DEHRI ROHTAS LIGHT RLY CO LTD Vs. EAST KESHALPUR COLLIERY

JUDGEMENT

(1.) These appeals arise out of one judgment given by the Subordinate Judge of Sasaram in a suit instituted by Messrs. Dehri Rohtas Light Railway Company Limited for recovery of railway freights and demurrage from the defendants. Two consignments of coal were booked by defendants No. 1 at Kusunda Railway Station on the Eastern Railway in the district of Dhanbad for delivery to defendant No. 2 at Banjari Railway Station on the Dehri Rohtas Light Railway in the district of Shahabad. The railway freights were to be paid at the time of delivery at Baniari, The consignments arrived at destination on the 12th November 1954. But the consignee (defendant No. 2), that is, the Kutchwar Lime and Stone Company, refused to take delivery of the same. There was a lot of correspondence between the parties and some others, which need not be discussed at this stage. Ultimately, the coal contained in the consignments was sold by the plaintiff railway on the 2nd June 1956 at a public auction held at Dehri-in-Sone for a sum of Rs. 1,050, which was credited to the account of the defendants. In the circumstances, the plaintiff claimed Rs. 495/14/- as freight and Rs. 18,180 as demurrage and instituted the present suit for recovery of Rs. 17,625/14/- after setting off Rs. 1,050 which had been fetched at the public auction, besides interest at six per cent. per annum. The defendants filed separate written statements. The consignee, the Kutchwar Lime and Stone Company, asserted that it was not liable for the railway freight or demurrage, as at the time of booking the goods the railway had entered into a contract with the consignor, namely, the East Keshalpur Colliery, in raspect of the wagons. On the other hand, the consignor said that it was the consignee who was responsible for the payment of the railway freight and the demurrage. Both of them, however, disputed the amount of demurrage claimed. They further submitted that the railway was not justified in keeping the coal in the wagons for a long period for which demurrage had been charged. The trial court granted a decree to the plaintiff against the Kutchwar Lime and Stone Company alone for the railway freight claimed and for the demurrage for 22 days only from the 23rd November 1954, the date when the Kutchwar Lime and Stone Company wrote to the consignor that they had refussd to lake delivery and sent a copy of their letter to the Manager of the Plaintiff-railway. Hence F.A. No. 210 by the plaintiff and F.A. No. 230 by the Kutchwar Lime and Stone Company.

(2.) The first question to be determined in these two appeals is whether the East Keshalpur Colliery or the Kutchwar Lime and Stone Company was liable to pay the amount of railway freight and demurrage which may be legally payable to the plaintiff. In order to determine this liability, it is necessary to find out as to who were the contracting parties and what was the nature of contract between them. It is admitted -- and there is documentary evidence in support of the fact that against the relevant column in the railway receipts and the forwarding notes the party concerned was "to pay" the freight. In other words, the freight was to be paid at the time of delivery at destination. This fact by itself is not sufficient to show as to who had entered into the contract with the railway for payment of the railway freight. As there is paucity of Indian decisions, some English decisions were cited by the learned advocate for the appellant, the Kutchwar Company. These decisions have been discussed in a decision of this court in Secretary of State v. Ganji Dosa, ILR 8 Pat 669: (AIR 1929 Pat 265), on which also the learned advocate relied. The Patna decision and the English decisions have also been discussed in a Bench decision of the Calcutta High Court in Kajora Coal Co. Ltd. v. Secy., of State, AIR 1931 Cal 33. From these decisions, it appears to be well settled that the person who is primarily liable for the payment of freight is the consignor and this liability of the con- signor is to be implied from the fact that he had made over the goods to the carrier for the purpose of being carried to destination and that this liability of the consignor may, in some cases, be even independent of the question of actual ownership of the goods. It follows that the consignee as such is not liable to pay the freight, because ordinarily he is not to be treated as a party to the contract of carriage, But if the facts of the case show that the consignor acted to the knowledge of the carrier as agent only, the person on whose behalf he acted as agent is in reality the principal and liable for the freight. Thus, the consignee is liable for the freight, when he has made himself liable by express contract or when he is treated as the undisclosed principal of the consignor or when it is understood between the consignor and the carrier that freight is to be paid by the consignee. In view of these well settled principles, the mere tact that the entry "to pay" is made in the relevant column of the railway receipt or the forwarding note is not sufficient to show that the consignee was liable to pay the freight. This was the view taken in the decisions of the Patna High Court and the Calcutta High Court; and, if I may say so with respect, this is the correct view.

(3.) We have, therefore, to see now whether independently of the railway receipts or the forwarding notes, there is any evidence to show that there was a contract between the railway and the Kutchwar Lime and Stone Company for supply of the wagons and whether to the knowledge of the railway, the East Keshalpur Colliery acted as the agent of the Kutchwar Lime and Stone Company at the time of booking the consignments at Kusunda Railway Station. It is admitted that in those days certain control orders in respect of coat issued under the Essential Supplies (Temporary Powers) Act, 1946, were in force. These\ orders were; (1) the Colliery Control Order, 1945, issued under R. 81 of the Defence of India Rules and Kept alive under the said Act; and (2) the Bihar Coal Control Order, 1947. It was conceded at the bar that, in view of the provisions of the Colliery Control Order, 1945, coal could not be sold to any person by any colliery without the orders of the Coal Commissioner or his Deputy. In fact, in the present case also, the coal in question was booked for supply to the Kutchwar Lime and Stone Company under the orders of the Deputy Coal Commissioner. Exhibit A-1 is the sanction order by the Deputy Coal Commissioner dated the 13th July, 1954. This order is addressed to the Divisional Superintendent of the Eastern Railway at Dhanbad, and the priority supply of wagons is sanctioned therein for "the Kutchwar Lime and Stone Company" at destination Banjari (Dehri Rohtas Light Railway). Under the heading "names of supplying collieries and managing agents" in the sanction order, the names of the proprietor of the East Keshalpur Colliery are mentioned and the quality of coal is steam, Grade IIIB. A copy of this letter addressed to the Divisional Superintendent was forwarded to the colliery concerned, that is, the East Keshalpur Colliery, who was directed in the forwarding memo, under Clause 8 of the Colliery Control Order, 1945, that the grade, size and quantity of coal to be supplied should "strictly conform to the specification given above." Another copy was forwarded to the "allottee" concerned, that is, the Kutchwar Lime and Stone Company, Dalmiannagar. In the forwarding note to this allottee, it is stated that the said quantity of coal has been sanctioned "on your account" and necessary sanction for the priority supply of wagons has also been accorded. The second paragraph of this forwarding note to the allottee reads this: