http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 6  

PETITIONER: STATE OF KERALA

       Vs.

RESPONDENT: GENERAL MANAGER, SOUTHERN RAILWAY,  MADRAS

DATE OF JUDGMENT30/08/1976

BENCH: KHANNA, HANS RAJ BENCH: KHANNA, HANS RAJ UNTWALIA, N.L. SINGH, JASWANT

CITATION:  1976 AIR 2538            1977 SCR  (1) 419  1976 SCC  (4) 265

ACT:             Code of Civil Procedure, Ss. 79 and 80, suit for compen-         sation  against railway administration.  whether  impleading         Union of India as a party necessary.             The Indian Railways Act, 1890, S. 3(6), Railway Adminis-         tration, whether a separate legal entity.

HEADNOTE:             The  appellant  booked  rice for  being  transported  by         train,  from Bareilly railway station to Trivandrum  railway         station.  On delivery, the rice was found to be damaged  and         short  in quantity.  The appellant claimed damages from  the         respondent,  who resisted the claim on the grounds that  the         suit was not maintainable as the Union of India had not been         impleaded as a defendant, and that a suit by a State against         the  Union of India could only be instituted in the  Supreme         Court  under  Art. 131 of the Constitution.   The  suit  was         dismissed  by  the Trial Court, and an appeal  from  it  was         dismissed by the High Court.         Dismissing the appeal, the Court,             HELD:  The  Southern Railway is owned by  the  Union  of         India.   As such, a suit dealing with the alleged  liability         of  that railway should have been brought against the  Union         of India.  Section 80 of the C.P.C. contemplates institution         of  a  suit against the Central Government  even  though  it         relates to a railway. [422 E-FI]             Sukhanand Shamlal v. Oudh Rohilkhand Railway  AIR  1924,         Born.  306; Hirachand Succaram Gandhy & Ors. v.G.I.P.  Rail-         way  Co.,  AIR 1928 Born. 421; Shaikh  Elahi  Bakhsh  v.E.I.         Railway  Administration, AIR 1941 Patna 326:  Chandra  Mohan         Saha & Ant. v. Union of India & Anr. AIR 1953 Assam 193  and         P.R.  Narayanaswami lyer & Ors. v. Union of India  AIR  1960         Madras 58, Approved.             (2)  Neither the definition of the "railway  administra-         tion"  in Section 3(6) of the Indian Railways Act,  nor  the         language of sections 72 to 80 of the Act, lends support  for         the view that the railway administrations are to be  treated         as  separate  personalities, entries or  separate  juridical         persons. [423 B-C]             Dominion of India v. Firm Musaram Kishunprasad AIR  1950         Nagpur 85. overruled.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 6  

           (3)  The demarcation of the different State-owned  rail-         ways  as distinct units for administrative and  fiscal  pur-         poses  cannot  have the effect of conferring the  status  of         juridical person upon the respective railway administrations         or their General Managers for the purpose of civil suits.

