Full Judgment Text
F.A. Nos.397 and 861 of 1991 1/22
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
FIRST APPEAL NO. 397 OF 1991
AND
FIRST APPEAL NO. 861 OF 1991
FIRST APPEAL NO.397 OF 1991 :
M/s. Maharashtra State Electricity Board,
through its Executive Engineer (Stores)
Major Stores 'A' (Kamptee) at
Patni Bhavan Gandhibag,
Nagpur, Tah. Dist. Nagpur (R.A.). …. Appellant
V/s
The Union of India,
owning and representing the Central Railway,
through its General Manager,
Central Railway, V.T. Bombay (R.A.). …. Respondent
.............................................................................................................................................
Shri D.K. Dubey, Advocate for the Appellant.
Shri N.P. Lambat, Advocate for the Respondent.
.............................................................................................................................................
FIRST APPEAL NO.861 OF 1991 :
Union of India,
Through General Manager,
Central Railway,
Bombay V.T. …. Appellant
V/s
The Maharashtra State Electricity Board,
through Asst. Controller of Stores,
Major Stores 'A' M.S.E.B. (Kamptee),
Nagpur, Tah. Dist. Nagpur. …. Respondent
.............................................................................................................................................
Shri N.P. Lambat, Advocate for the Appellant.
Shri D.K. Dubey, Advocate for the Respondent.
.............................................................................................................................................
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CORAM : S.B. SHUKRE, J.
th
Reserved On : 20 JANUARY, 2014
th
Pronounced On : 8 MAY, 2014
JUDGMENT :
These two appeals arise out of the common judgment and decree
dated 25/02/1991, passed in application no.128/OAI/RCT/NGP/90 by
Railway Claims Tribunal, Nagpur between the same parties and,
therefore, are being disposed of by this common judgment.
2. The case of the respondent in First Appeal No.861/1991, the
Maharashtra State Electricity Board (herein after called as 'the Board'),
which is the appellant in First Appeal No.397/1991, is that the
consignment consisting of four cases containing electric transformer
accessories dispatched by its supplier, M/s. Crompton Greaves Limited,
Mumbai was received at the destination station, Kalmeshwar, Nagpur in
damaged condition attributable to acts of neglect and failure to take
proper care on the part of the carrier, the railway administration. This
consignment was dispatched by the supplier by loading it on an open
wagon at its own railway siding at Bhandup and booked under railway
receipt no.290660 dated 13/06/1987. According to the Board, the entire
consignment was properly packed, both internally and externally. When
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it did not arrive at the destination, a formal claim for non-delivery of the
consignment was lodged by the Board with railway administration on
4/08/1987. Subsequently, the consignment had arrived at the destination
and since it was found that the cases were in damaged condition, the
Board demanded open delivery under joint assessment from the railway
administration, which request was accepted. A joint assessment report
dated 4/11/1987 was prepared. It was noticed that 3 HV bushings and 3
PIN insulators contained in the consignment had been damaged in the
transit.
3. Thereafter, at the instance of railway administration, the damage
was surveyed by an independent assessor, Superintendence Company of
India, (P) Ltd., Mumbai which submitted its report. On its basis, the
railway administration assessed the damage at Rs.1,10,000/-, which was,
however, not acceptable to the Board. It is the case of the Board that on
receipt of the value of the damaged goods from the supplier, a detailed
claim as per letter dated 13/09/1988 was lodged with the railway
administration, which was, however, repudiated by it by its letter dated
21/04/1989 on the ground that the packing of the consignment was not as
per prescribed conditions. The Board also entered into some
correspondence and even sent a notice under Section 80, Civil Procedure
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Code. The Board, thereafter, claimed damages, interest and notice charges
amounting to Rs.7,53,632.16 as compensation for the damage caused to
the articles in the consignment during transit.
4. The claim was resisted by the railway administration. It was
submitted that the damage was caused to the articles due to failure on the
part of the supplier to follow the prescribed packing conditions laid down
in goods tariff and also failure to take proper care while loading on open
wagon the four cases by means of a crane at the private siding of the
supplier. It was submitted that the loading of the consignment at the
private siding was carried out without supervision of the officials of the
railway administration and, therefore, there was a possibility of the
consignment having suffered damage at that time itself. It was also
submitted that the claim as lodged by the Board was time barred. On all
these grounds, it was urged that the claim application was liable to be
rejected.
5. The Railway Claims Tribunal framed several issues and finding
that there was a contributory negligence in the proportion of 90:10 on the
part of the railway administration and the Board respectively, partly
allowed the claim application, granting damages of Rs.1,58,850/- together
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with interest of Rs.16,250/- and other incidental charges. Thus, by the
judgment and decree dated 25/02/1991, the Railway Claims Tribunal
directed payment of Rs.1,75,200/- as damages and other charges by the
railway administration to the Board. As both the parties to the dispute
were not satisfied with the award of the damages, both of them have
preferred the present appeals.
6. I have heard Shri Lambat, learned Counsel for the railway
administration and Shri Dubey, learned Counsel for the Board. With their
assistance, I have gone through the impugned judgment and decree and
record of the Railway Claims Tribunal, Nagpur. Now, following points
arise for my determination :
I. Whether the claim filed by the Board is
within limitation?
II. Whether the railway administration has
proved that the damage caused to the articles
in the consignment was on account of any
neglect or lack of care on the part of the
Board and was not due to any neglect or care
on the part of railway administration?
III.Whether the railway administration has
proved that the damage caused to the articles
in the consignment was as a consequence of
defective packing or packing in a manner not
in accordance with the prescribed conditions
of packing, as contemplated under Section 77-
C(2)(a), Indian Railways Act, 1890?
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IV.Whether the compensation granted by the
Railway Claims Tribunal is just and proper?
V. What order?
7. Learned Counsel for the railway administration has submitted that
the claim was not lodged within a period of 6 months from the date of the
delivery of the goods for carriage by railway administration and,
therefore, it was barred under Section 78-B of the Indian Railways Act,
1890 (hereinafter referred to as 'the Act, 1890').
