Governor-General in Council vs Visheshwar Lal

Ray, J.—The question involved in this revision is whether the petitioner, who is defendant in the suit, is liable to pay damages amounting to Rs. 75/-flowing from loss of goods, in course of transit through the defendant''s railways consigned by the plaintiff under risk notes, A and B. The plaintiff based his cause of action on the following allegations, namely, that a consignment of rice was booked from Nirmali, a railway station on the 0. T. Railway through E.I. and B.N. Railways to Joychandi Pahar, a station on the last railway line, under invoice No. 10 of 16-9-43. At the delivery two bags out of the consignment consisting of 109 bags were found torn and parts of the contents pilfered resulting in a shortage of 2 maunds and 20 seers as found on re-weighment. The shortage was, it was claimed, due to pilferage owing to the misconduct on the part of the railway administration concerned and their employees. The act of negligence, it was alleged in the plaint, consisted in failure on the part of the railway employees to observe the railway standing orders in connection with loading of goods and storage thereof as well as selection of wagon. In short, they were charged with reckless disregard of duty in not taking reasonable precaution against possible damage and pilferage. The bags of rice were found stacked near the flap doors of the wagon which were defective so much so that there was sufficient gap to allow pilferage.

The defendant, who represented the three Railways mentioned above, set up the defence that the consignment in suit was carried at owner''s risk and was covered by risk notes, B and A on account of the fact that the bags were single and the contents liable to wastage in transit and the owner wanted to avail of reduced rate of freight. With regard to the misconduct and neglect on the part of the railway administrations or their servants, it was pleaded that the consignment in suit was made over to the E.I. Railway at Mokamehghat where it was properly loaded in a wagon which was duly sealed and rivetted, and it reached Asansol with the Mokamehghat seals intact in due course. The consignment was received at Asansol in good condition and was transshipped into and properly loaded, well away from the doors in a wagon which was free from defects. At Asansol the wagon was made over to the B.N. Railway. The wagon was duly sealed and rivetted. It is further alleged that the wagon reached Joychandi Pahar the station of destination, with both sides Asansol seals intact. On being unloaded on the same day, two bags put of the consignment were found torn and slack near the flap door with a total shortage of two maunds and twenty seers. Delivery was granted on the next day under qualified remark of the shortage noticed. By way of explaining as to the bags being found torn and slack near the flap doors, it was said that they must have got there in the normal oscillation of the wagon while in transit and were tern presumably either on account of the fact that the bags used were single and gave way in transit or on account of interference through the usual crevices of the flap doors by some unknown agency Somewhere in course of transit, a circumstance over which the carrying railways had no control. As such it was pleaded that the defendants are not at all liable for the plaintiff''s claim and are amply protected under the terms of risk notes A and B.

The suit was tried by the Munsif of Raghunathpur, in his Small Cause Court jurisdiction. The controversies before him were: (1) Whether the goods were carried under Railway risk or not; (2) whether there has been proper service of notice; and (3) whether the plaintiff is entitled to any damages or not. He found that the consignment was covered by risk notes A and B duly signed and executed by the person authorised to represent the consignor, and that there was a proper service of notice in compliance with the provisions of law. With regard to the plaintiff''s title to damages, he passed a decree in his favour holding that the plaintiff had been able to prove that there had been a deliberate mishandling by, at least the East Indian Railway Co., in dealing with the goods. He bases his finding, as is apparent to me on reading the judgment, on the following facts and circumstances, namely, (1) There is no evidence as to the manner of loading at Mokamehghat where the consignment was found intact. (2) At Asansol, though the seals and rivets put at the doors of the wagon at Mokamehghat were intact, three bags were received torn at the Asansol station, though the bags were found from the middle of the stacks. (3) A wire message of pilferage from the Goods Clerk at Asansol was sent to the Watch and Ward Department. (4) A further shortage of 30 seers was discovered at Joyachandi Pahar the station of destination, where the bags were found at flap doors in torn condition and (5) In spite of the message of pilferage sent at Asansol, no steps seem to have been taken by the Watch and Ward Department.

The learned Munsif seems to have attached great importance to the condition of the bags as found at Asansol while lying in the middle of the stack. The evidence adduced by the defendant is that at Asansol the Mokamehghat seals and rivets were intact. Evidently, this evidence precludes the theory of pilferage from outside. It could only be achieved through railway servants who could replace the seals and rivets intact after having stolen the goods. If the matter rested there, I would have found nothing wrong with the Munsif''s conclusion as this would be a clear circumstance to indicate misconduct on the part of the railway administration''s servants. With regard to the condition of the bags at Joyachandi Pahar, nothing can be said with any amount of certainty pointing to misconduct on the part of the railway servants largely because the bags might have come up near the flap doors by normal oscillation of the wagon in traffic, and the torn condition may be due to defective packing as risk note A conclusively suggests. The only laches that could be attributed to the railway administration may, if at all, consist in not closing the crevices near the flap doors of the wagon which could admit of pilferage through outside agency.

I have gone through the entire evidence in the case. From the standpoint of the view taken by the trial Court, the evidence of D.W. 3, the assistant Goods Clerk at Asansol, is most important. He says that he found three bags in condition of their mouths remaining open and on weighment, he found 20 seers missing from one bag, one maund from another and 10 seers from the third, making a total of 1 maund and 30 seers. The rest of the shortage namely 30 seers has been held by the Munsif to have occurred between Asansol and Joychandipur. But in coming to this conclusion about the shortage having occurred, by the time the consignment reached Asansol, which is solely responsible for his finding of mishandling on the E.I. Railway line between Mokamehghat and Asansol, he pays too little attention to a statement on the cross-. examination of this witness which is to the following effect:

About 1 maund to 2� maunds of rice were lying scattered on the floor of the wagon. They were put in to the bags again and after that they were resewn. The bags were resewn after the rice had been filled up.

This statement read with his statement in examination-in-chief in which he said about the respective shortages from the three bags, as already stated, leaves no room for doubt that there might have been no shortage due to pilferage. The opening of the mouths of the bags due to normal oscillation resulting in spreading of the rice on the floor of the wagon should not mean any negligence on the part of the railway administration. This might be due to defective packing, to cover the loss due to which condition, risk A was taken from the consignor.

If the matter rested there, I should allow the revision and dismiss the plaintiff''s suit, but quite apart from the fact that sitting in revision I am unable to interfere with the findings of fact, the question of law involved in the case is not at all free from difficulty, and to my mind it appears that there has been a misapprehension of law applicable to this case not only on the part of the Court below but also on the part of the parties concerned. I should, therefore, proceed to discuss the law that governs the relationship between the consignor and the railway administration in respect of the loss suffered by the former in course of transshipment by the latter.

Ordinarily, the responsibility of the railway administration as carriers is that of a bailee under Sections 152 and 161, Contract Act, 1872, (vide Section 72, Railways Act). The responsibility, however, can be limited by an agreement in writing, signed by or on behalf of the person sending or delivering to the railway administration the animals or goods in an approved form. In the present case such agreements are contained in risk notes A and B. u/s 76, Railways Act:

In any suit against a railway administration for compensation for loss, destruction or deterioration of animals or goods delivered to a railway administration for carriage by railway, it shall not be necessary for the plaintiff to prove how the loss, destruction or deterioration was caused.

The risk note form A is used when articles are tendered for carriage which are either already in bad condition or so defectively packed as to be liable to damage, leakage or wastage in transit. It contains an agreement by or on behalf of the consignor to the following effect:

I, the undersigned, do hereby agree and undertake to hold the said Railway administration over whose Railway the said goods may be carried in transit from...station to...station harmless and free from all responsibility for the condition in which the aforesaid goods may be delivered to the consignee at the destination and for any loss arising from the same except upon proof that such loss arose from misconduct on the part of the Railway Administration''s servants.

Risk note form B is used when the sender elects to despatch at a ''special reduced'' or ''owner''s risk'' rate, articles or animals for which an alternative, ''ordinary'' or ''risk acceptance'' rate is quoted in the Tariff. The undertaking contained in this form is to the following effect:

Whereas the consignment of...tendered by me as per forwarding order no....of...for despatch

by the Bengal Northwestern Railway Administration to...station, under railway receipt no....of...is charged at a special reduced rate instead of at the ordinary tariff rate chargeable for such consignment, I the undersigned, do in consideration of such lower charge, agree and undertake to hold the said Railway Administration harmless and free from all responsibility for any loss, destruction or deterioration of, or damage to, the said consignment from any cause whatever except upon proof that such loss, destruction, deterioration or damage arose from the misconduct on the part of the railway administration or its servants.

