ST. JOSEPH TEXTILESversusUNION OF INDIA AND ANR.

                               ST. JOSEPH TEXTILES                                     A
                                           v.
                           UNION OF INDIA AND ANR.

                                DECEMBER 17, 1992

                    [KULDIP SINGH AND P.B. SAWANT, JJ.)                                B

           Indian Railways Act, 1890: Sections 77 and 78-R.esponsibility of
      Railway Administration for delivery of goo~laim for damages-When
      maintainable.

            The appellant-firm booked goods by Railways for carriage to its C
      customer and sent the Parcel Way Bill and the Demand Draft given to it
      by the customer, to the Bank for clearance. However, the Bank returned
      the Demand Draft and the Parcel Way Bill to the appellant on the ground
      that the payment was not forthcoming. Immediately, the appellant wrote
      to the Station Master of the destination Railway Station to re-book the D
      goods to it. On failing to get back the goods despite repeated requests, the
      appellant filed a suit claiming damages. Earlier, the appellant had also
      given a notice under Section 78 of the Indian Railways Act, claiming"
      damages and all~ng that Railway Administration was grossly negligen~
      and misconducted itself and was careless in handling the goods and in no~ E
      re-booking and delivering the goods back to the appellant.

            The suit was defended by the Railways, contending that the parcels
      and the Parcels Way Bill were carried by the Railways with due care and
      caution, that the delivery of the parcels was taken against production of
      the Parcel Way Bill and payment of all charges due to the Railways, 20           F
      days after their arrival, that the appellant's request for re-booking of the
      parcels was received about two months after the termination of transit of
      the goods and, therefore, the respondents were not liable for the alleged
      non-delivery of the parcels that occurred after seven days after the ter-
...   mination of the transit, since they were protected against such non-
      delivery by the provisions of Section 77 (2) of the Act. It was also contended   G
      that there was no negligence, misconduct or carelessness on the part of its
      servants, and that even assuming that the Railway receipt on which the
      delivery was effected was not a genuine one, the Railways were not liable
      for the loss which occurred after seven days of the termination of the
      transit of the goods at its destination.                                         H
                                            681
     682                 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A          The trial court decreed the suit. In appeal by the respondent~Rail-
     ways, the High Court relied upon the provisions of Section 77(2) of the
     Act, and allowed the appeal.

           On the question: whether the respondent Railways could claim the
     protection of Section 77(2) of the Act for the delivery of goods to a wrong
B    person against the non-genuine railway receipt since the delivery of the
     goods was not taken for more than seven days after the termination of the
     transit and the wrong delivery of the goods occurred after the expiry of the
     said period.

 C         Dismissing the appeal, this Court

            HELD : 1.1. Sub-section (1) of Section 77 of the Indian Railways Act
     states that the Railway Administration shall be responsible as a bailee
     under Sections 151,152 and 161 of the Indian Contract Act, 1872 for the
     loss, destruction, damage, deterioration or non-delivery of goods carried
 D   by RailwayS if such loss etc. has occurred within a period of seven days
     after the termination of the transit of goods. Therefore, to entitle a
     claimant to make claim, the liability on account of loss etc. should have
     arisen within the period of seven days after the transit is terminated.
     From the provisions of Section 77(2) it is clear that the period of seven
E    days starts on the expiry of the free time allowed for removal of the goods
     from the Railway premises without payment of wharfage. Under the Rules
     for Warehousing and Retaining of Goods made under the Act, the said
     free time was of three days including the day of arrival of the goods.
                                                        [687-G,H; 688-A; 687-E]

