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Petitioner: SATYA CHARAN DATTA VS Respondent: FEDERATION OF PAKISTAN AND PRESIDENT OF THE REPUBLIC OF INDIA
P L D 1961 Dacca 218
P L D 1961 Dacca 218
Before Ispahani, Chowdhury and Akbar, JJ
SATYA CHARAN DATTA‑Appellant
versus
FEDERATION OF PAKISTAN AND PRESIDENT OF THE REPUBLIC OF INDIA‑Respondents
Second Appeal No. 137 of 1954, decided on 20th December 1957.
(a) Dacca High Court Rules (Appellate Side)---
--- Ch. VII, p. 85 Reference to Full Bench can be made only when one Division Bench differs with decision of another Division Bench‑Two Judges differing among themselves‑Matter should be referred to Third Judge and not to Full Bench.
(b) Railways Act (IX of 1890)-----
----- S. 80‑Railway belonging to Pakistan delivering at station in Pakistan goods received by and sent from station of Railway belonging to India‑Whether can be held liable for short delivery‑Principles of Private International Law.
Goods were consigned to E. I. Railway, belonging to India, at Calcutta in India for delivery at Kushtia Station in Pakistan on the E. B. Railway belonging to Pakistan. The consignment had to traverse through the two Railway systems. On reaching Kushtia, the consignment was found short by 12 bags. The plaintiff claimed damages for short delivery. He made Governor -General of Pakistan and Governor‑General of India in‑Council defendants in the suit. The plaintiff contended that the E. I. Railway as agent of the plaintiff made a contract with the E. B. Railway for carriage of the consignment from the borders of Pakistan to Kushtia, and, as such, the plaintiff could sue the E. B. Railway as a principal party to the contract. In reply the defence was that E. B. Railway of Pakistan was not liable for the loss in respect of which the claim had been made because there was no privity of contract between the plaintiff and E. B. Railway. It was further urged in defence that section 80 of the Railways Act, 1890 was not attracted because consequent to the creation of the two Independent States of India and Pakistan, operation of that section ceased in India.
Held, (per Akbar, J., Ispahani, J., concurring, Chowdhry, J. contra).‑The two Railways belonged to two different independent sovereign States and, therefore, E. B. Railway of Pakistan was not liable for the loss incurred. One independent sovereign power is not the agent of another independent sovereign power as far as Munici pal Courts are concerned, unless specifically such a state of agency is for a particular purpose assumed, and the Courts given jurisdiction. The contract in the case was entered into with the E. I. Railway at Calcutta, which is out of Pakistan and in a foreign country. Due to some arrangement between the two Railways, carriage of goods was possible over the E. B. Railway. But that cannot be construed to mean that the Indian Railway acted as agent of the Pakistan Railway. The accepted principle of private international law is that the lex loci contractus applied in a case of this nature and consequently the Government of India could not be sued as the agent of the Pakistan Government and as such E. B. Railway could not be treated as a principal contracting party and E. I. Railway as the agent of the plaintiff.
Union of India v. Brajen Saba 57 C W N 164 ; Bengal Stores v. Dominion of Pakistan East Bengal Circle P L R 4 Dacca 186 ; Dulichand Omraolal v. The Federation of Pakistan and others 9 D L R 85 ; Chhatumull Chowthmull v. Union of India, represented by General Manager, Eastern Railway 59 C W 1V 504 ; Chunni Lal and others v. The Nizam's Guaranteed State Railway Company Ltd. I L R 29 All. 228 ; Kalu Ram Maigraj v. The Madras Railway Company I L R 3 Mad. 24J ; Dekhari Tea Co. Ltd. v. Assam Bengal Railway Co., Ltd. I L R 47 Cal. 6 (19) ; K. C. Dhar v. Ahmad Bux I L R 60 Cal. 879 ; The Irrwaddy Flotilla Company v. Bugwandas I L R 18 Cal. 620 ; Bristol and Exeter Railway Company v. Collin (1859) 7 H L C 194 and The Province of East Bengal v. The State of Tripura 53 C W N 368 ref.
Further, that after Partition the Indian Railways Act, 1890 is applicable within India or Pakistan, which are now both in dependent States. This section will apply only when the different Railway systems run through the same State. The E. I. Railway and the 5. B. Railway are Railways of two different States, and, therefore, section 80 of the Railways Act 1890 cannot be invoked in the absence of any special legislation to govern cases such as the present.
