# STATE OF KERALA v. GENERAL MANAGER, SOUTHERN RAILWAY, MADRAS AUJ?USt 30, 1976

- **Citation:** [1977] 1 S.C.R. 419
- **Court:** Supreme Court of India
- **Decided:** 1977
- **Case number:** civil suits. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1367 of 1968
- **Bench:** H. R. Khanna, N. L Untwalia, Jaswant Singh
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-kerala-v-general-manager-southern-railway-madras-auj-ust-30-1976-6930
- **Pages:** 6

## Headnote

Code of Cil'i/ Procedure, Ss. 79 a11d 80, suit for compensation agains/ railiray
administration, whether impleading Union of India as a party necessary.
The 111dia11 Railways Act, 1890, S. 3(6), Railway Administration, whether ·a
separate legal e11tity.
The appellant booked rice for being transported by train, from Bareilly railway station to Trivandrum railway station.
On delivery, the rice was found to
be damaged and short in quantity.
The appellant claimed damages from the
rei;pondent, who resisted the claim on the grounds that the suit was not maintainable as the Union of India had not been impleaded as a defendant, and that
a 1mit by a State against the Union of India could only he instituted in the
Supreme Court under Art. 131 of the Constitution. The suit was dismiiied by
the Trial Court, and an appeal from it was dismissed by the High Court.
Dismissing the appeal, the Court,
HELD : The Southern Railway is owned by the Union .of India. As iuch,
a suit dealiug with the alleged liability of that railway should have been brought
agai-.st ·the Union of India.
Section 80 of the C.P.C. contemplates institution
of a suit against the Central Government even though it relates to a railway.
.
[422 E-F]
Sul.Jwnwul Sham/al v. 011dh Rohi/khand Railway AIR 1924, Bom. 306;
Hirac/zand S11ccara111 Ga11dhy & Ors. v. G.I.P. Railway Co., AIR 1928 Born. 421;
Slwikh Elahi Bakhsh v. E.l. Railway Administration; AIR 1941 Patna 326;
Chandra Mohan Saha & Anr. v. Union of India & Anr. AIR 1953 Assam .193
and P. R. Narayanaswami Iyer & Ors. v. Ui1ion of India AIR 1960 Madras 58,
Approved.
(2) Neither the definition of the "railway administration" in Section 3(6)
of the Indian Railways Act, .nor the language of sections 72 to 80 o~ the Act,
' lends support for the view that the railway administrations are to be treated as
separate personalities, entries or separate juridical persons. [423 B-C]
Dominion of India v. Finn Musaram Kishunprasad ATR 1950 Na~pur 85,
overruled.
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( 3) The demarcation of the different State-owned railways as distinct units
for administrative and fiscal purposes cannot have the effect of conferring the
~tatus of juridical person upon the respective railway administrations or their
G
General Managers for the purpose of civil suits.

## Text

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419
STATE OF KERALA
v.
GENERAL MANAGER, SOUTHERN RAILWAY, MADRAS
AUJ?USt 30, 1976
[H. R. KHANNA, N. L UNTWALIA AND JASWANT SINGH, JJ.]
Code of Cil'i/ Procedure, Ss. 79 a11d 80, suit for compensation agains/ railiray
administration, whether impleading Union of India as a party necessary.
The 111dia11 Railways Act, 1890, S. 3(6), Railway Administration, whether ·a
separate legal e11tity.
The appellant booked rice for being transported by train, from Bareilly railway station to Trivandrum railway station.
On delivery, the rice was found to
be damaged and short in quantity.
The appellant claimed damages from the
rei;pondent, who resisted the claim on the grounds that the suit was not maintainable as the Union of India had not been impleaded as a defendant, and that
a 1mit by a State against the Union of India could only he instituted in the
Supreme Court under Art. 131 of the Constitution. The suit was dismiiied by
the Trial Court, and an appeal from it was dismissed by the High Court.
Dismissing the appeal, the Court,
HELD : The Southern Railway is owned by the Union .of India. As iuch,
a suit dealiug with the alleged liability of that railway should have been brought
agai-.st ·the Union of India.
Section 80 of the C.P.C. contemplates institution
of a suit against the Central Government even though it relates to a railway.
.
