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Secy. of State Vs. Ramdhan Das Dwarka Das Firm - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKolkata
Decided On
Reported inAIR1934Cal151,150Ind.Cas.189
AppellantSecy. of State
RespondentRamdhan Das Dwarka Das Firm
Cases Referred and Cheshire v. Bailey
Excerpt:
- .....and of the principles of the common law of england with respect to the carriage of animals and goods by railway in this country. the primary question in all cases of this sort, having regard to section 72, railways act, read with sections 151 and 152, contract act, obviously is: has the railway company taken as much care of the goods as a man of ordinary prudence would under similar circumstances take of his own goods of the same description,-in bulk, quality and value?4. as regards burden of proof, the three classes of suits have to be kept apart from each other: one, dependent entirely upon sections 151 and 152, contract act; another in which section 9, carriers act, has to be borne in mind; and the third, within which category the present suits fall, in which not only sections 151.....
Judgment:

1. These two appeals and the application in revision have arisen out of three suits which were instituted for recovery of damages for non-delivery of goods, which ware entrusted for carriage to the Eastern Bengal Railway. Appeal No. 259 of 1929 has arisen out of Suit No. 3 of 1929, Appeal No. 49 of 1930 out of Suit No. 1 of 1929, and the revision petition out of Suit No. 7 of 1929. Suit No. 3 was instituted in respect of 285 half-bales of jute consigned on 16th March 1927 from Station Bogra to be delivered at the Coasipore Road Station. Suits Nos. 1 and 7 were for damages for loss of 82 half-bales and 20 half-bales of jute, respectively, consigned on 17th March 1927 from Station Sitalda for the same destination. In Suit No. 3 it was alleged that on 21st March 1927 the agent of the plaintiffs in that suit paid down the freight and obtained tickets and gate passes but no delivery could be had. In Suits Nos. 1 and 7 it was alleged that on 20th and 21st March 1927 attempts were made to obtain delivery but without success. The claims laid in the suits were: Rs. 5,343.12-0 in Suit No. 3, Rs. 1,383-12-0 in Suit No. 1 and Rs. 360 in Suit No. 7.

2. The defence, so far as it is necessary to be stated at this stage, was to the effect that at about 13-40 hours (railway time) on 21st March 1927, when the goods of these consignments, along with a large number of other bales of jute, were lying stored in Shed No. 8 of the Cossipore Road Station, a fire accidentally broke out ; that the fire was not due to any negligence on the part of the railway administration or its servants ; that every effort was immediately made to extinguish the fire, but notwithstanding the same only 17 bales of jute could be saved; that the salvaged jute was thereafter removed to the extension yard of the station in order to be dried; that in that yard another accidental fire broke out on 2nd April 1927 at abount 15-15 hours (railway time) inspite of every precaution taken against such fire and every effort made to quench it. The Subordinate Judge decreed the suits for the price of the jute and also for the freight paid as-claimed in Suit No. 3, and as regards Suits Nos. 1 and 7 on calculating the price of jute at a slightly lower rate than what was claimed.

3. Before dealing with the facts it would be convenient to say a few words about the law to be applied. Sub-section (1) of Section 72, Railways Act, 1890, makes the railway administration liable as bailees Under Sections 151, 152 and 161, Contract Act, 1872. Section 151, Contract Act, requires a bailee to take as much care of the goods bailed to him as a man of ordinary prudence would under similar circumstances take of his own goods of the same bulk, quality and value as the goods bailed. Section 152 makes the bailee, in the absence of a special contract, not responsible for the loss, destruction or deterioration of the thing bailed, if he-has taken the amount of care of it described in Section 151. And Section 161 makes the bailee responsible for delivery or tender at the proper time of the goods bailed, and in default makes him liable for any loss, destruction or deterioration thereof from that time. Along with Section 72, Railways Act, one has to read Section 78 of that Act which lays down that in any suit against a railway administration for compensation for loss, destruction or deterioration, it shall not be necessary for the plaintiff to prove how the loss, destruction or deterioration was caused. Sub-section (3), Section 72, Railways Act, excludes the operation of the Carriers Act (3 of 1865) and of the principles of the Common Law of England with respect to the carriage of animals and goods by railway in this country. The primary question in all cases of this sort, having regard to Section 72, Railways Act, read with Sections 151 and 152, Contract Act, obviously is: Has the Railway Company taken as much care of the goods as a man of ordinary prudence would under similar circumstances take of his own goods of the same description,-in bulk, quality and value?

