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Sri Gangaji Cotton Mills Co., Ld. Vs. East Indian Railway Co. - Court Judgment

LegalCrystal Citation
Decided On
Reported in68Ind.Cas.961
AppellantSri Gangaji Cotton Mills Co., Ld.
RespondentEast Indian Railway Co.
Cases ReferredG. I. P. Railway Co. v. Sham Manohar
railway company - delivery of goods--consignee, inspection by--damage to goods--delivery register, note in--register, signing of, if constitutes 'clear receipt'-unconditional offer to pay damages--liability, acknowledgment of. - - the litter, after soma inspection of the goods on the railway premise, objected to take delivery on the ground that the balas ware damaged, and on the 3rd july they sent a latter (exhibit q). they asked the goods clark to keep the good j at the railway goods-shed pending inspection by a railway officer. 9. vernon, who has bean examined as a witness in the case, reported that the damage was insignificant, that 48 out of the 54 bales ware in good condition and that 6 bale were slightly damaged. ha estimated the damage at 10 lbs of cotton per damaged bale and..........the 3rd july they sent a latter (exhibit q). they asked the goods clark to keep the good j at the railway goods-shed pending inspection by a railway officer. a telegram to the same office was sent to the district traffic manager at cawnpore on the same data and this was confirmed by letter (exhibits 10 and 22 respectively).6. in this latter they informed the district traffic manager that from out ward appearance it seemed that the bales had been neglected and exposed to rain and that each hale had been more or less damaged. plaintiffs said they wanted inspection before taking delivery.7. tae railway company agreed to have an ingestion made and this was earned oat on the first july, by a traffic inspector, mr. robinson. it is not denied that ribinson after inspection, offered the.....

Lindsay, J.

1. The suit which bas given rise to this appeal was brought against the East Indian Railway Company by the Sri Gangaji Cotton Mills Company, Limited, carrying on business at, Mirzapur and the claim was for Rs. 23,960 86 plus interest at Rs. 6 per sent, per annum, making a total of Rs. 25,360. 6.6.

2. The suit has been dismissed in toto by the Subordinate Judge and the plaintiff Company appeals.

3. The facts of the ease are that in May 1918, a consignment of 103 bales of cotton was booked, at Jaipur, on the Bombay Baroda and Central India Railway, for delivery to the plaintiff Company at Mirzapur A Portion of this consignment consisting of 54 bales, was delivered to the plaintiff Company at Mirzapur, on the 22nd May, 1918.

4.On that date, it appears, the plaintiffs handed over to the East Indian Railway toe Railway Receipt for the entire consignment of 10 bales, and paid the fall freight due amounting to Rs. 437-1.0.

5. The rest of the consignment, 54 bales, was dalayed in transit and did not arrive at r Mirzapur till the 2nd of July, 1918, on which date notice of arrival was given to the plaintiffs. The litter, after soma inspection of the goods on the Railway premise, objected to take delivery on the ground that the balas ware damaged, and on the 3rd July they sent a latter (Exhibit Q). They asked the Goods Clark to keep the good j at the Railway goods-shed pending inspection by a Railway Officer. A telegram to the same office was sent to the District Traffic Manager at Cawnpore on the same data and this was confirmed by letter (Exhibits 10 and 22 respectively).

6. In this latter they informed the District Traffic Manager that from out ward appearance it seemed that the bales had been neglected and exposed to rain and that each hale had been more or less damaged. Plaintiffs said they wanted inspection before taking delivery.

7. Tae Railway Company agreed to have an ingestion made and this was earned oat on the first July, by a Traffic Inspector, Mr. Robinson. It is not denied that Ribinson after inspection, offered the plaintiffs Rs. 10 par bale by way of compensation, an offer which the plaintiffs rejected as in. adequate [see their letter to the District Traffic Manager, dated 30th July 1918 (Exhibit 11)].

8. The plaintiffs pressed their claim for compensation at a higher rate and the Railway Company then deputed an Assistant Traffic Manager, Mr. Dyer, who examined the goods cm the 9th August 1918 and made an offer of compensation at the rate of Rs. 20 per bale. This second offer the plaintiffs also refuted by their letter of the, 9th August (Exhibit 4). The plaintiffs in that letter said they were willing to accept Rs. 30 par bale and would take delivery if damages were paid at that rate. The, Railway Company then arranged with the Upper India Chamber of Commerce for inspection by an expert, Mr. Vernon, the Superintendent of the Elgin Mills at Cawn-pore. He proceeded to Mirzapur and examined the goods on the morning of the 18th August. No representative of the plaintiffs was present at this inspection though notice had reached, the plaintiffs on the evening of the 17th August.

