Patna High Court
Union Of India (Uoi) vs Motilal Kamalia And Ors. on 14 September, 1961
Equivalent citations: AIR 1962 PATNA 384, 1962 BLJR 77 ILR 41 PAT 621, ILR 41 PAT 621
JUDGMENT Mahapatra, J.
1. In both the appeals, the Union of India as representing the East Indian Railway, the Oudh ahd Tirhut Railway and the Assam Railway, is the appellant. They were the defendant No. 1 in two money suits in the Court of the first Additional Subordinate Judge, Gaya, numbered as Money Suit No. 3/2 and 4/1 of 1952/1956. The suits were filed first in the Court of the Subordinate judge 1st Court, Gaya, but during the trial they came before the 1st Additional Subordinate Judge at that place. That explains the two different numbers given to each of the two suits. The plaintiffs in both the suits were Sri Motilal Kamalia and Sri Kashi prasad Kamalia, sons of Sri Rampra^ap Kamalia,, w^d were traders carrying on business in the nams and style of Messrs Sri Rampratap Kamalia Mills at Warsaliganj in the district of Gaya. They impleaded also two insurance companies, Messrs. National Fires and General Insurance Company Limited of Calcutta in the former suit and Messrs Gladstone Lyall and Company Limited of Calcutta in the latter. Two other persons, Sohanlal Saraogi and Jugal Kishore Jain were also common defendants in the two suits. Balchand Saraogi, who was expunged on account of his death, was another defendant in the second suit. The plaintiffs laid both the actions for recovery of money by way of damages for nondelivery of two consignments at Forbesganj, a station on the Assam Railway, which had been booked from Paimar railway station on the East Indian Railway (now known as Eastern Railway) to he carried at railway risk.
Their allegations were that the defendants Sohanlal and Jugal-Kishore, who carry on business at Warsaliganj in the name of Sitaram Radha Kishun, booked nine bags of black pepper at Paimar Railway Station on the 25th September, 1950, under invoice No. 3, and railway receipt No. 611192 to be carried to Forbesganj. On the 9th October, 1950, the deceased Balchand Saraogi, another trader at Gaya, booked a consignment of 16 bags of black pepper at Paimar Railway Station for carriage to Forbesganj at railway risk under invoice No. 4 and railway receipt No. 611193. The bags in both the consignments were new double gunny bags securely packed, the stitched portions being painted in green. The first consignment bore on the bags private marks as SRWRS (25) and the second PBBCS. The railway marks of the consignments were respectively 701 and 707. The first consignment was insured with Messrs National Fire and General Insurance Company of Calcutta for the transit. The railway receipt of the second consignment was endorsed by Balchand Saraogi in favour of Sitaram Radha Kishun who got the consignment insured with Messrs Gladstone Lyall and Company of Calcutta. Both the Railway receipts were again endorsed to favour of the plaintiffs for valuable consideration by the firm Sitaram Radha Kishun.
On getting the information of arrival of the consignments at Forbesganj the plaintiffs sent their man to take delivery who, however, found that the bags which had really been booked at paimar had not reached there and in their stead 25 other bags without the private marks on any of them, with contents like Chilli seeds and saw dust, were offered to be delivered to the plaintiffs. They had to refuse that and informed their grievance to railway station .master at Forbesganj on the 14th November, 1950 and the 19th December, 1950. They, lodged their claim with the railway administration as well as the insurance companies. As they had no redress, they brought the present suits.
2. Three sets of written statements were filed, one on behalf of Sitaram Radha Kishun another by the Insurance companies, and the third and main, on behalf of the Union of India representing the railway administration. Sitaram Radha Kishun laid support to the plaintiffs' case. They only alleged that they had been impleaded unnecessarily. The defence of the insurance companies wag that the plaintiffs were not the endorsees in due course and, as such, not entitled to any benefit under the policies. In Other respects they went on the same line as the railway administration. The main contestants were the railways and their written statement alleged that the plaintiffs were not the endorsees in due course, and that both the consignments were actually of bags containing chillies, chillies dust and other worthless things which the consignor booked as containing black pepper on a false declaration in the forwarding note, with a view to cheating the railway administration in collusion with the railway staff at Paimar. The bags were brought to the railway station at Palmar as completely closed with their mouths tightly secured and sewn up, and it was not possible for the booking clerk to know and verify their contents. They further stated that the railway administration and their servants dealing with the consignments at different stages were not guilty of any fraudulent conduct, and they had taken all possible care and precaution about the consignments, and there was no misconduct or negligence on their part in any way.
