PANDURANG DNYANOBA LAD v.

DADA RAMA METHE & ORS.

February 24, 1976

[Y, V. CHANDRACHUD, V. R. KRISHNA IYER AND A. C. GUPTA, JJ.]

Bombay Tenancy & Agricultural Lands Act 1948-Section 320(6)-32(0) -Bombay Merged Territories Miscellaneous Alienations Abolition Act, 1955-

Secs. 6. 7, 8 9. 28-Whether on abolition of Inams the relationship of landlord and tenant comes to an end-Whether tenants right to purchase land under tenancy act affected by abolition act.

The appellant owned a land which was held for the perfonnance of mis

cellaneous inferior services and was classified as a Huzur Sanadi Inam land.

C The respondents were in possession of the land as tenants and were declared as purchasers under the Bombay Tenancy & Agricultural Lands Act, 1948.

The Tenancy Act provides by section 32 that on 1st April, 1957, every tenant subject to certain conditions shall be deemed to have purchased from . his landlord the land held by him as a tenant. The Bombay Legislature passed

the Bombay Merged Territories Miscellaneous Alienations Abolition Act of

1955. The appellant contended that in view of the provisions of the Abolition Act, the relationship of landlord and tenant came to an end between the appelJant and the respondents and that, therefore, respondents have no right D to purchase the land. The contention of the appellant was negatived by the AJrricultural Lands Tribunal which was confirmed in appeal by the Special Deputy Collector and in revision by the Maharashtra Revenue Tribunal. A wril petition filed by the appellant in the High Court of Bombay was summarily dismissed.

Dismissing the appeal by Special Leave,

HELD : 1. By section 4 of the Abolition Act, all alienations in the Merged E Territories were abolished with effect from the appointed date. Sections 6, 7, 8 and 9 of the Abolition Act provide for the grant of occupancy rights ln respect of the erstwhile lnam Lands. There is no provision in that Act by virtue of which the relationship of landlord and tenant between the ex~Inamdar

and his tenant would stand eXtinguished.

On the contrary, section 28 provides that nothing contained in the Act shall in any way be deemed to effect the application of any of the provisions of the Tenancy Act to any alienated land or the mutual rights and obligations of a landlord and his tenants_ save in so F far a.11 the said provisions are in any way inconsistent with the express provisions of the Act. The provisions of the Tenancy Act contained in section 32 are in no way inconsistent with any of the express provisions of the Abolition Act. [495-A, B.C, & DJ

2. Section 32(0) of the Tenancy Act applies only to tenancies created after the tiller's day.

[495E]

3. The object of the Abolition Act was the elimination of Tnamdan es G intermediaries and not the eviction of the tillers of the soil. [495GJ

4. Section 32G(6) of the Tenancy Act shows that nothing contained in the Aholition Act can affect the tenant's right of purchase under sectian 32, even if anv land is regranted to the holder under the Abolition Act on condition that_ it was not transferable.

[496A-BJ

ClVIJ. APPELLATE JURISDICTION : Civil Appea:l No. 475 of 1973.

(Appeal by Special Leave from the Judgment and Order dated the 26-4-1972 of the Bombay High Court in Special Civil Application No. 165 of 1972)

\ 7 -L522 SCI/76

A S. B. Wad and M. S. Ganesh. for the appellant.

P. H. Parekh, for the respondent.

The Judgment of the Court was delivered by

CIIANDRACHUD, J.

The appellant owned a land, Survey No. 72, at Shiroli in the district of Kolhapur.

The land was held by the appellant for the performance of miscellaneous inferior services and was classified as a Huzur Sanadi Inam land. Respondents have been in possession of a portion of the land as tenants and wrc declared as purchasers under the Bombay Tenancy and Agricultural Lands Act, LXVH of 1948, (hereinafter called the Tenancy Act). Consequent upon the declaration, the Agricultural Lands Tribunal, Hatkanagale, fixed the price of the land under section 32G of the Tenancy Act.

That decision was confirmed in appeal by the Special Deputy Co!lector, Kulhapur. and in revision by the Maharashtra Revenue Tribunal. The appellant filed a petition in the Bombay High Court under article 227 of the Constitution to challenge the decision of the Revenue Tribunal but that petition was dismissed summarily by a learned Single Judge.

This appeal by special leave is directed against the order of the High Court.

The Teuancy Act provides by section 32 that on April 1, 1957, called the "tillers day", every tenant shall, subject to certain conditions, be deemed to have purchased from bis landlord the land held by him as a tenant.

Section 32G requires the Agricultural Land Tribunal to determine the purchase price of the land in accordance with a statutory formula.

The dispute before us is not as regards the arithmetic of the price fixation but as regards whether the respondents are qualified at all to purchase the land under section 32 of the Tenancy Act. The right of a tenant to opt for a compulsory purchase of the agricultural land held by him is no longer open to constitutional doubt or difficulty.

But, the respondents' right to purchase the land is questioned by the appellant on the ground that they ceased to be tenants and have therefore no right of purchase.

This plea is founded on the orovisions of the Bombay Merged Territorie& Miscellaneous Alienations A9olition Act, XXII of 1955 (hereinafter caueu tne Alienat10ns Abolition Act). It is argued that with the abolition of Inams effected under that Act, the old relationship of landlord and tenant between the appellant and respondents came to an end, that with the re-grant of occupancy rights to the appellant a new relationship of landlord and tenant came into existence between 01cm and since the respondents did not exercise their right to repurchase the land withi,1 the period prescribed by section 32-0 of th'' Tenancy Act, they have forfeited that right.

According to the appellant, the provision$ of the Tenancy Act and the Alienations Abolition Act are in a material respect inconsistent and the inconsistency has to be resolved by giving precedence to the latter Act.

_The mrit of thee contentio_n_s depends upon the validity of the basic premise that with the abolil!on of Inams which the Alienations Abolition Act brought about, the relationship of landlord and tenant

' I

P. D. LAD v. D. R. METHE (Chandrachud, J.) 4 95

between the appellant and the respondents came to an end.

We see no warrant for this premise.

By section 4 of the Alienations Abolition Act, all alienatlons in the merged territories were abolished with effect from the ppomted date.

As a result of the aboh!ion of Inams effected by sectlun 4, all alienated iands became liable under section 5 to the payment of land revenue in accordance with the provisions of the Bombay Land Revenue Code, 1879.

Sections 6, 7, 8 and 9 of the Alienations Abolition Act provide for the grant of occupancy rights in respect of the erstwhile Inam lands.

There is no provision in that Act by virtue of which the relationship of landlord and tenant between the ex- Inamdar and his tenant would stand extinguished.

On the contrary, section 28 provides that nothing contained in the Act shall in any way be deemed to affect the application of any of the provisions of the Tenancy Act to any alienated land or, "the mutual rights and obligations of a landlord and his tenants save in so far as the said provisions are not in any way inconsistent with the express provisions of this Act".

None of the provisions of the Tenancy Act, particularly the provision contained in section 32 of the Tenancy Act under which tenants became entitled to purchase the lands held by them in that capacity on the tillers' day, is in any way inconsistent with any of the express provisions of the Alienations Abolition Act.

Section 32 of the Tenancy Act must therefore govern the rights of the ex-Inamdar and his tenants notwithstanding the abolition of the lnams brought about by the Alienations Abolition Act.

Since the respondents did not cease to be tenants of the appellant on the introduction of the Alienations Abolition Act, they are entitled to purchase the land under section 32.

Consequently, it was competent to the Agricultura1 Lands Tribnnal to commence the price fixation proceedings under section 32G of the Tenancy Act.

Section 32-0 of the Tenancy Act applies only to tenancies created atfer the tillers' day. It provides that in respect of such tenancies, a tenant desirous of exercising the right of purchase must give an intimation to the landlord and the Tribunal within one year f; om the commencement of his tenancy.

As observed by us, the relationship of landlord and tenant between the appellant and respondents did not come to an end on the introduction of the Alienations Abolition Act nor indeed is there any legal justification for the theory that on the cesser of that relationship a new relationship of landlord and tenant came into existence between the parties so as to attract the application of section 32-0. The object of the Alienations Abolition Act was "to abolish . . . . alienations of miscellaneous character prevailing in the merged territories", that is to say, to abolish the Jnam grants prevailing irt those territories.

The elimination of Inamdars as . intermediaries, not the eiction of the tillers of the soil, was the

b1ect of ipat Act.

By se?ll?n 1 what was abolished was all alienat10ns, all nhts le)!ally subs1stmg m respect of alienations and all other

incdent~ of such alienations; A_ tenancy created by an Inamdar is not a nht m respect of t?e ahenat1on nor an incident of the alienation.

