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1981 DIGILAW 341 (KAR)

STATE OF MYSORE v. (C. L. MAHESWARI) WEST COAST PAPER MILLS

1981-11-06

K.J.SHETTY, P.A.KULKARNI

body1981
JAGANNATHA SHETTY, J. ( 1 ) THIS appeal has been filed by the State of Karnataka against the judgment and decree dated August 30, 1973 of the Civil judge, North Kanara, dismissing the Spl. OS No. 12 of 1971. ( 2 ) THAT suit was instituted by the State of Karnataka claiming Rs. 4,65,430 as damages from West Coast Paper Mills ltd. , which is a company ("the Company") incorporated under the Indian companies Act, 1913. The Company had entered into an agreement dated August 13, 1955 with the erstwhile State of Bombay to extract bamboos from the State forests for the specific purpose of manufacturing pulp and paper. The Company was required to pay royalty at a concessional rate on the basis of the weight of air dry pulp or paper manufactured. The Company had extracted 56,543 tons of bamboos and stacked in its bamboo yard during the summer season of the year 1960 61. On march 19, 1961, the entire stock of bamboos was destroyed by an outbreak of fire ( 3 ) THE Company, ho'wever, as per the agreement paid royalty of Rs 55,358 24 P. legitimately due to the Government in respect of the lost bamboos. But the Government, in addition to that royalty wanted the Company to pay the price of the said bamboos and so brought the suit, claiming damages. ( 4 ) THE case made out in the plaint was rested on a two-fold contention ; first, it was alleged that the bamboos were destroyed by fire due to gross and culpable negligence on the part of the Company's servants and secondly, it was contended that the stacked bamboos remained as the property of the State till they were utilised by the Company for manufacturing pulp and paper. ( 5 ) THE Company while admitting that it had extracted and stacked 46,543 tons of bamboos in the yard, has contended inter alia that it did not act negligently and the bamboos were destroyed by an accidental fire, notwithstanding the protective measures taken and diligent watch provided. It was also contended that the bamboos stacked in the Company's yard were the exclusive property of the Company and the Government was entitled to recover only the royalty agreed upon and not the value or price of the property. It was also contended that the bamboos stacked in the Company's yard were the exclusive property of the Company and the Government was entitled to recover only the royalty agreed upon and not the value or price of the property. ( 6 ) IN the light of the contentions raised in the pleadings, the trial Court was called upon to decide the first issue as to the title in respect of the bamboos lost by fire, and the second issue as to the gross or culpable negligence on the part of the Company's servants. ( 7 ) THE trial Court answered both the issues in favour of the Company and against the plaintiff. It held that under the terms of the agreement Ex. P 1, the bamboos extracted from the State forests would be the property of the Company and not of the State. It also held that the bamboos were destroyed by an accidental fire and not due to culpable negligence of the Company's servants. ( 8 ) THE contentions which have not been accepted by the Court below, have been pressed for consideration before us. ( 9 ) THE first point for consideration is whether the Company was guilty of negligence in not properly preserving the stacked bamboos or whether the Company was guilty of negligence in not preventing the havoc caused by the fire accident. The evidence on this question from the plaintiff is very little. Only one witness was examined. He was the Divisional Forest officer, Dandeli (PW 1 ). Before analysing his evidence, we may note the contention urged by Sri Ashok Kumar, learned government Pleader for appellant. He urged that the case attracts the principle of 'resipsa loquitor', and by the application of that maxim the plaintiff has only to prove that there was a fire incident destroying the entire stock of bamboos and it would then be for the Company to prove affirmatively the absence of negligence since the material was under its control and management. Mr. Krishnamurthy, learned senior Advocate for the Company, on the other hand, urged that the res ipsa maxim has no such water tight compartment in its applicability to cases governed by the Indian Evidence Act. Mr. Krishnamurthy, learned senior Advocate for the Company, on the other hand, urged that the res ipsa maxim has no such water tight compartment in its applicability to cases governed by the Indian Evidence Act. According to him, the maxim is only a means to estimate the logical probability from circumstances of the case and the Court always has to take the totality of circumstances in order to render justice and prevent injustice. ( 10 ) IT seems to us that Mr. Krishnamurthy was right in his submission. Mathew, J. in Shyam Sunder v. State of rajastan (1), para 10, observed:"the principal function of the maxim is to prevent injustice which would result if a plaintiff were invariably compelled to prove the precise cause of the accident and the defendant responsible for it, even when the facts bearing in the matter are at the outset unknown to him and often within the knowledge of the defendant But