This undertaking is subject to a proviso which provides that in case of:

Non-delivery of the whole of the said consignment or of the whole of one or more packages forming part of the said consignment packed in accordance with'' the instructions laid down in the Tariff, or, where there are no such instructions, protected otherwise than by paper or other packing readily removable by hand, and fully addressed, where such non-delivery is not due to accidents to trains or to fire

and in case of

pilferage from a package or packages forming part of the said consignment properly packed when such pilferage is pointed out to the servants of the Railway administration on or before delivery, the Railway Administration shall be bound to disclose to the consignor how the consignment was dealt with throughout the time it was in its possession or control, and, if necessary to give evidence thereof before the consignor is called upon to prove misconduct, but, if misconduct on the part of the Railway Administration or its servants cannot be fairly inferred from such evidence, the burden of proving such misconduct shall lie upon the consignor.

The proviso is intended to qualify the burden of proof that lies upon the consignor under the exception clause of the main agreement contained in the words "except upon proof that such loss etc. arose from the misconduct on the part of the Railway Administration or its Servants." The Railway Administration''s responsibility as a bailee is thus modified by the risk note forma A and B to the extent that the liability arises only upon the misconduct of the Railway Administration''s Servants, and the burden of proof as defined in Section 76 of the Act is modified to the extent that in the 2 cases of (1) non-delivery and (2) pilferage, the Railway Administration will have the burden to disclose to the consignor about the dealings of the consignment throughout the transport up till delivery. If from this disclosure no misconduct of the railway servants is inferable, then only the consignor will have to prove that his loss was due to such misconduct. A long series of decisions have clustered round the various problems that arise out of cases of loss or non-delivery where the cases are covered by risk notes A and B. The result of those judicial decisions makes however, one thing certain, beyond any possibility of doubt, that where the Railway Administration fails to make a full disclosure of how the consignment was dealt with during the time it was in its possession or control, the consignor is entitled to an inference in his favour, and adverse to the administration that if materials withheld would have been produced, they would have supported the case of misconduct. This principle is based upon Section 114(g), Indian Evidence Act.

In a trial involving adjudication of the Railway Administration''s liability, somewhat literal compliance with the procedure provided in risk note B is of vital importance. Before dealing with this aspect of the case, I have to deal, at the threshold, with a very important contention raised by the learned Counsel for the respondent which, if sound, will prevent any further consideration of the question. What he contends in this connection is that the question of misconduct or no misconduct is a pure question of fact and as such is not revisable by this Court in revision. In this connection he has called my attention to the following cases: Commissioners of Taxation v. English Scottish and Australian Bank AIR 1920 P.C. 88, E.I. Ry. Co. v. Jago Ram AIR 1918 Pat. 413, Bengal and North Western Ry. Co. v. Mohammad Munshi AIR 1943 Pat. 111 and Moulvi Lutfar Rahaman and Another Vs. Moulvi Waliur Rahaman and Others, . I shall proceed to deal with these cases one by one. In the first named case the question arose whether a particular Bank had been negligent in its dealing with regard to a certain cheque. Their Lordships of Judicial Committee said:

It is true that in this case there is only the finding of a judge and that may be reviewed on the merits, while the criterion as to the finding of a jury is not whether it is right but whether there was evidence which could support it. Nonetheless a finding essentially of fact will not be interfered with unless it is shown to be wrong. This was the view held in the present case by the learned Chief Justice and their Lordships think, he was justified in the way in which he approached the question. It follows that, being a question of fact, it is really impossible to lay down rules or statements which will determine what is negligence and what is not. Each case must be determined on its own circumstances.

This case, in my view, is distinguishable from the present case in which the question is not whether there has been negligence on the part of the Railway Administration but whether there has been misconduct on the part of its servants. Misconduct may flow from negligence, but every negligence is not misconduct. Whether any particular negligence will amount to misconduct must necessarily involve some question of principle, some observance or non-observance of rules and laws. At any rate, their Lordships of the Judicial Committee in holding that negligence is a question of fact, they make it clear that it is so on account of its being incapable of definition by any fixed rules or statements and by its dependence, in each case, upon its own facts and circumstances, and they also leave it open for the Court of appeal to find out whether there is any evidence of negligence or not.

In the second named case E.I. Ry. Co. v. Jago Ram AIR 1918 Pat. 413 reliance was placed upon a dictum of the Privy Council in the case of Madras Railway Co. v. Zamindar of Carvetnagram (75) 14 Beng. L.R. 209 and the proposition deduced was pronounced in the following terms:

The position therefore is that we as judges of law have in second appeal to decide whether there was evidence to put before a jury.

The proposition expressed in the above words is to the same effect as I have deduced from the first named case, namely whether there is evidence of negligence to go to the jury is for the Court of law. In Madras Railway Co. v. Zamindar of Carvetnagram (75) 14 Beng. L.R. 209 however, their Lordships of the Judicial Committee have-said:

Negligence consists in the omitting to do something that a reasonable man would do,-or in the doing something that a reasonable man would not do, in either case unintentionally causing mischief to a third party... Their Lordships are unable to say that the case has been decided on an erroneous view of the law.