9. Vernon, who has bean examined as a witness in the case, reported that the damage was insignificant, that 48 out of the 54 bales Ware in good condition and that 6 bale were slightly damaged. Ha estimated the damage at 10 lbs of cotton per damaged bale and recommended compensation on this scale.

10. There is no evidence on the record to show that this report was actually communicated to the plaintiffs, though it was stated in paragraph 34 of the defendant's written statement that an offer in accordance with Vernon's report was made' to the plaintiffs on the 7th September which was refused. The matter is not of much importance, for as the plaintiffs had already refused compensation at Rs. 20 per bale, it can hardly be imagined that they would have bean willing to accept the much lower rate of damages which Vernon had assessed.

11. The next thing we find is that on the 9th September 1918, the plaintiffs sent in a claim to the Agent of the Railway in a letter (Exhibit 14), They demanded the cost of the 54 bales at the rate of Rs. 80 a made, a total of Rs. 20,837. To this was added a claim for Rs. 2,925 for damages caused by the delay in delivery which has led to the closing down of the plaintiffs' Mills on account of shortage of cotton. This claim, U may be observed, was there-iteration of a claim put forward on the 28th June 1918 and related to the delay which had taken place in the carriage of the goods prior to the 2nd of July 1918. The third item of the claim made on the 9th September 1918 was for Rs. 218-8-6, this being one-half the freight of the whole consignment. The plaintiffs had pail the whole sum due for fright on the 22nd May.

12. It is evident from the language of Ws letter of the 9th September that the plaintiffs had made up their minds to claim compensation on a scale they had not hitherto contemplated; in fact they were advancing a claim for the total loss of the goods. We find them stating that the goods had been seriously neglected, that they had been lying in the open rain water pouring upon them freely for months and weeks together'. The plaintiffs further stated that after 'minute examination of the stuff' they had arrived at the conclusion that the, quality of the cotton had become seriously deteriorated.

13. It doss not appear when this minutes observation 'was made and it seems rather to be the fact that no such examination was ever made by the plaintiffs.

14. The Agent of the Railway acknowledged receipt of this claim and promised inquiry and, thereafter, a good deal of correspondence passed between the parties without any settlement being arrived at.

15. On the 9th November 1918 the Railway Company served a notice on the plaintiffs to say that if the goods ware not removed by a date mentioned in the notice, they would be sold at the plaintiffs' risk. The plaintiffs refused to comply with this notice, and eventually the Railway sold the goods at the rate of Rs. 117 per bale. At the bearing of the appeal we were told by the Counsel for the Railway Company that this sale took place in March 1919, and this, no doubt, is correct.

16. The correspondence between the parties closed with a letter from the Agent to the Railway to the plaintiffs dated the 28th April 1919. The Railway Company refused to content to farther arbitration and offered payment-to the plaintiffs of the sale proceeds of the goods less any amount due to the Railway.

17. The plaintiffs tied their suit on the 18th June 1919 : and this, as has been said, has been dismissed by the Court below.

18. In substance the findings of the Subordinate Judge are that the-plaintiffs had no right to recover and that the Railway Company was justified in selling the goods, The Court held that the plaintiffs were in default; that they had wrongfully refused delivery and that it had exercised its statutory right to sell the goods in accordance with law.

19. The Subordinate Judge was also of opinion that the plaintiffs had no right to compensate for damage to the goods as the plaintiffs had failed to prove that any damage took plate on the defendant Company's line and had omitted to sue the B. B. and C. I. Railway Company to which the goods had been made over by the consignor.

20. He also hell that the item of Rs. 2,925 claimed by the plaintiffs on account of damages resulting from the closing of their mills by reason of the delay in the carriage of the second installment of the goals, could not be awarded, as this was a false claim on the part of the plaintiffs.

21. It may be observed here that this portion of the claim is no longer pressed nor indeed could it be, for the Railway Company, defendant, was able to establish conclusively in the Court below that if the plaintiffs' mills were closed down, the reason was that there was a shortage of coal and not because of any delay in the transit of the bales of cotton.

22. To come now to the appeal, it is complained that the Court below did nob rightly appreciate the nature of plaintiffs' claim which, it is said, was in reality a claim based upon the wrongful conversion of the plaintiffs' goods by the defendant Railway Company.

23. Speaking for myself, I do not see that the Judge of the Court below was under any misapprehension regarding the nature of the case which the plaintiffs set up, though considering the manner in which the cue was sat out in the plaint, he might, with some excuse, have been led into doubt.

