Skip to content


Lal Chand Madhav Das Vs. Union of India and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtDelhi High Court
Decided On
Case NumberLetter Patent Appeal No. 65 of 1976
Judge
Reported inAIR1986Delhi29; 1985(9)DRJ317
ActsRailway Act, 1890 - Sections 76B
AppellantLal Chand Madhav Das
RespondentUnion of India and ors.
Advocates: Madan Bhatia and; H.S. Dhir, Advs
Cases ReferredUnion of India v. The West Punjab Factories Ltd. (supra
Excerpt:
.....maintainable because the plaintiff was not only the consignee but also a commission agent for the consignor. the learned single judge took the view that the plaintiff was merely a consignee and could not maintain the suit. ; that the lower appellate court having given a finding that the plaintiff was consignee for consideration he can file suit for damages against the carrier. - - the railway receipt was endorsed in the name of the plaintiff as consignee and the question raised before the division bench was, whether on these facts plaintiffs could maintain the claim. avadh behari rohatgi, j went to the extent of holding that 'even a commission agent to whom railway receipt is endorsed has sufficient interest to maintain the suit against the railway administration for compensation for..........suffered damage to the tune of rs. 1759.68 p. and after serving notice under section 78-b of indian railways act and under section 80 of the code of civil procedure, the plaintiff filed a suit for recovery of rs. 1759.68 against the defendant union of india. the union of india took the plea that the plaintiff had no locus standi to file the suit. the union of india did not take any plea that the plaintiff had no interest in the goods. however, during trial in examination of sh. behari lal, public witness -2, it came in evidence that the plaintiff had advanced money to the consignor and on cross-examination, it came out that the consignment was received by the plaintiff from the consignor for sale on commission at the rate of 7%. he also stated that on 26th may, 1965, a sum of rs......
Judgment:

Yogeshwar Dayal, J.

(1) This Letters Patent Appeal has been filed against the Judgment of learned Single Judge dated 8th April, 1976 passed in Sao No. 30/1973 setting aside the order of learned Additional District Judge, Delhi dated 28th August 1972 whereby the learned Additional District Judge, Delhi had held that the suit filed by the appellant was maintainable and had directed the learned trial court to decide the suit for damages filed against the respondents on merits,

(2) The learned trial court by Judgment and decree dated 1st February, 1972 while deciding issue No. 5 in the suit fried by the appellant, M/s. Lal Chand Madhav Dass for damages had held that the plaintiff had no locus standi to sue the railway. The suit itself had been filed by the plaintiff for compensation for damages to the goods due to late delivery.

(3) The lower appellate court vide its Judgment dated 28th August, 1972 in paragraph 7 thereof had held that the plaintiff was not a mere consignee but was a consignee who was also the commission agent for the consignor and who had advanced money to the consignor and was to charge commission on sale of the consignment and in this way had interest in the consignment and, accordingly, held that the plaintiff had locus standi to file the suit.

(4) The Union of India being aggrieved by the decision of the learned Additional District Judge, Delhi dated 28th August, 1972 came up in appeal (SAO No. 30/1973). Learned Single Judge took the view that the plaintiff was merely a consignee and could not maintain suit for damages against the carriers, namely, the railway. The plaintiff has now come up in Letters Patent Appeal.

(5) The case of the plaintiff was that the plaintiff was a named consignee of parcel way bill dated 6th May, 1965 by virtue of which a consignment comprising 564 baskets of mangoes was booked at Vizianagram railway station for carriage by rail and delivery at New Delhi station, it was alleged that the reasonable time for transit and delivery of similarly booked consignments is 5 days but in the instant case the delivery was made 10 days after the date of its booking, and in this way there was a delay of five days and on account of the delay, the consignment was got damaged ; that before taking the delivery and removal of the goods consignment, the plaintiff requested the railway authorities to examine the condition of the consignment and to make a note of the extent of damage in the railway delivery book and the railway authorities certified the damage to the extent of 26%. The plaintiff also alleged that this damage was the outcome of negligence or misconduct on the part of the railway administration. The plaintiff alleged that the price of 564 baskets of mangoes was @ Rs. 12.00 per basket and calculated the damage to the extent of 26%. The plaintiff suffered damage to the tune of Rs. 1759.68 P. and after serving notice under Section 78-B of Indian Railways Act and under Section 80 of the Code of Civil Procedure, the plaintiff filed a suit for recovery of Rs. 1759.68 against the defendant Union of India. The Union of India took the plea that the plaintiff had no locus standi to file the suit. The Union of India did not take any plea that the plaintiff had no interest in the goods. However, during trial in examination of Sh. Behari Lal, Public Witness -2, it came in evidence that the plaintiff had advanced money to the consignor and on cross-examination, it came out that the consignment was received by the plaintiff from the consignor for sale on commission at the rate of 7%. He also stated that on 26th May, 1965, a sum of Rs. 2000.00 was paid as advance by the plaintiff to the consignor. The learned lower appellate court gave a finding that the plaintiff was not a simple consignee but was also a commission agent for the consignor who had advanced money to the consignor and lie has to charge commission on the sale of consignment and in this way had interest in the consignment. (See paragraph 7 of the judgment of the lower appellate Court.) This evidence came in cross-examination. It also came in evidence that four persons had gone on behalf of the plaintiff to Vizianagram to purchase and booking of the consignment and out of which Public Witness -1 Narain Dass was one such person. Once the finding was given that the consignee, namely, the plaintiff was not implicate a consignee but a consignee for consideration, there can be no doubt that suit by a consignee for consideration is certainly maintainable. Apart from a debatable question, whether the consignee as a commission agent has a right to sue or not in the present case, the finding of fact was clear that the plaintiff was a consignee for consideration. It is true that in the plaint, the fact, whether plaintiff was consignee for consideration had not been pleaded but it was the counsel for the Union of India who while cross-examining the plaintiff brought out the evidence to show that the plaintiff was a consignee for consideration. The learned Single Judge had dealt with the catena of authorities and has also noticed this finding of tact and had not set aside this finding of fact and yet had dismissed the suit by holding that a mere consignee or mere commission agent had no right to file a suit for damages against the carrier.