8. Shri Dubey, learned Counsel for the Board submits that the first
claim regarding non-delivery of the articles was lodged on 4/08/1987 and
since it was completely within the scope of Section 78-B, there would be
no question of the claim being time barred.
9. I must say that the learned Counsel for the Board is right. It is seen
from the evidence available on record that first notice (Exhibit A-6) has
been sent to the railway administration on 4/08/1987 informing about
non-receipt of the articles and the intention of the Board to claim value of
the articles not received. Under Section 78(b) of the Act, 1890, it is
necessary that a person claiming compensation for the loss occasioned by
him due to damage, deterioration, destruction or non-delivery of the
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articles lodges his claim as regards refund or compensation in writing
within 6 months from the date of the delivery of the goods for carriage by
railway. The date of delivery of the goods in the instant case has been
13/06/1987 and, therefore, any claim for compensation either on account
of loss or damage to the goods should have been lodged within 6 months
from that date. The initial claim filed by the Board was for non-delivery
of the articles which was later on converted into a claim for compensation
for the damage caused to the articles during carriage. The first claim,
which was for non-delivery, was filed within the period of limitation and
it was required to be converted into a claim for compensation on account
of damage to the articles because the articles were received at
Kalmeshwar station, the destination point of the goods, much later. In
other words, as soon as the loss occasioned to the Board on account of
non-receipt of the articles was noticed, the Board preferred a claim on
4/08/1987 and, therefore, it cannot be said that the claim as lodged by the
Board was beyond the period of 6 months and, therefore, time barred.
10. Then, there is also a proviso to Section 78(b) and it states that if
any inquiry is made in writing from the railway administration within the
said period of 6 months regarding non-delivery or delay in delivery of the
goods with particulars to identify the consignment, the same shall be
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deemed to be the claim for the refund or compensation for the purposes
of Section 78(b). This proviso thus makes it clear that the first claim
itself covered the claim made for compensation on account of damage
caused to the goods during carriage.
11. For the afore stated reasons, I find that the claim filed by the Board
was well within the period of limitation. Point no.I is answered
accordingly.
12. Shri Lambat, learned Counsel for the railway administration has
further argued that there has been absolutely no negligence on the part of
the railway in carrying the goods from Bhandup to Kalmeshwar. He
submits that it is an admitted fact that the consignment was loaded on an
open wagon by the supplier at its private siding without any supervision
by any official of the railway and, therefore, the first duty to prove that it
was securely packed and properly loaded, was on the shoulders of the
Board and since its officials failed to discharge this burden, railway
administration cannot be called upon to prove that there was no
negligence on its part. He also submits that in the survey report of
an independent surveyor, Superintendence Company of India (P) Ltd.,
Mumbai, which is at Exh. 80, it is clearly stated that damage
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to the bushings could have been avoided, had the packing being done as
per the applicable packing conditions laid down in goods tariff. He
submits that it were the packing conditions IP-2 and IP-3(A) which were
not complied with by the supplier.
13. On the other hand, learned Counsel for the Board has argued that
the entire evidence available on record would show that the articles in the
consignment were securely packed which fact has been admitted by the
railway when it accepted the goods for carriage at Bhandup as per the
railway receipt dated 13/06/1987 (Exhibit A4) and that is the reason why
there is a remark made in the railway receipt that the consignment was
securely packed with wooden supports. Once, the condition of packing
of consignment being proper and in conformity with the prescribed
packing conditions is fulfilled, the learned Counsel further says, the
burden would be upon the railway to prove that the damage occurred due
to defective packing and since it has not been discharged, the damage to
the articles would have to be safely presumed to have occurred due to
mishandling of the articles during transit by the railway. He also submits
that in the evidence of Board's second witness Rajanikant, it has clearly
come on record that the supplier had packed the articles in the
consignment in good condition internally as well as outwardly and
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loading was also done in good conditions. He further submits that in his
entire evidence, nothing has come on record from which one can say that
a particular packing condition prescribed by the railways had been
breached by the supplier and because of the same the goods were
damaged.
14. First, we would have to examine the question about burden of
proof-whether it would lay upon the railway or on the Board, so as to
prove or disprove any causal relation between conditions of packing and
damage caused to the articles during carriage. In this regard provision of
Section 77-C(2) of the Indian Railways Act, 1890 is relevant and same is
reproduced as under:
“ (1) ….
(2)When any goods delivered to a railway
administration to be carried by railway are found on
arrival at destination to have been damaged or to
have suffered deterioration, leakage or wastage,
then, notwithstanding anything contained in the
foregoing provisions of this chapter, the railway
administration shall not be responsible for the
damage, deterioration, leakage or wastage of the
goods on proof by the railway administration -
(a) that the goods were, at the time of delivery
to the railway administration, in a defective
condition or were at that time either defectively
packed or packed in a manner not in accordance
with the general or special order, if any, issued under
sub-section (4) and as a consequence of such
defective condition or defective or improper packing
were liable to damage, deterioration, leakage or
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F.A. Nos.397 and 861 of 1991 11/22
wastage, and
(b) that such defective condition or defective
or improper packing was not brought to the notice of
the railway administration or of any of its servants at
the time of delivery of the goods to the railway
administration for carriage by railway:
Provided that the railway administration shall
be responsible for any such damage, deterioration,
leakage or wastage if negligence or misconduct on
the part of the railway administration or of any of its
servants is proved.
(3) …..
(4) …..”
15. From the language of the said provision, it is very clear that in case
of a claim for compensation raised upon the railway for damage suffered
during the carriage, the railway administration can successfully repudiate
the claim only when it can prove that the goods, at the time of delivery to
the railway administration, were in a defective condition or were at that
time defectively packed or packed in a manner in accordance with the
prescribed packing conditions and as a consequence of such defective
condition or defective or improper packing, the damage has been caused
to the articles and that such defective condition or defective or improper
packing was not brought to the notice of the railway administration at the
time of delivery of goods for carriage. In other words, the railway
administration can claim itself to be absolved of the responsibility only
when it can prove all the three following ingredients:
(i) Goods were handed over to the railway
administration in a defective condition or were
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defectively packed,
(ii) Damage to the goods was the result of defective
condition or defective packing,
(iii) Such defective condition or defective packing
was not brought to the notice of the railway at
the time of delivery of goods to it for carriage.
