Patna High Court
Union Of India (Uoi) vs Hari Nagar Sugar Mills Ltd. on 5 July, 1967
Equivalent citations: 1968(16)BLJR574, AIR 1968 PATNA 146, 1968 BLJR 574 ILR 46 PAT 987, ILR 46 PAT 987
JUDGMENT G.N. Prasad, J.
1. This appeal has been preferred by the Union of India which, as the owner of the North Eastern Railway, the Northern Railway and the Central Railway Administrations, was the defendant in a suit instituted by the plaintiff company tor recovery of a total sum of Rs. 6,614.31 Paise from the defendant.
2. The following facts are not in dispute before us. On the 3rd December, 1955, five packages of machineries were booked at Wadibundar on the Central Railway for being carried to Harinagar on the North Eastern Railway, then known as the O. T. Railway. The consignment was to have been carried in a parcel train, and it was, in fact, loaded in a parcel van and a sum of Rupees 7,868-00 was realised from the plaintiff as railway freight, the payment having been made at Harinagar on the 30th December, 1955. Four of the packages reached the destination on the 25th December, 1955, and they were duly delivered to the plaintiff. The fifth package which contained a Ruston Diesel Locomotive did not, however, reach the destination until the 21st January 1956, when it was delivered to the plaintiff. The case put forward by the plaintiff was that the delay occurred on account of the fact that the consignment was carried in a goods train, and not in a parcel train, although the freight charged from the plaintiff was for carriage by a parcel train. The freight chargeable for carriage in a goods train was Rs. 2,308.69 paise. The plaintiff alleged that the agreement was for carriage of the consignment in a parcel train, but since it was carried in a goods train, the action of the defendant was wrongful and had caused loss to the plaintiff. There was some correspondence between the plaintiff and the railway administration in this connection, and ultimately the plaintiff instituted the present suit after service of notice upon the defendant under Section 80 of the Code of Civil Procedure on the 14th May 1959. The plaintiff's claim was made up of three items as follows:
(a) Rs. 5,559.31 representing excess freight charged from the plaintiff;
(b) Rs. 1,030-00 as interest at the rate of 6 per cent by way of damages; and,
(c) Rs. 25-00 as costs of sending pleader's notice to the defendant.
3. The defendant resisted the plaintiff's claim on various grounds. It was alleged that the consignment had been carried in the usual way as parcel. It had to be transhipped from a broad gauge van into a meter gauge van. But the fifth package, which consisted of heavy machinery, required special treatment for transhipment and a special type of van for its carriage, and it was on this account that there was some delay in the arrival of the fifth package at the destination. The defendant further pleaded that the suit was bad for want of valid notice under Section 77 of the Railways Act, as it then stood. A further plea taken by the defendant was that the suit was barred by limitation.
4. The trial Court decided all the relevant points in favour of the plaintiff; but dismissed the suit on the ground that a notice under Section 77 of the Railways Act had not been duly served. In appeal, however, the lower appellate Court decreed the suit in part. It took the view that a notice under Section 77 of the Railways Act was not necessary in this case as it was a case of breach of contract, and not one of overcharge of freight. The lower appellate Court observed that even if Section 77 was attracted upon the facts of the present case, it had been complied with by a letter (Ext. 3) dated the 16th January 1956 addressed by the plaintiff to the Deputy Chief Commercial Superintendent, North Eastern Railway, for a direction to the Station Master of Harinagar to charge freight at a lower rate. The lower appellate Court, however, reduced the plaintiff's claim of interest by decreeing the same for a period of only three months prior to the date of the institution of the suit. Being thus aggrieved, the defendant has preferred this second appeal.
5. The principal point which has been canvassed before us by Mr. P. K. Bose ap-pearing in support of the appeal is the question of limitation. In the Courts below, the stand successfully taken by the plaintiff was that the suit was governed by Article 115 of the Limitation Act which provided for a period of three years as the limitation period in respect of a suit "for compensation for the breach of any contract, express or implied, not in writing registered and not herein specially provided for". The terminus a quo being "when the contract is broken". As against this, the defendant sought to invoke Article 31 which governed a suit "against a carrier for compensation for non-delivery of, or delay in delivering goods", and provided for a period of one year, to be computed from the time "when the goods ought to be delivered". In this Court, when the appeal was placed for hearing before a learned Single Judge, learned counsel for both the parties abandoned their original stand, and while the plaintiff relied upon Article 120, instead of Article 115, the defendant relied upon Article 62. The learned Single Judge was of the opinion that the question as to which Article of the Limitation Act will be applicable, should be decided by a Division Bench, as no direct authority of this Court on the point was brought to his notice. That is how this appeal has come before us.
