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2009 DIGILAW 169 (BOM)

Union of India v. Laxmikant Sunderlalji Chandak

2009-02-05

B.P.DHARMADHIKARI

body2009
JUDGMENT:- Union of India and General Manager, South Eastern Railway have filed these appeals under Section 23(1) of the Railway Claims Tribunal Act. 1987. The challenge therein is to common order dated 303-1993 delivered by the Railway Claims Tribunal. Nagpur Bench in Claim Application Nos.191 of 1991 to 196 of 1991. Claim Application Nos.238 of 1991 and 240 of 1991. It is to be noted that the dispute in Claim Application Nos.191 to 196 of 1991 pertains to non delivery while dispute in Claim Application Nos.238 and 240 of 1991 is in relation to short delivery of nine bags and 23 bags of incense sticks. Those Claim Applications were filed by present respondent pointing out that those consignments were booked in his favour by S.K. Enterprises. Himgir. District-Sundergarh (Orissa) and as he did not receive the consignment or then as there was short delivery, after serving the statutory notice as required by Section 78-B of the Indian Railway Act. 1890. (here in after referred to as the Act), he filed the Claim Applications. The booking dates are 9-11-1989 in Claim Application Nos.191. 192. 193 and 195/1991. 12-08-1989 in Claim Application No.196. 238-1989 in Claim Application No.240/1991 and 18-10-1989 in Claims Application Nos.194 and 238 of 1991. The defence of appellants before the Claims Tribunal was that there was no legal and valid notice as mandated by Section 78-B of the Act and the claimant (present respondent) lack locus because he was not the consignee. the quantum of loss sustained by claimant on account of alleged non-delivery or short delivery was not proved. Claims Tribunal has in para 4 of its judgment framed identical issues in all Claims separately but then its findings as recorded are common in all matters. 2. In this background, I have heard Shri. Lambat, learned counsel for the appellants and Shri. Khajanchi, learned counsel for the respondent. 3. Shri. Lambat, learned counsel has after narrating the facts as mentioned above, contended that the provisions of Section 78-B of the Act are mandatory and noncompliance therewith has been proved on record because notices forwarded on 9-1-1990 by present claimant were not addressed to the Manager of Railways but have been sent to Chief Claims Officer. He further states that after realising this lacunae, the remedial measures have been taken and notices have been again forwarded on 24-7 -1990 to General Manager, Railways - Appellant No.2. He further states that after realising this lacunae, the remedial measures have been taken and notices have been again forwarded on 24-7 -1990 to General Manager, Railways - Appellant No.2. According to him, date 24-7-1990 is beyond six months from the date of booking and hence said notices are invalid and the Claims Tribunal has overlooked this aspect. In order to demonstrate the nature and importance of such notice, attention is invited to the judgment of Allahabad High Court in the case of Ram Padarath Vs. Union of India, reported in AIR 1974 All. 465 , particularly para 2 onwards, It is further contended that the claimant could not prove that he was consignee and therefore entitled to receive the delivery of incense sticks at Nagpur. For that purpose, attention is invited to Railway receipts to show that though the name of consignor is mentioned as S. K. Enterprises at Himgir, consignee is self. It is urged that endorsement on back of Railway receipt in favour of claimant has not been established to be made by consignor and for that purpose attention is invited to affidavit dated 11-1-1992 filed by one S.K. Dey, proprietor of S.K. Enterprises at Himgir. It is stated that in view of this affidavit, it was obligatory for the claimant to show that incense sticks were meant for him and therefore, he should have produced his accounts to prove payment made there for to Mis. S.K. Enterprises. It is argued that what is produced is only a statement of accounts but then actually payment through Bank Draft or Bank accounts which could have been demonstrated, has not been proved because those documents or witnesses are not produced before the Claims Tribunal. It is contended that therefore the claims as filed by present respondent were unsustainable and liable to be rejected. 4. Lastly, it is urged that the damages are claimed @ Rs.11 per kg. but then that has not been proved to be the prevailing market rate. It is contended that affidavit of Shri. S.K. Dey dated 18-12-1991 shows that rate was not more than Rs.3 to 4 per kg, and in view of that affidavit, concrete material should have been brought on record to prove the prevailing market rate. but then that has not been proved to be the prevailing market rate. It is contended that affidavit of Shri. S.K. Dey dated 18-12-1991 shows that rate was not more than Rs.3 to 4 per kg, and in view of that affidavit, concrete material should have been brought on record to prove the prevailing market rate. It is pointed out that three witnesses examined by claimants again only orally state about the market rate but they do not produce any authenticate document like cash memo or any accounts to show the market rate then prevailing. The learned Tribunal has erroneously accepted such material to arrive at the market rate and according to the learned counsel, as the quantum of loss has not been established, the Claims Tribunal ought to have dismissed all matters. 