In simple words, all nghts of the Inamdars stood determined on the

introduction of the Alienations Abolition Act; the rights of tenants continued to exist and were expressly protected by section 28 of the Alienations Abolition Act.

The provision contained in section 32G(6) of the Tenancy Act shows that nothing contained in the Alienations Abolition Act can affect the tenant's right of purchase under section 32.

Section 32G ( 6) provides that if any land is re-granted to the holder under the provisions of any of the Land Tenures Abolition Acts referred to in Schedule III of the Tenancy Act on condition that it was not transferable, such condition shall not be deemed to affect the right of any person holding the land on lease created before the re-grant and such person shall. as a tenant, be deemed to have purchased the land under section 326 as if the condition that it was not transferable was not the condition of re-grant.

The Alienations Abolition Act is included in Schedule III of the Tenancy Act as item No. 21. Thus, even if the land. after the abolition of the Inam effected under the Alienations Abolition Act, was re-granted to the appellant on condition that it was not transferable, such a cqndition cannot affect the right of the respondent to purchase the land under section 32 and 32G of the Tenancy Act.

In other words, the statutory purchase of a land by a tenant under the provisions of the Tenancy Act is excepted from the restraint of nontransferability. It is undisputed that the respondents were holding the land on a lease created before theoccupancy rights were re-granted to the appellant on the abolition of the Inam.

The quetions _raised before us on behalf of the appellant merited careful cons1derat10n and we would have been happy to have the benefit of a considered judgment by the High Court.

But the Revenue

Tribunl was. !ight in its dcision and so the summary dismissal of

he. Wnt Petition by the High Court has not caused any failure of 1ustice.

In the result, the appeal fails and is dismissed.

We are thankful to Shri Parekh for assisting us in the case as amicus.

P.H.P.

Appeal dismissed.

PANDURANG DNYANOBA LAD

DADA RAMA METHE & ORS

February 24, 1976

V. CHANDRACHUD

V. R. KRISHNA IYER

A. C. GUPTA, JJ.

Agricultural Lands Act 1948

Section 320(6)

Agricultural Lands Act, 1948

section 32

1st April, 1957

AJrricultural Lands Tribunal

Maharashtra Revenue Tribunal

High Court of Bombay

section 4

Sections 6, 7, 8 and 9

section 28

section 32

Section 32(0)

Section 32G(6)

A S. B. Wad

M. S. Ganesh

P. H. Parekh

CIIANDRACHUD

Shiroli

Kolhapur

section 32G

Bombay High Court

article 227

section 32

April 1, 1957

Section 32G

section 32

section 32

section 4

section 5

Bombay Land Revenue Code, 1879

Sections 6, 7, 8 and 9

section 28

section 32

Section 32

section 32

Agricultura1 Lands Tribnnal

section 32G

Section 32

section 32

section 28

section 32G(6)

section 32

Section 32G

Schedule III

section 326

Schedule III

section 32 and 32G

Parekh


BAJRANG LAL & ANR. v.

STATE OF RAJASTHAN

February 24, 1976

[R. S. SARKARIA AND P. N. SHINGHAL, JJ.]

4~7

Prevention of Corruption Act (2 of 1947), s. 5(1)(d) and (2J, and Indian Penal Code (Act 45 of 1860), s. 21, Ninth-Railway Khalasis associated in the work of issuing passes to Railway employees-If 'public servants'.

Two khalasis were convicted for the offence of conspiracy to secure railway passes on forged applications, and under s. 5(1)(d} and (2), Prevention of Corruption Act, 1947.

It was the duty of the office of the Works Manager of the Railway to issue passes to railway employees for railway travc; l.

The two 'khalasi,<; were not formally appointed to work in the Pass section, but C their services were actually utilised in the office for issuing passes.

In appeal to this Court it was contended on behalf of the khalasis, inter alia, y that they are not public servants.

Dismissing the appeal, HELD : (I) Section 21. Ninth, l.P.C., as it stood at the reievant time included in the definition of 'public servant' every officer in the service or pay , of t, he Government. The tests for determining whether a person is an officer D of the Government. are: (a) whether he is in the service or pay of the Government: and (b) Whether he is entrusted with the performance of any public duty whether of an exalted or humble character. [500G501B1

In the present case. the two khalasis were actually allowed to deal with the preparation and issuance of railway passes. and as such, were in fact, performing public duties and dicharging public functions auxiliary to those of the Work-; Manager-who is an officer of the Government-and his office.

They were. therefore, in actual possession of the situation of a public servant E and in view of Explanation II to s. 21, l.P.C .• would be 'public servants'.

They were. therefore. rightly convicted under s. 5(1)(d) and (2), Prevention of Corruption Act. [501E-G]

G. A. Monterio v. State of Aimer [19561 S.C.R. 682, followed.

CRIMINAL

APPELLATE JURISDICTION : Criminal Appeal No. 198 of 1971.

Appeal by special leave from the iuMment and order date the 27th July, 1971 of the Rajasthan High Court at Jodhpur in Criminal Appeal No. 666 of 1969.

A. N. Mulla, S. K. Mehta and M. Qamaruddin, for the appellant.

Subhag Mal Jain, for the respondent.

The Judgment of the Court was delivered by G

SARKARIA, J.

This appeal by special leave is directed against a judgment of the High Court of Rajasthan. It arises out of these facts :

There is an office of the Works Manager, Northern Railway at Bikaner.

Among others, the duty of this office is to issue Railway Passes to the Railway emDloyees and their dependent family members for railway travel.

Sita Ram and Ganesh Ram were at the relevant time April 11, 1963 working as Pass Clerks in the office of the

Works Manager.

Bairancr T al and Ram Kishan, though posted as Khalasis in the Railway Carriage Shop, were associated with the work of issuing passes in the ottice ul the Works Manager. The office used to receive applications from Railway employees of the different sections under the Works Manager duly forwarded by the Foreman Incharge of the respective sections for issue of the Railway passes. It was the duty of the office hands to check the correctness of the application and the genuineness of the signatures of the forwarding officers before preparing the passes in the Railway Pass Books maintained by them.

After checking, preparing and initialling the passes they were put to the Works Manager. If the passes were meant for a local line, they were put to the Chief Clerk of the Works Manager's office for signature.

Thereafter, it was the duty of the Clerks to send the passes to the concerned sections with acknowledgement slips, and the Foreman of the section was expected to pass them on to the applicants concerned.

According to the prosecution case, during this period from December 23, 1961 and April 11, 1963, Bajrang Lal, Ram Kishan, Sita Ram an.d Ganesh Ram, all hatched a conspiracy for securing passes on forged applications.

The scheme, as untolded at the trial was that false and forged applications were prepared in collaboration by Bajrang Lal and Ram Kishan with the object of causing wrongful loss to the Railway.

The prosecution has brought material on the record to show that 15 forged applications were prepared by them to secure such passes.

Ex. P-46 is one of such applications prepared in the name of one Narain (P.W. 6). It is admittedly in the hand of Ram Kishan, appellant. It bears the endorsement purporting to be under the signature of the forwarding officer, Kishan (P.W. 20). The signature on this forwarding endorsement is in the hand of Bajrang Lal.

The passes Exts. P-4 7 and P-48 were prepared by Ram Kishan.

They were checked by Sita Ram.

Ram Kishan prepared the acknowledgement receipt in respect of the passes, Exts. P-47, and P-48, on Ext. P-140 to show that they had. been delivered to the persons in whose names they were prepared. ·

Similarly, the forged application, Ext. P-78, was prepared by Bajrang Lal, while the Pass, Ext. P-79, in respect thereof was prepared by Ram Kishan.

The slip Ext. P-140 containing an entry about tlie pass Ext. P-79 was prepared by Ram Kishan.

The application Ext. P-87 was written by Bajran!( Lt>!, while the acknowledgement receipt Ex. P-88 in the slip Ex. P-140 was prepared by Ram Kishan.

Ram Kishan also prepared the false acknowledgement receipt, Ex. P-76, and the acknowledgement receipt in respect of Pass No. 812080 in the slip, Ex. P-140.

On the preceding facts, Sita Ram, Ganesh Ram, Bajrang Lal and Ram Kishan were tried in respect of offences under ss. 120B. 420, 465, 471, Penal Code and under s. 5(1)(d) read with s. 5(2) of the Prevention of Corruption Act, 194 7, by the Special Judge.

