{"id":238301,"date":"1965-08-24T00:00:00","date_gmt":"1965-08-23T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/union-of-india-vs-west-punjab-factories-ltd-on-24-august-1965"},"modified":"2017-11-07T01:27:43","modified_gmt":"2017-11-06T19:57:43","slug":"union-of-india-vs-west-punjab-factories-ltd-on-24-august-1965","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/union-of-india-vs-west-punjab-factories-ltd-on-24-august-1965","title":{"rendered":"Union Of India vs West Punjab Factories Ltd on 24 August, 1965"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Union Of India vs West Punjab Factories Ltd on 24 August, 1965<\/div>\n
Equivalent citations: 1966 AIR 395, \t\t 1966 SCR (1) 580<\/div>\n
Author: K Wanchoo<\/div>\n
Bench: Gajendragadkar, P.B. (Cj), Wanchoo, K.N., Hidayatullah, M., Shah, J.C., Sikri, S.M.<\/div>\n
           PETITIONER:\nUNION OF INDIA\n\n\tVs.\n\nRESPONDENT:\nWEST PUNJAB FACTORIES LTD.\n\nDATE OF JUDGMENT:\n24\/08\/1965\n\nBENCH:\nWANCHOO, K.N.\nBENCH:\nWANCHOO, K.N.\nGAJENDRAGADKAR, P.B. (CJ)\nHIDAYATULLAH, M.\nSHAH, J.C.\nSIKRI, S.M.\n\nCITATION:\n 1966 AIR  395\t\t  1966 SCR  (1) 580\n\n\nACT:\nIndian\tRailways Act, s. 72-Responsibility of  railways\t for\nloss  of  goods\t -Whether continues of\tdelivery  not  taken\nwithin\tthree  days  of reaching  destination,\tafter  which\ndemurrage  is  payable under the rules-\t Maintainability  of\nsuit  for  damages  by\tconsignor of  goods  when  risk\t not\ntransferred to consignee-Damages whether payable at contract\nrate  or market rate-Interest whether payable on  amount  of\ndamages for period before date of suit.\n\n\n\nHEADNOTE:\nThere  was  a  fire at a railway station  in  which  certain\ngoods& were destroyed.\tTwo suits were filed claiming damage\nfor  loss  of goods by 'the said fire.\tThe first  suit\t was\nfiled by a factory which claimed to be owner of the goods as\nconsignor.  The other suit was filed by a consignee in whose\nfavour\tthe relevant documents were endorsed.  The Union  of\nIndia resisted both the suits.\tThe trial court and the High\nCourt  concurrently  held  that\t the loss  was\tdue  to\t the\nnegligence of the Railways.  The1 Union of India appealed to\nthis Court.\nIt was contended on behalf of the appellant : (1) The suits,\nas  filed,  were  not maintainable. (2)\t In  the  first-suit\ndelivery of the goods had been made to the consignee and the\nHigh Court's finding to the contrary was wrong. (3)  Damages\nshould\thave been awarded at the contract rat-. and not\t the\nmarket rate (4) Interest could not be awarded for the period\nbefore the suit on the amount of damages decreed. (5) In the\nsecond suit notice had been given to the consignee that\t the\nconsignment had arrived on February 23, 1943.  The consignee\ndid not come to remove the goods till March 8, 1943 when the\nfire   broke   out,  and  the  liability  of   the   railway\nadministration\tceased\tafter the lapse of  reasonable\ttime\nafter\tarrival\t  of   the  consignment\t  at   the   railway\nadministration.\nHELD:\t  (i)  A railway receipt is a document of  title  to\ngoods covered by it, but from that alone it does not follow,\nwhere  the consignor and consignee are different,  that\t the\nconsignee  is  necessarily the owner of the  goods  and\t the\nconsignor  in such circumstances can never he the  owner  of\nthe goods.  It is quite possible for the consignor to retain\ntitle  in the goods himself while the consignment is  booked\nin the name of another person.\tIn the first of the  present\nsuits the risk remained with the consignor according to\t the\nagreement  of the parties, and it had not been\tproved\tthat\nthe  consignor\thad parted with the property in\t the  goods.\nTherefore the suit by he consignor was maintainable. [586 D-\nH]\nIn  the second suit the railway receipt was endorsed in\t the\nconsignees  favour  and the courts  below  had\tconcurrently\nfound that the consignee was the owner of the goods.   There\ncould  therefore be no dispute about the maintainability  of\nthe second suit also. [588 D]\n(ii) Though  there was a token delivery to the consignee  in\nthe  first suit as appeared from the fact that\tthe  railway\nreceipt had been sur-\n581\nrendered and the delivery book had been signed, there was no\nredelivery  by the railway to the consignee.  The goods\t had\nnot  been  unloaded  and were still under  the\tcontrol\t and\ncustody\t of  the railway and the evidence of  the  Assistant\nGoods  Clerk was that his permission had still to  be  taken\nbefore the goods could be actually removed by the consignee.