JUDGMENT:         CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1367 of 1968.             (Appeal  by  Special Leave from the Judgment  and  Order         dated 25-3-1965 of the Kerala High Court in A.S. No. 487  of         1961).         S.V. Gupte and K.M.K. Nair, for the appellant.             Mrs. Shyamla Pappu, B.B. Sawhney, Raju Ramachandran  and         Girish Chandra, for the respondent.         420         The Judgment of the Court was delivered by             KHANNA, J.--This appeal by special leave by the State of         Kerala is against the Full Bench decision of the Kerala High         Court  affirming  on appeal the judgment and decree  of  the         trial  court whereby the suit for recovery of Rs.  28,208.70         filed by the appellant against the General Manager, Southern         Railway respondent was dismissed.             The appellant booked 2,000 tons of rice in 21,310   bags         from  Bareilli  railway  station for  being  transported  to         Trivandrum  central  railway station as per 10  railway  re-         ceipts  during  the  period from June 25 to  July  5,  1950.         According  to the case of the appellant, the rice  delivered         at  Trivandrum central railway station was short  by  79,378         lbs.   It  was also averred that the rice in  327  bags  was         found to be damaged.  The appellants accordingly claimed Rs.         28,208.70 as damages from the respondent.             The  respondent  resisted the claim  of  the  appellant,         inter alia, on the ground that the suit was not maintainable         as the Union of India had not been impleaded as a  defendant         to the suit and that a suit by a State against the Union  of         India could be instituted only in the Supreme Court of India         under article 131 of the Constitution.  It is not  necessary         to  set out the other pleas of the respondent.  As  many  as         nine  issues  were framed by the trial court.   Two  of  the         issues, namely, issue Nos. 1 and 3, were treated as prelimi-         nary issues and arguments were heard on those issues.  Issue         Nos. 1 and 3 read as under:           "1.  Is the suit maintainable ?  Can a decree   be  passed         against the defendant as now impleaded ?           2. Will the suit lie in this Court ?  Is the  suit  barred         by the provisions of the Constitution of India ?"         On issue No. 3 it was held by the trial court that since the         Union of India had not been made a party to the suit, clause         (a)  of article 31 of the Constitution had  no  application.         The  suit was accordingly held to be not liable to  be  dis-         missed on that ground.  On issue No. 1 the trial court  held         that  the Union of India was a necessary party to  the  suit         and  as  the  Union of India had not been  impleaded   as  a         party,  the suit was incompetent.  As a result of its  find-         ings on issue No. 1 the trial court dismissed the suit.  The         decision  of the trial court on issue No. 1 was affirmed  in         appeal by the High Court.  An application was also filed  at         the hearing of the appeal before the High Court for implead-         ing  the  Union of India as a party to the suit.   The  High         Court  rejected  that  application on the  ground  that   no         useful purpose would be served by allowing that application.         It was observed that if the application was allowed and  the         Union  of India was made a party, the suit would have to  be

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 6  

       dismissed as under article 131(a) of the-Constitution a suit         by  one State against the Union of India could only  lie  in         the Supreme Court.  In the result, the High Court  dismissed         the appeal filed by the appellant.             In appeal before us Mr. Gupte on  behalf of the   appel-         lant has invited our attention to the definition of "railway         administration"  in         421         section  3(6) of the Indian Railways Act,  1890  (Act  9  of         1890)  (hereinafter referred to as the Act) which  reads  as         under:                  "railway administration or ’administration’ in  the                  case of a railway administered by  the   Government                  means  the Manager of the railway and includes  the                  Government  and, in the case of a railway  adminis-                  tered  by  a  railway company,  means  the  railway                  company,"             He has further referred to sections 72, 74, 76 and 80 of         the  Act. According to section 72, the responsibility  of  a         railway  administration for the loss, destruction or   dete-         rioration of animals or  goods delivered to the  administra-         tion to be carried by railway shall, subject to other provi-         sions  of the Act, be that of a bailee under  sections  151,         152  and 161 of the Indian Contract Act, 1872.   Section  74         absolves  the railway administration of  any  responsibility         for  the loss,  destruction or deterioration of any  luggage         belonging  to or in charge of a passenger unless  a  railway         servant has hooked and given a receipt therefor.  Section 76         deals with burden of proof in suits for compensation against         a  railway administration for any delay, loss,  destruction,         deterioration  or damage.  Section 80 at the  relevant  time         read as under:                        "80.  Suits for compensation for  injury   to                  throughbooked  traffic.---Notwithstanding  anything                  in any agreement purporting to limit the  liability                  of a railway administration with respect to traffic                  while  on the railway of another administration,  a                  suit  for compensation for loss of the life of,  or                  personal  injury to, a passenger, or for loss,  de-                  struction  or  deterioration of  animals  or  goods                  where  the  passenger was or the animals  or  goods                  were booked through over the railway of two or more                  railway  administrations,  may  be  brought  either                  against  the railway administration from which  the                  passenger obtained his pass or purchased his  tick-                  et,   or to which the animals or goods were  deliv-                  ered by the consignor thereof, as the case may  be,                  or  against  the railway  administration  on  whose                  railway the loss, injury, destruction or deteriora-                  tion occurred."             It is urged by Mr. Gupte that as, according to section 3         (6)  of the Act, railway administration means a  Manager  of         the  railway and as some of the sections 72 to 80  make  ex-         press  reference to suits against railway administration,  a         suit against the General Manager of the railway concerned is         competent.  The trial court and the High Court, according to         the learned counsel, were in error in holding that the  suit         was  not maintainable because of the Union of  India  having         not been impleaded as a party to the suit.             The  above argument has the quality of being  ingenious,         attractive  and  not lacking in  apparent  plausibility.   A         closer examination, however, reveals its infirmity and after         giving the  matter our  earnest         422         consideration,  we find it difficult to accept it.  The  Act

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 6  

       deals with and specifies, inter alia, the rights and liabil-         ities  which arise in case the goods consigned to the  rail-         ways  are not delivered to the consignee. It likewise  deals         with  short delivery of those goods as well as the cases  in         which  the  goods get damaged during transit.  Most  of  the         railways in India are owned by the Union of India, but there         were  some minor railways which till recently were owned  by         railway  companies.  The definition of "railway  administra-         tion"  as given in section 3(6) is comprehensive  and  deals         with both types of railways. i.e., railways administered  by         the  Government  as well as those  administered  by  railway         companies.   The  words "railway administration"  have  been         used in sections 72 to 80 because those sections pertain  to         rights  and  liabilities  of the parties in  both  types  of         cases, i.e., cases where liability is incurred by Government         administered railways as well as cases in which liability is         incurred  by railway administered by railway  company.   The         Act,  however,  does not deal with, the question as  to  who         should  be impleaded as a defendant when a suit  is  brought         against the railway. administration.  This is essentially  a         matter relating to the frame of suits, and is dealt with  by         the Code of Civil Procedure.  According to section 79 of the         Code, in a suit by or against the Government, the  authority         to  be named as plaintiff or defendant, as the case may  be,         shall be (a) in the case of a suit by or against the Central         Government,  the  Union of India, and (b) in the case  of  a         suit  by  or against a State Government,  the  State.   This         section  is in accordance with article 300 of the  Constitu-         tion,  according to which the Government of India may sue or         be sued by the name of the Union of India and the Government         of a State may sue or be sued by the name of the State.   It         is not disputed that Southern Railway is owned by the  Union         of India.  As such, a suit dealing with the alleged liabili-         ty  of  that railway should have been  brought  against  the         Union of India.             Section 80 of the Code of Civil Procedure provides inter         alia that no suit shall be instituted against the Government         until the expiration of two months next after the notice  in         writing  has been delivered to or left at the office of,  in         the  case of a suit against the Central Government where  it         relates  to a railway, the General Manager of that  railway.         The  above provision clearly contemplates institution  of  a         suit  against the Central Government even though it  relates         to a railway. A suit against the Central Government in terms         of  section  79  of the Code would necessarily  have  to  be         brought against the Union of India.             The  Act no doubt makes provision for the  liability  of         the railway administration, but from that it does not follow         that  the railway administration is a separate legal  entity         having a juristic personality capable of being sued as such.         The  definition of "railway administration" in section  3(6)         of  the  Act that it would mean the Manager of  the  railway         does  not  warrant  the inference that a  suit  against  the         railway administration can be brought against the Manager of         that  railway.   We  have to bear in  mind  the  distinction         between  the  owner  of the railway, namely,  the  Union  of         India, and the authority which actually runs the railway and         to whom duties have been assigned for         423         this  purpose by the Act.  The manager of the railway  under         the  Act  is such authority.  When,  however,  liability  is         sought  to be fastened on the railway administration  and  a         suit is  brought against it  on  that account, the suit,  in         our  opinion, would have to be brought against the Union  of         India  because it is the Union who owns the railway and  who