Sita Ram and Ganesh Ram were acquitted of all the charges. Bajrang

' I I

BAJRANG LAL v. RAJASTHAN (Sarkatia, J.) 499

Lal and Ram Kishan were convicted on charges under ss. 420, 468 and 471, Penal Code and sentenced to one year's rigorous imprisonment and a fine of Rs. 200/- each on each of these counts.

They were further convicted under s. 120B, Penal Code and sentenced to 6 months' rigorous imprisonment, each.

They were. also convited under s. 5(1) (d) read withs. 5(2) ofthe Prevention of Corruption Act and sentenced to one year's rigorous imprisonment and a fine of Rs. WO/-, each. It was not thought necessary to record a separate conv1c!Ion under s. 465, Penal Code.

The sentences on all the counts were directed to run concurrently.

On appeal by the convicts, the High Court set aside their conviction under ss. 420, 468 and 471, Penal Code.

It, however, maintained their conviction and sentence in respect of the offence under s. l 20B,

Penal Code and s. 5(1)(d) read with s. 5(2) of the Prevention of Corruption Act.

It further altered the conviction of the appellant under s. 468/471, Penal Code to one under s. 465, Penal Code and reduced the sentence on this count to six months' rigorous imprisonment with a fine of Rs. 200/- only.

Hence this appeal by the convicts, Bajrang Lal and Ram Kishan.

Bajrang Lal has since died.

Ram Kishan's appeal only survives for decision.

The first contention of Shri A. N. Mulla appearing for the appellants is, that Ram Kishan and Bajrang Lal were not 'public servants' within the definition of the term in s. 21, Penal Code. It is urged that the High Court was wrong in assuming that at the relevant time every person in the service or pay of the Government was a 'public servant' within the meaning of clause (10) of s. 21, Penal Code.

Sub-Clause (a) of clause (10) of s. 21, it is pointed out, was introduced by the Amending Act 40 of 1964 and not by Act 2 of l 9S8 referred to by the High Court in its judgment. In the alternative, it is submitted that clause (9) of s. 21 a1so, as it stood at the relevant time, did not cover the case of. the appellants, Ram Kishan and Bajrang Lal, because they were mere khalasis or menial servants and not "officers in the service or pay of the Government", within the contemplation of that clause.

We are unable to accept these contentions.

True, that the High Court has wrongly referred to the Amending Act of 1958.

The relevant period is from December 23, 1961 to April 11, 1963.

Gause (9) of s. 21 as it stood at that time, was as follows :

"Ninth.-Every officer whose duty it is, as sach officer to take, receive, keep, or expend any property on behalf of the Government or to make any survey, assessment, or contract on behalf of the Government or to execute any revenue-process, or to investigate, or to report, on any matter affecting_ the . pecuniary interest of the Government, or to make, authenticate or keep any document relating to the pecuniary interests of the Government or to prevent the !nfraction of any law for the protection of the pecuniary mterests of the Government and every officer in the service

or pay of the Government or remunerated by fees or commission for the performance of any public duty."

The question, is whether the appellants, Ram Kishan and Bajrang Lal, were "officers in the service or pay of the Government" within the meaning of this clause 'I The term 'officer' has not been defined by the Code.

Mr. Mulla contends that the appellants were not "officers" withiO the contemplation of this clause, because-( a) they were mere Khalasis and, as such, were not exercising any delegated function of the Government, and (b) they were never appointed to P"form

any public duty in the office of the Works Manager.

In this connection. reference has been made to Reg v.

Ramajivrao( 1) and N/zamuddin v. E. ( 2).

In Ramajivrao's case (supra), the Bombay High Court held that the word 'officer' in this clause means "some person empkyed to exercise, to some extent and in certain circumstances, a delegated function of Government.

He is either armed with some authority or representative character, or his duties are immediately auxiliary to those of some person who is so armed."

Ramajivrao's case was noticed by a Bench of the Calcutta High Court in Nizamuddin v. Queen Empress (supra) and it was ruled that an 'officer' within the terms of s. 21, clause Ninth of the Penal Code is one who is appointed to some office for the performance of some public duty.

Accordingly, it was held thot a pe0n attached to the office of the Superintendent of the Salt Department was an officer in the service or pay of the Government and as such was ll public servant.

The meaning of the term 'officer' was considered by the Lahore High Court also in Abad Shah v. Emperor (3). It was opined that the term 'officer' in the aforesaid cluse means a functionary or holder of some officium or office, however humble to whom in some degree are delegated certain functions of the Government.

These cases were considered by this Court in G. A. Mnnterio

v. State of Ajmer( 4 ). Approving the law enunciated by the Calcutta High Conrt in Nizamuddin's case (supra), the Court speaking through Bhagwati J .. explained the position, thus :

"The true test. ... in ordr to determine whether a person is an officer of the Government is :

(1) whether he is in the service or pay of the Government. and

(2) whether he is entrusted with the performance of any public duty, ---

(1) (1875) 12 Born. H.C. R. 1.

(3) A.I.R. 1918 Lah. 152.

(2) I.LR. 28, Cal. 344.

(4) [19561 S.C.R. t<:<.

~ '

If both these requirements are satisfied it matters ot the least what is the nature of his office, whether the duties he is performing are of an exalted character or very humble indeed."

By the application of these tests, in the above case, it wa~ held that a Class III servant working as a Metal Examiner under the control of the Railway Works Manager, was an "officer" of the Government within the meaning of s. 21, Clause Ninth, Penal Code.

The instant case is within the ratio of the decision in

G. A.

Monterio v. State of Aimer (supra). As was pointed out in that case, the Railway Works Manager is an officer of the Government, armed with some amhor, ty or representative character qua the Government.

The appellants were holding the posts of Khalasis in the C Railway Carriage Section, but were actually allowed to deal with the preparation and issuance of Railway Passes in the Office of the Works 1 Manager and as such they were, in fact, performing public duties

and d1scharg.ng publ:c functions auxiliary to those of the Works Manager and his office.

On "the strength of the evidence" and the statement of the accused, the trial court unhesitatingly found it as an "established fact that Bajrang Lal and Ram Kishan worked in the D Pass Section".

This finding which is borne by the evidence of Sadhu Ram (P.W. 32), the Head-Clerk of the Works Manaer, Mohd.

Sajjad (P.W. 19) a.ld Mohd. Ibrahim (P.W. 34), was affirmed by the High Court.

We also find no good reason to disturb this concurrent finding of fact.

Thu.s, the position that emerges is that although Bajrang Lal and E Ram K1shan were not formally appointed -to work in the Pass Section, the posts held by them being of Khalasis drawing pay from the Railway Carriage Secti0n. their services were actually ut lised in the

Pass Section of the Office of the Works Manager.

The appellant was, therefore, in actual possession of the situation of a public servant, and in view of Explanation II to s. 21, Penal Code, would be a 'public servant' notwithstanding the defect in his right to hold F that situation.

We therefore negative the contention of Mr. Mulla and hold that the •appellant Ram Kishan was a 'public servant' within the 9th Clause of s. 21, Penal Code a!!' it stood at the material time. Consequently, the appellant's conviction for an offence under s. 5 (I) ( d) read with s. 5(2) of the Prevention of Corruption Act cannot be G assailed on that score.

It is next contended on behalf of the appellant that he had admitted only the execution of the body writing of the application Ex. P-46, and not the signature thereon purporting to be that of Narain.

The point sought. to .be made out is that without signature, the body writing of the apphcat1on would not be a "document" as defined in s. 29, nor would the mere scribing of the application amount to "forgery" under s. 463 or to 'making a false document' within the meaning of s. 464, Penal Code. ·

502 SUPREME COURlr REPORTS

(1976] 3 S.C.R.

I The contention mnst be repelle, tl.

There is no record before us to show that Ram Kishan appellant' had specifically denied the execution of that part of the writing which purports to be the signature of "Narayan" applicant.

No request was made by the appellant for summoning the original record.

On the contrary, from the judgments of the courts below, it appears that Ram Kishan had categorically admitted that the application, Ex. P-46, had been written by him.

Narayan (P.W. 6) testified that he had made no such application, nor had he ever asked the appellant to scribe it.

The witness unequivocally stated that this application does not bear his signature.

Narayan's evidence has been believed by the courts below.

There was thus no doubt whatever that this application including the signature thereon, is a false document. The passes, Ex. P-47, P-48, P-78' and the receipt, P-88, were also proved to be in the hand of the appellant. The charge under s. 465 was thus fully brought home t(} him.

