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PETITIONER: UNION OF INDIA

       Vs.

RESPONDENT: MAHADEOLAL PRABHUDAYAL

DATE OF JUDGMENT: 23/02/1965

BENCH: WANCHOO, K.N. BENCH: WANCHOO, K.N. MUDHOLKAR, J.R. SIKRI, S.M.

CITATION:  1965 AIR 1755            1965 SCR  (3) 145  CITATOR INFO :  RF         1969 SC 817  (4)

ACT: Indian   Railways   Act   (9   of   1890),   ss.   72    and 77--Risk-note   in  Form Z--Mode of proof of  liability   of railway  administration--Notice under s. 77--When necessary.

HEADNOTE:     Out  of  a  consignment  of  60  bales  of  piece  goods despatched  by the Railway, under risk-note Form Z, only  29 bales   were  delivered  to  the  respondent  who  was   the consignee.  By sending the consignment thus,  the  consignor got  a  specially  reduced rate but the burden was thrown on him,  of proving misconduct on the  part of the  railway  or its  servants,  if there was a loss of goods.  The  risknote also  imposed an obligation on the Railway, to disclose  how the  consignment was dealt with by it, during the  time  the consignment was in its possession or control. The respondent wrote  a  letter  to the Chief  Commercial  Manager  of  the Railway stating  that 60 bales were booked but only 29 bales had  been  delivered, and that a suit for damages  would  be filed. The letter was  sent  within  6 months of the booking of the consignment ,and contained the details     as to  how the amount of damage was arrived at. Later on, a notice  was given under s. 80 of the Civil Procedure Code, 1908, and   a suit  was filed for damages. But, before the filing  of  the suit, there was no demand by the consignor for a  disclosure as  to  how the consignment was dealt with  by  the  Railway throughout the period it was  in its possession or  control. The  Railway  however,  made a  disclosure  in  its  written statement  as.  to how  the  consignment  was,  dealt   with throughout  that period. Its defence was that, there  was  a theft  in  the running train and that was how  part  of  the consignment  was lost and not due to any misconduct  on  the part of the Railway or its servants. Even after the suit was filed and evidence let in at the trial, by the railway there was  no  statement by the respondent at any stage  that  the disclosure  made by the Railway in the written statement  or in the evidence, was in any way inadequate. The  resplendent never  told the court after the  evidence  of  the   Railway w.as over, that he was net satisfied with the disclosure and

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that  the  Railway  should  be  asked  to  make  a   further disclosure.  The suit was dismissed by the trial  court  but decreed on appeal, by  the  High Court.     In  the  appeal to the Supreme Court  it  was  contended that,  (i)  the,  suit was barred by s.  77  of  the  Indian Railways Act, 1890, inasmuch as notice required therein  was not given by the respondent, and (ii) under the terms of the risk-note  the Railway was absolved from all  responsibility for  the  less of the goods consigned thereunder,  from  any cause  whatsoever.  except upon proof of misconduct  of  the Railway  or  its servants, that the burden of  proving  such misconduct  was on the respondent and that  the   respondent had failed to discharge the burden.     HELD:  (i) A notice under s. 77 of the Act is  necessary in  the case of non-delivery which arises from the  loss  of goods.  Though the letter, written by the respondent to  the Chief Commercial Manager, was not specifically stated to  be a  notice  under the section it gave all  ’the  ’particulars necessary  for  such a notice and it was also  given  within time prescribed.  Therefore,  the  letter  was    sufficient notice for the purpose of the Act, [149 D-F] 146    Governor General in Council v. Musaddilal [1961]3  S.C.R. 647  and  Jatmull  Bhojraj  v.  The   Darjeeling   Himalayan Railway  Co.Ltd. [1963] 2 S.C.R. 832, followed.  (ii)  The view of the High Court, that there was  a  breach of  the condition relating to complete disclosure, and  that on such breach the risk-note could be completely ignored and the responsibility of the Railway judged purely on the basis of  s. 72(1) of the Act, as if the goods were  consigned  at the ordinary rates on  the  Railway’srisk, was not  correct. [154 H]    The  responsibility  of  the  railway  administration  to disclose  to  the consignor as to how  the  consignment  was dealt  with throughout the time it was in its possession  or control  arises at once, under the risk-note, in  either  of the  cases referred to therein, and is not confined  to  the stage  of litigation. But such disclosure is necessary  only where a consignor specifically asks the railway to make  the disclosure.  If  no  such  disclosure  is  asked  for,   the administration  need  not  make it  before  the  litigation. Therefore,  if  the  Railway did not  make  the  disclosure, before  the  suit was filed, it could not be  said  to  have committed a breach of the term of  the  contract [153 A-D]    The  disclosure envisages a precise statement of how  the consignment  was dealt with by the railway or its  servants. If  the disclosure is asked for before litigation  commences and  is not given, or the disclosure is given but it is  not considered  to be sufficient by the consignor,  the  dispute has to be judicially decided and it is for the court to say, if a suit is filed, whether there .has been a breach ,of the term.At that stage, evidence has to be led by the railway in the  first  instance to substantiate  the  disclosure  which might  have  been  made  before  the  litigation,  to,   the consignor,  or  which might have been made  in  the  written statement. When the administration has given its evidence in proof  of the disclosure, if the plaintiff is not  satisfied with the disclosure made in  evidence, he is entitled to ask the court to call upon the railway to fulfill its obligation under  the  contract, and the railway should then  have  the opportunity  of meeting the demands of the plaintiff. It  is then for the court to decide whether the further  disclosure desired  by. the plaintiff should be made  by  the  railway, and if the court decides that it should be made, the railway has to make such further disclosure as the court orders.  If

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the  railway fails to take that opportunity to  satisfy  the demands   of   the  plaintiff endorsed  by  the  court,  the railway,   at  that  stage,  would  be  in  breach  of   its contractual obligation of disclosure.  [153 E-154 B] The  effect  of  the  breach however is  not  to  bring  the contract  to  an  end and throw the  responsibility  on  the railway,   as   if   the   case  was  a   simple   case   of responsibility  under s.72(1). The risk-note would  continue to  apply  and the court would have to  decide  whether  the misconduct  can be fairly inferred from the evidence of  the railway,  with  the difference that, where the  railway  has been  in breach of its obligation to make  full  disclosure, misconduct  may be  more readily inferred and s. 114 of  the Evidence Act more readily applied. But the conditions of the risk-note cannot be completely ignored, simply because there has   been   a   breach  of  the   condition   of   complete disclosure.[154 D-G] Surat Cotton Spinning & Weaving Mills v. Secretary of State for India in Council [1937] 64 I.A. 176, applied.

JUDGMENT:    CIVIL APPELLATE JURISDICTION:  Civil  Appeal No. 536  of 1962.    Appeal from the judgment and decree dated March 26. 1958, of the High Court at Patna in First Appeal No. 340 of .1951. 147      Niren    De,   Additional    Solicitor-General,    N.D. Karkhanis and B.R.G.K. Achar, for the appellant.  Bishan  Narain, P. D. Himmatsinghka s. Murthy  and     B.P. Maheshwari, for the respondent.    The judgment of the Court was delivered by     Wanchoo,  J. This is an appeal on a certificate  granted by  the Patna High Court. The respondent sued the  Union  of India   as  representing G.I.P. Railway, Bombay  and  E.I.R. Calcutta   for  recovery of damages for non-delivery  of  31 bales  of  piece  goods,  out of 60  bales  which  had  been consigned   to   Baidyanathdham   from   Wadibundar.    This consignment  was  loaded in wagon No. 9643  on  December  1. 1947.  It  is not in dispute that  the  consignment  reached Mughalsarai  on  the morning of December 9, 1947 by  192  On goods train. After reaching Mughalsarai, the wagon was  kept in  the marshaling yard till December 12, 1947. It wag  sent to Baidyanadham by 214 On goods train from Mughalsarai at 6- 40  p.m.  on  December  12,  1947  and  eventually   reached Baidyanathdham on December 21, 1947. The respondent who  was the consignee presented the railway receipt on the same  day for  delivery  of  the consignment.  Thereupon  the  railway delivered 29 bales only to the respondent and the  remaining 31  bales were said to be missing and were never  delivered. Consequently  on August 31. 1948, notice was g:yen under  s. 80 of the Civil Procedure Code and this was followed by  the suit out of which the present appeal has arisen on  November 20,  1948. The consignment had been booked under  risk  note form Z which for all practical purposes is in the same terms as risk note form B. The respondent claimed damages for non- delivery on the ground that the non-delivery was due to  the misconduct of the servants of the railway, and the claim was for a sum of Rs. 36,461/12/-.     The  suit was resisted by the appellant and a number  of defences  were  taken.  In the present appeal  we  are  only concerned with two defences. It was first contended that the suit was barred by s. 77 of the Indian Railways Act, No.  IX of 1890, (hereinafter  referred to as the Act), inasmuch  as

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notice  required  therein was not given by  the  respondent. Secondly  it  was contended that the  consignment  was  sent under risk note form Z and under the terms of that risk note the  railway was absolved from all responsibility for  loss, destruction  or deterioration of goods consigned  thereunder from any cause whatsoever except upon proof of misconduct of the railway of its servants. and that the burden of  proving such  misconduct  subject to certain exceptions was  on  the respondent  and that the respondent had failed to  discharge that  burden.  Further in compliance with the terms  of  the risk  note,  the  railway made a disclosure in  the  written statement   as  to  how  the  consignment  was  dealt   with throughout  the period it was in its possession or  control. The  case of the railway in this connection was  that  there was a theft in the running train between Mughalsarai and 148 Buxar on December 12, 1947 and that was how part of the con- signment was lost. As the loss was not due to any misconduct on  the  part  of the railway or its  servants  and  as  the respondent  had not discharged the burden which lay  on  him after the railway had given evidence of how the  consignment had been dealt with, there was no liability on the railway.    On the first-point, the trial court held On the basis  of certain  decisions  of the Patna High Court that  no  notice under  s. 77 was necessary in a case of  non-delivery  which was  held  to be different from loss. On  the  second  point relating to the responsibility of the railway on the’  basis of  risk note form Z, the trial court held that it  had  not been  proved  that  the loss was due to  misconduct  of  the railway or its servants. It therefore dismissed the suit.     Then  followed an appeal by the respondent to  the  High Court.  The High Court apparently upheld the finding of  the trial court on the question of notice under s.77. But on the second point the High Court was of opinion that there was  a breach of the condition of disclosure provided in risk  note Z under which the consignment had been booked, and therefore the  appellant could not take advantage of the risk note  at all and the liability of the railway must be assessed on the footing of a simple bailee. It therefore went on to consider the liability of the railway as a simple bailee and held  on the’  evidence that the railway did not take proper care  of the  wagon  at Mughalsarai and that in all  probability  the seals  and rivets of the wagon had been allowed to be broken there and all arrangements had been completed as to how  the goods  would be removed from the wagon when the train  would leave that station and this could only be done either by  or in   collusion   with  the  servants  of  the   railway   at Mughalsarai.  In  this  view of the matter  the  High  Court allowed  the appeal and decreed the suit with costs  As  the judgment  was  one of reversal and the amount  involved  was over  rupees  twenty  thousand, the  High  Court  granted  a certificate.  and that is how the matter has come up  before us.     We .shall first deal with the-question of the notice. We are  in this case concerned with the Act as it -was in  1947 before  its amendment by Central Act 56 of 1949  and-Central Act No. 39 of 1961 and all references in this judgment  must be  read as  applying to the Act as it was. in 1947. Now  s. 77  inter alia provides that a person shall not be  entitled to  compensation for the loss, destruction or  deterioration of  animals or goods delivered to be  carried’  by  railway, unless  his  claim  to compensation has  been  preferred  in writing   by  him  or  on  his  behalf  to    the    railway administration  within  six  months from  the  date  of  the delivery  of the animals or goods for carriage  by  railway.

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There was a conflict between the High Courts on the question whether   non-delivery   of   goods   carried   by   railway amounted  .to  less within the meaning of s. 77.  Some  High Courts (including the. Patna High Court) held that a case of non-delivery was distinct from a case of loss and no  notice under s. 77 was necessary .in-the case of non-delivery. Other High Courts however took a contrary view and held that a case  of non-delivery also was a case of loss. This conflict has  now been  resolved  by the decision of-this Court  in  Governor- General  in Council v. Musaddilal (1) and the view taken  by the Patna High Court has been overruled. This Court has held that failure to deliver goods is the consequence of loss  or destruction  and the cause of action for it is not  distinct from  the  cause of action for loss  or   destruction,   and therefore  notice  under s. 77 is necessary in the  case  of non-delivery which arises from the loss of goods.  Therefore notice  under s.  77  was necessary in the present case.  It is  true  that  the  respondent  stated  in  the  plaint  in conformity with ’the view of the Patna High Court  prevalent in Bihar that no notice under s.77 was necessary as it was a case  of  non-delivery. But we find in actual  fact  that  a notice  was given by the respondent to the railway on  April 10, 1948 to the Chief Commercial Manager, E.I.R. in which it was  stated  that  60 bales of-cloth  were  booked  for  the respondent   but  only 29 bales had been delivered  and  the balance  of 31 bales had not been delivered.  Therefore  the respondent gave notice that if the bales were not  delivered to  him  within a fortnight, he would file a  suit  for  the recovery  of Rs. 36,461/12/-, and the details as to how  the amount was arrived at were given in this notice. It is  true that  the notice was not specifically stated to be a  notice under  s.  77 of the Act but it gave.  all  the  particulars necessary  in  a notice under that section. This  notice  or letter  was  sent within six months  of the booking  of  the consignment.  A similar case came up  before this. Court  in Jetmull  Bhojraj  v. The Darjeeling  Himalayan  Railway  Co. Ltd.(2) and this Court held that .the letter to the  railway in that case was sufficient notice for the .purpose of s. 77 of the Act. ’Following that decision we hold that the letter in  the  present  case  which  is  even  more  explicit   is sufficient  notice for the purpose of S: 77 .of the Act.  We may  add that the learned Additional Solicitor  General  did not  challenge  this  in view of  the  decision  in  Jetmull Bhojraj’s case(2).   This  brings  us  to the second  question  raised  in  the appeal.  We have already indicated that the High Court  held that  as the burden of disclosure which was on  the  railway had  not  been discharged there vas a breach of one  of  the terms of the risk note Z and therefore the risk note did not apply at all and the responsibility of the railway had to be assessed  under’ s. 72 (1) of the Act. This view of the  law has-been  contested  on behalf of the appellant and.  it  is urged that after the risk note is executed either in form  Z or  in  form B, the responsibility of the railway  must.  be judged  in  accordance with the risk note even if  there  is some  breach  of the condition as to disclosure. It  may  be mentioned  that  risk note form Z and risk note form  B  are exactly similar in their terms insolar as the responsibility of the. railway is .concerned for. risk note 150 form  B  applies to individual consignment while form  Z  is executed by a party who has usually to send goods by railway in large numbers. Risk note form Z is general in its  nature and applies to all consignments that a party may send  after

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its  execution.  It is proved that the consignment  in  this case  was  covered by risk note form Z. The  main  advantage that a consignor gets by sending a consignment under from  Z or  form  B is a specially reduced rate as compared  t3  the ordinary rate at which goods are carried by the railway  and it  is  because  of this specially reduced  rate  that   the burden  is thrown on the consignor in a suit for damages  to prove misconduct on the part of the railway or its  servants in  the  case  of loss etc. of the  goods,  subject  to  one exception.     On  the  other  hand  the  argument  on  behalf  of  the respondent is that the view taken by the Patna High Court is right and it is the duty of the railway administration under the risk note, as soon as there is non-delivery and a  claim is made on the railway for compensation, to disclose how the consignment  was dealt with throughout while it was  in  its possession or control and that its failure to do so  results immediately  in breach of the contract with the result  that the responsibility of the railway has to be judged solely on the  basis  of s. 72 (1) of the Act ignoring the  risk  note altogether.     Section 72 (1) defines the responsibility of the railway administration for the loss, destruction or deterioration of animals   or  goods delivered to the  administration  to  be carried by railway to be the same as that of a bailee  under ss. 152 and 161 of the Indian Contract Act, 1872, subject to other  provisions  of  the Act. Sub-section  (2)  of  s.  72 provides   that  an  agreement  purporting  to   limit   the responsibility  under s. 72 (1) can be made subject  to  two conditions,  namely, (i) that it is in writing signed by  or on behalf of the person sending or delivering to the railway administration the animals or goods, and (ii) that it is  in a form approved by the Governor-General. Sub-section (3)  of s. 72 provides that nothing in the common law of England  or in  the Carriers Act 1865  regarding the  responsibility  of common carriers with respect to carriage of animals or goods shall affect the responsibility as in  this section  defined of the railway administration. So the responsibility of  the railway for loss etc. is the same as that of a bailee  under the  Indian  Cantract Act. But this  responsibility  can  be limited  as  provided  in  s. 72 (2).  For  the  purpose  of limiting  this responsibility risk notes form B and  form  Z have  been approved by the Governor-General and where  goods are  booked under these risk notes the liability is  limited in   the  manner  provided  thereunder.   It  is   therefore necessary  to set out the relevant terms of the  risk  note, for  the decision of this case will turn on  the  provisions of the risk note itself.     The risk note whether it is in form B or form Z provides that  where goods are carried at owner’s risk  on  specially reduced  rates, the owner agrees or undertakes to  hold  the railway administration 151 "harmless  and  free from all responsibility for  any  loss, deterioration  or destruction of or damage to all or any  of such consignment from any cause whatever, except upon  proof that  such loss, destruction, deterioration or damage  arose from   the   misconduct   on  the  part   of   the   railway administration  or its servants". "thus risk notes B  and  Z provide  for  complete immunity of the railway  except  upon proof of misconduct. But to this immunity there is a proviso and it is the construction of the proviso that arises in the present appeal. The proviso is in these terms:--                      "Provided   that   in   the   following

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             cases:--                     (a)  Non-delivery  of  the  whole  of  a               consignment  packed  in  accordance  with  the               instruction laid .down in the tariff or  where               there   are   no   instructions,     protected               otherwise  than  by  paper  or  other  packing               readily removable by hand and fully addressed,               where such non-delivery is not due               to   accidents   to   train   or   to    fire;               (b)  ...............                     "The  railway  administration  shall  be               bound  to  disclose to the consignor  how  the               consignment  was   dealt with  throughout  the               time it was in its possession or control,  and               if necessary, to give evidence thereof  before               the   consignor  is  called  upon   to   prove               misconduct, but, if misconduct on the part  of               the  railway  administration or  its  servants               cannot be fairly inferred from such  evidence,               the  burden of proving such  misconduct  shall               lie  upon the consignor".     It  is not in dispute that the present case comes  under cl.  (a) of the risk note. An exactly similar  provision  in risk note form B came up for consideration before the  Privy Council  in  Surat  Cotton  Spinning  &  Weaving  Mills   v. Secretary Of State for India in Council, (’) and the law  on the subject was laid down thus at   pp.181-182:                 "The  first portion of the proviso  provides               that  the Rail-   way Administration shall  be               bound  to  disclose  to  the   consignor  ’how               the  consignment was dealt with through-   out               the time it was in its possession or  control,               and, if   necessary to give evidence  thereof,               before the consignor   is called upon to prove               misconduct’.  In their  Lordships’    opinion,               this  obligation  arises  at  once  upon   the               occurrence of either of cases (a) or (b),  and               is not confined to the   stage of  litigation.               Clearly  one object of the provision  is    to               obviate,   if  possible,  the  necessity   for               litigation.  On   the other hand, the  closing               words  of the obligation clearly apply to  the               litigious  stage.  As  to the  extent  of  the               disclosure,  it  is  confined  to  the  period               during  which the               (1) [1927] L.P-  LXIV:               152               consignment  was  within  the  possession   or               control of the Railway Administration; it does               not relate, for instance,       to the  period               after  the  goods  have  been  the   fatuously               removed from the premises. On the other  hand,               it  does envisage a precise statement  of  how               the   consignment  was  dealt  with   by   the               Administration   or   its    servants.     The               character  of  what  is  requisite  may   vary               according  to the circumstances  of  different               cases, but, if the consignor is not  satisfied               that  the  disclosure has been  adequate,  the               dispute must be judicially, decided. As to the               accuracy or truth of the information given, if               the  consignor is doubtful or unsatisfied, and               considers that these should be established  by               evidence, their Lordships are of opinion  that               evidence   before   a   Court   of   law    is

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             contemplated,  and that. as was properly  done               in    the    present   suit,    the    Railway               Administration  should submit their   evidence               first at the trial.                       "At the close of the evidence for  the               Administration    two questions may be said.to               arise, which it is important to keep distinct.               The  first  question is not  a  mere  question               of.procedure,   but  iS  whether   they   have               discharged  their obligation  of  disclosure,’               and, in regard  to  this, their Lordships  are               of  opinion  that the terms of the  Risk  Note               require a step in procedure, which may be said               to  :be  Unfamiliar  in the  practice  of  the               Court; if the consignor is not satisfied  with               the’  disclosure  made  their   Lordships  are               clearly of opinion that is for him tO say  so,               and  to call on the Administration to  fulfill               their  obligation   .Under the  contract,  and               that  the Administration should then have  the               opportunity   to  meet  the  demands  of   the               consignor  before  their case is  closed;  any               question as to whether the consignor’s demands               go  beyond  the  obligation  should  be   then               determined by the Court. If the Administration               fails  to take the opportunity to satisfy  the               demands of the consignor so far as endorsed by               the  Court, they will  be  in breach of  their               contractual obligation of disclosure.                "The  other  question which may  be  said  to               arise at this  stage is whether misconduct may               be  fairly inferred from the evidence  of  the               Administration;   if  so,  the  consignor   is               absolved  from his original burden  of  proof.               But,  in this case, the decision of the  Court               may  be given when the evidence of both  sides               has  been completed. It  is .clearly  for  the               Administration   to  decide   for   themselves               whether  they  have adduced all  the  evidence               which they consider desirable in avoidance  of               such  fair "inference of  misconduct"..   They               will doubtless keep in mind the provisions  of               s.114 of the Indian Evidence Act".-     With  respect we are of opinion that this exposition  of the law relating to risk note B applies also to risk note  Z and we accept it 153 as   correct.  Thus  the  responsibility  of  the   railway. administration   to  disclose  to  the  consignor  how   the consignment  was  dealt with thrOughOut-the time it  Was  in its possession or control arises at once under the agreement in either of the cases (a) or (b) and is not confined to the stage  of litigation. But we are not prepared to accept  the contention   on   behalf  of  the   respondent   that   this responsibility  to make full disclosure  arises  immediately the  claim  is  made by the consignor  and  if  the  railway immediately on such claim being made does. not disclose  all the facts to the consignor, there is immediately a breach of this term of the contract contained in the risk note. It  is true  that  the  railway  is  bound  to  disclose  to    the consignor how the Consignment was dealt with throughout  the time  it  was in its possession even before  any  litigation starts;  but  we  are of  opinion-that  such  disclosure  is necessary  only  where the consignor specifically  asks  the railway  to make :the disclosure. If no  such disclosure  is

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asked for, the administration need not make it  before  the’ litigation. In the present case there is’ no proof that  any disclosure was asked for in this behalf by the consignor  at any  time  before  the, suit was  filed.  Therefore  if  the railway did not disclose how the consignment was dealt  with throughout  before the suit was filed, it cannot be said  to have  committed  breach of this term of  the  contract.  The disclosure   envisages  a  precise  statement  of  how   the consignment  was dealt with by the railway or its  servants. if  the  disclosure  is  asked  for  before  the  litigation commences and is not given or the disclosure is given but it is  not  considered to be sufficient by the  consignor,  the dispute has to be judicially decided and it is for the court then  to say if a suit is brought whether there has been  Ia breach of this term’ of the contract.      After this, comes the stage where the consignor or  the consignee’   being   dissatisfied   brings   a   suit    for compensation.  At that stage evidence has to be led  by  the railway in the first instance to substantiate the disclosure which  might  have been made before the  litigation  to  the Consignor  or  which  might have been made  in  the  written statement   in   reply  to  the  suit.  When   the   railway administration.  has  given  its evidence in  proof  of  the disclosure  and  the  plaintiff is not  satisfied  with  the disclosure made in  the evidence, the plaintiff is  entitled to  ask  the court to call upon the railway  to  fulfil  its obligation  under  the  contract  and  the  railway   should then  .have  the opportunity of meeting the demands  of  the plaintiff before its case is closed. Thus in addition to the evidence that the railway may adduce on its own and in doing so  the  railway  has  necessarily  to  keep  in  mind   the provisions  of  s.  114  of the  Indian  Evidence  Act,  the plaintiff can and should draw .the attention of the court if he  feels that full disclosure has not been made., In  .that case  he  can ask the court to require the railway  to  make further disclosure and should. tell the court  what  further disclosure  he  wants. It is then for the  court  to  decide whether  the  further disclosure .desired by  the  plaintiff should  be  made by the  railway, and if the  court  decides that  such  further  disclosure 154 should  be  made  the  railway  has  to  make  such  further disclosure as the court orders it to make on the request  of the plaintiff. If the railway fails to take the  opportunity so  given to satisfy the demands of the plaintiff,  endorsed by  the  court,  the  railway would  be  in  breach  of  its contractual  obligation of disclosure. It is at  this  stage therefore that the railway can be truly said to be in breach of its contractual obligation of disclosure, and that breach arises because the railway failed to disclose matters  which the  court  on  the  request of the  plaintiff  asks  it  to disclose.  The question then is what is the effect  of  this breach.     It is remarkable that the Privy Council did not lay down that  as soon as the breach is made as above the  risk  note comes  to  an end and the responsibility of the  railway  is that  of  a  bailee  under s. 72 (l)  of  the  Act.  In  the observations  already quoted, the Privy Council has gone  on to say that after this stage is over, the question may arise whether misconduct may be fairly  inferred from the evidence of the railway. It seems to us therefore that even if  there is  a breach of the term as to full disclosure it  does  not bring the contract to an end and throw the responsibility on the   railway  as  if  the  case  was  a  simple   case   of responsibility  under s. 72(1) of the Act; the case is  thus

