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PETITIONER: UNION OF INDIA

       Vs.

RESPONDENT: STEEL STOCK HOLDERS’ SYNDICATE, POONA

DATE OF JUDGMENT01/03/1976

BENCH: FAZALALI, SYED MURTAZA BENCH: FAZALALI, SYED MURTAZA GOSWAMI, P.K.

CITATION:  1976 AIR  879            1976 SCR  (3) 504  1976 SCC  (3) 108  CITATOR INFO :  R          1990 SC 104  (4)

ACT:      Railways Act. 1890 (as amended in 1961)-Ss. 72, 73, 76, 78(d)-Scope of-Delay  in delivery  of Goods-Loss of interest on capital-If,  could be  measure of damages-If Railways Act overrides Contract Act.

HEADNOTE:      A  consignment   of  iron   goods  was  booked  by  the respondent by  rail on  December 15,  1961. The  due date of delivery under  the contract  or usage  of the  railways was December 25,  1961. As  the goods  were diverted,  they were actually delivered  on July 21, 1962. The respondent filed a suit for  damages alleging  negligence on  the part  of  the railway in  that, by  reason of  diverting the  consignment, there was inordinate delay in its delivery which resulted in loss to  it by  way of  interest on capital. The trial court decreed the suit but in the matter of damages by way of loss of interest  it gave  6% per annum instead of 12% claimed by the respondent. The District Court dismissed the appellant’s appeal, and  the High  Court dismissed  the second appeal in limine.      On appeal  to this  Court  it  was  contended  for  the appellant that  (i) since  the cause  of action was based on delayed delivery,  the case  was covered by the Railway Act, as amended in 1961, that the applicable section is s. 76 and that since  the conditions  mentioned therein  had not  been fulfilled, the respondent was not entitled to a decree; (ii) that the  respondent could  claim for loss of profit or loss of market  as the  same was  expressly barred by s. 78(d) of the new  Act; and  (iii) that  the  respondent’s  claim  for damages was  not actionable  in the absence of any agreement providing interest  on capital  as a  measure of damages. It was contended  for the  respondent that even if s. 76 barred the remedy,  loss of profit or market resulting from delayed delivery would  amount to "deterioration" contemplated by s. 76.      Dismissing the appeal to this Court, ^      HELD: In  view of the finding of fact arrived at by the courts below, the respondent is entitled to damages. [515B]

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    1. (a)  The case  is covered  by the new Act and not by the old  Act as  contended by the respondent. There could be no question  of liability arising when the goods were booked and the contract was entered into between the respondent and the railways,  because, there  was no  presumption that  the contract would result in breach. [512B-C]      In the instant case, the cause of action arose when the consignment was  delivered to  the respondent  on  July  21, 1962, that  is, after  the new  Act  came  into  force.  The reasonable transit  period having expired on January 1. 1962 the breach occurred after the new Act came into force.      (b) Section  76 of the Act has a very limited scope: it contemplates clearly  those  cases  which  fall  within  the contingencies contemplated  by it. These contingencies refer to certain  physical factors,  viz: actual and physical loss destruction, damage  or deterioration of goods. Where due to delay  on   the  part  of  the  railway  there  is  physical deterioration or  diminishing of the value of the goods, the plaintiff cannot  claim damages by way of loss of profits or loss of  market plus damages sustained by the actual loss or deterioration of the goods. In such a case the plaintiff can claim only  the actual loss in the value of the goods caused by destruction,  damage or  deterioration and  not  loss  of profit. [512F-H]      (c) The  word "deterioration"  is used  in its ordinary parlance, so  as to  include within  its  ambit  the  actual physical act  of deterioration,  namely, the  change for the worse in the thing itself. [514E-F] 505      B.I. Railway  Co. Ltd.  v. Piana Mal Gulab Singh A.I.R. 1925 Lah. 255, approved.      G.I.P. Railway  Co. & others v. Jugal Kishore Mukat Lal A.I.R. 1930  All. 132  and Union  of  India  and  others  v. Messrs. Sheobux  Satyanarayan, A.I.R.  1963 Orissa  68,  not approved.      (d)The   words    "loss,   destruction,    damage    or deterioration" occurring  in s.  76  must  be  read  ejuedem generis to  indicate the  actual and physical loss or change in the  goods contemplated  by that  section. In the instant case, since there was no physical deterioration of the goods at all  which were  delivered in the same condition in which they were  booked, the  case of the respondent does not fall within  the  four  corners  of  the  section.  Nor  can  the respondent take  advantage of  s. 76  relying  on  the  word "deterioration" because of the finding of negligence entered by the courts below. [514G]      If s.  76 does  not apply  then s.  78  would  have  no application because  that section starts with a non-obstante clause. [513E-F]      (2) Section  78(d), which  flows out of s. 76, provides that the railway administration shall not be responsible for any  indirect  or  consequential  damages  or  for  loss  of particular market.  It merely  incorporates the  measure  of damages as contemplated by s. 73. [513B]      In the  instant case  as the respondent had not claimed loss of market or remote damages the question of application of s. 78(d) did not arise.      3(a) The case of the respondent is clearly taken out of the ambit of ss. 76 and 78. Hence its suit for damages could not be defeated on the ground that it was barred by s. 76 or s. 78 of the Act. [515A-B]      (b) It  is difficult  to accept  the contention  of the appellant that,  by virtue  of ss.  72 and  73, any contract entered into  between the  parties and  the liability of the railway was governed purely by the provisions of the Railway