The charge of criminal conspiracy to prepare and obtain false Railway Passes with a view to cause wrongful loss to the Railway had been fully established against R, am Kishan and Bajrang Lal. The forged Passes Ex. P-4 7 and P-481 were admittedly in the hand of Ram Kishan, and the forwarding1 endorsement on the application Ex. P-46 pursuant to which these [orged Passes were prepared, was proved to be in the hand of Bajrng Lal.

Kishan (P.W. 20) who was supposed to have.made and signed this forwarding endorsement, testified that this writing did not bear his signature.

Again, Bajrang Lal made the false entries in the Railway Pass Book in respect of the Passes, Ex. P-4 7, P-48, Ram Kishan then prepared t)i_e acknowledgement receipt on Ex. P-140 showing that these Passes had been delivered to the persons in whose names they were prepared.

Similarly, the forged application, Ex. P-78, was prepared by Bajrang Lal and the Pass relating thereto was prepared by Ram Kishan. The slip in repect of this forged Pass is also in the band of Ram Kishan. Another instance was furnished by the application Ex. P-87 which was in the hand of Bajrang Lal, while the acknowledgement receipt Ex. P-88 was prepared by Ram Kishan.

From the concerted conduct of Bajrang Lal and Ram Kishan in preparing these forged writings, it could unerringly be inferred that they had agreed to prepare forged RaHway Passes with the intention of causing wrongful loss to the Railway.

And, in pursuance of the conspiracy they did prepare the fotged passes aforesaid.

' We therefore find no good re4son to disturb. the conviction of the appellant recorded by the High :Court in respect of offences under ss. 120B, 465, Penal Code and' s. 5(2) of the Prevention of Corruption Act.

Lastly Mr. Mulla submitted that the appellant was only a small fry.

The bigger fish, the clerks had gone scot free and therefore it was unfair to inflict so harsh a sentence on the appellant Might be that some bigger partners in the crime have escaped punishment

,\ ..

; \

for want of proof. But the sentence awarded to the appellant is A the minimum prescribed by law for an offence under s. 5(2) of the Prevention of Corruption Act.

The Court had no discretion to . inflict a lesser sentence on that count.

For tbe foregoing reasons, we dismiss this appeal and uphold the conviction and sentence of tbe appellant.

V.P.S.

Appeal dismissed.

BAJRANG LAL & ANR

STATE OF RAJASTHAN

February 24, 1976

R. S. SARKARIA

Prevention of Corruption Act

s. 5(1)(d)

Indian Penal Code

s. 21

s. 5(1)(d} and (2)

Prevention of Corruption Act, 1947

Section 21

s. 21

s. 5(1)(d)

Prevention of Corruption Act

A. N. Mulla

S. K. Mehta

M. Qamaruddin

Subhag Mal Jain

G

SARKARIA

High Court of Rajasthan

Sita Ram

Ganesh Ram

April 11, 1963

Bairancr T al

Ram Kishan

December 23, 1961

Bajrang Lal

Narain

Kishan

Bajran

ss. 120B

Penal Code

s. 5(1)(d)

s. 5(2)

Prevention of Corruption Act

Sita Ram

Lal

ss. 420, 468 and 471

Penal Code

s. 120B

Penal Code

s. 5(1)

Prevention of Corruption Act

s. 465

Penal Code

ss. 420, 468 and 471

Penal Code

Penal Code

s. 5(1)(d)

s. 5(2)

Prevention of Corruption Act

s. 468

Penal Code

s. 465

Penal Code

A. N. Mulla

s. 21

Penal Code

s. 21

Penal Code

s. 21

s. 21

Ram Kishan

Bajrang Lal

s. 21

Mulla

Ramajivrao

Bombay High Court

Calcutta High Court

s. 21

Ninth of the Penal Code

Lahore High Court

Calcutta High Conrt

Nizamuddin

Bhagwati

s. 21

Penal Code

Sadhu Ram

Mohd.

Sajjad

Mohd. Ibrahim

E Ram K1shan

s. 21

Penal Code

s. 21

Penal Code

s. 5

s. 5(2)

Prevention of Corruption Act

Narain

s. 29

s. 463

s. 464

Penal Code

Narayan

s. 465

R, am Kishan

Bajrng Lal

ss. 120B, 465

Penal Code

s. 5(2)

Prevention of Corruption Act

s. 5(2)

Prevention of Corruption Act


UNION dF INDIA

STEEL STOCK HOLDERS' SYNDICATE, POONA

March 1. 1976 [P. K. GoswAMI AND s. MuRTAZA FAZAL Au, JJ.J

I Railways Act, 1890 (as amended in 1961)-Ss. 72, 73, 76, 78(d)-Scope of-Delay in deliverv of Roods-Loss of inter:.est on capital-If, could be measure of damaRes-If Railways Act overrides Contract Act.

A consignment of iron 12; oods was booked by the respondent by rail on December 15. 1961. The due date of delivery under the contract or usage of the railways was December 25. 1961. As the goods were diverted, they were actually delivered on July 21, 1962. The respondent filed a suit for damages alleging negligence on the pait of the railway in that, by reason of diverting the consignment. there was inordinate delay in its delivery which resulted in loss to it by way of interest on capital. The trial court decreed the suit but in the matter of damages by way of loss of interest it gave 6% per annum instead of 12 % claimed by the respondent. The District Court dismissed the appellant's appeal, and the High Court dismissed the second appeal in limine.

On appeal to this Court it was coq.tended for the appellant that (i) since the cause of action was based on delyed delivery, the case was covered bv the Railway Act, as amended in 196l, that the applicable section is s. 76 and that. since the conditions mentiorj.ed therein had not been fulfilled. th~ respondent was not entitled to a decree: {ii) that the respondent could claim for loss of profit or loss of mrket as the same was expressly barred by s. 78(<l) oi the new Act; and {iii) that the respondent's claim for damages was not actionable in the absence of any agreement providing interest on capital as a measure of damages. It was contended for the respondent that even if s. 76 barred the remedy, IO$S of profit or market resulting from delayed delivery \\.'ould amount to "deterioration" contemplated by s. 76.

Dlc; missing the appeal to this Court,' HEW : In view of the finding of fact arrived at by the courts below, the respondent is entitled to damages. f515 Bl

1. (a) The case is covered by the new Act and not by the old Act as contended by the respondent. There could be no question of liability arising when the goods were booked and the contract was entered into between the resp<'ndent and the railways. because, there was no presumption that the contract would result in breach.

[512B-C] In the instant case, the cause of action arose when the consignment was delivered to the respondent on July 21. 1962, that is, after the neW Act came into force.

The reasonable transit period having expired on January 1. 1962 the breach occurred after the new Act came into force.

(b) Section 76 of the Act has a very limited scope : it contemplates clearly those cases which fall within the contingencies contemplated bv it.

These contingencies refer to certain physical factors. viz : actual and ohysical loss. destruction, damage or deterioration of goods. Where due to dt>lav on the part of the railway there is physical d¢terioration or diminishing of the value of the goods. the plaintiff cannot claim damages by way of loss of profits or loc; s of market plus damages sustaint>d by the actual loc; s or de"tPrioration of the goods.

In such a case the plaintiff can claim only the actual loss in the value of the good<I c::iuc; ed by destruction, damage or deterioration and not loss of profit. f512F-H] ( c) The word .. deterioration" is ui:.ed in its ordinarv parlance, so as to include within its ambit the actual phrsicaT act of deterioration. namely, the change for the worse in the thing itself., [514E-F]

i \

UNION V. STEEL STOCK SYNDICATE 505

B./. Railway Co. Ltd. v. Piana Mal Guiab Singh A.I.R. 1925 Lah. 255, A approved.

1 G./.P. Railway Co. & Others v. luRal Kishore Mukat Loi A.l.R. 1930

All. 132 and Union of India and others v.

Messrs. Sheobux Satya11arayan, A.J.R. 1963 Orissa 68, not approved.

(d) The words "loss, destruction, damage or deterioration" occurring in s. 76 must be read ejusdem generis to indicate the actual and physical loss or change in the JZ:Oods contemplated by that section. In the instant case, since there was no physical deterioration of the goods at all which were delivered in the same condition in which they were booked. the case of the respondent tloes not fall within the four corners of the section. Nor can the respondent take advantage of s. 76 relying on the word "deterioration" because of the finding of negligence entered by the courts below.

[514G]

H s. 76 does not apply then s. 78 would have no application because that

section starts with a non-obstante clause. [513E-F] C

(2) Section 78(d). which flows out of s. 76, provides that the railway administration shall nOt be responsible for any indirect or consequential damages or for loss of particular market. 1t merely incorporatesthe measure of damages ao contemplated by s. 73. [513B]

In the instant case as the respondent had not claimed loss of n1arket or remote damages the question of application of s. 78(d) did not aric:e.

