M/S Chunni Lal Rajnish Kumar vs Uoi & Anr
2010 Latest Caselaw 2478 Del

                                                       REPORTABLE


*      IN THE HIGH COURT OF DELHI AT NEW DELHI


                            FAO No.125/1992


                                    Date of Decision: May 10, 2010


       M/S CHUNNI LAL RAJNISH KUMAR         ..... Appellant
                    through Mr. Tanuj Khurana, Advocate


                   versus


       UOI & ANR                               ..... Respondents
                        through Mr. S.R.Narayan, Advocate


       CORAM:
       HON'BLE MISS JUSTICE REKHA SHARMA

1.     Whether the reporters of local papers may be allowed to see the
       judgment? Yes
2.     To be referred to the reporter or not? Yes
3.     Whether the judgment should be reported in the „Digest‟? Yes

REKHA SHARMA, J. (ORAL)

The short question which arises for consideration in this appeal

is, whether a consignee in whose favour the consignor of the goods

has made an endorsement on the railway receipt entitling him to

collect the goods at the destination, is competent to file a claim for

recovery in case the goods are found to be in a damaged condition at

the time of taking delivery from the Railways.

The present appeal was preferred way-back in the year 1992

against the order of the Railway Claims Tribunal (hereinafter referred

to as the „Tribunal‟) dismissing the claim of the appellant for a sum of

Rs.10,800/-, on the ground that the appellant was not an endorsed

consignee for valuable consideration and thus, had no right to sue.

It is submitted by learned counsel for the appellant that the

appellant was not a consignee simplicitor, but was also a commission

agent of the consignor and that in its such capacity, it could file a

claim in case the goods were found in a damaged condition. In

support, reliance has been placed upon a judgment of this Court in

the case of Union of India Versus B. Prahlad & Co. reported in

1976 Rajdhani Law Reporter 278. The relevant paragraphs of the

said judgment on which reliance has been placed by the learned

counsel for the appellant read as under:-

"x x x x x x

5. Has the commission agent a right to sue? This is the question to be decided. In Union of India v. W. P. Factories AIR 1966 S.C. 395 (398 and 399) the Supreme Court has laid down the following proposition:

".....Ordinarily, it is the consignor who can sue if there is damage to the consignment, because the contract of carriage is between the consignor and the railway administration. Where, however, the property in the goods carried has passed from the consignor to consignee, the latter may be able to sue. The mere fact that the consignee is different from the consignor does not necessarily pass title to the goods from the consignor to the consignee, and the question whether title to goods has passed to consignee will have to be decided on other evidence....."

6. The test, therefore, is: Has the title to goods passed to the consignee? If it has he can sue. It is quite possible for the consignor to retain title in the goods himself while the consignment is booked in the name of another person. The Supreme Court gives the following illustration:

"........Take a simple case where a consignment is booked by the owner and the consignee is the owner‟s servant, the intention being that the servant will take delivery at the place of destination. In such a case the title to the goods would not pass from the owner to the consignee and would still remain with the owner, the consignee being merely a servant or agent of the owner or consignor for purposes of taking delivery at the place of destination. It cannot, therefore be accepted simply because a consignee in a railway receipt is different from a consignor that the consignee must be held to be the owner of the goods and he alone can sue and not the consignor......"

7. Applying this principle to the facts of the present case the answer is plain beyond question. The commission agent is not a servant. Nor is he an ordinary agent. The Commission agent occupies an important place in the world of commerce. He plays a leading role in mercantile transactions as in this case: See Firm Ram Dev Jai Dev v. Seth Kaku, AIR 1950 E.P. 92 (FB) and Shivnarayan v. State, AIR 1967 SC 989 (990).

x x x x x x

44. This then is my conclusion. The plaintiff as commission agent has sufficient interest in the goods and is entitled to sue. To hold to the contrary "would be a retrograde step and would paralyse the entire mechanism of finance of our internal trade. In this vast country where goods are carried by railway over long distance and remain in transit for long periods of time, the railway receipt is regarded as a symbol of goods for all purposes." ( Morvi Mercantile Bank v. Union of India). AIR 1965 SC 1954 (1960)................."

Having regard to what has been held by this Court in the

aforementioned judgment, with which I fully agree, it can no longer

be contended by the other side that a commission agent in whose

favour the consignor has made an endorsement on the railway receipt

is not competent to bring a claim for the recovery of a certain sum in

the event of any damage having been caused to the goods during

transit by the Railways from the place of its booking till destination.

The only other question that is required to be determined is,

whether the appellant was, in fact, the commission agent of the

consignor and the railway receipt was endorsed by the consignor in

its favour.

The appellant has placed on the record the railway receipt

Ex.R1. On the reverse of the said receipt, there is an endorsement in

favour of the appellant by the consignee. As regards the question,

whether the appellant was a commission agent of the consignee, the

learned counsel for the appellant has relied upon affidavit of one of its

partners, Shri Suresh Kumar which was placed on the record by way

of evidence. It will be apposite to reproduce paragraphs 4, 5, 6, 7 & 8

of the said affidavit. The said paragraphs run as under:-

"x x x x x x

4. That the applicant is doing the business of commission agent. They receive the goods from the consignor for sale on commission basis. The consignor M/s. Sri Venkateswara Rice Trading Co. New Firm Vijaywada at Panduru sent 240 bags to the applicant for sale on commission basis, vide railway receipt No.725674. The same has been marked as R1. The consignor had made the endorsement on the back of the above railway receipt at point A. The same may kindly be read as part of this affidavit. The deponent identifies the signatures of Shri P.V.S.N.Rao, one of the partners of the said firm. The deponent has seen him signing and writing. As such he identifies the signatures of the said partner on the above endorsement.