16. In this case, the goods were accepted for carriage by the railway
administration on 13/06/1987 vide railway receipt at Exhibit A4. There is
an endorsement made on the top of the railway receipt to the effect,
“Securely packed with wooden support by already open wagon selected
by the party.” and this would mean that the railway administration had
accepted the fact that goods were properly packed and there was no
defective packing of the consignment at the time they were delivered to it
for carriage. Therefore, the burden that the damage was caused due to
defective packing of the goods was never on the Board and was squarely
upon the railway administration and it ought to have been properly
discharged by it. Therefore, I see no merit in the argument in this regard
on behalf of the railway administration.
17. Now it would have to be seen whether the burden placed upon the
railway administration in view of the provisions of Section 77-C(2) has
been satisfactorily discharged by it or not. The evidence brought on
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F.A. Nos.397 and 861 of 1991 13/22
record by the railway administration in this regard is sketchy and not at
all satisfactory. Learned Counsel for the railway administration has
submitted that as per the survey report vide Exhibit A-80, the bushings
were damaged due to defective internal packing and there was, in
particular, breach of standard packing conditions namely IP/2 and IP/3(a).
IP/2 is a condition of packing which requires that articles may be packed
in corrugated cardboard boxes, thick cartons, wooden box cartons and
IP/3(a) is a packing condition which says that the articles must be packed
in a metal container. The joint assessment report dated 4/11/1987
discloses that the articles kept in the 4 cases bearing numbers 102/1,
102/2, 102/3 & 104/3 were packed in wooden crates and these articles
were bushes or bushings which were kept in the first 3 cases, while the
other articles namely, PIN Insulators were kept in the fourth case. The
railway administration has not produced any evidence to show that the
these goods were mandatorily required to be packed in a manner
conforming to the packing conditions IP/2, IP/3(a). This was all the
more necessary as the witness no.2 of the Board, Rajanikant, the
production Superintendent of Crompton Greaves Ltd., who had
supervised the loading of the consignment on the open wagon had stated
that the consignment had been packed in good condition internally as
well as externally. There have been no suggestions given to this witness
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F.A. Nos.397 and 861 of 1991 14/22
that the afore stated packing conditions applicable to packing were not
followed by the supplier while loading the consignment. On the contrary,
it has appeared in his cross-examination, in paragraph 4, that internally
one felt was put in place to hold the bushings in proper position and also
for providing cushion effect and that the boxes in which the articles were
kept were made up of wood. Apparently, this packing conforms to the
packing condition IP/2, although there is no evidence adduced by the
railway administration that this packing condition was applicable to the
articles delivered to the railway for carriage.
18. Even otherwise, a close perusal of the survey report (Exhibit A-80)
shows that the surveying company could not form any opinion about
internal packing conditions of the articles in the consignment as no
packing of any of the cases was available for its examination except for, 4
sides of one case without its top cover and bottom cover. In this report,
the company has only expressed its doubt if the packing was done as per
the packing conditions of railway goods tariff. The railway
administration has heavily relied upon this report which does not lend any
helping hand to its case. The report only creates a doubt about
compliance by the supplier with the packing conditions of the railway
goods tariff.
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F.A. Nos.397 and 861 of 1991 15/22
19. In the circumstances narrated above, it was extremely important for
the railway administration to lead evidence in a specific manner to
establish its case that a particular packing condition, relating to external
or internal packing or both type of packing was applicable to the articles
in question and was not followed by the consignor, the Crompton
Greaves Ltd. No such evidence has been produced on record by the
railway administration. Even the joint assessment report nowhere refers
to any defective packing condition of the cases examined and assessed
jointly by both the parties. This joint assessment report prepared for
taking of open delivery by the both parties is a very relevant document as
it was a fresh examination report before delivery of the articles in the
consignment. The subsequent survey report of the surveying company,
though relevant for the assessment of damage, would not be so relevant
for ascertaining the fact of compliance or non-compliance with the
prescribed packing conditions as the survey itself had been carried out
more than 6 months after the arrival of the consignment and it was carried
out in conditions which did not rule out the possibility of loss of packing
material due to pilferage or some human factor or even natural factor.
The survey report vide Exhibit A-80 also clearly shows that no packing
material was available for examination. Therefore, the joint assessment
report dated 4/11/1987 assumes importance and when it does not record
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F.A. Nos.397 and 861 of 1991 16/22
any finding about non-compliance with prescribed packing conditions,
one has to say that the railway administration has failed to discharge its
burden that goods were delivered to it in defective or improper packing
conditions for carriage. This would lead to an inevitable inference that
the goods received damage during their carriage by the railway and the
railway administration would be liable to make good loss to the Board
which was suffered by it as a consequence of the failure to take proper
care and caution in transportation of the case.
20. The Railway Claims Tribunal, Nagpur has ignored the afore stated
material aspect emerging from the evidence available on record and
resultantly erroneously found that the supplier had substantially complied
with the packing conditions and only a few of the packing conditions had
remained to be followed by it and, therefore, the railway administration
would be responsible to the 90% of the damage and the blame for the rest
10% of the damage assessed would have to be taken by the Board. In
fact, there has been no evidence absolutely brought on record to record
such a finding and it appears that Railway Claims Tribunal has only
indulged in guess work in this regard. In the circumstances, I find that
the railway administration has failed to show that there was no negligence
or mishandling on its part in carriage of the goods and also failed to prove
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F.A. Nos.397 and 861 of 1991 17/22
that the goods that were handed over to it were defective or
defectively or improperly packed. Points no.II and III are answered
accordingly.
21. This brings us to the last question as to whether or not
compensation awarded by the Railway Claims Tribunal is just and proper.