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Act and  not by  the  terms  of  the  contract  between  the parties. [510G]      The Indian  Contract Act  provides  certain  elementary conditions for  a binding  contract but does not provide any particular  form  of  contract.  The  fact  that  where  the Government is  a party to a contract, the particular form in which the  contract is  to be executed has been provided for by the Constitution, did not mean that the provisions of the Contract Act stand superseded by the Constitution or in this case by  the Railway  Act. Section 72 does nothing more than provide for a particular form in which the contract is to be executed and  it enjoins that such a form will be prescribed by the  railway administration  and approved  by the Central Government. [510H-511-A]      (c)   Section   73   lays   down   that   the   Railway administration  shall   be   responsible   for   the   loss, destruction, damage, deterioration or non-delivery except in certain cases  which amount  to vis major in which case also the Act  places responsibility on the railways if it did not prove that  it had used reasonable foresight and care in the carriage  of   goods.  The  section,  while  converting  the liability of  the railway  administration  from  that  of  a carrier  to   that  of   an  insurer,  has  imposed  heavier responsibility on the railway administration. [511F-G]      4(a) There  is no question of s. 73 of the Contract Act over-riding the  provisions of  the Interest  Act because in the instant  case the Interest Act has no application at all inasmuch as  no interest  is claimed  by the  plaintiff; but interest has  been  used  as  a  measure  to  determine  the compensation which  the respondent  could seek  against  the appellant for  its negligence in causing inordinate delay in the delivery  of the  goods. The respondent had only claimed nominal damages  for the loss because of the amount of money locked up  for more  than six  months due  to late delivery. [517B]      (b) The courts below rightly found that the railway was guilty of  gross negligence. As a common carrier the railway is responsible  for breach of contract. There was absolutely no reason  for the  railway to  divert the  consignment to a place which did not fall on the route at all. [517D] 506      (c) The  trial court  was fully  entitled to scale down the amount of interest from 12% to 6%. [517F]      Union of  India v. Watkins Mayore & Company A.I.R. 1966 S.C. 275 distinguished.      Digbijai Nath  v. Tirbeni  Nath Tewari A.I.R. 1946 All. 12 and  The Official Receiver, Calcutta High Court & Anr. v. Baneshwar Prasad Singh & Anr. A.I.R. 1962 Pat. 155 approved.      5. The  present appeal  was concluded  by  findings  of fact. But  on the  proved facts  some clear questions of law arose for  decision and,  therefore, this  was not a case in which the  High Court  should have  dismissed the  appeal in limine. [507F]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 1237 of 1968.      From the Judgment and Order dated the 24th August, 1967 of the  High Court  of Judicature at Bombay in Second Appeal No. 798 of 1967.      Lal Narain  Sinha, Solicitor  General for  India, S. N. Prasad,  and   Girish  Chander,   (Not  present),   for  the appellant.

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    M. N.  Phadke, P.  C. Bhartari, J. B. Dadachanji, O. C. Mathur  and   Ravinder  Narain,   (Not  Present),   for  the respondent.      The Judgment of the Court was delivered by      FAZAL ALI,  J.-This is  a defendant’s appeal by special leave against  the judgment  and decree of the High Court of Bombay dismissing  its second  appeal in limine by its order dated August 24, 1967.      The appeal  raises important  and interesting questions of law  relating  to  the  interpretation  of  some  of  the provisions of  the Indian  Railways Act  pertaining  to  the liability of  the  Railways  for  breach  of  contract.  The plaintiff/respondent brought  a  suit  for  recovery  of  an amount of  Rs. 2,378.65  nP being  the damages for breach of contract  resulting  from  delayed  delivery  of  the  goods consigned by the plaintiff through the defendant Railways to be delivered  at  Poona.  The  plaintiff  which  is  a  firm carrying on  its business  dealing in  iron goods  booked  a consignment with  the  defendant  on  December  15  1961  at Bhillai to  be carried  to Poona and to be delivered therein to the consignee safely and in good condition. The defendant Railways accepted  the offer  under a  Railway Receipt dated December 15,  1961. It  appears that there was some delay in the delivery  of the goods at Poona and on enquiries made by the plaintiff  it appeared  that till  May 9, 1962 the goods had not  been delivered  at all.  Thereafter  the  plaintiff served a  noted claim  and of  suit dated May 9, 1962 on the Railway Administration. Soon after the service of the notice the consignment was delivered on July 21, 1962. According to the plaintiff  under  the  contract  or  the  usage  of  the Railways the  normal period  of delivery was ten days and as defendant had  committed an  inordinate delay  in delivering the goods it was liable to pay damages to the plaintiff. The plaintiff,  however,   calculated  the  damages  by  way  of interest at  the rate  of 12%  per annum  on the  locked  up capital of  Rs. 27,332-44  which due  to rise  in prices has swelled to  Rs. 35,476-27  nP. The plaintiff further alleged that the  delay in  the delivery was due to gross negligence of the defendant Railways which instead of sending the goods direct from Bhillai to Poona 507 diverted them  to Aurangabad where the consignment had to be loaded in a meter-gauge train and then to a broad-gauge line and it was only after the defendant received the notice from the plaintiff  that it  expedited the delivery of the goods. The defendant Railways contested the suit on the ground that there was  no inordinate  delay, nor  there was any contract that the  goods were  to be delivered within ten days. It is also averred  that the plaintiff had led no evidence to show that there  was any  loss of  profits or  rise in the market price. The  defendant further alleged that the plaintiff was not entitled  to claim  interest as damages. The Trial Court accepted the plaintiff’s case in toto and found-           (1)  that there  was an  inordinate delay  in  the                delivery  of   the  goods  belonging  to  the                plaintiff at Poona;           (2)  that  the   goods  were   first  diverted  to                Aurangabad, although  the route  from Bhillai                to Poona  lay via  Nagpur and Aurangabad does                not fall on the route at all; and           (3)  that  the   defendant  was  guilty  of  gross                negligence and  was,  therefore,  responsible                for loss  for delay  or deviation in carrying                the goods. The Trial  Court, however,  found that  the  figure  of  Rs.