4. As regards burden of proof, the three classes of suits have to be kept apart from each other: one, dependent entirely upon Sections 151 and 152, Contract Act; another in which Section 9, Carriers Act, has to be borne in mind; and the third, within which category the present suits fall, in which not only Sections 151 and 152, Contract Act but Section 76, Railways Act, also have to be applied. So far as the class of suits last mentioned is concerned, Scott, C.J., in the case of Lakhmi Chand v. G.I.P. Ry. (1913) 37 Bom 1 at p. 11 observed that Section 76, Railways Act, is not by any means the same in terms as Section 9, Carriers Act, and it should not be read as increasing the onus of proof laid upon a bailee by Section 151, Contract Act. The learned Chief Justice was inclined to take the view that the section may have been enacted to make it clear that a suit against a Railway Company was to be regarded as an action for breach of contract and not an action in case. Batchelor, J., and Robertson, J., in the same case seem to have been inclined to the view that Section 76, Railways Act, by taking away from the plaintiff the burden of proving how the loss, destruction or deterioration was caused, has recognized the principle that loss, destruction or deterioration itself in prima facie evidence that due care was not taken, because the goods were in defendant's sole possession and he ought to be able to account for the loss, destruction or deterioration. In the view taken by the learned Judges, this presumption or inference of negligence may be rebutted or repelled on behalf of the railway administration. The foundation of this presumption was explained in the case of Phipps v. New Claridge's Hotel Ltd. (1905) 22 TLR 49, in which it was said that where goods are given into the sole custody of a person and accepted by him as bailee, and they are lost while in his custody, the onus lies on him to show circumstances negativing negligence on his part, and Bray, J., observed:

No such evidence had been placed before him. The story which their witnesses told he could not accept, and he must therefore hold that they had not proved that reasonable care was taken and must come to the conclusion that there was negligence on their part.

5. In a large number of other cases it has been held by Indian Courts that loss or damage of goods entrusted to a bailee is prima facie evidence of negligence and the burden of proof to disprove negligence lies on the bailee and that this burden also lies on a railway administration in the absence of a special contract to the contrary see: Nanku Ram v. Indian Midland Ry. Co. (1900) 22 All 361; Surendra Lal v. Secy, of State AIR 1918 Cal 892, Hirji Khetsey and Co. v. B.N.W. Ry. Co. AIR 1914 Bom 154. In a case of loss due to fire which originated from an unknown cause the Judicial Committee observed that the defendants had Dot exonerated themselves from the onus cast upon them of showing that the fire originated from causes over which they had no control and could not have been expected to have had control: River Steam Navigation Co. v. Choutmull (1899) 26 Cal 398. But, as has been observed in the case of; Bullen v. Suan Electric Engraving Co. (1907) 23 TLR 258 it would be enhancing the burden of proof upon a defendant to an absurd extent if he has to prove not only that he has taken every reasonable care but also that he knew how the loss had happened. Their Lordships, in River Steam Navigation Co. v. Choutmull (1899) 26 Cal 398 therefore could not have meant that, even though the Court is satisfied that there was due care on the part of the bailee, the bailee would be liable if he cannot account for the cause of the fire. What is necessary, as pointed out in the case of Hirji Khetsey and Co. v. B.N.W. Ry. Co. AIR 1914 Bom 154 is:

Where a bailee cannot assign the cause of the loss he may always give evidence to prove, if he can, that although unknown the cause must have been external to himself and beyond his control. Failing that to exonerate himself he would have to prove that while unknown and in all probability attributable to himself the cause was of such a nature that he could not have foreseen and prevented it by taking all reasonable care and precaution.

6. The Judicial Committee in the case of Dwarkanath v. River Steam Navigation Co. Ltd. AIR 1917 PC 173 has pointed out that Under Section 106, Evidence Act, when a fact is especially within the knowledge of any person the burden of proving that fact lies on him, and in that way the bailee may be bound to place before the Court all material witnesses who were on the spot, but that this provision of the law of evidence does not discharge the plaintiff from proving the want of due diligence or (expressing it otherwise) the negligence of the defendant or his servants. Their Lordships in that case appear to have overruled the view which the trial Judge in that case had propounded, namely that it was for the defendant company to satisfy him that they had taken as much care of the goods as a man of ordinary prudence would take of his own goods, and their Lordships expressly said that that was not a correct statement of the law. Their Lordships said further:

It may be for the company to lay the materials before the Court; but it remains for the plaintiff to satisfy the Court that the true inference from those materials is that the servants of the defendant company have not shown due care, skill and nerve.

7. It must be admitted that it is not easy to reconcile this decision with other pronouncements of no lesser authorities, to some of which reference has been made above, but the principle enunciated in it is there and must be applied. The result of the case law therefore seems to be that Section 76, Railways Act, does no more than take away from the plaintiff a burden which in any case lies upon the defendant Under Section 106, Evidence Act, namely to prove facts which are within his special knowledge and adds no new burden on the latter; that it is for the defendant to place all material evidence, that may be available before the Court and if there is failure on the defendant's part in this respect the plaintiff may ask the Court to presume that if produced such material would have gone against the defendant; and that upon such materials as may be produced by the defendant the plaintiff has to show, as all plaintiffs must, in order to establish a liability on the defendant, that there was want of diligence or that there was negligence on the part of the latter or his servants or agents, or, in other words, that the requirements of Section 151, Contract Act, have not been fulfilled.

