Full Judgment Text
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PETITIONER:
THE TRUSTEES OF THE PORT OF BOMBAY
Vs.
RESPONDENT:
THE PREMIER AUTOMOBILES LTD.
DATE OF JUDGMENT26/08/1980
BENCH:
SHINGAL, P.N.
BENCH:
SHINGAL, P.N.
DESAI, D.A.
CITATION:
1981 AIR 1982 1981 SCR (1) 532
1981 SCC (1) 228
ACT:
Bombay Port Trust Act-Sections 61B and 87 para 2-Scope
of-Plaintiff’s machinery damaged in transit from docks to
godown-Plaintiffs claimed damages from Board as bailee-Board
claimed immunity for tortious acts of employees under para 2
of section 87-Liability of the Board-Non-contracted
bailment-Nature of.
HEADNOTE:
Section 4 of the Bombay Port Trust Act provides for the
creation of a Trust Board. It is a body corporate with
perpetual succession and can sue and be sued. Section 61A(1)
charges the Board with the duty of carrying out the
provisions of the Act. Section 61B provides that the
responsibility of the Board for loss, destruction or
deterioration of goods of which it has taken charge shall,
subject to the other provisions of the Act, be that of a
bailee under sections 151, 152 and 161 of the Contract Act,
1872 omitting the words "in the absence of any special
contract", in section 151 of the Contract Act. Paragraph 2
of section 87 provides that the Board shall not be
responsible for any misfeasance, malfeasance and nonfeasance
of any employee appointed under this Act.
A case containing machinery imported by the respondent
was taken charge of by the Board upon its landing in the
Bombay Port. While being transported by the Board’s
employees on a four-wheeler trolly to one of the sheds in
the docks the case fell down and the machinery was badly
damaged.
After carrying out a survey of the damage caused to the
machinery, the respondents gave notice to the Board claiming
a large sum as damages. Invoking the provisions of section
87 of the Act the Board denied all liability for the damage
caused to the machinery.
In the course of the trial of the plaintiff-
respondent’s suit the parties drew up certain "consent
terms" which formed the basis of the decision at the trial
and appeal. Summarizing the finding of the consent terms the
appellate court stated that (i) the trust Board admitted an
element of negligence on the part of its employees; (ii) the
employees, who were with the trolly at the time of the
accident, were appointed under the Act and (iii) while the
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Board merely claimed that the persons accompanying its
trolly were employees, the respondents claimed that they
were employees as well as agents of the Board.
The High Court came to the conclusion that the
liability of the Board was that of a bailee. As regards the
applicability of the provisions of paragraph 2 of section 87
on which the appellant relied the High Court was of the view
that this provision related to a totally different subject
with which section 61B was not concerned and, therefore, the
provisions of that section did not
533
afford any protection to the Board and that since a master
is always liable for the torts committed by his servants in
the course of the employment the Board was responsible for
the damage caused to the machinery by its employees in the
course of their employment.
Allowing the Board’s appeal
^
HELD : (1)(a) Section 61B makes it clear that the
responsibility of the Board was that of a bailee under three
sections of the Contract Act and no more. It was not the
case of the plaintiff that there was a contract of bailment
as contemplated by section 148 of the Contract Act. Since
there was no such contract between the parties, neither
section 151, nor section 152 or section 161 would have been
attracted as such: nor would the provision in section 61B
have been applicable in a case of contractual bailment. Even
though there was no contractual bailment, the responsibility
of the Board for the loss, destruction or deterioration of
the goods was clearly that of a bailee subject to the
reservations provided by the section. [539 A-D]
(b) The essence of bailment is possession. A bailment
may arise even when the owner of the goods has not consented
to their possession by the bailee at all. A bailment is not,
therefore, technically and essentially subject to the
limitations of an agreement and the notion of privity need
not be introduced in an area where it is unnecessary to do
so. It follows that a bailment may exist without the
creation of a contract between the parties and it
essentially gives rise to remedies which cannot be said to
be contractual. That is why it is said that bailment is
predominantly a tortious relation and that the two are
fundamentally similar. Therefore, since the claim in the
present case was not based upon a mere breach of statutory
duty under section 61B but was based on the Board’s
liability as bailee, it was no other than by way of an
action in tort. [539 F-H]
(c) It may be that section 61B has fastened certain
obligations on the Board which in truth are not contractual
because they did not rest on an agreement but which by
virtue of the same section were to be treated as if they
were so and were made the subject matter of liability under
sections 151, 152 and 162 of the Contract Act. Such a
relationship may well be called as one arising out of an
implied contract. But that does not mean that an altogether
new cause of action arises merely because a duty to take
charge of the goods is cast on the Board. By the very nature
of that relationship it was essentially a delictal
obligation, a civil wrong for which the remedy is an action
in damages and not by way of an action of breach of
contract. [540 B-D]
(d) In casting a duty on the Board to take charge for
the goods immediately upon landing, the Legislature took
care to lay down and define the nature and extent of the
liability which is set out in terms to be that of a bailee.