6. Before us, however, no endeavour was made on behalf of the plaintiff to invoke the six years' rule of limitation contained in Art 120. Mr Bose for the appellant, however, relied upon Article 62 as being the proper Article of the Lim Act, which would govern the present suit. The Article provided for a limitation period of three years for a suit "for money payable by the defendant to the plaintiff for money received by the defendant for the plaintiff's use "to be computed from the time when the money is received". On this footing Mr. Bose urged that the limitation period for the present suit expired on the 30th December 1958, with the lapse of the period of three years computed from the 30th December 1955, when the overcharge of the freight was made from the plaintiff, and the suit having been filed on the 14th May 1959, was barred by limitation. Alernatively, Mr. Bose contended that even if Article 115 were to be applied, as held by the Courts below, the suit was out of time since it had been filed beyond the period of three years from the date of the alleged breach of contract. As against this, the learned Advocate General appearing for the plaintiff-respondent contended that it was wholly academic to investigate whether the suit was governed by Article 62 or by Article 115, both providing for a limitation period of three years, which undoubtedly expired nearly six months before the date of the institution of the present suit.
The learned Advocate General also made it clear that he did not propose to rely upon the residuary Article, namely. Article 120. The learned Advocate General, however, contended that there was a fresh start of the period of limitation by reason of a letter (Ext. 3/h) dated the 28/30th January 1957, which was addressed to the plaintiff by the Chief Commercial Superintendent of the North Eastern Railway in connection with the claim which the plaintiff had made from the railway administration. In reply to a letter, Ext. 3/b, of the plaintiff, dated the 2nd January 1957, the Chief Commercial Superintendent wrote in Ext. 3/h to the plaintiff as follows:
"I acknowledge the receipt of your letter dated 2-1-57 regarding Wadi Bunder to Harinagar P. W. B. No. 6598/87 of 3-12-55.
If on examination the claim is found valid and payable please indicate whether you desire payment by Money Order or by Cheque on State Bank at ..... This is without prejudice."
According to the learned Advocate General, the letter (Ext. 3/h) contained an acknowledgement of liability of the plaintiff's claim within the meaning of Section 19 of the Limitation Act, and as such the suit filed within three years from the 2nd January 1957, was not barred by limitation.
7. The contents and the scope of Section 19 of the Limitation Act are no longer in doubt. In Tilak Ram v. Nathu, AIR 1967 SC 935 it was pointed out by their Lordships of the Supreme Court that the section requires (i) an admission or acknowledgement (ii) that such acknowledgement must be in respect of a liability in respect of a property or right (in) that it must be made before the expiry of the period of limitation and (iv) that it should be in writing and signed by the party against whom such property or right is claimed. Explanation I appended to the section provides that an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment has not yet come or is accompanied by a refusal to pay or is coupled with a claim of set off. Their Lordships referred to an earlier decision of the Supreme Court in Shapoor Fre-doom Mazda v. Durga Prosad Chamaria. AIR 1961 SC 1236 where it was held that the statement on which a plea of acknowledgement is based must relate to a subsisting liability, though the exact nature or the specific character of the said liability may not be indicated in words. The words used in the acknowledgement must, however, indicate the existence of jural relationship between the parties, such as that of a debtor and creditor and it must appear that the statement is made with the intention to admit such jural relationship It was further observed:
"Such intention can be inferred by implication from the nature of the admission, and need not be expressed in words. If the statement is fairly clear then the intention to admit jural relationship may be implied from it. The admission in question need not be express but must be made in circumstances and in words from which the Court can reasonably infer that the person making the admission intended to refer to a subsisting liability as at the date of the statement. In construing words used in the statement made in writing on which a plea of acknowledgment rests, oral evidence has been expressly excluded but surrounding circumstances can always be considered"
It was further indicated that the Courts generally lean in favour of a liberal construction of such statement but that does not mean that where no admission is made, one should be inferred, or where a statement was made clearly without intending to admit the existence of jural relationship, such intention could be fastened on the maker of the statement by involved or farfetched process of reasoning.
8. It is manifest, therefore, that one of the essential ingredients of Section 19 is that there must be an acknowledgment of liability in respect of the right or the claim put forward against the maker and that it must have relation to a present subsisting liability and the words used in the acknowledgment need not be express and may be reasonably inferred from the circumstances and from the words used by the maker But it must appear that the statement is made with the intention of admitting the existence of jural relationship between the parties. At the same time, the Court cannot infer an admission, where it is not made, or where a statement is made clearly without intending to admit the existence of jural relationship. We have, therefore, to investigate whether there is any acknowledgment of liability in respect of the plaintiff's claim or any admission of jural relationship between the parties in the letter Ext. 3/h, upon which the learned Advocate General has relied. The terms of the letter quite clearly do not contain an admission of the plaintiff's claim or an acknowledgment of liability in respect of it, nor it would be legitimate, in my opinion, to infer from the language employed in Ext. 3/h that the Chief Commercial Superintendent intended to admit the existence of jural relationship between the parties. The words "If on examination the claim is found valid and payable" cannot fairly be construed to mean that the claim which the plaintiff put forward was found to be valid or payable, or that there was a subsisting liability in respect of the claim which the plaintiff had lodged with the railway administration.