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27,332-44 the  original amount  which was  deposited by  the plaintiff in  the Bank  against the goods should be taken as the basis  for calculation  of damages and after calculating interest at  the rate  of 6%  per annum  the  plaintiff  was awarded a sum of Rs. 1250/- including the notice charges and passed a decree for this amount in favour of the plaintiff.      The defendant  then filed an appeal before the District Judge Poona  who upheld  the finding  of the learned Munsiff and dismissed  the appeal.  A second  appeal  taken  by  the defendant to  the High Court of Bombay was also dismissed in limine, and hence this appeal by special leave.      Normally it  would appear that the appeal was concluded by findings  of fact  but we  find that  on the proved facts some clear questions of law arise for decision and therefore this was  not a  case in  which the  High Court  should have dismissed the appeal in limine.      In support  of the appeal the learned Solicitor-General submitted three points before us:           (1)that as the cause of action of the plaintiff is      based on  the delayed  delivery which arose at the most      on January  1, 1962,  the  case  of  the  plaintiff  is      covered by  the provisions  of the  new Railways Act as      amended by  Act 39 of 1961, which is an exhaustive Code      in itself providing a self-contained machinery in order      to determine  the liability  of the Railways and as the      conditions mentioned  in s. 76 of the Railways Act have      not been fulfilled the plaintiff is not entitled to any      decree;           (2)that  at  any  rate  since  the  plaintiff  has      claimed interest  as damages,  in the  absence  of  any      agreement  providing   for  such   an   interest,   the      plaintiff’s claim is not actionable at law; and 508           (3) that the plaintiff could not claim for loss of      profit or  loss of  market as  the  same  is  expressly      barred by s. 78(d) of the new Railways Act. As an  alternative argument  it was  also pleaded  that  the plaintiff has  not averred  in his plaint that there was any rise in  the prices  because  the  goods  belonging  to  the plaintiff were  a controlled commodity and could not be sold without a permit, Before claiming loss of profits it was the bounden duty  of the  plaintiff to  allege that  he had been granted the permit to sell the goods.      Mr. Phadke  appearing for  the respondent  has repelled the contentions  of the appellant on the ground that the new Railways Act  does not  reduce or  diminish the liability of the railway  administration for  breach of  contract but  in fact the  Act seeks  to increase  the liability. Secondly it was submitted  that even  if the  case of the plaintiff does not fall  within the  four corners  of  s.  76  of  the  new Railways Act, the common law right of the plaintiff to claim damages against  the appellant  has not  been barred  by the Act. Lastly  it was  submitted that  the plaintiff  has  not claimed interest  on any  specified amount  of money but has merely calculated  the same as a measure of damages which it suffered due  to the breach of contract and gross negligence on the  part of  the Railways  which has  been found  by the Courts below.  Finally it was contended that as the contract was entered  into between  the parties on December 15, 1961, when the  goods were  booked   at Bhillai, the liability for damages arose  on that  day and  the case  of the  plaintiff would be  covered by  the provisions  of  the  Railways  Act before it was amended by Act 39 of 1961.      In order  to  answer  the  contentions  raised  by  the parties it  may be  necessary for  us to  trace briefly  the