           1.2. In the instant case, the goods reached the destination on
     1.7.1973. The alleged wrong delivery was effected on 21.7.1973 i.e., 20 days
     after the goods reached the destination and 11 days from the expiry of
     seven days after the termination of the transit of the goods. Since the
     goods were admittedly lost to the appellant on account of the wrong
.G   delivery hy the Railways when they were in the premises of the Railways        ...
     the liability of the Railways could be as that of a bailee. The Legislature
     has taken care to limit the period of liability of the Railways by providing
     specifically that notwitf!standing what is contained in Sections 151,152
     and 161 of the Contract Act, the liability of the Railways as a bailee does
•H   not extend beyond the period of seven days after the termi111tion of the
                    ST. JOSEPH TEXTILES v. U.0.1. [SAWANT, J.]                 683

     transit. Taking into consideration the period of free time allowed for the A
     removal of goods in question, the liablity of the Railways extended only up
     to 10th July, 1973. Since the goods were wrongly delivered or delivered
     against a non-genuine receipt on 21.7.1973 the absolute bar created
     against the Railways had come into operation at the end of the 10th July,
     1973. The appellant had retained the ownership in goods with it since the B
     goods were not to be parted except on the presentation of the Parcel Way
     Bill and the payment of the Bank Demand Draft. It was expected to know
     when the goods would reach the destination Railway Station and keep
     itself informed about the arrival time of the goods at tlie destination and
     should also have taken precaution to see that the goods were lifted by it
     or its agents or its consignees during the said period. In any case after the C
     expiry· of the said period, when the appellant would have learnt that the
     goods were not lifted by the consignee it was its duty to take prompt steps
     to remove the goods itself or through its agents. The appellant moved into
     the matter only about two months after the expiry of the period of liability
     of the Railways. Hence, the respondents are not liable to pay damages to D
     the appellant. [689-B; 688-D,G)

           1.3. Since the wrong delivery or loss of the goods was not during the
     transit of goods, provisions of Sections 72 and 73 of the Act would not be
     applicable to the facts of the instant case. It falls under Section 77(2)
     which itself provides for the limited period of liability. [689-C,D]             E

..   1984.
             Union of India v. W.P. Factories, A.I.R., 1966 S.C. 395, inapplicable•

             CIVIL APPELLATE JURISDICTION_: Civil Appeal No. 4694 of

                                                                                      F
          From the Judgment and Order dated 9.8.84 of the Madras High
     Court in Appeal Suit No. 399 of 1978.

             V. Krishnamurthy, V. Balachandran and A.K. Sinha for the Appel-
     lant.
                                                                                      G
           V.C. Mahajan, C.V. Subha Rao, V.K. Verma and Ms. Ameeka Singh
     for the Respondents.