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It is well settled that non-contractual bailment is
predominantly a tortious action. [541 A-B]
In the instant case the plaintiff’s claim was founded
not upon a breach of statutory duty under section 61B apart
from tort but on negligence, malfeasance and nonfeasance and
the acts of misconduct on the part of its employees. In
short the claim was based on careless handling by the
appellants when the case slipped and fell while it was being
removed by them as bailees. [541C]
2(a) The words "any person" in section 87 include the
Board. The benefit of the limitation prescribed in paragraph
1 of this section is available to other "persons" also. But
unlike paragraph 1, the protection of paragraph 2 is not
534
extended to cover "any person" but is confined to the Board.
Yet another and more serious restriction is that the Board
is made responsible for the misfeasance, malfeasance or
nonfeasance of only those of its employees who have not been
"appointed under this Act" which means that the protection
does not extend to any tortious act if it has been committed
by an employee who has not been appointed under the Act.
[542 A-D]
(b) Section 21 empowers the Board to appoint employees
whom it deems necessary and proper to maintain for the
purposes of the Act. But that could not possibly include all
the employees like artisans, porters, labourers etc., who
under the proviso to the section "shall not be deemed to be
within the meaning of this section." The protection which
the Board enjoys is therefore confined to the tortious acts
of the employees appointed under the Act. Therefore, the
loss, destruction or deterioration of goods of which the
Board has taken charge would clearly amount to the Board’s
responsibility under section 61B. But section 87 paragraph 2
has its resonance in section 61B and vice versa. Both the
sections are interconnected and have to be read together as
a whole. [542 E-H]
(c) The view of the High Court that the provisions of
paragraph 2 of section 87 are upon a totally different
subject with which section 61B is not at all concerned, runs
counter to the clear provisions of the two sections if read
together and is wholly unsustainable. It is section 61B
which makes the responsibility of the Board for the goods of
which it has taken possession subject to the other
provisions of the Act. There is no occasion or justification
for reading the clause regarding the subjection to the other
provisions of the Act so as to exclude section 87 as if it
were outside the Act. [543 B-E]
(d) When the High Court, while interpreting the consent
terms stated that it was admitted that those employees at
whose hands the machinery suffered damage in the course of
transport "were appointed under the said Act" it was a short
and inevitable step for it to hold that the Board was
entitled to be absolved of its liability for the acts of
those employees by virtue of paragraph 2 of section 87. [543
H]
(e) The liability of the master for the acts of his
servants would not possibly arise in a case where the
statute intervenes and provides in express terms that the
master would not be responsible for any act of misfeasance,
malfeasance or non-feasance committed by a special class of
its employees. The omission on the part of the High Court to
appreciate this aspect of the matter arose because it based
its findings on the mistaken impression that it was
concerned with the act of an ordinary employee of the Board
and not a special category of employee referred to in
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paragraph 2 of section 87. The High Court also failed to
notice that paragraph 2 of section 87 related essentially to
acts of misfeasance, malfeasance and nonfeasance of only
those employees who had been appointed under the Act, and,
as such employees were very few, the restriction on the
Board’s liability was limited and confined quite
substantially. [544D-F; 545 D]
3. Moreover, the so called statutory duty is not
unequivocal and even assuming that it took the case outside
the purview of the law of torts and made it an innominate
obligation, that would not take the case out of the
exception provided by paragraph 2 of section 87. Section 61B
and section 87 are parts of the same statute. [546 B-C]
Gulam Hussain Ahmedali & Co. Pvt. Ltd. v. Trustees of
the Port of Bombay, 64 Bombay L.R. 670 overruled.
535
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1282 of
1971.
From the Judgment and Order dated 17-7-1978 of the
Bombay High Court in Appeal No. 40/65.
Dr. Y. S. Chitale, J. B. Dadachanji and K. J. John for
the Appellant.