(6) It is true that if certain essential picas are not taken in the plaint no amount of evidence can be led. But in the present case all the evidence came in view of the cross-examination on behalf of the Union of India and surely in such circumstances, it cannot be said that the court cannot look into that evidence. The court could look into that evidence and the learned lower appellate court also gave a finding of fact on that basis. Once the position becomes dear and the finding is also there of the lower appellate court that the plaintiff/appellant was consignee for consideration we have no doubt that the plaintiff can file the suit for damages against the carrier.

(7) A Division Bench of this Court in the case reported as R.F.A No. 18-D of 1958. Union of India v. Messrs Ghamandi Lal Nanesh Mal Jain (decided on 1st March, 1967 by Hardayal Hardy & S.K. Kapur, JJ.) held that the consignee for consideration had locus standi to file a suit for damages for non-delivery. This judgment of the Division Bench has noticed an earlier decision of the Supreme Court in Morvi Mercantile Bank Lid. v. Union of India, : [1965]3SCR254 and felt that the said decision affords a right to endorsee of the railway receipt for a valuable consideration to maintain his action in his own name on account of the loss resulting from the non-delivery of the goods.

(8) The Division Bench also noticed an earlier decision of the East Punjab High Court in Jalan & Sons Ltd. v. Governor General in Council and others, Air 1949 Eas Punj 190 where M.C. Mahajan, J (As he then was) sitting with Teja Singh, J. held as Follows :

'A railway receipt being a mercantile document of title of the endorsement of it vests the endorsee with a valuable right. 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. It follows that he is also competent to brings suit against the Railway Company for damages in respect of the goods covered by the receipt.'

(9) The same question also came up for consideration before the Punjab High Court in the case of M/s. Latto Mal Nanu Ram v. The Union of India, R.F.A. 106-D/1954 decided on 31st December, 1963. Here also the plaintiff, M/s. Latto Mal Nanu Ram had sued the Union of India for damages for the deterioration of goods in transit. The suit had been dismissed by the trial court. On appeal, the learned Division Bench held that the plaintiffs were commission agent of M/s. Shait-ki-Sandh of Pachora for sale of banana. The sale proceeds were remitted by the plaintiffs to pachora and profit and los.s was borne by Pachora firm. The plaintiffs. obtained commission at the agreed rate between the parties. The plaintiffs had also advanced Rs. 10,000.00 to Pachora firm and the Pachora firm was to make adjustment of this amount with regard to the sale of the fruit by the plaintiffs as its commission agent. The railway receipt was endorsed in the name of the plaintiff as consignee and the question raised before the Division Bench was, whether on these facts plaintiffs could maintain the claim. The learned Division Bench, however, disagreed with the learned trial court and accepted the appeal. The Division Bench took the view that the plaintiff firm was a commission agent of the consignor of the goods with the right o.f commission on sale and further the goods had been consigned in their name. They had a right to sell the goods to a third person. It was, however, in evidence in that case that they also had title to the goods. The Division Bench in Jalan : sons Ltd. case (supra) found the plaintiff firm to have a right to maintain the claim. The Division Bench in M/s. Latto Mal Nanu Ram's case (supra) also noticed further observations of the learned Judges in Jalan & sons Ltd. case (supra) which are as follows :

'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 not only can take the delivery of the goads 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.'

(10) The Division Bench felt that in Jalan & sons case (supra) it had been held that a railway receipt is a document of title and endorsement on it vests the endorsee with valuable right and further that because the endorsee can give complete discharge on the basis of the endorsement, it follows that he can lay claim in respect of the goods and they felt that the facts of Jalan and sons case (supra) were similar to the facts of the case before them.

