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G.P. Venkataraman and Co., by Its Partner, Venkataswami Vs. Eastern Railways by General Manager and anr. - Court Judgment

LegalCrystal Citation
SubjectLimitation;Civil
CourtChennai High Court
Decided On
Reported in(1958)1MLJ175
AppellantG.P. Venkataraman and Co., by Its Partner, Venkataswami
RespondentEastern Railways by General Manager and anr.
Cases ReferredVenkatasubba Rao v. The Asiatic Steam Navigation Company
Excerpt:
.....any failure to comply with the requisition could arise. section 55 deals with cases of sale by the railway administration where freight, demurrage, wharfage charges, and the like, which the railway administration is entitled to demand, are not paid. section 56(2) makes the method of sale prescribed by section 55(2) applicable where the right to sell has accrued to the railway administration under section 56(1) and 56(2). 9. the right to sell may accrue either under section 55(1) by reason of the failure to pay, the demurrage, wharfage or other charges due to the railway administration, or under section 56(1) and 56(2) if after being given notice of the arrival of the goods, the owner or other person entitled to the goods does not claim delivery, and the goods become unclaimed goods. not..........railway which owns the railway system at shalimar.3. the plaintiffs claim is based on wrongful sale or conversion, to give the act its technical name. the plaintiff alleges that the defendants had no authority under the indian railways act to sell the potatoes on 25th august, 1948, that, by wrongfully selling the potatoes on the date, they were guilty of conversion and that the plaintiff suffered loss to the extent of the difference between the market value of the goods at calcutta on that date and the freight and other charges payable to the defendants.4. the defence to the suit was that the sale was legal and proper. the defendants pleaded that they were not bound in law or under the tariff rules or under the conditions of booking, to intimate the parties of the arrival of the.....
Judgment:

Subrahmanyam, J.

1. The plaintiff appeals from the judgment and decree of the learned Second Additional Subordinate Judge of Coimbatore in O.S. No. 370 of 1950 on his file. The plaintiff is a firm doing business in potatoes and other commodities in Coimbatore. The firm booked on 3rd August, 1948, at Coimbatore, 370 bags of potatoes. The consignor is described as G.P. Venkataraman & Co. The consignment was booked to ' Self'. The person who signed the forwarding note is the partner of the firm, Venkataswami, who later instituted the suit which has given rise to this appeal. The consignment reached Shalimar (Calcutta) on the 19th August, 1948. The wagon was placed in position for delivery on 20th August, 1948. The articles were unloaded on 21st August, 1948. As no person claimed delivery till 25th August, 1948, the potatoes were sold by public auction by the Station authorities at Shalimar on 25th August, 1948, and a sum of Rs. 2,910 was realised by the sale. The articles were delivered over to the purchaser at the auction N.C. Sinha & Bros. On 27th August, 1948, Venkataswami, the partner of the plaintiff firm, who had booked the consignment happened to be at Calcutta and he went to the Shalimar Goods Yard intending to take delivery. To his great surprise, he learnt that the goods had been sold to N.C. Sinha & Bros. for Rs. 2,910-4-0 on account of the omission of the consignee to take delivery in time.

2. The suit out of which this appeal arises was instituted by the plaintiff to recover the value of the goods, deducting the freight and the charges payable to the railways. The defendants are the railways which received the goods, through whose system the goods passed to Shalimar and the Eastern Railway which owns the railway system at Shalimar.

3. The plaintiffs claim is based on wrongful sale or conversion, to give the act its technical name. The plaintiff alleges that the defendants had no authority under the Indian Railways Act to sell the potatoes on 25th August, 1948, that, by wrongfully selling the potatoes on the date, they were guilty of conversion and that the plaintiff suffered loss to the extent of the difference between the market value of the goods at Calcutta on that date and the freight and other charges payable to the defendants.

4. The defence to the suit was that the sale was legal and proper. The defendants pleaded that they were not bound in law or under the Tariff Rules or under the conditions of booking, to intimate the parties of the arrival of the goods at the destination ; that since the goods were perishing, they had to be disposed of in public auction held in accordance with Section 56 of the Indian Railways Act after due and proper notifications prior to the auction, that accordingly the goods were sold and that the plaintiff had no cause of action. The defendants also pleaded that they acted in the best interests of the parties after waiting for a reasonable time before disposal of the goods in public auction. A further plea was taken that the suit was not in time.

5. The learned Subordinate Judge found that the sale was legal and proper and that the suit was barred by time. The goods were placed in position for delivery on 20th August, 1948 and could have been delivered that day. The sale was on 25th August, 1948 and the suit was instituted on the 14th September, 1950. The Subordinate Judge held that Article 31 of the Limitation Act, which allowed a year from the date when the goods ought to have been delivered, applied.

6. The first point for determination is whether the sale of the goods affected by the Eastern Railway on 25th August, 1948, was lawful and proper. During the trial, an attempt was made to prove that the Railways did all they could to give due intimation to the plaintiff that the goods were ready for delivery at the Shalimar station. D. W. 2 was the message clerk in 1948 at Shalimar. He produced copies of messages sent from the Station Superintendent, Shalimar, to the Station-master, Coimbatore, on the 21st August and the 23rd August, 1948, in relation to the potatoes which were ready for delivery at the Shalimar Goods Yard. The messages are Exhibits B-11 and B-12 respectively. Exhibit B-11 gives intimation to the Station-master, Coimbatore, that the bags had been received but that in regard to 20 bags the contents were found rotten and scattered on the wagon-floor and that bad smell was emanating. The message Exhibit B-12 states that the contents were going bad, that a reply regarding the consignee's address was necessary, that the goods were lying undelivered and that because the contents were getting rotten, instructions regarding disposal were required. We may presume that the messages were duly received at Coimbatore on the 21st and 23rd August respectively. No evidence is adduced of any attempt on the part of the Railway authorities at Coimbatore to pass on the intimation to the plaintiff firm or Venkataswami, the person who consigned the goods and obtain the plaintiff's or Venkataswami's instructions regarding the disposal of the goods. There can be little doubt that if either the plaintiff or Venkataswami had received the intimation that the goods were lying at Shalimar, that part of the goods had already become unfit for sale or consumption and that the rest of the goods might get rotten if not taken delivery of in a few days, the plaintiff firm would have given instructions to their agent at Shalimar, (or to the Bank to whom they had endorsed the railway receipt), to make immediate arrangements for taking delivery. The plaintiff remaining in the dark as to what was happening to the goods at Shalimar, the Railway authorities proceeded to sell the goods. There is no evidence that the Station Superintendent at Shalimar received any reply from Coimbatore to the messages which had been sent on the 21st and 23rd August. The sale, thus, was a sale effected without intimation of any kind to the consignor or the consignee, that, in default of delivery being taken within a reasonable time, the goods would be sold by public auction. The point for determination is whether the sale held without such intimation or notice to the owner or the consignee is a sale which is authorised by the Indian Railways Act.

7. Section 56 of the Indian Railways Act and condition No. 10 of the conditions printed on the forwarding note--the condition is extracted at page 13 of the Subordinate Judge's judgment--were relied on as authorising the railway authorities to effect a sale by public auction without notice or intimation of any kind to the owner or other person appearing to the Railway Administration to be entitled to the delivery of the goods. It is on the basis of condition No. 10 that paragraph 4 of the written statement of the third defendant pleaded that the defendants were not bound either in law or under the Tariff Rules to intimate to the parties the arrival of the goods at the destination. The defendants appear to be under a serious misapprehension as to the limits of what they might claim or do without giving notice of the arrival of the goods. In order that demurrage or wharfage charges might accrue due or be demanded, it is not necessary that intimation of the arrival of the goods should be sent to the owner or other person entitled to delivery of the goods. It is to that non-liability of the Railway Administration to give prior notice so as to be entitled to collect demurrage or wharfage charges that condition No. 10 refers or can properly refer. So far as the intimation required by Section 56(1) of the Indian Railways Act is concerned, that is an intimation which the Railway Administration is under an obligation' to give. The Railway Administration cannot contract itself out of that obligation by agreement with the consignor. The intimation required under Section 56(1) relates to a right which is totally different from the right of the railway to collect wharfage and demurrage charges. The intimation required under Section 56(1) relates to accrual to the Railway Administration of the right to sell. In order that they might be entitled to sell the property of which they are in possession on behalf of the owner or consignee they have to cause a notice to be served on him requiring him to remove the goods. That obligation arises where the owner or other person entitled to remove the goods is known. The learned advocate for the respondents-railways said at one stage of' his arguments that the owner was not known to the Railway Administration in this particular case. He quite fairly abandoned that contention after looking into Exhibit B-1 and B-2 and after further consideration of the evidence of D.W. 6. D.W. 6, the booking clerk, who without intending to do so, adopted the language of Section 56(1) said ' I know the plaintiff's firm '. Where the owner is known,, Section 56(1) says that the Railway Administration shall cause a notice to be served on him. Exhibits B-1 and B-2, the forwarding note and the risk note,, give the address, of Venkataswami as clearly as was necessary to enable the railway authorities in Coimbatore to serve notice on him as soon as they received the messages Exhibits. B-11 and B-12. Where the owner is known, Section 56(2) authorises sale only in cases where notice could not be served on the owner or where he does not comply with the requisition in the notice. Since no attempt was made in this case, to serve the owner, no question of any failure to comply with the requisition could arise. The Railway Administration did not, on the facts of this case, have a right to sell, the goods on 25th August, 1948.