though the parties' relative access to evidence is an influential factor, it is not controlling. Thus, the fact that the defendant is as much at a loss to explain the accident or himself died in it does not preclude an adverse inference against him, if the odds otherwise point to his negligence. (See John g. Fleming, The Law of Torts, 4th Edn. page 264)". The learned Judge further observed : (2)"the plaintiff merely proves a result, not any particular act or omission producing the result. If the result, in the circumstances in which he proves it makes it more probable than not that it was caused by the negligence of the defendant, the doctrine of res ipsa loquitor is said to apply, and the plaintiff will be entitled to succeed unless th defendant by evidence rebuts that probability". Sarkaria, J. m Syad Akbar V. State of karnataka (3), has further explained the applicability of the maxim and outlined two lines of approach The learned Judge said at page 1853 :' From the above conspectus, two lines of approach in regard to the application and effect of the maxim res ipsa loquitor are discernible. According to the first, where the maxim applies, it operates as an exception to the general rule that the burden of proof of the alleged negligence is in the first instance, on the plaintiff. According to the first, where the maxim applies, it operates as an exception to the general rule that the burden of proof of the alleged negligence is in the first instance, on the plaintiff. In this view, if the nature of an accident is such that the mere happening of it is evidence of negligence, such as, where a motor vehicle without apparent cause leaves the highway or overturns or in fair visibility runs into an obstacle ; or brushes the branches of an overhanging tree, resulting in injury, or where there is a duty on the defendant to exercise care, and circumstances in which the injury complained of happened are such that with the exercise of the requisite care no risk would in the ordinary course ensue, the burden shifts or is in the first instance, on the defendant to disprove his liability. Such shifting or casting of the burden on the defendant is on account of a presumption of law and fact arising against the defendant from the constituent circumstances of the accident itself, which bespeak negligence of the defendant. This is the view taken in several decisions of English Courts. (For instance, see Banke v. Manchester, sh-ffield and Linconshire Rly. Co. (1870)22 lt 442 ; Moore V. Tax (P) and Sons (1956) 1 QB 596. Also see paras 70, 79 and 80 of Halsbury's Laws of England, Third edn. , Vol. 28 and the rulings mentioned in the footnotes thereunder ). According to the other line of approach res ipsa loquitor is not a special rule of substantive law, that functionally, it is only an aid in the evaluation of evidence, 'an application of the general method of inferring one or more facts in issue from circumstance proved in evidence'. In this view, the maxim res ipsa loquitor does not require the raising of any presumption of law which must shift the onus on the defendant. It only when applied appropriately, allows the drawing of a permissible inference of fact, as distinguished from a mandatory presumption properly so called, having regard to the totality of the circumstances and probabilities of the case. Res ipsa is only a means of estimating logical probability from the circumstances of the accident. Looked at from this angle, the phrase (as Lord Justice kennedy put it) in Russet v. London and south-Western Rly. Co. Res ipsa is only a means of estimating logical probability from the circumstances of the accident. Looked at from this angle, the phrase (as Lord Justice kennedy put it) in Russet v. London and south-Western Rly. Co. (1908) 24 TLR 548, only means, 'that there is, in the circumstances of the particular case, some evidence which, viewed not as a matter of con jecture, but of reasonable argument, makes it more probable that there was some negligence upon the facts as shown and undisputed, than that the occurrence took place without negligence. . . . . It means that the circumstances are, so to speak eloquent of the negligence of somebody who brought about the state of thing which is complained of". ( 11 ) CONSIDERING the facts of the present case in the light of the authorities to which we have called attention, it is in our judgment, not possible to hold that the company was guilty of negligence in not preventing the outbreak of fire. PW 1 who bad witnessed the devastating fire has mostly referred to the unsuccessful attempt made by the Company's servants in putting off the fire. As to the measures taken by the Company in preserving the material and preventing the outbreak of fire, he has stated that the stacks were arranged in different groups and between the groups hydrants and pumps were arranged but there was no adequate pressure in the hydrants and so enough water could not be used for extinguishing the fire. He has, however, admitted that every possible effort was made by the Company's servants to extinguish the fire and every one of them had joined the rescue operations. In the cross-examination, he was frank enough to state that he did not have any personal knowledge of the efficacy of the hydrants, but he was informed by the persons who