It is seen from the claim lodged by the Board that the loss assessed by the
Board is on the basis of the value of the articles received in damaged
condition and not on the basis of the cost that would be incurred by the
Board for rectifying or repairing the articles. Of course, so far as the
th
articles contained in 4 case bearing case no.104/3 are concerned, the PIN
Insulators, admittedly there is no question of carrying out of repairs as
they were completely damaged, but so far as articles contained in other 3
cases bearing case no.102/1, 102/2 & 102/3 are concerned, it is seen from
the record that the damaged parts of these articles were capable of being
restored by carrying out necessary repairs. This position is also accepted
by the Board, as seen from the admissions given by its witness no.1
Sharad, who was Assistant Controller of Stores. During the course of his
cross-examination, taken on behalf of railway administration, he has
admitted that the damaged parts could not be repaired locally. At the
same time, he has stated that repairs can be carried out by the supplier.
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Admittedly, the Board has not obtained any estimate of repairs from the
supplier. Witness no.1 Sharad in whose presence, the surveying company
from Mumbai had examined the damaged articles has opined on the
reverse of the assessment report vide Exhibit A-10 that the damage
should be taken at certain percentage of the value of the articles. In the
opinion of the surveying company, damage to articles contained in case
no.102/1 should be taken at 50% of the value and damage to the articles
contained in case no.102/2, 102/3 should be taken at 25% each of the
value of these articles.
22. From the above evidence, it becomes clear that even the Board is
raising its claim against railway administration only in terms of
percentage of the value of the damaged articles and not in terms of the
entire value of the articles. This percentage of loss is on the basis that the
damaged articles are capable of being repaired and the assessment shown
in terms of percentage is only towards the cost of the repairs as seen from
the assessment report vide Exhibit A-10 and Survey report at Exhibit
A-80. Considering the endorsement made on the assessment report vide
Exhibit A-10 by Sharad, the Assistant Controller and also admissions
given by him in his evidence, it can be safely concluded that the damaged
articles were serviceable and even the Board has ultimately raised the
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F.A. Nos.397 and 861 of 1991 19/22
claim on the basis of the costs that would be incurred for servicing of
these articles. But, the Board, admittedly, has not obtained any cost
estimate of repairs of these damaged articles from the supplier. On the
other hand, the railway administration has produced in evidence such cost
estimate for repairs of the articles prepared by the surveying company,
whose expertise in the subject cannot be questioned as the reports
submitted by this company have not been disputed by the Board on the
ground of lack of expertise. The objection is only about the value of the
damage assessed by the company. But, the Company being expert in the
field and the Board having not produced any other evidence to show that
the assessment of the company is incorrect, this Court will have to accept
the assessment of the damage made by the company.
23. Accordingly, accepting the valuation, I find that the value of the
damage caused to articles kept in 3 cases bearing case nos.102/1, 102/2
and 102/3 would be totaling to Rs.1,10,000/- at the rate of 50% of the
value of the articles kept in first case and at the rate of 25% of the value
of the articles kept in each of the remaining 2 cases. The Tribunal,
however, has committed a serious error in making an assessment of the
value of the damage to the articles by arbitrarily taking it to be 50% of the
value of the articles kept in case nos.102/2 and 102/3, although there is no
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reliable evidence produced in this regard by the Board. The finding
recorded by the Tribunal in this regard, therefore, would have to be
quashed and set aside.
th
24. So far as the articles kept in the 4 case bearing case no.104/3 are
concerned, the railway administration would have to pay for the entire
value of these articles, 3 PIN Insulators, as they have been completely
damaged. Their value has been taken by the Tribunal to be at Rs.4,500/-
at the rate of Rs.1500/- per insulator and correctly so as it is based upon
the cost estimate submitted by the supplier. Therefore, there is no reason
to find any fault with it.
25. The Tribunal has also correctly estimated the expenses for sending
the damaged bushings for repairs to Bhandup and back to the Board at
Rs.7,000/- and there is no need for making any interference with this
finding. The interest has been granted by the Tribunal at the rate of 9%
per annum and the rate so granted being commensurate with the
prevailing market rate at the relevant time, can be found to be a
reasonable rate granted by the Tribunal. However, the interest period has
been restricted from 2/04/1989, the date on which the claim was
repudiated to 11/06/1990, the date on which the compensation application
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F.A. Nos.397 and 861 of 1991 21/22
was filed. There is no need to confine the interest payable by the railway
administration to this period only. The interest should be payable from
the date of 13/06/1987, the date on which the goods were delivered by the
supplier to the railway administration for carriage by railway for the
reason that the six months limitation period prescribed for filing of claim
application under Section 78-B starts from the date of delivery of the
articles. If the limitation period would start from the date of delivery of
the articles, there is no reason why the railway administration when found
responsible for delivery of the articles in damaged conditions should be
exempted from paying interest on the amount of compensation from that
date.
26. In view of above discussion, I find that the compensation amounts
payable by the railway administration would be Rs.1,10,000/- towards the
value of the damage caused to the bushings in case nos.102/1, 102/2 and
102/3, Rs.4,500/- being value of 3 PIN Insulators and Rs.7,000 as
transportation charges. I further find that the interest at the rate of 9% per
annum shall be payable by the railway administration on the amount of
Rs.1,14,500/- being the value of the damage caused to the articles from
13/06/1987 to 11/06/1990, the date of the application. The railway
administration shall also be liable to pay interest pendente lite at the rate
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F.A. Nos.397 and 861 of 1991 22/22
of 6% per annum on the amount of Rs.1,14,500/- from 12/06/1990 till
making of the final payment.
27. For the reasons stated earlier, I find that the railway administration
would be liable to pay compensation to the Board, for the loss occasioned
by it on account of damage to the said articles in transit, in the sum of
Rs.1,14,500/- and also amount of Rs.7,000/- as transportation charges. I
further find that railway administration shall also be liable to pay interest
on such amount, at such rate and for such periods as mentioned in earlier
paragraph. Points no. IV and V are answered accordingly.
Accordingly, First Appeal No.861/1991 is partly
allowed and the impugned judgment and decree
stands modified in the above referred terms.
First appeal No.397/1991 is dismissed.
In the circumstances of the case, parties to bear their
own costs.
S.B. SHUKRE, J.
