REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 7589 OF 2012
[Arising out of SLP (Civil) No. 33740 of 2011]
Shree Shyam Agency .. Appellant
Versus
Union of India & Others .. Respondents
J U D G M E N T
K. S. Radhakrishnan, J.
1. Leave granted.
2. We are, in this appeal, concerned with the question whether the
appellant is legally entitled to be intervened in a claim petition filed by
the 3rd respondent herein under Section 16 of the Railway Claims Tribunal
Act, 1987 (for short ‘Tribunal Act’).
3. The claim petition OA No. (1) 2 of 2010 was preferred by the 3rd
respondent against the Southern and Eastern Central Railways before the
Railway Claims Tribunal, Chennai Bench claiming an amount of
Rs.9,46,85,726/- together with the interest @ 12% per annum from the date
of filing of the petition till the date of payment and also for other
consequential reliefs.
4. In the claim petition, the appellant herein filed I.A. 3/2011 for
intervention claiming to be an interested party stating that its presence
is necessary for a proper adjudication of the claim. I.A.4/2011 was also
preferred by the 2nd respondent herein Central Railway to implead three
other parties, namely Subham Sugar Agencies, Umesh Chaudhary, Ex. Goods
Supervisor, Tatuha and Ambika Sugars Ltd., contending that the Railway
Claims Tribunal (for short ‘Tribunal’) has no jurisdiction to proceed with
the case since it involved contractual disputes, criminal conspiracy,
cheating and that a complaint filed by the above mentioned parties are
pending before the Chief Judicial Magistrate, Muzaffarpur, Bihar.
5. The Tribunal heard both the applications, i.e. I.A.3/2011 and
I.A.4/2011 and a common order was passed on 15.4.2011, stating that inter
se disputes between private parties cannot be decided by the Tribunal in a
claim petition. It also took the view that the Railway Administration
through those parties is trying to linger on with the proceedings and,
under no circumstance, the application for impleading the other three
parties can be entertained. Both I.A.3/2011 and I.A.4/2011 were
accordingly dismissed.
6. Aggrieved by the order passed by the Tribunal, C.R.P. (PD) No. 1713
of 2011 was preferred by the appellant herein, CRP (PD) No. 2152 of 2011
and CRP (PD) No. 2153 of 2011 by Southern Railway and Central Railway,
before the High Court of Judicature at Madras. All the three civil
revision petitions were heard and a common order was passed on 9.9.2011
dismissing all the revision petitions and confirming the order passed by
the Tribunal, against which the appellant in C.R.P. (PD) No. 1713 of 2011
has come up before this Court with the present appeal. Railway
Administration, however, accepted the order passed by the Tribunal which
has been affirmed by the High Court by the impugned judgment.
7. For disposal of this appeal, reference to few facts is necessary.
Claimant, the third respondent herein a company having its head office at
Chennai, is engaged in the business of manufacturer of white crystal sugar
having its factories at Thirumanthankudi village, Papiasam Taluk, Thanjavur
District and A. Chittur Village, Virudhachalam Taluk, Cuddalore District.
They used to sell free sugar in Northern Indian markets consisting of West
Bengal, Bihar, etc. by transporting the consignments in racks through the
services provided by the Railways. Railway receipts are made out showing
the consignee as “Self” which are thereafter endorsed by the consignor to
the buyer on payment of the sale price. The endorsed consignee/buyer takes
delivery of goods of the respective destinations by surrender of the
Railway Receipts. Claimant states that a dealer, by name Shubham Sugar
Agencies, Kolkata, placed an order with the claimant for purchase of 27000
quintal of free sale sugar with payment conditions stipulating that the
endorsed railway receipts would be released on receipt of entire sale
consideration. Claimant stated that it has booked consignment on 1.2.2010
for transportation from Kumbakonam to Fatuha, Bihar and that the railway
receipts were drawn as “Self” and were in the custody of the claimant and
that the purchaser was expected to remit the sale price and get the railway
receipts endorsed in its favour. The goods reached the destination on
10.2.1010. The buyer failed to pay the sale price and the goods, as stated
by the appellant, were kept at the railway godown incurring wharfage
charges. Further, it was stated that the claimant then sent a letter to
the Senior DGM/Southern Railway/Trichy on 23.4.2010 and informed that the
railway receipts were in the custody of the claimant and requested either
to shift the consignment to other destination or bring it back to
Kumbakonam. The claimant was, however, informed on 4.5.2010 by the
Railways that the consignment was delivered at Fatuha on 10.2.2010 on the
strength of Indemnity Note without disclosing the person to whom it was
delivered. Claimant maintained the stand that since the consignments were
booked under “Self” basis, the delivery to a third party was without
authority and amounted to negligence, misconduct and misappropriation and
hence, the Railway Administration is legally liable to pay compensation
being the value of the goods for non-delivery.