Anil B. Diwan, Rameshwar Nath and Ravinder Nath for the
Respondent.
The Judgment of the Court was delivered by
SHINGHAL, J.-This appeal by certificate is directed
against the judgment of the Bombay High Court dated July 17,
1970, by which it upheld the judgment of the trial court
dated March 3, 1965, decreeing the suit of the plaintiffs-
respondents for Rs. 35,000 and interest with a part of their
costs. It so happened that although there was initially much
controversy about the facts, the parties realised the
futility of disputing some glaring facts and agreed to take
a decision, even in the trial court, on what they once
described as "interim consent terms", but to which they have
stuck all through. We shall refer to them in a while, after
stating some of the facts on which both the trial and the
appellate courts have placed reliance. That will bring out
the significance of the "consent terms" and make them more
intelligible.
The Premier Automobiles Ltd, hereinafter referred to as
the plaintiffs, imported 13 cases of machinery from Italy.
Case No. 249, which is the subject-matter of the controversy
before us, contained an internal grinding machine weighing
over 3 tonnes. It arrived in Bombay on February 21, 1960, by
S. S. Jalsilton Hall. The "Board", constituted under section
4 of the Bombay Port Trust Act, 1879. for short the Act, was
a body corporate with a perpetual succession and a common
seal. It was called "the Trustees of the Port of Bombay" and
could sue and be sued by that name. We shall, however, refer
to it as "the Board" for that is how it has been referred to
in the Act and the impugned judgment. Since the Board was
charged with the duty of carrying out the provisions of the
Act, and had, in particular, the duty, under section 61A(1)
of the Act, to take charge immediately upon the landing of
any goods, it took charge of case No. 249 also on its
landing in Bombay on February 21, 1960. The Board has in
fact filed document Ex. K to prove that the case was in a
damaged condition when it landed on February 21, 1960, and
that attention to that fact was drawn of the handling agents
M/s Scindia Steam Navigation Co. Ltd. It purports to be a
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contemporaneous
536
document. The case was placed on a four-wheeler trolly and
was being carried to one of the sheds in the docks when it
fell down and the machine contained in it was severely
damaged. Several employees of the Board were in charge of
the case and the trolly at that time.
It is said that a survey of the damage was carried out
at the instance of the plaintiffs, who then took delivery on
February 29, 1960. They carried the case to their factory
and had the machinery examined by another firm. That firm
valued the machinery at Rs. 65,000 and the damage at Rs.
55,000. The plaintiffs gave a notice claiming Rs. 65,774.10.
The Board denied the claim in their reply and alleged that
the machinery was in a broken condition at the time of the
landing and it was due to the damaged condition of the case
that it slipped and fell from the trolly accidentally. They
relied on the aforesaid report Ex. K and pleaded, further,
that they were not liable because of section 87 and certain
bye-laws of the Board.
The controversy led to the suit which was instituted on
August 19, 1960. We shall refer to the pleadings in their
proper context to the extent they bear on the controversy
before us. Issues were framed and the parties went to trial.
They led "considerable" evidence, but during the course of
the trial they drew up certain "consent terms" on October 7,
1964 and limited the trial to them. Those terms have formed
the basis of the decision at the trial and in the appeal. It
seems there was some controversy regarding the admissions
contained in the consent terms, and we have accepted the
interpretation concurrently placed on them by both courts.
The appellate court has summarised its findings on paragraph
II(b) of the consent terms as follows,-
"The contents of this paragraph leave much to be
desired. But three things are clear from this paragraph
(1) that in deciding issue No. 1 (we are concerned with
issue No. 2 now) the Court had to assume that there had
been some misfeasance or malfeasance (there is no case
of non-feasance anywhere pleaded) on the part of
persons handling the case No. 249, that is to say, the
employees of the Port Trust. In other words, the
element of negligence on the part of the employees of
the Port Trust was admitted. (2) It is also admitted
that those employees were appointed under the said Act.
(3) The defendants merely alleged that they were
employees while the plaintiffs alleged that they were
employees as well as the agents of the Trust and that
this side issue will have to be decided."
