# M ~habir Prasad Rungt• v. 'nwrga Dalla Hidayat•llah ]. January 3x. z96z Gawrnor-G1n1ral in Council

- **Citation:** [1961] 3 S.C.R. 647
- **Court:** Supreme Court of India
- **Decided:** 1961
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-habir-prasad-rungt-v-nwrga-dalla-hidayat-llah-january-3x-z96z-gawrnor-g1n1ral-2062
- **Pages:** 6

## Headnote

r
3 S.C.R.
SUPREME COURT REPORTS
647
interest pendente lite until realisation, the appeals shall
stand dismissed. In view of the substantial failure of
the appeals, the appellant shall pay the costs· in this
Court. One hearing fee.
GOVERNOR GENERAL IN COUNCIL
v.
MUSADDI LAL.
(J. L. KAPUR and J. C. SHAH, J.T.)
Railway-Non-delivery of goods-Suit for compensation for
non-delivery, if distinct from compensation for loss, 1iestruction or
deterioration-Notice of claim
for
compensation, if condition
precedent -Limitation from when to run-Indian Railways Act,
I890 (IX of z890), ss. 72 and 77-Indian Limitation Act, x<)08,
Arts. 30, JI.
The respondent served on the Railway Administration a
composite notice under s. 77 of the Indian Railways Act and
under s. 80 of the Code of Civil Procedure and sued for price of
goods and for Joss on account of non-delivery. The claim was
resisted by the Railway Administration on pleas amongst others
that the suit was not maintainable without an effective notice
under s. 77 of the Railway Act and that. the suit was barred
because at the date of the suit the period of limitation prescribed
by Art. 31 of the Indian Limitation Act had expired.
A full bench of the Allahabad High Court upheld the decree
of the trial court in favour of the respondent holding that a claim
for compensation for non-delivery Of goods was a claim distinct
from the claim for compensation for loss, destruction or deteriora·
tion of the goods, and to· the enforcement of a claim of the
former variety by action in a court of law under s. 77 was not a
condition precedent.
Held, thats. 77 of the Indian Railways Act imposes a restriction on the enforcement of liability declared by s. 72 of the Act
and prescribes a condition precedent to the maintainability of a
claim for compensation for goods lost, destroyed or deteriorated
while in the custody of the railway Administration who are
bailees and not insurer of goods. The section is enacted with a
view to enable the railway administration to make enqniries and
if possible to recover the goods and deliver them to the consignee
and to prevent stale claims. Failure to deliver goods is the consequence of loss or destruction and the cause of action for it is
not distinct from the cause of action for loss or <!estruction,
83
M ~habir Prasad
Rungt•
v.
'nwrga Dalla
Hidayat•llah ].
January 3x.
z96z
Gawrnor-G1n1ral
in Council
v.
Mtuaddi Lal
Shah].
648
SUPREME COURT REPORTS
[1961]
Held, further, that merely because Arts. 30 and 3I of the
I.ndian Limitation Act prescribe different points of time from
which the limitation is to run for suits against carriers it cannot
be inferred that the claim covered by either article is not for
compensation for loss, destruction or deterioration of the goods;
and the said Arts. 30 and 3r cannot be projected upon ss. 72 and
77 of the Indian Railways Act for holding that suit for compensation for non-delivery of goods does not fall withins. 77.
The Madras and Southern Mahratta Railway Co. Ltd. v.
Haridoss Banmalidoss, {r9r8) l.L.R. 4r Mad. 871, Hilt Sawyers and
Co. v. Secretary of State, {r92r) I.L.R. 2 Lah. r33, Martab Ali v.
Union of India, (1954] 56 Born. L.R. 150, Union of India v.
Mitayagiri Pullappa; I.L.R. [r958] A.P. 323, Assam Bengal
Railway Co. Ltd. v. Radhika Mohan Nath and Others, A.I.R. (1923)
Cal. 397 and Bengal Nagpur Railway Co. Ltd. v. Hamir Mull Chhagan Mull and Another (r926} I.L.R. 5 Pat. ro6, approved.
Governor-General in Council and Others v. Mahabir Ram and
Another, {r953} I.L.R. I All. 64 and ]ais Ram Ramrekha Das v.
G.I.P. Railway and Another (1929) I.L.R. 8 Pat. 545, overruled.

## Text

r
3 S.C.R.
SUPREME COURT REPORTS
647
interest pendente lite until realisation, the appeals shall
stand dismissed. In view of the substantial failure of
the appeals, the appellant shall pay the costs· in this
Court. One hearing fee.
GOVERNOR GENERAL IN COUNCIL
v.
MUSADDI LAL.
(J. L. KAPUR and J. C. SHAH, J.T.)
Railway-Non-delivery of goods-Suit for compensation for
non-delivery, if distinct from compensation for loss, 1iestruction or
deterioration-Notice of claim
for
compensation, if condition
precedent -Limitation from when to run-Indian Railways Act,
I890 (IX of z890), ss. 72 and 77-Indian Limitation Act, x<)08,
Arts. 30, JI.
The respondent served on the Railway Administration a
composite notice under s. 77 of the Indian Railways Act and
under s. 80 of the Code of Civil Procedure and sued for price of
goods and for Joss on account of non-delivery. The claim was
resisted by the Railway Administration on pleas amongst others
that the suit was not maintainable without an effective notice
under s. 77 of the Railway Act and that. the suit was barred
because at the date of the suit the period of limitation prescribed
by Art. 31 of the Indian Limitation Act had expired.
A full bench of the Allahabad High Court upheld the decree
of the trial court in favour of the respondent holding that a claim
for compensation for non-delivery Of goods was a claim distinct
from the claim for compensation for loss, destruction or deteriora·
tion of the goods, and to· the enforcement of a claim of the
former variety by action in a court of law under s. 77 was not a
condition precedent.
Held, thats. 77 of the Indian Railways Act imposes a restriction on the enforcement of liability declared by s. 72 of the Act
and prescribes a condition precedent to the maintainability of a
claim for compensation for goods lost, destroyed or deteriorated
while in the custody of the railway Administration who are
bailees and not insurer of goods. The section is enacted with a
view to enable the railway administration to make enqniries and
if possible to recover the goods and deliver them to the consignee
and to prevent stale claims. Failure to deliver goods is the consequence of loss or destruction and the cause of action for it is
not distinct from the cause of action for loss or <!estruction,
83
M ~habir Prasad
Rungt•
v.
'nwrga Dalla
Hidayat•llah ].
January 3x.
z96z
Gawrnor-G1n1ral
in Council
v.
Mtuaddi Lal
Shah].
648
SUPREME COURT REPORTS
[1961]
Held, further, that merely because Arts. 30 and 3I of the
I.ndian Limitation Act prescribe different points of time from
which the limitation is to run for suits against carriers it cannot
be inferred that the claim covered by either article is not for
compensation for loss, destruction or deterioration of the goods;
and the said Arts. 30 and 3r cannot be projected upon ss. 72 and
77 of the Indian Railways Act for holding that suit for compensation for non-delivery of goods does not fall withins. 77.
The Madras and Southern Mahratta Railway Co. Ltd. v.
Haridoss Banmalidoss, {r9r8) l.L.R. 4r Mad. 871, Hilt Sawyers and
Co. v. Secretary of State, {r92r) I.L.R. 2 Lah. r33, Martab Ali v.
Union of India, (1954] 56 Born. L.R. 150, Union of India v.
Mitayagiri Pullappa; I.L.R. [r958] A.P. 323, Assam Bengal
Railway Co. Ltd. v. Radhika Mohan Nath and Others, A.I.R. (1923)
Cal. 397 and Bengal Nagpur Railway Co. Ltd. v. Hamir Mull Chhagan Mull and Another (r926} I.L.R. 5 Pat. ro6, approved.
Governor-General in Council and Others v. Mahabir Ram and
Another, {r953} I.L.R. I All. 64 and ]ais Ram Ramrekha Das v.
G.I.P. Railway and Another (1929) I.L.R. 8 Pat. 545, overruled.
CIVIL APPELLATE JURISDICTION:
Civil
Appeal
No. 313/1956.
Appeal from the judgment and decree dated
July 25, 1952, of the Allahabad High Court in Second
Appeal No. 2547of1946.