The letter Ext. 3/h was really designed to enquire from the plaintiff as to how it would like the payment to be made in the event its claim being found valid and pay-able. The letter cannot be construed as conveying to the plaintiff that its claim had been found to be valid and payable or that there was a subsisting jural relationship between the parties. It was clearly indicated therein that the claim which the plaintiff had made in its letter Ext. 3/b dated the 2nd January 1957 would be examined or investigated into, and that if upon such examination or investigation, the claim was found valid and payable then the payment would be made either by money order or by cheque, as desired by the plaintiff. In other words, the plaintiffs claim was still to be examined and it would be wholly unreasonable to hold that without subjecting the plaintiff's claim to examination or investigation, the Chief Commercial Superintendent could have proceeded to admit it to be admissible, either in part or in whole. The inquirv as to the manner in which the plaintiff would like the payment to be made, was undoubtedly made with the intention of making an expeditious settlement of the claim, if as a result of an examination of the claim it was found to be valid and payable In the letter Ext. 3/b, to which reference was made by the Chief Commercial Superintendent in Ext 3/h, the plaintiff had referred to the circumstances under which excess railway freight was charged from it. Ext. 3/h would, therefore, indicate that the circumstances, mentioned by the plaintiff in its letter Ext 3/b were to be examined, and the question of making the payment or admitting the existence of jural relationship between the parties would only have arisen if the facts and circumstances mentioned by the plaintiff in Ext. 3/b would have been found, upon investigation, to be correct in whole or in part. In Ext. 3/b, the plaintiff had claimed refund of the amount of difference between parcel freight and goods freight, which in the present case was Rupees 5,559.31 paise for the entire distance between Wadibundar and Harinagar. But it is an admitted position in this case that the consignment had been carried in a parcel express train at least up to Itarsi. In other words, for some part of the journey, at any rate, the plaintiff had been rightly charged parcel freight. In the lower appellate Court, the case of the defendant was that between Itarsi and Varanasi, the consignment was carried by passenger train, but no direct evidence was adduced on this point.
Be that as it may, the railway authorities concerned were undoubtedly to investigate whether the claim which the plaintiff had put forward in Ext. 3/b, was well founded or not either in whole or in part. Without making a complete investigation into the matter, the Chief Commercial Superintendent could never have intended to acknowledge the existence of jural relationship between the parties at the time when he wrote the letter Ext 3/h to the plaintiff. In my opinion, no part of the plaintiff's claim had been admitted in the letter Ext. 3/h, either expressly or by implication, and this is made further clear in the concluding words of the letter Ext. 3/h, which read "This is without prejudice" In other words, nothing was admitted in Ext. 3/h, and all that was said was that the claim would be examined, and in case it was found that to be valid and payable, then payment would be made in the manner desired bv the plaintiff.
9. The learned Advocate General sought to rely upon the principle of the decision of the Privy Council in Maniram v. Seth Rupchand, (1906) 33 Ind App 165 (PC). That, however, was a case of a mutual, open and current account which from the very nature, involved reciprocal demands between the parties and of striking a balance. A right to have the account taken was inherent in the nature of the dealings between the parties, and that necessarily carried implied promise to pay. Those considerations do not arise in the present case, and, therefore, a promise to pay cannot be inferred either from the words used in Ext. 3/h or from the circumstances in which it was addressed to the plaintiff.
10. In an unreported decision of this Court in the case of Firm Mahinder Singh Ramchandra Singh v. Union of India, Second Appeal No 1294 of 1958 decided by a Bench of this Court on 25th October 1952 (Pat), the following observation was made:
"The relevant question that falls for determination is whether the correspondence disclosed any acknowledgment of liability by the carrier. We have been taken through the correspondence and there is nothing to show that, by this correspondence, the Railway Administration ever accepted the liability to compensate the plaintiff. In fact, in none of the letters, there is any mention of any liability of the Railway Administration, Apart from this, what is of greater significance in this case is that all these letters have been marked 'without prejudice'. Therefore, even if by some stretch of language, an interpretation of acknowledgment of liability on the part of the carrier be likely, yet it will have no legal effect, because of the letters being addressed without prejudice to the claims of the parties. In this case, therefore, the question of acknowledgment of liability does not arise."
