The General Manager, Southern Railway, ... vs Agarwal Traders on 20 April, 2001

[Cites 5, Cited by 2]

Karnataka High Court

The General Manager, Southern Railway, ... vs Agarwal Traders on 20 April, 2001

Equivalent citations: 2003ACJ184, AIR2001KANT366, 2002(1)KARLJ201, AIR 2001 KARNATAKA 366, 2001 AIR - KANT. H. C. R. 1732

1. This is a defendant's appeal in a suit for payment of compensation for damage caused to goods entrusted to the Indian Railways at Lucknow for carriage to Davangere, in the State of Karnataka. The claim in question was initially lodged before the Civil Judge at Davangere in O.S. No. 125 of 1984 which was upon constitution of the Railway Claims Tribunal, transferred to the Tribunal under Section 24 of the Railway Claims Tribunal Act, 1987. The Tribunal has awarded the claim, hence the appeal.

2. The claimant-respondent in this appeal is a partnership firm carrying on business as merchant and commission agents at Davangere. Two consignments comprising 180 bags of gram in each were booked on behalf of the claimant for transportation from Lucknow city to Davangere in July 1981. The consignments were a few months later delivered to the respondent-consignee at Davangere. At the time of delivery, out of the first tot of 180 bags only 1,070 Kgs. was in good condition while the remaining had suffered damage. From out of the second lot of 180 bags also only 582 Kgs. was found to be good while the rest was damaged. The delivery of the damaged part of two consignments was taken by the consignee only after the Railway Superintendent had issued a Certificate to the effect that 98% of the said stock was damaged. In due course the consignee lodged a claim for compensation for the damage suffered by the consignments on account of the negligence of the Railway Authorities. Two claim notices marked Exts. P-9 and P-10 were in this connection sent to the Railway Authorities. In the first notice, the consignee claimed a sum of Rs. 66,139/- while in the second a claim for a sum of Rs. 68,294/- was made. Upon failure of the Railway Authorities to recognise and pay the claim amount, the respondent-consignee filed O.S. No. 125 of 1984 for a sum of Rs. 1,91,532/- inclusive of interest at 18% per annum from the date the consignment was booked till the date of suit.

3. The claim was contested by the Railway Administration on the ground that the damage to the consignment was due entirely to an act of God and despite due care and foresight used by the Railways. The Tribunal has however come to the conclusion that the Railway Administration had failed to establish use of reasonable foresight and care in the carriage of the consignments in question and therefore failed to discharge the burden that lay upon it in terms of proviso to Section 73 of the Railways Act. It has accordingly awarded the claim made by the respondent-consignee but only in part and to the extent of a sum of Rs. 1,19,481/- with interest at 6% per annum, calculated from the date of the application till the date of the order. A further direction to the effect that in case the amount was not remitted by the appellant-Railway Administration within two months it shall pay interest on the awarded amount
at 18% per annum was also issued. The Railway Administration has questioned the correctness of the said order in the present appeal.

4. Counsel for the appellant strenuously argued that the damage to the consignment had taken place on account of heavy rainfall resulting in extensive breaches and consequent damage to the Railway tracks over which wagons carrying the consignments were stabled. It was argued by him that the oral and documentary evidence adduced by the Railway Administration sufficiently established that the consignments in question had reached Getor Jagatpur Station, near Jaipur on the 18th of July, 1981 and that while the wagons were waiting further movement, heavy rain and flood had hit the said station resulting in disruption of traffic to and from Getor Jagatpur from all sides. The Railway tracks over which the wagons were stabled had been washed away and the wagons pushed into deep pits formed by the floods. The damage to the consignments was in that view entirely on account of an act of God, and not because of any negligence on the part of the Railways. Section 73 of the Railways Act, 1890, argued the learned Counsel, completely absolved the Railways of any liability on account of any such damage.

5. On behalf of the respondent-consignee, it was per contra argued that there was no legal evidence to establish that the damage to the consignment was due to any act of God. The solitary witness examined by Railway Administration in support of its case was on his own showing not present at Getor Jagatpur on the date the alleged storm and flood hit the said station. Alternatively, it was argued that even if the damage was the result of any flood or storm, the liability of the Railway Administration to compensate the consignee for the loss continued so long as the Administration did not satisfactorily establish that it had used reasonable foresight and care in the carriage of the consignment and avoidance of the loss. There was according to Mr. Rudraiah, Counsel for the respondent, no evidence whatsoever to support any such version. Reliance was placed by him upon the decisions in Union of India v. Kuthari Trading Company Limited, Union of India and Anr. v. Orissa Textile Mills Limited and Anr. Shiv Saran Dass v. Union of India, Union of India v. B. Prahlad and Company, Firm of T. Muddu Veerappa and Sons v. Union of India and Anr., and K.R. Rajamanickam Chettiar and Ors. v. Union of India.

