Shah Jayantilal Jivraj and Co. vs The Union of India (UOI)

K. Suguna, J.—This Civil Miscellaneous Appeal has been filed challenging the order dated 28.12.1998 passed in O.A. No. I/1078 of 1990

on the file of the Railway Claims Tribunal, Chennai Bench. The facts of this appeal are that a consignment of 171 bundles were booked from

Shilong Out Agencies to the Salt Cataurs under R.R. No. 697667 dated 20.06.1988. After a delay of 42 days, the said consignment has reached

the destination point. When the goods were unloaded, it was found that 70 bundles are being received in a good condition and 86 bundles were

damaged by water and 15 bundles were missing. The appellant has received the 70 bundles. With regard to the 86 bundles, which has been

damaged by water and found to be unfit for any use, the appellant sought for open delivery for assessment of the damage. Hence, on 02.08.1988

after verification and finding that 70 bundles were in sound condition, the claimant took delivery of the 70 bundles. Since the other 86 bundles were

completely damaged and unfit for any use, the appellant did not take delivery of the same and sought for assessment of damages. Since the

respondent has not assessed the damage properly, the appellant refused to take delivery of the same. Subsequently, the respondent had conducted

an auction with regard to these 86 bundles on 05.12.1988. In the auction for the 86 bundles, the respondent was able to fetch a sum of Rs.

4,748/-. Since the appellant has suffered a loss to the tune of Rs. 1,12,817/-, with regard to the damaged bundles and loss of 15 bundles, he had

filed a claim petition before the Railway Claims Tribunal, Chennai, claiming a sum of Rs. 1,12,817/-.

The claim petition was taken up on file in O.A. No. I/1078-90. Originally, the matter was heard by the Judicial Member as well as the Member

(Technical) and an order has been passed on 01.05.1998 whereby the Judicial Member has given a judgment that the appellant is entitled for a

sum of Rs. 1,08,272/- as compensation whereas the Member (Technical) has differed from the view of the Judicial Member on certain issues and

gave a finding that the appellant is not entitled for any compensation since he has refused to take delivery of the 86 bundles. Hence the matter was

referred to the Hon''ble Chairman of the Railway Claims Tribunal, Delhi, who appointed Member (Technical) of the Secunderabad Bench, as the

third member for deciding the issue. The third member, after providing an opportunity for both the appellant as well as the respondent, passed an

order on 14.12.1998 totally negativing relief to the appellant. Challenging the same, the above C.M.A. has been filed.

Learned counsel for the appellant has made the following submissions :

As per the learned Counsel normally when there is a difference of opinion between the Judicial Member and the Member (Technical), the matter

would be referred to a Judicial Member and not a Member (Technical).

Because of the negligence in not following the safeguard methods by the respondent railway, 86 bundles were damaged due to which they

cannot be put to any use at all. Besides, 15 bundles were missing. Since this is due to the carelessness and negligence on the part of the railway, it

has to pay damages as claimed by the claimant. That apart, the learned Counsel for the appellant has argued that auction has taken place under

Sections 54 and 55 of the old Act wherein it was clearly stated that before conducting an auction, the appellant should have been provided with a

notice. But whereas no notice has been issued as contemplated under Sections 54 and 55 of the Act and as such, the order passed by the Tribunal

is totally erroneous and the same has to be interfered with.

On the other hand, learned Counsel for the respondent has argued that in the event of difference of views between the Judicial Member and the

Member (Technical), as per the provisions of the Act, the matter can be referred to either a Judicial Member or a Member (Technical). He would

contend that as per Section 81 of the Railways Act 1989, where the consignment arrives in a damaged condition or shows signs of having been

tampered with and the consignee or the endorsee demands open delivery, the railway administration shall give open delivery in such manner as may

be prescribed. But, however, when the consignee refuses to take delivery of the consignment, the question of paying for the damages does not

arise at all. That apart, the counsel for the respondent has argued saying that even in case if the consignee is having any grievance with regard to the

damages arrived at, after taking delivery, he can have re-assessment of the damages through the private agencies like Chamber of Commerce and

other agencies. But in this case, totally the appellant has refused to take delivery of the goods. Consequently, he lost his right to ask for any

damages. With regard to the procedure contemplated under Sections 84 and 85 of the Railways Act, 1989 is concerned, the learned Counsel for

the respondent would contend that in fact from Ex.A.7-letter from the respondent, it is clearly established that notice has been given and the

appellant consignee has refused to take delivery of the goods. Hence, the procedure contemplated under the Act is not only followed but also

when the consignee refused to take delivery of the goods, the respondent is left with no other option except to dispose of the goods through

auction sale. Even assuming without admitting that the procedure contemplated under Sections 84 and 85 of the Act has not been followed, at the

most the appellant can be compensated with the value of the money which has been received in the auction sale namely Rs. 4,748/-. In this

connection, learned Counsel for the appellant has relied on the judgment reported in Niranjan Lal Vs. Union of India (UOI), and Union of India

(UOI) Vs. Mohan Raj, . Hence, the learned Counsel for the respondent has argued that the award passed by the Tribunal has to be confirmed in

all respects.

