Union Of India vs M/S Southern Commercial ...
2008 Latest Caselaw 1269 Del

 *                   HIGH COURT OF DELHI : NEW DELHI

              Judgment reserved on : July 1, 2008
           Judgment delivered on :  August 07, 2008

+                        R.F.A. No.289/1985

       Union of India                        ...       Appellant
                         Through: Mr. S.R. Narayanan, Advocate

                                versus

       1. M/s Southern Commercial Enterprises,
       2. M/s Guest Keen Williams Ltd and
       3. M/s Arim Metal Industries Pvt Ltd.  ...   Respondents
                       Through: None


CORAM:

HON'BLE MR. JUSTICE T.S. THAKUR
HON'BLE MR. JUSTICE SUNIL GAUR

1.     Whether the Reporters of local papers may
       be allowed to see the judgment?

2.     To be referred to Reporter or not?

3.     Whether the judgment should be reported
       in the Digest?

SUNIL GAUR, J.

1. Way back in June, 1973 Indian Railways had transported the

goods of the respondents no.2 and 3 through the agent

(respondentno.1) from Hawrah to New Delhi and a short delivery of

104 packages was detected and on account thereof, the suit for

damages for rupees one lac was filed by the respondent no.1

against the appellant and the same stood decreed by the Court

below on 4th March 1985 with interest @ 9% per annum.

R.F.A. NO.289/2008 Page 1

2. The bare facts which needs to be noticed for disposal of this

appeal are that vide the railway receipt dated 19th June 1973 the

consignment containing 504 packets having total weight of 224

Quintals was booked by the appellant-Railway under the Freight

Forwarding Scheme and out of which, 225 bags belonged to

respondents no.2 and 24 packs/cases belonged to respondent no.3

and the Railway Wagon containing the above said goods was duly

padlocked and sealed by the railway officials and at the

destination station, it was found that both side locks and bolts of

that wagon were missing and the original seal and one third of the

tape and one hook ring stood cut. Since open delivery was

claimed by the respondents, a short delivery certificate with

respect to 104 packages was issued by the Railways on 24th June,

1973. Damages of rupees one lac were claimed on account of the

aforesaid short delivery as it was stated to be as a result of gross

negligence and misconduct on the part of the railway officials.

3. During the trial, the suit of the respondents was contested by

the appellant by taking a stand that the railway was not

responsible for any short delivery as it had taken all possible care

during the transit of the goods. The principle stand of the appellant

before the trial Court was that the consignment of the respondents

was booked at the risk of the owner and this was so mentioned on

the railway receipt.

R.F.A. NO.289/2008 Page 2

4. The issues framed by the trial Court are as under:-

Issues

i). Has the Plaintiff no locus standi to file the suit? If so, to what

effect.

ii). Did the plaintiff fail to took the consignment in suit in

accordance with rules?

iii). Did the defendant no.1 fail to take reasonable and due care

of the consignment in suit or was it not negligent in handling

the consignment in suit?

iv). Was the consignment in suit short delivered?

v). Is the suit bad for mis-joinder of parties?

vi). Is the suit barred by limitation?

vii). Are the notices U/s 78-B of the Railways Act and section 80 of

the Code of Civil Procedure not legal and valid?

viii). To what amount is the plaintiff entitled from the defendant

no.1?

ix). Is the plaintiff entitled to interest? If so, at what rate?

x).     Relief.




R.F.A. NO.289/2008                                                    Page 3

5. Both the sides had led evidence before the trial Court, which

vide impugned judgment has decreed the suit of the respondent

no:1 against the appellant. Hence this appeal.

6. On behalf of the appellant, Mr. S.R. Narayanan has appeared

but no one has put in appearance on behalf of the respondents.

This is an old appeal. We have heard the learned counsel for the

appellant and have gone through the evidence on record with his

assistance.