Per Chowdhury, J., (contra.).‑The E. B. Railway of Pakistan was liable to the plaintiff for compensation for the loss of goods. Though one sovereign State cannot be an agent of another sovereign State, there was no bar for an individual to enter into a contract with the sovereign State doing commercial business and if an individual or any corporate body enter into a contract with a sovereign‑State for commercial business and book goods in the Railway of a sovereign State to be carried to the Railway of another sovereign State, there might be a contract by the consignor through his agent, the receiving Railway, with the delivering Railway, and the contract was enforceable in the Court of Pakistan.
India General Navigation and Railway Company and another v. Baroda Kanta Dey and others (1954) 6 D L R 341 ; Dawes v. Pack (1799) 8 T R 330 and Bengal and North‑Western Railway and another v. Mul Chand I L R 42 All. 655 ref.
Further, section 80 of the Railways Act, 1890 is an enabling section introduced in the Act for the benefit of the consignor or consignee to avoid the difficulty as to the forum of action and against which of the two or more Railways over which the goods are cent, action is to be taken. It is a recognition of common law right. It does not take away the common law right to sue the Railway on whose administration the loss occurred.
(c) Carriers Act (III of 1865)-----
----- S. 2.‑Common carrier‑Railway belonging to Government‑Whether common carrier‑Whether can be sued in tort or held liable for damages.
Per Ispahani, J. (Chowdhry, J. contra.)‑Section 2 of the Carriers Act, 1865 defines a "Common carrier" as a person other than the Government, engaged in the business of trans porting for hire property from place to place, by land or inland navigation, for all persons in discriminately. A Railway belonging to Government is, therefore, not a common carrier within the meaning of the Carriers Act, 1865.
Messrs Constance Zena Wells v. Governor‑General of India in Council A I R 1946 Lah. 50 not foll.
F. D. R. Footwear v. N. W. Railway and others A I R 1933 All. 348 and Alamgir Footwear & Co. v. Secretary of State and another A I R 1933 All. 466 foll.
Per Chowdhury, J. (contra.).‑The sovereign activity of the Crown stands absolutely on a different footing from the commer cial function undertaken by the Crown and the State Railway is an organisation standing on the same footing as any other organisation of carriers. So in respect of the commercial activities of the Crown, no special privilege can be claimed so far as the suits for damages are concerned. Action in tort against a Railway belonging to a State would therefore lie against the Crown.
Messrs Constance Zena Wells v. Governor‑General of India in Council A I R 1946 Lah. 50 and Dekhari Tea Co. Ltd. v. Assam Bengal Railway Co. Ltd. I L R 47 Cal. 6 (19) rel.
Radhikaranjan Guha and Ruhul Islam for Appellant.
Syed A. B. Mahmud Hussain, Senior Government Pleader for Respondent No. 1.
JUDGMENT
ISPAHANI, J.‑This case has been referred to me as a Third Judge because the Division Bench consisting of Akbar and Chowdhury, JJ., have differed in their opinion.
2. The plaintiff appellant filed the suit in the Subordinate Judge's Court at Kushtia claiming damages for short delivery of 9 bags of Bidi tobacco leaves sent by rail from Calcutta on 21st December 1948, by V. C. Laljee & Company. The Bidi leaves were covered by three Railway receipts. The plaintiff was the consignee, who was to take delivery at Kushtia of the tobacco leaves. He laid his claim at Rs. 2,192‑14‑0. The suit was filed against the Governor‑General of Pakistan‑in‑Council, Karachi, and the Governor‑General of India Dominion‑in‑Council, New Delhi.
3. The suit was not contested by the Governor‑General of India, but was contested by the Governor‑General of Pakistan. The allegations in the plaint were denied, and it was specifically stated that the consignments were booked from Calcutta, a station on the E. I. Railway and the plaintiff was put to strict proof that the consignment was correctly made over to the E. B. Railway system by the E. I. Railway and the loss was incurred by the defendant Railway in the absence of which the suit was liable to be dismissed. By an additional written statement, the contesting defendant contended that there was no privity of contract between the plaintiff and the defendant. Consequent to the creation of the two Independent States of India and Pakistan, operation of section 80 of the Indian Railway Act ceased in India. He contended that the suit, therefore, was not maintainable against that defendant and the Court had no jurisdiction, and the plaintiff's remedy, if any, lay with the contracting Railway owned and managed by the Republic of India.