NH/-
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
FIRST APPEAL NO. 397 OF 1991
AND
FIRST APPEAL NO. 861 OF 1991
FIRST APPEAL NO.397 OF 1991 :
M/s. Maharashtra State Electricity Board,
through its Executive Engineer (Stores)
Major Stores 'A' (Kamptee) at
Patni Bhavan Gandhibag,
Nagpur, Tah. Dist. Nagpur (R.A.). …. Appellant
V/s
The Union of India,
owning and representing the Central Railway,
through its General Manager,
Central Railway, V.T. Bombay (R.A.). …. Respondent
.............................................................................................................................................
Shri D.K. Dubey, Advocate for the Appellant.
Shri N.P. Lambat, Advocate for the Respondent.
.............................................................................................................................................
FIRST APPEAL NO.861 OF 1991 :
Union of India,
Through General Manager,
Central Railway,
Bombay V.T. …. Appellant
V/s
The Maharashtra State Electricity Board,
through Asst. Controller of Stores,
Major Stores 'A' M.S.E.B. (Kamptee),
Nagpur, Tah. Dist. Nagpur. …. Respondent
.............................................................................................................................................
Shri N.P. Lambat, Advocate for the Appellant.
Shri D.K. Dubey, Advocate for the Respondent.
.............................................................................................................................................
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F.A. Nos.397 and 861 of 1991 2/22
CORAM : S.B. SHUKRE, J.
th
Reserved On : 20 JANUARY, 2014
th
Pronounced On : 8 MAY, 2014
JUDGMENT :
These two appeals arise out of the common judgment and decree
dated 25/02/1991, passed in application no.128/OAI/RCT/NGP/90 by
Railway Claims Tribunal, Nagpur between the same parties and,
therefore, are being disposed of by this common judgment.
2. The case of the respondent in First Appeal No.861/1991, the
Maharashtra State Electricity Board (herein after called as 'the Board'),
which is the appellant in First Appeal No.397/1991, is that the
consignment consisting of four cases containing electric transformer
accessories dispatched by its supplier, M/s. Crompton Greaves Limited,
Mumbai was received at the destination station, Kalmeshwar, Nagpur in
damaged condition attributable to acts of neglect and failure to take
proper care on the part of the carrier, the railway administration. This
consignment was dispatched by the supplier by loading it on an open
wagon at its own railway siding at Bhandup and booked under railway
receipt no.290660 dated 13/06/1987. According to the Board, the entire
consignment was properly packed, both internally and externally. When
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F.A. Nos.397 and 861 of 1991 3/22
it did not arrive at the destination, a formal claim for non-delivery of the
consignment was lodged by the Board with railway administration on
4/08/1987. Subsequently, the consignment had arrived at the destination
and since it was found that the cases were in damaged condition, the
Board demanded open delivery under joint assessment from the railway
administration, which request was accepted. A joint assessment report
dated 4/11/1987 was prepared. It was noticed that 3 HV bushings and 3
PIN insulators contained in the consignment had been damaged in the
transit.
3. Thereafter, at the instance of railway administration, the damage
was surveyed by an independent assessor, Superintendence Company of
India, (P) Ltd., Mumbai which submitted its report. On its basis, the
railway administration assessed the damage at Rs.1,10,000/-, which was,
however, not acceptable to the Board. It is the case of the Board that on
receipt of the value of the damaged goods from the supplier, a detailed
claim as per letter dated 13/09/1988 was lodged with the railway
administration, which was, however, repudiated by it by its letter dated
21/04/1989 on the ground that the packing of the consignment was not as
per prescribed conditions. The Board also entered into some
correspondence and even sent a notice under Section 80, Civil Procedure
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F.A. Nos.397 and 861 of 1991 4/22
Code. The Board, thereafter, claimed damages, interest and notice charges
amounting to Rs.7,53,632.16 as compensation for the damage caused to
the articles in the consignment during transit.
4. The claim was resisted by the railway administration. It was
submitted that the damage was caused to the articles due to failure on the
part of the supplier to follow the prescribed packing conditions laid down
in goods tariff and also failure to take proper care while loading on open
wagon the four cases by means of a crane at the private siding of the
supplier. It was submitted that the loading of the consignment at the
private siding was carried out without supervision of the officials of the
railway administration and, therefore, there was a possibility of the
consignment having suffered damage at that time itself. It was also
submitted that the claim as lodged by the Board was time barred. On all
these grounds, it was urged that the claim application was liable to be
rejected.
5. The Railway Claims Tribunal framed several issues and finding
that there was a contributory negligence in the proportion of 90:10 on the
part of the railway administration and the Board respectively, partly
allowed the claim application, granting damages of Rs.1,58,850/- together
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F.A. Nos.397 and 861 of 1991 5/22
with interest of Rs.16,250/- and other incidental charges. Thus, by the
judgment and decree dated 25/02/1991, the Railway Claims Tribunal
directed payment of Rs.1,75,200/- as damages and other charges by the
railway administration to the Board. As both the parties to the dispute
were not satisfied with the award of the damages, both of them have
preferred the present appeals.
6. I have heard Shri Lambat, learned Counsel for the railway
administration and Shri Dubey, learned Counsel for the Board. With their
assistance, I have gone through the impugned judgment and decree and
record of the Railway Claims Tribunal, Nagpur. Now, following points
arise for my determination :
I. Whether the claim filed by the Board is
within limitation?
II. Whether the railway administration has
proved that the damage caused to the articles
in the consignment was on account of any
neglect or lack of care on the part of the
Board and was not due to any neglect or care
on the part of railway administration?
III.Whether the railway administration has
proved that the damage caused to the articles
in the consignment was as a consequence of
defective packing or packing in a manner not
in accordance with the prescribed conditions
of packing, as contemplated under Section 77-
C(2)(a), Indian Railways Act, 1890?
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F.A. Nos.397 and 861 of 1991 6/22
IV.Whether the compensation granted by the
Railway Claims Tribunal is just and proper?
V. What order?
7. Learned Counsel for the railway administration has submitted that
the claim was not lodged within a period of 6 months from the date of the
delivery of the goods for carriage by railway administration and,
therefore, it was barred under Section 78-B of the Indian Railways Act,
1890 (hereinafter referred to as 'the Act, 1890').
8. Shri Dubey, learned Counsel for the Board submits that the first
claim regarding non-delivery of the articles was lodged on 4/08/1987 and
since it was completely within the scope of Section 78-B, there would be
no question of the claim being time barred.