\nThe contention in the first suit that the delivery had\tbeen\nmade to the consignee before March 8, 1943 therefore, in the\npeculiar circumstances of the case had to fail. [590 C-D]\n(iii)  The High Court rightly calculated the damages on\t the\nbasis  of the  on March 8 as it is well settled that  it  is\nthe  market  price at lest be damage occurred which  is\t the\nmeasure of the damages to be awarded.\t[590 E-F]\n(iv) In the    absence of any usage or contract, express  or\nimplied, or of any provision of law to justify the award  of\ninterest  it  is not possible to award interest\t by  way  of\ndamages\t and therefore no interest should have been  awarded\nin the present two suits up to the date of filing of  either\nsuit. [591 A]\nBengal\tNagpur Railway Co. Ltd. v. Ruttanji Rant, & Ors.  65\nI.A. 66, Seth Thawardas Pherumal v. Union of India<\/a> [1955]  2\nS.C.R.\t48,  Union of India v, A. L. Rallia  Ram,  [1964]  3\nS.C.R.\t164 and Union of   India V. Watkins Mayer &  Co.  C.\nAs.  Nos.<\/a> 43 and 44 of 1963 dt. 10-3-65,\nrelied\t  on.\n(v)  Under   s.\t  72  of  the  Indian  Railways\t  Act,\t the\nresponsibility of the railway administration  for the  loss,\ndestruction  or deterioration of animals or goods  delivered\nto  the administration to be carried by railway is,  subject\nto  the other provisions of the Act, that of a bailee  under\nss.  151,  152\tand 161 of the\tIndian\tContract  Act.\t The\nresponsibility continues until terminated in accordance with\nsq. 55 and 56 of the Railways Act. [591 E]\nIt may be that under the Rules framed by the Railways  goods\nare kept at the railway station of destination only for\t one\nmonth, and that demurrage has to be paid after three days of\nreaching  the  destination.  But the responsibility  of\t the\nrailway\t is  under s. 72 of the Indian Railways Act  and  it\ncannot\tbe cut down by any rule.  Even if owing to the\tsaid\nRules  the responsibility of the railway as a  carrier\tends\nwithin a reasonable time after the goods have reached  their\ndestination-station,  its responsibility as  a\twarehouseman\ncontinues  and that responsibility L. the same at that of  a\nbailee. [592 E-H]\nChapman v. The Great Western Railway Company, (1880)5 Q.B.D.\n278, distinguished.\nIn  the\t present  case the consignee (in  the  second  suit)\nclaimed\t the  goods  well within the  period  of  one  month\nmentioned in the rules.\t The fact that he was liable to\t pay\ndemurrage  because  he did not take delivery  of  the  goods\nwithin three days did not relieve the railway of its respon-\nsibility as warehouseman.  As it had been concurrently found\nby  the courts below that there had been negligence  by\t the\nrailway within the meaning of ss. 151 and 152 of the  Indian\nContract Act, the railway war, liable to make good the\tloss\ncaused by the fire. [593 A-B]\n\n\n\nJUDGMENT:\n<\/pre>\n
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 601 and 602
\nof 1963.\n<\/p>\n
Appeals from the judgment and decree dated December 9, 1958,
\nof  the\t Allahabad High Court in First Appeals Nos.  373  of
\n1945 and 92 of 1946.\n<\/p>\n
582<\/span><\/p>\n
Civil Appeal No. 603 of 1963.\n<\/p>\n
Appeal\tby special leave from the judgment and decree  dated
\nDecember 9, 1958 of the Allahabad High Court in First Appeal
\nNo. 374 of 1945.\n<\/p>\n
N.  D. Karkhanis and R. N. Sachthey, for the  appellant\t (in
\nall the\t  three appeals).\n<\/p>\n
G.  S. Pathak, Rameswar Nath, S. N. Andley and P. I.  Vohra,
\nfor  the respondents (in all the three appeals).
\nThe Judgment of the Court was delivered by.
\nWanchoo,  J. These three appeals raise common questions\t and
\nwill  be dealt with together.  They arise out of  two  suits
\nfiled  against the Government of India claiming damages\t for
\nloss  of goods which were destroyed by fire on\tthe  railway
\nplatform  at Morar Road Railway Station.  One of  the  suits
\nwas  filed by Birla Cotton Factory Limited, now\t represented
\nby  the West Punjab Factories Limited (hereinafter  referred
\nto  as\tthe  Factory).\tIt related to  six  consignments  of
\ncotton\tbales booked from six stations on various  dates  in
\nFebruary and March 1943 by the Factory to Morar Road Railway
\nStation.   In  five of the cases, the consignment  was\tcon-
\nSigned to J. C. Mills while in one it was consigned to self.
\nThe  consignments arrived at Morar Road Railway Station\t or.