[422 E-F]
Sul.Jwnwul Sham/al v. 011dh Rohi/khand Railway AIR 1924, Bom. 306;
Hirac/zand S11ccara111 Ga11dhy & Ors. v. G.I.P. Railway Co., AIR 1928 Born. 421;
Slwikh Elahi Bakhsh v. E.l. Railway Administration; AIR 1941 Patna 326;
Chandra Mohan Saha & Anr. v. Union of India & Anr. AIR 1953 Assam .193
and P. R. Narayanaswami Iyer & Ors. v. Ui1ion of India AIR 1960 Madras 58,
Approved.
(2) Neither the definition of the "railway administration" in Section 3(6)
of the Indian Railways Act, .nor the language of sections 72 to 80 o~ the Act,
' lends support for the view that the railway administrations are to be treated as
separate personalities, entries or separate juridical persons. [423 B-C]
Dominion of India v. Finn Musaram Kishunprasad ATR 1950 Na~pur 85,
overruled.
A.
B
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( 3) The demarcation of the different State-owned railways as distinct units
for administrative and fiscal purposes cannot have the effect of conferring the
~tatus of juridical person upon the respective railway administrations or their
G
General Managers for the purpose of civil suits.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1367 of 1968.
(Appeal by Special Leave from the Judgment and Order dated
25-3-1965 of the Kerala High Court in AS. No. 487 of 1961).
S. V. Gupte and K. M. K. Nair, for the appellant.
Mrs. Shyamla Pappu, B. B. Sawhney, Raju Ramachandran and
Girish Chandra; for the respondent.
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420
SUPREME COURT REPORTS
[1977) 1 S.C.R.
The Judgment of the Court was delivered by
KHANNA, J.-This appeal by special leave by the State of Kuala
is against the Full Bench decisioi;i of the Kerala High Court affirming
on appeal the judgment and decree of the trial court whereby the suit
for recovery of Rs. 28,208.70 filed by the appellant against the General Manager, Southern Railway respondent was dismissed.
The appellant booked 2,000 tons of rice in 21,310 bags from
Bareilli railway station for being transported to Trivandrum central
railway station as per 10 railway receipts during the period from
June 25 to July 5, 1950. According to the case of the appellant, the
rice delivered at Trivandrum central railway station was short by
79,378 lbs. It was also averred that the rice in 327 bags was found
to be damaged.
The appellants accordingly claimed Rs. 28,208.70
as damages from the respondent.
The respondent resisted the claim of the appellant, inter aUa, on
the ground that the suit was not maintainable as the Union of India
had not been impleaded as a defendant to the suit and that a suit by
a State against the Union of India could be instituted only in the
Supreme Court of India under article 131 of the Constitution. It is
not necessary to set out the other pleas of the respondent.
As many
as nine issues were framed by the trial court.
Two of 'the issues,
namely, issue Nos. 1 and 3, were treated as preliminary issues- and
arguments were heard on those issues.
Issue Nos. 1 and 3 read a~
under:
"l. Is the suit maintainable? Can a decree be passed agaimt
the defendant as now impleaded ?
2. Will the suit lie in this Court? Is the suit barred by
the provisions of the Constitution of India?"
On issue No. 3 it was held by the trial court that since the Union
of India had not been made a party to the suit, clause (a)· of article
131 of the Constitution had no application.
The suit was accordingly
held to be not liable to be dismissed on that ground.
On issue No.
1 the trial court held that the Union of India was a necessary party
to the suit and as the Union of India had not been impleaded
38 a
party, the suit was incompetent.
As a result of its findings on issue
No. 1 the trial court dismissed the suit.
The decision of the trial
court on issue No. 1 was affirmed in appeal by the High Court. An
application was also filed at the hearing of the appeal before the High
Court for impleading the Union of India as a party to the suit.
The
High Court rejected that application on the ground that no useful
purpose would be served by allowing that application. It was observed that if the application was allowed and the Union of India was
made a party, the suit would have to be dismissed as under article
131 (a) of the Constitution a ~uit by one State against the Union
of India could only lie in the Supreme Court.
In the result, the High
Court dismissed the appeal filed by the appellant.
In appeal before us Mr. Gupte on behalf of the appellant has
invited l!>ur attention to the definition of "railway administration" in
\ I
KERALA v. G. M. SOUTHERN RLY. (Khanna, J.)
-4.21
section 3(6) of the Indian Railways Act,
1890
(Act 9 of 1890)
(hereinafter referred to as the Act) which reads as under :
A
"railway administration or 'administration' in the case of a
railway administered by
the
Government
means
the
Manager of the railway and includes the Government and,
in the case of a railway administered by a railway company,
B
means the railway company,"
He has further referred to sections 72, 74, 76 and 80 of the Act.
