KUCHWAR LIME AND STONE CO. versus M/S. DEHRI ROHTAS LIGHT RAILWAY CO. LTD. & ANR.

Citation: [1969] 1 S.C.R. 359 · Decided: 15-07-1968 · Supreme Court of India · Bench: J.C. SHAH

Judgment (excerpt)

A 
B 
c 
D 
E 
F 
G 
H 
359 
KUCHW AR LIME AND STONE CO. 
v. 
M/S. DEHRI ROHTAS LIGHT RAILWAY CO. LTD. & ANR. 
July 15, 1968 
[J. C. SHAH AND V. BHARGAVA, JJ.] 
Railway freight and demurrage-consignment booked 'freight to pay'-
Whether consignee liable to pay after refusing to accept consignment.-
Railway not unloading consignment for seven months-if entitled to de-
murrage for full period or obliged to unload and claim demurrage on(y 
for reasonable period. 
A quantity of coal was booked by a Colliery to the appellant Company 
carriage to Banjari station on the respondent Railway's line and the ·freight 
on the consignment was to be paid by the appellant Company. The Com-
pany declined to take delivery of a part of the consignment which reached 
Banjari on November 12, 1954. After some correspondence between the 
parties as well as with the Coal Controller, the Railway sold the coal on 
June 2, 1955, after serving a notice on the appellant. It thereafter filed 
a suit against the Company claiming demurrage for 202 days during which 
six wagons in which the coal was loaded were detained and 
sought a 
decree for Rs. 17,625114/- after giving eredit for the amount realised 
from the sale of the coal. The trial court granted a decree for about 
Rs. 1,620/- with interest, but in appeal the High Court decreed the 
~µway's claim in full. 
In the appeal to this Court by certificate, it was contended on behalf 
of the appellant (i) that the Company being a consignee of the goods 
booked by the Colliery there was no privily of contract between the Com-
pany and the Railway and no claim for demurrage or freight lay at the 
instance of the Railway against the Company; and (ii) that in any event 
the Railway ought to be awarded demurrage for only 22 days out of the 
total period for which the wagons were detained. 
HELD : (i) At the material time the sale and delivery of coal were 
controlled under the Colliery Control Order 1945; the supply of the coal 
in the present case was sanctioned by the Deputy Coal Commissioner to 
be made to the appellant Company and an order was also made by him 
in favour of the Company for priority supply of wagons to carry the 
coal to Banjari. 
In these circumstances it would be reasonable to infer 
that the Colliery acted as an agent for the Company in entering into the 
contract of consignment and the liability for payment of freight and of 
dcmurrage charges for failure to take delivery of the goods lay upon the 
Company. [361 E-F, 363 D-E] 
There was no force in the contention that it is only in those 
cases 
where delivery of goods is taken by the consignee that the liability to pay 
demurrage may be imposed upon him. 
Even where the consignee does 
not ultimately take delivery, if the wagon is detained for his benefit, nor-
mally the Railway would be entitled to hold him liable for demurrage. 
[363 G] 
(ii) The High Court was in error in holding that the Company was 
liable to pay denmrrage for the full period of 202 days. 
As the wagons 
containing the coal reached Banjari on November 12, 1954 and before 
that date and thereafter the Company had declined to take delivery of 
360 
SUPREME COURT REPORTS 
[ 1969] J S.C.R. 
1hc coal, !he Railway could have exercised its power to sell the coal under 
s. 56 of t.he Railways Act. The Railway was in the position of a bailee 
qua the (,ornpany ;ind \\·as bound to n1inimisc the h..1s~ : it could not un-
_rc;1;;?nahly detain t~c \\·agons and claim dcm11rragc. 
Even a.'>sun1ing that 
in view of !he Colliery Control Order, the Railway could not sell the coal 
\\'1ihout the Coal Commissioner's sanction, it could have unloaded the 
coal from the \Vagons and put the \Vagons to use. 
After the wagons were 
unloaded !he consignee could be liable only for wharfagc. (.163 H-364 CJ 
On !be facts in the present case the respondent Railway was entitled 
tu <lcmurragc for the detention of \\'agons for only one month. 
Clv1L APPELLATE JURISDICTION : Civil Appeals Nos. 
987 
and 988 of 1965. 
A 
B 
-
Appeals from the judgment and decree dated July 25, 1962 
of the Patna High Court in Appcal1 from Original Decree Nos. 
C 
210 and 230 of 1968. 
S. V. Guptc, and P. K. Chatterjee, for the appellant (in both 
the appeals). 
R. Gopa/akrishnan, for respondent No. 
I 
(in both the 
appeals). 
D 
K. K. Sinha, for respondent No. 2 (in both the appeals). 
The Judg1nent of the Court was delivered by 
Shah, J. 
The East Keshalpur Colliery-hereinafter called 
'the Co!liery'--book

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