SINGH BROTHERS Vs. UNION OF INDIA

JUDGEMENT

(1.) Under three railway receipts dated March 22, 1955, April 12, 1955 and May 30, 1955, the Plain- tiff consigned arms and ammunition to MessrsArms& Ammunitions Stores, Town Hall, Bareilly (Defendant Nor 2). For securing the price of the good?, the plaintiff sent the railway receipts along with hundies to the Punjab National Bank Limited, Bareilly to be retired against payment The consignee instead of getting the railway receip- ts against payment from the bank, obtained consignments from the railway against indemnity bonds. The price of the goods in the circumstances not having been paid, the plaintiff filed suit for the recovery of Rs. 4, 983. 70 against the Union of India Arms and Ammunition Stores and Bakhshi Trilochan Singh, proprietor of the second defendant firm. This amount represents the balance of the price of goods (part payment of the price having been made by the second defendant) and interest. The three indemnity bonds are Ex- hibit D-5 dated March "3, 1955, Exhibit D-6 dated April 15, 1955 and Exhibit D 7 dated June 8, 1955. In Exhibit D 5. no reason has been given fir non-production of the railway receipt while in the other two bonds it is stated that the railway receipt had not been received. It was not disputed at the bar that the goods could be consigned only in the name of the consignee who held the necessary licence for purchase there of. The trial Court passed an ex parte decree on November 28, 1958 against Defendants 2 and 3 hut dismissed the suit against the Union oflndia(first defendant). Byjudgment dated March 24, 196;), the learned Additional District Judge dismisssed the plaintiff's appeal. The lower appellate Court decided in favour of the Union of India on the ground that the goods were delivered to the consignee, the right full owner, and there fore no responsibility fell on the Union of India for non-payment of the price by Defendants 2 and 3. On the pleadings of the parties, the following nine issues had been framed; 1. Whether the plaintiff firm is a registered firm and Shri Harbans Singh its registered partner? 2 Whether the railway authorities were bound to make the delivery only on production of relevant railway receipt by the consignee? If so, its effect? 3 Whether the defendant No. 2 obtained the goods in suit by fraud? 4. To what amount, if any, is the plaintiff entitled and from whom? 5. Whether the suit is in time? 6. Whether the notice under section 80 C. P. C. is vaild? 7. Whether the notice under section 77 of the Railways Act was net necessary? 8. What is the effect of the plaintiff's having received a sum of Rs 4 400 from defendants Nos. 2 and 3 regarding the liabilities of Defendant No. 1 ? 9 Relief. It may be recalled that in the plaint, the plaintiff had alleged that railway authorities failed to discharge their contractual obligation to deliver the goods against railway receipts; that the railway officials delivered the go ds in breach of rule 45 (7) of the General Rules of Goods Tariff and that the railway officials colluded with the consignee and did not insist upon a compliance with the rules, so the Railway is also liable on the basis of fraud." The plaintiff does not, however, appear to have claimed any issue regarding the liability of the Railway on the grounds of fraud or negligence and the issue was confined only to the question whether the Railway authorities were bound to make the delivery only on production of relevant railway receipt by the consignee. The answer to the issue depends on the interpretation of section 57 which reads:

(2.) . In Chirnari Gopalam v. Union of India" the consignor got a railway receipt made out in his own name, but the goods were intended for a firm in Midnapore The defendants who wanted ready money, received from the plaintiffs the value of the goods and endorsed the railway receipt in their favour as well as a hundi on Midnapore firm. The plaintiffs borrowed money from Andbra Bank for the purpose of paying the defendants and endorsed the railway receipt as well as the hundi to the said bank who in their turn sent the railway receipt and the hundi duly endorsed to the Imperial Bank of India Midnpore. The Midnapore Bank as well as the Andhra Bank informed to Station Master that the goods should be delivered only against the railway receipt to be produced by the Imperial Bank. In holding the railway administration liable the High Court observed:

(3.) . In my opinin, the scope of section 57 of the Indian Railways Act is no more then that it authorises the Railway administration in certain circumstances to withhold delivery of goods unitil "the person entitled in its opinion to receive them has given an indemnity, to the satisfaction of the railway administration, against the claims of any other person ...". If the Railway administration negligently delivers the goods to a person other then the rightful owner, it may be liable for breach of duty under the general law. So far as section 57 goes, the Railway administration is only expcted to see that it delivers the goods to the person entitled in its opinion to receive them. This section does not impose any liability on the Railway by its own force. The liability will have to be determined under the general law for breach of duty or negligence.) The decisions in the cases of Sait Madan Gopal Trading Company and Chinnari Gopalam were founded on negligence by the Railway administration in delivering the goods. If in every case where the Railway administration deliver goods even to a rightful owner against indemnity bond they were to be held responsible for negligence the functioning of the Railways will become impossible. The administration when delivering goods to the person entitled there to cannot be expected to enter in to an elaborate enquiry and investigate the circumstances touching on the non-production of the Railway receipt. One can think of various complications that may completely paralyse the Railway administratin. Cre of such comphcation may be the postal delay in the delivery of Railway receipt to the consignee in case of perishable goods. Storage accommodation available and limited rescurces of the administration for enquiring into the movements of Railway receipts are also circumstance which cannot be lost sight of. The decisions that turn on the proved negligence of the Railway admiaistration can, therefore, be of no avail to the appellant What are the facts of this case? The goods were consigned to the second defendant. The copy of the Railway receipt in the hands of the Railway administration would show on its face that the second defendant is entitled to receive the goods. The formation of opinion that the goods are to be delivered to the second defendant would therefore be completely justified. The contract between the consignor and the administration was to carry the goods and to deliver them to the consignee and that it exactly what the Railway administration did. It is too much to expect that the Railway administration should have made a detalied enquiry about the position of document of title to find out whether the property in goods had been diverted by reasor of certain endorsements on the Railway receipts. The plaintiff took to steps to inform the Railway administration that the goods should be delivered only against the Railway receipt. In these circumstances the Railway administration was perfectly within its rights to deliver the goods to the: consignee In spite of some allegations of collusion and fraud between the consignee and the Railway administration, the plaintiff claimed no issue in this behalf. As I have said ealier there was no obligation in the circumstances on the Railway administration to deliver the goods only on the production of Railway receipt. It must in the circumstances be held that the plaintiffs, suit was rightly dismissed against the Union of India.