UNION OF INDIA versus M/S CHATURBHAI M. PATEL & CO. AND VICE VERSA

Citation: [1976] 2 S.C.R. 902 · Decided: 09-12-1975 · Supreme Court of India · Bench: KUTTYIL KURIEN MATHEW · Disposal: Dismissed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
c 
D 
E 
F 
902 
UNION OF INDIA 
v. 
Mis CHATURBHAI M. PATEL & CO. 
AND VICE VERSA 
December 9, 1975 
[K. K. MATHEW AND S. MURTAZA FAZAL ALI, JJ.] 
Fraud-must be estabiis/u'd beyond reasonable doubt-Mere suspicion-
lf proof of fraud, 
'111e resondent filed a suit against the, Union of India alleging that due to 
negligence of the railways a consignment of tobacco despatched by him to 
Gaya was substituted in transit and that in its place inferior tobacco was deli· 
vered al Gaya. 
The railways on the other hand alleged fraud and collusion 
between the respondent and his father, also a bidi tobacco merchant in Gujarat, 
because by deliberate manipulation, ·the respondent consigned inferior goods 
to Gaya and superior goods to Gujarat. 
The trial court dismissed the respondent's suit. The High Court allowed the 
suit for damages but refused refund of exci&ci duty said to have been paid by 
the respondent. 
Dismissing the appeal to thi9 Court, 
HELD : (I) The appellant had not been able to make out a case of fraud. 
The High Court was justified in negativing the plea of fraud and in decreeing 
the suit. 
[904-FJ 
(2) Fraud, like any other charge of criminal offence, whether made in civil 
or criminal proceedings must be established beyond reasonable doubt. 
How-
ever suspicious maY be the circumstances, however strange the coincidences 
and however grave the doubts, suspicion alone can never take the place of 
proof. 
[904 .. FG] 
A. L. N. Narayanan Chettyar v. Official Assignee, lligh Court Rangoon, 
A.I.R. 1941 P.C. 93, referred to. 
In the instant case there is absolutely no evidence to show any prior meeting 
of the minds between the respondent and hi~ father before the consignment was 
sent either to Gujarat or Gaya so as to raise an inference that these two per-
sons bad hatched up a conspiracy in order to defraud the appellant. 
[904-EF] 
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 972-913 of 
1968. 
From the Judgment and Decree dated the 1st December 1961, of 
the Allahabad High Court in First Appeal No. 285 of 1958. 
Gobi11d Das and S. P. Nayar for the appellants in Appeal 972 and 
G 
for Respondents in C.A. 973/68. 
H 
S. M. Jain, J. P. Goyal, S. K. Jain and Shripal Singh for Respon-
dent in Appeal 972 and for the Appellant in C.A. 973/68. 
The Judgment of the Court was delivered by 
FAzAL Au. J. This is a defendant's appeal by certificate, granted 
by the High Court of Allahabad under Art. 133(1) of the Constitu-
tion of India. The plaintiff which is a registered partnership firm at 
Banaras dealing in Bidi tobacco filed the pres~nt suit for dam2ges 
against the defendant Union of India on the allegation that it had 
1 
UNION v. CHATURBHAI & co. (Fazal AU.!.) 
903 
despatched a. consignment containing to_bacco at Banaras for G_aya i_n 
Bihar for delivery to the firm Chaturbhat M. Patel & Co: at Gaya. T~1s 
consignment was booked under Invoice No. 107 Railway 
Receipt 
No. 89551 dated July 9, 1954. The plaintiff's allegation was that due 
to negligence of the Railway t_he identical goods despatched by . !he 
plaintiff did not reach the consignee at G~ya but the g?ods ;:ontammg 
inferior type of tobacco reached there ~h1ch caused senous ioss to the 
plaintiff. 
The suit wa~ filed after no.tic~ under s .. 80 of the Code of 
Civil Procedure was given. 
The plamtiff also claimed refund of the 
e1ecise duty which was paid by the plaintiff. The suit was resisted _by 
the defendant mainly on the ground that due to fraud and collusion 
between the plaintiff in Banaras and his father's fir~ in ~ujarat, 
t~e 
consignment at Benaras was interchanged by mampulat1on and d~h­
beratien so that the inferior goods were sent to Gaya and the supenor 
goods were sent to Gujarat which were sold by the firm at Gujarat and 
huge profit was earned by the aforesaid firm. 
A 
B 
c 
The Trial Court framed a number of issues 
and accepted the 
defence and accordingly dismissed the suit. The plaintiff then filed an 
appeal in the High Court of Allahabad which reversed the judgment 
and decree of the Trial Court and decreed the plaintiff's suit for 
damages but refused to pass a decree regarding the amount of 
the 
D 
excise duty said to have been paid by the plaintiff. 
Iv1r. Gobind Das appearing for the appellant submitted that there 
were number of suspicious circumstances which clearly went to show 
that some amount of fraud had been played on the defendant py the 
collusion of the plaintiff with his father at Gujarat whose

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