1. These three petitions for revision (Civil Revisions Nos. 99. 138 and 139 of 1967) under Section 25 of the Small Cause Courts Act are against the decree passed by the Additional District Judge, Rajnandgaon. They were first heardby one of us (Shrivastava J.); but as there was some difference of opinion between the different Judges of this Court on the interpretation of Section 77C of the Indian Railways Act, (hereinafter referred to as 'the Railways Act'), he made recommendation under Rule 9, Chapter 1 of the High Court Rules for placing the cases before a larger Bench and that is how the matter has come before us.
2. The following facts are no longer in dispute in all the three cases:
(i) the plaintiffs had booked at railway risk a consignment of groundnut oil from Kurnool to Rajnandgaon;
(ii) the oil was contained in old used tins with dents and the tins were defectively packed.
(iii) the condition of defective packing was noted in the forwarding note;
(iv) the oil leaked in transit and the leakage was from the joint in the tins, which were not properly soldered;
(v) the quantity delivered to the consignors was less than the quantity booked. The findings of the Court below as regards the quantity lost and its price are accepted by the parties before us; and
(vi) on way the consignments were transhipped from metre-gauge wagons to broad-guage wagons at Secunderabad.
3. The contention of the plaintiffs was that the loss to the consignments was due to the misconduct or negligence of the railway administration. The defence was that the loss was due to defective packing and the Railways were exonerated from any liability under Section 77-C of the Railways Act. The trial Court dismissed the suits accepting the contention that Section 77-C fully protected the Railways,
4. Shri J. V. Jakatdar for the applicants contends that in spite of the defective condition being noted in the forwarding note and in spite of the fact that the burden of proving misconduct or negligence lay on the consignors under Section 77-C, it was necessary for the Railways to establish how the consignment was dealt with and to lead evidence to show that they were not negligent. The learned counsel contends that as the facts were within the special knowledge of the Railways, Section 106 read with Section 114 of the Indian Evidence Act made it incumbent for the Railways to prove how the loss occurred and it was not for the consignors to adduce any evidence. Shri M. L. Mukherjee for the Railways, on the other hand, contends that the Railways need not have made any disclosure about the manner in which the consignment was dealt with, without a demand from the consignors and they need not have given any evidence on that point He concedes that the Railways would be bound and would have placed any relevant material before the Court, if the on signors had made a demand for it; but as this was not done, the burden placed on the consignors by Section 77-Chas not been discharged and the suits could not succeed.
5. The question which arises for determination on these contentions is whether in the absence of any evidence by the parties as to the cause of the loss, the claim should have been decreed or are the Railways protected under Section 77-C of the Railways Act?
6. Extensive amendments have been made in the Railways Act by Act 39 of 1961 and it would be helpful to refer to some of the important changes which are relevant to the question before us. Section 72 of the Act, before the amendment, defined the liability of a Railway as that of a bailee under the Indian Contract Act. This matter is now provided in Section 73 of the Act. The responsibility of the Railways has been considerably increased making them liable more or less as insurer of the goods. It appears that the Railways cannot now contract out of this liability by special contracts as in the earlier risk-notes under the repealed Section 72(2). As in the unamended Act, Section 74 provides for the booking of consignments at 'railway risk rates' and 'owner's risk rates'. In the latter case, the liability of the Railways under Section 73 has been considerably reduced and has been limited only to those cases in which their misconduct or negligence is proved. Then, the newly introduced Section 76F imposes the duty of making a disclosure about the manner in which the consignment was dealt with in transit. This Section replaces the earlier Section 74D. In both the earlier and the present sections, the provision about disclosure is regarding consignments booked at owner's risk rates or in regard to consignments which were pilferred. A similar liability to make a disclosure existed under some of the risk-notes which were prevalent before the amendment.
7. We may then pass on to Section 77-C. the material part of which runs as follows:
'77-C. (1) When any goods tendered to a railway administration to be carried by railway,--
(a) are in a defective condition as a consequence of which they are liable to damage, deterioration, leakase or wastage; or
(b) ......... .........
and the fact of such condition or defective or improper packing has been recorded by the sender or his agent in the forwarding note, then, notwithstanding anything contained in the foregoing provisions of this Chapter, the railway administration shall not be responsible for any damage, deterioration, leakage or wastage or for the condition in which such goods are available for delivery at destination, except upon proof of negligence or misconduct on the part of the railway administration or any of its servants.'
