Delhi High Court
M/S Southern Petrochemical Industries ... vs Union Of India And Anr on 21 December, 2023
Author: Dharmesh Sharma
Bench: Dharmesh Sharma
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on : 29 November 2023
Judgment pronounced on : 21 December 2023
+ FAO 65/2017
M/S SOUTHERN PETROCHEMICAL INDUSTRIES
CORPORATION LTD ..... Appellant
Through: Mr. Satish Kumar and Mr.
Sanjay Gupta, Adv. along with
Mr. R. Venkata Krishnan, AR
of the appellant.
versus
UNION OF INDIA AND ANR. ..... Respondents
Through: Mr. Bhagwan Swaroop Shukla,
CGSC with Mr. Sawan Kumar,
Adv. for UOI.
CORAM:
HON'BLE MR. JUSTICE DHARMESH SHARMA
JUDGMENT
FACTUAL BACKGROUND:
1. This Judgment shall decide a Statutory Appeal preferred by the
appellant Company under Section 23 of the Railway Claims Tribunal
Act, 19871 for setting aside the judgment/order dated 07.10.2016
passed by the Principal Bench, Railway Claims Tribunal-1, Delhi,2
whereby the claim of the appellant seeking damages for a sum of Rs
37,25,380/- for alleged loss caused by the Railway Administration on
account of negligence in protecting the goods was dismissed in Claim
Petition No. TA-1/1993 titled „M/s Southern Petrochemical Industries
Corporation Ltd. Vs. Union of India.‟
1 RCTA
2 RCT
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BRIEF FACTS:
2. The broad facts of this case are not in dispute. Briefly stated, the
appellant on 03.06.1991 and 04.06.1991 booked 42,704 bags of DAP3,
each weighing 50 Kg, vide R.R. No. 054558 to 051562 from Windmill
to Tohana (Haryana) for carriage by Rail.
3. Needless to state that the applicant was the owner of the
consignment and the transportation of the goods had been booked
under „Railway Risk Rate‟ and the goods were booked on an „L/U
basis‟, which in railway business parlance would mean that the
liability of loading and unloading was upon the applicant Company.
4. It is an admitted fact that the consignment of goods was brought
by the Railways and unloaded at Tohana railway station on
09.06.1991 at 12:50 P.M. On the same day, the appellant cleared and
carried 280 metric tons of goods before 10:00 P.M.
5. The grievance of the appellant was that the consignment was
kept in the open and unprotected ground. Unfortunate as it may
appear, there was torrential rain accompanied with gale at around 3:30
A.M in the morning of 10.06.1991 and the remaining consignment /
stock of goods weighing approximately 1855.200 metric tons lay in
the open as the shed where the goods were stored was exposed to the
rain.
6. It was also the grievance of the appellant that the Railway
Administration did not take reasonable care as a bailee of the goods as
the Administration did not cover the same with tarpaulins and due to
stagnation of water between the railway lines, the goods were
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damaged. The appellant requested for a joint survey but the same was
refused by the Railways. Therefore, the appellant was constrained to
appoint its own special surveyor, who after assessment of the loss
provided the salvage value of Rs 35,55,255/-.
7. The claim petition was filed by the appellant on 29.03.1993 and
the main plank of the case of the appellant was that as per Rule 134(1)
(a)(ii) of IRCA4, transit for the purposes of Railway's Liability
terminates only on the expiry of free time allowed for removal of
goods from the Railway premises. It was stated that since rainfall is a
natural phenomenon in Tohana during the month of June, the
Railways miserably failed to take or use reasonable foresight and care
in protecting the consignment. Therefore, a claim for damages to the
extent of Rs.37,25,380/- for the loss of the value of the consignment
of the goods was lodged.
8. The claim petition was contested by the respondents / Railways
primarily stating that the goods were transported to Tohana well
within time and delivered to the applicant on 09.06.1991, and there
was no further responsibility of the Railway Administration to take
any further measures for protection of consignment from exposure to
rain.