9. I must say that the learned Counsel for the Board is right. It is seen
from the evidence available on record that first notice (Exhibit A-6) has
been sent to the railway administration on 4/08/1987 informing about
non-receipt of the articles and the intention of the Board to claim value of
the articles not received. Under Section 78(b) of the Act, 1890, it is
necessary that a person claiming compensation for the loss occasioned by
him due to damage, deterioration, destruction or non-delivery of the
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F.A. Nos.397 and 861 of 1991 7/22
articles lodges his claim as regards refund or compensation in writing
within 6 months from the date of the delivery of the goods for carriage by
railway. The date of delivery of the goods in the instant case has been
13/06/1987 and, therefore, any claim for compensation either on account
of loss or damage to the goods should have been lodged within 6 months
from that date. The initial claim filed by the Board was for non-delivery
of the articles which was later on converted into a claim for compensation
for the damage caused to the articles during carriage. The first claim,
which was for non-delivery, was filed within the period of limitation and
it was required to be converted into a claim for compensation on account
of damage to the articles because the articles were received at
Kalmeshwar station, the destination point of the goods, much later. In
other words, as soon as the loss occasioned to the Board on account of
non-receipt of the articles was noticed, the Board preferred a claim on
4/08/1987 and, therefore, it cannot be said that the claim as lodged by the
Board was beyond the period of 6 months and, therefore, time barred.
10. Then, there is also a proviso to Section 78(b) and it states that if
any inquiry is made in writing from the railway administration within the
said period of 6 months regarding non-delivery or delay in delivery of the
goods with particulars to identify the consignment, the same shall be
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F.A. Nos.397 and 861 of 1991 8/22
deemed to be the claim for the refund or compensation for the purposes
of Section 78(b). This proviso thus makes it clear that the first claim
itself covered the claim made for compensation on account of damage
caused to the goods during carriage.
11. For the afore stated reasons, I find that the claim filed by the Board
was well within the period of limitation. Point no.I is answered
accordingly.
12. Shri Lambat, learned Counsel for the railway administration has
further argued that there has been absolutely no negligence on the part of
the railway in carrying the goods from Bhandup to Kalmeshwar. He
submits that it is an admitted fact that the consignment was loaded on an
open wagon by the supplier at its private siding without any supervision
by any official of the railway and, therefore, the first duty to prove that it
was securely packed and properly loaded, was on the shoulders of the
Board and since its officials failed to discharge this burden, railway
administration cannot be called upon to prove that there was no
negligence on its part. He also submits that in the survey report of
an independent surveyor, Superintendence Company of India (P) Ltd.,
Mumbai, which is at Exh. 80, it is clearly stated that damage
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F.A. Nos.397 and 861 of 1991 9/22
to the bushings could have been avoided, had the packing being done as
per the applicable packing conditions laid down in goods tariff. He
submits that it were the packing conditions IP-2 and IP-3(A) which were
not complied with by the supplier.
13. On the other hand, learned Counsel for the Board has argued that
the entire evidence available on record would show that the articles in the
consignment were securely packed which fact has been admitted by the
railway when it accepted the goods for carriage at Bhandup as per the
railway receipt dated 13/06/1987 (Exhibit A4) and that is the reason why
there is a remark made in the railway receipt that the consignment was
securely packed with wooden supports. Once, the condition of packing
of consignment being proper and in conformity with the prescribed
packing conditions is fulfilled, the learned Counsel further says, the
burden would be upon the railway to prove that the damage occurred due
to defective packing and since it has not been discharged, the damage to
the articles would have to be safely presumed to have occurred due to
mishandling of the articles during transit by the railway. He also submits
that in the evidence of Board's second witness Rajanikant, it has clearly
come on record that the supplier had packed the articles in the
consignment in good condition internally as well as outwardly and
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F.A. Nos.397 and 861 of 1991 10/22
loading was also done in good conditions. He further submits that in his
entire evidence, nothing has come on record from which one can say that
a particular packing condition prescribed by the railways had been
breached by the supplier and because of the same the goods were
damaged.
14. First, we would have to examine the question about burden of
proof-whether it would lay upon the railway or on the Board, so as to
prove or disprove any causal relation between conditions of packing and
damage caused to the articles during carriage. In this regard provision of
Section 77-C(2) of the Indian Railways Act, 1890 is relevant and same is
reproduced as under:
“ (1) ….
(2)When any goods delivered to a railway
administration to be carried by railway are found on
arrival at destination to have been damaged or to
have suffered deterioration, leakage or wastage,
then, notwithstanding anything contained in the
foregoing provisions of this chapter, the railway
administration shall not be responsible for the
damage, deterioration, leakage or wastage of the
goods on proof by the railway administration -
(a) that the goods were, at the time of delivery
to the railway administration, in a defective
condition or were at that time either defectively
packed or packed in a manner not in accordance
with the general or special order, if any, issued under
sub-section (4) and as a consequence of such
defective condition or defective or improper packing
were liable to damage, deterioration, leakage or
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F.A. Nos.397 and 861 of 1991 11/22
wastage, and
(b) that such defective condition or defective
or improper packing was not brought to the notice of
the railway administration or of any of its servants at
the time of delivery of the goods to the railway
administration for carriage by railway:
Provided that the railway administration shall
be responsible for any such damage, deterioration,
leakage or wastage if negligence or misconduct on
the part of the railway administration or of any of its
servants is proved.
(3) …..
(4) …..”
15. From the language of the said provision, it is very clear that in case
of a claim for compensation raised upon the railway for damage suffered
during the carriage, the railway administration can successfully repudiate
the claim only when it can prove that the goods, at the time of delivery to
the railway administration, were in a defective condition or were at that
time defectively packed or packed in a manner in accordance with the
prescribed packing conditions and as a consequence of such defective
condition or defective or improper packing, the damage has been caused
to the articles and that such defective condition or defective or improper
packing was not brought to the notice of the railway administration at the
time of delivery of goods for carriage. In other words, the railway
administration can claim itself to be absolved of the responsibility only
when it can prove all the three following ingredients:
(i) Goods were handed over to the railway
administration in a defective condition or were
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F.A. Nos.397 and 861 of 1991 12/22
defectively packed,
(ii) Damage to the goods was the result of defective
condition or defective packing,
(iii) Such defective condition or defective packing
was not brought to the notice of the railway at
the time of delivery of goods to it for carriage.