11. The situation in the instant case is exactly the same. The use of the words "without prejudice", which are to be found in Ext. 3/h, re-enforce the view which I have taken that the Chief Commercial Superintendent never accepted any liability in respect of the plaintiff's claim contained in their correspondence A question was also raised before us as to whether the effect of marking the letter as "without prejudice" would be to exclude it entirely from evidence in the case. Relying upon In re Daintrey, (1893) 2 QB 116 and In re River Steamer Co., (1871) 6 Ch A 822 it was urged on behalf of the plaintiff that it cannot be excluded from consideration as a piece of evidence in the case. But the question here is not of excluding Ext. 3/h from consideration, but one of its interpretations and upon its interpretation as also in consideration of the circumstances surrounding it, I am clearly of the opinion that it constituted no admission of liability for the plaintiff's claim, or even an acknowledgment of the existence of jural relationship between the parties. I, therefore, hold that Ext 3/h cannot be used as an acknowledgment of liability under Section 19 of the Limitation Act so as to give a fresh starting point of limitation for the plaintiff's suit. Therefore even if Article 62 applied, as urged by the learned counsel for the appellant, or Article 115 applied, as held by the Courts below the suit must fail on the ground of limitation.
12. Another question which has been raised by Mr. Bose is that the suit must fail for want of a valid notice under Section 77 of the Railways Act (now Section 78 B). That section, so far as it is relevant, lays down that a person shall not be entitled to a refund of an overcharge in respect of animals or goods carried by the railway unless his claim for refund 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 The lower appellate Court has held that the notice contemplated by Section 77 was not necessary as the present case is not for refund of an overcharge, but for compensation for loss arising out of breach of contract. But I will assume, as urged by Mr. Bose, that the plaintiff has framed its suit as a suit for refund of an overcharge of the freight and that the provision of Section 77 is, accordingly, attracted, and I will determine whether a valid notice under Section 77 was served upon the railway administration within the requisite period of six months.
It appears that on 16-1-1956, that is to say, well within the period of six months mentioned in Section 77, the plaintiff had addressed two letters (Exts. 3 and 3/a), one to the Deputy Chief Commercial Superintendent of the North Eastern Railway and the other to the Assistant Transhipment Inspector, North Eastern Railway, Banaras Cantt. I would leave Ext. 3/a out of consideration which was addressed to the Assistant Transhipment Inspector, because that officer was obviously not an officer upon whom such a notice could have been validly served as contemplated by Section 140 of the Railways Act, under Section 140, the notice had to be served upon the General Manager. Ext. 3/a, however, was not addressed to the General Manager, but to the Deputy Chief Commercial Superintendent for a direction to the Station Master of Harinagar for refund of the excess amount realised from the plaintiff for "parcel freight" and, accordingly, it was urged by Mr. Bose that it was not served upon a competent authority.
Section 140, however, came up for consideration before this Court in Governor General in Council v. Gouri Shankar Mills Ltd., AIR 1949 Pat 347 and the view that has prevailed in this Court is that the requirements of Section 77 read with Section 140 of the Railways Act are fulfilled by serving a notice within the prescribed period on the Chief Commercial Manager or any other Subordinate Officer of the railway provided it is established as a fact that such subordinate officer has been held out as a competent person to deal with the claims of such kind. In paragraph 10 of its judgment, the lower appellate Court has referred to certain materials from which it appears that the claim put forward by the plaintiff in the letter Ext. 3 was entertained by the Chief Commercial Superintendent who acknowledged the receipt of the plaintiffs letter (Ext. 3) and wrote to the plaintiff that the matter was under investigation (vide Ext. 3/i dated the 9th March 1956). The lower appellate Court further pointed out that on the side of the defendant there was no denial of authority of the Deputy Chief Commercial Superintendent to deal with the plaintiff's claim, and no attempt was made on behalf of the defendant to show that the Deputy Chief Commercial Superintendent was not an officer who was authorised to entertain such claim. In these circumstances, the lower appellate Court was amply justified in presuming, as it did that the notice under Section 77 was validly served upon a competent officer of the railway administration The second point raised by Mr Bose, accordingly, fails.
13. Mr. Bose also contended that under no circumstances, the plaintiff could have been entitled to a refund of the entire difference between parcel rate and goods rate, because at least up to Itarsi, the consignment was carried in a parcel train, and up to that point, therefore, the plaintiff was liable to pay parcel freight. I do not propose to express a concluded opinion on this point because, as I have already held, the suit must fail in its entirety on the ground of limitation.
14. In the result, the decision of the lower appellate Court is set aside and the plaintiff's suit is dismissed with costs throughout.
B.N. Jha, J.
15. I agree.