\nvarious\t dates in March Delivery was given of a part of\t one
\nconsignment on March 7, 1943 while the remaining goods\twere
\nstill  in  the custody and possession of  the  railway.\t  On
\nMarch  8, 1943, a fire broke out at the Morar  Road  Railway
\nStation and these goods were involved in the fire and severe
\ndamage was caused to them.  It is not necessary to refer  to
\nthe details of the damage for that matter is not in  dispute
\nbetween\t the parties.  The case of the Factory was that\t the
\ndamage\tand  loss  was caused while the goods  were  in\t the
\ncustody and control of the railway administration and it was
\ndue  to misconduct, negligence and carelessness on the\tpart
\nof  the railway administration.\t Consequently, the suit\t was
\nfiled  for Rs. 77,000 and odd along with interest  upto\t the
\ndate  of  the  suit and interest pendente  lite\t and  future
\ninterest.\n<\/p>\n
In  the other suit there was one consignment of 45 bales  of
\ncotton yarn.  This consignment was booked from Belangunj  to
\nMorar  Road  Railway Station on February 22,  1943  and\t the
\nrailway receipt relating to this consignment was endorsed in
\nfavour\tof  Ishwara Nand Sarswat who filed the\tsuit.\tThis
\nconsignment arrived at
\n583<\/span>
\nMorar  Road Railway Station on February 23,  1943.   Ishwara
\nNand  Sarswat went to take delivery of this  consignment  on
\nMarch  10,  1943, his case being that be  had  received\t the
\nrailway receipt on March 9, 1943.  He then came to know that
\nthe consignment was involved in a fire which had taken place
\non  March  8, 1943 and severe damage had been  done  to\t the
\nconsignment.  Ishwara Nand Sarswat therefore filed the\tsuit
\non  the ground that damage and loss was due entirely to\t the
\ngross-negligence of the railway administration.\t He  claimed
\nRs.  72,000,\/- and odd as damages and also claimed  interest
\nupto  the  date\t of the suit and pendente  lite\t and  future
\ninterest.\n<\/p>\n
The suits were resisted by the Government of India.  In\t the
\nfirst  suit by the Factory, it was pleaded that the  Factory
\ncould  not  sue as-, the goods in five of the  receipts\t had
\nbeen consigned to the J. C. Mills; secondly, it was  pleaded
\nthat  delivery\thad  been  given  of  atleast  five  of\t the
\nconsignments to the J.C. Mills before the fire broke out and
\nthe railway administration was not therefore responsible for
\nthe damage done by the fire, for it was the fault of the  J.
\nC.  Mills not to have removed the – goods immediately  after
\nthe  delivery; thirdly, it was pleaded that  damages  should
\nhave  been granted at the rate of Rs. 38\/- per\tbale,  which
\nwas  the  price\t contracted for between the  buyer  and\t the
\nseller and not at the market rate on the date of the  damage
\nas  was done by the courts below-, fourthly, it was  pleaded
\nthat  no  interest should have been allowed for\t the  period
\nbefore the suit; and lastly, it was pleaded that the conduct
\nof the railway administration was not -negligent and  there-
\nfore the railway was not bound to make good the loss.
\nOn  these pleas, five main issues relating to each  of\tthem
\nwere framed by the trial court.\t The trial court found\tthat
\nthe Factory could maintain the suit and decided accordingly.
\nIt  also found that in the case of five consignments by\t the
\nFactory,  delivery had been given before the fire broke\t Out
\nand  therefore the railway was not responsible; in the\tcase
\nof  the\t sixth consignment it held that there was  no  proof
\nthat  delivery bad been given before the fire broke out\t and
\nthat  the  railway would be responsible\t if  negligence\t was
\nproved.\t  On  the quantum of damages, the trial\t court\theld
\nthat the damages had to be calculated at the market price on
\nthe  date of the fire and not at the contract price  between
\nthe  buyer  and seller.\t On the question  of  interest,\t the
\ntrial  court held that interest before the date of the\tsuit
\nshould\tbe allowed on equitable ,-rounds.  Finally,  on\t the
\nquestion of negligence, the trial court held that there\t was
\nnegligence  by the railway and it was therefore\t liable\t for
\nloss  and  damage  caused by the fire  which  broke  out  on
\nL7Sup.\/65-9
\n584<\/span>
\nMarch  8, 1943.\t As however, the trial court had  held\tthat
\ndelivery  had been given in the case of\t five  consignments,
\nthough\tthe goods had not been removed, the railway was\t not
\nresponsible for the loss.  It therefore decreed the suit  in
\npart  with respect to the sixth consignment about  which  it
\nhad found that there had been no delivery.\n<\/p>\n
The  same  issues were raised in the suit  by  Ishwara\tNand
\nSaraswat.   But there was one additional issue in that\tsuit
\nbased  on the contention of the Government of India that  it
\nhad  given notice to Ishwara Nand that the  consignment\t had
\narrived\t on February 23, 1943, Ishwara Nand however did\t not
\ncome  to remove the goods till March 8, 1943 when  the\tfire
\nbroke out; therefore it was urged that the liability of\t the
\nrailway administration as carrier had ceased after the lapse
\nof  reasonable time after arrival of the consignment at\t the
\nrailway\t station.  This reasonable time could not be  beyond
\nthree\tdays   in  any\tcase  and  therefore   the   railway
\nadministration\twas not bound to make good the loss even  if
\nit  had been occasioned on account of the negligence of\t the
\nadministration.\t  As  Ishwara Nand should have\tremoved\t the
\nconsignment  within  three days of February 23, it  was\t his
\nfailure to do so which resulted in the damage and loss.\t The
\nissues\twhich were common to this suit and the suit  by\t the
\nFactory were decided on the same lines by the trial court as
\nin  the\t suit by the Factory.  On the  further\tissue  which
\narose  in this suit as to the delay in the removal of  goods
\nafter  notice  to Ishwara Nand, the trial court\t held  after
\nreference   to\t certain   rules   made\t  by   the   railway
\nadministration\tthat  even if the  railway  administration’s
\nresponsibility\tas  carrier had ceased after  the  lapse  of
\nreasonable time, it was still liable as a bailee either as a
\nwarehouseman or as a gratuitous bailee.\t It therefore gave a
\ndecree for Rs. 76,000 and odd to Ishwara Nand.