             The Judgment of the Court was delivered by

             SAWANT, J. The appellant is a firm carrying on business in textiles      H
    684                 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A at Karur. One Ganesh Chander Das of Azim Ganj, West Bengal had visited
    Karur and selected handloom cloth worth Rs. 53441.93 to be booked by
    the appellant firm to Azim Ganj City Railway Station. He sent the Parcel
    Way Bill along with bank demand draft for a sum of Rs. 52,672.93 being
    the price of the goods supplied less railway freight of Rs. 769i- to the State
B   Bank of India at Jiaganj. He undertook to clear the demand draft by
    payment to the Bank and take the Parcel Way Bill from the Bank. The
    appellant booked the cloth at Karur Railway Station for carriage by railway
    to Azim Ganj on 11.6.1973 under Parcel Way Bill No. 835434 of the same
    date. The appellant then sent the said Parcel Way Bill and the demand
    draft to the-State Bank of India, Jiaganj. The normal time for the goods to
C   reach the destination was less than 30 days. The State Bank of India sent
    back the demand draft and the Parcel Way Bill to the appellant on
    12.9.1973 for the reason that the payment was not forthcoming. Therefore,
    on 12.9.1973, the appellant addressed a letter to the Station Master, Azim
    Ganj requesting him to rebook the goods to Karur. Along with the request,
D   the appellant enclosed the original Parcel Way Bill endorsed in his favour
    and the General Forwarding Note duly signed, to enable the Station Master
    to rebook the goods to Karur. This letter was.acknowledged by the Station
    Master, Azim Ganj on 18.9.1973. However, he did not reply to the appel-
    lant. Thereafter, the appellant sent an Express telegram on 4.10.1973 which
    was followed by a letter of even date sent by registered post.. It appears
E   that in reply, the Station Master, Azim Ganj City Railway Station communi-
    cated to the appellant on 15.10.1973 that he had already sent a letter dated
    27.9.1973 to the appellant in which he had stated that the appellant's letter    <
    had been forwarded to the Divisional Commercial Suerintendent, Eastern
    Railway, Howrah and Chief Commercial Superintendent, Eastern Railway,
F   Calcutta and that he had not received any reply from the said officers. The
    communication also stated that the matter would be disposed of as soon
    as orders were received from the said officers. The appellants then sent
    telegrams to the Chief Commercial Superintendent and the General
    Manager, Eastern Railways on 6.10.1973. On 8.10.1973, the appellant ad-
    dressed further letter to Station Master, Azim Ganj; to the General
G   Manager, Eastern Railway, and the Chief Commercial Superintendent,
    Eastern Railway by way of reminder. On 9.10.1973, he also gave notice of
    claim for Rs. 53,441.93 under Section 78 of the Indian Railways Act
    (hereinafter referred to as che 'Act') to the General Manager (Claims),
    Eastern Railway, Calcutta and to the General Manager (Claims), Southern
H
                  ST. JOSEPH TEXTILES v. U.0.1. [SAWANT, J.]                 685
                           I
     Railway; Madras. In the notice, it was alleged that the Railway Administra- A
     tion was grossly negligent and misconducted itself and was careless in
     handling the goods and in not rebooking and delivering the goods back to
     the appellant. The Chief Commercial Superintendent acknowledged the
     notice on 7.11.1973. In the meanwhile, the appellant again sent another
     letter on 31.10.1973 to the Divisional Superintendent, Eastern Railway,
     Howrah to return the Parcel Way Bill which had been sent by it to the B
     Station Master, Azim Ganj and which the Station Master had forwarded
     to the said officer for action. To this letter also, there was no reply from
     the said officer. The appellant thereafter filed the present suit claiming
     from the Railways Rs. 53,441.93 by way of damages.
                                                                                   c
           2. The suit was defended by contending that the parcels and the
     Parcel Way Bill were carried by the Railways v.ith due care and caution,
     and they reached Azim Ganj City Railway Station on 1.7.1973 in good
     condition and were made available for delivery for more than seven days.
-    No one turned up for taking delivery of the goods tilt 20.7.1973. On D
     21.7.1973, the parcels were taken delivery of by one Sunil Dutta against the
     Parcel Way Bill produced by him, and against payment of all charges due
     to the Railways. The appellant's request for rebooking of the parcels to
     Karur was received on 12.9.1973, i.e., about two months after the termina-
     tion of transit of the goods. The defendants were, therefore, not liable in
     law for the alleged non-delivery of the parcels that occurred after seven E
     days after the termination of the transit, since the Railways were protected
     against such non-delivery by the provisions of Section 77 (2) of the Act. It
     was also conteded that there was no negligence, misconduct or carelessness
•    on the part of any of its servants. The defendants were also not liable for
     the fraud practised by the consignor or the consignee or their agents. It F


..   was further contended that even assuming that the Railways receipt on
     which the delivery was effected to the said Sunil Dutta was not a genuine
     one, the Railways were not liable for the loss which occurred after seven
     days of the termination of the transit of the goods at its destination.

                                                                                   G
          · The Trial Court decreed the suit. In appeal by the Railways, the High
     Court relied upon thi; provisions of Section 77 (2) of the Act which
     exonerated the Railways of any liability for loss etc. beyond the period of
     seven days after the termination of the transit, and allowed the appeal and
     dismissed the suit.                                                          f-J
 (
    686                 SUPREME COURT REPORTS (1992] SUPP. 3 S.C.R.