24. He has, however, in my opinion, dealt with the ease on the right lines as a whole and has definitely found that the Railway Company was justified in selling the plaintiffs' goods in exercise of the power conferred by sector 56 of the Indian Railways Act (IX of 1830) whish authorizes a Railway Administration, in certain circumstances and on certain conditions, to sail unclaimed goods.

25. In this connection the whole question is whether the Railway was of the circumstances entitled to treat the 54 bales of cotton as unclaimed goods.

26. The argument urged for the plaintiffs, in substance, is that it was not so entitled. It is contended that in the first instance the Railway Company wrongfully out obstructions in the way of the plaintiffs' (sic) and it is further argued that because the: plaintiffs had put in a claim for damages, the Company had no right to sail pending a settlement of the claim. In my opinion neither of these arguments can be accepted. To take first the plea that the Railway Company obstructed taking of delivery.

27. What is the case of the plaintiff Company on this point?.

28. It is set out in paragraphs 7 and 8 of the plaint where it is alleged that the plaintiffs sent their men to the Railway Station and discovered that the bales were wet and damaged, and that thereupon the plaintiff Company 'refused to take delivery without an inspection and a note as to the condition' of the goods by the defendant Company's servants at the Mirzapur Station which they refused to do.' If this means that the inspection referred to was inspection by the plaintiffs themselves, then the allegation is not true, for it is dear on all hands that the plaintiffs had ample opportunity to inspect the goods and did, as a matter of fast, inspect them. On the other hand, if it means that the inspection was to be inspection by the Railway Company, then the answer to the plaintiff's case is that they bad no right to insist upon an examination of the goods by the defendant Railway. There seems to have been some argument in the Court below about the right to what is sailed 'open inspection' and the Subordinate Judge seems' to have thought that the plaintiffs were insisting upon some such right though that is denied in the third paragraph of the memorandum of appeal.

29. It has been definitely settled in this Court' that a consignee has no right to demand that the goods shall be opened and inspected on the Railway premises before he can be called upon to take delivery. Jwala Pershad & Co. v. G. I. P Railway Co. 21 Ind. Cas. 448 : 11 A. L. J. 772.

30. But it is argued (see the plea in the 12th paragraph of the memorandum of appeal) that the plaintiffs had a right to have a note made in the Railway Company's Delivery Register recording that the goods were in a damaged condition and that if the Company's servants refused to make such an entry or allow stub, an entry to be made, there was an obstruction amounting to wrongful refusal to deli(sic) stress has been laid upon the fast that the plaintiffs had handed over the Railway receipt to the defendant Company before the second lot of bills arrived and it is said that if the plaintiffs had signed the Delivery Register without recording that the goods were damaged, they would have been precluded there after from claiming damages on the ground that they had given a clear receipt. This argument does not appeal to me. In the first places I have not been shown any provision of law or any statutory rule which obliges a Railway Company to make or to allow to be made in its Delivery Register any note alleging that goods are in a damaged condition. In the next plate, it has bean definitely decide by a Bench of this Court that the plaintiff cannot refuse to take delivery because the Railway Company refuses to make an entry in their book. There the plaintiffs' case was that' there was a shortage in the weight of the goods. The Bench held that the plaintiff could not insist upon an entry. If he had any complaint, he was entitled to make his representation to the Company in any other way. Kolia Mai v. G. I. P. Railway 21 Ind. Cas. 428 : 11 A. L. J. 775n, and, lastly, it is not correct to say that the plaintiffs would have been barred from a suit if they had signed the Delivery Register so as to constitute what is called a 'clear receipt,' Hast Indian Railway Co. v. Sispal Lal 12 Ind. Cas. 596 : 39 C. 311 : 14 C. L. J. 472: 16 C. W. N. 329.

31. I am satisfied, therefore, that the plaintiffs cannot maintain that anything done by the defendant Railway's servants on the 2nd July 1918 amounted 13 a wrongful refusal to deliver the goods.

32. As for anything which happened after that date, I can find no evidence of wrongful retention of the goods by the defendant Railway. It is true they kept the goods in their custody but that was at the plaintiffs' own request. The Railway Company a order to satisfy the plaintiffs consented to have the goods inspected by their own officers and by Mr. Vernon bit the plaintiffs cannot be heard to say that this was, is any way, a wrongful act on the part, of the Railway Company. After the inspections had been made and compensation had bean offered to the plaintiffs, it was their duty to remove their goods and no hindrance to removal was placed in their way.

33. The argument pub forward on behalf of the plaintiffs seems to imply that they had a right to call upon the Railway Company to ware out their goods until such time as the Company was prepared to offer them damages which they would accept. There is, its my opinion, no warrant for such a proposition, and it may be added that even if there were, the plaintiffs abandoned the position completely when they wrote to the Agent, on the 9th September 1918 claiming not damages but the full price of the goods.

