1. This is a plaintiffs' appeal arising out of a suit for the recovery of Rs. 7,500 against the Governor-General in Council. The facts briefly stated are as follows:
2. On 20th May 1943, the Sutlej Cotton Mills, Okara, consigned 15 bales of cotton dhotis from Okara to Delhi and sent the railway receipt to Messrs. Jallan and Sons Ltd., Delhi, duly endorsed in their favour. The railway receipt was presented by Jallan and Sons to the railway at Delhi on 22nd and 23rd June 1943 and. they were given delivery of 1675 pairs of dhotis. The rest of consignment, consisting of 725 pairs of dhotis, had got damaged during transit and accordingly Jallan and Sons refused to accept them. A correspondence then ensued between Jallan and Sons on one side and the railway on the other and when nothing came out of it, the former after having served the railway with a notice under Section 80, Civil P.C., instituted the suit on 30th May 1944. The plaintiffs alleged that so far as the dhotis of which delivery was given to them on the 22nd and 23rd June 1943 were concerned, they had been unnecessarily and negligently delayed by the railway officials and as a result of the late delivery they had suffered loss. About the remaining dhotis, i.e. 725 pairs, the plaintiffs' case was that 'they had got damaged, deteriorated and rotten by water owing to the default, negligence and misconduct of the servants of the railway' and consequently they were entitled to claim from the defendant not only the price of the dhotis but damages as well. The total amount of the claim was made up as follows: (i) Rs. 1,756/7/6 for the loss suffered by the plaintiffs on account of the late delivery of 1675 pairs of dhotis; (ii) Rs. 5,247/5/6 on account of the price of 725 pairs of dhotis that had been damaged and of which the plaintiffs refused to take delivery; (iii) Rs. 496/3/6 on account of interest on the above amount at the rate of ten annas per cent per mensem from 1st June 1943 to the date of the suit.
3. The defendant resisted the suit on merits as also on technical grounds. The technical objections were that no proper notice had been given and the plaintiffs being only the endorsee of the railway receipt could not maintain the action. These objections formed the subject-matter of two preliminary issues, namely, whether the plaintiffs had locus standi to institute the suit and whether the plaintiffs gave a valid notice under Section 80, Civil P.C., to the defendant. As regards the second issue, the Subordinate Judge held that notice had been given and that it was a proper notice. The first issue was, however, found against the plaintiffs and in the result the suit was dismissed with costs.
4. It was urged by the appellants' counsel that the railway receipt was a document of title and since it had been duly endorsed in the plaintiffs' favour by the consignor the former had the right to sue. The respondent's counsel did not deny that the railway receipt was a document of title, what he, however, urged was that the scope of it was limited and the endorsement receipt merely gave the endorsee a right to take the delivery of the consignment and nothing further. His argument was that when a consignor despatches goods and takes the railway receipt in his own name but later on endorses the receipt in favour of some one else, the effect of the endorsement is to constitute the latter merely an agent for purposes of taking delivery of the consignment from the railway and his right to maintain a suit against the railway for non-delivery or short delivery of the consignment depends upon the question whether the consignor intended to give him any interest in the consignment or did so as a matter of fact.
5. The appellant's learned counsel relied upon Sub-Section (4) of Section 2, Sale of Goods Act, in  of 1930, which lays down that 'document of title to goods' includes intsr alia a bill of lading and a railway receipt. The counsel argued that as in the case of a bill of lading the endorsement of the railway receipt transfers the ownership in goods coverd by the receipt, to the endorsee and it, therefore, follows that the endorsee not only can take the delivery of the goods from the railway but in case of necessity he can sue the railway for the price of goods or for damages etc. The learned Counsel then relied upon a Bench decision of the Bombay High Court in the Firm of Dolatram Dwarkadas v. A.I.R. 1914 Bom. 178. The facts of this case are quite similar to those of the present one. The consignor had taken the railway receipt in his own name but had sent it on to another person with an endorsement in the latter's favour. The endorsee went to the railway station, which was the destination of the goods, paid the railway freight and received delivery of a part of the goods. The rest of the goods, which consisted of 19 bags, he refused to accept, because they appeared to him to have been torn and empty. In a suit by the endorsee against the railway for the value of 19 bags and damages the railway contended inter alia that the plaintiff being merely a commission agent was not entitled to maintain the suit. The Small Cause Court Judge dismissed the suit and the plaintiff applied for revision to the High Court. The learned Judges took the view that the railway receipt was a mercantile document of title and held that that being so, it necessarily followed that the endorsee of the receipt had interest in the goods covered by the receipt and had a right to maintain an action for damages in respect of the goods. This case was followed by a Single Judge of the Allahabad High Court in Piari Lal Gopi Nath v. The East Indian Railway Company A.I.R. 1924 All. 574.
6. The learned Counsel for the defendant-respondent cited a number of cases but only two of them appear to me to be in point. In Maula Baksh-Muhammad Shafi v. Secretary of State and Anr. A.I.R. 1929 Lah. 590, Johnstone, J. held that when the goods are sent to his agent by a principal and he consigns the railway receipt to the latter the suit in respect of the goods could only be maintained by the principal. The relevant observations made by the learned Judge read as follows:
It is true that in certain exceptional cases an agent may sue, but that is not the general law. The Contract Act is clear on the point. The endorsement of the railway receipt to the plaintiff did not do anything more than give him a right to obtain delivery of the goods. But he still was to obtain delivery as agent of defendant 2 and the property in the goods did not pass to the plaintiff.