According to section 72, the responsibility of a railway administration for the loss, destruction or deterioration of animals or goods
delivered to the administration to be carried by railway shall, subject
to other provisions of the Act, be that of a bailee under sections 151,
152 and 161 of the Indian Contract Act, 1872. Section 74 absolves
the railway administration of any responsibility for the loss, destruction or deterioration of any luggage belonging to or in charge of a
passenger unless a railway servant has ·booked and given a receipt
therefor.
Section 76 deals with burden of proof in suits for compensation against a railway administration for any delay, loss, destruction,
deterioration or damage.
Section 80 at the relevant time read as
under:
. "80. Suits for compensation for injury
to
throughbooked traffec.-Notwithstanding anything in any agreement
purporting to limit the liability of a railway administration
with respect to traffic while on the railway of another administration, a suit for compensation for loss of the life of,
or personal injury to, a passenger, or for loss, destruction
or deterioration of animals or goods where the passenger
was or the animals or goods were booked through over the
railway of two or more railway tlldministrations, may be
brought either against the railway administration from which
the passenger obtained his pass or purchased his ticket, or
to which the animals or goods were delivered by the consignor thereof, as the case may be, or against the railway
administration on whose railway the loss, injury, destruction
or deterioration occurred."
It is urged by Mr. Gupte that as, according to section 3 ( 6) of the
Act, railway administration means a Manager of the railway and as
some of the sections 72 tb 80 make express reference to suits against
railway administration, a suit against the General Manager of the
railway concerned is competent.
The trial court and the High Court,
according to the learned counsel, were in error in holding that the suit
was not maintainable because of the Union of India having not been
impleaded as a party to the suit.
The above argument has the quality of being ingenious, attractive
and not lacking in apparent plausibility.
A closer examination, however, reveals its infirmity and after giving the matter our earnest
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SUPREME COURT REPORTS
(1977] 1 S.C.R.
consideration, we find it difficult to accept it. The Act deals with and
specifies, inter alia, the rights and liabilities which arise in case the
goods consigned to the railways are not delivered to 'the consignee.
It likewise deals with short delivery of those goods as well as the
cases in which the goods get damaged during transit.
Most of the
railways in India are owned by the Union of India, but there were
some minor railways which till recently were owned by railway companies.
The definition of "railway administration" as .given in section 3 ( 6) is comprehensive and deals with both types of railways,
i.e., railways administered by th~ Government as well as those! administered by railway companies.
The words "railway administration"
have been used in sections 72 to 80 because those sections pertain
to rights and liabilities of the parties in both types of cases, i.e., cases
where liability is incurred by Government administered railways as
well as cases in which liability is incurred by railway administered by
railway COP'"~--- .. ·
The Act, however, does not deal with. the question
as to who should be impleaded as a defendant when a suit is brought
against the railway. administration.
This is essentially a matter telating to the frame of suits, and is dealt with by the Code of Civil Procedure.
According to section 79 of the Code, in a suit by or against
the Government, the authority to be named as plaintiff or defendant,
as the case may be, shall be (a) in the case of a suit by or against
the Central Government, the Union of India, and (b) in the case
of a suit by or against a State Government, the State.
This section
is in accordance with article 300 of the Constitution,
according to
which the Government of India may sue or be sued by the name of
the Union of India and the Gqvernment \of a State may sue or be
sued by the name of the Stat¢. It is not disputed that Southern
Railway is owned by the Union of India.
As •Such, a suit dealing with
the alleged liability of that railway should have been brought against
the Union of India.
Section 80 of the Code of Civil Procedure provides inter alia that
no suit shall be instituted against the Government until the expiration
of two months next after the notice in writing has been delivered to or
left at the office of, in the case of a suit against the Central Government where it relates to a railway, the General Manager of that railway.
The above provision clearly contemplates institution of a suit
against the Central Government even though it relates to a railway.
A suit against the Central Government in terms of section 79 of the
Code would necessarily have to be brought against the Union of India.
The Act no doubt makes provision for the liability of the railway administration, but from that it does not follow that the railway
administration is a separate legal entity having a juristic personality
capable of being sued as such.
The definition of "railway administration" in section 3 ( 6) of the Act that it would meaa the Manager of
the railway does not warrant the inference that a suit against the railway administration can be brou,ht against the Manager of that railway.
