1. Defendant 1 in this case sent a consignment of Cocoanuts by rail on the 6th October, 1930 from East Godavari to Jalna, a station on the Nizam's Railway. The railway receipt was made out to the consignor himself, but it was intended that Defendant 3 a merchant of Jalna should receive the goods. A hundi was drawn against Defendant 2 a merchant in Bombay to the debit of the account of Defendant 3 to provide for payment. On the 8th October Defendant 1 assigned the hundi and railway receipt to the plaintiff. Sometime after this-the exact date is not available from the records--Defendant 1 sent a telegram to the Jalna Railway Station to deliver the Cocoanuts to Defendant 3 and the Cocoanuts were duly delivered to him although he did not produce the railway receipt which was of course in the hands of Plaintiff. The hundi was dishonoured and the plaintiff brought the present suit against Defendants 1 to 3 and the Railway Company to recover the costs of the goods. The suit was decreed against Defendants 1 to 3 after allowing for a part payment but the Railway Company was held not liable and in the present petition Plaintiff and the Railway Company are the only parties.
2. In dismissing the suit against the Railway Company, the learned Subordinate Judge relied upon certain observations in M. and S. M. Railway Co., Ltd. v. Haridoss Banmalidoss : (1918)35MLJ35 in which it was held that a Railway Company was not under a duty never to deliver goods except to the holder of the Railway receipt : and also upon the fact that at the time the delivery was made the company had no notice of Plaintiff's claim. But the Subordinate Judge has not discussed the facts of M. and S.M. Railway Co., Ltd. v. Haridoss Banmalidoss : (1918)35MLJ35 or apparently perceived the very vital difference between the positions of the claimant there and the plaintiff here. In M. and S.M. Railway Co., Ltd. v. Haridoss Banmalidoss : (1918)35MLJ35 goods were consigned by one Gurunathan to his own order and were intended to be delivered to one Swaminatha Reddi. The receipts were pledged to the Bank of Madras to whom Swaminatha Reddi was to make payment for the value of the goods. Swaminatha Reddi obtained the goods before he did this but two or three days later he duly paid the Bank and obtained possession of the receipts. Instead however of handing them in at the Railway Station he pledged them with the claimant who thereupon sued the Railway Company. It was held first that as soon as Swaminatha Reddi paid the Bank the contract with the Railway Company was completed and the Bank as holders of the receipt could have no claim. The delivery of the goods to Swaminatha Reddi was thus rightful and the company could not be liable for the result of subsequent fraud on Swaminatha Reddi's part. It was then argued for the claimant that although in fact the goods were delivered to the person rightfully entitled to them the company was under a duty never in any circumstances to deliver the goods except against the actual receipts relating to them, and it was to refute that argument that the observations in question were made.
3. Now what are the facts in the present case? The cocoanuts were delivered to the person who was not entitled to receive them. The person who was entitled was the plaintiff. The primary duty of the Railway Company it cannot be denied-was to deliver the goods to the rightful owner. They have not done so. Prima facie their liability is clear and the question is whether any facts have been proved which would absolve them from that liability. The mere fact that Defendant 3 did not produce the railway receipt may not itself be conclusive against the company but it still remains to examine the other facts.
4. No evidence was offered on behalf of the company and the only facts we have are that the company which did not know of plaintiff's claim, delivered the goods to, Defendant 3 upon the authority of a telegram sent by Defendant 1 who was the actual consignee. In these circumstances the action of the company may well have been bona fide but seems to me to be clearly negligent. It is well known that railway receipts do pass from hand to hand and that in general railway receipts are regarded as practically equivalent to documents of title. To deliver goods without the production of such a receipt on the mere authority of an unconfirmed telegram and without apparently the slightest explanation for the non-production seems to me a clear breach of duty. It follows that the company in this case have not proved any facts sufficient to absolve them from liability. This petition must be allowed and Plaintiff's suit decreed as against the Railway Company for Rs. 590-7-0, i.e., Rs. 817 less Rs. 226-9-0 with costs throughout and with interest at 6 per. cent, from the date of the plaint.