5. In reply, Shri. Khajanchi, learned counsel for the respondent has stated that no grievance was made before Claims Tribunal by present appellants that notice was not served upon their Manager or any prejudice has been caused to them in verification of claim lodged by the present respondent. He invites attention to the judgment of the Hon'ble Apex Court in the case of Niranjanlall Vs. Union of India reported at AIR 1969 SC 23 , Jetmull Bhojraj Ys. D H. Railway, reported at AIR 1962 SC 1879 and in the case of Union of India Vs. Kaiinga Textiles, reported at AIR 1969 Born. 401, to urge that though notice is mandatory, its purpose is only to enable the Railway Administration to verify the claim as lodged immediately and in present matter that purpose has been achieved because after the respondent-claimant served these notices on 4-4-1990 (vide Exh.A-6), the Chief Commercial Officer immediately took up the issue and started verification. He, therefore, states that notice dated 9-1-1990 as issued is served upon a responsible officer of Railway and he further states that officer is entrusted with the duty of verification of claims. He relies upon the above mentioned first judgment to urge that the notice has, therefore, been served upon the Competent Officer and no grievance in that respect can be made by present appellants. The recent judgment of this Court in the case of Union of India Vs. State Trading Corporation Ltd., reported at 2007(3) Mh.L.J. 609: [2007(4) ALL MR 548], is also pressed into service for this purpose. 6. The recent judgment of this Court in the case of Union of India Vs. State Trading Corporation Ltd., reported at 2007(3) Mh.L.J. 609: [2007(4) ALL MR 548], is also pressed into service for this purpose. 6. Shri. Khajanchi', learned counsel further contends that the Railway Receipts are not in dispute and hence the delivery of goods to Railway at Himgir for its transport to Nagpur is also not in dispute. He further states that the fact that present respondent served legal notice and then tendered railway receipts are also not in dispute. According to him, the endorsement on the back of the railway receipt is proved because of custody of that receipt and he contends that said railway receipt is a title document. He further states that very same S.K. Dey has further filed affidavit on 6-31992 in support of the claim of present respondent. He invites attention to the contents of railway receipt to show that it can be endorsed in favour of any person and in order to show that endorsee has got locus to claim the damages for loss from railways, he places reliance upon the judgment of the Hon'ble Apex Court in the case of Morvi Mercantile Bank Vs. Union of India, reported at AIR 1965 SC 1954 . He points out that the Hon'ble Apex Court has considered the Privy Council judgment in the case of Ramdas Yithaldas Durbar Vs. S. Amerchand & Co., reported at AIR 1916 PC 7, equivalent to 1943 Indian Appeals 164. In order to show the payment, he invites attention to Exh.R-3 - a credit memo drawn by Mis. S.K. Enterprises in the name of claimant/respondent. He also invites attention to the consideration of case by the Claims Tribunal in this connection to show that payment of the purchase price by claimant to Mis. S.K. Enterprises has been accepted on record by the Claims Tribunal. 7. About the valuation of goods or quantum of loss, the learned counsel states that the Tribunal has not acted only upon the affidavit of Shri. Dey. He states that market price is mentioned by present respondent/ claimant and he also examined four other independent Traders to prove the market price. He points out that those persons have deposed accordingly on affidavit and have also filed the cash memos on record to demonstrate the price then prevailing. He states that market price is mentioned by present respondent/ claimant and he also examined four other independent Traders to prove the market price. He points out that those persons have deposed accordingly on affidavit and have also filed the cash memos on record to demonstrate the price then prevailing. He states that in view of the provisions of Section 18(3)(c) of Railway Claims Tribunal Act, the Claims Tribunal is competent to act upon affidavit and Tribunal has accordingly acted on this material. He points out that though railways cross-examined the respondent, no material has been brought on record to discredit him insofar as market price is concerned and none of the other persons have been cross-examined by the railways. He further points out that Railway did not produce any evidence of its own. 8. Lastly, he invites attention to the judgment of Federal Court in the case of Madholal Vs. Official Assignee of Bombay, reported at AIR (37) 1950 Federal Court 21, to urge that when entire evidence on record has been considered by the Claims Tribunal and a particular view has been reached, the appellate Court has to be slow to interfere with such view until and unless the view is shown to be totally erroneous or perverse. According to him, there is no merit in any of the appeals and the appeals, therefore, are liable to be dismissed. 