We have to bear in mind the distinction between the owner of
the railway, namely, the Union of India, and the authority which
actually runs the railway and to whom duties have been assigned for
I
KERALA v. G. M. SOUTHERN RLY. (Khanna, J.)
423
this purpost< by the Act. The manager of the railway under the Act is
A
such authority.
When, however, liability is sought to be fastened on
the railway administration and a suit is brought against it on that
·account, the suit, in our opinion, would have to be brought against the
Union of India because it is the Union who owns the railway and
who would have the funds to satisfy the claim in case decree is awarded in such suit.
·
The scheme of the Act, even though there are now hardly any
company-owned railways in India, is to treat different railway administrations as different units, although all of them may be owned by the
Union of India. Neither the definition of the "railway administration"
in section 3 ( 6) of the Act nor the language of sections 72 to 80 of
the Act lends support for the view that the railway administrations
are to be treated as separate personalities, entities or separate juridical persons as seems to have been observed in the case of Dominion
of India v. Firm Museram Kfahunprasad(').
Yet the treatment of
the different railway administrations as different units for the purpose
of fastening liability on the Union of India has got significance and
relevance.
Viewed in that light, it would follow that the definition
of the "railway administration" given in section 3 ( 6) of the Act does
not make the railway administration or its General Manager a legal
entity or a corporate body or a juridical person to represent the railway administration as such in suits.
The claim in a suit for recovery_
· of money under the Act against the different railway administrations
owned by the Central Government in accordance with the general
principle of law contained in Order 1 Rule 3 of the Code of Civil
Procedure has got to be made against the person against whom the
right to relief is alleged to exist.
The significance of creating the various railway administrations as
'eparate units, even though they may be State-owned, is to be found
i;1 section 80 of the Act, and section 80 of the Code of Civil Procedure.
For claiming a decree against the Union of India under the
Act the plaintiff has got to specify the railway administration or administrations on account of which liability is sought to be fastened
upon the Union of India, as contemplated by section 80 of the Act.
The institution of the suit has to be preceded by service of notice under
section 77 of the Act and section 80 of the Code to the appropriate
authority which is the General Manager of the railway concerned.
The requirement of clause (b) of section 80 of the Code that a notice
in the case of a suit against the Central Government where it relates
to a railway must go to the GenerafManager of the concerned railway
or railways is also based upon the assumption that it is primarily tl1e
liabi~ity of the railway administration of the said railway or railways
to satisfy the claim of the suitor in accordance with section 80 of the
Act. The demarcation of the different State-owned railways as distinct
units for administrative and fiscal purposes cannot have the effect of
conferring the status of juridical person upon the respective railway
administrations or their General Managers for the purpose of civil
suits.
(1) A.I.R. (1950) Nagpur 85.
11-1104SCI/76
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SUPREME COURT REPORTS
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The Bombay High Court in two cases, Sukhanand Shamlal v. Oudh
& Rohilkhand Railway(l) and Hirachand Succaram Gandhy & Ors.
v. G.l.P. Railway Co.(2) has held that a suit against a State railway
should be brought against the Government.
Similar view was expressed by Patna High Court in Shaikh Elahi Bakhsh v. E.I. Railway,
Administration(8 ) and a Full Bench of Assam High Court in the TMe
of Chandra Mohan Saha & Anr. v. Union of India & Anr.(4 )
The
observations of a Division Bench of the Madras High Court in the
case of P. R. Narayanaswami Iyer & Ors. v. Union of India(~) also
lend support to the above view.
It may be stated that the reasoning
employed in the cases mentioned above was different and not identical,
but whatever might be the nature of that reasoning the fact remaim
that the learned Judges deciding those cases were all at one on the point
that such a suit should be brought against the Government, which
means in the present case the Union of India.
Any contrary vie~
would be against the well-established practice and procedure of law,
as evidenced by various deci~ions of the High Courts, and as such,
must be rejected.
Submission bas also been made on behalf of the appellant that
the High Court should have allowed the appellant to amend the plaint.
We agree with the High Court that the present is not an appropriate
case in which
permission to
amend the plaint should have been
granted.
.
The appeal consequently fails and is dismissed but in the circumstances without costs.
M.R.
(1) A.I.R. 1924 Bombay 306.
(3) A.J.R. 1931 Patna 326.
(5) A.I.R. 1960 Madras 58.
Appeal dismissed.
(2) A.1.R. 1928 Bombay 421.
(4) A.I.R. 1953 Assam 193.
"W·
(