4. The suit was dismissed by the trial Court, and on appeal, it was held, contrary to the decision of the trial Court that the loss of the said bags of tobacco leaves was due to absence of proper care or misconduct or negligence of the E. B. Railway staff. Both the Courts, however, held that for want of privity of contract between the plaintiff and the E. B. Railway, the suit was not maintainable against defendant No. 1, nor was it maintainable against the said defendant either as carrier or in tort, because the E. B. Railway being a State Railway was not a common carrier under the Carriers Act, and an action in tort does not lie against the Crown.
5. The matter was taken in Second Appeal before a Division Bench of this Court consisting of Akbar and Chowdhury, JJ. They are not unanimous in their opinion on various grounds. Akbar, J., affirmed the decision of the lower Courts mainly on the ground that the E. B. Railway cannot be treated as principal con tracting party, a case which was not made out in the plaint. Chowdhury, J., on the other hand, came to a contrary decision that there was privity of contract between the plaintiff and E. B. Railway through his agent E. I. Railway at Calcutta. He has further held teat apart from a contract, the E. B. Railway as a common carrier was also liable for damages, and an action in tort also lay against tae E. B. Railway, which is owned by Pakistan. The appeal before the Division Bench was heard for three days, and judgment delivered after about three weeks.
6. Mr. Radhikaranjan Guha has appeared on behalf of the plaintiff appellant, and he has firstly argued on the non‑maintain ability of this Reference to me as a Third Judge. His argument is that when the two learned Judges differed in their opinion, the case should have been referred to a Full Bench in terms of the Rules of the High Court, Appellate Side, Chapter VII, page 85. There is no foundation for this argument, because it is not a case where one Division Bench has differed with the decision of another Division Bench on the same point. The two learned Judges differed among themselves, and the matter had to be referred to a Third Judge. Thus, this Reference is not incompetent.
7. Coming to the merits of the appeal, the most important point for consideration is as to whether the E. B. Railway, which is the delivering Railway and which belongs to Pakistan can be held liable for short delivery when the goods were received by the E. I. Railway at Calcutta, which also is a Government Railway. The plaintiff appellant entered into a contract with the Railway at Calcutta for such a delivery, and it is admitted that there is no contract between the appellant and the E. B. Railway. The lower Appellate Court has found as a fact, differing from the view taken by the trial Court, that the loss occurred at Ishurdi after the goods had been taken delivery of by the E. B. Railway. Before the Partition of India, there was some difference of opinion as to which Railway was liable for loss in such cases. Thus, section 80 of the Indian Railways Act (IX of 1890) was enacted, and section 80 provides that notwithstanding anything in any agreement purport ing 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 Railways of two or more Railway administrations, may be brought either against the Railway admi nistration from which the passenger obtained his pass or purchased his ticket, or to which the animals or goods ware 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. Under this section an option is given either to sue the Railway administrations with whom the contract is made or the Railway administration on whose Railway the loss occurs. Before Partition, therefore, a person, such as the plaintiff, could pick and choose his forum of action. This Act after Partition is applicable within India or Pakistan, which are now both independent States. The Railways in question are Railways of two different States, and therefore, the said section cannot be invoked in the absence of any special legislation to govern cases such as the present. The contract was entered into with the E. I. Railway at Calcutta, which is out of Pakistan and in a foreign country. It has not been showed how the E. B. Railway could be bound as a contracting party. Due to some arrangements between the two Railways, carriage of goods was possible over the E. B. Railway. That cannot be construed to mean that the Indian Railway acted as agent of the Pakistan Railway. The lower Appellate Court has observed that the agreement, if any, between the two Railways of Pakistan and India was in the nature of an international under standing, which could be enforced can tie international plane by India and Pakistan, and no private party could enforce it. There is no evidence nor are the circumstances such from which the contract made at Calcutta wish the B. I. Railway can be construed to be contract with the E. B. Railway as well. These two Railways belong to two different States, and the view held by Akbar, J., that E. B. Railway was not liable for the loss incurred, must be upheld.