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history of  the circumstances  in which  the Railways Act of 1890 was  amended by  Act 39  of 1961.  We would, for short, refer to  the Railways  Act of 1890 as the "old Act" and the Act as  amended by Act 39 of 1961 as the "new Act". It would appear that under s. 72 of the old Act the responsibility of railway administration as a carrier of animals and goods was clearly that  of a  bailee under ss. 151, 152 and 161 of the Indian  Contract   Act.  In   other   words,   the   railway administration was  impressed with  the duty  to  carry  the goods with  the same  care and caution which a prudent owner would apply  in the  case of  his own goods If there was any violation or breach of the said care and caution expected of the Railway  it would  have been  liable to damages. Section 72(1) of the old Act ran thus:           "(1)   The    responsibility    of    a    railway      administration   for    the   loss,    destruction   or      deterioration of  animals or  goods  delivered  to  the      administration to  be carried by railway shall, subject      to the  other provisions  of this  Act, be  that  of  a      bailee under  sections 151.  152 and  161 of the Indian      Contract Act, 1872 (9 of 1872)." It may be pertinent to note that sub-section (3) of s. 72 of the old  Act expressly excluded the principles of the common law of  England or in the Carriers Act of 1865 regarding the responsibility of  common carriers. After our country became free and the Railways entered the commercial field as one of the important wings of the Government, there 509 appears to  be  a  public  demand  for  making  the  Railway administration as  a public  body to  take upon  itself more onerous  responsibilities  where  the  rights  of  the  free citizens were involved. Under the British Government most of the Railways were owned by private companies whose ownership was to  be extinguished  after lapse of a particular period. Soon after  the freedom  all the Railways were taken over by the Central  Government and  run by  it. In  view of the new problems facing  the Government  and the public demand for a change in the law, the Government appears to have decided to convert the  responsibility of  the railway  from that  of a carrier to  that of  an insurer.  But before doing this, the Government appointed  a Committee called the Railway Freight Structure Enquiry Committee (1956-57) which recommended that the responsibility  of  the  Railways  in  India  should  be changed to that of a common carrier instead of a bailee. The Committee which  had been  asked to  examine  the  statutory provisions dealing  with the  responsibility of  railways as common carriers  was of  the opinion  that the  public would derive much satisfaction from a radical change from bailee’s responsibility to  that of  a common  carrier, and that this change was  bound to tone up the administrative machinery of the railways  in respect  of effective prevention of transit losses. In view of the recommendations of the said Committee the Government  introduced a  bill  in  the  Lok  Sabha  for amending some  of the provisions of the Railway Act in order to implement  those recommendations.  From a  perusal of the debates of  the Lok  Sabha when  this Bill was introduced it would appear that the Deputy Minister of Railways explaining the objectives of the Bill observed as follows:           "Taking into  account all  aspects of the problem,      it  is   proposed  that   railways  should  assume  the      responsibility of a common carrier instead of that of a      bailee. As  bailees, the  railways are required to take      as much  care  of  the  goods  entrusted  to  them  for      carriage as  a man  of ordinary  prudence would,  under      similar circumstances,  take of  his own  goods of  the

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    same bulk, quality and value.           However, closely  following the  legal position in      the United  Kingdom, it  is  proposed  that  the  basic      responsibility of our railways for loss, destruction or      deterioration etc. of animals or goods be as set out in      the proposed section 73.           When  the  railways  assume  this  responsibility,      broadly speaking,  they will  be liable  for loss of or      injury to  goods while in transit by rail, arising from      any cause  whatsoever, unless  such loss  or injury  is      proved by the railways to have been caused by an act of      God, or  by an  act of  war, or  by an  act  of  public      enemies or is proved to be consequence of inherent vice      in  the   thing  carried  or  is  attributable  to  the      consignor’s own fault.           Even where  the loss  is proved by the railways to      have been  caused by the excepted perils, just referred      to by  me, the  railways will  not be absolved of their      responsibility unless  they further prove that they had      used reasonable forethought and care in the carriage of      animals or goods. 510           The result  of the  changes proposed  will be that      the railways  will be paying claims for compensation in      many cases  where they  are not  paid at  present,  for      example, in  cases  of  losses  due  to  running  train      thefts, damage  by wet  in transit in spite of bailee’s      care having been taken etc." This was  the clear background against which the new Act was passed. Even  the statement  of  objects  and  reasons,  the relevant parts of which may be extracted as under, shows the main object of the new Act:           "The Railway  Freight Structure  Enquiry Committee      (1956-57) has  recommended that  the responsibility  of      the railways in India as carriers of animals and goods,      which is at present that of a bailee, should be changed      to that  of a  common carrier.  There is  also a public      demand for  such a change. After a careful and detailed      examination  of   the  question,  the  Government  have      decided to accept the Committee’s recommendation.                x      x      x      x     x           (a) The  Bill seeks  to make  it clear that in the      case of  through booking of consignments over an Indian      Railway and  a Foreign  Railway, the  responsibility of      the Indian  Railway as  a common  carrier would  extend      only over  that portion  of the  carriage which is over      the Indian Railway;                x      x      x      x     x           (c) Other  amendments included  in  the  Bill  are      intended to  rectify certain  defects or ambiguities in      the existing  provisions of the Act which were revealed      by experience in its working." It appears  that  the  old  s.  72  was  completely  deleted including  sub-s.   (3)  which   expressly  prohibited   the principles of  the common law of England for determining the liability of  the Railways  as common  carriers. Instead the new s.  72 laid  down the form in which a contract was to be executed between a consignor and the Railway and a risk note was provided  for by clause (b). It may be necessary to note an argument  put forward by the learned Solicitor-General on this  point.   It  was  submitted  that  by  virtue  of  the provisions of  ss. 72  and 73  of the  new Act  the  statute superseded any contract entered into between the parties and the liability  of the Railways was governed purely under the provisions of  the Railways  Act and  not under the terms of