16. In this case, the goods were accepted for carriage by the railway
administration on 13/06/1987 vide railway receipt at Exhibit A4. There is
an endorsement made on the top of the railway receipt to the effect,
“Securely packed with wooden support by already open wagon selected
by the party.” and this would mean that the railway administration had
accepted the fact that goods were properly packed and there was no
defective packing of the consignment at the time they were delivered to it
for carriage. Therefore, the burden that the damage was caused due to
defective packing of the goods was never on the Board and was squarely
upon the railway administration and it ought to have been properly
discharged by it. Therefore, I see no merit in the argument in this regard
on behalf of the railway administration.
17. Now it would have to be seen whether the burden placed upon the
railway administration in view of the provisions of Section 77-C(2) has
been satisfactorily discharged by it or not. The evidence brought on
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F.A. Nos.397 and 861 of 1991 13/22
record by the railway administration in this regard is sketchy and not at
all satisfactory. Learned Counsel for the railway administration has
submitted that as per the survey report vide Exhibit A-80, the bushings
were damaged due to defective internal packing and there was, in
particular, breach of standard packing conditions namely IP/2 and IP/3(a).
IP/2 is a condition of packing which requires that articles may be packed
in corrugated cardboard boxes, thick cartons, wooden box cartons and
IP/3(a) is a packing condition which says that the articles must be packed
in a metal container. The joint assessment report dated 4/11/1987
discloses that the articles kept in the 4 cases bearing numbers 102/1,
102/2, 102/3 & 104/3 were packed in wooden crates and these articles
were bushes or bushings which were kept in the first 3 cases, while the
other articles namely, PIN Insulators were kept in the fourth case. The
railway administration has not produced any evidence to show that the
these goods were mandatorily required to be packed in a manner
conforming to the packing conditions IP/2, IP/3(a). This was all the
more necessary as the witness no.2 of the Board, Rajanikant, the
production Superintendent of Crompton Greaves Ltd., who had
supervised the loading of the consignment on the open wagon had stated
that the consignment had been packed in good condition internally as
well as externally. There have been no suggestions given to this witness
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F.A. Nos.397 and 861 of 1991 14/22
that the afore stated packing conditions applicable to packing were not
followed by the supplier while loading the consignment. On the contrary,
it has appeared in his cross-examination, in paragraph 4, that internally
one felt was put in place to hold the bushings in proper position and also
for providing cushion effect and that the boxes in which the articles were
kept were made up of wood. Apparently, this packing conforms to the
packing condition IP/2, although there is no evidence adduced by the
railway administration that this packing condition was applicable to the
articles delivered to the railway for carriage.
18. Even otherwise, a close perusal of the survey report (Exhibit A-80)
shows that the surveying company could not form any opinion about
internal packing conditions of the articles in the consignment as no
packing of any of the cases was available for its examination except for, 4
sides of one case without its top cover and bottom cover. In this report,
the company has only expressed its doubt if the packing was done as per
the packing conditions of railway goods tariff. The railway
administration has heavily relied upon this report which does not lend any
helping hand to its case. The report only creates a doubt about
compliance by the supplier with the packing conditions of the railway
goods tariff.
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F.A. Nos.397 and 861 of 1991 15/22
19. In the circumstances narrated above, it was extremely important for
the railway administration to lead evidence in a specific manner to
establish its case that a particular packing condition, relating to external
or internal packing or both type of packing was applicable to the articles
in question and was not followed by the consignor, the Crompton
Greaves Ltd. No such evidence has been produced on record by the
railway administration. Even the joint assessment report nowhere refers
to any defective packing condition of the cases examined and assessed
jointly by both the parties. This joint assessment report prepared for
taking of open delivery by the both parties is a very relevant document as
it was a fresh examination report before delivery of the articles in the
consignment. The subsequent survey report of the surveying company,
though relevant for the assessment of damage, would not be so relevant
for ascertaining the fact of compliance or non-compliance with the
prescribed packing conditions as the survey itself had been carried out
more than 6 months after the arrival of the consignment and it was carried
out in conditions which did not rule out the possibility of loss of packing
material due to pilferage or some human factor or even natural factor.
The survey report vide Exhibit A-80 also clearly shows that no packing
material was available for examination. Therefore, the joint assessment
report dated 4/11/1987 assumes importance and when it does not record
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F.A. Nos.397 and 861 of 1991 16/22
any finding about non-compliance with prescribed packing conditions,
one has to say that the railway administration has failed to discharge its
burden that goods were delivered to it in defective or improper packing
conditions for carriage. This would lead to an inevitable inference that
the goods received damage during their carriage by the railway and the
railway administration would be liable to make good loss to the Board
which was suffered by it as a consequence of the failure to take proper
care and caution in transportation of the case.
20. The Railway Claims Tribunal, Nagpur has ignored the afore stated
material aspect emerging from the evidence available on record and
resultantly erroneously found that the supplier had substantially complied
with the packing conditions and only a few of the packing conditions had
remained to be followed by it and, therefore, the railway administration
would be responsible to the 90% of the damage and the blame for the rest
10% of the damage assessed would have to be taken by the Board. In
fact, there has been no evidence absolutely brought on record to record
such a finding and it appears that Railway Claims Tribunal has only
indulged in guess work in this regard. In the circumstances, I find that
the railway administration has failed to show that there was no negligence
or mishandling on its part in carriage of the goods and also failed to prove
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F.A. Nos.397 and 861 of 1991 17/22
that the goods that were handed over to it were defective or
defectively or improperly packed. Points no.II and III are answered
accordingly.
21. This brings us to the last question as to whether or not
compensation awarded by the Railway Claims Tribunal is just and proper.
