wagons were taken on Barge No. 6 from
\nSamaria Ghat to Mokamah Ghat on 7 September, 1955. There was
\nan accident. The Barge with all the wagons sank in the river
\nGanges. The  Railways contended\t that the employees were not
\nguilty of any negligence or misconduct.\n<\/p>\n
     The Subordinate  Judge dismissed all the suits and held
\nthat the  accident was\tnot because of the negligence of the
\nrailway employees.\n<\/p>\n
     The High  Court  accepted\tthe  appeals  filed  by\t the
\nrespondent. The\t High Court  held that the consignments were
\nbooked at  railway risk\t and there  was no explanation given
\nfor the sinking of the Barge.\n<\/p>\n
616<\/span><\/p>\n
The High  Court held  that the Barge sank because of serious
\nnegligence of the railway employees and it was not a case of
\ninevitable accident.  The High\tCourt  also  held  that\t the
\nrailway did  not take the care which it was required to take
\nas a  bailee. The  High Court  delivered the  judgment on 13
\nApril, 1966 and sent to the trial court for determination of
\nthe issue:  “What is the amount for which the plaintiffs are
\nentitled to a decree in this case?”\n<\/p>\n
     One group\tof appeals  is against\tthe judgment  of the
\nHigh  Court  dated  13\tApril,\t1966  which  determined\t the
\nliability.\n<\/p>\n
     The Additional  Subordinate Judge,\t Motihari, who tried
\nthe issue  on remand  by an  order dated  10 September, 1966
\ngave decrees  in favour of the respondent. The High Court by
\njudgment dated\t3 September, 1968 set aside the judgment and
\ndecree of  the trial court on remand. The High Court awarded
\ndecrees in favour of the respondents.\n<\/p>\n
     The second\t group of  appeals is by certificate against
\nthe judgment of the High Court dated 3 September, 1968.\n<\/p>\n
     One of the contentions raised before the High Court and
\nrepeated here  is that the High Court should not have relied
\non an  enquiry report into the accident. The High Court held
\nthat there was an enquiry under Rule 18 of the Rules made by
\nthe Railway  Board. The\t High Court  referred to sections 83
\nand 84\tof the\tRailways Act.  Section 83  provides that  if
\nthere is  any accident\tattended with  loss of human life or
\ngrievous hurt  or with\tserious injury\tto property,  notice
\nshall be  given to various persons. Section 84 confers power
\non the Central Government to make Rules for several purposes
\nincluding the  purpose of  prescribing the duties of railway
\nservants, police officers, inspectors and Magistrates on the
\noccurrence of  an accident.  Section 2 of the Indian Railway
\nBoard Act  authorises the  Central Government  to invest the
\nRailway Board  with all or any of the powers or functions of
\nthe Central  Government under  the Railways Act. The Central
\nGovernment authorised  the Railway  Board to  make rules  in
\npursuance of  section 84 of the Railways Act. Rule 18 of the
\nRailway Board  Rules provides  that whenever an accident has
\noccurred in  the course\t of working  a Railway, the Agent or
\nManager shall  cause an\t enquiry to  be promptly  made by  a
\ncommittee of railway officers (to be called a joint enquiry)
\nfor the thorough investigation of the cases which led to the
\naccident. It  is also  provided in  the rule that an enquiry
\nmay be dispensed with in certain cases.\n<\/p>\n
     In the  present case  the enquiry\twas  held  by  three
\nofficers. The  enquiry report  which is\t marked as Exhibit 9
\nwas contended  by the  respondent  to  be  admissible  under
\nsections 5,  7, 9  and 35  of the  Evidence Act. The Railway
\ncontended that\tthe report  was a  privileged  document\t and
\nfurther claimed\t that the enquiry was a private enquiry. The
\nHigh Court rightly rejected both the contentions. First, the
\nHigh Court held that no privilege had been claimed and there
\nwas no\taffidavit of the Minister in charge or the Secretary
\nof the department to support a claim for privilege. The High
\nCourt
\n617<\/span>
\nalso referred  to the fact that the report was called for by
\nthe Court  of the Subordinate Judge at Gaya and the Railways
\ndid not\t claim any  privilege there.  Second, the High Court
\nalso rightly  held that\t the enquiry  report was  admissible
\nunder sections\t5, 7  and 9  of the  Evidence Act.  The High
\nCourt did not go into the question whether it was admissible
\nunder section 35 of the Evidence Act.\n<\/p>\n
     The High  Court further  held that the Railways did not
\nexamine important  witness, viz., the Commander of the ferry
\nwho was\t on the spot when the Barge was in trouble. The High