This section corresponds to the earlier Section 74-A and also to the corresponding clauses in risk-note. A Sub-section (1) of this section deals with the case where the defective condition etc., is noted in the forwarding note and the second sub-section deals with the case where the defective condition etc., was not brought to the notice of the railway administration. In the first case, the burden of proving negligence or misconduct is placed on the consignor but in the second case, this burden is cast on the consignor only if the railways prove that the defective condition etc., was not brought to their notice.
8. The contention of Shri Jakatdar, that the Railways are bound to make a disclosure of the manner in which the consignment was dealt with, is not tenable in view of the language of Section 76 (repealed Section 74-D). It has been held by the Supreme Court in Union of India v. Mahadeolal Prabhu Dayal, AIR 1965 SC 1755 that the duty of the Railways to make a disclosure arises only on a demand being made. Their Lordships were considering Risk Note Z. It was observed that the breach of contractual obligation to make a disclosure under that risk note occurs only when the disclosure is refused on a demand and where the Railways have committed this breach of duty to make a disclosure, the Courts may more readily infer misconduct on the part of the Railways under Section 114(g) of the Evidence Act. It is clear from this decision that there will be no breach of the statutory obligation imposed by Section 76-F unless a demand is made to make a disclosure. In the case of consignments booked at railway risk, the burden has now been placed on the Railways under Section 73 of the Railways Act and so the question of making a disclosure will not arise. In the case of consignments falling under Section 77-C, booked at railway risk, Section 76-F being restricted to cases of consignments at owner's risk does not apply and recourse will have to be taken by the consignor to the provisions of the Civil Procedure Code relating to discovery, interrogatories and similar other provisions to compel the Railways to produce necessary material before the Court. A refusal by the Railways may lead to an inference against them under Section 114 of the Evidence Act. However, if this is not done, no inference can be drawn against the Railways as Section 77-C expressly places the burden on the consignor and it cannot be discharged unless the relevant material is placed on record. To accept that a presumption should be drawn under Section 106 of the Evidence Act without anything being done by the consignor would render Section 77-C otiose in every case. It would not be proper to place an interpretation on Section 77-C which will make it wholly ineffective. In our opinion, the burden has been deliberately cast on the corsignor in the case of defective packing whichmay lead to loss by leakage etc. This is more so in view of the fact that the liability of the Railways has now been made more onerous. The consignor has, therefore, been required to show that the loss was due to misconduct or negligence of the Railways. Of course, the burden can be discharged by leading positive evidence, or by the nature of damage in the light of surrounding circumstances or by cross-examination of the Railway witnesses or by calling the Railways to place the relevant material from their records and other sources or by raising adverse presumptions against the Railways if they avoid to place the relevant material. However, we are unable to agree that the burden placed on the consignor under Section 77-C should be deemed to have been discharged when parties lead no evidence at all and the consignor takes no steps to compel production of what he considers necessary for his case
9. Shri Jakatdar referred to Section 73 of the Railways Act and pointed out that the concluding sentence of that Section provides that the Railway Administration shall not be relieved of the responsibility unless the administration further proves that it has used reasonable foresight and care in the carriage of the goods. The learned counsel contends that effect must be given to Sections 77-C and 73 together and they should not be so interpreted as to render one of them nugatory. We are unable to accept this contention. The concluding sentence of Section 73 makes provision for only those contingencies which are mentioned in that section as exonerating the Railways. These contingencies do not relate to defective packing. It appears to us that Section 73 creates a general liability of the Railway administration and Section 77-C is in the nature of an exception to this general liability created by Section 73, Further, Section 77-C expressly provides that its provisions have to be given effect 'notwithstanding anything contained in the foregoing provisions of this Chapter.' This clause excludes Section 73 altogether in the context of cases which fall under Section 77-C. It is, therefore, clear that Section 77-C is not, in any way controller by Section 73.
10. Shri Jakatdar referred to Surat Cotton Spinning and Weaving Mills, Ltd. v. Secretary of State, AIR 1937 PC 152 in which a clause similar to Section 76-F in Risk Note B was considered. It has no doubt, been observed by their Lordships in that case that it is the duty of the Railways to adduce evidence first as to how the consignment was dealt with and after this, the demand of the consignor for further disclosure if endorsed by the Court has to be complied with All this was said in interpreting the special provisions in the Risk Note. These observations are of no assistance to the consignor who has no such risk-note in his favour and who is not entitled to thebenefit of Section 76-F as the consignment was not booked at owner's risk and on whom the burden of proof has been expressly cast by Section 77-C of the Railways Act.
