UNION OF INDIA versus MOHD. NIZAM

Citation: [1980] 1 S.C.R. 968 · Decided: 18-10-1979 · Supreme Court of India · Bench: A.C. GUPTA · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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968 
UNION. OF INDIA 
v. 
MOHD. NIZAM 
October 18, 1979 
(A. C. GUPTA AND E. S. VENKATARAMIAH, JJ.J 
Indian Post O[ficl! Act, 1898, SeCtion 34, Scope of-Value Payable Artic£e 
accepted by the Union of India for onward transmission to a foreign country 
which in turn collects the amount from the addressee but fails 
to send back 
due to suspension of the money order service between the two countries-
Whether the pn,\t office is an agent of the sender and the foreign country a sub-
agent. 
The respondent filed a suit for the recovery of a sum of Rs. 1606-8-0 being 
the value of V.P. article paid by the addressee in Pakistan to that Government 
for transmission to India-. 
Due to the suspension of the money order service 
between Pakistan and India after 19-9-49, the amount was not sent by Pakistan 
P&T authorities to P&T authorities in India: Therefore, the appellant, pleaded 
non-liability by virtue of proviso to Section 34 of the Indian Post Office Act, 
1898~ The Trial Court dismissed the suit on the ground that the resPQndent's 
claim was barred by limitation under Rule 102 of the Rules framed under the 
Act and was also not maintainable in view of the proviso to S. 34. The first 
appellate court reversed the said decision on the view that Rule 102' was ultra 
vires the Indian Post Office Act and that non-payment by the Pakistan Govern-
ment was' not a valid defence. The High Court on appeal by the appellant 
affirmed the appellate decision holding that the post office established by the 
Government of India was an agent of the plaintiff and the Government of Pakis-
tan was acting as the sub-agent. 
Allowing the appeal, the Court 
HEW : When two sovereign powers enter into an agreement, as in the 
instant case "in order to establish 3.n exchange of value payable articles", neither 
of them can be described as an agent of the· other. It is plain that under such 
an agreement if the Pakistan Administration decided to suspend the V.P. service 
temporarily and did not make over the money realised from the addressee, it 
cannot be said that the Union of India had received the money but failed to 
pay. [975 C-D] 
Had the Pakistan Government been really a sub-agent, payment to them 
would have been as good as payment to the Union of India, but that is not the 
case here. 
Sub-agent is defined in Section 191 of the Contract Act, 1872, as 
"a person employed by and acting under the control of, the original agent in 
the business of the agency". 
Under the arrangement entered into between the 
two sovereign powers, Union of India and Pakistan, neither could be said to 
be employed by or acting under the control of the other. In view of the fact 
that since 19-9-1949 the money order service with Pakistan remained suspended, 
the proviso to section 34 of the Indian Post Office Act, 1872 is attracted which 
absolves the Central 
Government from "any liability in 
respect of the sum 
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UNION v. MOHD. NIZAM (Gupta, J.) 
969 
-specified for recovery unless and until that sum has been received from the 
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'<!ddtessee". f975 E-Gl 
CivrL APPELLATE JURISDICTION: Civil Appeal No. 446 of 1969 . 
Appeal by Special Leave from the Judgment and 
Order dated 
1-4-66 of the Allahabad High Court in S.A. No. 1133/65. 
R. P. Bhatt and Girish Chandra for the Appellant. 
Pramod Swarup and R. Sathish for the Respondent. 
The Judgment of the Court was delivered by 
GUPTA, J. 
The stakes are not high in this appeal-it is valued at 
Rs. 1606-8-0-but it raises two rather interesting questions. Does the 
post office when it accepts a postal article for transmission act as an 
agent of the sender of the article ? And where the postal article is 
sent from India to an addressee in a foreign country, does the govern-
ment of that country act as a sub-agent for 
transmission of the 
article? 
The questions arise on the following facts. The respondent bad 
instituted a suit in th.e court of Munsif, Moradabad, for recovery of 
a sum of Rs. 1606-8-0 from the Union of India (Post an9 Telegraph 
Department) alleging that during the period from August 31, 1949 
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to September 17, 1949 the plaintiff despatched from the Moradabad 
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City Post Office thirty value-payable parcels to addresses in Lahore 
and Rawalpindi in Pakistan, that they received the articles and paid 
the entire amount payable, but the defendant Union of Indfa failed to 
pay the sum to the plaintiff. The Union of India in their written 
statement admitted th

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