6. Section 73 of the Railways Act, 1890, as amended in 1961, reads as follows.-

"73. Save as otherwise provided in this Act, a railway administration shall be responsible for the loss, destruction, damage, deterioration or non-delivery in transit, of animals or
goods delivered to the administration to be carried by railway, arising from any cause except the following, namely-

(a) act of God;

(b) act of war;

(d) arrest, restraint or seizure under legal process;

(e) orders or restrictions imposed by the Central Government or a State Government or by any officer or authority subordinate to the Central Government or a State Government authorised in this behalf;

(f) act or omission or negligence of the consignor or the consignee or the agent or servant of the consignor or the consignee;

(g) natural deterioration or wastage in bulk or weight due to inherent defect, quality or vice of the goods;

(h) latent defects;

(i) fire, explosion or any unforeseen risk:
Provided that even where such loss, destruction, damage, deterioration or non-delivery is proved to have arisen from any one or more of the aforesaid causes, the Railway Administration shall not be relieved of its responsibility for the loss, destruction, damage, deterioration or non-delivery unless the Railway Administration further proves that it has used reasonable foresight and care in the carriage of the animals or goods".

7. A plain reading of the above would show that the Railway Administration is responsible for loss, destruction, damage, deterioration or non-delivery of animals or goods, delivered to the administration for carriage except where any such loss, damage or destruction has occurred because of any one of the reasons enumerated in Clauses (a) to (i) thereof. What is significant is that according to the proviso to Section 73, even where loss, destruction, damage, deterioration or non-delivery is proved to have arisen from any one or more of the causes enumerated, in Clauses (a) to (i), the Railway Administration is not relieved of its responsibility unless it further proves that it has used reasonable foresight and care in the carriage of animals or goods entrusted to it. It is not therefore enough for the Railway Administration to prove that the loss caused to the consignments entrusted to it for carriage had resulted from an act of God, an act of war or similar other causes mentioned in Section 73. It has in order to escape liability not only to establish that the loss was caused by any one of the said causes but also that it had used reasonable foresight and care in the carriage of the goods or animals entrusted to it. To the same effect are the decisions relied upon by Mr. Rudraiah.

8. The question then is whether the Railway Administration has discharged the burden that lay upon it under proviso to Section 73
(supra). The answer has to be in the negative for there is no evidence whatsoever to suggest that the Railway Administration has used reasonable foresight and care for the carriage of the goods in question. Shri Rampal Sharma is the only witness examined on behalf of the Railway Administration. The said witness was working as transshipment of goods clerk at Getor Jagatpur during July 1981. The witness states that during July 1981, there was heavy rain in and around Getor Jagatpur between 17th July, 1981 and 19th July, 1981. The two wagons carrying the consignment in question and bound for Davangere had arrived at Getor Jagatpur on 18th of July, 1981 and had been stabled at Road No. 3 of the station. On account of heavy rains several breaches had taken place between Jaipur and Bandikui section and the track itself was washed away with the result that the wagons had capsized into deep pits caused by the flood water. The witness goes on to state that since several breaches had taken place between Jaipur and Bandikui sections, the salvage operations could not be undertaken till restoration of the track in August 1981 when the goods loaded in the same were transshipped into four other wagons for onward journey. There was according to the witness no negligence on the part of the Railway Administration and the loss was entirely on account of the unprecedented and unforeseen heavy rains.

9. In the cross-examination, the witness states that he was not at Getor Jagatpur on 18th, 19th and 20th of July, 1981, yet it was not correct to suggest that he was not aware of the actual conditions at the said station during the said three days. The witness has also produced an extract of the Section Register marked as Ext. R-4 to show as to when and how the breaches caused by the flood were repaired. He has also produced the Meteorological report for the relevant period marked as Ext. R-1 and the Transshipment Register to show how and when the consignments were transshipped from the ill-fated wagons to other wagons for onward transportation.

10. It is evident from a reading of the deposition of the above witness that he was not actually on duty at Jagatpur during the period the floods and storm hit the said station. It was on that basis argued by the Counsel for the respondent that the witness was not competent to state whether the damage caused to the consignments was on account of the floods and storm as alleged by the Railway Administration. That line of reasoning may not be wholly correct for even when the witness was not at Jagatpur during the relevant period, he could still be a competent witness to state whether the damage to the consignment had occurred by reason of flood or otherwise. The breaches caused by the flood, the washing away of the Railway tracks and the overturning of the wagons into pits caused by the flood, are matters which the witness could and was expected to notice even if he had returned to Jagatpur three days after the occurrence. The question however is whether the statement of the witness that the Railway Administration was not at fault or guilty of any negligence in the matter of preventing loss to the consignments can be accepted as sufficient discharge of the burden that lay upon the Railway Administration in terms of proviso to Section 73. The answer
has to be in the negative. The witness as seen earlier was working as transshipment clerk. While his testimony regarding what was seen by him after his return to Jagatpur may be relevant for the purpose of deciding as to how the damage occurred, the same cannot be treated to be the best available evidence to prove that the Railways had used reasonable foresight and care to prevent a possible damage to the consignments. The best evidence under the circumstances would be of the officer-in-charge of the Jagatpur Station where the wagons were stabled on the relevant date. It was he who could possibly testify whether the Railway Administration had used all possible care to prevent loss or damage to the consignment in question. No explanation is however forthcoming for the non-production of the officer-in-charge of the Jagatpur Station. Whether or not these wagons were stationed at a safe place to avoid damage from a possible flood as a result of the heavy downpour that hit Jagatpur and whether or not the wagons could have been moved to a safer location to prevent damage thus remains a mystery. Use of reasonable foresight and care in the transportation of goods is not limited to care and foresight only while the goods are in actual movement. Such care and foresight must be used by the Railway Administration at all stages till the goods are delivered to the consignee including in situations where the goods are in a state of rest at any intermediary station like the one in the instant case. While the claimant-respondent has not led any evidence as to the nature of negligence or lack of care and foresight, the Railway Administration on whom the burden lay has also failed to discharge that burden. All that the evidence adduced suggests is that there was extensive damage to tracks resulting in the wagons getting capsized in the pits caused by floods. There is no evidence however as to whether the Railways could or could not have avoided damage to the goods even if reasonable care and foresight was used nor is there any evidence to show that whatever care and foresight was possible had in fact been used. In cases where no evidence is led on either side, the issue has to be answered by reference to the burden of proof which in the instant case lay on the Railway Administration. It follows that in the absence of evidence that was admittedly available but has not been adduced, the question whether Railway had used reasonable care and foresight must be answered in the negative.