The High Court has given its interpretation of paragraph
II(c) also in regard to the applicability of bye-law No. 82
to the benefit of the
537
Board, but it does not really matter in the view we have
taken of the case in other respects. The High Court took
note of the fact that the loss or damage to the goods was
not pointed out by the plaintiffs or acknowledged by the
Docks Manager before the removal of the goods from the docks
with reference to bye-law No. 98. That court however noticed
the fact that both parties had agreed that if damages were
to be awarded, the amount thereof should be Rs. 35,000. As
regards evidence, it was agreed that, except as indicated in
the preceding terms of consent, no other evidence "hitherto"
recorded would be taken into consideration in the future
proceedings in the suit or for decision of the remaining
issues. That led the High Court to observe that the parties
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somewhat narrowed down the controversy by confining it to
the points of law, and the learned Single Judge decided the
case only upon those points of law which were referred to in
the judgment.
The High Court, in appeal, took the view that the
principal and substantial point before it was the true scope
and effect of section 61B and paragraph 2 of section 87 of
the Act. It arrived at a number of conclusions with
reference to those provisions, namely, that the plaintiffs
founded their claim upon the breach of statutory duty under
section 61B also, that the provision of paragraph 2 of
section 87 was upon a totally different subject with which
section 61B was not at all concerned, that the liability of
the Board was that of a bailee, that a master or employer
was always liable for all torts committed by the servant
provided it was in the course of his employment and that any
other view of paragraph 2 of section 87 would render the
provision of section 61B nugatory. In reaching its
conclusions the High Court relied heavily on its Division
Bench decision in Gulam Hussain Ahmedadi & Co. Pvt. Ltd. v.
Trustees of the Port of Bombay.
We shall examine whether these conclusions of the High
Court are correct and whether it was justified in upholding
the judgment and decree of the trial court and dismissing
the appeal.
The first point for consideration is whether the High
Court was right in taking the view that "apart from the
claim in tort, the plaintiffs also claimed for the breach of
the Trusts’ statutory liability under section 61B." In
reaching that conclusion the High Court noticed the obvious
facts that in paragraph II(b) of the consent terms the trial
court was required to assume that there was some
misfeasance, malfeasance or non-feasance of the persons
handling case No. 249. The High Court also noticed the two
further facts (i) that there were
538
three clear heads under which torts could be classified, and
by using them in paragraph 2 of section 87 of the Act, "the
Legislature provided for immunity of the Port Trust from
torts committed by its employees", and (ii) that in so far
as the plaintiffs’ claim in tort was concerned there could
be no doubt that "it would fall within the ambit of
paragraph 2 of section 87 because misfeasance, malfeasance
or nonfeasance (was) specifically admitted". We have
therefore to examine whether the plaintiffs in fact, or in
substance, founded their claim on the alleged breach of the
statutory duty under section 61B and, if so, what is its
bearing on the suit.
A reference to the plaint (paragraph 4) shows that the
plaintiffs pleaded that case No. 249 arrived by S.S.
Jalsilton Hall and that the Board took charge of it "in
accordance with the provisions of the Bombay Port Trust Act,
1879 and the dock bye-laws framed there-under." Then (in
paragraph 5) the plaintiffs pleaded that after taking charge
of the case, the defendants placed it on a trolly for
removing it to their open shed, and that, while it was being
so removed, "on account of careless handling by the
defendants, the case slipped from the trolly and fell on the
ground" and its machine was "entirely broken". While making
that assertion, the plaintiffs categorically assorted that
"the defendants moved the said case as aforesaid in their
capacity as bailees thereof." This reference to the Board’s
responsibility was pleaded because section 61B provided that
that would be the nature of the liability of the Board. The
section clearly states as follows,-
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"61B. The responsibility of the Board for the
loss, destruction or deterioration of goods of which it
has taken charge shall, subject to the other provisions
of this Act and subject also in the case of goods
received for carriage by railways to the provisions of
the Indian Railways Act, 1890, be that of a bailee
under sections 151, 152 and 161 of the Indian Contract
Act, 1872, omitting the words ‘in the absence of any
special contract’ in section 152 of the last mentioned
Act."
So if there was any loss, destruction or deterioration of
the goods within the charge of the Board, its responsibility
was that of a bailee under the three specific sections of
the Contract Act, excepting of course the further provision
about the omission of the words meant to exclude a special
contract to the contrary in section 152 of the Contract Act
and the relevant provisions of the Railways Act. The section
thus makes it clear that, for purposes of the present case,
the responsibility of the Board was that of a bailee under
the three sections of the Contract Act, and no more.