\nThen  followed\tthree appeals to the High Court two  in\t the
\nsuit  by  the Factory and one in the suit of  Ishwara  Nand.
\nThe appeal in the suit by Ishwara Nand was by the Government
\nof  India; one appeal in the suit by the Factory was by\t the
\nfactory\t with  respect to that part of the claim  which\t had
\nbeen dismissed, and the case of the Factory was that in fact
\nno  delivery had been made to it and it was entitled to\t the
\nentire sum claimed as damages.\tThe other appeal was by\t the
\nGovernment  of India with respect to the amount\t decreed  by
\nthe trial court and it raised all the contentions which\t had
\nbeen raised before the trial court.\n<\/p>\n
The  High Court dealt with the three appeals  together.\t  In
\nall  appeals  the High Court confirmed the  finding  of\t the
\ntrial  court that there had been negligence on the  part  of
\nthe railway which
\n585<\/span>
\nresulted  in damage to the goods.  On the  question  whether
\nthe  suit  could be maintained by the plaintiffs,  the\tHigh
\nCourt affirmed the finding of the trial court that both\t the
\nsuits  were maintainable.  The High Court also affirmed\t the
\nfinding of the trial court with respect to the rate at which
\ndamages should be calculated and on the question of interest
\nbefore the date of the suit.  Further in the suit by Ishwara
\nNand,  the  High  Court\t held  that  even  if  the   railway
\nadministration ceased to be responsible as a carrier after a
\nreasonable  time had elapsed after the arrival of the  goods
\nat Morar Road Railway Station, it was still responsible as a
\nwarehouseman.\tThe  appeal therefore of the  Government  of
\nIndia in Ishwara Nand’s suit was dismissed.  On the question
\nof  delivery in the Factory’& suit the High Court  disagreed
\nwith  the  finding of the trial court that  there  had\tbeen
\ndelivery  of five consignments.\t It held that there  was  no
\neffective  delivery  even of these  five  consignments.\t  In
\nconsequence,  the  appeal of the Factory was  allowed  while
\nthat of the Government of India was dismissed.
\nThen  followed applications to the High Court for  leave  to
\nappeal to this Court in the Factory’s suit.  ‘Me High  Court
\ngranted the certificate as the judgment was one of  variance
\nand  the  amount involved was over rupees  twenty  thousand.
\nHowever, in the suit of Ishwara Nand, the High Court refused
\nto grant a certificate as the judgment was one of affirmance
\nand  no\t substantial question of law arose.   Thereupon\t the
\nGovernment of India applied to this Court for special  leave
\nin  Ishwara  Nand’s suit and that was  granted.\t  The  three
\nappeals have been consolidated in this Court for as will  be
\nseen from what we have said above, the principal points\t in-
\nvolved in them are common.\n<\/p>\n
Learned\t counsel  for the appellant has not  and  could\t not
\nchallenge  the concurrent finding of the trial court and  of
\nthe High Court that the fire which caused the damage was due
\nto  the negligence of the railway administration.   But\t the
\nlearned counsel has pressed the other four points which were
\nraised in the courts below.  He contends-(i) that the  suits
\nas filed were not maintainable, (ii) that the High Court was
\nin  error in reversing the finding of the trial\t court\tthat
\nthe  delivery  had been given with respect to  five  of\t the
\nconsignments  in  the  Factory’s suit,\t(iii)  that  damages
\nshould have been awarded at Rs. 38\/- per bale which was\t the
\ncontract  price between the buyer and seller and not at\t the
\nmarket price on the date on which the damage took place, and\n<\/p>\n
(iv)  that  interest  could not be awarded  for\t the  period
\nbefore the suit on the amount of damages decreed.\n<\/p>\n
586<\/span><\/p>\n
Re. (i).\n<\/p>\n
The contention of the appellant with respect to five of\t the
\nconsignments  in  the suit of the Factory was  that  as\t the
\nconsignee  of the five railway receipts was the J.C.  Mills,
\nthe consignor (namely, the Factory) could not bring the suit
\nwith respect thereto and only the J.C. Mills could  maintain
\nthe  suit.  Ordinarily, it is the consignor who can  sue  if
\nthere  is  damage to the consignment, for  the\tcontract  of
\ncarriage   is\tbetween\t the  consignor\t and   the   railway
\nadministration.\t Where the property in the goods carried has
\npassed\tfrom  the  consignor to\t some-one-else,\t that  other
\nperson\tmay  be\t able to sue.  Whether in such\ta  case\t the
\nconsignor  can also sue does not arise on the facts  in\t the
\npresent case and as to that we say nothing.  The argument on
\nbehalf\tof  the appellant is that the railway receipt  is  a
\ndocument of title to goods [see S. 2(4)] of the Indian\tSale
\nof  Goods  Act,\t No.  3 of 1930), and  as  such\t it  is\t the
\nconsignee who has title to the goods where the consignor and
\nconsignee are different.  It is true that a railway  receipt
\nis a document of title to goods covered by it, but from that
\nalone it does not follow, where the consignor and  consignee
\nare  different, that the consignee is necessarily the  owner
\nof  goods and the consignor in such circumstances can  never
\nbe the owner of the goods.  The mere fact that the consignee
\nis  different from the consignor does not  necessarily\tpass
\ntitle to the goods from the consignor to the consignee,\t and
\nthe  question  whether\ttitle to goods\thas  passed  to\t the
\nconsignee will have to be decided on other evidence.  It  is
\nquite  possible\t for the consignor to retain  title  in\t the
\ngoods,\thimself while the consignment is booked in the\tname
\nof  another person.  Take a simple case where a\t consignment
\nis  booked  by the owner and the consignee  is\tthe  owner’s
\nservant,  the  intention being that the\t servant  will\ttake
\ndelivery  at the place of destination.\tIn such a  case\t the
\ntitle  to  the goods would not pass from the  owner  to\t the
\nconsignee  and\twould  still remain.  with  the\t owner,\t the
\nconsignee  being merely a servant or agent of the  owner  or
\nconsignor  for purposes of taking delivery at the  place  of
\ndestination.  It cannot therefore be accepted simply because
\na  consignee  in  a  railway receipt  is  different  from  a
\nconsignor that the consignee must be held to be the owner of
\nthe goods and he alone can sue and not the consignor.  As we
\nhave  said already, ordinarily, the consignor is the  person
\nwho  has  contracted with the railway for  the\tcarriage  of
\ngoods  and  he can sue; and it is only where  title  to\t the
\ngoods  has  passed that the consignee may be  able  to\tsue.