It was disclosed that a criminal case had been started arising out of that transaction and was pending in court. The case as it was learnt in evidence, was under Sections 420 and 120B of the Indian Penal Code against Bhagirath Kamalla, Jugal Kishore Jain (one of the defendants) and Kailaspathi, the station master at Paimar railway station. That ended in acquittal in appeal.
3. Thus, the main defence was that the transaction consisting in the transfer of the railway receipts in favour of the plaintiffs was collusive and not for consideration and the booking of the two consignments describing them to be bags containing black pepper, at railway risk, was fraudulent and in collusion with the station staff for the ulterior purpose of claiming damages against the railways concerned. Another plea, which was seriously contended during the trial as well as before us, was that the booking of the two consignments at Paimar was in spite of and against the positive directions issued by the Railway authorities to stop any booking of goods to the O. T. Railway through Bhagalpur. This fact, however, was not mentioned in the written statement but was alluded to in evidence in proof of the alleged fraud.
4. The trial court decreed both the suits in part against the Union of India and the insurance companies, and dismissed the same against the other two defendants, Sohanlal and Jugal Kishore Jain of the firm Sitaram Radha Kishun. The court below also held that the liability of the insurance companies is to arise only in case the claim is not satisfied by the railway administration. Against this decree, the present two appeals were filed by the Union of India.
5-6. Two points mainly were urged for consideration : whether there was non-delivery of the two consignments at Forbesganj; and whether the plaintiffs have arty right to claim damages for such non-delivery. For the railway administration it was asserted that whatever goods had been consigned were offered for delivery at Forbesganj, but the plaintiffs refused that on the false pretext that the bags and contents were not the same as consigned. (After discussion of evidence his Lordship proceeded) I have no doubt that the railways have failed to prove that the content of the consignment at palmar was Chilli and not black pepper.
7. A mass of evidence was given on behalf of the railway in an attempt to show that neither the plaintiffs nor the original consignor of both the consignments had any dealing in black papper, and the firm from where black pepper was alleged to have been purchased in Calcutta was not in existence. (After discussion of evidence, his Lordship proceeded :) Thus the transactions of black pepper between the different firms before it came to the hands of the plaintiffs have been proved quite satisfactorily, and the trial court has given very good reasons: for accepting that. It is not necessary to refer to them in greater detail. No doubt P. Ws. 13, 15 and 16 did not impress the trial court. Even without their evidence, other materials on record are sufficient to prove the transactions. I must point out here that all the evidence on this aspect was irrelevant and should not have been gone into in view of the pleadings of the defendants. If the railway wanted to make out a case of fraud on the part of the consignors, they were required to give details in their written statement of facts on which they were depending to prove the fraud. A mere casual allegation of fraud in a general manner is not enough and cannot justify detailed evidence during the trial. There was no whisper in the written statement that there was no dealing with black pepper by the consignors or that there were no such firms from whom the consignors or their Suppliers could have purchased black pepper. In absence of such allegation, the plaintiffs were not required to adduce evidence in that respect. When the railways began to lead such evidence, there was an objection on the side of the plaintiffs, and the court overruled their objections by saying that they would be given an opportunity to rebut such evidence. No doubt the plaintiffs examined some witnesses after closure of the defence, but that would not cure the legal defect. I find that the defendants closed their evidence on the 14th January 1956, and the plaintiffs were to give their rebuttal evidence on the 17th January 1956. There can be no doubt that the plaintiffs were seriously prejudiced by the permission given to the defendants to lead evidence in excess of and inconsistent with their plea in the written statement. I would refer here to the case of Bishundeo Narain v. Seogeni Rai, AIR 1951 SC 280. While referring to the provisions under Order 6 Rule 4, Civil Procedure Code, it was observed that in cases of fraud, undue influence and coercion, the parties pleading it must set forth full particulars and the case can only be decided on the particulars as alleged and there can be no departure from them in evidence. General allegations are insufficient even to amount to an averment of fraud, of which any court ought to take notice, however strong the language in which they are couched may be, and the same applies to undue influence and coercion, in the case of coercion when a court is asked to find that a person was threatened with death, it is necessary to give particulars as to the nature of the threat; the circumstances, the date, time and place in which it was administered and the name of the person threatening. The entire allegation of fraud in the written statement in the present case was confined to paragraph 8 which was amended at a later stage during the trial. It reads after the amendment as follows :
"The defendant submits that enquiries in this matter have revealed that the bags under the consignment in suit actually contained chillies, chilly dust and other worthless things which the consignor booked as containing 'Black Pepper' and a false declaration was made in the forwarding note with a view to cheat the Railway Administrations by fraudulent means in collusion with the station staff of Paimar in order to realise heavy compensation from them".