9. The learned RCT framed the following issues to adjudicate
upon the claims:-
"1. Whether the application is not maintainable against respondent
No. 2? OPR
2. Whether the application has been signed and verified by a
3 Diammonium Phosphate
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competent person?
3. Whether respondents are protected under Section 93(f) and (i) of
the Railways Act, 1989 and Rule 13 of the Goods Tariff? OPR
4. Whether the goods were booked at railways risk rate? OPA
5. Whether the applicant is entitled to any compensation, if so, how
much?
6. Relief?"
10. Suffice to state that the issue Nos. 1, 2 and 4 were decided in
favour of the appellant. However issue nos. 3 & 5 were decided
against the appellant. This Court shall advert to the reasoning given by
the learned RCT later on in this judgment.
ANALYSIS AND DECISION:
11. I have given my thoughtful consideration to the submissions
advanced by learned counsels for the rival parties and I have perused
the record including the digitized record of the RCT.
12. It would be relevant to go through the provisions of Section 93
of The Railways Act,19895 which reads as under:-
"93. General responsibility of a railway administration as
carrier of goods-
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-
(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
5 Railways Act
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inherent defect, quality or vice of the goods;
(h) latent defects;
(i) fire, explosion or any unforeseen risk:
Provided that even where such loss, destruction, damage,
deterioration or non-delivery is proved to have arisen from any one
or more of the aforesaid causes, the railway administration shall not
be relieved of its responsibility for the loss, destruction, damage,
deterioration or non-delivery unless the railway administration
further proves that it has used reasonable foresight and care in the
carriage of the goods."
13. A careful perusal of the aforesaid provision would show that
Section 93 provides for a general responsibility of the railways for
loss, damage, deterioration in transit or for non-delivery of any
consignment arising from any causes specified therein. Clause (f)
however, makes an exception where such loss, damage or
deterioration of the consignment has resulted on account of act,
omission or negligence on account of consigner or consignee but at
the same time the entire provision is controlled by the proviso to the
effect even where such loss, destruction, damage, deterioration has
arisen from anyone or more of the aforesaid clauses, the Railway
Administration is still not relieved of its responsibility for loss,
destruction etc., unless the Railway Administration proves that it has
used reasonable foresight and care in the carriage of the goods.
14. The term „carriage in the goods‟ is not defined under the
Railways Act except that Section 2 (2) defines „carriage‟ to mean
carriage of passengers or goods by Railway Administration. It would
also be expedient to refer to Section 99 of the Railways Act which
provides as under:-
"99. Responsibility of a railway administration after
termination of transit. - (1) A railway administration shall be
responsible as a bailee under sections 151,152 and 161 of the
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Indian Contract Act, 1872, for the loss, destruction, damage,
deterioration or non-delivery of any consignment up to a period of
seven days after the termination of transit Provided that where the
consignment is at owner's risk rate, the railway administration shall
not be responsible as a bailee of such loss, destruction, damage,
deterioration or non-delivery, except on proof of negligence or
misconduct on the part of railway administration or on any of its
servants.
(2) The railway administration shall not be responsible in any case
for the loss, destruction, damage, deterioration or non-delivery of
any consignment arising after the expiry of a period of seven days
after the termination of transit.
(3) Notwithstanding anything contained in the foregoing provisions
of this section, a railway administration shall not be responsible for
the loss, destruction, damage, deterioration or non-delivery of
perishable goods, animals, explosives and such dangerous or other
goods as may be prescribed, after the termination of transit.
(4) Nothing in the foregoing provisions of this section shall affect
the liability of any person to pay any demurrage or wharfage, as the
case may be, for so long as the consignment is not unloaded from
the railway wagons or removed from the railway premises."
15. A careful perusal of the provision would show that the Railway
Administration is responsible as a bailee in respect of any goods in
carriage as provided under Section 151, 152 and 161 of the Indian
Contract Act, 1872 for loss, destruction, damage or deterioration up to
a period of seven days after termination of the transit. However, the
proviso states where the consignment is at owner‟s risk and that the
Railway Administration shall be not responsible for any loss,
destruction, damage or deterioration.