539
It has to be appreciated that the subject-matter of
contractual bailment has been dealt with in chapter IX of
the Contract Act, and section 148 defines "bailment" to mean
the delivery of goods "upon a contract". As it was nobody’s
case that there was any such contract between the plaintiffs
and the Board in this case, section 151 (regarding care to
be taken by the bailee), section 152 (regarding the absence
of that responsibility after taking the necessary care), and
section 161 (regarding responsibility when goods were not
duly returned), would not have been attracted as such. Nor
would the provision in section 61B that the aforesaid
responsibility of the Board shall be "subject to the other
provisions of this Act", have been applicable in a case of
contractual bailment.
So even though there was no contractual bailment either
according to the pleadings of the parties. or on the
wordings of section 61B, the responsibility of the Board was
of the nature aforesaid, as the bailee of the consignment by
virtue of that section. In other words, in so far as the
"responsibility" of the Board for the loss, destruction or
deterioration of the goods of which it had taken charge was
concerned, it was clearly that of a bailee, subject of
course to the reservations provided by the section. What
then is the nature of a bailment? It may be mentioned that
we have gone through the pleadings and there is no
justification for the view that the plaintiffs based their
claim on the breach of a mere statutory duty of the Board
under section 61B.
It is well settled that the essence of bailment is
possession. It is equally well settled that a bailment may
arise, as in this case, even when the owner of the goods has
not consented to their possession by the bailee at all :
Palmer on Bailment, 1979 edition, page 2. There may thus be
bailment when a wharfinger takes possession of goods
unloaded at the quay side : (1970)2 All E.R. 826. A bailment
is not therefore technically and essentially subject to the
limitations of an agreement, and the notion of privity need
not be introduced in an area where it is unnecessary, for
bailment, as we have said, arises out of possession, and
essentially connotes the relationship between a person and
the thing in his charge. It is sufficient if that possession
is within the knowledge of the person concerned. It follows
that a bailment may very well exist without the creation of
a contract between the parties and it essentially gives rise
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to remedies which, in truth and substance, cannot be said to
be contractual. That is why Palmer has made the assertion
that "bailment is predominantly a tortious relation" (page
36), and the two are fundamentally similar.
It follows, therefore, that as the claim in the present
case was not based upon a mere breach of statutory duty
under section 61B of the
540
Act, and was based on the Board’s liability as bailee, it
was no other than by way of an action in tort.
It may be that, as in the present case, certain
obligations were fastened on the Board under section 61B of
the Act which were not in truth contractual in as much as
they did not rest on agreement, but which, by virtue of the
same section, were to be treated as if they were so, and
were made the subject-matter of liability under three
sections (sections 151, 152 and 162) of the Contract Act.
Such a relationship may well be called as one arising out of
an implied contract. But that does not justify the view of
the High Court that an altogether new cause of action arose
merely because a duty to take charge of the landed goods was
cast on the Board under section 61A(1) and the Board’s
responsibility for them was defined in section 61B. By the
very nature of that relationship, which admittedly did not
arise out of agreement between the parties, it was
essentially a delictal obligation. It was a civil wrong, for
which the remedy was an action in damages and not by way of
an action for breach of contract, as it is no body’s case
that there was any such relationship between the parties. It
may be that the obligation of the Board was of the nature of
a quasi-contract, but that also would not justify the view
that it arose merely because of the words of sections 61A
and 61B, as a statutory obligation quite apart from the
sources of origin of obligations defined by Salmond (on
Jurisprudence), twelfth edition, page 452 as contractual,
delictal, quasi-contractual and innominate. In fact as
Halsbury has put it (third edition, Vol. 37, page 111) while
dealing with the nature and elements of liability the
position is as follows,-
"Those civil rights of action which are available
under English common law for the recovery of
unliquidated damages by persons who have sustained
injury or loss from acts, statements or omissions of
others in breach of duty or contravention of right
imposed and conferred by law rather than by agreement
are rights of action in tort."
(Emphasis supplied)
Reference may also be made to Street on Torts, sixth
edition, page 5, that an action for breach of a statutory
duty is an action in tort. As has further been pointed out
on page 6, there is no fixed catalogue of circumstances
which alone and for all time mark the limit of what are
torts. Speaking simply and generally the law of torts is
concerned with those situations where the conduct of one
party causes or threatens harm to the interests of the other
party. As in this case a duty was cast on the Board under
section 61A to take charge of
541
the goods immediately upon landing, the Legislature took
care to lay down and define the nature and the extent of
that liability, which was set out, in terms to be that of a
bailee. Palmer has ably brought out the nature of bailment
vis-a-vis tort and has rightly reached the conclusion that
non-contractual bailment is predominantly a tortious action.