\nWhether title to goods has passed from the consignor to\t the
\nconsignee will depend upon the facts of each case and so  we
\nhave to look at the evidence produced in this case to decide
\nwhether in the case of five con-\n<\/p>\n
587<\/span><\/p>\n
signments  booked to the J.C. Mills, the title to the  goods
\nhad  passed to the Mills before the fire broke out on  March
\n8,  1943.  We may add that both the courts have\t found\tthat
\ntitle to the goods had not passed to the J. C. Mills by that
\ndate  and that it was still in the consignor  and  therefore
\nthe Factory was entitled to sue.  We may in this  connection
\nrefer briefly to the evidence on this point.
\nThe  contract  between the Factory and the J. C.  Mills\t was
\nthat delivery would be made by the seller at the godowns  of
\nthe J. C. Mills.  The contract also provided that the  goods
\nwould  be dispatched by railway on the seller’s risk  up  to
\nthe  point  named above (namely, the godowns of\t the  J.  C.
\nMills).\t Therefore the property in the goods would only pass
\nto the J. C. Mills when delivery was made at the godown\t and
\ntill then the consignor would be the owner of the goods\t and
\nthe   goods   would  be\t at  its  risk.\t   Ordinarily,\t the
\nconsignments  would have been booked in the name  of  “self”
\nbut it seems that there was some legal difficulty in booking
\nthe consignments in the name of self and therefore the J. C.
\nMills  agreed that the consignments might be booked  in\t the
\nMills’ name as consignee; but it was made clear by the J. C.
\nMills  that  the  contract would stand\tunaffected  by\tthis
\nmethod\tof  consignment\t and all  risk,\t responsibility\t and
\nliability  regarding these cotton consignments would  be  of
\nthe  Factory till they were delivered to the J. C. Mills  in
\nits  godowns as already agreed upon under the  contract\t and
\nall  losses arising from whatever cause to the\tcotton\tthus
\nconsigned would be borne by the Factory till its delivery as
\nindicated  above.   This being, the nature of  the  contract
\nbetween the consignor and the consignee in the present\tcase
\nwe have no hesitation in agreeing with the courts below that
\nthe  property in the goods was still with the  Factory\twhen
\nthe fire broke out on March 8, 1943.  Therefore the ordinary
\nrule that it is the consignor who can sue will prevail\there
\nbecause it is not proved that the consignor had parted\twith
\nthe property in the goods, even though the consignments were
\nbooked in the name of the J. C. Mills.\tWe are therefore  of
\nopinion\t that the suit of the Factory was in view  of  these
\ncircumstances maintainable.\n<\/p>\n
As   to\t the  suit  by\tIshwara\t Nand,\the  relies  on\t two
\ncircumstances in support of his right to maintain the  suit.
\nIn  the first place, he contended that he was the  owner  of
\nthe goods and that was why the railway receipt was  endorsed
\nin  his\t favour\t by the consignor though it  was  booked  to
\n“self”.\t  In the second place, it was contended that  as  an
\nendorse\t to a document of title he was in any case  entitled
\nto maintain the suit.  The trial court found on the evidence
\nthat it had been proved satisfactorily that Ishwara Nand
\n588<\/span>
\nwas  the  owner\t of  the goods.\t It also  held\tthat  as  an
\nendorse\t of  a\tdocument of title he was  entitled  to\tsue.
\nThese  findings\t of  the trial court on\t the  evidence\twere
\naccepted by the High Court in these words :-\n<\/p>\n
\t      “It  was\tnot  contended before  us  that\t the
\n\t      finding arrived at by the learned court  below
\n\t      that  the plaintiff had the right to  sue\t was
\n\t      wrong, nor could, in view of the\toverwhelming
\n\t      evidence,\t such  an  issue  be  raised.\t The
\n\t      evidence\t on  the  point\t has  already\tbeen
\n\t      carefully\t analysed  by the court\t below.\t  We
\n\t      accept  the  finding and confirm it.   It\t was
\n\t      also  pointed  out that Ishwara Nand  was\t the
\n\t      endorsed consignee and in that capacity he had
\n\t      in  any case a right to bring the\t suit.\t The
\n\t      correctness   of\t this  statement   was\t not
\n\t      challenged before us.”\n<\/p><\/blockquote>\n
Thus  there are concurrent findings of the two courts  below
\nthat  Ishwara Nand was the owner of the goods and  that\t was
\nwhy  the  railway receipt was endorsed in  his\tfavour.\t  In
\nthese circumstances he is certainly entitled to maintain the
\nsuit.\tThe contention that the plaintiffs in the two  suits
\ncould not maintain them. must therefore be rejected.