A          3. In this appeal against the decision of the High Court, the only.
    question to be answered is whether the respondent-Railways can claim the
    protection of Section 77 (2) ofthe Act for the delivery of goods to a wrong
    person against a non-genuine railway receipt since the delivery of goods
    was not taken of for more than seven days after the termination of the
    transit and the wrong delivery of the goods occurred after the expiry of the
B   said period. Section 77 of the Act reads as follows:

            "77. Responsibility of a railway administration after ter-
            mination of transit - (1) A railway administration shall be
            responsible as a bailee under Sections 151, 152 and 161 of
c           the Indian Contract Act, 1872, for the loss, destruction,
            damage deterioration or non-delivery of goods carried by
            railway within a period of seven days after the termination
            of transit: ·

                Provided that where the goods are carried at owner's
D           risk rate, the railway administration shall not be respon-
            sible for such loss, destruction, damage, deterioration or
            non-delivery except on proof of negligence or misconduct
            on the part of the railway administration or of any of its
            servants.
E
                (2) The railway administration shall not be responsible
            in any case for the loss, destruction, damage, deterioration
            or non-delivery of goods carried by railway, arising after
            the expiry of the period of (seven days) after the termina-
            tion of transit.
F
                (3) Notwithstanding anything contained in the forego-
            ing provisions of this section, a railway administration shall
            not be responsible for the loss, destruction, damage,
            deterioration or non-delivery of the goods .mentioned in
            the Second Schedule, animals and explosives and other
G           dangerous goods carried by railway after the termination
            of transit.

                (4) Nothing in the foregoing provisions of this section
            shall relieve the owner of animals or goods from liability
H           to any demurrage or wharfage for SQ long as the animals
                                                                                   )-
                  -ST. JOSEPH TEXTILES v. U.0.1. [SAWANT, J.]                   687

             or goods are not unloaded from the railway wagons or                      A
             removed from the railway premises.

                 (5) For the purposes of this Chapter-

                (a) Unless otherwise previously determined, transit
             terminates on the expiry of the free time allowed (after                  B
             the arrival of animals or goods at destination) for their
             unloading from railway wagons without payment of
             demurrage, and where such unloading has been com-
             pleted within the free time so allowed, transit terminates
             on the expiry of the free time allowed for the removal of
             the animals or goods from railway premises without pay-
                                                                                       c
             ment of wharfage;

                 (b) 'demurrage' and 'wharfage' have the meanings
             respectively assigned to them in clause (d) and clause (h)
             of seetion 46-C."                                                         D
            4. It is clear from the provisions of Section 77 (2), that the period of
    seven days starts on the expiry of the free time allowed for removal of the
    goods from the railway premises without payment of wharfage. In the
    present case, under the Rules for Warehousing and Retaining of Goods
    made under .the Act, the said free time was of three days including the day        E
    of arrival of the goods. The goods reached the Azim Ganj Railway Station
    on 1.7.1973. The alleged wrong delivery was effected on 21.7.1973, i.e., 20
    days after the goods reached the destination and 11 days from the expiry
    of seven days after the termination of the transit of the goods. Since the
    goods were admittedly lost to the appellant on account of the wrong
    delivery by the Railways when they were in the premises of the Railways,           F
    the liability of the Railways would admittedly be as that of a bailee. That
;   is why Section 77 makes a provision for limiting the period of the said
    liability as a _bailee.                -

          5. Sub-section (1) of Section 77 of the Act states that the Railway
    Administration shall be responsible as a bailee under Sections 151, 152 and G
    161 of the Indian Contract Act, 1872 ('Contract Act') for the loss, destruc-
    tion, damage, deterioration or non-delivery of goods carried by Railways if
    such loss etc. has occur.red within a period of seven days after the termina-
    tion of the transit of goods. According to this provision, therefore, to entitle
    a claimant to make claim the liability on account of loss etc. should have H
    688                 SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R.