There is nothing in this plea to indicate that either the plaintiffs or their assignors or their previous suppliers had no dealing in black pepper, or that any of the firms connected with the transaction was not in existence at all. The trial Court should not have allowed the defendants to lead any evidence beyond the scope, of their pleading of fraud or collusion. Though, according to the written statement, the consignments in suit actually contained chillies, the evidence was led to disclose that the consignments even did not contain that but only chilli seeds, dust, husk and sand. The only collusion alluded to was between the consignors and the station staff at Paimar. Nothing was mentioned about the plaintiffs' collusion. This collusion has not at all been established. The station-master has not been examined.
The only proof sought to be given was that there was a restriction in the booking at Paimar under a circular dated 24-8-1950, marked Exhibit T. It was argued that in spite of this restriction the station staff colluded with the consignors and booked the goods. If the consignment was unauthorised that could have been resented by the guard or any of the station staff during the transit. Even the protesting telegram from Forbesganj railway station did not refer to this restriction. Exhibit T says that in supersession of the existing quotas via Bhagalpur and Via Mokamehghat the revised quotas for the booking of goods traffic to O.T. Railway station via BGP and via MKG would be as detailed in that circular. The quota for booking of non-crane (Smalls) traffic to O. T. Railway via BGP and via MKG was shown to be nill. It was argued that that imposed a complete restriction on booking of any goods from Paimar to any of the stations on O.T. Railway via Bhagalpur, and as such, the present consignments could not have been booked. That was a matter between the railway administration and the station staff. As far as the public were concerned, there is no evidence that they were made aware of this circular. Even the proof of intimation of the circular to the station staff at Paimar is very meagre and desultory. D. W. 28, commercial traffic Inspector, said that the circular was given to the station masters in the Dinapur division. It was in force till the end of 1950. There was a ban imposed by the Government of Bihar on the movement of paddy and iron and steel. Copy of the circular was sent to South Bihar Railway Sections by Gaya staff. The telegraph office branch of Gaya Railway informed of the ban to Paimar. The information was sent through railway guard on the same date it was sent from Dinapur as there was no telegraph line to Paimar. He did not remember the name of the guard who carried the message nor the train number, but he was definite that there was a record of the despatch of the information to Paimar at Gaya railway station. nO such record was proved D. W. 29 is a clerk in the transportation branch of the Divisional Superintendent's office at Dinapur. His evidence is that the guard after delivery to the station master concerned takes his signature in token of receipt in his guidance book. The guidance book is not available as it is destroyed in the course of a year. Thus there is no written proof of the despatch, far less of receipt, of the circular to Paimar station-master. nO paper from Paimar railway station has also been proved to show such receipt. The station-master or any one from that station has not been examined. It is not enough that there would be a circular. There must be proof of its despatch and receipt at the relevant places and by the persons concerned. This has not been proved in this case. Besides, the circular itself refers that other instructions contained in that office circular letter of the 4th of May, 1950, would continue to operate. That letter has not been produced.
