CHINNARI GOPALAM Vs. UNION OF INDIA UOI

JUDGEMENT

(1.) The question for consideration in this appeal is whether the Railway administration is liable to the plaintiffs in the circumstances of the case.

(2.) The facts are not disputed for the purposes of this appeal. The husband of the 2nd defendant and the defendants 3 to 10 were carrying on a joint family business in Parvatipuram and in the course of such business, the 10th defendant on behalf of the family dispatched on 18-1-1952 a wagon-load of bags of mustard seeds valued at Rs. 11,378.00 from Parvatipuram railway station to Midnapur railway station. The consignment was made to "self", although the goods were intended for Sri Krishna Oil Mills, Midnapur. On 19-1-1952, these defendants, who wanted ready money, received from the plaintiffs the value of the goods and endorsed the railway receipt to their favour as well as a hundi drawn on the Midnapore firm. The plaintiffs borrowed money from the Andhra Bank for the purpose of paying the defendants and endorsed the railway receipt as well as the hundi to the Andhra Bank, who in their turn sent the railway receipt and the hundi duly endorsed to the Imperial Bank of India, Midnapore. The railway receipt was in the hands of the Rank of Midnapore on 22-1-1952 and they immediately informed the Master of the Midnapore railway station on that very day that they were in possession of the railway receipt and asked him not to deliver the goods to anybody else. The Andhra Bank, Parvatipuram also sent an express telegram on 23-1-1952 to the same Station Master requesting him to deliver the goods only against the railway receipt to be produced by the Imperial Bank at Midnapore. This telegram was followed by a confirmation letter from the Bank dated 23-1-1952. On 19-1-1952, the 10th defendant represented to the Station Master, Parvatipuram that he had lost the receipt relating to the goods and having been told that he could get delivery of the goods only on executing an indemnity bond in favour of the railway company, he signed on 22-1-1952 an indemnity bond in the terms required and armed with it proceeded to Midnapore and presenting it to the goods clerk obtained delivery of the goods on 24-1-1952. The Station Master, Midnapore who was instructed not to deliver the goods by the Imperial Bank of India at Midnapore, says in his evidence as D. W. 1 that he duly instructed the goods-clerk not to deliver the goods to anybody except on the production of the railway receipt. Unfortunately, as the concerned goods-clerk is no longer alive, we are not in a position to say how it happened that he disobeyed the instructions of the Station Master; but the fact is that the goods were delivered to the 10th defendant. The plaintiffs having obtained by a valid transfer all the rights of the Midnapore Bank as well as the Andhra Bank brought the present suit for recovery of the value of the goods from the railway administration as well as from the defendants 2 to 10.

(3.) The trial Court held that the railway administration was not liable to the plaintiffs on the above facts. We are clearly of the opinion that, in so holding, it was in error. It is well-known, and Section 2(4) of the Indian Sale of Goods Act makes it clear, that a railway receipt is a document-of-title. As a rule, therefore, the administration should insist upon the production of the receipt before it parts with the goods to which it relates. The railway receipt may be endorsed by the consignor or his endorsee to any other person; when so endorsed it is a direction from the bailor to the bailee to deliver the goods to such other person and it is the duty of the bailee to obey the instructions of the bailor.