11. There is yet another aspect to which I must at this stage advert. Section 56-A of the Railways Act, empowers the Railway Administration to sell goods entrusted to it if it is not possible to deliver the same on account of the traffic on any route getting interrupted by flood, landslip, breach of any Railway lines, collision between trains, derailment etc., and where there is no other route to which traffic of perishable consignment may be diverted to prevent loss, deterioration or damage to such consignment. The power to dispose of the goods coupled with the duty which the Railway owes towards the consignee obliges the Railways to invoke the said provision wherever circumstances so demand. In the instant case even according to its own showing Jagatpur was cut off from all sides making it difficult to move the consignments for their onward journey. The Railways could therefore invoke the powers vested
in them for sale of the goods to prevent loss, deterioration or damage to the consignment. There is no explanation much less a cogent one for the failure of the Railways to invoke the said provision even when it is not on facts denied that movement of goods from Jagatpur was impossible till the breaches were repaired. The fact that the breaches could be repaired only a month later clearly shows that the Railways was not alive to its duty of preventing loss to the consignment by invoking the power that was reserved in its favour to take care of such situations. Suffice it to say that both on account of the lack of evidence as regards the use of foresight and care to prevent the damage to the goods while they were in transit at Jagatpur as also on account of the failure of the Railways to invoke Section 85 of the Railways Act, to prevent loss on account of damage to the goods, the Railways had rendered itself liable to compensate for the damage suffered by the consignee.

12. The next question then is what is the extent of damage that had been proved by the respondent-consignee. The cost of the two consignments was even according to the plaintiff Rs. 61,241/- per consignment. It is also admitted that out of the first consignment, the claimant had received 1,070 Kgs. of gram in good condition while out of the second, 582 Kgs. of gram was found good. The proportionate cost of the said stocks will have to be deducted out of the total costs incurred by the consignee for purchasing the stocks. The cost of 1,070 Kgs. + 582 Kgs. = 1,652 Kgs. of gram works out to Rs. 5,620/-. The cost of the remaining consignment would thus come to Rs. 1,16,862/-. Even out of the remaining damaged stocks, the certificate issued by the Railway Authorities shows that the loss was only to the extent of 98%. Besides, no evidence has been led by the respondent-consignee as to the disposal of the damaged stocks. It is also not its case that the damage was so extensive that the stocks could not be sold even as cattle feed. Taking into consideration all these circumstances, I deem it just and proper to deduct a further amount equivalent to 10% of the costs of damaged stocks. The loss suffered by the respondent would therefore come to Rs. 1,16,862/-less Rs. 11,686/- i.e., Rs. 1,05,176/- rounded off to Rs. 1,05,000/-. On the said amount the claimant would be entitled to interest at the rate of 6% per annum from the date of the suit till the amount paid by the Railways. This appeal therefore succeeds but only in part and to the extent that, the respondent shall be entitled to recover a sum of Rs. 1,05,000/-as compensation for the loss suffered by it on account of damage to the consignments in question with interest at 6% per annum on the said amount from the date of the suit till actual payment. The order passed by the Claims Tribunal shall stand modified accordingly. The parties are directed to bear their own costs throughout.

Tirath Singh Thakur, J.

20-4-2001

13. Immediately after pronouncement of the above order, it was pointed out by Counsel appearing for the appellant that 50% of the amount payable under the impugned award made by the Tribunal had been deposited in this Court pursuant to the directions issued in that regard.

14. The Registry shall accordingly verify whether any amount has been deposited and in case the deposit is found to have been made, the said amount shall be remitted to the Tribunal for disbursement to the respondent.

15. It is made clear that the interest awarded by this Court shall, from the date the above deposit was made, be counted only on the balance amount that remained payable to the said respondent.

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Karnataka High Court