Union Of India vs M/S. Udho Ram and Sons

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: supreme-court

Case Number: Civil Appeal No. 581 of 60

Decision Date: 1 May 1962

Coram: Raghubar Dayal, J.L. Kapur, K.C. Das Gupta

In the matter Union of India versus M/s Udho Ram & Sons, the Supreme Court delivered its judgment on 1 May 1962. The opinion was authored by Justice Raghubar Dayal, who was joined by Justices J. L. Kapur and K. C. Das Gupta. The case is reported in the 1963 volume of the All India Reporter at page 422 and also in the 1963 Supreme Court Reports, second series, page 702. The dispute arose under the Indian Railways Act of 1890, specifically section 72, and under section 151 of the Indian Contract Act of 1872. The headnote records that a merchant consigned goods to the respondents, M/s Udho Ram & Sons, and that some of those goods were lost while in transit. The respondents sued the railway authorities for damages, alleging that the loss resulted from the negligence of railway officials. The railway authorities defended the suit by asserting that the loss was caused by circumstances beyond their control. The trial court dismissed the suit, but on appeal the Punjab High Court reversed that decision, holding that the loss was attributable to the negligence and misconduct of the railway authorities because the railway police failed to take adequate precautions to prevent interference with the goods. The Union of India appealed to the Supreme Court on a certificate granted by the High Court. The Supreme Court held that the liability of the railway under section 72 of the Indian Railways Act is subject to the requirements of section 151 of the Indian Contract Act, and that the railway, as a bailee, was required to exercise the degree of care that a prudent person would exercise in similar circumstances. Since the loss was caused by the negligence of railway servants, the railway was found liable for the loss suffered by the respondents.

The appeal, numbered Civil Appeal No. 581 of 1960, was filed against the decree dated 23 April 1958 issued by the Punjab High Court (Circuit Bench) in Delhi in Civil Regular First Appeal No. 32‑D of 1953. Counsel for the appellant were identified only as representatives of the Union of India, while counsel for the respondents were representatives of M/s Udho Ram & Sons. The factual background was that M/s Radha Ram Sohan Lal of Calcutta consigned certain goods to itself for delivery at Delhi. The consignment was to be delivered to M/s Udho Ram & Sons, the plaintiffs, and the railway receipt was endorsed in their favour by the consignor. Certain articles from the consignment were not delivered to the plaintiffs, and the railway receipt indicated that those articles were to be delivered to them. After the plaintiffs failed to obtain compensation for the missing articles, they instituted the suit that now forms the basis of this appeal. The court accepted that there was no dispute regarding the quantum of loss, which had been quantified by the trial court. The sole remaining issue was whether the loss of the goods in transit between Calcutta and Delhi was caused by the negligence and misconduct of the railway authorities. The Union of India, as the respondent, contended that the loss occurred due to factors beyond the railway administration’s control. The trial court had found that the wagon carrying the consignment had been properly riveted and sealed at Howrah, yet the seals and rivet on one door were discovered to be open when the train arrived at Chandanpur Station early on 1 October 1949, after a brief stop for a home signal. The railway protection police had escorted the train, and the High Court accepted these findings without question. The trial court concluded that the precaution of posting railway protection police in the train, given the frequent thefts on that route, amounted to the railway taking proper care of the consignment. This factual record formed the foundation upon which the Supreme Court evaluated the parties’ arguments and ultimately affirmed the liability of the railway for the loss.