\nCourt held  that the Railways suppressed important documents
\nlike the  marine certificate  and the  stock register  which
\nwould have  given the  life history  and the capacity of the
\nBarge. The  High  Court\t correctly  drew  adverse  inference
\nagainst the  appellants\t for  non  production  of  important
\nwitness and important documents.\n<\/p>\n
     The liability  of the railway was that of a bailee. The
\nconsignments were  booked  at  railway\trisk.  The  onus  of
\nproving that the railway employees took the necessary amount
\nof care\t and that  they were not guilty of negligence rested
\non the\tRailway Authorities. The High Court held that it was
\nnot a  case of\tunavoidable accident and that the Barge sank
\nbecause of  gross negligence  of railway  employees and\t the
\nrailways did  not take\tthe amount  of\tcare  which  it\t was
\nrequired to take as a bailee.\n<\/p>\n
     The question  of onus  is not important when the entire
\nevidence is  before the\t Court. The  High Court\t found\tthat
\nRasul  the  Sarang  of\t‘Chapra’  was  responsible  for\t the
\naccident because  he had  failed to exercise proper judgment
\nwhile manoeuvring  his own vessel for the purpose of heaving
\nup the\tanchor of  Barge No.  6 and  he failed\tto  exercise
\ninitiative to  save the barge by breaching it on the nearest
\nchar, instead  of taking  it to the Simariaghat goods jetty.
\nThe High  Court also  held that\t the Commander\tof the ferry
\nfound that he visited the steamer ‘Samastipur’ and Barge No.
\n6 when\tthere was  difficulty in  heaving the  anchor of the
\nbarge and  thereafter went away, leaving the matter entirely
\nin the\thands of  the sarang. The High Court held that these
\nofficers were responsible for not staying on board until the
\nbarge was out of trouble.\n<\/p>\n
     The High  Court found that Barge No. 6 was very old. It
\nwas built  in 1897.  It underwent heavy repairs in 1953. The
\ntime of\t the accident was at about 2-20 p.m. on 7 September,
\n1955. “Samastipur”  started towing  the barge,\twent about a
\nmile when  the radius  rod of  Samastipur broke down. Radius
\nrod is\ta part\tof the\tpaddle by which a steamer is driven.
\nThe radius  rod of Samastipur was repaired in due course. It
\nthen heaved up its anchor. The anchor of the barge could not
\nbe lifted.  There was a danger whistle. Rasul, the Sarang of
\n“Chapra” came with his steamer to the aid of Samastipur. Two
\nofficers Lall  and Devia  herein before\t mentioned left\t the
\nmatter\tin  the\t hands\tof  the\t three\tsarangs.  Lall,\t the
\nCommander of  the Ferry\t was  not  examined.  The  Assistant
\nMechanical Engineer  was examined. The High Court found that
\nRasul did  not take  the steamer  and the barge to the Diara
\nbut took them to Simarighat. The steamer and the
\n618<\/span>
\nbarge reached jetty at Simariaghat. When the barge was about
\nto be attached to the jetty, it sank.\n<\/p>\n
     The High  Court found  that the strength of the current
\nin the\tmonth of  September was\t a known factor. The railway
\nemployees were used to ply the steamer and the barge between
\nthe two\t ghats during  the month  of September.\t The railway
\nemployees were\tfound to  equip themselves  with appropriate
\nappliances and\tnecessary skill\t for the  job of  taking the
\nbarge across.  The  High  Court\t found\tthat  there  was  no
\nsatisfactory explanation  for the  sinking of the barge. The
\nHigh Court  also found that there was no explanation why the
\nanchor of  the barge  could not\t be lifted. According to the
\nHigh Court,  this  might  have\tbeen  due  to  defective  or
\ninsufficient appliance\tfor haulage  of the anchor. The High
\nCourt also  found that\tthere was  no evidence\tto show that
\nthere was  any unforeseen difficulty, by reason of which the
\nanchor could  not be  heaved up.  The fact  that the  anchor
\ncould not  be lifted  was held\tby the\tHigh Court  to be on
\naccount of the negligence of the railway employees.\n<\/p>\n
     The High Court also referred to the fact that the barge
\ndeveloped a  big hole  and there was no explanation how this
\nhappened. The  High Court  felt that this could be explained
\nby assuming that Chapra pulled the barge in such a way as to
\nmake the  anchor chain\trub against the bottom plates of the
\nbarge so  as to\t create the  hole. The\tHigh Court  found no
\nother reasons  because there is no suggestion that there was
\nany submerged tree or stone, and the hole was caused because
\nthe barge  accidentally struck\tagainst any  such substance.