8. To make this part of the judgment complete, it may be useful to refer to Section 55(2) on which the learned Subordinate Judge relied in support of his finding that the sale was lawful, and which the learned advocate for the respondents too relied on during his arguments. Section 55 deals with cases of sale by the Railway Administration where freight, demurrage, wharfage charges, and the like, which the Railway Administration is entitled to demand, are not paid. Section 55(1) authorises the Railway Administration in such cases, that, is, where the charges legally due are demanded and are not paid, to detain the goods. Where the charges are not paid and the goods are detained, Section 55(2) confers on the Railway Administration the right to sell the goods. Where the right to sell the goods has thus accrued, Section 55(2) prescribes the procedure to be adopted in conducting the sale. If the goods are perishable they may be sold at once. If they are not perishable they may be sold after notice of the auction is. given in the manner prescribed in that Sub-section. Section 56(2) makes the method of sale prescribed by Section 55(2) applicable where the right to sell has accrued to the Railway Administration under Section 56(1) and 56(2).

9. The right to sell may accrue either under Section 55(1) by reason of the failure to pay, the demurrage, wharfage or other charges due to the Railway Administration, or under Section 56(1) and 56(2) if after being given notice of the arrival of the goods, the owner or other person entitled to the goods does not claim delivery, and the goods become unclaimed goods. Where the right to sell has thus accrued, the sale has to be held in accordance with the procedure prescribed by Section 55(2), that is to say, the sale may be held at once if the goods are perishable, or it may be held after due notice of auction, if they are not perishable. There is no contention in this case that due notice of auction under Section 55(2) has not been given. We may presume that in conducting the sale the proper, procedure was adopted. But the right to sell had not accrued and for that reason, the sale was void as against the plaintiff. In thus selling the plaintiff's goods without legal authority, the defendants were in law guilty of conversion. For the purposes of this case, it is not necessary to define conversion beyond quoting the following sentence from Salmond on Torts, (11th Edition, page 330).

Every person is guilty of conversion who, without lawful justification, deprives a person of his. goods by delivering them to someone else so as to change the possession.

10. Since we have found that the defendants deprived the plaintiff of the goods without lawful justification and delivered the goods over to the purchaser at the auction, the defendants were guilty, in the technical sense of the term, of conversion. We find that the sale was wrongful and that, subject to limitation,, the plaintiff was. entitled to compensation.

11. The next point for determination is whether the suit is in time. On that point the learned advocate for the appellant states that the article of the Limitation Act applicable is Article 48 and not Article 31 which the learned Subordinate Judge applied. Article 48 is in these terms:

For specific movable property lost, or acquired by theft, or dishonest misappropriation or conversion, or for compensation for wrongfully taking or detaining the same.

Three years from the date when the person having the right to the possession of the property first learns in whose possession it is.