In this case the Court examined whether the loss of goods while they were being transported from Calcutta to Delhi resulted from the misconduct or negligence of the railway authorities. The Union of India, as the respondent, argued that the loss occurred because of circumstances that were beyond the control of the railway administration. The trial Court recorded that the railway wagon in which the consignment had been loaded was properly riveted and sealed at Howrah. It further found that the seals and the rivet on one door of the wagon were discovered to be open when the train that had departed Howrah at 1:30 a.m. on 1 October 1949 reached Chandanpur Station at 3:15 a.m. on the same night. The trial Court noted that the train had stopped for fourteen minutes at the Howrah‑Burdwan link for the home signal at 2:05 a.m., and that railway protection police had escorted the train. The High Court accepted these factual findings and did not dispute them. However, the trial Court concluded that the precaution of posting railway protection police on the train, given the frequent thefts reported on trains running between Howrah and Chandanpur, showed that the railway had exercised proper care as a carrier and therefore could not be held liable for negligence or misconduct. The trial Court expressed the view that the railway protection police, who usually travelled in the guard’s van, could not possibly observe what was happening inside the other wagons or in the middle of the train during the journey, and consequently dismissed the suit. On appeal, the High Court held the railways responsible for the loss, finding that the loss was due to the railway’s negligence and misconduct. The High Court reasoned that there was no evidence on record that the railway protection police had taken any steps to prevent interference with the train during the fifteen‑minute halt at the Howrah‑Burdwan link at night, and that no other watch‑and‑ward arrangement had been made at the link. The Court also observed that no evidence was presented regarding the strength of the railway protection police or that they had left the train to secure the wagons. Accordingly, the High Court concluded that the railway servants were negligent, that the railway administration was responsible for the negligence of its employees because it could act through them, and that the loss of goods was therefore due to the misconduct and negligence of the railway. The High Court reversed the trial court’s decree and granted the plaintiffs’ suit for the amount of loss they had suffered. The Union of India obtained a certificate of fitness for appeal from the Punjab High Court against this decree and preferred the present appeal. The record contained no evidence that the railway protection police escorting the train was adequate in strength to ensure that the goods were not interfered with during transit.

In this case, the Court observed that the defendants had not asserted in their written statement that any railway protection police had accompanied the train. The only evidence that the train had been escorted by such police came from the testimony of Chatterjee, D. W. 10, who was then the Assistant Station Master at Chandanpur Railway Station. In his statements, Chatterjee did not record the escort in any of his messages or memoranda; he merely noted the presence of railway protection police at the moment when the wagon was re‑sealed. During cross‑examination, Chatterjee admitted that he could not recall from memory the events that occurred at Chandanpur station on 1 October 1949 and that his answer was based solely on the documents placed before him. Nevertheless, both lower courts had found that the railway protection police did escort the train. No evidence was presented to explain why the police force failed to prevent interference with the wagons when the train stopped at the link, a place where, according to the lower courts, thieves are thought to have accessed the wagon and tampered with its seal and rivets. Because there was no proof concerning the strength or adequacy of the railway protection police, the appellant’s claim that the force was sufficient could not be upheld. While it is possible that even careful precautions may not always avert theft during transit, the record in this case did not establish what precautions were taken nor what actions the railway protection police performed at the location where the train halted. The Court could not accept the argument that the police could not have left the guard’s van because of uncertainty about the train’s stop at a signal. It was the duty of the police members to dismount at every stoppage and to monitor the wagons as effectively as possible. There was no risk that the train would suddenly depart without them; they could re‑board when movement resumed. The wagon carrying the plaintiffs’ goods was situated in the centre of the train, being the twenty‑ninth wagon from the opposite end. Accordingly, it was incumbent upon the railway protection police to exit the guard’s van whenever the train stopped, whether at a platform or any other location. In fact, the need to descend and observe the train when it stopped at a place other than a station was greater than when it stopped at a station, because at a station there would ordinarily be other persons whose presence would deter miscreants from tampering with any wagon, and any tampering at a station was likely to occur on the periphery. The responsibility of the railways under section 72 of the Indian Railways Act was therefore to be read subject to the provisions of the applicable law.

Section 151 of the Indian Contract Act provides that in every case of bailment the bailor must exercise the same degree of care over the bailed goods as an ordinarily prudent person would exercise over his own goods of comparable bulk, quality and value under similar circumstances. The provision therefore sets a standard of ordinary prudence rather than a heightened duty. The Court observed that a reasonable person travelling by train would ordinarily keep a watchful eye on his belongings, particularly when the train comes to a stop. Consequently, requiring the railway staff – and more specifically the railway protection police who are specially assigned to prevent loss of goods – to alight from the wagon and monitor the train’s wagons does not impose a higher standard of care on the railway administration than that required by ordinary prudence. In view of this standard, the Court held that the High Court’s finding that the loss occurred because of negligence on the part of the railway servants, and consequently of the railway administration, was well‑founded. Accordingly, the Court dismissed the appeal and ordered that costs be awarded. The appeal was therefore dismissed with costs.