This indicates that in deciding a case of negligence the Court has to decide keeping in view what in law negligence amounts to. It follows, therefore, where a Court in judging about occurrence of negligence or otherwise departs from what negligence in law is, he commits an error of law which is for the Court of appeal to decide.

In the third named case (Bengal and North Western Ry. Co. v. Mohammad Munshi AIR 1943 Pat. 111) I am unable to find any decision to the effect that a finding of negligence howsoever arrived at is always a question of fact beyond the power of interference by a Court of law. In that case their Lordships examined the various facts as to commission and-omission on the part of the railway servants as found by the Courts of fact, and further examined that in view of certain judicial pronouncements relied upon by the said Courts the facts found did amount to negligence amounting to misconduct and then said "as a Court of second appeal we are unable to hold'' that there was no such negligence." I should Commissioners of Taxation v. English Scottish and Australian Bank AIR 1920 P.C. 88 read this decision to mean to say that where facts which put together would in law amount to negligence amounting to misconduct, have been found by Courts of fact, the Court of law in second appeal should not interfere.

In the last named case Moulvi Lutfar Rahaman and Another Vs. Moulvi Waliur Rahaman and Others, reliance is placed upon the passage which runs:

The lower appellate Court has found that the plaintiff did not neglect his duty as Chairman. This is a finding of fact.

This case involved consideration of the question whether the duty of a Chairman as laid in a particular statute had Been performed in the manner prescribed or not. Such a question bears no analogy to the question before me. On the other hand, there is a direct authority on the point. In the case of Durga Dutta Shri Ram v. Secretary of State AIR 1930 Pat. 283 it was decided, that in a case covered by risk note form B, it was necessary for the plaintiff consignee to prove that the loss was due to the misconduct of the Railway Company or their servants. Misconduct is defined as wilful neglect and whether there was wilful negligence is a question of law. This being a direct authority on the point, with respect, I feel bound by the decision, and, in my view, this accords with good sense. I have already said that every negligence on the part of the railway servants will not amount to misconduct. What is misconduct has, besides the cases just dealt with, been considered in another case of this Court, namely, Bengal Nagpur Railway Company, Limited v. Harijiban Iswar AIR 1937 Pat. 289 in which misconduct has been variously defined. In one passage it is said:

Misconduct is not necessarily established by proving even culpable negligence; it is something opposed to accident and negligence and is the intentional doing of something which the doer knows to be wrong or which he does recklessly not caring what the result may be.

It is also said in that case that in some cases misconduct has been held to mean unbusinesslike conduct. Unless the conduct of the officials was unbusinesslike, misconduct cannot be inferred. Even if the officials erred in judgment, it is not a case of negligence much less a case of misconduct. If what was done was not unbusinesslike or unreasonable, it is not neglect.

From the above definitions, it is clear that the question whether there has been negligence of a character which may amount to misconduct involves a determination of the question of principles of law and it, in my judgment, cannot therefore, be always a question of fact. Keeping this legal definition of the word "misconduct" as propounded in various decisions, I shall see whether the learned trial Court has appreciated, in arriving at his findings, the principles involved in the question.

From the findings of the trial Court as summarised above, it will appear that the learned trial Court has not come to any finding as to what unbusinesslike or reckless act of the Railway servants is responsible for the loss. Nothing appears on the facts of his judgment. It cannot be said that he has appreciated the distinction between mere negligence and negligence amounting to misconduct. He has not shown what the railway servants were to do either under the rules or under the instructions applicable to loading, unloading and transport of consignments and did not do, or, in other words, whether they did anything recklessly without caring what the result may be.

The learned Counsel for the respondent has relied upon the following cases for two propositions, namely, the risk note form A or risk note form B or both conjointly do not: relieve the Railways of their responsibilities for loss or damage of the consignments, and that the Railways being in possession and control of the goods, the onus lay on them to show that; the negligence of their servants did not cause the loss. There is nothing to quarrel with the correctness of the aforesaid propositions. Reliance is placed in support of the first of the two propositions on Secretary of State Vs. Bhagwan Das and Another , and Bengal North Western Railway Co. v. Firm Dassundhi Mal Bishambar Das AIR 1928 Lah. 166, and for the second proposition on Joseph Travers & Sons Ltd. v. Copper (1915) I.K.B. 73 Ganesh Dass Bisheshwar Lal v. East Indian Rly. Co. AIR 1927 Pat. 193, and Ghelasbhai Punsi v. East Indian Rly. Co. AIR 1921 Bom. 443.