12. Looking at that article independently of the authorities relied on, this suit is. not clearly within the language of that article. The plaintiff does not sue for specific movable property lost or acquired by theft, or dishonest misappropriation or conversion. The suit was instituted in 1950. Even if the potatoes had not been sold, they would be of no use in 1950 to the plaintiff or anybody else and it is altogether out of the question that anybody in 1950 would sue for the specific movable property which was consigned to the railways in 1948 for carriage to Shalimar. There has of course been 'conversion'. A person might sue for specific movable property where it has been detained and such detention amounts to conversion,, or where the property has been transferred to another, and such act of transfer amounts to conversion. But even where the act alleged is conversion, unless the relief prayed for is possession of the specific movable property, the earlier part of that article will not apply. The latter part of the article would apply where compensation is prayed for wrongfully taking or detaining the same. The goods in this case were taken by the Railway Administration lawfully, on being consigned to them for carriage. On the plaintiff's own allegation, the goods have been disposed of and are not detained. We may note in passing that, if the suit were laid immediately after the sale to Sinha and Bros., and while they were yet capable of being delivered to the plaintiff and the suit were for possession of the goods, then, the suit would be a suit of the kind provided for by Section 11(d) of the Specific Relief Act. Under Section 11(d) of the Specific Relief Act, a person who is in possession of a particular article of movable property of which he is not the owner, may be compelled specifically to deliver it to the person entitled to its immediate possession when the possession of the thing claimed has been wrongfully transferred from the claimant where conversion of that sort is alleged and on the basis of such cause of action, specific movable property is sought to be recovered, Article 48 of the Limitation Act would directly come into play. Article 48, in our opinion, has no application to a case where possession has been transferred by conversion and the relief claimed is not possession of the specific movable property so transferred but compensation for such conversion. It is true that under Order 20, Rule 10, Civil Procedure Code, even where possession of specific movable property is; claimed and the Court grants a decree for possession of such property, the Court has to state in its decree the amount of the money to be paid in the event of the failure to deliver the article. Nonetheless the suit remains a suit under Section 11 of the Specific Relief Act for specific movable property. We have dealt with this particular point at some length because we do not think that the authority cited to us on the question of the applicability of Article 48 to the facts which have been proved in this case, viz., Sunderji v. Secretary of State : AIR1934Pat507 , should, speaking with great respect, be followed by us. The facts in that case were : The plaintiff through a firm of colliery proprietors known as Messrs. Villiers, Ltd., ordered certain consignments of coal to be sent to his consumers in different parts of the country. The customers were a firm known as Sikri Brothers of Adampur. Messrs. Villiers, Ltd., made arrangements with the Railway company for the moving of a quantity of coal by the Railway Company to Sikri Brothers, but, owing to some mistake on the part of the plaintiffin directing Messrs. Villiers, Ltd., as to where the coal was to be sent, it was sent to a wrong destination. After some correspondence between the Railways, the plaintiff and Messrs. Villiers, Ltd., it was ultimately arranged that the goods-might be delivered to a trader at the station to which they had been wrongly sent. But that particular trader would not take delivery unless the railway company remitted the charges for wharfage. The railway company declined to remit the charges for wharfage. The goods were not taken delivery of. The company, acting in exercise of the power conferred on it by Section 55(2) ,of the Indian Railways Act sold the goods by public auction. The plaintiff instituted the suit which gave rise to that Civil Revision Petition in that High Court, claiming compensation. The High Court held that Article 48 applied to the facts of that case. We have given reasons for the view that, even if the facts in the case before us were not distinguishable, from the facts in that case, we would not, with respect, be inclined to follow that ruling. But for our present purposes, it is sufficient to note that, on the facts the case before us is distinguishable from the facts of that case. The question before us is whether the article applicable is, Article 31 or Article 48. But on the facts in Sunderji's case AI.R. 1934 Pat. 507, nobody could argue that Article 31 might apply. We shall presently state our reasons for that view.