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 6  

       would have the funds to satisfy the claim in case decree  is         awarded in such suit.             The scheme of the Act, even though there are now  hardly         any  company-owned railways in India, is to treat  different         railway administrations as different units, although all  of         them may be owned by the Union of India.  Neither the  defi-         nition  of the "railway administration" in section  3(6)  of         the  Act  nor the language of sections 72 to 80 of  the  Act         lends support for the view that the railway  administrations         are  to  be treated as separate personalities,  entities  or         separate juridical persons as seems to have been observed in         the case of Dominion India v. Firm Museram  Kishunprasad(1).         Yet  the treatment of the different railway  administrations         as different units for the purpose of fastening liability on         the  Union  of  India has got  significance  and  relevance.         Viewed in that light, it would follow that the definition of         the  "railway administration" given in section 3(6)  of  the         Act does not make the railway administration or its  General         Manager  a legal entity or a corporate body or  a  juridical         person  to represent the railway administration as  such  in         suits.  The claim in a suit for recovery of money under  the         Act  against the different railway administrations owned  by         the Central Government in accordance with the general  prin-         ciple  of  law contained in Order 1 Rule 3 of  the  Code  of         Civil  Procedure  has  got to be  made  against  the  person         against whom the right to relief is alleged to exist.         The significance of creating the various railway administra-         tions  as  separate units, even though they  may  be  State-         owned,  is  to be found     in section 80 of  the  Act,  and         section  80 of the Code of Civil Procedure.  For claiming  a         decree  against the Union of India under the Act the  plain-         tiff has got to specify the railway administration or admin-         istrations  on  account of which liability is sought  to  be         fastened upon the Union of India, as contemplated by section         80 of the Act. The institution of the suit has to be preced-         ed  by  service of notice under section 77 of  the  Act  and         section 80 of the Code to the appropriate authority which is         the  General Manager of the railway concerned. The  require-         ment  of clause (b) of section 80 of the Code that a  notice         in  the case of a suit against the Central Government  where         it  relates to a railway must go to the General  Manager  of         the  concerned  railway or railways is also based  upon  the         assumption that it is primarily the liability of the railway         administration  of the said railway or railways  to  satisfy         the claim of the suitor in accordance with section 80 of the         Act.  The demarcation of the different State-owned  railways         as  distinct  units for administrative and  fiscal  purposes         cannot have the effect of conferring the status of juridical         person upon the respective railway administrations or  their         General Managers for the purpose of civil suits.         (1) A.I.R. (1950) Nagpur 85. 11 --1104SCI/76         424             The Bombay High Court in two cases, Sukhanand Shamlal v.         Oud, h & Rohilkhand Railway(1) and Hirachand Succaram Gandhy         & Ors. v.G.I.P. Railway Co.(2) has held that a suit  against         a  State railway should be brought against  the  Government.         Similar view was pressed by Patna High Court in Shaikh Elahi         Bakhsh v.E.I. Railway, Administration(3) and a Full Bench of         Assam High Court in the case     Chandra Mohan Saha &  ,Anr.         v. Union of India & Anr.(4)  The observations of a  Division         Bench  of  the Madras High Court in the case of  P.R.  Nara-         yanaswami lyer & Ors. v. Union of India(5) also lend support         to  the  above view.  It may be stated  that  the  reasoning         employed in the eases mentioned above was different and  not         identical, but whatever might be the nature of that  reason-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 6  

       ing the fact remains that the learned Judges deciding  those         cases  were all at one on the point that such a suit  should         be  brought  against  the Government,  which  means  in  the         present case the Union of India.  Any contrary view would be         against the well-established practice and procedure of  law,         as evidenced by various decisions of the High Courts, and as         such, must be rejected.             Submission has also been made on behalf of the appellant         that  the  High Court should have allowed the  appellant  to         amend  the  plaint. We agree with the High  Court  that  the         present  is not an appropriate case in which  permission  to         amend the plaint should have been granted.             The  appeal consequently fails and is dismissed  but  in         the circumstances without costs.         M-R.                                      Appeal dismissed.         (1) A.I.R. 1924 Bombay 306.     (2) A.I.R. 1928 Bombay 421.         (3) A-I.R. 1931 Patna 326.      (4) A.I.R. 1953 Assam 193.         (5) A.I.R. 1960 Madras 58.         425