\nRe. (ii).\n<\/p>\n
The  contention\t under\tthis  head  is\tthat  five  of\t the
\nconsignments  had been delivered to the J. C.  Mills  before
\nMarch 8, 1943 and therefore the railway was not\t responsible
\nfor  any loss caused by the fire which broke out  after\t the
\nconsignments had been delivered on March 6 and 7, 1943.\t  It
\nwas  urged that it was the fault of the J. C. Mills that  it
\ndid not remove the consignments from the railway station  by
\nMarch 7 and the liability for the loss due to fire on  March
\n8 must remain on the J. C. Mills.  The trial court had\theld
\nin  favour  of\tthe appellant with  respect  to\t these\tfive
\nconsignments.\tBut  the High Court  reversed  that  finding
\nholding\t that there was no real delivery on March 6  and  7,
\nthough the delivery book had been signed on behalf of the J.
\nC.  Mills and the railway receipts had been handed  over  to
\nthe railway in token of delivery having been taken.  It\t was
\nnot disputed that the delivery book had been signed and\t the
\nrailway receipts had been delivered to the railway; but\t the
\nevidence  was  that  it was the\t practice  at  that  railway
\nstation,  so far as the J. C. Mills was concerned,  to\tsign
\nthe  delivery  book and hand over the railway  receipts\t and
\ngive  credit  vouchers\tin respect of  the  freight  of\t the
\nconsignment  even  before the goods had been  unloaded\tfrom
\nwagons.\t  It  appeared from the evidence that what  used  to
\nhappen was that as soon the wagons
\n589<\/span>
\narrived and they were identified as being wagons  containing
\nconsignments  in favour of the J. C. Mills,  the  consignee,
\nnamely,\t the  J.  C. Mills, used to  surrender\tthe  railway
\nreceipts.,  sign the delivery book and give credit  vouchers
\nin  respect  of the receipt of freight due even\t before\t the
\ngoods  were unloaded from wagons.  This practice was  proved
\nfrom  the  evidence  of Har Prashad (D.W.  6)  who  was\t the
\nAssistant  Goods Clerk at Morar Road at the  relevant  time.
\nHe  was\t in-charge of making delivery of such  goods,  there
\nbeing  no Goods Clerk there.  He admitted that signature  of
\nIshwara\t Nand as agent of the J. C. Mills was taken as\tsoon
\nas the consignments were received and identified by  Ishwara
\nNand without being unloaded.  He further admitted that there
\nhad  been  no  actual  delivery\t to  Ishwara  Nand  of\t the
\nconsignments and this happened with respect to all the\tfive
\nconsignments.\tIshwara\t Nand signed the  delivery  book  in
\ntoken  of having received the delivery and  surrendered\t the
\nrailway\t receipts though when he did so the wagons were\t not
\neven unloaded.\tOn this evidence the High Court held that it
\ncould  not be said that there was any effective delivery  of
\nthe  goods to the J. C. Mills through Ishwara  Nand,  though
\ntoken  delivery was made inasmuch as the delivery  book\t had
\nbeen  signed and the railway receipts surrendered.  It\talso
\nappears\t from  the evidence of Har Prashad that\t before\t the
\ngoods  were actually removed, Ishwara Nand used to take\t the
\npermission  of Har Prashad to remove them.  This shows\tthat
\nthough there might be token delivery in the form of  signing
\nthe  delivery  book and surrendering the  railway  receipts,
\nactual delivery used to take place later and the removal  of
\ngoods  took  place with the permission of Har  Prashad.\t  On
\nthis  state of evidence the High Court was of the view\tthat
\nthe  so-called\tdelivery by signing delivery book  and\tsur-
\nrendering  the railway receipts was no delivery at  all\t for
\ntill then the goods had not been unloaded.  The unloading of
\ngoods  is  the\tduty  of the railway and  there\t can  be  no
\ndelivery  by the railway till the railway has  unloaded\t the
\ngoods.\t It is also clear from the evidence that even  after
\ntoken delivery had been made in the manner indicated  above,
\nthe  consignee was not authorised to remove the\t goods\tfrom
\nthe  wagons and that it was the railway which  unloaded\t the
\nwagons\tand  it\t was  thereafter  that\tthe  consignee\t was
\npermitted to remove such goods with his permission as stated
\nby  Har Prashad in his evidence.  The High  Court  therefore
\nheld that there was no clear evidence that delivery of goods
\nhad been made over to the consignee in these cases.  Further
\nthere  was  no\tevidence to show that  the  consignee  could
\nremove\tthe goods from the wagons without further  reference
\nto  the\t railway, on the other hand it appeared\t that  after
\nsuch token delivery permission
\n590<\/span>
\nof Har Prashad was taken for actual removal of goods.  There
\nfore,  the  High  Court came to\t the  conclusion  that\treal
\ndelivery had not been made when the fire took place on March
\n8,  for the goods were till then in wagons and\tthe  railway
\nwas  the only authority entitled to unload the\tsame.\tTill
\nthey  were  unloaded  by the railway, they must\t be  in\t the
\ncustody of the railway and no delivery could be said to have
\ntaken  place  merely  by  signing  the\tdelivery  book\t and
\nsurrendering  the railway receipts.  We are of opinion\tthat
\non the evidence the view taken by the High Court is correct.