(11) The Division Bench in the case of M/s. Latto Mal Nanu Ram (supra) also noticed a decision of Allahabad High Court in the case of Dominion of India v. Messrs Gaya Pershad, : AIR1956All338 and had ultimately held that the plaintiff had the right to sue.

(12) The observations of Avadh Behari Rohatgi. J. in the case of Union of India v. M/s. B. Prahlal and Co. are also pertinent. Avadh Behari Rohatgi, J went to the extent of holding that 'even a commission agent to whom railway receipt is endorsed has sufficient interest to maintain the suit against the railway administration for compensation for loss of goods. The railway receipt is regarded as a symbol of the pods for all purposes. It is a document of title, and an endorsee thereof has sufficient interest in the goods covered by it to maintain an action for their loss.' Avadh Behari Rohatgi, J. further held :

'THAT the plaintiffs firm are a commission agent of the consignor of the goods. They have a right to commission on sale. Further the goods were consigned in their name. They were the named consignee in the railway receipt. They were able to give a complete discharge. thereforee, they had title to the goods. They had a right to sell the goods to third persons. The plaintiff firm has considerable interest in the proceeds of the sale Even though the property in the goods did not pass to the consignee, he is the proper person to sue as the consignor delivered the goods to the carrier as agent for the consignee. The plaintiff as commission agent has sufficient interest in the goods and is entitled to sue.'

(Seeparas 8,13,18 & 44).

(13) Similar question came up before one of us in the case of Union of India v. Taneja Fruit Co., 1981 Raj L.R 10 wherein it was observed: 'Respondent is a wholesaler fruit merchant. 5 consignments of litchi fruit were consigned to him from Mizzafarpur. Respondent consignee at the time of taking delivery found the goods short and on account of short delivery filed a suit for damages claiming Rs. 720.00 Railway opposed it on numerous grounds one of which was that plaintiff was a mere consignee and a commission agent and he could not sue. Trial Court held that plaintiff was a consignee for valuable consideration and had interest in the goods and could claim damages. Railway filed revision in the High Court. It was held that the trial court found from evidence that plaintiff was a consignee for valuable consideration and relying upon the decision in the case of Union of India v. B. Prasad,& Co., 1976 Raj L.R 278 it was concluded that the plaintiff had a right to file the suit.'

(14) The facts of the cases reported as Morvi Mercantile Bank Ltd. v. Union of India, : [1965]3SCR254 and The Union of India v. The West Punjab Factories Ltd., Air 1966 Sc 295 are most interesting. The consignor in the case of Morvi Mercantile Bank Ltd. (supra) had consigned the goods 'to self', endorsed the railway receipt in favor of Morvi Mercantile Bank Ltd. against an advance of Rs. 20,000.00 made by the bank to the firm. The consignment was consigned to Okhla near Delhi. The consignment did not reach Okhla. The railway company offered to deliver certain parcels to the Bank, but the bank refused to take delivery of the same on the ground that they were not the goods consigned by the firm. As the railway failed to deliver the goods, the Bank as the endorsee and pledgee of the said railway receipts for valuable consideration sued the railway. Subba Rao, J. wrote the majority judgment and paragraphs 6, 7 and 13 of the judgment are very illuminating. The Supreme Court analysed the provisions of Contract Act and Indian Sale of Goods Act and took the view that the owner had absolute right of pledge and the pledges had sufficient interest in goods and can sue the Carrier for non-delivery of the goods. The Supreme Court gave railway receipt a symbol of goods itself and, surely, if the pledgee can be held entitled to sue the railway, the consignee for consideration can certainly sue.

(15) The facts of the case of Union of India v. The West Punjab Factories Ltd. (supra), in fact, show the extent to which carrier can go in frustrating honest and fair claimant. If the suit is filed by a consignor, the plea will be that the consignor cannot sue as property had passed to the consignee. If the suit is filed by a consignee, the plea will be that the property had not passed to the consignee and suit can only be filed by the consignor. In the case of Union of India v. The West Punjab Factories Ltd. (supra) the suit was filed by a consignor and the usual plea was taken that the consignor could not file the suit as the title to the goods had passed to the consignee and the litigation was taken right uptil Supreme Court. The Supreme Court, on the facts in that case, found that the property in goods had not passed to the consignee and, thereforee, the consignor could sue the carrier.

(16) With all due respect, it appears to us that the learned Single Judge fell in error in ignoring the findings of fact recorded by learned lower appellate court in para 7 of the judgment noticed earlier. The result is that the judgment of the learned Single Judge in relation to Sao No. 30 of 1973 is set aside and the order of learned lower appellate court on issue No. 5 is restored.

(17) Parties are, accordingly, directed to appear before the trial court on July 10, 1985 for further proceedings in accordance with the judgment of the learned lower appellate court dated 28th August, 1972. The appellant would be entitled to the costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //