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The Union of India (Uoi) Vs. Alliance Assurance Co. Ltd. and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata High Court
Decided On
Case NumberA.F.O.D. No. 34 of 1963
Judge
Reported inAIR1967Cal47
ActsRailways Act, 1890 - Sections 77 and 140
AppellantThe Union of India (Uoi)
RespondentAlliance Assurance Co. Ltd. and anr.
DispositionAppeal dismissed
Cases ReferredBansi v. Governor General of India
Excerpt:
- .....for the loss sustained and accordingly give you notice of claim under sections 77 and 140 of the indian railways act, 1890, for the sum of rs. 11.928-10-0 as assignees of the consignees. a letter of subrogation transferring the rights and interest in the undelivered goods to us has been executed by the consignees and we shall be glad if you will please settle our claim expeditionsly.' the plaintiff disclosed at the hearing of the suit, the counterfoil of a cheque for rs. 11,928-10-0 bearing dated may 30, 1953. the evidence of the plaintiff's witness khitish chandra chakravarty was to the effect that the cheque was actually handed over to a representative of the goodyear tyre and rubber company of india limited on may 30, 1953. receipt for the payment was given on june 2 following and a.....
Judgment:

G.K. Mitter, J.

1. This is au appeal by the Union of India representing the Eastern Railway Administration from a decree for Rs. 11, 928.37 in favour of the respondent Alliance Assurance Company Limited in sespect of a claim for loss and/or non-delivery of certain goods, to wit certain tyres and tubes specified in the plaint and consigned from Bansabali on the Eastern Railway to Nagpur.

2. The consignment was effected by the Goodyear Tyre and Rubber Company of India Limited on April 7, 1953. It consisted of 467 packages of tyres and other rubber accessories. The goods were covered by an insurance policy of the Alliance Assurance Company Limited. sonic of these packages were never delivered at the destination station. The Goodyear Tyre and Rubber Company Limited claimed from the plaintiff as an insurer and the latter paid to the Goodyear Tyre and Rubber Company Limited a sum of Rs. 11,928-10-0 being the value ot the non-delivered goods. There is no dispute as to the loss or the shortage. The Union of India which was the first defendant in the suit raised various defences and a number of issues were struck but the only one to which the appeal is confined is issue No. 4, namely, whether there was any valid or sufficient notice under Section 77 of the Railways Act served on the proper authority. The adjudication of this issue depends on the proper construction to be put on certain correspondence coupled with the evidence adduced, The Insurance Company addressed a letter to the General Manager, Eastern Railway which was posted at Calcutta on June 2, 1953 and delivered to the addressee on the next day. The letter itself was dated May 29. 1953 and was headed.

'Claim for Rs. 11,928-10-0 for shortage of rubber goods booked from Bansabati to Nagpur under Railway Receipt No. C 543404 (Invoice No. 2) dated 7-4-53 shortage certified under Nagpur, Station Master's Certificate.'

The text of the letter was as follows :--

'We would advise you ot having settled a claim for Rs. 11,928-10-0 with our Insured, Messrs Goodyear Tyre and Rubber Co. of India Ltd. Calcutta in respect of the above shortage. As the loss occurred whilst the goods were in your custody, we hold you responsible for the loss sustained and accordingly give you notice of claim under Sections 77 and 140 of the Indian Railways Act, 1890, for the sum of Rs. 11.928-10-0 as assignees of the consignees.

A letter of Subrogation transferring the rights and interest in the undelivered goods to us has been executed by the consignees and we shall be glad if you will please settle our claim expeditionsly.'

The plaintiff disclosed at the hearing of the suit, the counterfoil of a cheque for Rs. 11,928-10-0 bearing dated May 30, 1953. The evidence of the plaintiff's witness Khitish Chandra Chakravarty was to the effect that the cheque was actually handed over to a representative of the Goodyear Tyre and Rubber Company of India Limited on May 30, 1953. Receipt for the payment was given on June 2 following and a document of assignment oi the claim of the Goodyear Tyre and Rubber Company Limited was executed on June 11, 1953. The plaintiff addressed a letter to the Chief Commercial Superintendent of the Eastern Railway on June 6, 1953. This letter too bore the same heading as the letter to the General Manager. The letter was to the effect that the writers had settled the claim for Rs. 11,928-10-0 with Goodyear Tyre and Rubber Company Limited in respect of the loss mentioned and that as the same had occurred while the goods were in the custody of the Railway Administration the plaintiff would hold the Administration resposible for the loss. By the letter the plaintiff gave notice of claim under Sections 77 and 140 of the Indian Railways Act. The enclosure to the letter mentioned a copy of a letter of subrogation as also a copy of a letter addressed to the General Manager. The letter of subrogation the original of which was produced before us showed that it first bore the date June 2, 1953 but was actually executed on the 11th June. The opening paragraph of the letter reads :

'In consideration of your paying to us a sum of Rs. 11,928/10/- in respect of the undermentioned goods insured with you under policy No. 4859 (open), we hereby assign and transfer to you all our rights, title and interest in respect of the said goods and all rights or claims against any person or persons in respect thereof.'

On June 29, 1.933 the Chief Commercial Manager wrote back to the plaintiff acknowledging receipt of the letter and stating that the matter was receiving his attention. On July 30, 1953 the plaintiff wrote once more to the Chief Commercial Superintendent in respect of the shortage and the claim, This was replied to on August 18, 1953 to the effect that the matter was under investigation by the Watch and Ward and the Government Railway Police and that a definite decision regarding disposal of the claim would be given on receipt of the reply of the said authorities. Ultimately not getting any satisfaction the plaintiff filed this suit on June 4, 1954 after serving a notice under Section 80 of the Code of Civil Procedure against the Union of India owning and conducting the administration of the Eastern Railway and the Goodyear Tyre and Rubber Co of India Ltd. as a pro forma defendant. The claim made was for failure to deliver tyres and tyre parts as already mentioned. The first defendant put in a written statement raising several defences. We need not stop to consider these excepting the point that no valid notice of claim under Section 77 of the Railways Act was given as no other defence was pressed before us.

3. Two witnesses were examined on behalf of the plaintiff. The first witness J.N. Moorty was incharge of the Export and Import and Claims of the Goodyear Tyre and Rubber Co. of India Ltd. He proved the insurance police effected by the second defendant and said that the said defendant had received a cheque in settlement of its claim for Rs. 11,928-10-0. The second witness K.C. Chakraborty who was in charge of the Marine Department of the plaintiff said that the cheque was handed over to a representative of the Goodyear Tyre and Rubber Co. of India Limited on May 30, 1953 and a receipt therefor was obtained on June 2. 1953. The document of subrogotion and assignment was executed on June 11, 1953.

4. It is now beyond dispute that Section 77 prescribes a condition precedent to the maintainability of a claim for compensation for Goods lost or destroyed while in the custody of the Railway Administration and that the expression 'loss, destruction or (sic) occurring therein means loss, or destruction or deterioration of the goods and consequent loss of the owner thereof. See Governor General in Council v. Musaddilal, : [1961]3SCR647 . Basing on this Mr Mallick argued that the combined effect of Sections 77 and 140 of the Railways Act was that the owner of the goods had to lodge a claim with the General Manager of a Railway Administation conducted by the Government. According to him the notice io the General Manager dated May 29, 1953 was sent at a time when the plaintiff had acquired no interest in the goods as the plaintiffs claim was only perfected on the execution of the document of assignment on June 11, 1953. So tar as the notice dated June 6, 1953 or July 31, 1953 was concerned Mr. Mallick's argument was that being addressed to the Chief Commercial Superintendent they could not be construed as proper notice to the Manager of the Railway Administration.

5. iN our opinion, the first argument of Mr. Mallick cannot be accepted 'Section 77 of the Railways Act' according to the judgment referred to:

'was enacted with a view to enable the Railway Administration to make enquiries and, if possible, to recover the goods and to deliver them to the consignee and to prevent stale claims. It imposes a restriction on the enforcement of liability declared by Section 72. The liability declared by Section 72 is for loss, destruction or deterioration Failure in deliver is the consequence of loss or destruction of goods; it does not furnish a cause of action on which a suit may lie against the Railway Administration, distinct from a cause of action for loss or destruction.'

If in a notice to the General Manager of a State owned Railway full particulars of the consignment giving the number of the Railway receipt, the forwarding and destination stations as also the name of the consignee are given and the notice further shows in what capacity the writer was making a claim in respect of the shortage there is substantial compliance with Section 77 of the Railways Act. In this case full details were given and it was further stated that the letter of subrogation transferring the right and interest in the undelivered goods had been executed by the consignees in favour of the writer. It must be noted that this last portion of the letter of May 29, 1953 was not accurately worded inasmuch as the letter of subrogation was executed some days thereafter but it is in evidence that although the letter bore the date May 29, 1953 it was sent out on June 2, 1953 when the Goodyear Tyre & Rubber Co. of India Limited's claim had already been settled. There can be no doubt that the plaintiff's claim against the Railway Administration arose as soon as the payment was made although until the execution of the deed of subrogation and assignment they could not maintain an action in their own name. This is clear from the decision of the Judicial Committee in King v. Victoria Insurance Co. Ltd., 1896 A. C. 250. There the Insurance Company had brought a suit against the appellant as assignee under a deed of the cause and right of action of the Bank of Australasia in respect of the loss and damage caused to certain wool, the property of the bank, by a collision between certain punts the property of and under the control of the Queensland Government, and the lighter on which the wool was stowed. In that case the Supreme Court of Queensland had taken the view that the plaintiffs were not, by the mere fact of paying the claim, subrogated to all the rights of the Bank. The Judicial Committee observed.

'no doubt that if, after receiving payment from the plaintiffs, the Bank had got damages from the Government, a Court of Equity would have treated them as trustees for the plaintiffs to the extent of the payment, and that if it had been necessary to use the name of the Bank a Court of Equity would have compelled the Bank to permit it on the usual terms.' It is true that subrogation by act of law would not give the insurer a right to sue in a court of law in his own name. But that difficulty is got over by force of the express assignment of the Bank's claim.'

