Jagmohan Lal, J.
1. This second appeal filed on behalf of Union of India arises out of a suit filed by the plaintiff-respondent for recovery of Rupees 1973/- along with interestand costs of the suit.
2. The facts as alleged by the plaintiff were that the defendant respondent No. 4 who is a dealer in cloth in Assam State had purchased some cloth from the plaintiff-respondent on credit and in order to pay its price sent currency notes worth Rs. 1973/- in an insured cover from Assam addressed to the plaintiff at Tanda in District Faizabad. The delivery of this insured cover was taken at the post office Tanda by the plaintiff's man after signing a receipt to the effect that the insured cover had been received by him with its seals intact. But after opening the envelope he found that instead of currency notes it contained only waste paper pieces. He, therefore, made a complaint to the post office. He suspected that the currency notes had been taken out from the envelope by some postal employee by adopting some subtle device so as not to tamper with the seals and yet replace the currency notes by waste papers. The plaintiff, therefore, filed a suit against the Union of India, the Director General of Post and Telegraph Department and the purchaser of goods in Assam who had sent this insured cover to him. He prayed for a decree either against the defendants 1 and 2, if it was found that the defendant No. 3 had put the currency notes in that envelope and the same bad been excreted by the postal employees during transit or a decree for that amount against the defendant No. 3 if it was found that this defendant had failed to put the currency notes in the envelope.
3. The trial court held that the defendant No. 3 had put the currency notes in the envelope which was sent under insured cover to the plaintiff but the plaintiff on reopening the cover found only waste paper in it instead of currency notes. He, however, held that the Goverment was not liable for the loss of the currency notes from this envelope in view if Section 33 of the Indian PostOffice Act read with Rule 175 of the Indian Post Office Rules. The suit was not decreed against the defendant No. 3 also because it was found that there was an implied agreement between the parties to send the money by the defendant to the plaintiff by this mode and the money was actually sent by that mode by the defendant No. 3. The suit was accordingly dismissed.
4. On an appeal filed by the plaintiff the lower appellate court agreed with the finding of the trial court that the defendant No. 3 had put the currency notes in the envelope addressed to the plaintiff and that the defendant No. 3 had the implied authority of the plaintiff to send the money by that mode and as such the defendant No. 3 was not liable. The learned appellate Judge also agreed with the finding of the trial court that the envelope when it was delivered to the plaintiff's man was apparently in a sound condition with its seals intact but he found that the currency notes had been taken out from this envelope by some postal employee during transit by adopting some subtle device without tampering with the seals put on the envelope. He was of the opinion that this wrongful act was done by some employee of the post office in the course of his employment for which Government was liable and that Section 33 read with Rule 175 did not afford any protection to the postal department. The suit was accordingly decreed against the Union of India and the Director General, Post and Telegraph Department, who feeling dissatisfied with this decree filed this second appeal.
5. I heard the learned counsel for the parties. The only question that arises in this appeal is whether on the facts found by the courts below the appellants were liable to compensate the plaintiff or they were protected under Section 33 read with Rule 175 which corresponds to the present Rule 81. Section 33 provides as follows:--
'Subject to such conditions and restrictions as the Central Government may, by rule, prescribe, the Central Government shall be liable to pay compensation, not exceeding the amount for which a postal article has been insured, to the sender thereof for the loss of the postal article or its contents, or for any damage caused to it in course of transmission by post:
Provided that the compensation so payable shall in no case exceed the value of the article lost or the amount of the damage caused.'
The relevant portion of Rule 81 (corresponding to old Rule 175) reads as follows:--
'There shall be payable to the sender of an insured postal article compensation not exceeding the amount for which the article has been insured, for the loss of the postal article or any of its contents or for any damage caused to it in course of transmission by post:
Provided that the compensation shall in no case exceed the value of the article orany of its contents lost or the amount of the damage caused, and provided that in the case of loss the sender shall furnish full particulars of the contents of the postal article and their value:
Provided also, that no compensation shall be payable
(c) where the insured article has been delivered to the addressee and he has signed and returned the receipt thereof
(f) where there is no visible damage to the cover or seals.....'
6. The learned Counsel for the appellant also relied on a decision of the Patna High Court in Union of India v. Lallan Pra-sad Singh, AIR 1963 Pat 216 in which it was held that no compensation is payable by the Central Government where there is no visible damage to the insured cover or the seals, although the addressee finds only blank pieces of paper inside the cover. Jntactness of the seals is conclusive on the question of tampering by postal authorities. It was further observed in this case that when the seals are found intact no inference that the currency notes were replaced by the postal employees during transit can be drawn from the mere fact that the paste on the flap which was pasted by the sender after putting in the contents, had spread or found besmeared on the contents. The presence of the seals in the same position as before is sufficient to destroy the theory of tampering by postal authorities. The spreading of paste can at best raise some suspicion but cannot displace the conclusion afforded by the seals.