16. It is pertinent to mention that Section 2 (21) of the Railways Act
defines the expression „in transit‟ as under:-
"Section 2. In this Act, unless the context otherwise requires,-
(21). "in transit", in relation to the carriage of goods by railway,
means the period between the commencement and the termination
of transit of such goods, and unless otherwise previously
determined-
(a) transit commences as soon as the railway receipt is issued or
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the consignment is loaded, whichever is earlier;
(b) transit terminates on the expiry of the free time allowed for
unloading of consignment from any rolling stock and where such
unloading has been completed within such free time, transit
terminates on the expiry of the free time allowed, for the removal of
the goods from the railway premises."
17. In the light of the aforesaid statutory provisions, reverting to
the instant case, it would be expedient to reproduce the decision taken
by the learned RCT in issue Nos. 3 & 5 against the appellant which
are as under:-
"3. Whether respondents are protected under Section 93(f) and
(i) of the Railways Act, 1989 and Rule 13 of the Goods Tariff?
OPR.
7. The issue pertains to a plea made that since the complaint of the
applicant is that goods were spoiled by gale and rain, it should be
taken as an unforeseen risk and they should be protected under
Clause 93(f) of the Railways Act. It is the further plea that the
damage occurred on account of all the omission of the applicant
himself to protect his goods by tarpaulins and hence, the claim
cannot be sustained in the light of s 93(i) of the Act.
8. I must observe at the outset that Section 93 provides for a general
responsibility for loss, damage, deterioration in transit or for non-
delivery of any consignment. This is not a case of the goods being
in transit, for admittedly, the transit had come to an end and the
goods had been made available for delivery at the destination
station. There is no complaint that the delivery was not offered. On
the other hand, the application itself makes reference to the fact that
out of the total consignment, a portion, namely, 280 metric tons of
goods were cleared at Tohana railway station before 10:00 PM on
the same day when the goods arrived on 9.6.91. There is no
meaning in invoking Section 93 under such a situation. I, therefore,
hold that there is no scope for invoking Section 93 of the Railways
Act. The issue is answered accordingly.
5. Whether the applicant is entitled to any compensation, if so,
how much?
25. The extent of damage is clearly visible from the surveyor's
report. I find the manner of calculation of the damage after
segregating the urea bags, which could be sold in the market and the
bags which had been damaged and which could be still sold as
salvage, have been correctly provided and if there is a quantum of
loss, which is determined I will take that to be merely relevant for
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the estimate of loss that has entailed by the sudden onslaught of
rain. The assessment even if correct shall not be a ground for
fastening the liability on the railway administration. I find that there
is no scope for casting liability as assigned by the surveyor on the
railway administration. In the light of the discussion already made,
the assessment of actual damages has no relevance to fasten liability
on the railways."
18. First things first, the decision by the learned RCT on issue No. 4
to the effect that the consignment of goods was booked at „Railway‟s
Risk Rate‟ is not challenged by the respondents/Railways. However,
it is also evident from the record that the consignment had been
booked under „L/U Basis‟, which would mean that the responsibility
of loading and unloading was to be undertaken by the consignee i.e.,
the appellant Company in this case. Admittedly, the consignment had
arrived and was unloaded by the respondent/Railways at the railway
yard Tohana, and the same had been made available for delivery to be
taken by the appellant. It is also admitted that the appellant within the
„free time or period‟ available to it, took delivery of part of the
consignment to the extent of 280 metric tons before 10:00 PM on
09.06.1991. There is no gain saying that whether risk in the
consignment had passed over to the appellant/consignee is a question
of fact. The facts brought on the record demonstrate that the delivery
of consignment was accepted by the appellant and part of the
consignment was then removed by 10:00 PM.
19. The said aspect would raise an inference that while part of the
consignment was removed; the remaining was allowed to be kept in
the railway yard for the remainder of the goods to be taken during free
time/period up to 10:00 PM on the following day i.e., 10.06.1991. In
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such a scenario, the risk in the goods had already passed or had been
transferred to the appellant. It is evident that the appellant had an
opportunity to take delivery of the consignment and remove the same
for safe keeping/storage in their own establishment but they did not
elect to do so. There are forthcoming no reasons as to why the entire
lot could not be removed. There is no explanation by the appellant as
to why they rushed at the eleventh hour, supposedly at 03:30 AM in
the morning on 10.06.1991 when lightning struck that there was going
to be heavy pouring with gale.