8. Appellant, however, maintained the stand that it was the purchaser of
sugar from the claimant through broker Shubham Sugar Agencies, Kolkata and
that the entire payment was made by it on instruction through various
instruments like cheques/RTGS etc. which was accepted and acknowledged by
the claimant. Further, it was also pleaded that the claimant has
suppressed the full facts. It was stated that the appellant had not
obtained the delivery of sugar without payment and out of the total
consideration of Rs.7,87,52,850/-, it had already paid Rs.7,30,22,052.40
and the balance of a sum of Rs.57,30,797.60 was offered, but the claimant
did not accept.
9. We are, in this appeal, primarily concerned with the question whether
the appellant has got the right to get itself impleaded in the Claim
Petition No. OA(1) No.2 of 2010 pending before the Tribunal and whether the
findings recorded by the Tribunal as well as the High Court are legally
sustainable or not. Since the claim petition is pending before the
Tribunal, we are not expressing any opinion on the merits of the case. But
the question whether the Railway Administration and the appellant therein
are proper and necessary parties to the claim petition, has to be decided.
10. The Tribunal has been established under the Tribunal Act, 1987.
Reference to its preamble would indicate the purpose and object of its
creation. The Preamble of the Tribunal Act, 1987 reads as follows:
“An Act to provide for establishment of a Railway Claims
Tribunal for inquiring into and determining claims against a railway
administration for loss, destruction, damage, deterioration or non-
delivery of animals or goods entrusted to it to be carried by railway
or for the refund of fares or freight or for compensation for death or
injury to passengers occurring as a result of railway accidents or
untoward incidents and for matters connected therewith or incidental
thereto.”
It is evident from the preamble that the Tribunal has been established for
inquiring into and determining the claims against the Railway
Administration for loss, destruction, damage, deterioration or non-delivery
of animals or the goods entrusted to it to be carried by railway and not
for adjudication of any claim or dispute against a third party.
11. Chapter III of the Tribunal Act deals with the jurisdiction, powers
and authority of the Claims Tribunal. Section 13 of the Tribunal Acts
reads as follows:
| | |
| | |
| |“13. Jurisdiction, powers and authority of Claims Tribunal.-(1) The |
| |Claims Tribunal shall exercise, on and from the appointed day, all |
| |such jurisdiction, powers and authority as were exercisable |
| |immediately before that day by any civil court or a Claims |
| |Commissioner appointed under the provisions of the Railways Act,- |
| |relating to the responsibility of the railway administrations as |
| |carriers under Chapter VII of the Railways Act in respect of claims |
| |for- |
| | |
| |compensation for loss, destruction, damage, deterioration or |
| |non-delivery of animals or goods entrusted to a railway administration|
| |for carriage by railway; |
| | |
| |compensation payable under section 82A of the Railways Act or the |
| |rules made thereunder; and |
| | |
| |(b) in respect of the claims for refund of fares or part thereof or |
| |for refund of any freight paid in respect of animals or goods |
| |entrusted to a railway administration to be carried by railway. |
| | |
| |(1A) The Claims Tribunal shall also exercise, on and from the date of |
| |commencement of the provisions of section 124A of the Railways Act, |
| |1989 (24 of 1989), all such jurisdiction, powers and authority as were|
| |exercisable immediately before that date by any civil court in respect|
| |of claims for compensation now payable by the railway administration |
| |under section 124A of the said Act or the rules made thereunder. |
| | |
| |(2) The provisions of the Railways Act 1989 (24 of 1989) and the |
| |rules made thereunder shall, so far as may be, be applicable to the |
| |inquiring into or determining, any claims by the Claims Tribunal under|
| |this Act.” |
| | |
Section 16 of the Tribunal Act deals with the application to Claims
Tribunal and reads as follows:
“16. Application to Claims Tribunal.- (1) A person seeking any
relief in respect of the matters referred to in sub-sections (1) or
sub-section (1A) of section 13 may make an application to the Claims
Tribunal.
(2) Every application under sub-section (1) shall be in such form and
be accompanied by such documents or other evidence and by such fee in
respect of the filing of such application and by such other fees for
the service or execution of processes as may be prescribed :
Provided that no such fee shall be payable in respect of an
application under sub-clause (ii) of clause (a) of sub-section (1) or,
as the case may be, sub-section (1A) of section 13.”
Section 18 of the Tribunal Act deals with the procedure and powers of
Claims Tribunal and the same reads as follows:
“18. Procedure and powers of Claims Tribunal.- (1) The Claims
Tribunal shall not be bound by the procedure laid down by the Code of
Civil Procedure, 1908 (5 of 1908), but shall be guided by the
principles of nature justice and, subject to the other provisions of
this Act and of any rules, the Claims Tribunal shall have powers to
regulate its own procedure including the fixing of places and times of
its enquiry.
(2) The Claims Tribunal shall decide every application as
expeditiously as possible and ordinarily every application shall be
decided on a perusal of documents, written representations and
affidavits and after hearing such oral arguments as may be advanced.
(3) The Claims Tribunal shall have, for the purposes of discharging
its functions under this Act, the same power as are vested in a Civil
Court under the Code of Civil Procedure, 1908 (5 of 1908), while
trying a suit, in respect of the following matters, namely :
a) summoning and enforcing the attendance of any person and
examining him on oath;
b) requiring the discovery and production of documents;
c) receiving evidence on affidavits;
d) subject to the provisions of sections 123 and 124 of the
Indian Evidence Act, 1872 (1 of 1872), requisitioning any
public record or document or copy of such record or
document from any office;
e) issuing commissions for the examination of witnesses or
documents;
f) reviewing its decisions;
g) dismissing an application for default or deciding it ex
parte;
h) setting aside any order of dismissal of any application for
default or any order passed by it ex parte;
i) any other mater which may be prescribed.”
Rule 44 of the Railway Claims Tribunal (Procedure) Rules, 1989 confers
inherent powers on the Tribunal to meet the ends of justice. On a conjoint
reading of the above mentioned provisions, it is clear that the Tribunal
has been constituted to adjudicate the claim made against the Railways and
not against a third party. The claim petition, it is seen, is based on the
contract of carriage entered into between the claimant and the railways.
12. The question to be decided by the Tribunal is whether the Railway
administration has caused any loss, destruction, damage, deterioration or
non-delivery of animals or goods entrusted to it to be carried by railway
or the refund of fares or freight or for compensation for death or injury
to the passengers as a result of railway accidents or untoward incidents
etc. Chapter III of the Act deals with the jurisdiction, powers and
authority of the Tribunal.
13. Section 13(1)(a) of the Tribunal Act, as already indicated, confers
exclusive jurisdiction on the Tribunal to decide the responsibilities of
the Railways as carriers under Chapter VII of the Railways Act, 1989 in
respect to the above mentioned claims made against the railways. Chapter
IX of the Railways Act, 1989 deals with carriage of goods. Section 61 of
the Railways Act, 1989 says that every railway administration shall
maintain the rate-books etc. for carriage of goods and Section 62 imposes
conditions for receiving etc. of goods. Section 65 is also important for
the purpose of disposal of this case and hence extracted hereunder:
“65. Railway receipt. (1) A railway administration shall,-
(a) in a case where the goods are to he loaded by a person
entrusting such goods, on the completion of such loading; or
(b) in any other case, on the acceptance of the goods by it,
issue a railway receipt in such form as may be specified by
the Central Government.
(2) A railway receipt shall be prima facie evidence of the
weight and the number of packages stated therein:
Provided that in the case of a consignment in wagon-load or
train-load and the weight or the number of packages is not checked by
a railway servant authorized in this behalf, and a statement to that
effect is recorded in such railway receipt by him, the burden of
proving the weight or, as the case may be, the number of packages
stated therein, shall lie on the consignor, the consignee or the
endorsee.”
Section 74 of the Railways Act, 1989 deals with the passing of property in
the goods covered by railway receipt and the same reads as follows:
“74. Passing of property in the goods covered by railway
receipt.- The property in the consignment covered by a railway
receipt shall pass to the consignee or the endorsee, as the case may
be, on the delivery of such railway receipt to him and he shall have
all the rights and liabilities of the consignor.”
Section 76 of the Railways Act, 1989 deals with the surrender of railway
receipt and reads as follows:
“76. Surrender of railway receipt.- The railway administration
shall deliver the consignment under a railway receipt on the surrender
of such railway receipt:
Provided that in case the railway receipt is not forthcoming,
the consignment may be delivered to the person, entitled in the
opinion of the railway administration to receive the goods, in such
manner as may be prescribed.”
Section 77 deals with the power of railway administration to deliver goods
or sale proceeds thereof in certain cases which reads as follows:
“77. Power of railway administration to deliver goods or sale
proceeds thereof in certain cases.-Where no railway receipt is
forthcoming and any consignment or the sale proceeds of any
consignment are claimed by two or more persons, the railway
administration may withhold delivery of such consignment or sale
proceeds, as the case may be, and shall deliver such consignment or
sale proceeds in such manner as may be prescribed.”
Section 87 of the Railways Act, 1989 confers rule making power on the
Central Government, the relevant portion of which reads as under:
“87. Power to make rules in respect of matters in this Chapter.-
(1) The Central Government may, by notification, make rules to carry
out the purposes of this Chapter.
(2) In particular, and without prejudice to the generality of
the foregoing power, such rules may provide for all or any of the
following matters namely:-
xxx xxx xxx
xxx xxx xxx
(e) the manner in which the consignment may be delivered
without a railway receipt under section 76;
(f) the manner of delivery of consignment or the sale proceeds
to the person entitled thereto under section 77;
xxx xxx xxx
xxx xxx xxx”
14. The Central Government in exercise of its powers conferred by Clauses
(e) and (f) of Section 87(2) of the Railways Act, 1989 read with Section 22
of the General Clauses Act, 1897 has framed the Railways (Manner of
Delivery of Consignments and Sale Proceeds in the Absence of Railway
Receipt), Rules, 1990 (for short “1990 Rules”).
15. The appellant or the Railway administration has no case that M/s
Subham Sugar Agencies, Calcutta, the consignee had presented the railway
receipt for claiming the goods. On the other hand, it has been the
specific stand of the railway administration that the consignment was
delivered at Fatuha on 10.2.2010 to a third party on the strength of
“Indemnity Note” and not on production of the “Railway Receipt”. 1990
Rules, as already indicated, deals with the manner of delivery of
consignments and sale proceeds in the absence of railway receipt. Sub-
rules (1) and (2) of Rule 3 of 1990 Rules is relevant for our purpose and
the same is extracted hereunder:
“3. Delivery of consignments when the railway receipt is not
forthcoming:- (1) Where the railway receipt is not forthcoming, the
consignment may be delivered to the person, who in the opinion of the
railway administration is entitled to receive the goods and who shall
receive the same on the execution of any Indemnity Note as specified
in Form I:
Provided; however, that if the consignee is a Government
official in his official capacity, such delivery may be made on
unstamped Indemnity Note).
(2) Where the railway receipt is not forthcoming and the
consignment is addressed by the sender to self, delivery shall not be
made unless Indemnity Note, duly executed in Forms I-A and I-B are
produced by the persons claiming delivery of the consignment.”
Rule 5 of the 1990 Rules deals with delivery of perishable articles when
the railway receipt is not forthcoming and the same reads as follows:
“(5) Delivery of perishable articles when the railway receipt is
not forthcoming:- (1) notwithstanding anything contained in these
rules, where the consignment consists of perishable articles and the
railway receipt is not forthcoming, such consignment may be delivered
to the person who, in the opinion of the railway administration is
entitled to receive such consignments, and such person shall take
delivery subject to the following conditions, namely:-
a) if the invoice copy of the railway receipt is available at
the time of taking delivery and the booking is to be named
consignee who is claiming delivery, such person shall,
before taking delivery execute an Indemnity Note specified
in Form I; or
b) (i) if the invoice copy of the railway receipt is not
available at the time of taking delivery; or
ii) if such invoice copy is available and the
consignment is booked to “self”,
Such person shall, deposit an amount equivalent to the cost of
consignment by way of security apart from freight and other
charges before taking delivery of such consignment.
(2) If any amount has been deposited by way of security under
clause (b) of sub-rule (1), such amount shall be refunded by the
railway administration on production of the original railway receipt
within six months from the date of taking such delivery.
(3) In the absence of original railway receipt refund may be
granted on execution of an Indemnity Note in Form I or I-A and I-B, as
the case may be, provided the invoice copy of the railway receipt is
available and the particulars of consignment can be connected with
reference to the invoice copy, within six months from the date of
taking delivery.”
16. Form I under Rule 3(1) of the 1990 Rules deals with the “Indemnity
Note” that when the consignment is to be delivered to the ‘person’, not to
‘self’. If it is to a ‘person’ then he has to furnish an indemnity note
signed by the ‘consignee’. Sub-rule (2) of Rule 3 specifically states
that, when the railway receipt is not forthcoming and the consignment is
addressed to “Self”, delivery shall not be made unless Indemnity Note, duly
executed in Forms I-A and I-B are produced by the persons claiming delivery
of the consignment. The relevant portion of Form I-A and I-B are extracted
below for easy reference:
“Form I-A
[See Rule 3(2)]
FORM OF INDEMNITY NOTE
_______ RAILWAY
INDEMNITY NOTE
** I/We hereby acknowledge to have received from _________
Railway ______ valued at Rs.___________ which was dispatched by **
me/us and booked to self/as value payable, from the _______ Station of
the ________ Railway on or about the ________ day of _____ the railway
receipt for which has been ______________ and ** for myself, my heirs,
executors and administrators / and for our Company / Firm, their
assigns, and successors.