In coming to this conclusion the learned Judge referred to two rulings, Subrahmania Pattar v. Narayanan Nayar 24 Mad. 130 and Mallhu v. Megh Raj A.I.R. 1920 Lah. 196. In the Madras case the members of a Malabar devasom had executed a document in favour of the plaintiff, whereby, in consideration of the advances made by the plaintiff, all the properties of the devasom were given over to him on lease for eighteen years. The plaintiff was given authority to sign, conduct suits and do other acts on behalf of the executants. The plaintiff brought a suit in his own name to recover certain property belonging to the devasom and which had been demised on kanom prior to the date of the plaintiff's authority. It was held that the plaintiff was not entitled to sue. The reason why the learned Judges came to this conclusion may be given in their own words. This is what they said:
In the case before us there is no privity between the plaintiff and the defendant. The authority to bring suits in the document does not purport to give the plaintiff the right to sue in his own name, and so far as we are aware, nothing else has happened which could authorise the plaintiff to sue the defendant in his own name.
In the second case the defendant had bought wheat from the plaintiff but did not take delivery and the plaintiff sued him for the amount of the loss incurred on re-sale. The defendant contested the plaintiff's right to sue on the ground that the wheat did not belong to him and he was mere agent. The objection was overruled and it was held that when an agent enters into a contract, he may sue thereon in his own name if he has an interest in the contract. It will thus be seen that neither of these cases had any direct bearing upon the question that fell for determination in the Lahore case. Moreover, it appears to me that the case of an endorsee of a railway receipt is altogether different from the case of an ordinary agent, for the simple reason that the railway receipt being a mercantile document of title the endorsement of it vests the endorsee with a valuable right. It is not denied that the endorsee of a railway receipt not only can take the delivery of the goods covered by the receipt but he can also give a complete discharge. I am of opinion that it follows from all this that, he is also competent to bring a suit, in respect of the goods.
7. The second case is Shamji Bhanji and Co. v. North Western Railway Co. : AIR1947Bom169 decided by Bhagwati, J. Certain observations made by the learned Judge no doubt support the respondent, but they are of the nature of obiter dictum, because the point involved in the case was entirely different. One P sold certain goods to S and entrusted them to a railway company to be carried to Peshawar. The railway receipt, which was in P,s name, was endorsed by him to another person, the latter endorsed it in his turn to some one else and there were several successive endorsements. The last endorsee was S who endorsed it back in favour of P. The goods were destroyed by fire in the course of transit and P sued the railway for damages. The railway contended inter alia that P had no locus standi to maintain the suit, a plea which is quite reverse to the one taken by the defendant in the present case.
8. The learned Judge spurned the contention of the railway and held that the suit was competent. It is curious that the Bench decision of his own Court was not brought to the notice of the learned Judge and was consequently not even referred to in the judgment. With all deference the observations of the learned Judge which go counter to Firm of Dolatram Dwarkadas v. B.B. and C.I. Rly. Co. A.I.R. 1914 Bom. 178, do not appear to me |to be correct and I have no hesitation in following the latter decision and in holding that the | plaintiffs being the endorsee of the railway receipt had the right to maintain the suit.
9. In the view that I take it is not necessary to discuss the arguments advanced by the respondent's learned Counsel that the plaintiffs were only agents of the Sutlej Cotton Mills and as such they could not bring the suit in their own name. It may, however, be pointed out that according to the evidence produced by them they were not mere selling agents but had substantial interest in the goods. P.W. 1, Jodha Ram, who is the head accountant of the Mills, besides proving the endorsement on the back of the railway receipt, deposed that the plaintiffs became the owners of the goods by virtue of the endorsement and that they had the power to sell them, Baij Nath (p.w. 6), who is the salesman of the plaintiffs' firm, deposed that the plaintiffs take the delivery of the goods from the railway as owners and then they sell them to third persons in that capacity. Both these witnesses further stated, and this fact is not denied by the other side, that the plaintiffs get commission on the goods that they sell. Prom this it is clear that the position of the plaintiffs is not like that of an agent who simply represents his principal in dealings with third parties and has no interest whatsoever in the goods. On the other hand, the plaintiffs not only deal with third parties in respect of the sale of goods as owners, but have considerable interest in the proceeds of the sale. It also follows from this that the intention of the Sutlej Cotton Mills while endorsing the receipt in the plaintiffs' favour could not have been merely to enable them to take the delivery of the goods but to give them an interest of substantial nature. For this reason also the plaintiffs' right to sue cannot be denied.
10. Last of all the learned Counsel for the respondent made an effort to convince us that the position of the plaintiffs was no better than that of a servant of the consignor, who is sent to the railway to take the delivery of the goods on behalf of his master and in whose favour the railway receipt is endorsed in order to enable him to take delivery. The contention is wholly devoid of force, because while the servant merely acts for his master and has no interest in the goods whatsoever, the plaintiffs acted for them elves and their interest in the goods was substantial. Moreover it must be remembered that when the consignor's servant takes the delivery of goods, his possession is that of his master and he has no right to deal with them of his own accord or in his own name. But it is proved by the evidence in this case that the plaintiffs' possession after they had taken the delivery of the goods from the railway was in their own right and they were entitled to sell them as owners. Accordingly, I set aside the finding of the trial Sub-Judge on the issue relating to the locus standi.
11. As regards the other issue, though the learned trial Sub-Judge found it in the plaintiffs' favour, he observed that if he were to decree the plaintiffs' claim he would not travel beyond what was contained in the notice and would confine the decree to the amount claimed therein. Since the case is being sent back for decision on merits, we are not called upon to decide how much amount, if any, the plaintiffs are entitled to.
12. The result is that the appeal is allowed, the decree of the Court below is set aside and the case is remanded for decision on merits. The court-fee will be refunded. Other costs will abide the event. The parties' counsel have been directed to cause their respective clients to appear before the trial Court on 25th October 1918.