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Firm Kishanlal Shrilal Patwa Vs. Union of India (Uoi), Rly. Administration Now Northern Rly. and anr. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtMadhya Pradesh High Court
Decided On
Case NumberFirst Appeal No. 41 of 1955
Judge
Reported inAIR1960MP289
ActsContract Act, 1872 - Sections 73 and 161; Railways Act - Sections 72
AppellantFirm Kishanlal Shrilal Patwa
RespondentUnion of India (Uoi), Rly. Administration Now Northern Rly. and anr.
Appellant AdvocateR.K. Zamindar and ;S.L. Dubey, Advs.
Respondent AdvocateDhodapkar, Adv.
DispositionAppeal dismissed
Cases ReferredManindra v. Mathuradas.
Excerpt:
.....it is not whether the happening that causes deterioration is an act of god, but if the claimant for compensation has satisfied us on what he had to in every suit for compensation for breach of contract that one of the two requirements have been fulfilled......have held that in regard to the delivery of a consignment of goods to the consignee plaintiff, the railway administration, defendant respondent, was guilty of misconduct by the delay of 15 days, beyond the time in which in due course of their busi-ness they should have delivered them. the suit is for compensation for deterioration by fall in market during this interval; on the actual depreciation on account of the fall in price, there is no difference of opinion.2. the difference is that, on the one hand shri nevaskar j. applying the principles contained in section 73 of the indian contract act, holds that the depreciation in the value of the goods was neither a direct consequence of the delay on the part of the administration, nor was a consequence which both parties to the contract.....
Judgment:

Krishnan, J.

1. A difference of opinion having arisen between my learned brothers Shree Nevaskar J. and Shri Shiv Dayal J. as to whether compensation could be properly awarded to the plaintiff appellants in this case, a reference has been made to me. Both the judges have held that in regard to the delivery of a consignment of goods to the consignee plaintiff, the Railway Administration, defendant respondent, was guilty of misconduct by the delay of 15 days, beyond the time in which in due course of their busi-ness they should have delivered them. The suit is for compensation for deterioration by fall in market during this interval; on the actual depreciation on account of the fall in price, there is no difference of opinion.

2. The difference is that, on the one hand Shri Nevaskar J. applying the principles contained in Section 73 of the Indian Contract Act, holds that the depreciation in the value of the goods was neither a direct consequence of the delay on the part of the administration, nor was a consequence which both parties to the contract knew to be likely. Accordingly on the basis of the interpretation of Section 73 of the Contract Act by different High Courts he decided that the plaintiff was not entitled to anything. On the other hand, Shri Shivdayal J. was of the view that once it is found that there had been a misconduct on the part of the administration, and the owner of the goods had suffered loss on account of the depreciation, he is entitled to damages whether or not there is a causal connection OB awareness of the parties at the time of the contract. There is also an indication in his judgment, that the sudden notification of price control in the present case, which resulted in the fall of price was not an unforeseen event but one which the parties could have foreseen.

Accordingly he has held that the plaintiff appellant is entitled to compensation. But on the actual measure, if it can be awarded at all, there is no difference of opinion. The plaintiff himself had claimed a largest sum, but the Judges have found that the fallen price was 11 rupees (Rs. 32 -- Rs. 21) to the Maund and as the consignment was of 342 Maunds and 13 Seers, the compensation would be Rs. 3765/9/-.

3. Thus, I am not called upon to deal at this stage, either with the question whether or not there was mis-conduct by delay in the delivery, or whether the plaintiff actually found that the market price had fallen from Rs. 32/- to Rs. 21/- a Maund between the 22-10-1950 when the consignment could have been delivered in due course of transport business, down to 21 rupees a Maund on 6-11-50, when it was actually delivered to the plaintiff. It is also a non-controversial fact that this fall in the price was the immediate consequence of an order passed by the Central Government on 25-10-1950 controlling the price of 'Gur'' and fixing it at 21 rupees a Maund.

4. The other relevant facts can be briefly stated. On 6-10-1950 the plaintiff delivered at the Railway Station Bharwari, on the erstwhile Eastern Railway in the Allahabad District of the U. P., a consignment of 157 bags of 'gur' weighing 342 Maunds and 13 seers for transport by public goods train, at Ujjain station on the erstwhile G. I. P. Railway, The plaintiff's own notion was that it should ordinarily reach on the 17th October, 1950. When it did not, he was trying to contact the authorities conceVned, and arrange somehow to get the consignment pushed on to Ujjain as early as possible, and even went to the extent of requesting the railway authorities to tell him where the wagon was actually lying, and permit him to take delivery there, and make his own arrangements for transport by truck to his place. The administration was unable to do this for the plaintiff, and the consignment actually reached Ujjain and was delivered on 6-11-1950.

5. In the interval things were happening. 'Gur' was an essential commodity for the purposes of the Essential Supplies (Temporary Powers) Act 1946. Some orders had been passed from time to time in regard to it but the price itself had not been fixed till the 25th October, 1950. On that date the Central Government by Notification had fixed the price of the 'gur' at 21 rupees per maund. The finding on the fact is that before this order came into force, in particular, on 22-10-1950 which according to both the Judges was the date on which the goods could have been delivered in due course of transport, the market price was Rs. 32/-per maund. It is also on the finding that in the event of the plaintiff having received the goods on 22-10-1950 itself they could have been worth to him Rs. 32/- per maund, though nobody could say that he could have succeeded in selling that large quantity at that price.