had tried the hydrants that there was no adequate pressure in them. ( 12 ) IT will also be observed from the evidence of PW 1 that immediately after the fire accident, he did not give any report to his superior officers stating that the company's servants were guilty of gross or culpable negligence. Such negligence was alleged against the Company's servants, for the first time in the plaint presented to the Court after 10 years of the accident. Such negligence was alleged against the Company's servants, for the first time in the plaint presented to the Court after 10 years of the accident. His information as to the efficacy of the hydrants used to put off the fire appears to be hearsay and we do not find any semblance of reality in his allegatis is. The trial Court, therefore, was justified in observing that his evidence was unsatisfactory and could not be relied upon. ( 13 ) ON behalf of the Company, two witnesses were examined. The Assistant regional Manager of the Oriental Fire and general Insurance Co. (DW 1) has in the course of his evidence produced two reports on the basis of which the Insurance Company assessed the damages payable to the company on account of the fire accident. In those reports it was stated that the loss of the bamboos was by an accidental fire. Kanwarchand Sharma (DW 2) who was a fire Supervisor employed by the Company has stated in detail the measures taken by the Company to protect and preserve the bamboos stacked in the Company's yard covering an area of 60 acres. He has produced a book Ex. D 3 called as occurrence Book, wherein the day to day works carried out by the Company for prevention of fire accident were recorded. The relevant entries from 1 1-1 61 to 19-3-1961 have been marked as Exts. D 3 (a) and d 3 (b) evidencing that even on the date of the fire accident, before the fire was noticed, water was sprinkled on all the stacks of bamboos. His evidence also shows that the bamboos were stacked in three rows and each row contained about 8 or 9 stacks. The dimension of each stack was 120 ft. x 100 ft. x 20 ft. The stacks were separated by a distance of 100 ft. and each row was separated by another row by 200 ft. In between the stacks and the row, there were hydrants. ( 14 ) IT is thus seen that the Company had taken sufficient precautionary measures to protect the bamboos. The Company had maintained its own fire force with a qualified and experienced Fire Supervisor. The bamboos were stacked allowing sufficient intervening space from one stack to another and hydrant line was laid out in the intervening space. Every day, water was sprinkled on the bamboos by engaging special workers. The Company had maintained its own fire force with a qualified and experienced Fire Supervisor. The bamboos were stacked allowing sufficient intervening space from one stack to another and hydrant line was laid out in the intervening space. Every day, water was sprinkled on the bamboos by engaging special workers. DW 2 noticed the fire at the extreme end of the third row towards the railway line. Immediately there was a fire alarm followed by the gathering of five hundred workers to fight the fire. But the fire was so fiercely raging, that the workers could neither contain it nor extinguish it. Within an hour, the fire spread over the entire bamboo yard threatening to engulf even the factory buildings. The workers then struggled to isolate the factory buildings awaiting the arrival of fire fighters from Belgaum, Dharwar, Hubli and Sirsi. They all came one after another. Two hundred military people with fire fighters from Belgaum also arrived. The fire fighters of the Forest Department were also secured and used, but all in vain, and none could save even a stick of bamboo. ( 15 ) THERE was undoubtedly an appalling havoc caused by fire, but to say that it was due to the negligence or culpable negligence on the part of the Company would be far from truth and pedalling on untruth. The trial Court, in our opinion was justified in holding that there was no negligence on the part of the Company or its servants. ( 16 ) THE conclusion that we have reached may be sufficient to dismiss the appeal. But, since the second question was also urged by the counsel, we may briefly deal with those contentions. The question to be considered is whether and at what time the property passes to the Company under the agreement Ext. P 1. Law bearing on the question goes back to ancient days. It was once deeply rooted in the habits of people, but in all modern agreements, it has to be culled out from intention of parties which is very often expressed obscurely. There is, however, no general rule which can be applied merely mechanically. Where the parties have given no express indication as to the time for passing of the property for the sale of goods, the Court will have to consider all the circumstances of a given case. There is, however, no general rule which can be applied merely mechanically. Where the parties have given no express indication as to the time for passing of the property for the sale of goods, the Court will have to consider all the circumstances of a given case. Ordinarily, the property cannot pass until goods of the agreement description are unconditionally appropriated to the agreement. The goods must be first ascertained and put in