A arisen within the specified period of seven days after the transit is ter-
    minated. However, even this entitlement is qualified by the proviso to the
    said section which.states that if the goods are ~ried at owner's risk rate,
    the Railway Administration is not responsible even for such loss except on
    proof of negligence or misconduct on the part of the Railway Administra-
    tion or any of its servants.
B
           Sub-se:ction (2) of Section 77, however, states that where the goods
     are carried at owner's risk rate or otherwise, in no case the Railway
     Administration shall be responsible for the loss etc. after the expiry of
     seven days from the termination of the transit of the goods.
c        Sectio11 151 of the Contract Act states that in all cases of bailment,
   the bailee is bound to take as much care of the goods bailed to him as a
  man of orcfuiary prudence would in similar circumstances take of his own
  goods of the same bulk and quality and value as the goods bailed. Section
  152 provides that the bailee in the absence of any special contract, is not
D responsible for the loss, destruction or deterioration of the thing bailed, if
  he has taken the amount of care described in Section 15L Section 161 of
  the Act provides that, if by the default of the bailee, the goods are not
  returned, delivered or tendered at the proper time, he is responsible to the
  bailor for any loss, destruction, or deterioration of the goods from that
  time. It is for this reason that the legislature has taken care to limit the
E
  period of the liability of the Railways by providing specifically that not-
  withstanding what is contained in Sections 151, 152 and .161 of the Contract
  Act, the liability of the Railways as a bailee does not extend beyond the
  period of seven days after the termination of the transit.

F       6. We have already pointed out above that taking into consideration
  the period of free time allowed for the removal of the goods in question,
  the liability of the Railways extended only upto 10th July, 1973. Since
  admittedly the goods were wrongly delivered or delivered against a non-
  genuine receipt on 21.7.1973, the absolute bar created by Section 77 (2) for
G claiming damages against the Railways had come into operation at the end
  of the 10th July, 1973.

          7. In the present case, the appellant had retained the ownership in
    goods with it since the goods were not to be parted except on the presen-
    tation of the Parcel Way Bill and the payment of the bank demand draft.
H   It was expected to know when the goods would reach .the destination
             ST.JOSEPH TEXTILES v. U.0.1. [SAWANT, J.]                 689

Railway Station, viz., Azim Ganj Railway Station. In any case, it was A
expected to keep itself informed about the arrival time of the goods at the
said destination. As stated earlier, the goods arrived at the destination
railway station on 1.7.1973. It ought to have, therefore, taken precaution to
see that the goods were lifted by it or its agents or its consignees during
the said period. In any case, after the expiry of the said period when the
appellant could have learnt that the goods were not lifted by the c_onsignee, B
it was its duty to take prompt steps to remove the goods itself or through
its agents. As pointed out above, the appellant-firm moved into the matter
only on 12.9.1973, i.e., about two months after the expiry of the period of
liability of the Railways.

        8. Since, admittedly a wrong delivery or loss of the goods in the
                                                                              c
present case was not during the transit of the goods, provisions of Sections
72 and 73 of the Act would not be applicable to the facts of the present
case. Hence the decision of this Court in Union of India v. W.P. Factories,
{AIR 1966 SC 395) would be inapplicable. It may, however, be pointed out
that in that case the responsibility of the Railways under Section 72 of the D
Act was under consideration and it was held that that responsibility cannot
be cut down by any rule. As has been pointed out above, the present case
falls under Section 77 {2) which itself provides for the limited period of
liability as a bailee.

      9. In the circumstances, we agree with the conclusions of the High
                                                                              E
Court and confirm the order dismissing the appellant's suit. The appeal is,
therefore, dismissed. In the circumstances of the case, however, there will
be no order as to costs.

N.P.V.                                                  Appeal dismissed.