3(a) The case of the respondent is clearly taken out_of the ambit of ss. 76 D and 78.

Hence its suit for damages could not be defeated on the ground that it was barred by s. 76 or s. 78 of the Act. [515A-B]

(b) It is difficult to accept the contention of the appellant th:it, by virtue of ss. 72 and 73. any contract entered into between the parties and the liability of the railway was governed purely by the provisions of the Railway Act and not by the terms of the contract between the parties. [5JOG]

The Indian Contract Act provides certain elementary conditions for a binding i; ontract but does not provide any particular form of contract. The fact that where the Government is a party to a contract, the particular form in which the contract is to be executed has been provided for by the Constitution, did not mean that the provisions of the Contract Act stand superseded by the Constitution or in this case by the Railway Act. Section 72 does nothing more than provide for a particular form in which the contract is to be executed and it enioins that such a form will be prescribed by the railway administration and approved by the Central Government. [510H-511-A]

(c) Section 73 lays down that the Railway administration shall be respoJ; I~ sible for the loss, destruction, damage, deterioration or non-delivery except in certain cases Which amount to vis ma; or in which case also the Act places responsibility on the railways if it did not prove that it had used reasonable foresight Rnd care in the carriage of goods. The section, while converting the liability of the railway administration from that of a carrier to that of an insurer, has imposed heavier responsibility on the railway administration.

[511F-G] 4(a) There is no auestion of s. 73 of the Contract Act over-riding the provisions of the Interest Act because in the instant case the Interest Act has no application at all inasmuch as no interest is , clai_med by the plaintiff; but interest has been used as a measure to determine the compensation which the respondent could seek against the appellant for its negligence in causing inordinate delay in the deliverv of the oods. The respandent had only claimed nominal

damaes for the loss because of the amount of money locked up for more than six months due to late delivery. [5 l 7B]

(b) The courts below rightly found that the railway, was guilty of gross H

:aehtence. As a common carrier the railway is resPonsible for breach of contract. There was absolutely no reason for the railway t" ";"ert the consign. men! to a place which did not fall on the route at all. [5170]

A ( c) The trial court was fully entitlecl to scale down the amount of jnte\est

from 12% to 6%. [517Fl

Union of India v.

Watkins Mayore & Company A.LR. 1966 S.C. 275 distinguished. \

Digbijai Nath v. Tirbeni Nath Tewari A.I.R. 1946 All. 12 and The Official Receiver, Calcutta High Court & Anr. v. Baneshwar Prasad Singh & Anr. A.LR. 1962 Pat. 155 approved.

5. The present appeal was concluded by findings <>f fact.

But onJhe proved facts some clear questions of law arose! for decision and, therefore, this was not a case in which the High Court should have dismissed the appeal in /imine.

[507Fl

CIVIL APPELLATE JURISDICTION: Civil Appeal No. !237 of 1968.

From the Judgment and Order dated the 24th August, 1967 of the High Court of Judicature at Bombay in Second Appeal No. 798 of 1967.

Lal Narain Sinha, Solicitor Gen¢ral for India, S. N. Prasad, and Girish Chander, (Not present), for the appellant.

M. N. Phadke, P. C. Bhartari, J. B. Dadachanji, 0. C. :Wathur and Ravinder Narain, (Not Present), for the respondent.

The Judgment of the Court was delivered by

FAZAL ALI, J .-This is a defendant's appeal by special leave against the judgment and decree of the High Court of Bombay dismissing its second appeal in limine by its order I dated August 24, 1967.

Tue appeal raises important and lnteresting questions of law relating to the interpretation of some of the provisions of the Indian Railways Act pertaining to the liability of the Railways for breach of contract.

The plaintiff/respondent brought a suit for recovery of an amount of Rs. 2,378.65 nP being the damages for breach of contract resulting from delayed delivery of the goods consigned by the plaintiff through the defendant Railways to be delivered at Poona.

The plaintiff which is a furn carrying on its business dealing in iron goods booked a consignment with the defendant on December 15,, 1961 at Bhillai to be carried to Poona and to be delivered therein to the consignee safely and in good condition.

The defendenf Railways accepted the offer under a Railway Receipt dated December 15, 1961. It appears that there was some delay in the delivery of the goods at Poona and on enquiries made by the plaintiff it appeared that till May 9, 1962 the goods had not been delivered at all.

Thereafter the plaintiff served a notice of claim and of suit dated May 9, 1962 oh the Railway Administration. Soon after the service of the notice the consignment was delivered on July 21, 1962.

According to the plaintiif under the contract or the usage of the Railways the normal period of delivery was ten days and as defendant had committed an inordinate delay in delivering the goods it was liable to pay damages to the plaintiff.

Tue plaintiff, however, calculated the damages by way of interest at the rate of 12% per annum on the Jocked up capital of Rs. 27.332-44 which due to rise in prices has swelled to Rs. 35,476-27 nP.

The plaintiff further alleged that the delay in the delivery was due to gross negligence of the defendant Railways which instead of sending the g?ocls direct from Bhillai to Poona

diverted them to Aurangabad where the consignment had to be loaded A in a meter-gauge tram and then t0 a broad-gauge lmo and it was _only after tile acrendant received the nonce from the plamtitl that it expedi.ed the delivery of the goods. The derendant Ra1hvuys contested the suit on the ground that there was no inordinate delay, nor there was any contract that the goods were to be delivered within ten "

<lays. lt is also averred that the plaintiff had led no evidence to show

/ that there was any loss of profits or rise in the market price.

The de- B ' fondant further alleged that the plaintiff was not en.titled to claim interest • as damages. The Trial Court accepted the plaintiff's case in toto and found-

(1) that there was an inordinate delay in the delivery of the goods belonging to the plaintiff at Poona;

(2) that the goods were first diverted to Aurangabad, alc though the route from Bhillai to Poona lay via Nagpur and Aurangabad does not fall on the route at all; and

(3) that the defendant was guilty of gross negligence and was, therefore, responsible for loss for delay or devialion in carrying the goods.

The Trial Court, however, found that the figure of Rs. 27,332-44 the D original amount which was deposited by the plaintiff in the Bank against the goods should be taken as the basis for calculation of damages and after caiculating interest at the rate of 6% per annum the plaintiff was awarded a sum of Rs. 1250/- including the notice charges and passed a decree for this amount in favour of the plaintiff.

The defendant then filed an appeal before the District Judge,, Poona E who upheld the finding of the learned Munsiff and dismissed the appeal.

A second appeal taken by the defendant to the High Court of Bombay was also dismissed in limine and hence this appeal by special leave.

Normally it would appear that the appeal was concluded by findings of fact but we find that on the proved facts some clear questions of law arise for decision and therefore this was not a case in which the High Court should have dismissed the appeal in limine.

In support of the appeal the learned Solicitor-General submitted

thre~ points before us :

( 1) that as the cause of action of the plaintiff is based on the delayed delivery which arose at the most on January 1, 1962, the cse of the plaintiff is covered by the provisions of

.G the new Railways Act as amended by Act 39 of 1961, which is an exhaustive Code in itself providing a self-contained machinery in order to detemine .the Jiability of the Railways ;. and as the cond1t10ns menl!oned m s. 76 of the Railways Act have not been fulfilled the plaintiff is not entitled to any decree; • ( 2) that at any rate since the plaintiff has claimed interest H as damages, in the absence of any agreement providing for such an interest, the plaintiff's claim is not actionable at law; and

(3) that the plaintiff cou!d

1 not claim for loss of profit or loss of market as the same is expressly barred by s. 78( d) of the new Railways Act.

As an alternative argument it was ! also pleaded that the plaintiff has; not averred in his plainu that t!tee was any rise in the prices ecause the goods belonging to the plamtiff were a controlled commodity an~ could not be sold without a permit. Before claiming loss of profits 1t was the bounden duty of the plaintift to allege that he had been granted the permit to sell the goods.

Mr. Phadke appearing for the respondent has repelled the contentions e>f the appellant on the ground that the new Railways Act does not reduce or diminish the liability !of the railway administration for breach of contract but in fact the Act seeks to increase the liability.

