Patna High Court
The Union Of India (Uoi) vs Baijnath Madan Lall And Ors. on 21 August, 1950
Equivalent citations: AIR1951PAT219, AIR 1951 PATNA 219
JUDGMENT Reuben, J.
1. These two appeals are directed against a decision of the Subordinate Judge, Patna, in Money Suite Nos.1 land 11 of 1944, which were tried analogously by him. The appellant was the defendant in both the suits.
2. The suits were for the recovery of damages for short delivery and for loss due to delay in the delivery of two consignments of Indian cotton piece goods made over to the B. B. and C. I. Railway at Ahmedabad on 10-4-1948 for transport to and delivery at Bigha Ghat on the O. T. Railway. In the ordinary course, these consignments should have arrived at Digha Ghat in the first week of May. Actually they arrived on 8-11-1943. The consignee finding them to be in a damaged condition, took open delivery on 23-11-1943. Shortages were found in both the consignments, Rs. 696 in Money Suit No. 11 of 1944 and Rs. 227 in Money Suit No. 1. The plaintiffs claim these amounts on account of the short delivery, and, on account of loss due to late delivery. They base their claim on the difference between the market prices of cotton piece goods on She data when the consignments should have been delivered and on the date when they were, in fact, delivered. The Subordinate Judge has held that, during this period, there was a depreciation in the price of 25 per cent, of the value on the date when the goods should have been delivered. He has decreed the suits accordingly.p-
3. The appellant does not challenge the decrees so far as they relate to short delivery. As regards delay in delivery, two points are urged on his behalf:
(1) that the appellant was sued as the owner of the O. T. Railway and, under the provisions of Section 80, Railways Act, the plaintiffs are not entitled to ft decree against him without proof that the O. T. Railway Administration was responsible for the delay, and (2) that the plaintiffs have not proved that they have suffered loss by reason of the delay in delivery and, in any case, the evidence given by them is insufficient to prove the amount of damages they should get.
On behalf of the plaintiffs a third point is pressed, that the decrees appealed from are decrees against the Governor General in Council as owner of the B. B. and C. I., the E. I. and the O. T. Railways, that the appeals have been filed by him only in the capacity of the owner of: the O. T. Railway, and that, therefore, the decrees are final so far as the other two Railways are concerned,
4. It will be convenient to take up the second point first. The other two points can be dealt with together afterwards.
5. The provision for compensation when there is a breach of contract is made by Section 73, Contract Act. I reproduce the relevant portion:
"When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract, compensation, for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it.
* * * * * * Explanation.--In estimating the loss or damage arising from a breach of contract, the means which, existed of remedying the inconvenience caused by the non-performance of the contract must be taken into account."
There follow a number of illustrations. Illustration (e) exactly covers the present case, According to it, the test adopted by the Subordinate Judge namely, the difference between, the market prices on the due day of delivery and on the day of actual delivery, is correct; this-is subject however, to the main provision of the section which I have reproduced above. From the portion of the citation which I have placed in italic, it is clear that the plaintiff must prove loss or damage. Ordinarily the mere difference in price on the two relevant dates is sufficient to establish this fact. In the present case, it is urged that it is not sufficient because it is admitted by the Munim of the plaintiffs (P. W. 1) that the goods were sold. The witness admits, further, that particulars of the sales are to be found in the account books of the plaintiffs, but those account books have not been produced and no particulars of the sales have been given. It is possible it is urged, that, on the prices obtained, no loss was suffered by the plaintiffs; or, at least, it is possible that the sales were at prices exceeding the market prices in November and that the loss incurred was considerably leas than that shown by a comparison of the market prices on the respective dates. On behalf of the appellant, reference has been made to Jamal v. Moolla Dawood, Sons & Co., 43 I. A. 6: (A. I. R. (2) 1915 P. C. 48) as an authority that the price actually obtained by the plaintiffs by selling those goods is irrelevant for the purpose of ascertaining the damages to be given to them in a suit for breach of contract. That was a case of a contract for the sale of negotiable securities and their Lordships of the Judicial Committee, in stating the points for consideration were careful at p. 10 of the report to specify this fact. They found that the retention of the shares after the breach had occurred was a speculation of the plaintiff. As such, it was his speculation and, since the other party could not be penalised for any loss he might suffer thereby, it could not claim any profit he might get by means of that speculation. The decision was followed as an authority in a ease similar to the present one in G. I. P. Rly. v. Jugul Kishore, 52 ALL. 238: (A. I. R. (17) 1930 ALL. 132). With respect I would suggest that the correct principle was laid down by the Judicial Committee in Wertheim v. Chicoutimi Pulp Co., (1911.) A. C. 301: (80 L. J. P. C. 91). In that case the plaintiff sought to re-cover damages for late delivery at 27 sh. 6 d. a ton, the difference in the market price on the due date and on the data of actual delivery. It appeared, however, that he had sold the goods at 65 sh. a ton involving a loss to him, as compared with the price on the due date of only 5 sh. a ton, It was contended on his behalf that the rule on which he based his claim was "the well established and indisputable measure of damages for delay in breach of contract in delivery of goods."