9. In his reply, Shri. Lambat, learned counsel for the appellants has reiterated the arguments already mentioned above with addition that no independent or impartial evidence either orally or documentary has been placed on record by the respondent to show either market price or then his locus. He further states that the judgment of the Hon'ble Apex Court in the case of Niranjanlall Vs. Union of India (supra) sought by other side is considered by "Allahabad High Court in the judgment relied upon by him. 10. In the arguments raised, the following questions cropped up for decision in these First Appeals; "1. Whether service of notice under Section 78-B of Railways Act, 1890, by the respondent upon the appellants is valid? 2. Whether the respondent has locus to file claims? 3. Whether the respondent has proved the quantum of loss as sustained by him on record ?" 11. Whether service of notice under Section 78-B of Railways Act, 1890, by the respondent upon the appellants is valid? 2. Whether the respondent has locus to file claims? 3. Whether the respondent has proved the quantum of loss as sustained by him on record ?" 11. In view of the various judgments cited before me, it is not necessary to look into the language of Section 78-B of Railways Act. 1890. Ram Padarath Vs. Union of India (supra) is the judgment of the learned Single Judge of Allahabad High Court and its perusal shows that the suit of the plaintiff for recovery of compensation for non-delivery was dismissed by the trial Court. The Railway Administration there did not accept that any notice was issued to it by the claimant, The claimant in order to show service of such notice, relied upon an acknowledgment given on 7-4-1961 by some clerk in the office of Chief Commercial Superintendent, Gorakhpur. Even receipt of that notice and signature of that clerk along with seal was being disputed by the railway and they contended that it was obtained in collusion with clerk by the plaintiff, It is in this background that the controversy has been gone into. In present facts, the receipt of notice dated 9-1-1990 and immediate response thereto vide Exh.A6 on 4-4-1990 by the Chief Claims Officer is not at all in dispute. Not only this, the railway administration has nowhere urged that because notice was served upon the Chief Claims Officer and as it was not served upon the Manager, some prejudice has been caused to it and it could not complete the procedure for verification of claims effectively. It is, therefore, apparent that Chief Claims Officer. a person appointed for verification of such claims after receipt of notice has promptly proceeded further to safeguard the interest of railways and railways have not made any grievance in this respect either against him or any grievance in relation to procedure followed by the present respondent/claimant. The judgment mentioned above has, therefore, no relevance insofar as present case is concerned. 12. It is no doubt true that the judgment of the Hon'ble Apex Court in the case of Niranjanlall Vs. Union of India (supra) is considered by the Hon'ble Allahabad High Court in para 9. The judgment mentioned above has, therefore, no relevance insofar as present case is concerned. 12. It is no doubt true that the judgment of the Hon'ble Apex Court in the case of Niranjanlall Vs. Union of India (supra) is considered by the Hon'ble Allahabad High Court in para 9. It has found that the notice there was served upon the Chief Commercial Manager (Claims and Refunds) as the Railway therein at the relevant time did not have the post of General Manager. The Allahabad High Court, therefore, found that the said judgment of the Hon'ble Apex Court was not relevant. The facts before the Allahabad High Court clearly show that this judgment had no relevance 111 the facts before it. However, in the facts 8efore this Court, when the service of notice is 'not in dispute and no prejudice is being, pointed out on that count, it is apparent that the ratio therein is appealed and the Hon 'ble Apex Court in para 9 has observed that .the Chief Commercial Manager (Claims and Refunds) was the authority specially engaged in the enquiry into such claims and would, therefore, be competent to deal with the claims of consignor or consignee against the railway administration. He was not a person of such inferior status that it could be said of him that claim for non-delivery would not have been properly investigated or looked into by him. In para 9, the Hon'ble Apex Court has further held that the purpose of such notice essentially is