20. Presumably, the appellant was also well aware about the
weather conditions in the area and there is no iota of whisper that they
made any request to the respondents/Railways well in time to ensure
protection of the consignment lying in the railway yard so as to get the
same covered with tarpaulins. At the cost of repetition, since the risk
in the consignment had passed on to the appellant, then in capacity of
an ordinary prudent person, the appellant had the duty to ensure and
take reasonable precautionary measures to protect the goods present in
the railway yard. By operation of law, the appellant was the owner of
goods having physical possession; the Railways only had a symbolic
possession of those goods. The aforesaid view is demonstrated in a
decision by the Allahabad High Court in the case of M/s. Raymonds
Cement Works v. Union of India6, wherein on similar facts, goods
were partially removed and remaining portion of the goods were
damaged that were still at the railway station, it was observed as
under:-
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"16...Removal of major part of the goods from railway station after
unloading of the goods from the railway wagons clearly lead to the
conclusion, especially in view of the fact that it was to be
supervised by the owners themselves, that it was not a token but an
actual delivery taken by the owners. There is neither any case of
appellant of having taken personal delivery nor there is any partial
delivery certificate. The owners removed major part of the
consignment but after taking delivery left behind some part of the
consignment which due to unusual rains got wet and damaged. The
liability of the respondent ceased soon after actual delivery of goods
was taken it was a duty of owner after taking delivery of goods to
have taken all possible steps to avoid damage to the goods. It is also
in the statement that there was facility of unloading the goods from
the wagons to the truck also but this facility available at the railway
station was not utilised by the owners. Shri J.R Yadav has stated
that sufficient number of tarpaulins of the size which could cover
the entire four wheelers are also available at the railway station and
the same are provided to the owners on demand but the owner did
not make any oral or written request for making the tarpaulins
available to cover the goods left at the station. The appellant also
could not produce any evidence to show that there was at all any
request for supply of tarpaulin. The learned counsel for the
respondent rightly argued that after delivery of the goods in good
and sound condition the liability of the Railways has bailee came to
an end under Section 160 of the Contract Act. Therefore, the onus
being responsible for unloading after taking delivery and having not
utilised the facility of unloading direct from the wagons to the truck
for removing the entire consignment after unloading as also the lack
on the part in demanding the tarpaulins to cover the consignment
left over at the station, the owner and not railway administration is
responsible for loss."
21. As observed by the learned RCT, in the instant matter the
tarpaulins were not even available. Be that as it may, the
representatives of the appellant cannot escape from their primary
responsibility to take reasonable care to protect their goods, especially
on being aware of the weather conditions in Tohana, which lies in
Haryana in the Northern Part of India. It would be relevant to observe
6 [LAWS (ALL)-2006-2-116 dated 07.02.2006]
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that Sections 93 and 98 of Railways Act, have to be read
harmoniously and at the same time there is no escape from concluding
that Section 99 takes precedence over Section 93 of the Railways Act.
The general liability of the Railways, for any loss, destruction,
damage, deterioration in any goods could only be invoked where
patent negligence is found on part of the Railways and they have been
found to be wanting in taking reasonable care. Even assuming for the
sake of convenience that there was lack of oversight and care, how
could the appellant absolve themselves from such oversight and not
taking measures to take the delivery of the goods overnight, thereby
protecting its own goods.
22. In view of the foregoing discussion, it is a stark case where
there was contributory negligence on the part of the appellant in
protecting its own goods despite being aware of the ground realities
and unforeseen weather conditions. Therefore, it is difficult to hold
that the impugned judgment dated 07.10.2016 passed by the learned
RCT suffers from any patent illegality, perversity or incorrect
approach in law.
23. The appeal is accordingly dismissed.
DHARMESH SHARMA, J.
DECEMBER 21, 2023
SS/SP/SM
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