\nThough\tthere was a token delivery as appears from the\tfact
\nthat railway receipts had been surrendered and the  delivery
\nbook  had  been signed, there was no real  delivery  by\t the
\nrailway\t to  the  consignee,  for the  goods  had  not\tbeen
\nunloaded and were still under the control and custody of the
\nrailway\t and Har Prashad’s evidence is that  his  permission
\nhad  still  to be taken before the goods could\tbe  actually
\nremoved by the consignee.  The contention that the  delivery
\nhad  been  made to the consignee before March 8,  1943\tmust
\ntherefore in the peculiar circumstances of this case fail.
\nRe. (iii).\n<\/p>\n
It  is next contended that damages should have been  awarded
\nat  the\t rate of Rs. 38\/- per bale which was  tile  contract
\nprice  between\tthe  factory  and the  J.  C.  Mills.\tThis
\ncontract  was made in November 1942.  The contract price  is
\nin our opinion no measure of damages to be awarded in a case
\nlike the present.  It is well-settled that it is the  market
\nprice  at the time the damage occurred which is the  measure
\nof  damages  to be awarded.  It is not in dispute  that\t the
\ntrial  court  has  calculated damages on the  basis  of\t the
\nmarket\tprice prevalent on March 8. In\tthese  circumstances
\nthis contention must also be rejected.\n<\/p>\n
Re. (iv).\n<\/p>\n
The next contention is that no interest could be awarded for
\nthe period before the suit on the amount of damages decreed.
\nLegal  position with respect to this is well-settled :\t(see
\nBengal\tNagpur\tRailway Co. Limited v.\tRuttanki  Ramji\t and
\nOthers)\t (1).  That decision of the Judicial  Committee\t was
\nrelied upon by this Court in Seth Thawardas Pherumal v.\t The
\nUnion  of  India<\/a>(2).  The same view was\t expressed  by\tthis
\nCourt  in  Union of India v. A. L. Rallia  Ram<\/a>(3).   In\t the
\nabsence of any usage or contract, express or implied, or  of
\nany provision of law to justify the award of interest, it is
\nnot possible to award interest by way of damages.  Also see
\n(1)  65 I.A. 66.\n<\/p>\n
(2) [1955] 2 S.C.R. 48.\n<\/p>\n
(3) [1964] 3 S.C.R. 164.\n<\/p>\n
591<\/span><\/p>\n
recent\tdecision of this Court in Union of India v.  Watkins
\nMayer & Company<\/a>(1).  In view of these decisions no  interest
\ncould  be awarded for the period upto the date of  the\tsuit
\nand  the  decretal amount in the two suits will have  to  be
\nreduced by the amount of such interest awarded.
\nWe now come to the additional point raised in Ishwara Nand’s
\nsuit.\tIt  is\turged that Ishwara  Nand’s  consignment\t had
\nreached Morar Road Railway Station on February 23, 1943\t and
\nIshwara\t Nand should have taken delivery within\t three\tdays
\nwhich is the period during which under the rules no wharfage
\nis charged.  The responsibility of the railway is Linder  s.
\n72  of\tthe  Indian Railways Act (No. 9 of  1890)  and\tthat
\nresponsibility\tcannot be cut down by any rule.\t It  may  be
\nthat the railway may not charge wharfage for three days\t and
\nit  is expected that a consignee would take away  the  goods
\nwithin three days.  It is however urged that the railway  is
\na  carrier and its responsibility as a carrier must come  to
\nan  end within a reasonable time after the arrival of  goods
\nat   the  destination,\tand  thereafter\t there\tcan  be\t  no
\nresponsibility\twhatsoever  of the railway.  It\t is  further
\nurged  that three days during which the railway keeps  goods
\nwithout charging wharfage should be taken as reasonable time
\nwhen its responsibility as a carrier ends; thereafter it has
\nno  responsibility whatsoever.\tUnder s. 7 2 of\t the  Indian
\nRailways Act, the responsibility of the railway\t administra-
\ntion  for the loss, destruction or deterioration of  animals
\nor  goods delivered to the administration to be\t carried  by
\nrailway is, subject to the other provisions of the Act, that
\nof  a  bailee  under  ss. 151, 152 and\t161  of\t the  Indian
\nContract  Act, (No. 9 of 1872).\t This responsibility in\t our
\nopinion continues until terminated in accordance with ss. 55
\nand 56 of the Railways Act.  The railway has framed rules in
\nthis connection which lay down that unclaimed goods are kept
\nat the railway station to which they are booked for a period
\nof  not\t less than one month during which  time\t the  notice
\nprescribed under s. 56 of the Railways Act is issued if\t the
\nowner of the goods or person entitled thereto is known.\t  If
\ndelivery  is  not taken within this  period,  the  unclaimed
\ngoods  are sent to the unclaimed goods office where if\tthey
\nare not of dangerous, perishable or offensive character they
\nare  retained in the possession of the railway.\t  Thereafter
\npublic sales by auction can be held of unclaimed goods which
\nremain with the railway for over six months.  This being the
\nposition under the rules so far as the application of ss. 55
\nand  56 is concerned, it follows that even though  the\tres-
\nponsibility  of the railway as a carrier may come to an\t end
\nwithin
\n(1)  C. As. 43 & 44 of 1963 decided on March 10, 1965.\n<\/p>\n