** I/We undertake in consideration of such delivery as
aforesaid to hold.
* President of India, his agents and servants the ____________
railway administration, its agents and servants harmless and
indemnified in respect of all claims to the said goods.
** I/We also undertake to pay on demand to the railway
administration freight charges, undercharges, wharfage and any other
charges that may be subsequently found due in respect of this
transaction.
And ** I/We the undersigned, signing below the consignor of
these goods certify that the first signor is the bona fide owner of
the goods; and that ** I/We undertaken the whole of the said liability
equally with the consignor, and for this purpose ** I/We affix **
my/our signature hereto.
Signature of Witness _______ Signature of Consignor______
Father’s name ____________ **Father’s name __________
Age ____________________ Age _____________________
Profession _______________ Profession ________________
Residence _______________ Residence ________________
_______________________________
Designation and Seal of the Co./Form
_____________________________
Registered Office/Place of business”
Signature of witness___________ Signature of Surety__________
Father’s name________________ **Father’s name____________
Age________________________ Age______________________
Profession___________________ Profession_________________”
“Form I-B
[See Rule 3(2)]
FORM OF INDEMNITY NOTE
_______ RAILWAY
INDEMNITY NOTE
** I/We hereby acknowledge to have received from _________
Railway ______ valued at Rs.___________ which was dispatched by
________ from _____ Station of the ________ Railway on or about the
________ day of _____ and booked to self/as value payable, the
railway receipt for which has been ______________ and ** for myself,
my heirs, executors and administrators / and for our Company / Firm,
their assigns, and successors.
** I/We undertake in consideration of such delivery as
aforesaid to hold.
* President of India, his agents and servants the ____________
Railway Administration, its agents and servants harmless and
indemnified in respect of all claims to the said goods.
** I/We also undertake to pay on demand to the railway
Administration freight charges, wharfage and any other charges that
may be subsequently found due in respect of this transaction.
** I enclose a copy of a stamp Indemnity Note executed by the
consignor and countersigned by the Station Master of the Forwarding
Station which has been duly endorsed by the Consignor in my favour
authorizing me to take delivery of the consignments on his behalf.
And ** I/We the undersigned, signing below the person authorized
by the consignor to take delivery of the goods. I hereby certify that
the first signor is the bona fide owner of the goods and ** I/We
undertake the whole of the said liability equally with the signor, and
for this purpose **I/We affix ** my/our signature hereby.
Signature of Witness _______ Signature of Consignor______
Father’s name ____________ Father’s name __________
Age ____________________ Age _____________________
Profession _______________ Profession ________________
Residence _______________ Residence ________________
_______________________________
Designation and Seal of the Co./Form
_____________________________
Registered Office/Place of business”
Signature of witness___________ Signature of Surety__________
Father’s name________________ **Father’s name____________
Age________________________ Age______________________
Profession___________________ Profession_________________”
17. In Form 1-A, Indemnity Note, the consignor has to sign certifying
that his is the bona fide owner of goods. Form 1-B, Indemnity Note, has to
be signed by the consignor authorizing the person to take delivery. The
copy of a stamped Indemnity Note has to be executed by the consignor and
counter signed by the Station Master of the forwarding station. In other
words, all the formalities prescribed under Form 1-A and Form 1-B have to
be complied with, when the Railway Receipt is not forthcoming and the
consignment is addressed by the sender to Self. The Railways cannot effect
delivery unless those formalities have been complied with.
18. On going through the Railways Act, 1989, the Tribunal Act as well as
the 1990 Rules and the statutory forms, we are of the considered view that
what the Tribunal has to inquire into and determine is the claim against
the Railway Administration, that is whether the Railway Administration is
at fault in discharging its responsibilities under the Railways Act, Rules
and Regulations and not the inter se disputes between the claimants and
third parties.
19. In view of the above facts and circumstances of the case, we find no
error in the view taken by the Tribunal, which was affirmed by the High
Court. Consequently, the appeal is dismissed. We, however, make it clear
that we are not expressing our opinion on the merits of the case and the
same has to be adjudicated by the Tribunal in accordance with law.
……………………………………….…J
(K. S. RADHAKRISHNAN)
………………………………………..J.
(DIPAK MISRA)
New Delhi,
October 18, 2012