R. Ganapathy Iyer and T: M. Sen for the appellant
K. P. Gupta, for the respondent.
1961. January 31. The Judgment of the Court was
delivered by
Slj:AH, J.-On January 30, 1943, Bhola NathSambhu
Ram as agent of the respondent L. Musaddilal delivered a bale of cloth to the railway administration
E. I. Rly. at Agra railway station for carriage by railway to the Chola Station in the E. I. !Uy. The
consignment was accepted by the railway administration and a railway receipt was issued in the name
of the consignor Bhola Nath Sambhu Ram. Bhola
Nath Sambhu Ram endorsed the railway receipt in
favour of the respondent and sent it by post to the
respondent. The bale of cloth did· not reach Chola,
and the railway administration was unable despite
efforts to trace it. There was correspondence between the railway administration and the respondent,
about the consignment. Failing to obtain satisfaction
i
3 S.C.R.
SUPREME COURT REPORTS
649
for the loss suffered by him, the respondent served
z96z
a composite notice under s. 77 of the Indian Railways G
--G
,
A
<l
80
f h 0. .1 p
d
C d
D
overnorenera~
ct an s.
o t e 1v1
roce ure
o e on ecemin coun,u
her 7, 1943, and thereafter on May 18, 1944, filed
v.
suit No. 283 of 1944 in the court of the II Munsif,
Musaddi Lal
Bulandshahr, for a decree for Rs. 782-3-6 being the
"price of the bale " and Rs. 200 " for loss on account
of non-delivery." The railway administration resisted
the claim on the pleas. among others that the suit was
not maintainable without an effective notice under
s. 77 of the Railways Act and that the suit was
barred because at the date of the institution of the
suit, the period of limitation prescribed by Art. 31 of
the Limitation Act had expired. The trial court
decreed the suit. In appeal, the Additional Civ,il
Judge, Bulandshahr, reversed the decree passed by
the trial court and dismissed the suit. A Full Bench
of the High Court of Allahabad reversed the decree
passed by the first appellate court and restored the
decree of the trial court. With certificate of fitness
under Art. 133(1 )( c) of the Constitution, this appeal has
been preferred by the Union of India.
Section 77 of the Railways Act in so far as it is
material provides :
"A person shall not be entitled to ......... compensation for the loss, destruction or deterioration of ...
goods delivered to be ......... carried, unless his claim
to ...... compensation has been preferred in writing
by him or on his behalf to the railway administration within six months from the date of the delivery
of the ...... goods for carriage by railway."
Section 77 manifestly prescribes a condition precedent to the maintainability of a claim for compensation for goods lost, destroyed or deteriorated while
in the custody of the railway administration. The
notice prescribed w!Ls not served by the respondent
upon the railway administration within six months
from the date on which the goods were delivered for
carriage, and prima facie the suit would be barred for
non-compliance of a statutory condition precedent.
But the respondent pleaded and the plea has found
favour with the High Court that the suit filed by him
Shah].
650
SUPREME COURT REPORTS
[1961]
z96z
was for compensation not for loss, destruction or
- -G
1 deterioration of the goods, but " for non-delivery of
Governor enera
h
-- d
h
·
h H' h C
1 ·
in council
t e goo s." In t e vrnw of t e
1g
ourt, a c aim
v.
for compensation for non-delivery of goods is a claim
Musaddi Lal
distinct from -a claim for compensation for loss,
destruction or deterioration of goods and to the
Shah J.
enforcement of a claim of the former variety by action
in a court of law s. 77 is not a condition precedent.
The railway administration in India is not an insurer of goods: it is merely a bailee of goods entrustedto it for carriage. Section 72 of the Railways Act
prescribes the measure of the general responsibility
of a railway administration as a carrier of goods.
By that section, the responsibility of a railway administration for loss, destruction or deterioration of
goods delivered to be carried by railway is subject to
other provisions of the Act to be that -of a bailee
under s. 152 and s. 161 of the Indian Contract Act,
1872. Sections 151 and 152 of. the Indian Contract
Act deal with the duties of a bailee. If a bailee takes
as much care of the goods bailed to him as a person
of ordinary prudence would under similar circumstances of his own goods of the same bulk, quality
and value as the goods bailed to him, in the absence
of a special contract, he is not responsible for loss,
destruction or deterioration of the goods bailed. By
ss. 160 and 161 of the Indian Contract Act, tb,e
bailee is under an obligation to return or deliver
according to the bailor's direction the goods. bailed
as soon as the time for which the goods were bailed
has expired or the purpose for
which the goods
were
bailed has been accomplished and if on
account of 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. The railway administration being a bailee of the goods delivered for
carriage to it is therefore a bailee during the period
when the goods remain in its custody for the purpose
and in the course of carriage and for the purpose of
delivery after the goods are carried to the destination.