Their Lordships pointed out that, if his reasoning was accepted, the result would be that, whereas if the goods had been delivered in time his profit would have been 32 sh. per ton, he should now get damages according to the above formula in addition to the profit made by the sale at 65 sh. per ton, making a total profit to him of 54 sh. 6 d. per ton, the result being that the plaintiff would get a profit at 22 sh. 6 d. more per ton than if the contract had never been broken at all. Their Lordships, therefore, accepted the contention for the defence and allowed damages only at 5 sh. a ton. In the present case, there is nothing to suggest that there was any holding back of the goods by way of speculation. Hence, the rule laid down in Wertheim v. Chicoutimi Pulp Co., (1911 A. C. 301:80 L. J. P. C. 91) would apply, and the price at which the goods were sold not having been proved, the plaintiffs are not entitled to any damages.
6. Further, even accepting the rule which has been followed by the Subordinate Judge, it seems to me that there is insufficient evidence to establish the rate at which damages should be allowed, The evidence on the point falls into three classes. There is the evidence of two witnesses who come from Ahmedabad from which place the goods were despatched and where the mills which supplied the goods were situated. These witnesses know nothing about the prices at Patna. They only tell us about the rate of prices in Ahmedabad, and the general result of their depositions is that, between May and November of that year, the prices fell about 25 to 35 per cent. Secondly, there is the evidence of three witnesses belonging to Patna, one of them an employee of the plaintiffs and the other two employees of other firms in Patna. Their evidence is very general and they depose that the price of the cotton piece goods fell about 50 per cent, during this period. They do not depose particularly about the price of cotton piece goods of the sort with which we are concerned. In view of this fact and also because of the failure of the plaintiffs to produce their account books showing the entries relating to the sale of the cotton piece goods in question, the Subordinate Judge found himself unable to accept the evidence of these witnesses. Thirdly, there are some account books of the plaintiffs and of two other firms at Patna. Only a very few entries in these books, eight in all, have been marked as exhibits--I say advisedly "marked as exhibits" and not "proved". The Subordinate Judge rejected the entries in the books of the plaintiffs, because the books were produced very late. As regards the books of the other two firms, he pointed out that the entries did not relate to the same sorts of cloth and, further, he was not prepared to believe that, during this period, the prices fell as much as 50 per cent. It has been pointed out to us that two of the entries in those books, namely Exs. 3 (d) and 3 (e), relate to dhotis NO. 2470 which is one of the different varieties of cloth forming a part of the consignments with which we are concerned. Exhibit 3 (d) relates to sale of two pairs of dhotis in May 1948 at Rs. 8-10-0 per pair and Ex. 3 (e) to sale in November 1943 of one pair of dhotis at Rs. 3-8-0 a pair. To my mind, two individual transactions like this are insufficient to establish what were the ruling market prices. Even if I accepted these entries as reliable, therefore, I would not accept them as evidence for this purpose. Looking at the deposition of Shoo Narain Lal (P. W. 2), however, I find that the transactions have not been properly proved. The witness deposes:
"These entries in the credit books of the firm are In my pen and in the pen of Beni Madho marked Exs. 3 (b) and 3 (e)."
[The portion in italics appears from the record to be a mistake for "Exhibits 3 (b) to 3 (e)".] The mere existence of these entries in the account books in the handwriting of a particular person is not sufficient to prove that there were really such transactions. What the witness says is insufficient to establish that he has any personal knowledge of these particular transactions and can vouch that such transactions took place. The same is the case with the entries in the ac-count book of the firm of Babulal Narain Prasad, which Mahabirji Kalawatia (P. W. 3) proves to be in the handwriting of Lakhan Lal Gumasta. We find this also in the case of the entries in the books of the plaintiffs, which Shyam Sunder Agrawala (P. W. 1) proves to be in the handwriting of Ramjiwan Ram and of Sarju Prasad, It is for this reason that, when mentioning these entries above, I said that they had been "marked as exhibits".
7. In the absence of satisfactory evidence regarding market prices in Patna, the learned Subordinate Judge has inferred the probable drop in prices at Patna from the drop in prices during the corresponding period at Ahmedabad. That drop, as I have mentioned above, was; between 25 to 35 per cent. It is hardly necessary to state that this reasoning is purely conjectural. There is no logical connection between the price at Ahmedabad and those at Patna. There are many factors which determine what the price of a particular commodity at a particular place will be, and it may well happen that, owing to local factors, the prices at Patna may have gone up, although those at Ahmedabad went down. The conclusion arrived at by the learned Subordinate Judge, therefore, can-not be supported.