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contract which  may  have  been  entered  into  between  the consignor and the Railway. We are, however, unable to accept this argument.  It is  well settled  that while  the  Indian Contract Act  merely provides  certain elementary conditions under which  the contract becomes binding on the parties, it does not  provide any  particular form  or  condition  of  a contract. It  is, therefore,  clear that  the parties to the contract may  agree to  a particular form or condition or of mode in  which the contract is to be executed. In case where the Government  enters into a contract with a person or vice versa a  particular form  in which  the contract  is  to  be executed has  been provided for even by the Constitution and the contract has to be in that form. 511 This does  not mean  that the provisions of the Contract Act stand superseded  either  by  the  Constitution  or  by  the Railways Act  which provide  for a particular mode or a form in which  the contract  has to  be entered  into. Section 72 therefore does nothing more or nothing less than provide for a particular  form in  which the  contract is to be executed and it  enjoins that  such a  form will be prescribed by the railway  administration   and  approved   by   the   Central Government. The provisions of s. 72 of the new Act run thus:           "72.  Any   person   delivering   to   a   railway      administration any  animals or  goods to  be carried by      railway shall-           (a) if the animals or goods are to be carried by a      train in tended solely for the carriage of goods, or           (b) if  the goods  are to  be carried by any other      train and  consist of  articles of any of the following      categories, namely:-           (i) articles carried at owner’s risk rates.           (ii) articles of a perishable nature.           (iii) articles mentioned in the Second Schedule.           (iv)  articles   in  a   defective  condition   or      defectively packed.           (v) explosives and other dangerous goods.      execute  a  note  (in  this  Act  referred  to  as  the      forwarding note)  in such  form as may be prescribed by      the railway  administration and approved by the Central      Government, in which the sender or his agent shall give      such particulars  in respect of the animals or goods so      delivered as may be required". It is not possible from the provisions of s. 72 to spell out the principle  that the  new Act  completely supersedes  the provisions of  the Contract  Act  both  in  respect  of  the conditions and the liability. Section 73 of the new Act lays down that  the railway  administration shall  be responsible for the  loss, destruction,  damage, deterioration  or  non- delivery except  in certain cases which amount to vis major. But there  also the  proviso confers  responsibility on  the Railways for  loss etc.,  if the railway administration does not prove  that it has used reasonable foresight and care in the carriage of the goods.      The Solicitor-General  contended that  s. 76 of the new Act is  the provision which deals with delay in the delivery and the  plaintiff can succeed only if his case falls within the four  corners of  the  section.  Before  answering  this question, it may be necessary to dispose of a point on which the counsel  for the parties have joined issue. According to the Solicitor-General  the liability of the Railway would be governed by  the new Act inasmuch as the cause of action has arisen after  coming into  force of the new Act. Counsel for the respondent,  however, submits  that the  matter will  be governed by