7. I am in respectful agreement with the above observations made by the learned Judges of Patna High Court. Section 33 which defines the liability of the post office for loss or damage to articles sent by post under insured cover is by its own terms subject to the provisions of Rule 81. In my opinion this rule is based on sound principle of expediency. The post office does not examine the contents of an insured cover and it only insists that the cover should be properly packed and sealed. If the insured packet does not show any visible damage to its cover or the seals it clearly raises a presumption that the contents of the packet had not been opened or excreted by any employee of the post office. The post office, therefore, as an insurer stands exonerated. If any deficiency or damage is found in the contents after opening the packet it is a matter between the sender and the addressee. Similarly if the addressee has accepted the insured cover and signed and returned the receipt therefor, the liability of the post office as an insurer ceases. After that it cannot have any track on the acts and dealings of the addressee when he opens the insured cover and takes out its contents or finds those contents missing which the sender had represented to have despatched. If, however, the addressee before accepting the insured article points out that there was some visible damage to the cover or the seals, it will befor the post office to give open delivery thereof and if the contents are found to be short or damaged, to start an immediate enquiry against the postal employees as to the circumstances in which the seals or the cover had been damaged and as to who was responsible for that. If this provision as contained in Rule 81 had not been there, a very onerous responsibility would have been placed on the post office as an insurer of the articles sent under insured cover. In such a case if any fraud had been committed by the sender of the article, it would have been well snigh impossible for the post office to prove the actual contents which were put by the despatcher in that packet which it had no occasion to see before it was packed and sealed. Similarly, if an addressee had accepted the article and given a receipt therefor obviously after examining the soundness of the cover and the seals, it would be very difficult for the post office to refute the addressee when he claims that the articles sent under the insured cover were not actually found in it on opening that cover. That is why these conditions have been incorporated in this rule which limit the liability of the post office.
8. In the present case the plaintiff's man accepted the insured envelope and sign-ed the receipt without raising any objection about the contents of the envelope or its seals. That envelope is on the record and all the seals on it are intact and quite legible. Usually in sending currency notes in such an envelope a stitch is made on the cover at its middle and on both sides of that stitch seals are put. This ensures that the contents con-not be taken out without breaking one or both of the seals. But in this case we find that there is only one seal in the middle on one side but no corresponding seal on the other side. The person who despatched this envelope also did not state that he had put the seals on both sides. The plaintiff's man Banwari Lal stated that after he had accepted this envelope and taken it to his master's shop, he cut open one of its ends with a knife. The lower appellate court has laid considerable emphasis on the fact that on this end which was cut open by the plaintiff's man some gum was found which should no ordinarily be there. He, therefore, inferrec that some postal employee had already cut open this end, taken out the currency notes from it and replaced them by pieces of waste papers and then closed this end by pasting gum. If that had been the case, the threat of the cloth which had come out after cutting open this end would be clearly visible and would have aroused a suspicion in the mind of Banwari Lal before accepting this envelope that there was some thing wrong. If this end of the envelope had been pasted by gum, it was not necessary to cut it open and it could easily be opened just by inserting any sharp thing which would have separated the two flaps pasted by gum. But in this case the statement of Banwari Lal is definitely tothe effect that he had cut open this end. It was just a coincidence that he applied his knife at this end which he could as well do at the other end which is quite intact. The presence of the gum at this end may also be due to the fact that the flap was fully covered with gum and there was some excess of the gum which even went inside the envelope so as to be found at this end. In any case this can at best arouse a suspicion that some-body might have tampered with the envelope [so as to take out the currency notes from it and replace them by pieces of wate paper But it cannot positively be said that it had been done while this envelope was in course of transit by the postal employees. The possibility that some man of the despatcher before delivering the envelope to the post office might have done so cannot be wholly ruled out though the man of the defendant No. 3, whose statement was recorded on commission, deposed that he himself had put the currency notes in it, stitched the envelope, put the seals on it and personally delivered it to the postmaster in Dehabari Post office in any case, from the facts as stated above the Central Government is protected by Rule 81.
9. The appeal is allowed. The judgment and decree passed by the lower appellate court is set aside. The plaintiff's suit is dismissed. But in the circumstances of the case the parties shall bear their own costs throughout.