to enable the Railway administration to make enquiry and investigation as to whether the loss was due to consignor's laches or due to wilful negligence of Railway administration or its servants. It is held that notice under Section 78-B of the Act needed to be liberally construed. As already observed above, the Chief Commercial Officer on whom the notice was served is again an authority entrusted with the job of verification of claims and hence the observations of the Hon'ble Apex Court mentioned above squarely clinch the issue. It is held that notice under Section 78-B of the Act needed to be liberally construed. As already observed above, the Chief Commercial Officer on whom the notice was served is again an authority entrusted with the job of verification of claims and hence the observations of the Hon'ble Apex Court mentioned above squarely clinch the issue. It may be mentioned that the Tribunal here in para 9 has considered the position as prevailing in relation to South Eastern Railways and has found that every Zonal Railway Officer has got a Chief Claims Officer to deal with claims arising out of transport of such goods and such Officer has jurisdiction in relation to claims for compensation and enquiries on traffic. Thus, findings reached by the Claims Tribunal have not been demonstrated to be either erroneous or perverse. 13. It is to be noted that the Division Bench of this Court in Union of India Vs, Kalinga Textiles (supra), after considering the entire case law has found that the main factor which needed to be taken into account was the function, purpose and sufficiency pf notice under Section 78-B of the Act., the said purpose is achieved in present matter. In view of this position, I do not find it necessary to refer to various other judgments on which Shri. Khajanchi, learned counsel has placed, reliance because those judgments take the same view. Hence, in the present circumstance, it has to be held that notice dated 9-1-1990 forwarded by the respondent to Chief Claims Officer is in accordance with the provisions of Section 78-B of the Act and the challenge on that count by the present appellants must fail. 14. It is to be noticed that though there is challenge to locus of present respondent in the matter, the appellants have not denied the railway receipts Exh.R-2. The receipts clearly show that commodity and quantity as mentioned therein was entrusted at Himgir to South Eastern Railway by M/s. S.K. Enterprises for its transport to Nagpur. The receipt also shows that consignee was self at Nagpur. These facts are not in dispute and it is not the case of Railway that the commodity and quantity received by it through such railway receipts has been delivered at Nagpur to anybody else. Thus, non-delivery or short delivery is not being denied on merits. The receipt also shows that consignee was self at Nagpur. These facts are not in dispute and it is not the case of Railway that the commodity and quantity received by it through such railway receipts has been delivered at Nagpur to anybody else. Thus, non-delivery or short delivery is not being denied on merits. The technical objection raised is present claimant/ respondent is not entitled to file said claims as there is no endorsement on railway receipts in his favour. It is again not in dispute that on reverse of each railway receipts, there is an endorsement in favour of present respondent and below that endorsement there is a seal of M/s. S.K. Enterprises and signature of Shri. S.K. Dey as its proprietor. The Notice No.1 on the back of railway receipt clearly permits such endorsement. The effect of such endorsement is considered by the Hon'ble Apex Court in Morvi Mercantile Bank Vs. Union of India (supra) where the Menthol boxes sent to Okhla firm were the subject matter of railway receipts and those railway receipts were endorsed in favour of Morvi Mercantile Bank i.e. appellant before the Hon'ble Apex Court. The claim filed by the Bank was dismissed on the ground that the endorsee of railway receipt was not entitled to sue railway for loss of consignment. The matter was then raised before the Division Bench of this court and on this issue Division Bench held that the endorsee of railway receipt was entitled to sue to compensation. The Hon'ble Apex Court after considering various judgment on the point in para 14 has affirmed said view. In para 12, the Hon'ble Apex Court has held that railway receipt is regarded as symbol of the goods for all purposes for which a bill of lading is so regarded in England. The other judgment on which Shri. Khajanchi, learned counsel has placed reliance i.e. in Ramdas Vithaldas Durbar Vs. S, Amerchand & Co, (Supra) is quoted with approval by the Hon'ble Apex Court. It is, therefore, clear that the Railway receipts in possession of present respondent are the documents of title and as railways could not prove that goods mentioned in those receipts were delivered to anybody, it was obligatorv for the railways to deliver the goods as claimed by the respondent. It is, therefore, clear that the Railway receipts in possession of present respondent are the documents of title and as railways could not prove that goods mentioned in those receipts were delivered to anybody, it was obligatorv for the railways to deliver the goods as claimed by the respondent. The respondent/claimant has also produced cash memo Exh.R-3 to show the payment of purchase price to M/s. S. K. Enterprises and he has also produced his accounts to show such payment. In these circumstances, the contention of Shri. Lambat, learned counsel for the appellants that present respondent lacked locus to approach the Claims Tribunal on the basis of such railway receipts cannot be appreciated. 