6. In Pariyamianna Marakkayar & Sons v. Banians and Co. : AIR1926Mad544 it was observed that:

'so far as the contract of indemnity is concerned, by which a person agrees to indemnify another against loss caused by the conduct of a third person and which does not require the consent of, or privity with, the third person, the person who indemnifies can, on payment or discharge of the obligation, sue, but the suit in the absence of any assignment can only be in the name of the promisee.'

The learned Judge of the Madras High Court also referred to the dictum of Lord Cairns in Simpson v. Thomson, (1877) 3 AC 279 that:

'where one person has got to indemnify another, he will, on making good the indemnity, be entitled to succeed to all the ways and means by which the person indemnified might have protected himself against or reimbursed himself for the loss.'

7. These decisions are referred to in a division bench judgment of this Court in Union of India v. Alliance Assurance Co. Ltd., : AIR1964Cal31 where Bachawat, J. observed that:

'the plaintiff, us insurer, having paid the claim for shortage arising under the policy has by way of subrogation an equitable right to all the claims of the assured against the carrier in respect of the shortage. The contract of insurance against loss is a contract of indemnity. On payment of the amount of the loss the insurer as indemnifier has an equitable right of subrogation to the claims of the assured against the carrier.'

8. These decisions make it clear that even before the execution of the deed of subrogation on June 11, 1953 the plaintiff had a claim in equity against the Union of India. The notice given to the General Manager, though inaccurate in mentioning the execution of the deed of subrogation gave the said Manager fill details about the goods, the loss thereof and the basis of the plaintiff's claim. According to the judgment of the Supreme Court in Jethmull Bhojraj v. Darjeeling Himalayan Rly. Co. Ltd. : [1963]2SCR832 .

'a notice under Section 77 should be liberally construed. In our opinion, that would be the proper way of construing a notice under that section. In enacting the section the intention of the legislature must have been to afford only a protection to the railway administration against fraud and not to provide a means for depriving the consignors of their legitimate claims for compensation tor the loss of or damage caused to their consignments during the course of transit on the railways.'

9. We are not, therefore, prepared to accept the first contention of Mr. Mallick that the notice to the General Manager was not a sufficient notice under Section 77 inasmuch as it had been given before the execution of the deed of subrogation.

10. On the second point, Mr. Mallick drew our attention to a number of decisions of this Court which arc not all to the same effect In some of them it has been held that any notice to persons other than the General Manager would not be a valid notice. Thus in Sureridranath v. Governor General in Council : AIR1952Cal341 , it was held that a notice served on the Chief Transportation Manager was not sufficient compliance with the provisions ot Section 77 and Section 140. To the same effect is the judgment in Union of India v. Indumati Sana, : AIR1951Cal512 ; In Union of India v. Durga Dutt, : AIR1957Cal202 , it was held that a notice served on the Chief Commercial Manager of a railway administration of the Government was not sufficient. There is a similar decision in Niranjanlal Agarwalla v. Union of India, : AIR1962Cal42 . The same reasoning was adopted in Mohanlal Shrilal Mohatta v. Union of India, (1965) 69 Cal WN 614, as also in Jibanram Agarwalla v. Union of India, (1965) 69 Cal WN 692.

11. In Union of India v. Gujrath Tobacco Co : AIR1955Cal448 reliance was placed on a number of decisions of this Court and chielly on Sristhidhar Mondal v. Governor General in Council. : AIR1945Cal412 , for coming to the conclusion that a notice served on the Chief Commercial Superintendent was sufficient. It should also be noted that Mr. Justice Henderson's view was approved in a full Bench's decision of this Court in Bansi v. Governor General of India in Council, : AIR1952Cal35 .

12. Speaking for myself I see no reason why the just claim of a consignor or a consignee of goods should be defeated because the notice under Section 77 was not sent to the General Manager, but to another person standing very high in the hierarchy of officials in the railway administration who according to the practice of the administration is the proper authority to deal with the claim tor shortage, non-delivery etc. and actually deals with it. In my opinion, this reasoning also finds support from the dictum of the Supreme Court in : [1963]2SCR832 .

13. In the case we find that the Chief Commercial Superintendent did not throw out the notice or fail to respond to it. In more than one letter he said that the matter was being investigated and a suitable reply would be given after the completion thereof In such circumstances, it would not be just to hold that because the letter containing the notice under Section 77 was not addressed to the General Manager, it was not a sufficient notice. I do not however propose to hold that a notice of claim sent to any railway officer would be sufficient for the purpose of Section 77, although he might purport to deal with it. In my opinion, the Chief Commercial Superintendent of the Eastern Railway at Calcutta is not a person ot such inferior standing that notice to him should be deemed to be incompetent.

14. This is, however, strictly not necessary in view of our finding that the notice to the General Manager was a sufficient notice.

15. For the above reasons, the appeal must be dismissed with costs.

A.K. Mukherjea, J.

16. I agree.


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