LexUNION OF INDIA AND ORS. versus SUGAULI SUGAR WORKS (P) LTD.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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UNION OF INDIA AND ORS.
v.
SUGAULI SUGAR WORKS (P) LTD.
March 11, 1976
[A. N. RAY, C.J., M. H. BEG AND JASWANT SINGH, JJ.]
Indian I<ailway's Act as it stood an1ended by Act 46 of 1959 and prior to-
1961 a1nencbne11t Ss. 72 and 74-Liability of the Railway in respect of goods
sent at Railway's risk is the sa1ne as that of a bailee under the Indian Contract
Act 1872 Ss. 151, 152, 161-I::nquiry under Sections 83 and 84 of the Railways
Act read lritiz s. 2 of the Indian Raihva).'S Board Act (4 of 1905) and nlfe 18
of the Railv;ay Board Rules is a Joint Enquiry, adniissible 1t11der S.\. 5, 7 and 9
of the Evidence Act-Not covered, for clai111 of privileges, under s. 123 of tf1e
Evidence Act read with Art. 298 of the Constitution-Correct n1eas11re of
dama{!FS for purposes of awarding d(1mages for negligence under the Roi/ways
Act--Jt'lwt is.
The non·delivery of the goods booked by the respondent on September 5,
1955 to .several destinations under "Railway Risk" due to the sinking of
"Barge No. 6, carrying the wagons containing the goods" led to the filing of
four suits V·lhich were dismissed by the Trial Court holding that the accftlent
was not due to the negligence of the Railway employees.
The High Court,
acc~pting the appeal of the respondent by its judgment dated April 13, 1966
held that the sinking of BaI"ge was not due to "inevitable accident" hut due
to the serious negligence of the Railway employees and their failure of duty
to take due cnre which it \Vas required to take as a bailee as revealed hr their
own Enquiry Committee held with reference to Ss. 83 and 84 of the Railways
Act read \.Vith section 2 of the Indian Railways Board Act (4 of 19-05) and
rul~ 18 of the Railway Board Ruks. The High Court remanded the suits
for determination of the quantum of the decretal amount due to the respondent.
The trial court after remand gave decrees in favour of the respondoot on
10th September, 1966 without interest claimed up to the date of filing of the
suit and interest "pendent-lite". The High Court, on appeal by the respondent
by its judgment dated 3·9·1968 allowed interest "vendent·lite'', <1nd futur~ interest
at the rate of 4!·% per annum.
Dismissing the two sets of appeal by the Union, one by Special' Leav·e.
against the order dated 13-4·1966 determinin.(!; the liability and
anoth~r by
certificate against the judgment dated 3-9·1968 awarding interest the High
Court.
HELD :
(I) The liability of the Railway was that of a bailee.
The
consignments were booked at Railway risk. The onus of proving that the
Railway employees took the necessary amount of care and they were not guilty
of negligence rested on the Railway Authorities. The question of onus is not
important when the entire evidence is before the court. In the instant case
there was no legal evidence to prove "inevitable accident" but suppression
of important documents and non production of important witnesses in charge
of the Barge. The Barge sank because of the serious and gross negligence
of the railway employees and the railways did not take due care which it was.
required to take as a bailee.
f617B-D: 618F-Gl
•
(II) The Enquiry Committee, in the instant case, is a Joint Enquirv. under
the rules and the report is admissible under Ss. 5, 7 and 9 of the Evidence
Act.
The claim for privilege is not admissible because no such claim was made
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before the Courts bttlow and there was no affidavit of the Minister incharge
or the Secretary of the Department to support a claim for privilege.
[(1160-H-l
(III) One of the principles for award of damages is that so far as possib1e
he who has proved a breach of a bargain to supply \\:hat he has cpntraCted
to get is to be placed as far as money can do it, in as good a ~ituation as
if the contract ha.d been performed. The fundamental basis thus is co1npensa-
tion for the pecuniarv loss which naturally flows from the breach. Therefore,
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UNION V. SUGAULI SUGAR WORKS (Ray, C.J.)
615
the principle is that as far as possible the injured party should be placed
in as good a situation if the contract has been performed.
Jn other words,
it is to provide compensation for the loss which ---n~ti;irally flows f~om !he
breach.
The market rate is a presumptive test because it 1s the general intention
.of law that in giving damages for breach of contract, the party complaining
·should, ~o far as it can be by money, be placed in the same posExcerpt shown. Read the full judgment & AI analysis in Lexace.