Secondly it was submitted that even if the case of the plaintiff does not fall within the four corners of s. 76 of the new Railways Act, the common law right of the plaintiff to claim damages against the appellant has not been barred by the Act. Lastly it was submitted that the plaintiff ha; not claimed interest on any specified amount of money but has merely calculated the same as a measure of damages which it suffered due to the breach of contract and gross negligence on the part of the Railways which has been found by the Courts below. Finally it was contended that as the contract was entered into between the parties on Decembe1' 15, 1961, when the goods were booked at Bhillai, the liability for damages arose on that day and the case of the plaintiff would be covered by the provisions of the Railways Act before it was amended by Act 39 of 1961.

In order to answer the contentions raised by the parties it may be necessary for us to trace briefly the history of the circumstances in which the Railways Act of 1890 was amended by Act 39 of 1961. We would, for short, refer to the Railways Act of 1890 as the "old Act" and the Act as amended by Act 39 of 1961 as the "new Act". It would appear that under s. 72 of the old Act the responsibjlity of railway administration as a carrier of animals and goods was clearly that of a bailee under ss. 151, 152 and 161 of the Indian Contract Act. Jn other words, the railway administration was impressed with the duty to carry the goods with the same care and caution which a prudent owner would apply in the case of his own goods. If there was any viola•ion or breach of the said care and caution expected of the Railway it would have been liable to damages. Section 72 (1) of the old Act ran thus :

" ( 1) 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, suhiect to the other provisions of this Act, be that of a bailee unner sections 151, 152 and 161 of the Indian Contract Act, 1872

(9 of 1872)."

It may be pertinent to note that su!Hection (3) of s. 72 of the old Act expressly excluded the principles of the common law of Enland or in the Carriers Act of 1865 regarding the responsibility of common carriers. After onr country became free and the Railways entered the commercial field as one of the important wings of the Government, there

• l

appears to be a public dernan~ for making the Railway diistration A as a public body to take upon itself more onerous responst?!hues where the nghts of the free citizens were mvolved. Under the Bnttsh Govern- I rncnt most of the Railways were owned by private companies whoso ownership was to be extinguished after lapse of a particular period. Soon after the freedom all the Railways were taken over by the Central Gov- 1 ernrnent and run by it. In view of the new problems facing the Govern- B rnent and the public demand for a change in the Jaw, the Government appears to have decided to convert the responsibility of the railway • from that of a carrier to that of an insurer. But before doing this, the Government appointed a Committee called the Railway Freight Struclure Enquiry Committee (1956-57) which recommended that the responsibility of the Railways in India should be changed to that of a cornman earner instead of a bailee. The Committee which had been asked to cx[1 mine the statutory provisions dealing with the responsibility of railways as common carriers was of the opinion that the public would c

derive much satisfaction from a radical change from bailee's responsi- 'f

bility to that of a common carrier, and that this change was bound to tone up the administrative machinery of the railways in respect of effec-

•• tive prevention of transit losses. In view of the recommendations of the ili said Committee the Government introduced a bill in the Lok Sabha for amending some of the provisions of the Railway Act in order to irnplc- D ment those recommendations.

From a perusal of the debates of the Lok Sabha when this Bill was introduced it would appear that the Deputy

Minister of Railways explaining the objectives of the Bill observed as follows :

"Taking into account all aspe<:ts of the problem, it is proposed that railways should assume the responsibility of a corn- E rnon carrier instead of that of a bailee. As bailees, the railtways are required to take as much care of the goods entrusted to them for carriage as a man of ordinary prudence would under similar circumstances, take of his own goods of the sarn~ bulk, quality and value.

However, closely following the legal position in the F United Kingdom, it is proposed that the basic responsibility of our railways for loss, destruction or deterioration etc. of anirnals or goods be as set out in the proposed section 73.

W.hen the railways assume this responsibility, broadly speakmg, they will be liable for loss of or injury to aoods while in transit by rail, arising from any cause whatso.;'ver, unless G such loss or injury is proved by the railways to have been caused by an act of God, or by an act of war, or by an act of l'

p_ubli~ enemies or is proved to be consequence of inherent ; vice m the thing carried or is attributable to the consignor's own fault.

Even where the loss is proved by the railways to have been • caused by the excepted perils, just referred to by me, the rail- H ways will not be absolved of their responsibility unless they further prove that they had nsed reasonable forethought and I

care in the carriage of animals or goods. - 18-L522SCl/76

The result of the changes proposed will be that the railways will be paying claims for compensation in many cases where they are not paid at present, for example, in cases of losses due to running train thefts, damage by wet in transit in spite of bailee's care having been taken etc."

This was the clear background against which the new Act was passed.

Even the statement of objects and reasons, the relevant parts of which may be extracted as under,, shows the main object of the new Act :

"The Railway Freight Structure Enquiry Committee ( 1956-57) has recommended that the responsibility of the railways in India as carriers of animals and goods, which is at present that of a bailee, should be changed to that of a common carrier. There is also a public demand for such a change. After a careful and detailed examination of the question, the Government have decided to accept the Committee's recommendation.

x x x x

(a) The Bill seeks to make it clear that in the case of through booking of consignments over an Indian Railway and a Foreign Railway, the responsibility of the Indian Railway as a common carrier would extend only over that portion of the carriage which is over the Indian Railway;

x x x x

( c) Other amendments included in the Bill are intended to rectify certain defects or ambiguities in the existing prcwisions of the Act which were revealed by experience in its working.·•

It appears that the old s. 72 was completely deleted including sub-s. ( 3) which expressly prohibited the principks of the common law of England for determining the liability of the Railways as common carriers. In

stead the new s. 72 laid down the form in which a contract was to be executed between a consignor and the Railway and a risk note was pro

vided for by clause (b). It may be necessary to note an argument put forward by the learned Solicitor-General on this point. It was submitted that by virtue of the provisions of ss. 72 and 73 of the new Act the statuto superseded any contract entered into between the parties and the liability of the Railways was governed purely under the provisions of the Railways Act and not under the tcrn1s of contract which may have been entered into between the consignor and the Railway. \V~ are, however, unable to accept this argument. It is well settled that while the Jndian Contract Act merely provides certain elementary conditions under which the contract becomes binding on the parties, it does not _ provide any particular form or condition of a contract. It is, therefore, clear that the parties to the contract may agree to a particular form or condition or of mode in which the contract is to be executed. In case where the Governn1ent enters into a contract with a person or vice versa a particular form in which the contract is to be executed has been provi- H

ded for even by the Constitution and the contract has to be in that form.

f'

This does not mean that the provisions of the Contract Act stand superseded either by the Constitution or by the Railways Act which provide for a particular mode or a fotm in which the contract has to be entered into. Section 72 therefore does nothing more or nothing less than provide for a particular form in which the contract is to be executed and it enjoins that such a form will be prescribed by the railway administraction and approved by the Central Government. The provisions of s. 72 of the new Act run thus :

"72. Any person delivering to a railway administration any animals or goods to be carried by railway shall-

( a) if the animals or goods are to be carried by a train intended solely for the carriage of goods, or

(b) if the goods are to be carried by any other train and consist of articles of any of the following categories, namely:-

( i) articles carried at owner's risk rates. (iil articles ol a perishable nature.

(iii) articles mentioned in the Second Schedule.

(iv) articles in a defective condition or defectively packed.

(v) explosives and other dangerous goods.

execute a note (in this Act referred to as the forwarding note) in such form as may be prescribed by the railway administration and approved by the Central Government, in which the sender or his agent shall give such particulars in respect of the animals or goods so delivered as may be required".

It is not possible from the provisions of s. 72 to spell out th~ principle that the new Act completely supersedes the provisions of the Contract Act both in respect of the conditions and the liability.

Section 73 of the new Act lays down that the railway administration shall be responsible for the loss, destruction, damage, deterioration or non-delivery except in certain cases which amount to vis major.

But there also the proviso confers responsibility on the Railways for loss etc., if the railway administration does not prove that it has used reasonable foresight and care in the carriage of the goods.

The Solicitor-General contended that s. 76 of the new Act is the provision which deals with delay in the delivery and the plaintiff can succeed only if his case falls within the four corners of the section.

Beore answering this question, it may be necessary to dispose of a pomt on which the counsel for the parties have joined issue.

According to the Solicitor-Gene.ral the liability of the Railway would be governed by the new Act masmuch as the cause of action has arisen after coming into force of the new Act.

Counsel for the respondent, however, submits that the matter will be governed by

the old Act because the liability of the Railway. a_rose when he. gaod~ were booked in December 1961.

In our opm1on, there 1s a very short answer to this question. The plaintiff has clearly and categorically pleaded in paragraph-2 of the plaint that the cause of act10n arose at Poona when the complete consignment was delivered to the plaintiff on July 21, 1962 i.e. after the new Act had already come into force.