I have considered the submissions made on both sides. Before the Tribunal, originally when the matter has been referred, the following issues

were framed :

Whether the consignor entrusted 171 bundles to railways for carriage at the forwarding station ?

Whether there was short delivery of 15 bundles at the destination ?

Whether packing conditions had not been complied with by the consignor and whether it resulted in the damage to 86 bundles found at the

destination ?

Whether the railways used reasonable foresight and care in the carriage of the goods ?

Whether the petitioner refused to take delivery of the damaged 86 bundles

Whether there were valid notices under Sections 55 and 56 of the Railways Act and whether the sale held by the railways is valid?

Whether the petitioner is entitled to any compensation and if so, how much ?

What relief are the parties entitled to?

With regard to issue Nos 1 to 5 both the Judicial Member and the Member (Technical) have taken a same view. But with regard to Issue No. 6 is

concerned, the Judicial Member has given a finding that as required u/s 55 of the Railways Act due notice was not given to the appellant and

hence, the sale of goods in the auction conduced by the respondent railways is invalid one. Besides, he has given a finding that the auction sale of

86 bundles of broom which was held on 05.12.1988 is bad in law. On this issue, viz. issue No. 6, the Member (Technical) has given a finding that

the appellant was not justified in refusing to take delivery of 86 bundles.

As far as issue No. 7 is concerned, the Judicial Member passed an order directing payment of Rs. 1,08,272/- as compensation for non delivery

of 101 bundles of broom (i.e. 86 bundles damaged and 15 bundles missing). On this issue, the Member (Technical) has concluded that as the

claimant had not taken delivery, he is not entitled for any compensation. Since the Judicial Member and the Member (Technical) took a different

view on certain issues as stated supra, the matter was referred to a third Member.

With regard to the first contention of the counsel for the appellant that in the event of a difference of opinion between the Judicial Member and

the Member (Technical) the matter should have been referred to another Judicial Member, as per Section 21 of the Railway Claims Tribunal Act

1987 if the Members of a Bench differ in opinion on any point, the matter can be referred for hearing on such point or points by one or more of the

other Members and such point or points shall be decided according to the opinion of the majority. There is no specific provision in the Act that in

the event of difference of opinion, the matter has to be referred only to a Judicial Member. Therefore, the first contention of the learned Counsel

for the appellant fails.

With regard to the second contention of the learned Counsel for the appellant, Section 82(1) of the Railways Act states that the consignee

should take delivery of the consignment or part thereof nothwithstanding that such consignment or part thereof is damaged. u/s 84 of the Railways

Act if a person fails to take delivery of any consignment or any part thereof, such consignment shall be treated as unclaimed and the railway can

take recourse to other methods of disposal such as auction after giving due notice to the consignee. But in this case, though the appellant made a

demand for open delivery, the Railway refused to agree to record cent percent damage. As such, basing on the refusal of the railway alone, the

appellant refused to take delivery of the consignment.

Whether the act of the appellant in not taking delivery of the entire consignment or part thereof dis-entitle him to claim the damages is the issue in

question. As far as this aspect is concerned, as per the arguments of the counsel for the appellant, on the arrival of the goods at the destination

point, when the goods were unloaded 86 bundles of brooms were found to be in a damaged condition and that damage has been caused due to

the non-adoption of safety methods by the Railway administration. That too, the goods have been unloaded after a delay of 42 days. Damages

have been caused to the goods because of the failure on the part of the Railway to give adequate protection to the goods is proved as the goods

were damaged because of the flow of water into the wagon wherein the goods have been stored. To say in other words, since the Railway has

refused to give cent percent damage certificate, the appellant refused to take delivery of the goods. But, as per Section 82 of the Railways Act

1989 the consignee shall, as soon as the consignment or part thereof is ready for delivery, take delivery of such consignment or part thereof

notwithstanding that such consignment or part thereof is damaged. Besides, as per Sub-section (3) of the same Section, if the consignee refuses to

take delivery under Sub-section (1), the consignment or part thereof shall be subject to wharfage charges beyond the time allowed for removal.