It is seen from the claim lodged by the Board that the loss assessed by the
Board is on the basis of the value of the articles received in damaged
condition and not on the basis of the cost that would be incurred by the
Board for rectifying or repairing the articles. Of course, so far as the
th
articles contained in 4 case bearing case no.104/3 are concerned, the PIN
Insulators, admittedly there is no question of carrying out of repairs as
they were completely damaged, but so far as articles contained in other 3
cases bearing case no.102/1, 102/2 & 102/3 are concerned, it is seen from
the record that the damaged parts of these articles were capable of being
restored by carrying out necessary repairs. This position is also accepted
by the Board, as seen from the admissions given by its witness no.1
Sharad, who was Assistant Controller of Stores. During the course of his
cross-examination, taken on behalf of railway administration, he has
admitted that the damaged parts could not be repaired locally. At the
same time, he has stated that repairs can be carried out by the supplier.
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F.A. Nos.397 and 861 of 1991 18/22
Admittedly, the Board has not obtained any estimate of repairs from the
supplier. Witness no.1 Sharad in whose presence, the surveying company
from Mumbai had examined the damaged articles has opined on the
reverse of the assessment report vide Exhibit A-10 that the damage
should be taken at certain percentage of the value of the articles. In the
opinion of the surveying company, damage to articles contained in case
no.102/1 should be taken at 50% of the value and damage to the articles
contained in case no.102/2, 102/3 should be taken at 25% each of the
value of these articles.
22. From the above evidence, it becomes clear that even the Board is
raising its claim against railway administration only in terms of
percentage of the value of the damaged articles and not in terms of the
entire value of the articles. This percentage of loss is on the basis that the
damaged articles are capable of being repaired and the assessment shown
in terms of percentage is only towards the cost of the repairs as seen from
the assessment report vide Exhibit A-10 and Survey report at Exhibit
A-80. Considering the endorsement made on the assessment report vide
Exhibit A-10 by Sharad, the Assistant Controller and also admissions
given by him in his evidence, it can be safely concluded that the damaged
articles were serviceable and even the Board has ultimately raised the
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F.A. Nos.397 and 861 of 1991 19/22
claim on the basis of the costs that would be incurred for servicing of
these articles. But, the Board, admittedly, has not obtained any cost
estimate of repairs of these damaged articles from the supplier. On the
other hand, the railway administration has produced in evidence such cost
estimate for repairs of the articles prepared by the surveying company,
whose expertise in the subject cannot be questioned as the reports
submitted by this company have not been disputed by the Board on the
ground of lack of expertise. The objection is only about the value of the
damage assessed by the company. But, the Company being expert in the
field and the Board having not produced any other evidence to show that
the assessment of the company is incorrect, this Court will have to accept
the assessment of the damage made by the company.
23. Accordingly, accepting the valuation, I find that the value of the
damage caused to articles kept in 3 cases bearing case nos.102/1, 102/2
and 102/3 would be totaling to Rs.1,10,000/- at the rate of 50% of the
value of the articles kept in first case and at the rate of 25% of the value
of the articles kept in each of the remaining 2 cases. The Tribunal,
however, has committed a serious error in making an assessment of the
value of the damage to the articles by arbitrarily taking it to be 50% of the
value of the articles kept in case nos.102/2 and 102/3, although there is no
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reliable evidence produced in this regard by the Board. The finding
recorded by the Tribunal in this regard, therefore, would have to be
quashed and set aside.
th
24. So far as the articles kept in the 4 case bearing case no.104/3 are
concerned, the railway administration would have to pay for the entire
value of these articles, 3 PIN Insulators, as they have been completely
damaged. Their value has been taken by the Tribunal to be at Rs.4,500/-
at the rate of Rs.1500/- per insulator and correctly so as it is based upon
the cost estimate submitted by the supplier. Therefore, there is no reason
to find any fault with it.
25. The Tribunal has also correctly estimated the expenses for sending
the damaged bushings for repairs to Bhandup and back to the Board at
Rs.7,000/- and there is no need for making any interference with this
finding. The interest has been granted by the Tribunal at the rate of 9%
per annum and the rate so granted being commensurate with the
prevailing market rate at the relevant time, can be found to be a
reasonable rate granted by the Tribunal. However, the interest period has
been restricted from 2/04/1989, the date on which the claim was
repudiated to 11/06/1990, the date on which the compensation application
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F.A. Nos.397 and 861 of 1991 21/22
was filed. There is no need to confine the interest payable by the railway
administration to this period only. The interest should be payable from
the date of 13/06/1987, the date on which the goods were delivered by the
supplier to the railway administration for carriage by railway for the
reason that the six months limitation period prescribed for filing of claim
application under Section 78-B starts from the date of delivery of the
articles. If the limitation period would start from the date of delivery of
the articles, there is no reason why the railway administration when found
responsible for delivery of the articles in damaged conditions should be
exempted from paying interest on the amount of compensation from that
date.
26. In view of above discussion, I find that the compensation amounts
payable by the railway administration would be Rs.1,10,000/- towards the
value of the damage caused to the bushings in case nos.102/1, 102/2 and
102/3, Rs.4,500/- being value of 3 PIN Insulators and Rs.7,000 as
transportation charges. I further find that the interest at the rate of 9% per
annum shall be payable by the railway administration on the amount of
Rs.1,14,500/- being the value of the damage caused to the articles from
13/06/1987 to 11/06/1990, the date of the application. The railway
administration shall also be liable to pay interest pendente lite at the rate
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F.A. Nos.397 and 861 of 1991 22/22
of 6% per annum on the amount of Rs.1,14,500/- from 12/06/1990 till
making of the final payment.
27. For the reasons stated earlier, I find that the railway administration
would be liable to pay compensation to the Board, for the loss occasioned
by it on account of damage to the said articles in transit, in the sum of
Rs.1,14,500/- and also amount of Rs.7,000/- as transportation charges. I
further find that railway administration shall also be liable to pay interest
on such amount, at such rate and for such periods as mentioned in earlier
paragraph. Points no. IV and V are answered accordingly.
Accordingly, First Appeal No.861/1991 is partly
allowed and the impugned judgment and decree
stands modified in the above referred terms.
First appeal No.397/1991 is dismissed.
In the circumstances of the case, parties to bear their
own costs.
S.B. SHUKRE, J.
NH/-
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