It would thus appear that it was not the case of the
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plaintiffs in their pleadings that their claim was founded
merely upon the breach of the statutory duty under section
61B of the Act, apart from tort. On the other hand. in their
notice before the suit, the plaintiffs’ case was based on
negligence, malfeasance and non-feasance on the part of the
Board’s administration at the docks and/or the acts of
misconduct on the part of its employees. As has been pointed
out, in the plaint the claim was based on careless handling
by the defendants when the case slipped and fell while it
was being removed by them as bailees
So when the action was by way of tort, and was, at any
rate, rested on section 61B, it was necessary for the High
Court to give full meaning to what that section provided and
to give effect to paragraph 2 of section 87 if it had a
bearing on that section as was canvassed at length all
through the litigation.
We have extracted section 61B. It will appear that
while it prescribes the responsibility of the Board for the
loss, destruction (as in this case) and deterioration of
goods of which it has taken charge, it expressly provides,
further, that that responsibility shall be "subject to the
other provisions" of the Act. The "other provisions" on
which reliance was placed by the Board, was section 87. It
will be enough to read the first two paragraphs of that
section, for the arguments before us have been confined to
paragraph 2. The two paragraphs read as follows,-
"87. No suit or other proceeding shall be
commenced against any person for any thing done, or
purporting to have been done, in pursuance of this Act,
without giving to such person one month’s previous
notice in writing of the intended suit or other
proceeding, and of the cause thereof, nor after six
months from the accrual of the cause of such suit or
other proceeding.
The Board shall not be responsible for any
misfeasance, malfeasance or non-feasance of any
employee appointed under this Act."
It is not in dispute before us that the words "any
person" at the opening of section 87 prohibiting the
commencement of a suit
542
or other proceeding against it (or him), include the Board.
Section 4 of the Act in fact expressly provides that the
Board shall be a body corporate and have perpetual
succession and a common seal, and shall sue and be sued by
its long name mentioned in the section. The term "person"
within has been defined in the General Clauses Act to
include any company or association or body of individuals,
whether incorporated or not. So the Board was a "person"
within the meaning of section 87 and it was entitled to
notice and the benefit of the limitation prescribed in
paragraph 1. But that benefit is available to other
"persons" also. Then comes paragraph 2, which expressly
provides that the Board shall not be responsible for any
misfeasance, malfeasance or non-feasance of any employee
appointed under the Act. It has to be noted that, unlike
paragraph 1, the protection of paragraph 2 is not extended
to cover "any person" and is confined to the Board. Then
there is another, and a more serious restriction, namely,
that the Board shall be responsible as aforesaid for the
misfeasance, malfeasance or non-feasance of only those of
its employees who have not been "appointed under this Act".
It does not therefore extend to any such tortious act if it
has been committed by an employee who has not been appointed
under the Act.
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Not all the Board’s employees are appointed under the
Act. Thus a cross-reference to section 21, which deals with
officers and servants of the Board, shows that the Board is
required to prepare and sanction a schedule of the staff of
employees whom they shall deem it necessary and proper to
maintain for purposes of the Act. That could not possibly
include all the employees of the Board, for the proviso to
the section states that artisans, porters and labourers and
mukadams of porters and laborers etc., and a person in
temporary employment other than those who are in receipt of
the specified monthly salary, "shall not be deemed to be
within the meaning of this section". The protection which
the Board enjoys is thus confined to the tortious acts of
the employees appointed under the Act, while the Board is
answerable for any such act committed by the vast majority
of its lesser employees who do the main work of actually
handling, loading, transporting, storing etc. of the goods
handled on behalf of the Board in the exercise of its
statutory powers. The protection is therefore very much
restricted, in so far as the Board is concerned, and there
is no reason why it should be denied to it where it is
otherwise available by a direct and emphatic provision in
the Act. The section is clear and categorical in providing
that if any misfeasance, malfeasance or non-feasance is
committed by any employee appointed under the Act, the Board
shall not be responsible for it. Thus loss, destruction or
deterioration of goods of which the
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Board has taken charge, falling in one or the other of those
three categories according to the facts and circumstances of
each offending act, would clearly amount to the Board’s
responsibility under section 61B, but section 87 (paragraph
2) has its reasonance in section 61B, and vice versa, so
that the sections are inter-connected and have to be read
together and as a whole.