15. This brings me to the question of proof of quantum at loss. It is correct that Shri. S.K. Dey has given an affidavit dated 18-121991 and mentioned therein that the rate of incense sticks was never more than Rs.3 to 4 per kg. and he never sold the sticks at rate more than that. However, it is to be noticed that this person has given two affidavits i.e. affidavit dated 11-1-1992 and 18-12-1991 to railways and both his affidavits are produced before the Claims Tribunal by the Railways. The respondent/claimant has produced his affidavit dated 16-3-1992 by which he has eXplained the circumstances in which the earlier two affidavits were given by him. He has also mentioned the rate, bill number, quantity, along with the date of transaction with claimant/respondent. The said affidavit is at Exh.A-32 before the Claims Tribunal. Exh.R3 is the credit memo by which the claimant has attempted to show the payment actually made to M/s. S. K. Enterprises. All these documents show the rate of Rs.11/- per kg., The consideration of this aspect by the Claims Tribunal from para 19 onwards reveals that the Claims Tribunal has applied its mind not only to these three affidavits of Shri. Dey but also to the other independent evidence brought on record by the claimant. The documents produced are mentioned by it in para 20 and the claim as produced through affidavits of four traders viz., Laxman Tiwari, Mukunda Motghare, Ravi Gondane and Girdhar Chandak, to prove the market price. From para 24 onwards, it has also considered the documents in individual cases and has found that rate has been established. The documents produced are mentioned by it in para 20 and the claim as produced through affidavits of four traders viz., Laxman Tiwari, Mukunda Motghare, Ravi Gondane and Girdhar Chandak, to prove the market price. From para 24 onwards, it has also considered the documents in individual cases and has found that rate has been established. The learned counsel for the appellants has relied upon observations of Tribunal in para 29 to urge that the Tribunal itself has found that neither any receipt nor any letter from Bank or acknowledgment of Bank Draft or acknowledgment of cash payment by Mis. S. K. Enterprises was produced by the claimant. It is to be seen that cash book entries for various dates have been produced and appreciated by the Claims Tribunal. The perusal of affidavits of independent traders produced as witnesses by the claimant at Exhs.A32, A33, A34 and A35 show that these persons have given details of their past transactions with M/s. S. K. Enterprises during the relevant period and have also mentioned the rate of Rs.11/- per kg. and they have also filed copies of bills along with affidavits. They have also mentioned P.W. Bill Nos., Gate pass Nos. and date of delivery to support the receipt of railway parcel from Nagpur Railway Station. 16. The consideration of evidence available on record by the Claims Tribunal, therefore, does not appear to be either erroneous or perverse. It is to be noted that if the Railways wanted to rely upon the affidavit of S.K. Dey, in view of the admitted railway receipts, admitted non-delivery or short delivery and other affidavits/material brought on record by the claimant, the Railways ought to have called upon the present claimant to produce these witnesses for cross-examination. Such opportunity was not taken by the Railways before the Claims Tribunal. It is also to be noticed that though rate of Rs.11/- per kg. was demonstrated before the Claims Tribunal, Claims Tribunal has effected the deduction of 15% from said rate while granting compensation. The said deduction has not been challenged by the claimant. In these circumstances, I find that no case is being made out warranting any interference even on this count. 17. In view of this discussion, all the questions framed above, need to be answered against the appellants and in favour of the respondent. First Appeals are accordingly dismissed. The said deduction has not been challenged by the claimant. In these circumstances, I find that no case is being made out warranting any interference even on this count. 17. In view of this discussion, all the questions framed above, need to be answered against the appellants and in favour of the respondent. First Appeals are accordingly dismissed. However, in the circumstances of the case, there shall be no order as to costs. Appeals dismissed.