8. Another question is: What is the standard of care that has to be taken by the bailee Under Section 151, Contract Act. Very learned arguments have been addressed to us on both sides on this question. Lord Holt's classification of Bailments under six heads in the celebrated case of Coggs v. Bernard (1704) 1 Sm LC 187 and Storey's classification of them under three heads on the basis of the character of the trust reposed (see Storey on Bailment, Section 2) would not help us here. As regards the amount of care required of bailees in English law it was said in the case of Beal v. South Devon Railway (1864) 3 H and C 337:

For all practical purposes the rule may be stated to be that the failure to exercise reasonable care, skill and diligence is gross negligence. What is reasonable varies in the case of a gratuitous bailee and that of a bailee for hire.

9. From the former is reasonably expected such care and diligence as persons ordinarily use in their own affairs and such skill as he has. From the latter is reasonably expected care and diligence, such as are exercised in the ordinary and proper course of similar business, and such skill as he ought to have, namely the skill usual and requisite in the business for which he receives payment. The Indian legislature in Section 151, Contract Act, makes no reference to the distinction between a gratuitous bailee and a bailee for hire, and, omitting all reference to skill, lays down for both one standard, namely, as much care as a man of ordinary prudence would take of his own goods in similar circumstances. The standard therefore must, while it is one and the same so far as it is a question of principle, cannot be formulated by an inflexible practical rule applicable to all cases.

10. To show what the standard ought to be, a number of English authorities have been cited before us on behalf of the appellant. These authorities it must be admitted are not always consistent, and moreover they have to be, if at all, relied on with great caution, in view of the difference that exists between the two systems of law. The case very strongly relied on behalf of the appellant is Giblin v. McMullen 2 CP 317. The view of the facts taken in that case was that the precautions taken were not such as any reasonable man might not properly have considered amply sufficient. It has to be noted that that was a case in which plaintiff had put his debentures into a box which he kept with the bank as gratuitous bailees, and that box along with boxes of other customers was kept in a strong room in which the bank's own securities used to be kept in a box called the manager's box, and the cashier of the bank, against whom there had been nothing before, suddenly turned dishonest one day, and taking advantage of an opportunity which presented itself, abstracted the plaintiff's debentures. It was held on the facts that this opportunity could never have been prevented by the bank by taking any amount of precautionary measures, and in any event a reasonably prudent man would ordinarily have thought of taking any greater precaution than what the bank had done.

11. In connexion with this question it has also been argued that the responsibility of the bailee ends with employing men in his service with reasonable care and if these servants eventually turn out to be negligent the bailee must be regarded as satisfying the requirements of Section 151, Contract Act. This matter does not seem to have been expressly provided for in the Act or discussed in any reported decision. But in our judgment, to hold that the bailee is not responsible for the negligence of his agents and servants, committed in the course of their employment, would be to reduce the bailee's liability to an absurdity. There is no question that under the English law bailees are liable for negligence on the part of their agents or servants committed in the course of their employment, about the use and custody of the thing bailed, but not on account of an unauthorized act done outside the course of their employment: Sanderson v. Collins (1904) 1 KB 628 and Cheshire v. Bailey (1905) 1 KB 237. In our opinion it was never intended that it should be otherwise under the law in this country. It has been argued on behalf of the appellant that Section 15, Trust Act, is worded very much in the same way as Section 151, Contract Act, and that it cannot be imagined that if a trustee employs a servant with reasonable care, and eventually through the negligence of that servant some loss is caused the trustee should be made liable. It would be sufficient for us to say that we do not see anything inherently wrong to make a trustee liable in such circumstances.

12. In a case of the present description therefore two questions primarily arise: 1st, what is the degree of care that the railway administration has taken with regard to all consignments generally which may be similarly placed; and second, what care has it taken with regard to the particular consignment. Each of these questions again has two branches, one with reference to the duty of taking all reasonable precautions to obviate the risk of loss, and the other with reference to the duty of taking all proper measures for the protection of the goods when such risk has already occurred. To deal with these questions we shall in the first place confine our attention to the first occurrence, namely the fire of 21st March 1927.

13. Before dealing with the facts it is necessary to refer to an argument which the respondents have put forward, namely that the railway authorities have not dealt with them fairly and have shown considerable unwillingness to disclose the real state of facts in answer to their queries. We are not prepared to attach any importance to this matter because it is evident that at the time when these inquiries were made, litigation was in sight and it was only natural that the railway authorities should have felt an inclination to avoid being drawn into a controversy which might oblige them to make some sort of statement which might be construed as an admission on their part. (After examining the evidence in the case, his Lordship held that such care as would fulfil the requirement Under Section 151, Contract Act, was not taken and that there was gross negligence on the part of the railway people to which the fire of that day must be attributed. (The judgment then concluded). On the whole, we can see no reason to differ from the conclusions which the Subordinate Judge has arrived at in these cases. The appeals and the revision petition are accordingly dismissed. In the appeals the respondents will be entitled to their costs. In Appeal No. 49 of 1930 hearing-fee is assessed at three gold mohurs and in the other appeal, viz. Appeal No. 259 of 1929, hearing-fee will be according to scale. There will be no order for costs in the revision petition.


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