The High Court, however, went to the extent of
observing that the provisions of section 87 paragraph 2 are
upon "a totally different subject with which section 61B is
not at all concerned" and that was why it took the view that
they could not possibly be held to control section 61B. The
High Court went on to hold that in its opinion one and the
same act may give rise to two liabilities, one for breach of
statutory duties and the other for the commission of a civil
wrong or a tort and that while section 61B provides for the
former, paragraph 2 of section 87 provides for the latter
and the two provisions do not overlap. No justifiable reason
has been given for this view and, if we may say with
respect, we find that it runs counter to the clear
provisions of the two sections if they are read together,
and is wholly unsustainable. It is section 61B which deals
with and prescribes the responsibility of the Board for
goods of which ’it has taken possession under the statutory
duty’ under section 61A, and it is that section, namely,
section 61B, which makes that responsibility "subject to the
other provisions of (that) Act". There is no occasion or
justification for reading the clause regarding the
subjection to the other provisions of the Act so as to
exclude section 87 as if it were outside the Act.
So if it could be shown that the acts of misfeasance,
malfeasance and non-feasance compendiously used at the trial
and in the consent terms, were committed by any employee
appointed under the Act, there is no reason why the Board
should not invoke paragraph 2 of section 87 and successfully
claim that it was not responsible for them.
A reference to paragraph II(b) of the consent terms
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clearly shows that issues Nos. 1 and 2, which related to the
liability of the Board by reason of the provisions of
section 87, were to be decided on the assumption that there
was some misfeasance, malfeasance or non-feasance of the
persons who handled the case in question and who according
to the defendants were their "employees appointed under the
Act" whilst who according to the plaintiffs were the
employees and the "agents" of the defendants. As we have
mentioned earlier, the contents of this part of the consent
terms has been interpreted by the High Court to mean that
while negligence on the part of the Board was admitted "it
was also admitted that these employees were appointed under
the said Act". When the High Court clearly reached that
conclusion, it was a short and inevitable step for it to
hold,
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further, that the Board was therefore entitled to be
absolved of its liability for the acts of these employees by
virtue of paragraph 2 of section 87. So here again the High
Court fell into an error for which its judgment cannot be
sustained.
The High Court has tried to interpret paragraph 2 of
section 87 with reference to the law which was in operation
prior to the enactment of section 87 by an Act of 1879 for
till then the ordinary law was in operation, and reference
in that connection was made to Barwick v. English Joint
Stock Bank.(1) There the law was stated as follows:
"The general rule is that the master is answerable
for every such wrong of the servant or agent as is
committed in the course of the service and for the
master’s benefit, though no express command or privity
of the master be proved."
Reference has also been made by the High Court to Salmond on
Jurisprudence that actual benefit to the master need not be
shown in such cases. But what the High Court did not
properly appreciate was that such a liability or
responsibility of the master could not possibly arise in a
case where the statute intervenes, and provides, in express
terms, that the master shall not be responsible for any act
of misfeasance, malfeasance or non-feasance committed by a
special class of its employees. This omission of the High
Court to appreciate the correct legal position with
reference to the decision in Barwick (supra) and the text
book relied upon by it, arose because it based its finding
on the mistaken impression that it was concerned with the
act of an ordinary employee of the Board and not the special
category of employee referred to in paragraph 2 of section
87 of the Act, namely, the "employee appointed under the
Act". This mistake runs through the entire judgment and
occurs at a dozen places where the question of tortious
liability has been examined in regard to the action of an
ordinary employee and the master’s vicarious liability for
the same.