34. I hold, therefore, that the suit for damages for wrongful conversion fails and that the decision of the Court below on this point is correct. The only question which remains to be considered is whether the plaintiffs should be awarded any compensation far damage to the goods.

35. That the goods were damaged, tiers is no reason to doubt. On the other hand, it is clear that the damage was inconsiderable and that the claim put forward by the plaintiffs is grossly exaggerated. This in apparent from the fact that they were wiping to accept compensation at the rats of Rs. 30 per bals.

36. In dealing with this matter it has to be borne in mind that the goods were carried over the systems of several Railways. They were ma le over a Jaione to the B. B. & C. I. Railway and they travelled first over the line under the Railway's control, than over the lines of the Bengal North-Western Railway and of the Oudh and Rohilk and Railway before they came upon the line of the defendant Company at Mugal Sarai which is only a short distance from Mirzapur.

37. The B. B. & C. I Railway Company with which the goods were booked no party to the suit nor has any other of the above-named administrations bean imp leaded as the defendant. The sole defendant is the East Indian Railway Company.

38. In these circumstances the plaintiffs could only recover damages from the Bad Indian Railway Company by proving that the damage was tanked on its system. This is clear from the provisions of Section 80 of the Indian Railways Act (IX of 1890) and the law has been so interpreted in the ease of G. I. P. Railway Co. v. Sham Manohar 14 Ind. Cas. 803 : 34 A. 422 : 9 A. L. J. 492.

39. The plaintiffs have not produced any direst evidence to show that the defendant Railway Company is responsible for the damage to their goods.

40. The only evidence whish has any bearing en this question is the statement of Krishna Gopal Do, a witness called for the defendant. He is a clerk on the Order & Rule Railway and deposes that the 54 bales were received at Banners Cantonment Station, on the 26 In Jane 1918 from the Bengal North-Western Railway (a mater gauge line) and ware transhipped the same day into a waggon on the broad-cauge system of the Order & Rule Railway for dispatch to Mirzapur via Mogul Sarai, He deposes that the bales ware in good condition at the time of transhipment and that they were placed in a scaled waggon.

41. If this statement be true, then all that can be said is that any damage which was caused to the goods must have been caused between the 26th Fane and the 2nd July, 1918, either on the Order & Rule Railway system or on the system of the defendant Company. That evidence would not suffice to fasten liability upon the East Indian Railway Company. Apart from this, there remains only the fast that the defendant Company did, on three occasions subsequent to the 2nd July 1918 offer compensation other plaintiffs. I have stated above that Rs. 30 per bale was offered by Robins in, one of the defendant Company) inspectors. Later on, another employee of the defendant Railway, Mr. Dyer, offered Rs. 20 per bale, and, lastly, there was the vary much reduced offer made after the inspection by Mr. Vernon on the 18th August.

42. The question is whether these offers constitute an acknowledgment of liability on the part of the Railway Company which would justify an award of damages.

43. In paragraph 9 of the written-statement the plea of the defendant Company is that these offers mere made in order to lead to a settlement out of Court, but neither Robinson nor Dyer has been examined; so it is not possible to say whether the offers were made 'without prejudice' nor have we been refer red to any documentary evidence on the point. I have considered this point tare-fully and am disposed to hold that the Railway Company has acknowledged liability.

44. As to the amount of damages I think a fair sum is at the rate of Rs. 20 per bale offered by Dyer It is true that the expert evidence of Mr. Vernon would, if accepted, show that this offer was in excess of what was really claimable. But Vernon's inspection was not made till the 18th August, more than six weeks after the goods had 'arrived at Mirzapur---a fact which must be taken into account when estimating the value of his report.

45. I would, therefore, allow the plaintiffs damages to the extent of Rs. 1,080. The plaintiffs are not entitled to return of the freight, for the goods were tarried to their, designation. They are entitled to the gale-proceeds of the goods at the rate of Rs. 117 per bale.

46. There should, therefore, be judgment for Rs. 7,398 in all but the plaintiffs having been in the wrong throughout, must be made to pay the defendant Company's costs in both Courts.

47. Allowing the appeal in part, I would substitute for the decree of the Court below a decree for Rs. 7,398 and direst that the plaintiffs do pay the casts of the defendant Company in both Courts.

Kanhaiya Lal, J.

48. I agree in the order proposed.

49. Br the Court.---The appeal is allowed. A decree for Rs. 7,398 will be prepared in favour of the plaintiff Company. The plaintiff Company will pay the Costs of the East Indian Railway Company in both Courts.

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