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not assimilated to a case where the goods are carried at the ordinary rates at railway risk. The reason for this seems to be  that the goods have already been carried at the  reduced rates and the consignor has taken advantage of that term  in the  contract. Therefore, even though there may be a  breach of  the  term as to complete disclosure by the  railway  the consignor  cannot fall back on the  ordinary  responsibility of  the  railway under s. 72 (1) of the Act as if the  goods had been carried at railway’s risk at ordinary rates, for he has derived the  advantage of the goods having been  carried at  a  specially reduced rates. The risk note would  in  our opinion continue to apply and the  court would still have to decide  whether misconduct can be fairly inferred  from  the evidence of the railway, with this difference that where the railway  has been in breach of its obligation to  make  full disclosure  misconduct may be more readily inferred  and  s. 114 of the Indian Evidence Act more readily applied. But  we do  not  think that the conditions in the risk note  can  be completely  ignored simply  because there has been a  breach of  the  condition of complete disclosure. The view  of  the Patna  High  Court that as soon as  there is breach  of  the condition  relating to complete  disclosure  the  risk  note can  be  completely ignored and the  responsibility  of  the railway  judged purely on the basis of s. 72 (1) as  if  the goods  were carried at the ordinary rates on railway’s  risk cannot therefore be accepted as correct.     We  may  point  out that in Surat  Cotton  Spinning  and Weaving Mills Limited’s case, (I) the plaintiffs wanted  the guard  of the train to be examined and he was undoubtedly  a material witness. Even 155 so  the  witness was not examined by  the  railway.  Finally therefore  the Privy council allowed the appeal  with  these observations at p. 189:-                     "While their Lordships would be inclined               to hold that the respondent, by his failure to               submit  the evidence of Rohead, was in  breach               of  his  contractual obligation  to  give  the               evidence  necessary for disclosure of how  the               consignment  was dealt with, they are  clearly               of  opinion  that the failure  to  submit  the               evidence  of Rohead, in the  circumstances  of               this  case, entitles the court to presume,  in               terms of s. 114 (g) of the Evidence Act,  that               "Rohead’s  evidence,  if  produced,  would  be               unfavorable  to the respondent, and  that,  in               consequence,  misconduct by complicity in  the               theft  of  some servant, or  servants  of  the               respondent  may  be fairly inferred  from  the               respondent’s evidence".     These observations show that even though there may be  a breach  of the obligation to give full disclosure that  does not mean that the risk note form Z or form B can be  ignored and the  responsibility of the railway fixed on the basis of s. 72 (1) as a simple bailee. If that was the effect of  the breach,  the  Privy  Council  would not  have  come  to  the conclusion after applying s. 114 (g) of the Evidence Act  in the  case  of Rohead that misconduct by  complicity  in  the theft  of  some servant or servants of the railway   may  be fairly inferred from the railway’s evidence. The appeal  was allowed by the Privy Council after coming to the  conclusion that  misconduct by the servant or servants of  the  railway might  be  fairly inferred from the evidence  including  the presumption   under  s.    114(g) of the  Evidence  Act.  It seems  to us clear therefore that even if there is a  breach

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of the obligation to make full disclosure in the sense  that the  railway  does not produce the evidence desired  by  the plaintiff  in  the  suit  even though  the  request  of  the plaintiff  is  endorsed  by the court, the  effect  of  such breach  is not that the risk note is completely out  of  the way, the ’reason for this as we have already indicated being that  the  consignor  has already  taken  advantage  of  the reduced rates and therefore cannot be allowed to ignore  the risk  note  altogether. But where there is a breach  by  the railway of the obligation to make full disclosure the  court may more readily infer misconduct on the part of the railway or its servants or more readily presume under s. 114 (g)  of the Evidence Act against the railway. This in our opinion is the  effect  of the decision of the Privy Council  in  Surat Cotton Spinning and Weaving ’Mills Limited’s case(1). As  we have  already said we are in respectful agreement  with  the law as laid down there. So far as the present appeal is concerned, there was no  de- by the consignor for disclosure before the suit. Even  after the suit was filed  there was no statement by the respondent at any (1) [1937] L.R. 64 I.A. 176. 156 stage  that  the  disclosure made by the  appellant  in  the evidence  was  in any way inadequate. The  respondent  never told  the court after the evidence of the railway  was  over that  he was not satisfied with the disclosure and that  the railway  be asked  to make further disclosure  by  producing such  further  evidence as the respondent wanted.  In  these circumstances  it  cannot be said in the present  case  that there was any breach by the railway of its responsibility to make full disclosure. In the circumstances we are of opinion that  the  risk note would still apply and the  court  would have to decide whether misconduct on the part of the railway can be fairly inferred from the evidence produced by it.  If the  court cannot fairly infer misconduct from the  evidence adduced by the railway, the burden will be on the respondent to prove misconduct. that burden, if it arises, has  clearly not  been discharged for the respondent led no  evidence  on his behalf to discharge the burden. We therefore turn to the evidence  to see whether from the evidence produced  by  the railway a fair inference of misconduct of the railway or its servants can be drawn on the facts of this case.    It  is  not  in  dispute in  this  case  that  the  wagon containing the  consignment arrived intact at Mughalsarai on December  9,  1947.  Besides there is  evidence  of  Damodar Prasad  Sharma,  Assistant Trains Clerk,  Mughalsarai,  P.W. 14, who had the duty to receive trains at the relevant  time that  192 Dn. goods train was received by him on line No.  4 and  that there were two watchmen on duty on that  line  for examining  the goods train and they kept notes of the  same. He also produced the entry relating to the arrival  of   the train  and  there is nothing in the entry to  show  anything untoward   with.this  wagon  when  the  train   arrived   at Mughalsarai.   His  evidence also shows that the  train  was sent  to the marshaling yard on December 11,  1947.  Finally there  is the evidence of Chatterji (P.W. 8) who is also  an Assistant  Trains Clerk. It was his duty to make notes  with respect  to goods trains which left  Mughalsarai. He  stated that  this wagon was sent by train No. 214 on  December  12, 1947  in the evening. He also stated that the wagon  was  in good  condition  and  produced the entry  relating  to  this wagon. It appears however from his evidence that rivets  and seals are examined by the watch and ward staff and they keep record  of  it.  Apparently therefore he  did  not  actually