8. On the authority of Erroll Mackay v. Kameshwar Singh, 59 I. A. 398: (A. I. R (19) 1932 P. C. 196), it has been contended on behalf of the respondents that the prices at Ahmedabad, and not those at Patna formed the proper criterion for assessing the damages payable in this case. That decision related to an entirely different set of circumstances. The claim for damages arose out of a failure by a vendor to supply at Purnea 200 mds. of indigo seed. Under Section 73, Ill. (e), Contract Act, damages were recoverable at the difference between the contract price and the price for which the purchaser might have obtained a like quantity of indigo seed at Purnea on the due date for delivery. Evidence showed that there was no market for indigo seed at or near Purnea, and that Cawnpore, 300 or 400 miles from Purnia, was the central market for indigo seed to which growers at Purnea and purchasers resorted. It was in these circumstances that it was held that the damages should be based upon the market price at Cawnpore. Here, Ahmedabad is merely the wholesale market from which the plaintiffs obtained the goods in question. The goods were purchased by them for resale at Patna or in its neighbourhood The wholesale or even the retail prices at Ahmedabad are, therefore, irrelevant.
9. This brings me to points 1 and 3. To understand them, it is necessary to refer to the provisions of Sections 77 and 80, Railways Act, which-are reproduced below :
77. A person shall not be entitled to a refund of an overcharge in respect of animals or goods carried by railway or to compensation for the loss, destruction or deterioration of animals or goods delivered to be so carried unless his claim to the refund or compensation has been preferred in writing by him or on his behalf to the railway administration within six months from the date of the delivery of the animals or goods for carriage by railway.
80. Notwithstanding anything In any agreement purporting to limit the liability of a railway administration with respect to traffic while on the railway of another administration, a suit for compensation for loss of the life of, or personal injury to a passenger, or for loss, destruction or deterioration of animals or goods where the passenger was or the animals or goods were booked through over the railways of two or more railway administrations, may be brought either against the-railway administration from which the passenger obtained his pass or purchased his ticket, or to which the animals or goods were delivered by the consignor thereof, as the ease may be, or against the railway administration on whose railway the loss, injury, destruction or deterioration occurred."
10. Two sets of notices purporting to be under Section 77 were issued in this ease. One set was issued on 28-7-1943 and directed to the three Railways concerned, namely, the B. B. & C. I., the E. I. and O. T. Railway Administrations. The second set was issued on 28-12-1943 and was directed to the O. T. Railway Administration alone. It has been held that, under Section 77, notice is not necessary in cases relating to pure nondelivery but is required where non delivery is due to loss or destruction : vide Jaisram Ramrekha v. G. I. P. Rly. Co., 8 Pat. 545 : (A. I. R. (16) 1929 Pat. 109) and Dominion of India, v. Hazari Lal, A. I. R. (36) 1949 Pat. 410: (30 P. L. T. 280 F. B.). On behalf of the appellant, it has been argued that the first set of notices was for pare non-delivery, and that the notices were unnecessary. It is pointed out that the claim in these suits is for short delivery which has been attributed in the plaint to tampering, that is theft thus requiring a notice under Section 77 and for loss due to fall of prices which has been held to be a claim for deterioration within the meaning of Section 77. It is these claims, it is said, that are covered by the second set of notices and, therefore, the suits lay against the O. T. Railway alone.
11. At first sight, the contention on behalf of the appellant seemed plausible, but, on examining the matter more closely, it is found to have no substance. It should be pointed out, first of all, that a notice under Section 77 must be given within sis months from the date of the delivery of the goods for carriage by railway. Therefore, the notice that was given in December 1943 was not a notice under Section 77. Coming to the notice given in July 1943, it runs substantially as follows:
"The said consignment has not been delivered to ray clients in spits of demands and various correspondence, and great loss has been caused to my clients.
There has been unreasonable delay in delivery of the consignment and the market value of the goods has gone down by 50 per cent, and is still going down.
My clients have been advised to submit that the delay caused is unreasonable and they are entitled to all loss due to the depreciation in value of the goods and in case of non-delivery to the purchase price."
This is clearly a notice relating to depreciation due to fall in prices. It is also a notice that sufficiently covers non-delivery due to loss or destruction. At that stage, it was not possible for the plaintiffs to say whether it was a pure case of pure non-delivery or was non-delivery due to loss or destruction. If it is the law that it is not open to the plaintiff to give notice until he is certain on the point, it might become too late for him to give such notice at all, for the knowledge might come to him much more than six months after the goods were delivered for transport. In fact, in Dominion of India v. Hazari Lal, A.I.R. (36) 1949 pat. 410 : (30 P. L. T. 280 F. B.), it is suggested by Manohar Lall J. that for safety a notice under Section 71 should be given even when the claim relates to pure non-delivery. The notices given in July 1943, therefore, were sufficient to entitle the plaintiffs to a decree against all the three Bail-ways concerned.