8. Akbar, J., in coming to that decision relied on Union of India v. Brajen Saha (57 C W N 164=5 P L R Dacca 349), wherein Chunder, J., held in such cases that one independent Sovereign power is not the agent of another independent Sovereign power as far as Municipal Courts are concerned, unless specifically such a state of agency is for a particular purpose assumed, and the Courts given jurisdiction. Consequently, the Government of India cannot be sued as the agent of the Pakistan Government. He held further that the lex loci contractus applied to a case of this nature is the accepted principle of private international law. Akbar, J., had previously followed that decision in Bengal Stores v. Dominion of Pakistan, East Bengal Circle (P L R 4 Dacca 186) and Dulichand Omraolal v. The Federation of Pakistan and other (9 D L R 85). The opinion expressed by Akbar, J., in this case, therefore, is in conformity with what he held previously following the decision of Chunder, J.
9. As against this, Chowdhury, J., has relied on a decision of a Division Bench in S. A. 20 of 1954 to which he was a party. He relied on Chhatumull Chowthmull v. Union of India, represented by General Manager, Eastern Railway (59 C W N 504), in which the facts were that on the 22nd August 1951, the petitioner delivered 125 bales of four maunds jute per bale to the Station Master Gaibandha, on a Railway in East Pakistan, for carriage to Cossipore Road Station on the Eastern Railway in the Union of India. The goods were carried by the Pakistan Railway to the border, and the goods were received by the Eastern Railway from the Pakistan Railway. It was held that in these circumstances, the proper conclusion is not that the Pakistan Railway as principal made the contract with the Eastern Railway, but that it made the contract with the Eastern Railway as an agent of the consignor for the carriage of goods to Cossipore Road Station on the Eastern Railway. The petitioner as plaintiff can, therefore, enforce the contract. No reasons are given for coming to that decision and it does not appear that the decision of Chunder, J., 57 C W N 164, was referred to. In S. A. 20 of 1954 the trial Court held that the Eastern Railway in the Union of India could not make any agreement with the Pakistan Government or with the. Pakistan Railway to be enforced against it in any Court of Pakistan. Before the Division Bench, however, the learned Advocate for the appellant did not challenge the proposition of law on which the learned trial Court based its decision as it was supported by a decision of this High Court in the case 5 P L R Dacca 349 ; but contended that though one Sovereign State could not be an agent of another Sovereign State in the absence of any arrangement between them, yet it could work as agent of private individual, and in that capacity the Eastern Railway in the Indian Dominion as an agent of the plaintiff made a contract with the E. B. Railway to carry the consignment from the border of Pakistan to Gaibandha Railway Station, the Station of destination, and, as such, the plaintiff as principal could sue the East Bengal Railway. This argument which was a hypothetical one was not based on any material in the case, and the Division Bench remarked :
"Every day we find that a particular Department of the Government, namely, the Communication Department is practic ally doing the business of carrier entering into contract with individuals. Nobody can deny its validity and enforcibility against the Government. If this position is accepted, then there is no bar for an individual or any corporate body to enter into contract with a Sovereign State either directly or through his agent, another Sovereign State, and that contract can be enforced by the principal in the Court of that Sovereign State, and the suit will be governed lex loci i.e., law of the country . . . . . ."