Further more, it is also allegea that the reasonable and normal transit period expired on January 1, 1962. In these circumstances, therefore, according to the plaintiff itself, the breach occurred only after the new Act had come into force-whether it was January

I, 1962 or thereafter.

There can be no question of the liabilify arising when the goods were booked and the contract was entered into between the plaintiff and the Railway, because ther~ is no presumption that the contract would result in breach. The plaintiff would be entitled to damages only when there was a breach of contract and if the said breach,, even according to the plaintiff itself. occurred on January 1, 1962 or thereafter, then it is manifest that the case -would be covered by the new Act and not by the old Act.

The first contention put forward by the Solicitor-General was that the case of the plaintiff does not fall under any of the contingencies contemplated by s. 76 of the new Act. Section 76 runs thus :

"76. A railway administration shall be responsible for loss, destruction, damage or deterioration of animals or goods proved by the owner to have been caused by delay or detention in their carriage unless the railway administration proves that the delay or detention arose without negligence or misconduct on the part of the railway administration or of any of its servants."

It is submitted that although there was delay in the delivery of the goods on the part of the railway administration, but the railway administration would be responsible only if !he plaintiff further proves that there has beeu loss, destruction, damage or deterioration of the goods by virtue of the delay.

It is true that the plaintiff has. not alleged that there was any physical loss, destruction, damage or dete.rioration of the goods, but that, in our opinion, does not put the plaintiff out of court.

Section 76 appears to have a wry limited scope : it contemplates clearly those cases which fall within the contingencies contemplated by s. 76. These contingencies refer to certain physical factors, viz., actual and physical loss, destruction, damage or deterioration of goods. For instance, where the goods worth Rs. 10,000/- due to delayed delivery have sustained deterioration as a result of which their value has gone down to Rs. 5,000/- then once this fact is proved the railway administration shall be liable for such a loss or the value of such deterioration. We are of the opinion that s. 73 of the new Act, while converting the liability of the railway administration from that of a carrier to that of an insurer, has imposed heavier responsibility on the railway administration.

The history and the object with which the radical provisions of the new Act were introduced bear testimony to change of the nature

<lf the liability of the railway administration. But in order to avoid the payment of double damages, ss. 76 and 78 have been inserted. ' In other words, where due to delay on the part of the Railway there is physical deterioration or diminishing of the value of tiie goods, the plaintiff cannot claim damages by way of loss of profits or loss of market pfos damages sustained by the actual loss or deterioration of the goods.

In such a case the plaintiff can claim only the actual Joss in the value of the goods .caused by destruction, damage or deterioration and not)oss of profit. Section 78(d) which flows out of s. 76 clearly provides that the railway administration shall not be. respon- • sible for any indirect or consequential damages or for loss of particular market.

The Solicitor-General, therefore, rightly contended that in cases falling squarely within the four corners of s. 7 6 of the new Act, s. 78(d) will apply.

In facts. 78(d) merely incorporates the measure of damages as contemplated by s. 73 itself. It is well settled that the liability of an ordinary carrier even in the English 'f common law does not extend to a damage which is indirect or remote.

Loss of profit or loss of a particular market has been held by a number of decisions to be a remote damage and can be awarded only if it is proved that the party which is guilty o! committing the breach was aware or had knowledge that such a loss would be caused.

Section 78 ( d), however, seeks to bar the remedy of this kind of damage.

In the instant case, however, as the plaintiff itself has not claimed .Joss of market or remote damages, the question of application of s. 78(d) does not arise. Moreover, in the instant case, it is conceded that there was no physical deterioration of the goods at all which were delivered to the consignee at Poona in the same condition as they were booked from Bhillai by the plaintiff.

In these circumstances, the case of the plaintiff does not fall within the four corners of s. 76, nor does it fulfil any of the categories mentioned therein.

If s. 76 does not apply to the facts of the present case, then s. 78

V.'ill also have no application,, because s. 78 starts with a non obstru1te olause "Notwithstanding anything contained in the foregoing provisions of this Chapter, a railway administration shall not be responsible".

We, therefore, agree with the learned counsel for the respondent that under the new Act th_e liability of the Railway has been increased so as to take upon itself the responsibility of a common carrier.

Counsel for the respondent submitted that even if s. 76 barred the remedy of the plaintiff, the fact that due to delay in delivery there was loss of profil or loss of market would amount to "deterioration

as ontemplated by s. 76 of the new Act. In support of this content10n, the learned counsel relied on a decision of the Allahabad High Court in G.l.P. Railway Co. & others v. Jugul Kishore Mukai Lal(l) where Sulaiman, Ag. CJ., as he then was, observed as follows: • "Tt is clear to us that the meaning of the word "deterioration" in s. 161 which imposes the liability on the rililway company must be the same as in risk-note form B which lays

(11 \ !. 'l. IJJ l A'l. 112.

down the special conditions under hich. the . rai!;-vay co.mpany is protected.

In both these detenorallon resultmg from a delay in tendering the good is contemplated: x x. x We therefore accept the view expressed by Mukeri1, J., in the unreported case and hold that the word "deterioration"

is wide enough to include depreciation in value on account of a fall in the price of the goods."

The same view appears to have been taken by the Orisa High Court in Unioh of India and orthers v. Messrs. Sheobux Satyanarayan (') where Misra, J., as he then was, observed as follows :

"Though there was some difference of opinion as to the import of the word "deterioration" used in section 72 of the Indian Railways Act and in section 161 of the Indian Contract Act, the position is now well settled that it is wid0 enough to include depreciation in value on account of a fall in the price of the goods."

As against this a Division Bench of the Lahore High Court in R. I. Railway Co. Ltd. v. Diana Ma! Guiab Singh(2) observed as follows :

"The 'deterioration' of a thing, whether it be in quality or in value, implies in ordinary parlance a change for the worse in the thing itself.

If a thing is worth less than it was before only because the market rate has gone down it would be correct to say that it has depreciated in value, but not that it has deteriorated."

Having regard to the background and the setting in which the word

"deterioration" occurs in s. 76 of the new Act it seems to us that the parliament intended that the word should be used in the ordinary parlance and in a restricted sense so as to inculde--within its ambit the actual physic&) act of deterioration, i.e. the physical P.art of it, namely, the change for the worse in the thing itself as very aptly F put by Martineau, J., in the Lahore High Court judgment referred to above.

We must seek to draw a clear distinction between a physical deterioration of a thing and depreciation in its value according to market price.

These are two separate concepts having separate ingredients. The words used in s. 76 of the new Act, namely, "loss, destruction, damage or deterioration" must be read as ejusdem generis so as to indicate the actual and physical loss or change in the goods G contemplated by s. 76. In these circumstances, therefore, with due respect, we are unable to agree with the somewhat broad view taken by the Allahabad High Court and followed by the Orissa High Court in the cases referred to above.

We, on the other hand, prefer to adopt the view taken by the Labore High Court in the case referred to above. In this view of the matter, it is clear that the word "deterioration" used in s. 76 refererd to the physical and actual deteriora- H tion of the goods which has admittedly not taken place in the present case.

The plaintiff cannot take advantage of s. 76 relying on the

(I) A.LR. 1963 Orissa 60.

(2) A.LR. '1925 Lah. 255.

word "deterioration" because of the finding of neglience entered by the Courts below.

The case of the plaintiff is clearly taken out of the ambit of ss. 76 and 78 and his suit for damage also cannot be defeated on the ground that it is barred by s. 76 or s. 78 of the new Act.

We are, therefore, of the opinion that in view of the finding of fact arrived by the Courts below the plaintiff is undoubtedly entitled to damages. . '..

This brings us to the second contention raised by the Solicitor- General, namely, that the plaintiff is not entitled to interest as .daages for breach of the contract. It was submitted that what the plamttff has done is to calculate interest at the rate of 12 % which has been reduced to 6% per annum on the amount deposited by him in the Bak which remained locked up for more than six months and to claim the same as damages.

It was contended that the plaintiff plainly could not do so in view of the Interest Act under which interest can only be charged bdore suit if so stipulated by the parties to the contract.

It is common ground that in the present case the contract between the parties does not provide for charging any interest for breach of contract.

The Solicitor-General relied on a decision of this Court in Union of India v. Watkins Mayore & Company (') where this Court observed as follows :

"Under the Interest Act, 1839, the Court may allow interest of the plaintiff if the amount claimed is a sum certain

which is payable at a certain time by virtue of a written instrument. But it is conceded that the amount claimed in this case is not a sum certain but compensation for unliquidated amount. On hehalf of the respondent it was submitted by Mr. Aggarwala that interest may be awarded under the foterest Act which contains a provision that "interest shall be payable in all cases in which it is now payable by law''.