Then the High Court went on to examine its decision in
Gulam Hussain’s case (supra) and, while disagreeing with
that portion of that judgment where the Division Bench had
stated that the "scope and the effect of the second
paragraph of section 87 is to protect the Board from
vicarious liability which they might have otherwise incurred
for the torts committed by their employees in the course of
employment", the High Court chose to follow the view taken
in that judgment that the responsibility for the loss,
destruction or deterioration of goods, which had been
referred to in section 61B of the Act, was the direct
responsibility of the Board itself and not that of any
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545
of its employees, But we are constrained to say that in
Gulam Hussain’s case(1) also, the High Court referred only
to the "employees of the Board and the torts committed by
them in the course of their employment, but failed to notice
that even though a duty was cast on the Board under section
61B for the loss, destruction or deterioration of goods of
which it had taken charge, that responsibility was "subject
to the other provisions of the Act", namely, section 87,
paragraph 2 to which reference has been made by us at some
length, and which expressly absolved the Board from
responsibility for any misfeasance, malfeasance or non-
feasance of any employee appointed under the Act. Gulam
Hussain’s case (supra) was therefore not decided correctly
and as the High Court, in the impugned judgment, took the
view that the conclusion reached in Gulam Hussain’s case
(supra) was binding on it, it naturally arrived at a
decision with which we are unable to agree. The High Court
failed to notice that paragraph 2 of section 87 related
essentially to acts of misfeasance, malfeasance and non-
feasance of only those employees who had been appointed
under the Act, and as such employees were very few, the
restriction on the Board’s liability was limited and
confined quite substantially. The High Court went further,
and brought in the question and concept of the Board’s
"agents" even though it was quite foreign to paragraph 2 of
section 87 and no evidence was relied upon to establish that
it were the Board’s "agents" who were responsible for the
damage to the consignment. In fact, in Gulam Hussain’s case
(supra) the High Court presumed that if the Board was
responsible for the loss, destruction or deterioration of
the goods, the cause of action must be the failure of the
Board to take the requisite degree of care by itself or
through its agents, and not merely a tort committed by an
employee for which the Board was sought to be held
vicariously liable. With respect, we are unable to find any
justification for such a view. Gulam Hussain’s case (supra)
was therefore not decided on a proper appreciation of the
provisions of section 61B and paragraph 2 of section 87 of
the Act. One of the Judges who decided that case was the
Judge who tried the present case, and he naturally followed
his own earlier judgment in Gulam Hussain’s case (supra). As
the Division Bench, which gave the present judgment (under
appeal before us) in that very case held that the conclusion
reached in Gulam Hussain’s case (supra) was binding upon it,
it fell into the error which had crept in the initial
decision in Gulam Hussain’s case (supra). Gulam Hussain’s
case (supra) is therefore no authority or basis for
upholding the impugned judgment.
It has to be appreciated and remembered all through.
that section 61B which imposes the responsibility on the
Board for loss.
546
destruction or deterioration of goods of which it has taken
charge, and states that that responsibility shall be that of
a bailee under the three sections of the Contract Act,
states further that the responsibility shall be "subject to
the other provisions of (the) Act". So the so-called
statutory duty is not unequivocal, and even if it were
assumed that it took the case outside the purview of the law
of torts and made it what Salmond has classified as an
"innominate obligation", that would not take the case out of
the exception provided by paragraph 2 of section 87.
Sections 61B and 87 are both parts of the same statute, and
must be read together-particularly when that is the clear
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direction of section 61B. By virtue of that section, the
liability of the Board is no more than that of a bailee
under sections 151, 152 and 161 of the Contract Act. As we
have pointed out, bailment is a concept correlated to
possession, and when that is admittedly not contradicted in
this case, it is really a liability in tort and the so-
called liability under section 61B of the Act means no more
and no less than this.
The High Court has observed that any other view would
"virtually render the provisions of section 61B largely
nugatory". But the very next sentence gives out the reason
for that view, for the High Court has gone on to observe
that that would be so if paragraph 2 of section 87 is
construed otherwise, namely, that "for any and every
misfeasance, malfeasance or non-feasance of its employee,
the Board is given complete immunity." That, however, is not
what section 61B and paragraph 2 of section 87 provide for,
as we have pointed out earlier, only a very few of the
Board’s employees are appointed under the Act and all that
the paragraph provides is that the Board shall not be
responsible for any misfeasance, malfeasance or non-feasance
on the part of only those employees. They may, for aught one
knows, be responsible personally for what they do, but it is
not a correct proposition of law to say that the view which
has found favour with us would virtually render the
provisions of section 61B "largely nugatory".
In the view we have taken, it is not necessary for so
to examine the validity of the bye-laws to which reference
has been made by the High Court. They were produced before
us towards the close of the hearing, for the arguments
proceeded and were based on the true meaning and
construction of sections 61B and 87 (paragraph 2) and it was
agreed that our decision thereon would govern the fate of
this case. We should not therefore be taken to have
expressed any opinion about the validity of the bye-laws in
question. It will be sufficient for us to say that the
decision here or below will not be conclusive of
547
their validity or invalidity for purposes of the present
case or like controversy.
In the result, the appeal succeeds and is allowed. The
judgment and decree of the High Court are set aside and the
suit is dismissed. In the circumstances of the case, the
parties shall pay and bear their own costs throughout.
P.B.R. Appeal allowed.
548