We do not know to what extent the restrictions were imposed without any proof of the previous instructions which were in force. My impression on reading the circular (Exhibit T) and the evidence of D. Ws. 28 and 29 is that the restriction was in regard to the booking of potato, iron and steel and not other merchandise. In any case, the restriction on transhipment of other articles like black pepper to the O. T. Railway to the knowledge of the station staff at Paimar has not been proved. Secondly, if any limitation is imposed by the principal on an agent, it would not be binding against third parties unless they are made aware of that. The station-master is undoubtedly an agent of the railway administration and his avowed normal functions include booking of goods. The public take him as authorised to conduct such transactions on behalf of the railway. If his authority to the extent of booking of particular goods or to particular stations was sought to be restricted the public should have been notified of that. Otherwise there was no means for them to know of such limitation. Assuming that the station-master was aware of the restriction be he purposely violated it and accepted the booking, the liability of the railway to the consignor will not be diminished in any way. There cannot be any doubt that where a principal gives an agent an express authority to do a particular act or class of acts on his behalf, the principal is bound as regards third persons, by every act done by the agent which is so authorised, or which is necessary for the proper execution of such authority, even though the existence of such authority is Unknown to the third person. Where a principal gives an agent general authority to conduct any business on his behalf, he ie bound, as regards the third persons, by every act done by the agent which is incidental to the ordinary course of such business, or which falls within the apparent scope of the agent's authority. If a person has by words or conduct held out another person, or enabled another person to hold himself out as having authority to act on his behalf, he is bound, as regards the third parties by the acts of such other person to the same extent as he would have been bound if such other person has in fact had the authority which he held out as having. (See 1 Halsbury's laws of England, 3rd edition page 208).
8. In the case of page v. L and N. W. Rly. Co., (1868) 16 WR 567 the defendant Railway company gave instruction to their booking clerk not to book cattle except in accordance with certain rules. In violation of those rules the booking clerk, however, booked the cattle of the plaintiff which were to be forwarded according to the priority of their booking. It was held that in an action against the company for not forwarding the cattle according to such priority, the fact that the booking clerk haying violated the special rules in booking of the plaintiffs cattle did not disentitle the plaintiff to have his cattle forwarded according to the priority of their booking, as he was not aware that the general authority of the booking clerk was limited by such special rules, in our case there is no evidence that the consignors or for the matter of that the public, had any notice of the circular letter (Exhibit T).
9. In the case of Mohendra Nath v. Kali Proshad ILR 30 Cal 265 the authority of the agent to admit execution of a document was revoked by the principal before registration of a particular document. That revocation was not known either to the grantee of the document or the registering officer. It was held that the document was not invalidated as far as the grantee was concerned and was binding on the grantor (the principal) although it was registered by his agent after the revocation of his authority.
10. Section 208 of the Indian Contract Act provides that the termination of the authority of an agent does not take effect so far as regards third persons before it becomes known to them. The illustration B under that section is more clear on the point. A at Madras by letter directs B to sell for him some cotton lying in a warehouse in Bombay. Afterwards he revokes his authority to sell by a letter and directs B to send the cotton to Madras B even after receiving the second letter enters into a contract with C who only knows of the first letter but not of the second, for the sale to him of the cotton. C pays B the money with which B absconds. C's payment is good as against A. Thus there cannot be any doubt that the liability of the Railway to the consignors in respect of the goods booked by their station-master will continue in spite of any restrictions contemplated under Exhibit T unless that restriction was known to the consignors before the booking. There is no evidence in this case of any such knowledge of the consignors or of the public. Even the knowledge of the restriction of the station master at Paimar has not been proved. In such circumstances the union of India cannot take any advantage of the circular Exhibit T.
11. Learned Counsel for the appellant raised the same contention in respect of Exhibit T in another form. He urged that the station master is an employed servant of the railway and the action of the plaintiff against the railwayt the master or employer of the station staff, is of the nature of tort and the vicarious liability can only be imposed on the master if the injury has been caused by the servant in course of his employment. This argument presupposes that the restriction contemplated under Exhibit T, if any, in respect of the booking of the kind under consideration, was conveyed to the station staff at Paimar. it further presupposes that the booking of the two consignments in question was not of the same class of acts which the booking staff was authorised to do. The facts and circumstances of the case belie these two Presuppositions. Secondly, the servant is also a kind of agent. He is a person employed by the master to do work for him on the terms that he, the servant, is to be subject to the control and directions of his employer in respect of the manner in which his work is to be done. In that sense agents are of two kinds, distinguishable as servants and independent contractors. When the agent is an independent contractor, his employer is not, in general, answerable for the torts either of the contractor himself or of his servants. But when the agent is a servant, his employer will answer for all torts committed in the course of the employment, whether or not the employer has obtained any benefit thereby. There can hardly be any doubt that the booking of the two consignments was in the course of the employment of the station-master and he did an act belonging to a class of acts for which he is employed. The distinction between a servant and an independent contractor is that the former is to obey his employer's orders from one to time and works under the supervision and direction of his employer; whereas the latter is to exercise his own discretion as to the mode and time of doing work for which he has been engaged; he is bound by his contract but not by his employers orders. My chauffeur is my servant and I shall be responsible if he runs over someone by negligent driving; but when I engage a taxi for a particular journey, the cabman is not my servant. He has made a contract with me, not that he will obey my directions, but that he will drive me to a certain place; if an. accident happens by his negligence, he will be responsible and not I. This illustration brings out the difference between the two kinds of agents, servant and independent contractor.
12. The present action is not for any negligence committed by the station staff at Paimar. It is for non-delivery by the bailee of the goods. So there is no question of vicarious liability of the railway on account of any act done by their servants at Paimar railway station. It is not necessary to deal with the cases which learned Counsel cited before us about vicarious liability (Conway v. George Wimpey and Co. (No. 2), (1951) 2 K.B. 266; 1946-1 All ER 283 (Sic) and Canadian Pacific Rly. v. Lockhart, 1942 AC 591.)
13. The evidence about the consignment of 16 bags booked at Paimar on the 9th of October, 1950, is of the same nature as the other consignment which I have discussed already at length. (After discussion of evidence the judgment proceeds) :
For the same reasons the railway has failed to show that chilliseeds, dust, husk and sand and not black pepper was booked at palmar in those 16 bags on the 9th of October, 1950. It was thus a clear case of non-delivery of the goods at the destination.
14. For the appellant, it was also urged that the plaintiffs, in any case, would not be entitled to claim any damages on account of the non-delivery of the goods, as they have not been proved to be endorsees of the railway receipts for consideration. The endorsements on the railway receipts in favour of the plaintiffs are not denied but they were alleged to be for no consideration. The case of the plaintiffs as well as of the defendants, Sohanlal Saraogi and Jugal Kishore Jain, is that money was due from the latter to the plaintiffs' firm on account of business transactions and before the close of the Diwali year there was a pressure for its repayment. Those defendants chose to endorse the railway receipts and to credit the value of the two consignments to their account with the plaintiffs. Apart from their oral evidence, account books have been proved to show this adjustment, (After discussion of evidence, his Lordship proceeded). For these reasons it is not possible to accept the appellant's contention that the plaintiffs were not entitled to the two consignments.
15. Some evidence has been adduced by the railway to show that during the transit the railway administration had taken all possible care about the two consignments. In my opinion, this was Irrelevant inasmuch as the consignments were at the railway risk and as a bailee, the railway was bound to return the goods at the destination. If the risk of the railway was not the special condition of the booking, advantage could have been taken of the provisions of Section 152 of the Indian contract Act which says that the bailee, in the absence of any special contract, is not responsible for the loss, destruction or deterioration of the thing bailed, if he has taken the amount of care of it described in Section 151. In that case alone the way the goods were looked after during transit would have been relevant Section 160 provides that it is the duty of the bailee to return the goods bailed ...... as soon as the time for which they were bailed has expired, or the purpose for which they were bailed has been accomplished, and under Section 161, if, by the default of the bailee, the goods are not returned, delivered or tendered at the proper time, he is responsible to the bailor for any loss, destruction or deterioration of the goods from that time. In the case of Kush Kanta v. Chandra Kanta, 28 Cal WN 1041 : (AIR 1924 Cal 1056), their Lordships after reviewing several English authorities at length held that failure to return the thing bailed, if it is not explained, will be presumed to be by the bailee's default. In the present case if the non-delivery would have been explained by the railway to nave been due to an accident or vis. major, over which they had no control, they might have escaped their responsibility to the bailor for any loss suffered by him. The attempt in the present case has been, on the other hand, to show that not only there was no such accident but also the railway took all precaution about the transit of the goods till its destination, in such a case, once non-delivery is established .the plaintiffs will be entitled to damages from the carrier. If it were necessary to examine evidence about the conditions in which the two consignments travelled from Paimar to Forbesganj, I would have no hesitation to say that that due care of the goods was not taken during the transit. The wagon containing the consignments was not sealed at Paimar, nor was there any note in any railway papers to show at which station it was sealed. Wrong numbers or at least different numbers of the wagon was given by (D. W. 7, the guard, D. W. 12, the number-taker. Change in the weight of the consignment was noted by D. W. 14, commercial clerk at Bhagalpur. The consignment was left on the platform at Bhagalpur. The guidance sheet which under the rules is to be placed in the wagon containing the consignment was not available at Katihar railway station. The consignment had been kept in outward goods shed in that railway station. The private marks on the bags disappeared during the transit. The railway marks were not found at the destination. The second consignment was wrongly sent to Sagargali. All these things indicate lack of due care as a bailee is bound to take under the provisions of Section 151 of the Contract Act. In the present case, therefore, the railway administration will be liable for the loss suffered by the plaintiffs and to pay damages to them on that account. It was clearly a case of contract of carriage entered into by the station-master, Paimar, for the benefit of the railway administration. The dictum laid down in the case of Bar-wick v. English joint Stock Bank, (1867) 2 Ex 259 is clearly attracted. The alleged collusion of fraud between the consignor and the station staff at Paimar having not been proved, there will be no escape for the railway from the liability.
16. The two Insurance Companies contended before us that the decree passed against them could not be sustained. At the first place I would like to point out that they did not choose to prefer any appeal against the decree. Thev wanted to take advantags of the provisions of Order 41, Rule 33, Civil Procedure Code. The decree against them is separable. The judgment of the trial court was that in case the damage is not recovered from the railway administration, the plaintiffs would be entitled to recover the same from the insurance. As held in the case of Ram Prasad Singh v. Mohan Madal, AIR 1934 Pat 524 and Mt. Jagpati Kuer v. Sukhdeo Prasad, AIR 1942 Pat 204 the provisions of Order 41, Rule 33 should not be applied in favour of the two insurance companies. The causes of action against the railway and the insurance companies were different and the decrees are on those two causes. Though in form there is one decree, in effect there are two. In the case of Suraj Prakash Puri v. Sant Lal Singh, ILR 18 Pat 768: (AIR 1940 Pat 137) this court held that Order 41, Rule 33 was intended to enable the appellate Court, where its decision interfered with or modified or extended the decision of the lower Court, to give effect to that decision by interfering, if necessary, even with rights and liabilities of those who have not in fact appealed from the decision of the trial Court; but it ought not to be applied to cases where there has been a distinct and separate decree against persons who have not chosen to appeal. For these reasons the two insurance companies cannot be heard to challenge the decree passed against them as they have not preferred any appeal to this Court.
17. For the respondent, Gladstone Lyall and Company Ltd., (Insurance Company of Calcutta), it was urged that the insurance being only for the transit of goods, it came to an end on the consignment reaching the destination at Forbesganj. The endorsement of assignment of the policy in favour of the plaintiffs does not bear any date. The 16 bags which were booked at paimar on the 9th of October, 1950, and which was the subject of insurance with that company, reached the destination on the 3rd of December, 1950. Without any proof that the policy had been assigned before that date, the plaintiffs will have no action against the company. From Exhibit. 6(z)3, dated the 21st November, 1950, a letter written by Sit'aram Radha Kishun to this company, it appears that the original person who had Insured intimated .the company that the railway receipt had already been sold to the plaintiffs. They requested the company to endorse their names. In that letter they made reference to a previous communication of the 11th October, 1950, in which they had requested the company to send the form for endorsing it in favour of the purchaser, and they complained that they had not received anything as yet and asked them to send the same immediately. In reply, on the 2nd December, 1950, the company informed Sitaram Radha Kishun that the insurance document was only to be negotiated by an endorsement of the party in whose name the policy was taken out. The first letter from the firm to the insurance company of the nth October, 1950, referred to in Exhibit 6(z)3 has not been produced by the company. From the two letters, referred to above, there cannot be ally doubt that the policy was assigned in favour of the plaintiffs before the 3rd of December 1950. The evidence of P. W. 12 was that the policies were assigned in the first week of December 1950 on two different dates. The policy has been marked as Exhibit 4 (a) and the endorsement of assignment on it is Exhibit 3(c). The argument of the company wrongly resupposes that the consignment which was insured with them had reached Forbesganj on the 3rd of December 1950. I have already held that it was not so. in that view whether the assignment was before the 3rd of December, 1950, or not becomes immaterial.
18. For the other insurance company (the National Fire and General Insurance Company Limited) it was argued that the consignment of 9 bags was the subject-matter of insurance and the policy in that respect appears to have been issued on the 13th November, 1950. The consignment had already arrived at the destination Forbesganj on the 4th of November 1950. Thus there was no insurable interest when the insurance policy was issued. This argument Is fallacious. The date of issue of a policy is not the starting point of coverage by insurance; it relates back to the date of the proposal. The insurance company has not produced the proposal; nor have they led any evidence to disclose the date of the proposal. Secondly, the consignment never reached Forbesganj till the institution of the suit to the. knowledge of the plaintiffs, or even the original consignor, or the persons who insured the consignment. The terms of the policy, which has been marked as Exhibit 4, with the endorsement of assignment, Exhibit 3 (b) embodies a term that the insurance commenced with the loading of each package and the risk was to continue till three days after the arrival of the consignment or the delivery of the consignment by the railway at the destination whichever occurs first.
19. Next, it was urged that the plaintiffs being a registered firm could not maintain the suit in their individual capacities. This plea was not taken during the trial. No evidence has been led in this case to show that the firm is a registered one. Our attention was drawn to the plaintiffs' notice given under Section 77 of the Indian Railways Act in which it was stated by the lawyer concerned that under instruction from his clients Messrs Shree Rampratap Kamalia Mills, a registered firm under Section 58 (1) of the Indian Partnership Act, 1932, at Warsaliganj, district Gaya, through its partners, namely, Sri Motilall Kamalia and Sri Kashi Prasad Kamalia, he gave the notice. In the first paragraph of the plaint it was stated that the plaintiffs were traders and used to carry on business under the name and style of Messrs Sri Rampratap Kamalia Mills at P. O. and P. S. Warsaliganj, district Gaya. Thus there is no merit in this objection.
20. Learned Counsel also raised a plea of defect of parties inasmuch as all the partners of the firm were not impleaded. For this he referred to Exhibit 23 (b), the judgment of the High Court in a criminal appeal arising from the police case. Statement of facts in that case can hardly be admitted as evidence in the present case, Bhagirathi Kamalia was stated in that judgment to be one of the partners, but there is no other evidence in the present case in support of that. This plea about defect of parties is a belated One and it was not raised in the pleadings or during the trial. It should, therefore, be rejected.
21. I should, however, mention here that both the insurance companies will only be liable for the sums not exceeding the amount for which they insured the consignments, namely, Rs. 16,350 in the case of Gladstone Lyall and Company Limited, and Rs. 9,000/- in the case of the National Fire aid General insurance Company Limited.
22. One more point was raised by the appellants and the insurance companies. They contended that the trial court should not have awarded interest for any period before the suit as there was to contract between the parties for paymen.t of interest. The case of B.N. Rly. Co. Ltd. v. Ruttanji Ramji, AIR 1938 PC 67 : 65 Ind App 66 was cited in support of it. Under Section 34, Civil procedure Code, where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate not exceeding 6% per annum, as the Court deems reasonable on the principal sum so adjudged, from the date of the decree to the date of payment, or to such earlier date as the Court thinks fit. The trial Court in the order, ing portion of the judgment observed :
"that the suits be decreed in part with corresponding costs and pleader's fee at five per cent. Futuke interest at 6 1/4 per cent till realisation. They are, however/dismissed against defendants Sohanlal and Jugal Kishore Jain without costs. The railway administration is allowed 90 days time to pay the decretal amount."
In the plaint the plaintiffs claimed interest at the rate of .12 per cent ,per annum till the date of the suit, besides 20 per cent as loss of profit. The learned Subordinate judge disallowed the profit and observed that the interest claimed was excessive. He allowed 6 per cent instead of 12 per cent. Though the ordering portion did not refer to that, the decree has incorporated it as well as pendente lite interest. This interest was claimed and allowed by way of damages as the plaintiffs' money remained blocked. Learned Counsel for the plaintiffs-respondents contended before us that even in the circumstances of the case the plaintiffs were entitled, on principles of equity, to interest for the period preceding the suit even though there was no contract for payment of interest. The Court's jurisdiction to allow such interest is not taken out completely under the Interest Act. He urged that their Lordships of the Judicial Committee in the case reported in AIR 1938 PC 67 did not completely rule out equitable considerations. Apart from general principles of not allowing interest even by way of damages on any money that may be due to a person, for any period before the suit, in absence of any contract for payment of interest, in the present case the whole claim is for damages and to allow interest on that will be damages on damages. That will be hardly equitable. The plaintiffs came to the Court one year after they refused to take delivery of the goods, although notices under S- 77 of the Indian Railways Act were served within a month of the refusal. None of the correspondence from the Railway, as exhibited in the case, justified this waiting on the part of the plaintiffs. All these facts do not call for any equitable considerations in favour of the plaintiffs for award of any interest by way of damages for any period preceding the suit. The sum of RS. 592-6-0 and Rs. 1,016/- will be taken out of the decrees in Money Suit No. 3/2 of 1952/1956 and Money Suit no. 4/1 of 1952/1956, respectively, pendente lite interest will be allowed at 6 per cent per annum on the sum of Rs. 9,020-4-0 and Rs. 16,392/- in the two Suits respectively.
23. It may be pointed out that the decree drawn up in Money suit No. 3/2 of 1952/56 is obviously wrong in so far defendant no. 4, Jugal Kishore Jain, also has been made liable and this as not in conformity with the judgment. The trial court has dismissed the suit against him as indicated in the judgment, and as such, there will be no decree against him. Accordingly Money Suit No. 3/2 of 1952/56 is decreed against defendants 1 and 2 only for a sum of Rs. 9020-4-0 as price of 9 bags of Golki and RS. 80/- cost of notice etc. besides interest at the rate of 6 per cent per. annum pendente, lite and future on the principal sum of RS. 9020-4-0 but the liability of defendant no. 2 will arise only if the decree is. not satisfied from defendant No. 1 and in that case it will be to the extent of Rs. 9000/- only. The plaintiff is allowed costs of both the courts in proportion to there success in this appeal against defendant no. 1 only. The decree passed in the other Money suit no. 4/1 of 1952/56 also is varied to this extent that it is decreed against defendants 1 and 5 for Rs. 16392/- as price of 16 bags, of Golki and Rs. 125/- as cost of notice etc. brides interest at the rate of 6 per cent per annum pendente lite and future on the principal sum of RS. 16392/-but the liability of defendant no. 5 will arise only if the decree remains unsatisfied from defendant no. 1 and it is limited to Rs. 16350/- only, plaintiffs are entitled to costs of both the courts in proportion to their success in this appeal against defendant No. only. In both the appeals there will be only one hearing fee.
24. Defendant No. 1 (Union of India) is allowed 90 days' time from the preparation of; the decree in this court to pay the decretal dues in both the cases.
25. The appeals are allowed in part.
Tarkeshwar Nath, J.
26. I agree.