Be that as it may the finding is that between 122-10-1950 and 6-11-1950 the goods had suffered depreciation. This has been also held to be one form of deterioration, for the purposes of Section 72 of the Indian Railways Act and 161 of the Indian Contract Act. Shri Dubey appearing for the plaintiff has urged that we should for the purposes of this case apply Sections 72 of the Railways Act and 161 of the Contract Act, without any reference to Section 73 of the Contract Act. According to him Section 161 of the Contract Act does not require that the claimant should prove either that there was a direct causal connection between the deterioration and the misconduct or breach on the part of the railway administration, or that the deterioration was a possibility of which both the parties were aware at the time they entered into the contract.

6. As this is the sheet anchor of the claimant's case it is worth examining whether there is a dis-tinction in principle between Section 161 and Section 73 ofthe Indian Contract Act and consequently a claimant can get something under the former section which he cannot get under the latter. Section 72(1) has also been mentioned but it only makes the Railway Administration a defaulting bailee for the purposes of Section 161 of the Indian Contract Act. It is convenient to quote all the three Sections in file :

(a) 'Section 72 (1). The responsibility of the Railway Administration for the loss, destruction or deterioration of animals or goods delivered to the administration to be carried by railway shall, subject to the other provisions of this Act, be that of a bailee under Ss, 151, 152 and 161 of the Indian Contract Act.'

(b) Section 73 of the Contract Act. 'Compensation for loss or damage caused by breach of contract -- When a contract has been broken, the party who suffers by such breach is entitled to-receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of such things from such breach, or which the parties knew when they made the contract, to be likely to result from the breach of it. Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach.'

(c) Section 161 of the Contract Act. 'Bailee's responsibility when goods are not duly returned; If by the default of the bailee, the goods are not returned, delivered or tendered at the proper time he is responsible to the bailor for any loss, destruction or deterioration of the goods from that time.'

7. Section 73 of the Contract Act is a general section governing all cases of a claim for compensation upon a breach of contract. Bailment is one kind of contract dealt with in Chapter 9; and the bailment to a carrier is a bailment by delivery of goods for the purposes of carriage. When such bailee commits a breach of contract by defaulting to deliver the goods at the proper time certain consequences follow. They are mentioned in Section 161. In the present case we are dealing with 'deterioration'. In spite of some early difference of opinion, it has been generally accepted to include the depreciation by fall in market price.

8. This section does not set out the general condition; in particular those in Section 73,

'naturally arose in the usual course of things or which the party knew when he made the contract to be likely to result from the breach of it.'

But it does not follow that because of this, a claimant under Section 161 will get what he may not under Section 73. This would be to ignore the frame work of the entire Act. The earlier Section 73 is the general one governing all cases of breach of contract, resulting in loss or damage to one of the contracting parties. The later Section 161 deals with only one kind of breach of contract. In other words Section 73 deals with the genus and Section 161 with a specie. Therefore the latter section should be read as an expansion or illustration of the earlier and need not repeat the condition in the latter. Except where the conditions themselves are in issue, the judgment will refer to Section 161 as fixing the measure of compensation if and when it is payable. But when it has to be seen, if compensation can at all be awarded, -then the discussion will be about the conditions mentioned in Sec-tion 73.

9. Thus it becomes necessary to see if compensation can be granted, for one or (sic) (other) of the two conditions in that section. It is not acase of deterioration naturally arisen in due course from the delay or is theoretically conceivable, even apart from physical decomposition, that there is a steady downward trend. That is not the position here nor it has at all been suggested by the plaintiff. In the natural course of things such a fall in price would not have happened. The other alternative is 'what is within the knowledge of the parties (that is both the parties) when they made the contract'. This knowledge can be derived by either from the term of the correspondence between the consignor and the servants of the administration, or inferred from the general knowledge, which the servants of the administration are expected to have.

It might be that the plaintiff was aware of the possibility of some action by Government in regard to the 'gur'. He goes to the Allahabad District from Ujjain and delivers the consignment for transport on 6-10-1950. He must have collected the consignment a day or two before. Actually 'The Sugar and Gur Control Order' was notified on 7-10-1950. It has nothing to do with the control of the price as such, but it started the ball rolling.

Another ordef was passed on 19-10-1950 under one of the clauses of Sugar Control Order. It was followed by third order made on 25-10-1950 fixing the price of 'gur'. aS usually happens it brought down the price with a flop. But both parties should be aware of the possibility at the time of contract; The railway administration at the top or its servants had no reason to know this, till after the control price was notified on 25-10-1950. Thus on the date of contract the parties (that is both the parties) did not know that delay in transport was likely to result in a sudden fall of the price. What did happen was one of those remote and indirect consequences referred to in the last clause of the first part of the Section 73.

10. I find in the learned discussion in the judgment of Shri Shivdayal, J. that for one thing, it is not necessary for the claimant to show any direct connection; and for another control of the price of 'gur* was a possibility which could be foreseen. In fact, the anology suggested is of the Calcutta case where it was held that a storm of an ordinary nature could be foreseen, Manindra v. Mathuradas. AIR 1946 Cal 175. There the position was that the defendant had put up a structure which was likely to come down in a storm and therefore was not allowed when it did happen, to urge that it was an act of God. In that sense the price control was not a thunder bolt from the blue.

But I respectfully disagree, for in a case like this it is not whether the happening that causes deterioration is an act of God, but if the claimant for compensation has satisfied us on what he had to in every suit for compensation for breach of contract that one of the two requirements have been fulfilled. He has not. This is one of these cases in which casual connection is remote and we have no proof of awareness by both parties of this possibility. Thus it is one of those cases in which the claimant is not entitled to get compensation, even after proving the delay on the part of the Administration.

11. Accordingly, I agree with my learnedbrother Shri Nevaskar J. and order that the suitshould be dismissed. Costs of this appeal payableto respondents by the appellant.


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