But this provision only applies to cases in which the Court of Equity exercises jurisdiction to allow interest.

In the above case the plaintiff had brought a suit for damages claiming a particular quantified amount of Rs. 1,07,700/- as compensation for storage of over 600 tons of iron sheets for a particular period.

This quantified amount included a sum of Rs. 2,974/2/- as interest on the various sums claimed by the plaintiff as compensation, namely, godown rent, chowkidar's salary, cartage from Railway station to godown etc.

The High Court, however, granted a decree only for R,. 27 "o?.5./"o /- including the amount of ir"erest daimed by the plaintiff.

Thus this Court in that case was dealing with interest claimed by the plaintiff not as a yardstick for assessing damages but as pure and simple interest on the quant; fied amount of comoensation or damages claimed bv the plaintiff.

This Court held that the interest to the extent of Rs. 2,974/2/- as claimed by the plaintiff could not be allowed in the ahsence of there be; ng anv contract iustifving the charging of such interest. This Court was not at all concerned with a case like the present one where the plaintiff has merely claimed damages pure and simple and in order to assess the same had applied the

(I) A.LR. 1966 S.C. 275.

yardstick of charging interest at a particular rate on the locked up capital. for a period of more than six months. In these circumstances, therefore the ratio of the aforesaid decision in Watkins Mayore & Company (suprn) is not applicable to the facts of the present case,

Similarly in Bengal Nagpur Railway Co. Ltd. v. Ruttanji Ramji( 1 ) which was relied upon by this Court in Watkins Mayore & Company

(supra) the amount claimed by the plaintiff was a specified amount on the basis of which interest was charged which had the effect of increasing the damages sought for.

That was a case of a contractor who had brought a suit for recovery of the amount due from the Government Department and had added interest to the total claim made by the plaintiff.. The Privy Council pointed out that as there was no stipulation which authorized the plaintiff to charge interest on the quantified amount of damages, the plaintiff was not entitled to any interest.

Thus, in other words, the ratio of the decision in Ruttanji Ramji's case as also in Watkins Mayore & Company (supra) would apply only to such cases where interest by way of damages is claimed for wrongful detention of a debt or where the interest is claimed on a specified amount due or claimed against any debtor.

The principle adumbrated in the two cases mentioned above will not apply to cases where the plaintiff does not claim interest on a quantified amount or on damages but where the plaintiff merely calculates interest as a yardstick or measure to assess the damages which he would be entitled to.

In the instant case the Courts below have clearly found that the plaintiff had deposited a sum of Rs. 27,332-44 in the Bank scion after booking the consignment with the railway administration.

The plaintiff was a stockist and as the money in the Bank remained idle for a period of more than six months due to the delayed delivery made by the Railway on account of its negligence, the plaintiff merely claimed compensation for this delayed delivery on the basis that if the amount was not locked up it would have earned some interest which would yield some profit to the plaintiff.

Thus it is clear, therefore, that in the instant case the plaintiff neither claimed interest on any quantified amount, nor did he claim profit due to loss of lnarket.

In Digbijai Nath v. Tirheni Nath Tewari(') a Division Bench of the Allahabad High Court, while interpreting the decision of the Privy Council referred to above, observed as follows :

"We do not consider that this case is authority for the G proposition that interest cannot be claimed by way of damages for breach of a contract under s. 73, Contract Act.

All that was held in it was that interest cannot be allowed by way of damages for wrongful detention of debt. • • * The position is different where interest is claimed as part of the damages for breach of a contract.

H A similar view was taken by a Division Bench decision of the Patna High Court in The Official Receiver, Calcutta High Court and another

(1) A.LR. 1938 P.C. 67.

(2) A.1.R. 1~46 All. 12.

t •

v. Baneshwar Prasad Singh and another ('). We find ourselve in A complete agreement with the principles laid down in those cases.

For these reasons, therefore, we are of the opinion that the decision of this Court in Watkins Mayore & Company (supra) does not appear to be of any assistance to the pJ1ellant, so far as the facts of the present case are concerned.

Thus 1t 1s clear tiJat there 1s no q uestion of s. 73 of the Contract Act overriding the provisions of the Interest Act, because in the instant case the Interest Act has no application at all inasmuch as no interest is claimed by the plaintiff at all but interest has been used as a measure to determine the compensation which the plaintiff could seek against the appellant for its negligence in causing inordinate delay in the delivery of the goods.

The contention raised by tlie learned Solicitor-General on this point is, therefore, overruled.

The plaintiif is not claiming the sum decreed by way of interest but he is claiming the damages calculated on a particular basis.

As a common carrier the Railway is undoubtedly responsible for breach of contract. ln the instant case the Railway Receipt shows that the goods were booked to be carried from Bhillai to Poona which is on the

Nagpur route.

There was absolutely no reason nor any. occasion for the Railway to divert the goods to a different route and for taking the same to a different route and for taking the same to Aurangabad which did not fall on the route to Poona at all.

The Courts below, therefore, rightly found that the Railway was guilty of gross negligence.

The last question submitted by the learned Solicitor General was that the plaintiff was not entitled to loss of profit or loss of market. because the plaintiff has not pleaded anywhere that he had obtained any permit for the go9ds which were a controlled commodity and sustained loss of market. It is true that the plaintiff has not pleaded this fact, but the plaintiff has not at all prayed for any damages on the ground of loss of market or loss of profit.

The plaintiff has only claimed nominal damages for the loss which occurred to him because of the amount of money which he had deposited in the Bank and was locked for more than six months due to the delayed delivery.

The Trial Court has already scalerl dnll'n the amount from Rs. 2,378-65 to Rs. 1,250/- and we think the Trial Court was fully entitled to do so.

In these circumstances, therefore. all the contentions raised bv the Solicitor General fail and we find no merit in this appeal which is accordingly dismissed with costs.

P.B.R.

Appeal dismissed.

(I) A.LR. 1962 Pat. 155.

UNION dF INDIA

STEEL STOCK HOLDERS' SYNDICATE, POONA

March 1. 1976

P. K. GoswAMI

Railways Act, 1890

Ss. 72, 73, 76, 78(d)

s. 76

s. 78(<l)

s. 76

s. 76

July 21. 1962

January 1. 1962

Section 76

s. 76

s. 76

s. 76

s. 78

Section 78(d)

s. 76

s. 73

s. 78(d)

ss. 76

s. 76

s. 78

ss. 72 and 73

Indian Contract Act

Section 72

Central Government

Section 73

s. 73

Interest Act

Interest Act

High Court of Judicature at Bombay

Lal Narain Sinha

S. N. Prasad

Girish Chander

M. N. Phadke

P. C. Bhartari

B. Dadachanji

Ravinder Narain

FAZAL ALI

High Court of Bombay

August 24, 1967

Railways Act

Poona

December 15,, 1961

Bhillai

December 15, 1961

May 9, 1962

July 21, 1962

Aurangabad

Nagpur

District Judge,, Poona E

Railways Act as amended by Act

s. 76

Railways Act

s. 78( d)

Railways Act

Phadke

Railways Act

s. 76

Railways Act

Decembe1' 15, 1961

Railways Act

Railways Act

Railways Act

s. 72

ss. 151, 152 and 161

Indian Contract Act

Section 72

sections 151, 152 and 161

Indian Contract Act, 1872

s. 72

India

United Kingdom

section 73

s. 72

England

s. 72

ss. 72 and 73

Railways Act

Railways Act

Section 72

s. 72

Second Schedule

s. 72

Section 73

s. 76

January

I, 1962

January 1, 1962

s. 76

Section 76

Section 76

s. 76

s. 73

ss. 76 and 78

Section 78(d)

s. 76

s. 7

s. 78(d)

s. 73

Section 78

s. 78(d)

s. 76

s. 76

s. 78

s. 78

s. 76

s. 76

Allahabad High Court

Sulaiman

s. 161

Orisa High Court

Misra

section 72

Railways Act

section 161

Indian Contract Act

Lahore High Court

s. 76

Martineau

s. 76

s. 76

Orissa High Court

Labore High Court

s. 76

s. 76

ss. 76 and 78

s. 76

s. 78

Interest Act

Interest Act, 1839

Aggarwala

Watkins Mayore & Company

Ruttanji Ramji

s. 73

Patna High Court

Baneshwar Prasad Singh

s. 73

Interest Act

Interest Act