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inspect the wagon before it left though he says that it  was in good condition. The relevance of his evidence however  is only  this  that in his register showing  the   dispatch  of trains  there is no entry to the effect that there  was  any thing wrong with this wagon when it was dispatched.    The  most important evidence however is of the  guard  of the  train, Ram Prasad Ram (P.W. 2). He stated  that  before the  train started from Mughalsarai he patrolled both  sides of it  and  the place from where the train started was  well lighted and watch and ward staff also patrolled the area. He also  stated that the rivets and seals of all the wagons  in the  train  were  checked  at Mughal  sarai  and  there  was apparently nothing wrong with them. Now if 157 the evidence of the guard is believed it would show that the wagon  containing the consignment was intact at  Mughalsarai upto  the  time 214 goods train including  this  wagon  left Mughalsarai.  If  so there would be no reason to  hold  that anything  was  done  to  the wagon  before  the  train  left Mughalsarai.  It  may  be mentioned  that  the  trial  court accepted the evidence of the guard while the High Court  was not  prepared to believe it. On a careful  consideration  of the evidence of the guard we see no reason why his  evidence should  not  be believed. It is obviously the  duty  of  the guard  to  see that the train was all right,  when  he  took charge  of it. It appears that in discharge of his duty  the guard patrolled the train on both sides and looked at rivets and  seals  to see that they were intact.  It  is,  however, urged that the guard’s evidence does not show that the seals which he found intact were the original seals of  Wadibundar and  the  possibility  is not ruled out  that  the  original seals  might  have been tampered with and new seals  put  in while  the train was in the marshaling yard  at  Mughalsarai for  two days, as  the evidence of the watch and ward  staff had not been  produced. It would perhaps have been better if the  evidence of the watch and ward staff had been  produced by the railway; but if the evidence of the guard is believed that  the seals and rivets were intact when the  train  left Mughalsarai,  the evidence of the watch and ward  staff  is’ not  necessary. It is true that the guard does not say  that the  seals  were  the original seals of  Wadibundar  but  it appears  from the evidence of Jagannath Prasad (P.W. 9)  who was  the  Assistant Station Master at  Dildarnagar  that  he found  when  the  train  arrived  there  that  the  northern flapdoors  of the wagon were open while  southern  flapdoors were intact with the original seals. This evidence  suggests that  the original seals could not have been  tampered  with when  the  train  left  Mughalsarai  and  that  the  guard’s evidence  that  seals  and rivets  were  intact  shows  that nothing   had  happened  to  the  wagon  while  it  was   at Mughalsarai. Further it is also in  evidence  that there  is ample light in the marshalling yard at Mughalsarai and  that watch and ward staff is posted there as well. So the chances of  tampering with the seals and rivets in  the  marshalling yard  in the circumstances are remote. As such the  evidence of  the guard that the seals and rivets were intact when  he left  with  the train on the evening of December  12,  would apparently  exclude  the  possibility  that  there  was  any tampering  with the wagon before it left Mughalsarai. It  is true that on the last day when the evidence for the  railway was  recorded  and the guard had been recalled  for  further cross-examination  it was suggested to him that the  railway servants  at  Mughalsarai  had removed the  bales  and  were responsible for the theft. He however denied that. But it is remarkable that if the respondent was dissatisfied with  the