592<\/span><\/p>\n
a   reasonable\ttime  after  the  goods\t have  reached\t the
\ndestinationstation,  its  responsibility as  a\twarehouseman
\ncontinues  and that responsibility is also the same as\tthat
\nof  a  bailee.\t Reference in this  connection\tis  made  to
\nChapman\t v. The Great Western Railway Company(1).   In\tthat
\ncase what had happened was that certain goods had arrived on
\nMarch  24  and\t25.   On the morning of\t March\t27,  a\tfire
\naccidentally  broke out and the goods were consumed  by\t the
\nfire.  The consignor then sued the railway as common carrier
\non the ground that liability still subsisted when the  goods
\nwere  destroyed.  The question in that case was whether\t the
\nliability  of the railways was still as common\tcarrier,  on
\nMarch  27 or was that of warehousemen.\tThe question was  of
\nimportance  in English law, for a common carrier  under\t the
\nEnglish\t law is an insurer and is liable for the  loss\teven
\nthough\tnot  arising from any default on his  part  while  a
\nwarehouseman was only liable where there was want of  proper
\ncare.\tIt was held that the liability as a  common  carrier
\nwould  come  to end not immediately on the  arrival  of\t the
\ngoods  at the destination but sometime must  elapse  between
\nthe  arrival of goods and its delivery.\t This interval\thow-
\never  must be reasonable and it was held in that  case\tthat
\nreasonable time had elapsed when the fire broke out on March
\n27  and therefore the railway’s responsibility was not\tthat
\nof a carrier but only as warehouseman.\tThe position of\t law
\nin  India  is slightly different from that in  England,\t for
\nhere  the  railway is only a bailee in the  absence  of\t any
\nspecial\t contract and it is only when it is proved that\t the
\nrailway\t did  not take such care of the goods as  a  man  of
\nordinary  prudence would under similar circumstance take  of
\nhis  own  goods of the same bulk, quality and value  as\t the
\ngoods  bailed, that the railway’s responsibility arises.   A
\nwarehouseman is also a bailee and therefore the railway will
\ncontinue  to be a warehouseman under the bailment,  even  if
\nits  responsibility  as\t a  carrier after  the\tlapse  of  a
\nreasonable  time after arrival of goods at  the\t destination
\ncomes  to an end.  But in both cases the  responsibility  in
\nIndia is the same, namely, that of a bailee, and  negligence
\nhas  to\t be proved.  In view of the rules to which  we\thave
\nalready\t  referred   it\t  is  clear   that   the   railway’s
\nresponsibility\tas  a  warehouseman continues  even  if\t its
\nresponsibility as a carrier comes to end after the lapse  of
\na  reasonable  time  after  the\t arrival  of  goods  at\t the
\ndestination.  The responsibility as a warehouseman can\tonly
\ncome  to end in the manner provided by ss. 55 and 56 of\t the
\nRailways  Act  and the Rules which have been framed  and  to
\nwhich  we  have\t already  referred as  to  the\tdisposal  of
\nunclaimed  goods.  In the present case under the  Rules\t the
\ngoods had to remain at Morar
\n(1)  (1880) 5Q.B.D.278.\n<\/p>\n
593<\/span><\/p>\n
Road  Railway Station for a period of one month after  their
\narrival there and Ishwara Nand came to take delivery of them
\non  March 10-well within that period.  It may be that as  he
\ndid  not  come within three days he has to pay\twharfage  or
\nwhat  is  called  demurrage in\trailway\t parlance,  but\t the
\nresponsibility\tof the railway as a  warehouseman  certainly
\ncontinued  till\t March\t10 when Ishwara Nand  went  to\ttake
\ndelivery of the goods.\tAs it has been found that there\t had
\nbeen negligence within the meaning of ss. 151 and 152 of the
\nIndian\tContract  Act, the railway would be liable  to\tmake
\ngood the loss caused by the fire.\n<\/p>\n
The  appeals therefore fail with this modification that\t the
\ndecretal  amount would be reduced by the amount of  interest
\nawarded\t for the period before the date of each\t suit.\t The
\nrest  of the decree will stand.\t The appellant will pay\t the
\nrespondents’  costs-one\t set of hearing fee.  In  CA  603\/63
\ninterest  will be calculated from 6-8-62 in accordance\twith
\nthat order.\n<\/p>\n
Appeal dismissed and decree modified.\n<\/p>\n
594<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Union Of India vs West Punjab Factories Ltd on 24 August, 1965 Equivalent citations: 1966 AIR 395, 1966 SCR (1) 580 Author: K Wanchoo Bench: Gajendragadkar, P.B. (Cj), Wanchoo, K.N., Hidayatullah, M., Shah, J.C., Sikri, S.M. PETITIONER: UNION OF INDIA Vs. RESPONDENT: WEST PUNJAB FACTORIES LTD. DATE OF JUDGMENT: 24\/08\/1965 BENCH: […]<\/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-238301","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nUnion Of India vs West Punjab Factories Ltd on 24 August, 1965 - 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-vs-west-punjab-factories-ltd-on-24-august-1965\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Union Of India vs West Punjab Factories Ltd on 24 August, 1965 - 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