1. The plaintiff, a trader delivered a parcel containing silver jewellery of the value of Rs. 115 to the Post-Master of the Kotwal Chavady Post Office, Trichinopoly for transmission to one Krishna Chetty at Colombo, Ceylon, as a value payable Article. He also registered and insured the parcel for Rs. 115. He duly paid the fees and obtained receipts and the Post Office took charge of the parcel.
2. This action was brought to recover from the Secretary of State for India in Council the value of the jewellery as the Post Office would neither pay the money nor return the article to the plaintiff. The defence is that by some mistake of a clerk in the Post Office the parcel was delivered to and accepted by the addressee without its value being collected from him, and liability is disclaimed as regards the insurance because the article was duly delivered and as regards the non-collection of its value under the proviso to Section 34 of the Indian Post Office Act, 1898. That proviso runs as follows :-Provided that the Secretary of State for India in Council shall not incur any liability in respect of the sum specified for recovery unless and until that sum has been received from the addressee.' Admitting the disclaimer to be good, so far as the insurance is concerned, we cannot hold the Secretary of State is saved from liability by the proviso quoted. The effect of the proviso is that the Post Office does not guarantee the collection of the money, but it does not absolve it from the common law liability to pay damages for delivering the parcel without collecting the money. The Post Office in order to meet the requirements of traders and others who wish to recover the value of articles supplied by them undertakes on the payment of certain fees to act as their agents for the collection of money (see Rule 130, Indian Postal Guide). So that the Post Office is bound by contract to collect the money when it delivers the article. If the Post Office for any reason neglects to collect the money as agreed to by it for consideration, it has committed a breach of contract and is liable to pay damages. The measure of the damages in this case is the value of the silver jewellery which the plaintiff has lost and which he has proved to be Rs. 115.
3. It was contended before us that the suit was not cognizable by a Small Cause Court and also that the Secretary of State was not liable for the neglect of his servant. The answer to both these objections is that the case is one of contract and not of tort. The decree of the District Munsif is set aside and the plaintiff will get a decree for Rs. 115 with his costs in both courts.