13. In Venkatasubba Rao v. The Asiatic Steam Naigation Co., Calcutta (1915) 29 M.L.J. 342 : I.L.R. 39 Mad. 1 , one of the questions considered was whether, if a case fell within the language of Article 31 and Article 49, it was Article 31 or Article 49 that should be applied. In that case, the Full Bench held that even if Article 49 applied its operation would be excluded by the provisions of the special Article 31 on the principle generalia speciallbus non derogant. Therefore, on the question whether, if a case fell within the language of Article 31 and Article 48, the article to be applied would be Article 31 or Article .48, we have the authority of the Full Bench decision in Venkatasubba Rao v. The Asiatic Steam Navigation Co, Calcutta (1915) 29 M.L.J. 342 : I.L.R. 39 Mad. 1 for the view that Article 31 should be applied and not Article 48. No such question arose in Sunderji v. Secretary of State : AIR1934Pat507 , because in that case Article 31 could not be applied at all. Article 31 is in these terms:

Against a carrier for compensation for non-delivery of, or the delay in delivering goods. One year from the date when goods ought to be delivered.

14. Sunderji v. Secretary of State AI.R. 1934 Pat. 507, was not a case of non-delivery by the Railway Administration. The Railway Administration were entitled to wharfage charges and they were not bound to deliver unless those charges were paid. The person entitled to take delivery declined to pay and take delivery. Therefore it was not a case of non-delivery and Article 31 could not be applied. Therefore, in a case which falls under the language of Article 31 and Article 48, Sunderji v. Secretary of State : AIR1934Pat507 , cannot be regarded as authority for the proposition that Article 48 should be applied and not Article 31. On the other hand, we have the authority of the Full Bench decision in Venkatasubba Rao v. The Asiatic Steam Navigation Company, Calcutta (1915) 29 M.L.J. 342 : I.L.R. 39 Mad. 1 , for the view that, in such a case the article applicable is Article 31. The Full Bench case dealt on the facts, with a case where one of the articles included in the consignment was not traceable. It was not a case of conversion or of the commission of a tort on the part of the Railway Administration. The Full Bench held that, whatever the cause of non-delivery by the carrier the suit for compensation for non-delivery should be held to fall under Article 31. Their Lordships observed:

It seems to us that by this amendment (of 1899) the legislature clearly indicated its intention that Article 31 should apply to a claim against a carrier for compensation for non-delivery of goods irrespective of the question, whether the suit was laid in contract or in tort.

15. The suit in this case is laid in tort. But the result is non-delivery and in the ultimate analysis, if compensation is allowed, it is allowed not for conversion but for non-delivery. The suit is not, in our opinion, a suit of the nature for which Article 48 provides. The article of the Limitation Act, applicable to the suit is Article 31. The Subordinate Judge was right in finding that the suit was barred by time.

16. One other article which may be considered in this connection is Article 36 which provides:

For compensation for any malfeasance, misfeasance or non- Two years from the date when feasance independent of contract and not herein specifically the malfeasance, misfeasance, provided for or non-feasance takes place.

17. The suit in this case may be regarded as a suit for compensation for misfeasance. Even if that article were applicable, the suit would be beyond time by nearly a month. The question whether, in a case which falls within the language of Articles 31 and 36, the Article to be applied is Article 31 or Article 36 may perhaps deserve consideration in a case in which that question becomes material. But that question is of no practical importance in this case because whether Article 31 is applied or Article 36, the suit is beyond time.

18. By Exhibit A-8 dated 21st December, 1949, the Railways offered to pay the plaintiff Rs. 1275-13-0 after deducting wharfage and other charges payable from the sale proceeds realised. The offer was made ' without prejudice'. The plaintiff by Exhibit A-9 dated 16th January, 1950 accepted the offer and said that without prejudice to its right to file a suit for the balance, it would accept Rs. 12 75-13-0. But the defendants changed their mind in February, 1950 and wrote to the plaintiff that payment would be arranged only ' on receipt of your clear acceptance of the offered amount in full and final settlement of the claim '. The plaintiff declined to accept the amount in full satisfaction (Exhibit A-n). By oversight, the learned Subordinate Judge neglected to pass a decree for that sum. We consider that the plaintiff is entitled to interest at 6 per cent, on Rs. 1275-13-0 with effect from 16th January, 1950, the date on which the plaintiff accepted the defendants' offer to pay without prejudice. There will accordingly be a decree against the defendants for payment of Rs. 1275-13-0 with interest at 6 per cent. per annum from 16th January, 1950.

19. The parties will bear their own costs in both Courts.


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