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evidence of the guard which was to the effect that the wagon was  all  right when he left Mughalsarai with the  train  on December  12, it did not ask the court to order the  railway to  produce  the evidence of the watch and ward  staff  with respect  to this wagon while it was in the marshalling  yard at   Mughalsarai.   The  respondent  could  ask   for   such disclosure. If the court L/B(D)2SCI--12 158 had  accepted  the  request and the railway  had  failed  to produce the evidence of the watch and ward staff it may have been  possible  to use s. 114 of the Evidence Act  and  hold that the watch and ward staff having not been produced their evidence, if produced, would have gone against the  railway. But  in the absence of any demand by the respondent for  the production  of the watch and ward staff which he  could  ask for, we see no reason why the  statement of the guard to the effect  that seals and rivets of the wagon were intact  when he  left Mughalsarai with the train should not be  accepted. In  the  absence  of any demand by the  respondent  for  the production of watch and ward staff his mere suggestion  that the railway servants at Mughalsarai might have committed the theft cannot be accepted.     There  is the further evidence of the guard as  to  what happened  between Mughalsarai and Buxar. It appears  between these two stations the train stops only at Dildarnagar.  The evidence  of  the guard however is that the  train  suddenly stopped  between  the  warner and  home  signals  before  it reached Dildarnagar. He therefore got down to find out  what the  trouble  was. He found that the  hosepipe  between  two wagons  had  got  disconnected and  this   resulted  in  the stoppage  of  the train. The evidence further  is  that  the hosepipe was intact when the train started from Mughalsarai. He  made  a note of this in his rough memo  book  which  was produced. It is noted by him that the northern flap door  of this wagon was open. He reconnected the hosepipe and went up to Dildarnagar. There he reported the matter to the  station staff. His further evidence is that there were three escorts with  the train and that they were guarding the  train  when the  train  was  standing between the warner  and  the  home signals before it reached Dildarnagar. Nothing untoward  was reported  to  him  by these escorts. It  was  at  this  stop between  the  two signals that the guard  noticed  that  the rivets and seals of this wagon on one side had been  broken. The  case  of  the railway is that there was  theft  in  the running  train between Mughalsarai and Buxar and that is how part of the consignment was lost. The evidence of the  guard does suggest that something happened between Mughalsarai and Dildarnagar  and  then  between Dildarnagar  and  Buxar.  In addition  to  this  the evidence of  the  station  staff  at Dildarnagar  is that the flapdoors of this wagon were  found open  when  the train arrived at Dildarnagar.  The  contents were not checked at Dildarnagar as there was no  arrangement for  checking  at that station. The wagon  was  resealed  at Dildarnagar, and the fact was noted in the station  master’s diary. It may be mentioned that the evidence of the  station staff  was   that  the wagon was resealed though  the  guard says  that it was riveted also at Dildarnagar. The entry  in the  guard’s rough memo. however is only that the wagon  was resealed. The guard certainly says that it was rivetted also at  Dildarnagar  but that is not supported  by  the  station staff  and the entry in the guard’s rough memo.   It   seems that the statement of the guard may be due to some error  on his 159

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part.  That may also explain why, when the train arrived  at Buxar,  the  flapdoor again was found open, for it  had  not been rivitted at Dildarnagar. Then the evidence of the Buxar station  staff is that the northern flapdoors of this  wagon were  open  when  the train arrived at Buxar.  It  was  then resealed  and  rivetted and was detached for  checking.  The checking  took place on December 14th at Buxar.It  was  then found  that one side had the original seals of  Wadibun  dar while the other side had the seals of Buxar. On checking the wagon, 27 bales were found intact, covering of one bale  was torn  and one bale was found loose and slack. This  evidence asto what happened between Mughalsarai and Buxar thus  makes it  probable  that  there was theft  in  the  running  train between  Mughalsarai and Buxar and that may account for  the loss of part of the  consignment.    It is however contended on behalf of the respondent  that no   evidence  was  produced  from  Mughalsarai  asto   what happened  while  the wagon was in the marshalling  yard  and that  the  seal book which is kept at every railway  station containing entries of resealing when a wagon is resealed was not  produced  from  Mughalsarai and  an  adverse  inference should be drawn from this non- production. We are however of opinion  that the evidence of the guard to the  effect  that the  seals  were intact when he left  Mughalsarai  with  the train is sufficient to show that the wagon was in-tact  with the  original seals when it left Mughalsarai and  there-fore it  is not possible to draw any adverse inference  from  the non-production of the watch and ward staff or the seal  book of  Mughalsarai in the circumstances of this case. It  would have been a different matter if the respondent had asked for the  production of the seal book as well as the evidence  of the  watch   and ward staff. But  the  respondent  contented itself  merely with the suggestion that a theft  might  have taken place at Mughalsarai which was denied by the guard and did  not ask the court to order the railway to produce  this evidence. In these circumstances in the face of the evidence of the guard and the fact that one seal on the  southernside of  the  door was of the original station. we do  not  think that it is possible to draw an adverse inference against the railway  on  the ground that the evidence of the  watch  and ward  staff  and  the  seal book  at  Mughalsarai  were  not produced. The seal book would have been of value only if the wagon  had been resealed at Mughalsarai but there is in  our opinion no reason to think that the wagon had been  resealed at Mughalsarai after the evidence of the guard that he found the  seals and rivets intact when he left  Mughalsarai  with the  train.  On  a careful  consideration  of  the  evidence therefore we are of opinion that a fair inference cannot  be drawn  from  the  evidence of the  railway  that  there  was misconduct  by  the railway or its servants  at  Mughalsarai during the time when the wagon was there. If the evidence of the guard is accepted, and we do accept it, there can be  no doubt that the loss of the goods took place be-case of theft in the running train  between   Mughalsarai  and 160 Buxar.  There is no evidence on behalf of the respondent  to prove   misconduct  and  as  misconduct  cannot  fairly   be inferred  from  the  evidence  produced  on  behalf  of  the railway, the suit must fail.     We  therefore allow the appeal, set aside  the  judgment and  decree  of  the  High Court and  restore  that  of  the Additional  Subordinate Judge. In the circumstances of  this case we order parties to bear their own costs throughout. Appeal allowed. 161

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