a deliverable state. Generally, though not always, delivery of such goods to the carrier or to the buyer is an unconditional appropriation to the contract. Ss. 20 to 24 of the Sale of Goods Act contain the rules of construction to ascertain the intention of the parties in regard to these aspects of the matter. ( 17 ) S. 19 of the Sale of Goods Act provides that when there is a contract for the sale of specific or ascertained goods, the property in them is transferred to the buyer at such time as the parties to the contract intend to be transferred. The draftsman has used the words "specific or ascertained", which are two synonymous epithets and one perhaps, would have been sufficient to convey the meaning. But, we may proceed with the assumption made by atkin, L. J. , in Re. Wait (4) case. While trying to discover the reasons for adding those idle words, the learned Lord said at page 630 :"it is not easy to discover the reason for adding the words 'or ascertained'. It is, howaver, clear that 'specific goods' bear the meaning assigned to them in the definition clause 'goods identified and agreed upon at the time a contract of sale is made'. 'ascertained' probably means identified in accordance with the agreement after the time a contract of sale is made, and I shall assume that to be the meaning". ( 18 ) S. 19 (2 ) provides that for the purpose of ascertaining the intention of the parties as to the time at which the property passes, regard must be had to the terms of the agreement, the conduct of the parties and the circumstances of the case. It is necessary, therefore, to examine first the terms of the agreement Ex. P 1. It is necessary, therefore, to examine first the terms of the agreement Ex. P 1. The erstwhile Government of Bombay allowed the company to extract bamboos for thirty years from the specified forests for the purpose of manufacturing pulp and paper the company was required to pay royalty at the rate of three rupees and two annas per ton of dry pulp manufactured at the company's factory for the first five years and thereafter at the revised rates to be fixed by the Government for every ten years. Clause 16 (a) of the agreement provides ;"the Company shall defray all expenses which may be incurred in felling, concerting and removing the bamboos to which this contract applies, including any compensation payable under the workmen's Compensation Act, 1923 (VIII of 1923) to workmen employed by it". Clause 18 (a) provides:"bamboos remaining in the Depot aforesaid or anywhere within the limits of the forest, after the expiry or termination of this agreement shall be the property of Government and may be removed from the said forest by the Divisional Forest Officer". Clause 16 (a) indicates that the bamboos have to be extracted at the cost of the company from the specified areas. Clause 18 (a) exptessly states that the bamboos remaining any where within the limits of the forest or in the Depot after the expiry or termination of the agreement, shall be the property of the Government. It thus impliedly indicates that the Government ceases to be the owner of the bamboos extracted during the currency of the agreement. The combined effect of these two clauses is that the bamboos would be in a deliverable state and appropriated to the agreement when they are severed or extracted from the forests and the property thereupon passes to the Company. That appears to be the proper conclusion in the absence of any other direction under the agreement. In reaching the conclusion, we were guided by two high authorities : the decision of the Kings Bench in Kursell v. Timber operators and Contractors Ltd. , (5) and the decision of our Supreme Court in slate of M. P. V. Orient Paper Mills ltd. (6 ). ( 19 ) IT was, however, urged for the appellant that since the Compay was required to pay royalty at Rs. (6 ). ( 19 ) IT was, however, urged for the appellant that since the Compay was required to pay royalty at Rs. 3-2-0 per ton of pulp or paper manufactured, the property could not pass to the Company till the pulp or paper was manufactured out of the bamboos. It is true that there is such a clause in the agreement, but according to us, it provides a measure to determine the royalty payable since the bamboos were of different kinds, qualities, ages, sizes, girths, moisture contents etc. , and it cannot have the effect of postponing the passing of the property till the pulp or paper is manufactured. In fact, the liability to pay the prescribed royalty does not depend upon the manufacture of pulp or paper. The Company has to pay a minimum royalty of Rs. 36,000 irrespective of the faot whether any pulp or paper it manufactured or not. The liability to pay royalty, therefore, arises immed'iately when the bamboos are extracted from the forest and it has also been expressly admitted in the plaint. This also suggests that the property passes immediately upon the extraction of bamboos from the forests. ( 20 ) IN the result, the appeal fails and is dismissed with costs. ( 21 ) MR. Ashok Kumar, learned Government Pleader seeks a certificate to appeal to the Supreme Court. In our opinion, the case does not involve substantial question of law of general importance which needs to be decided by the Supreme Court. Certificate prayed for is therefore refused. --- *** --- .