,_
)
3 S.C.R.
SUPREME COURT REPORTS
651
But the quantum of care which the railway adminis-
~~
tration is required to take is that care which it would Governor-G•neral
take having regard to the bulk, quality and value of
in Couni;il
its own similar goods.
v.
Section 77 of the Railways Act is enacted with a
Musaddi Lal
view to enable the railway administration to make
enquiries and if possible to recover the goods and to
deliver them to the consignee and to prevent stale
claims. It imposes.a restriction on the enforcement
of liability declared by s. 72.
The liability declared
by s. 72 is for loss, destruction or deterioration.
Failure to deliver is the consequence of loss or des.
truction of goods; it does not furnish a cause of
action on which a suit may lie against the railway administration, distinct from a cause of action for loss
or destruction. By the use of the expression, " loss,
destruction or deterioration," what is contemplated is
loss or destruction or deterioration of the goods and
the consequent loss to the owner thereof. If because
of negligence or inadvertence or even wrongful act
on the part of the employees of the railway administration, goods entrusted for carriage are lost, destroyed
or deteriorated, the railway administration is guilty of
failing to take the degree of care which is prescribed
by s. 72 of the Railways Act.
There are undoubtedly two distinct articles, Arts.· 30
and 31 in the first schedule of the Indian Limitation
Act dealing with limitation for suits for compensation
against carriers. Article 30 prescribes the period of limitation for suits against a carrier for compensation
against loss or injury to goods and Art. 31 prescribes
the period of lim.itation for suits for compensation
against a carrier for non-delivery or delay in delivering the goods. The period of limitation under each
of these articles is one year but the points of time
from which that period is to be reckoned are different.
But because the Indian Limitation Act provides
different points of time from which the period of
limitation is to run, it is not possible to infer that the
claim covered by either article is not for compensation
for loss, destruction or deterioration of the goods. We
are unable to project the provisions of Arts. 30 and 31
Shah J.
Governor·General
in Council
v.
Musaddi Lal
Shah].
January JI.
652
SUPREME COURT REPORTS
[1961)
of the Limitation Act upon ss. 72. and 77 of the Railways Act and to hold that a suit 'for compensation for
loss because of non-delivery of goods does not fall
withins. 77. The view we have expressed is supported
by a large volume of authority in the c.ourts in India.
-for instance The Madras and Southern M ahratta Railway Co., Ltd. v. Haridoss Banmalidoss ('), Hill Sawyers
and Co. v. Secretary of State('), Martah Ali v. Union
of India('), Union of India v. M itayagiri Pullappa (' ),
Assam Bengal Railway Co., Ltd. v. Radhika Mohan
Nath(') and Bengal Nagpur Railu;ay Co. Ltd. v. Hamir
.Wull Chhagan Mull(').
The view expressed to the contrary in the Allahabad
High Court in Governor-General in Council v ~ Mahabir
Ram (7) and by the Patna. High Court in Jais Ram
Ramrekha Das v. G. I. P. Railway('), is in our judgment erroneous.
This appeal will therefore be allowed and the
respondent's suit will stand dismissed. As the Union
of India was permitted to appeal for obtaining the
decision of this Court which may settle the conflict of
views even though the amount involved is small, we
think that it is just and proper that there should be
no order as to costs throughout.
Appeal allowed.
THE ORIOL INDUSTRIES LTD.
v.
THE BOMBAY MERCANTILE BANK LTD.
(P. B. GAJENDRAGADKAR, K. N. WANCHOO and
K. c. DAS GUPTA, JJ.)
Bank-Payment in company's account-Cheques drawn by
authorised agents without so describing themselves or stating as on
behalf of the company-Payment if wrongfully made-Indian Companies Act, I9I3 (VII of I9IJ), s. 89.
The Managing Agents of the appellant company withdrew
certain sums of money from its account with the respondent
(1) (1918) I.L.R. 41 Mad. 871.
(5) A.LR. 1923 Cal. 397.
(2) (1921) !.L.R. 2 Lah. 133.
(61 (1926) I.L.R. 5 Pat. 106.
I .
)
I
(3) [1954] 56 Bom. L.R. 150.
(71 (19531 I.L.R. l All. 64.
I~
(4) I.L.R. [1958) A.P. 323.
(8) (1929) I.L.R. B Pat. 545·