11. The next case relied upon by the learned counsel for the applicants is Sri Sarada Mills Ltd. v. Union of India, AIR 1966 Mad 381. It has been observed in para 9 of that decision that 'the burden is on the administration to show how the consignment was dealt with and when this has not been done to the satisfaction of the Court, we are entitled to presume negligence'. These observations were made in the context of a consignment which was partly destroyed on account of the wagon catching fire during transit. The goods were booked on railway risk and the liability of the railways was that of a bailee. In such a case, the burden is now expressly laid on the railways under Section 73. The circumstances do not fall at all under Section 77-C and the reasoning cannot apply to a case where leakage was likely in usual course on account of defective packing.
12. The third case cited in Mangilal Kadia v. Union of India, AIR 1963 Orissa 41. In that case damage to the consignment was held to have been caused by loose shunting on the basis of the statement of one of the railway witnesses. The consignment was defectively packed but the railways could have been held liable on account of the inference drawn from the statement of one of their witnesses. However, the case was not decided on merits as the counsel on both the sides agreed to split the damage between the parties. There was thus no decision in the case at all. Even otherwise, the case could have been of no assistance in interpreting Section 77-C as in that case there was evidence of neglect on the part of the railways.
13. In Sahu Vanaspati Traders v. Union of India, AIR 1966 All 333 relied upon on behalf of the non-applicant, the question was about sufficiency of the notice under Section 80, Civil Procedure Code. In the notice, one kind of negligence was alleged and at the time of trial, another type of negligence was sought to be proved. It wag held that this was not permissible. In deciding this question, the learned Judge considered the question of burden of proof. The goods were defectively packed in that case. Reference was made to the repealed section similar to the present Section 77-C. It was held that the burden of proving negligence was on the consignor and it was not open to him to say that he was entitled to compensation simply because the goods were booked at railway risk rate. It was therefore, concluded that the consignor should give particulars of the specific negligence in the notice and restrict his case to these particulars only in the plaint. This decision thus goes further than placing the burden of proof during the trial stages by laying down that the specific act of negligence mustbe alleged in the notice before suit and so departure from those particulars should be permitted later.
14. Conflicting views on the interpretation of Section 77-C of the Railways Act have been taken by the different Judges of this Court. One view is that the Railways must be held liable for the loss if they fail to adduce all the evidence at their command to disprove that the loss or damage was caused by their negligence or misconduct:
H. V. M. Haji Hasan Dada v. Union of India, C. R. No. 764 of 1966, D/- 2-11-1966 (MP), Abdul Gaffar v. Union of India, C. R. No. 72 of 1966, D/- 3-11-1966 (MP); Union of India v. Firm Gannamal Bhagwan Das, C. R. No. 602 of 1963, D/- 28-8-1964 (MP) and B. S. Gupta v. Union of India, C. R. No. 151 of 1963, D/- 20-12-1963 (MP).
Another view is that in a case to which Section 77-C applies, the consignor must prove the negligence or misconduct of the Railways and in the absence of such proof, the railways are exonerated of the liability:
Firm Mannoolal Nanhulal v. Union of India, C. R. No. 862 of 1965. D/- 20-4-1968 (MP), Loonkaran v. Union of India, C. R. No. 194 of 1966, D/- 29-9-1966 (MP) and Jivajirao Cotton Mills Ltd. v. Union of India: C. R. No. 123 of 1965. D/- 25-1-1966 (MP).
15. For the reasons, which we have already given, we are of the opinion that the latter view is more in consonance with the provisions in Section 77-C of the Railways Act and should be preferred. With great respect, we say that the decisions taking the contrary view were not correctly decided.
16. So far as the evidence in the cases in hand is concerned, the consignors have not made any attempt to lead evidence showing the neglect or misconduct of the Railways. Nor have they been able to bring nut any material from the witnesses of the railways to lead to any such inference. The decisions of the trial Court dismissing the claim are therefore, correct.
17. In the result, the petitions for revision are dismissed with costs. Hearing feeis fixed at Rs. 25 for each case.