On the other hand, it has to be borne in mind that the risk note form B lays down how the initial onus of the Railway Co., has to be discharged and when can it be said that the same has been discharged. The note says that before the consignor is called upon to prove the loss sustained by him arising from misconduct of the Railway Administration''s servants, the Administration has to make a full disclosure of how the consignment was dealt with by them during the time it was in their possession and control. The note says that after this is done, if the consignor can prove misconduct from the materials found after such disclosure, he is entitled to judgment failing which he has to prove misconduct, and in default thereof he must suffer judgment. I do not think the cases cited above go any further than this. It has also to be borne in mind that if notwithstanding the usual care and skill on the part of the Railway Administration or its servants something unforeseen might happen, it cannot be attributed to culpable negligence or misconduct of the railway servants: vide Secy. of State Vs. Ramdhan Das Dwarka Das Firm, . It has also to be borne in mind that if the Railway Company on whom the initial onus lies to prove how the consignment was dealt with, throughout the transit, fails or is unable to do so in order to enlighten the Court on the point, the plaintiff''s claim cannot be prejudiced thereby, that is, their failure would enure for the benefit of the plaintiff in the sense that the loss in such a case shall be deemed to have been caused by the misconduct of the Railway Administration''s servant.

I am also of opinion that in the case before us the procedure dictated by law as cast in the form of an agreement in risk note form B can seldom be said to have been followed. This has been so accurately and clearly laid down in the case of AIR 1937 152 (Privy Council) . Their Lordships of the Judicial Committee have very lucidly expressed the position to be as follows:

In a dispute arising in a case coming under the proviso to risk note B, the procedure is the following: On the occurrence of either of the cases, (a) or (b), the obligation on the part of the railway to disclose the nature of their dealings with the consignment, while under their control, arises immediately and is not postponed to the stage of litigation. If the consignor is not satisfied, recourse to a Court of law is contemplated and the railway should submit their evidence first at the trial. If the consignor be not even then satisfied with the disclosure made, he should say so and the Court will decide whether the consignor''s demands go beyond the obligation of the railway. The railway should then have an opportunity of meeting the demands of the consignor, so far as endorsed by the Court before their case is closed; but if they fail to take this opportunity, they will be in breach of their contractual obligation of disclosure. The question that next arises is whether misconduct may fairly be inferred from the evidence of the railway: if so, the consignor is absolved from his original burden of proof. But in this case the decision of the Court may be given after both sides have closed their evidence> It is for the railway to decide whether they have adduced all the evidence they consider desirable in avoidance of a fair inference of misconduct. If they withhold any material evidence, they may either be in breach of the contractual obligation of disclosure or on the next question of a fair inference may expose themselves to the presumption u/s 114(g) of the Evidence Act. If the obligation of disclosure has been discharged and the evidence given by the railway does not lead to a fair inference of misconduct, the proviso will cease to operate and the consignor will be relegated to his original burden of proof of misconduct.

I am clearly of the opinion that in this case the procedure laid down has not been followed. I therefore feel constrained to remand this case for a fresh trial after strict observance of the procedure laid down by the Privy Council in the passages quoted above. The evidence that is already on record will form part of it and it would be open to the plaintiff to say that he is not satisfied with the disclosure as made by the defendant and may call upon him whatever materials he considers to be necessary for full disclosure. In case it is objected to on the ground that the consignor''s demands go beyond the obligation of the railway the Court will have to adjudicate the same. The defendant should then have an opportunity of meeting the demands of the plaintiff so far endorsed by the Court before they close their case. The plaintiff may thereafter choose to adduce further evidence or may rely upon any inference as to misconduct whether deducible from the materials adduced by the defendant or whether deducible from the breach of the contractual obligation of disclosure on the part of the defendant or whether on the ground that the defendant has exposed himself to the presumption u/s 114(g), Evidence Act, on the ground of adverse inference against the defendant. It may happen that after further opportunities have been availed of by the parties in substantial compliance with the requirements as set forth above, the result of this litigation may be the same as it is now, but having in view the state of evidence on record and the manner in which the question has been approached by the trial Court, I am of opinion that in the ends of justice it is necessary to remand this case to the trial Court for disposal according to law in the light of the observations made above. The costs will abide the result. Hearing fee of this civil revision in assessed at 2 gold mohurs.