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512 the old  Act because the liability of the Railway arose when the goods  were booked  in December  1961. In  our  opinion, there is a very short answer to this question. The plaintiff has clearly  and categorically pleaded in paragraph-2 of the plaint that  the cause  of action  arose at  Poona when  the complete consignment  was delivered to the plaintiff on July 21, 1962 i.e. after the new Act had already come into force. Further more,  it is  also alleged  that the  reasonable and normal transit  period expired  on January 1, 1962. In these circumstances, therefore, according to the plaintiff itself, the breach  occurred only  after the  new Act  had come into force-whether it  was January  1, 1962  or thereafter. There can be  no question  of the liability arising when the goods were booked  and the  contract was  entered into between the plaintiff and  the Railway,  because there is no presumption that the  contract would  result in  breach.  The  plaintiff would be entitled to damages only when there was a breach of contract and  if the  said breach,  even  according  to  the plaintiff itself, occurred on January 1, 1962 or thereafter, then it  is manifest  that the  case would be covered by the new Act and not by the old Act.      The first  contention put  forward  by  the  Solicitor- General was  that the  case of  the plaintiff  does not fall under any  of the contingencies contemplated by s. 76 of the new Act. Section 76 runs thus:           "76. A railway administration shall be responsible      for  loss,  destruction,  damage  or  deterioration  of      animals or  goods proved  by the  owner  to  have  been      caused by  delay or  detention in their carriage unless      the railway  administration proves  that the  delay  or      detention arose without negligence or misconduct on the      part of  the railway  administration or  of any  of its      servants." It is  submitted  that  although  there  was  delay  in  the delivery  of   the  goods   on  the   part  of  the  railway administration, but  the  railway  administration  would  be responsible only  if the plaintiff further proves that there has been  loss, destruction,  damage or deterioration of the goods by  virtue of the delay. It is true that the plaintiff has  not   alleged  that   there  was   any  physical  loss, destruction, damage or deterioration of the goods, but that, in our  opinion, does  not put  the plaintiff  out of court. Section  76  appears  to  have  a  very  limited  scope:  it contemplates clearly  those  cases  which  fall  within  the contingencies contemplated  by s.  76.  These  contingencies refer to certain physical factors, viz., actual and physical loss, destruction,  damage or  deterioration of  goods.  For instance, where  the goods worth Rs. 10,000/- due to delayed delivery have  sustained deterioration  as a result of which their value has gone down to Rs. 5,000/- then once this fact is proved  the railway  administration shall  be liable  for such a  loss or  the value  of such deterioration. We are of the opinion  that s. 73 of the new Act, while converting the liability of  the railway  administration  from  that  of  a carrier  to   that  of   an  insurer,  has  imposed  heavier responsibility on the railway administration.      The history  and the  object  with  which  the  radical provisions of  the new Act were introduced bear testimony to change of the nature 513 of the liability of the railway administration. But in order to avoid  the payment  of double damages, ss. 76 and 78 have been inserted.  In other  words, where  due to  delay on the part of  the Railway  there  is  physical  deterioration  or

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diminishing of  the value of the goods, the plaintiff cannot claim damages  by way  of loss  of profits or loss of market plus damages  sustained by  the actual loss or deterioration of the  goods. In  such a  case the plaintiff can claim only the actual  loss  in  the  value  of  the  goods  caused  by destruction, damage or deterioration and not loss of profit. Section 78(d) which flows out of s. 76 clearly provides that the railway  administration shall not be responsible for any indirect or  consequential damages or for loss of particular market. The  Solicitor-General, therefore, rightly contended that in cases falling squarely within the four corners of s. 76 of  the new  Act, s.  78(d) will  apply. In fact s. 78(d) merely incorporates  the measure  of damages as contemplated by s. 73 itself. It is well settled that the liability of an ordinary carrier  even in  the English  common law  does not extend to  a damage  which is  indirect or  remote. Loss  of profit or  loss of  a particular  market has  been held by a number of decisions to be a remote damage and can be awarded only if  it is  proved that  the party  which is  guilty  of committing the breach was aware or had knowledge that such a loss would  be caused.  Section 78(d), however, seeks to bar the remedy  of this  kind of  damage. In  the instant  case, however, as  the plaintiff  itself has  not claimed  loss of market or  remote damages, the question of application of s. 78(d) does  not arise.  Moreover, in the instant case, it is conceded that  there was  no physical  deterioration of  the goods at  all which were delivered to the consignee at Poona in the  same condition  as they  were booked from Bhillai by the plaintiff.  In these  circumstances,  the  case  of  the plaintiff does  not fall  within the  four corners of s. 76, nor does  it fulfil any of the categories mentioned therein. If s.  76 does  not apply  to the facts of the present case, then s.  78 will  also have  no application,  because s.  78 starts with  a non obstante clause "Notwithstanding anything contained in  the foregoing  provisions of  this Chapter,  a railway  administration   shall  not  be  responsible".  We, therefore, agree with the learned counsel for the respondent that under the new Act the liability of the Railway has been increased so  as to take upon itself the responsibility of a common carrier.      Counsel for the respondent submitted that even if s. 76 barred the  remedy of  the plaintiff,  the fact  that due to delay in delivery there was loss of profit or loss of market would amount  to "deterioration  as contemplated by s. 76 of the new  Act. In  support of  this contention,  the  learned counsel relied  on a decision of the Allahabad High Court in G.I.P. Railway Co. & others v. Jugul Kishore Mukat Lal where Sulaiman, Ag. C.J., as he then was, observed as follows:           "It is  clear to  us that  the meaning of the word      "deterioration" in  s. 161  which imposes the liability      on the railway company must be the same as in risk-note      form B which lays 514      down the  special conditions  under which  the  railway      company is  protected. In  both  these  "deterioration"      resulting  from  a  delay  in  tendering  the  good  is      contemplated. x  x  x  We  therefore  accept  the  view      expressed by  Mukerji, J.,  in the  unreported case and      hold that  the word  "deterioration" is  wide enough to      include depreciation  in value  on account of a fall in      the price of the goods." The same  view appears to have been taken by the Orissa High Court in  Union of  India  and  others  v.  Messrs.  Sheobux Satyanarayan where  Misra, J.,  as he  then was, observed as follows:

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         "Though there was some difference of opinion as to      the import  of the word "deterioration" used in section      72 of the Indian Railways Act and in section 161 of the      Indian Contract  Act, the  position is now well settled      that it is wide enough to include depreciation in value      on account of a fall in the price of the goods."      As against  this a  Division Bench  of the  Lahore High Court in  R. I.  Railway Co.  Ltd. v.  Diana Mal Gulab Singh observed as follows:           "The ’deterioration’  of a thing, whether it be in      quality or  in value,  implies in  ordinary parlance  a      change for the worse in the thing itself. If a thing is      worth less  than it  was before only because the market      rate has  gone down  it would be correct to say that it      has  depreciated   in  value,   but  not  that  it  has      deteriorated."      Having regard  to the  background and  the  setting  in which the  word "deterioration"  occurs in  s. 76 of the new Act it  seems to  us that  the parliament  intended that the word should  be used  in the  ordinary  parlance  and  in  a restricted sense  so as  to include  within  its  ambit  the actual physical act of deterioration, i.e. the physical part of it,  namely, the change for the worse in the thing itself as very aptly put by Martineau, J., in the Lahore High Court judgment referred  to above.  We must  seek to  draw a clear distinction between  a physical deterioration of a thing and depreciation in  its value  according to market price. These are two  separate concepts  having separate ingredients. The words  used  in  s.  76  of  the  new  Act,  namely,  "loss, destruction,  damage  or  deterioration"  must  be  read  as ejusdem generis  so as  to indicate  the actual and physical loss or  change in the goods contemplated by s. 76. In these circumstances, therefore, with due respect, we are unable to agree with  the somewhat  broad view  taken by the Allahabad High Court  and followed  by the  Orissa High  Court in  the cases referred  to above.  We, on  the other hand, prefer to adopt the  view taken  by the  Lahore High Court in the case referred to  above. In  this view of the matter, it is clear that the  word "deterioration" used in s. 76 referred to the physical and  actual deterioration  of the  goods which  has admittedly  not   taken  place  in  the  present  case.  The plaintiff cannot take advantage of s. 76 relying on the 515 word "deterioration"  because of  the finding  of negligence entered by  the Courts  below. The  case of the plaintiff is clearly taken out of the ambit of ss. 76 and 78 and his suit for damage  also cannot be defeated on the ground that it is barred by  s. 76 or s. 78 of the new Act. We are, therefore, of the  opinion that  in view of the finding of fact arrived by the Courts below the plaintiff is undoubtedly entitled to damages      This brings  us to  the second contention raised by the Solicitor  General,   namely,  that  the  plaintiff  is  not entitled to  interest as damages for breach of the contract. It was  submitted that  what the  plaintiff has  done is  to calculate interest at the rate of 12% which has been reduced to 6%  per annum  on the amount deposited by him in the Bank which remained  locked up  for more  than six  months and to claim the  same  as  damages.  It  was  contended  that  the plaintiff plainly  could not  do so  in view of the Interest Act under  which interest can only be charged before suit if so stipulated  by the  parties to the contract. It is common ground that  in the  present case  the contract  between the parties does  not provide  for  charging  any  interest  for breach  of  contract.  The  Solicitor-General  relied  on  a

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decision of this Court in Union of India v. Watkins Mayore & Company where this Court observed as follows:           "Under the Interest Act, 1839, the Court may allow      interest of  the plaintiff  if the  amount claimed is a      sum certain  which is  payable at  a  certain  time  by      virtue of a written instrument. But it is conceded that      the amount  claimed in  this case  is not a sum certain      but compensation  for unliquidated amount. On behalf of      the respondent  it was  submitted by Mr. Aggarwala that      interest may  be awarded  under the  Interest Act which      contains a provision that "interest shall be payable in      all cases  in which it is now payable by law". But this      provision only  applies to  cases in which the Court of      Equity exercises jurisdiction to allow interest. In the  above case  the plaintiff  had brought  a  suit  for damages claiming  a  particular  quantified  amount  of  Rs. 1,07,700/- as  compensation for  storage of over 600 tons of iron sheets  for a particular period. This quantified amount included a  sum of  Rs. 2,974/2/- as interest on the various sums claimed  by  the  plaintiff  as  compensation,  namely, godown  rent,   chowkidar’s  salary,  cartage  from  Railway station to  godown etc.  The High  Court, however, granted a decree only  for Rs.  27,525/5/-  including  the  amount  of interest claimed  by the  plaintiff. Thus this Court in that case was  dealing with interest claimed by the plaintiff not as a  yardstick for assessing damages but as pure and simple interest on the quantified amount of compensation or damages claimed by  the plaintiff. This Court held that the interest to the  extent of  Rs. 2,974/2/- as claimed by the plaintiff could not  be allowed  in the  absence of  there  being  any contract justifying  the charging  of  such  interest.  This Court was  not at all concerned with a case like the present one where  the plaintiff has merely claimed damages pure and simple and in order to assess the same had applied the 516 yardstick of  charging interest  at a particular rate on the locked up  capital for  a period of more than six months. In these circumstances,  therefore the  ratio of  the aforesaid decision  in   Watkins  Mayore  &  Company  (supra)  is  not applicable to the facts of the present case.      Similarly in Bengal Nagpur Railway Co. Ltd. v. Ruttanji Ramji which  was relied upon by this Court in Watkins Mayore & Company  (supra) the amount claimed by the plaintiff was a specified amount  on the basis of which interest was charged which had  the effect  of increasing the damages sought for. That was  a case  of a contractor who had brought a suit for recovery of  the amount  due from  the Government Department and had  added interest  to the  total  claim  made  by  the plaintiff. The  Privy Council  pointed out that as there was no stipulation  which authorized  the  plaintiff  to  charge interest on  the quantified amount of damages, the plaintiff was not  entitled to any interest. Thus, in other words, the ratio of  the decision  in Ruttanji  Ramji’s case as also in Watkins Mayore  & Company  (supra) would  apply only to such cases where  interest by  way  of  damages  is  claimed  for wrongful detention  of a  debt  or  where  the  interest  is claimed on  a specified  amount due  or claimed  against any debtor. The  principle adumbrated in the two cases mentioned above will  not apply  to cases where the plaintiff does not claim interest  on a  quantified amount  or on  damages  but where  the   plaintiff  merely   calculates  interest  as  a yardstick or measure to assess the damages which he would be entitled to.  In the  instant case  the  Courts  below  have clearly found  that the plaintiff had deposited a sum of Rs. 27,332-44 in  the Bank  soon after  booking the  consignment

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with  the   railway  administration.  The  plaintiff  was  a stockist and  as the  money in  the Bank remained idle for a period of  more than  six months due to the delayed delivery made by  the Railway  on  account  of  its  negligence,  the plaintiff  merely  claimed  compensation  for  this  delayed delivery on  the basis  that if the amount was not locked up it would  have earned  some interest  which would yield some profit to  the plaintiff.  Thus it is clear, therefore, that in the  instant case  the plaintiff neither claimed interest on any  quantified amount,  nor did  he claim  profit due to loss of market.      In Digbijai  Nath v.  Tirbeni Nath  Tewari  a  Division Bench of  the Allahabad  High Court,  while interpreting the decision of the Privy Council referred to above, observed as follows:           "We do  not consider  that this  case is authority      for the  proposition that interest cannot be claimed by      way of  damages for  breach of  a contract under s. 73,      Contract Act. All that was held in it was that interest      cannot be  allowed  by  way  of  damages  for  wrongful      detention of  debt. *  * *  The position  is  different      where interest  is claimed  as part  of the damages for      breach of a contract. A similar view was taken by a Division Bench decision of the Patna High  Court in  The Official  Receiver, Calcutta  High Court and another 517 v. Baneshwar  Prasad Singh and another. We find ourselves in complete agreement  with the  principles laid  down in those cases.      For these  reasons, therefore,  we are  of the  opinion that the  decision of this Court in Watkins Mayore & Company (supra) does  not appear  to be  of any  assistance  to  the appellant, so  far as  the facts  of the  present  case  are concerned. Thus  it is clear that there is no question of s. 73 of  the Contract  Act overriding  the provisions  of  the Interest Act,  because in  the instant case the Interest Act has no application at all inasmuch as no interest is claimed by the  plaintiff at  all but  interest has  been used  as a measure to  determine the  compensation which  the plaintiff could seek  against the  appellant  for  its  negligence  in causing inordinate  delay in  the delivery of the goods. The contention raised  by the  learned Solicitor-General on this point is, therefore, overruled.      The plaintiff is not claiming the sum decreed by way of interest but  he is  claiming the  damages calculated  on  a particular  basis.  As  a  common  carrier  the  Railway  is undoubtedly responsible  for  breach  of  contract.  In  the instant case  the Railway  Receipt shows that the goods were booked to  be carried  from Bhillai to Poona which is on the Nagpur  route.  There  was  absolutely  no  reason  nor  any occasion for  the Railway to divert the goods to a different route and  for taking  the same to a different route and for taking the  same to  Aurangabad which  did not  fall on  the route to  Poona at all. The Courts below, therefore, rightly found that the Railway was guilty of gross negligence.      The last  question submitted  by the  learned Solicitor General was  that the  plaintiff was not entitled to loss of profit or  loss of  market, because  the plaintiff  has  not pleaded anywhere  that he  had obtained  any permit  for the goods which,  were a controlled commodity and sustained loss of market.  It is  true that  the plaintiff  has not pleaded this fact,  but the  plaintiff has not at all prayed for any damages on  the ground  of loss of market or loss of profit. The plaintiff  has only claimed nominal damages for the loss

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which occurred  to him  because of the amount of money which he had  deposited in  the Bank  and was locked for more than six months  due to the delayed delivery. The Trial Court has already scaled  down the  amount from  Rs. 2,378-65  to  Rs. 1,250/- and  we think  the Trial Court was fully entitled to do so.      In these  circumstances, therefore, all the contentions raised by the Solicitor General fail and we find no merit in this appeal which is accordingly dismissed with costs. P.B.R.                                     Appeal dismissed. 518