\nSince the  creation of\tthe hole  could not  be\t attributed,
\naccording to  the High\tCourt to anything unforeseen, it was
\ndue to the negligence of the railway employees.\n<\/p>\n
     The High Court further found that if the barge had been
\ntowed to  the Diara,  it could\tnot sink. The water near the
\nDiara must  have been  shallow so  that the  wagons upon the
\nbarge could  not be  submerged in  the water near it. On the
\nother hand,  Rasul took\t the steamer and the barge to a much
\nlonger\tdistance   and\tthe   passage  must   have  taken  a
\nconsiderable time.  Besides, the  water near  the jetty\t was
\nundoubtedly deep and the wagons were also submerged.\n<\/p>\n
     The High  Court on these findings correctly came to the
\nconclusion that\t the  barge  sank  because  of\tthe  serious
\nnegligence of the railway employees and the railways did not
\ntake the care which it was required to take as a bailee.\n<\/p>\n
     The High  Court passed decrees awarding the respondents
\nprice of  sugar and  costs of  damages and interest pendente
\nlite and future interest.\n<\/p>\n
     The appellant  contended that the contract price should
\nnot have been awarded. The High Court said that the evidence
\nof plaintiff’s\twitness Gaya  Prasad showed the selling rate
\nof sugar  and there  was no  challenge to that evidence. The
\nHigh Court  found  that\t the  goods  were  despatched  on  4
\nSeptember, 1955. The barge sank on 7th September, 1955, and,
\ntherefore, the contract price would be the correct
\n619<\/span>
\nmeasure\t of  damages.  The  High  Court\t on  the  facts\t and
\ncircumstances of  the case  found that\tthe  contract  price
\nwould also be the same as the market price at that time.\n<\/p>\n
     The market rate is a presumptive test because it is the
\ngeneral intention  of the  law that,  in giving\t damage\t for
\nbreach of  contract, the party complaining should, so far as
\nit can\tbe done\t by money, be placed in the same position as
\nhe would  have been  in if  the contract had been performed.
\nThe rule  as to\t market price  is intended to secure only an
\nindemnity to  the  purchaser.  The  market  value  is  taken
\nbecause it  is presumed to be the true value of the goods to
\nthe purchaser. One of the principles for award of damages is
\nthat as\t far as\t possible he  who has  proved a\t breach of a
\nbargain to  supply what\t he has\t contracted to\tget is to be
\nplaced as  far as money can do it, in as good a situation as
\nif the\tcontract had  been performed.  The fundamental basis
\nthus is\t compensation for the pecuniary loss which naturally
\nflows from  the breach.\t Therefore, the principle is that as
\nfar as\tpossible the  injured party  should be\tplaced in as
\ngood a\tsituation as  if the contract had been performed. In
\nother words,  it is  to provide\t Compensation for  pecuniary
\nloss which  naturally flows  from the breach. The High Court
\ncorrectly applied  these principles and adopted the contract
\nprice in  the facts  and circumstances\tof the\tcase as\t the
\ncorrect basis for compensation.\n<\/p>\n
     For these\treasons, the  judgment of  the High Court is
\naffirmed. The appeals are dismissed with one set of costs.\n<\/p>\n
S.R.\t\t\t\t\t  Appeals dismissed.\n620<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Union Of India And Ors vs Sugauli Sugar Works (P) Ltd on 11 March, 1976 Equivalent citations: 1976 AIR 1414, 1976 SCR (3) 614 Author: A Ray Bench: Ray, A.N. (Cj) PETITIONER: UNION OF INDIA AND ORS. Vs. RESPONDENT: SUGAULI SUGAR WORKS (P) LTD. DATE OF JUDGMENT11\/03\/1976 BENCH: RAY, A.N. (CJ) […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-218851","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nUnion Of India And Ors vs Sugauli Sugar Works (P) Ltd on 11 March, 1976 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/union-of-india-and-ors-vs-sugauli-sugar-works-p-ltd-on-11-march-1976\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Union Of India And Ors vs Sugauli Sugar Works (P) Ltd on 11 March, 1976 - 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