Basing on this, the appellant company, even in the event of not being satisfied with the assessment of damages done by the railway administration,

can always go for an alternative method of assessment of damages like assessment by Chamber of Commerce or independent surveyors or even

assessment by a local Panchayat. Instead of all these things, the appellant in this case has refused to take delivery of the goods.

Under these circumstances, whether u/s 84 and 85 of the the Railways Act, 1989, the appellant is entitled for a notice is the issue next arises.

Admittedly, as per Ex.B.7 dated 2.8.1988, the appellant left the 86 bundles for assessment of damages. On 08.08.1988 when he turned up to

take delivery on assessment, he refused to segregate the damaged goods from the bundle which was in good condition. Therefore, the appellant

was informed that the consignment incurred wharfage charges from 2.8.1988 and the same will be disposed off under Sections 55 and 56A of the

Indian Railways Act, 1890. From the contents of Ex.B.7 it is clear that on 02.081988 the appellant has left the goods for assessment and on

8.8.1988 when he went to take delivery of the same on assessment, since assessment has not been made as per the damages incurred, he did not

take delivery of the same, though the appellant is aware that after taking delivery of the goods if it is not satisfied with the assessment made, it can

follow the other methods of assessments such as assessing the damages through the Chamber of Commerce or local surveyor or otherwise. Having

refused to do so, the appellant cannot now take a stand that the procedure contemplated under Sections 55 and 56 A of the Indian Railways Act

1890, i.e. before auction he has not been issued with a notice, has not been followed. It is not the case of the appellant that he was willing to take

delivery of the goods and that the railway administration refused to give delivery. On the other hand, it is the case of the appellant himself that since

the damages were not properly assessed, he refused to take delivery of the consignment. But, as per the decisions which has been relied on by the

Tribunal in deciding the issue, viz. AIR 1993 Rajasthan 200 (Union of India v. Mohan Raj); A.K. Sundaram Vs. Government of India, and AIR

1959 M&P 276 (Managing Agents (Martinn & Co.) v. Seth Deokinandan, when the consignee had refused to take delivery of the consignment,

he had no right to claim damages from the respondent for non delivery of the goods since there is default on the part of the consignee / appellant in

not taking delivery of the goods. On the other hand, in the judgment reported in Niranjan Lal Vs. Union of India (UOI), , relied on by the learned

Counsel for the respondent, under similar circumstances, the Allahabad High Court has taken a view that due to the negligence on the part of the

railway administration or its servants damage had been caused to the consignment. Besides, as per the said judgment, the responsibility of the

railway as a carrier does end within a reasonable time after the goods have reached the destination. Its responsibility as a warehouseman, however,

continues and that responsibility is also the same as that of a bailee which must come to an end as provided by Sections 55 and 56 and the relevant

rules framed under the Act. In the case before the Allahabad High Court also the railway authorities were willing to deliver the consignment and

asked the plaintiff to unload the wagon and with regard to the assessment of damages, the railway official dealing with the delivery of goods stated

that the matter would be referred to his higher authorities. But the plaintiff had not taken delivery of the goods and continued with his request for

assessment of damages before taking delivery thereof. Hence, the railway authorities disposed of the goods as per Section 55 of the Act wherein

no notice has been issued to the plaintiff in the above case. Consequently, the Allahabad High Court has taken a view saying that since there is

failure in following the procedure contemplated u/s 55 of the Act, the sale is invalid and as such the consignee is entitled for damages. But, in the

case on hand, from Ex.B.7 which has been marked as Ex.A.7 by the appellant himself, it is clear that the railway administration has categorically

stated that since detention of the goods incurs wharfage charges from 2.2.1988 and they have clearly brought to the notice of the appellant that

unclaimed goods will be disposed of under Sections 55 and 56 of the Act. This letter has been issued on 09.08.1998. But the auction shall take

place only on 5.12.1988. In spite of the letter dated 09.08.1988, the appellant having failed to take delivery of the goods now the appellant cannot

claim damages since a liability has been caused on the appellant to take delivery of the goods u/s 82 of the Act. Having failed to avail that, even if

he is not satisfied with the assessment of damages made by the Railways, he cannot claim damages. Having failed to execute the liability which he

ought to have done under the Railways Act, now the appellant is estopped from claiming damages. Hence, finding no ground to interfere with the

order passed by the Tribunal, this Civil Miscellaneous Appeal is dismissed.