After observing the above, the case was disposed of on the facts found against the plaintiff appellant. Akbar, J., has characterised the above observation as obiter, while Chowdhury, J., has held that a finding was arrived at having regard to the contentions raised before the Division Bench. It seems to me that the portion above mentioned is in the nature of an obiter ; because Chowdhury, J., says : "If this position is accepted . . . . ." It is possible that in the present case, being faced with that passage in his previous judgment, has sought to bring the decision in this case in conformity with that observation. I am unable to agree with Chowdhury, J., that when a Railway of a Sovereign State receives goods to be sent from a station of that Railway to another station on the Railway of another Sovereign State, the receiving Railway enters into a contract with the delivering Railway on behalf of the consignor. In this connection reference may be made to Chunni Lal and others v. The Nizam's Guaranteed State Railway Company Ltd. (I L R 29 All. 228 (FB) ). In that case the facts were that two wagon loads of chillies were received by the Station Master at Bezwada on the Nizam's Guaranteed State Railway for carriage to Agra Station on the Great Indian Peninsular Railway at a rate of Rs. 270 per wagon for the whole distance. On arrival at Agra the Great Indian Peninsular Railway Company's Station Master demanded payment of higher rates, calculated per maund, and refused delivery until such rates were paid. The consignees paid under protest, and sued both Railway Companies for a refund of the
excess charges. It was held that the contract for carriage of the goods for the whole distance was one entire contract with the receiving Company, who were liable for the overcharge, if any, wrongfully demanded from the consignees. In Kalu Ram Maigraj v. The Madras Railway Company (I L R 3 Mad. 240), it was held that when two Railway Companies interchange traffic, goods and passenger with through tickets, rates and invoices, payment being made at either end and profits shared by mileage, the receiving Company by granting a receipt‑note for goods to be carried over and delivered at a station of the delivering Company's line, does not thereby contract with the consignor of the goods as agent of the delivering Company. In Dekhari Tea Co. Ltd. v. Assam Bengal Railway Co. Ltd. (I L R 47 Cal. 6 (19)), Rankin, J., observed as follows :
"The basis, however, of the above decisions is that it would be a strained and improbable inference to hold that a sender on an ordinary `through booking' transaction enters into a series of contract with carriers 1, 2 and 3 making each carrier except the last his agent to make a further contract, or treating him as the next carrier's agent to make a further contract with the sender. If it be said that though there is an entire contract with the first carrier for the whole journey, yet there may also be a contract with each of the other carriers for their own part of the transit, this no doubt is true. But as an inference it is still more elaborately improbable. It involves a contract and a parallel series of other contracts. This series has to be operated either by each carrier being treated as the senders' agent to contract with the next which involves a doubtful scheme for the transmission of authority ; or else by each carrier being treated as having made the previous one (or perhaps the first one) his agent to contract on his behalf, while himself being the previous carrier's agent to perform. Again this latter view is possible, and in some cases it is right. Such a position is a quasi- partnership and is illustrated by Gill v. M. S acrd L. Railway Co. (1873) L R 8 Q B 186 and G. I. P. Railway v. Radhakishun (1881) I L R 5 Bom. 371. It has been put in argument that where for their mutual advantage two Companies are in the habit of handling through traffic for a reward to be divided in proportions there is in substance a quasi‑partnership, and each is the agent of the other to contract. I do not agree. . . ."
In a later Calcutta case K. C. Dhar v. Ahmad Bux (I L R 60 Cal. 879), it was held that a common carrier, exercising a public employment, commits a breach of the law by failing to carry safely. Rankin, C. J., observed that the doubt expressed in the Dekhari Tea Co. Ltd v. Assam‑Bengal Railway Co. Ltd. was overcautious, considering the dicta of Lord Macnaughten in the Irrwaddy Flotilla Company v. Bugwandas (I L R 18 Cal. 620). It was held further that the person, who has suffered loss by a common carrier's breach of his common law obligation, can maintain a suit independent of contract. Whether a single contract is entered or whether there is a series of contracts makes no difference because Pakistan and India are two independ ent Sovereign States now. So far as the liability of a common carrier is concerned, the Carriers Act, 1865, defines a "common carrier" as a person other than the Government, engaged in the' business of transporting for hire property from place to place, by land or inland navigation, for all persons indiscriminately. Reference was made by Mr. Guha to Mrs. Constance Zena Wells v. Governor‑General of India in Council (A I R 1946 Lah. 50), where it was held inter alia that the Sovereign activity of the Crown stands on an absolutely different footing from the commercial functions under taken by the Crown. The State Railway is a commercial organisa tion standing on the same footing as any other organisation of carriers. In respect of the commercial activities of the Crown, no special privilege can be claimed so far as suits for damages are concerned, and hence no specific enactment making the Crown specifically responsible for damages is necessary. That was the law before Partition, and after Partition of India both the countries have become independent States. In F. D. R. Footwear v. N. W. Railway and others (A I R 1933 All. 348) and in the case of Alamgir Footwear & Co. v. Secretary of State and another (A I R 1933 All. 460), it was held that Government is not a common carrier within the meaning of the Carriers Act of 1865.
10. The position, therefore, is that it cannot be held that the E. B. Railway can be treated as a principal contracting party, and the E. I. Railway acted as an agent for the plaintiff. It is not the plaintiff's case that the E. B. Railway was…
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