12. It is this fact, which was pointed out by me during course of the argument, that suggested the point that has been urged on behalf of the plaintiffs-respondents. It is stressed on their behalf that the plaints in these suits are directed against "the Governor-General of India in Council, New Delhi, representing the State Railways, "and that it is in this form that the defendant is described in the decrees in both the suits. It is argued from this that the decrees must be taken to be decrees against all the three Railways and that since the appeal has been filed by the Governor-General as owner of the O. T. Railway alone, it must be taken that the decrees are final as against the other two Railways. We must not allow ourselves to be misled by the description of the defendant in the plaints and in the decrees. The cases must be looked to as a whole. It is evident from the giving of the second set of notices that the plaintiffs thought a further notice was necessary. This second notice was addressed to the O. T. Railway alone and, the plaints did rot mention the particular Railways against which the plaintiffs were proceeding. The Governor-General apparently under the same impression, appeared in the suits as the owner of the O. T. Railway alone and filed a written statement in this capacity. The suits proceeded on the basis that they related to the O. T. Railway alone. This is shown by the Judgment of the Subordinate Judge, which States in express-terms that the suits are against the Governor-General, in Council as owner of the O. T. Railway. When he decreed these suits, therefore, he decreed them only against the O. T. Railway. The description of the Governor-General in the decrees as representing she States Railways has-by itself no meaning. In order to understand the term, it is necessary to go back to the Judgment which makes it clear that the decrees are decrees in respect of the O. T. Railway alone.
13. If I had hold that the decrees under appeal are decrees in respect of the B. B. & C. I., and the E. I. Railway also, I would have felt justified in varying the decrees in favour of those two railways in exercise of this Court's powers under Order 41, Rule 4, Civil P. C. In this connection, a reference has been made on behalf of the respondents to Chokalingam Chetty v. SeethaiAche, 55 I. A. 7: (A.I.R. (14) 1927 P. C. 252) and Nathuni Bam v. Secy. of State, A I. R. (21) 1934 pat. 589 : (154 I. C. 171). These are both decisions under Order 41, Rule 20, and decide that, where one of the holders of a decree has not been joined as respondent to the appeal and the time limited for appealing has elapsed, he is no longer "interested in the result of the appeal" and cannot be added as a party to the appeal under Order 41, Rule 20. The question arose in those decisions when the appellant was seeking to press his appeal against persons who had not been impleaded. The problem does not arise when all that the Court proposes is to exercise its power under Order 41, Rule 4, and to pass an order in favour of, and not against a person who is not a party to the appeal.
14. This brings me back to the first point, namely, the contention of the appellant, as owner of the O. T. Railway, that he is not responsible for the loss due to fall in prices unless it is shown that the O. T. Railway Administration was responsible for the delay. The point is of academic interest in view of my finding that the plaintiffs have failed to establish that they are entitled to any damages on this account. I may merely note briefly that; this contention is not open to the appellant in view of an admission made by his Advocate in the Court of the Subordinate Judge that "the defendant is liable for the late delivery" (I am citing from the Judgment of the learned Subordinate Judge,) The liability of the O. T. Railway Administration depended on certain facts, namely, that the delay occurred while the goods were in the custody of the O. T. Railway Administration. When the appellant's lawyer made this admission, he must be taken to have made an admission of this necessary fact, and the appellant must be treated at this stage as bound by that admission. In the order-sheet of the learned Subordinate Judge dated 10-6-1946, with reference to a petition filed by the plaintiffs for the delivery of certain documents, the Subordinate Judge disallowed the petition, observing :
"In my opinion these documents could have been necessary, provided the defendant company would have asserted that there was no negligence or misconduct on the part of the Railway in dealing with the consignment. In the present suit, I find as is also admitted by the learned Advocate for the defendant that there was late and short delivery of the goods consigned to the plaintiff."
This shows that, even at an earlier stage, this position was taken up by the Advocate for the appellant. Had he contended that under Section 80, the appellant was not liable, it might have been open to the plaintiffs to take steps to bring the appellant on the record as representative of the other two Railways also. In these circumstances, It would not be fair at the appellate stage to permit the appellant to disclaim liability on this ground.
15. In the result, I would allow these appeals to the extent indicated, namely, that the decrees will be set aside so far as they relate to damages for late delivery. The principal amount of the decrees will, therefore, be Rs. 696 in Money Suit No. 11 and RS. 227 in Money Suit No. 1. The appellant will get his coats in this Court proportional to his success. In accordance with Section 82, Civil P. C., it will further be directed that the decrees in these suits be satisfied within three months from today.
Jha, C.J.
16. I agree.