5. That the applicant sent a sum of Rs.95,000/- to the above consignor on 15.7.1985 vide bank draft issued by the State Bank of Bikaner and Jaipur, Khari Baoli, Delhi. Entries for the above were made by the deponent in the cash book on 5.7.1985 and

corresponding entries were also made in the sale book. The said accounts are maintained by the deponent in due course of business of the applicant firm. The true copy of the above cash and sale book are being submitted with this affidavit with their translation in English. They may kindly be read as annexure B and B/T and C and C/T to this affidavit. Thus the applicant are the endorsed consignee of the above goods for valuable consideration. Even otherwise as the applicant are the commission agent/consignor they had right in the sale proceeds of the goods. They had interest in the commission. Thus the applicant being the commission agent of the consignor had all right, title and interest in the goods and are entitled to file the application and claim the same from the respondent.

6. That the goods were received in Delhi in damaged condition. The applicant applied for delivery of the goods on assessment. The respondent made the assessment and issued the assessment certificate which has been marked as Ex.R3 and Ex.R4.

7. That the respondent did not settle the claim of the applicant, as such notice dated 5.8.1985 was given. The respondent has placed on record a copy thereof which has been admitted by the applicant as Ex.R5.

8. That the damage to the goods are due to the acts of negligence and misconduct on the part of the respondent."

The Tribunal inspite of the specific averments made in the

aforesaid paragraphs of the affidavit that the appellant was a

commission agent of the consignor and that the railway receipt

contained an endorsement in its favour as a consignee, rejected the

claim on the ground that there was no corresponding averment in the

plaint that the appellant was a commission agent of the consignor.

I have gone through the plaint. I do find on a perusal of the

same that it does not contain a specific averment that the appellant

was the commission agent of the consignor, but that, to my mind, is

not such an omission as would disentitle the appellant from filing a

suit for recovery of damages. The appellant in paragraph-2 of its

plaint has stated that, "the plaintiffs were the endorsed consignees of

the above railway receipt for the said goods for valuable

consideration." This averment, I feel, was sufficient in terms of the

aforementioned judgment of this Court to enable the appellant to lay a

claim for damages. In any case, the appellant not only made this

averment, but, as noticed above, also filed on record the affidavit of

one of its partners, namely, Suresh Kumar who stated therein that a

sum of Rs.95,000/- was sent to the consignor as advance payment

towards the sale of the goods. The documents showing payment of

Rs.95,000/- were exhibited as AW1/2, AW1/IIT, AW1/3 & AW1/3T. If

the appellant had no interest in the goods, as is sought to be

contended by the learned counsel for the other side and was only

deployed by the consignor to receive the goods on its behalf, then

there was no sense in the appellant paying an advance of Rs.95,000/-

to the consignor.

It has been argued by the learned counsel for the respondents

that there was no authorization from the consignor in favour of the

appellant empowering him to file a claim in case the goods received

were found in a damaged condition and, therefore, the claim so filed

was not valid. This argument in the teeth of the judgment noticed

above has no merit.

It has also been argued by the learned counsel for the

respondents that the appellant led no evidence to show that the goods

were, in fact, damaged. This submission again is liable to be

dismissed. It was for the Railways to have made a note with regard to

the status of the goods at the time they were accepted for

transportation to another place. The railway receipt Ex.R1 carries no

such note, implying thereby that at the time the goods were booked,

they were in perfect condition. The Railways having accepted the

goods without any certification that they were in a damaged

condition, the presumption is that they were in perfect condition.

It may also be noticed that as per the Railway Receipt

Exhibit R-1, the goods were booked under the caption „Risk Rate‟. As

per Section 63 of the Railways Act, 1989, " where any goods are

entrusted to a railway administration for carriage, such carriage shall,

except where owner‟s risk rate is applicable in respect of such goods,

be at railway risk rate." I may, in this context, also refer to

Section 93 of the Act which lays down that:

"...........Save as otherwise provided in this Act, a railway administration shall be responsible for the loss, destruction, damage or deterioration in transit, or non-delivery of any consignment, arising from any cause except the following namely:-

       (a)    act of God;
       (b)    act of war;
       (c)    act of public enemies;
       (d)    arrest, restraint or seizure under legal
       process;
       (e)    orders or restrictions imposed by the Central

Government or a State Government or by an officer or authority subordinate to the Central Government or a State Government authorised by it in this behalf;

(f) act or omission or negligence of the consignor or the consignee or the endorsee or the agent or servant of the consignor or the consignee or the endorsee;

(g) natural deterioration or wastage in bulk or weight due to inherent defect, quality or vice of the goods;

       (h)    latent defects;
       (i)    fire, explosion or any unforeseen risk."

The case of the appellant is not covered by any of the exceptions

contained in clauses (a) to (i). As a matter of fact, the Railways itself

had prepared an assessment report dated July 30, 1985 and therein it

was recorded that the goods in question were partly damaged. The

said report is Ex.R5.

For what has been noticed above, I find that the Tribunal

wrongly held the claim to be not maintainable. Having regard to the

fact that the claim pertains to the year 1987, it will be wholly unjust if

the matter is sent back to the Tribunal for fresh adjudication, more so,

when the amount claimed was only to the tune of Rs.10,800/- and also

on account of the fact that the witness of the appellant was not

cross-examined on the amount claimed by it. Hence, I award a sum of

Rs.10,800/- to the appellant on account of the damage caused to the

goods along with pendentelite and future interest @ 9% per annum

from the date of filing of the suit, i.e. May 20, 1987 till the date of its

realization. The respondents are directed to make the payment within

three months from now.

The appeal is disposed of.

REKHA SHARMA, J.

MAY 10, 2010 ka