7. The only contention raised by learned counsel for the

appellant before us is that since the consignment was booked at

owner's risk, therefore, the appellant cannot be saddled with the

liability to pay damages as the insurance company has paid the

money/claim for the goods found to be short, to the consigners. It

is true that when the consignment is booked at owner's risk, the

railway would not be responsible for the loss unless negligence or

misconduct on the part of the railway is proved. In the instant case,

we have scrutinized the evidence on record and we find there is

clinching evidence of the railway officials i.e. DW-2 and DW-3

regarding padlocks of the wagon in question missing and the

railway seal on one side was found to be tampered with. On the

basis of the aforesaid evidence on record, trial Court has held that

the tampering of the wagon in question took place while goods

were in transit. We find no reason to take different view as there is

R.F.A. NO.289/2008 Page 4 clear cut evidence of the Chief Goods Clerk (DW-3) of the railways

that on the other side, the Hawrah seal was present only to the

extent of one third tape and it was supported by Ghaziabad

Railway Station seal. Not only this, it becomes clear from the

evidence of this witness DW-3 that supporting seal is fixed by the

railway en-route if the original seal is broken or defective. Trial

Court has rightly concluded that if the wagon is duly padlocked

and sealed and had reached the destination station then there was

no liability of the railway even if, some shortages had been found

in the said wagon. But in the present case, there is cogent

evidence of tampering of the seals etc of the wagon in question

which establishes that the railway was grossly negligent in

transporting the goods in question.

8. On merits, we have found that the appellant is liable the

damages as awarded by the trial Court but the question is that to

whom it has to be paid? Respondent no.1 had booked the

consignment of goods of respondents 2 and 3 on their behalf and,

therefore, in the suit filed by respondent no.1, decree was sought

in favour of the Respondent no.1 or in favour of Respondents 2 and

3. Likewise, Respondent no.2 has claimed the decree in his favour.

There was short delivery of 79 bags of respondent no:2 valued at

Rs.19,932.29 P. In the absence of evidence on record of these

goods being insured, it is deemed appropriate that aforesaid

R.F.A. NO.289/2008 Page 5 amount is decreed in favour of respondent no:2 as we find that

respondent no:1 is a mere agent and cannot legitimately

appropriate it. However, Respondent no.3 has asserted that since

its goods transported in the wagon in question were insured with

United India Fire and General Insurance Company Limited, so the

above said Insurance Company being subrogated to the claim of

this respondent, is entitled to the said sum of Rs.79,971.25 P.

Whereas, respondent no:1 is only entitled to correspondence

expenses etc of Rs.473.89 P.

9. On this aspect, a passage from the case of Union of India

versus Deoria Sugar Mills (AIR 1979 Allahabad 200) quoted by

the trial Court in the impugned judgment is as under :-

''Even if insurance company had paid the damages even then the consigner is not debared from filing the suit against the railway for recovery of price of short delivered goods. It was held that the railway continues to be primarily liable for the damages and it being not a party to the contract of indemnity made between the insurance company and the consigner and thus it cannot be absolved of its liability to pay the damages to the consigner merely on the grounds that the insurance company had paid the money to the consigner. It was held that in such a situation, the consigner will receive the compensation from railway and keep it for payment to the Insurance Company.''

10. Although the impugned judgment on merits is upheld but in

view of the above referred dictum, it needs to be modified to the

extent that the damages awarded by the trial Court cannot be kept

R.F.A. NO.289/2008 Page 6 by respondent no:1. Since the impugned decree is in favour of

respondent no.1, therefore, it stands modified to the extent that

respondent no.1 shall receive the damages of rupees one lac with

interest as awarded by the trial Court by means of three Demand

Drafts i.e. first of Rs.79,971.25 P with proportionate interest, which

shall be in favour of the United India Fire and General Insurance

Company Limited and shall be transmitted to it. Second Draft of

Rs.19,932.29 P with proportionate interest in favour of respondent

no:2 and the third Draft of Rs.473.89 P only with proportionate

interest in its favour.

11. This appeal is partly allowed to the extent indicated above

with no order as to costs.

                                             SUNIL GAUR, J




                                             T.S. THAKUR, J

August       07, 2008
DKG




R.F.A. NO.289/2008                                               Page 7