LexUNION OF INDIA versus STEEL STOCK HOLDERS SYNDICATE, POONA
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UNION dF INDIA
v.
STEEL STOCK HOLDERS' SYNDICATE, POONA
March 1. 1976
[P. K. GoswAMI AND s. MuRTAZA FAZAL Au, JJ.J
I
Railways Act, 1890 (as amended in 1961)-Ss. 72, 73, 76, 78(d)-Scope
of-Delay in deliverv of Roods-Loss of inter:.est on capital-If, could be measure
of damaRes-If Railways Act overrides Contract Act.
A consignment of iron 12;oods was booked by the respondent by rail on
December 15. 1961. The due date of delivery under the contract or usage
of the railways was December 25. 1961. As the goods were diverted, they
were actually delivered on July 21, 1962. The respondent filed a suit for
damages alleging negligence on the pait of the railway in that, by reason of
diverting the consignment. there was inordinate delay in its delivery which
resulted in loss to it by way of interest on capital. The trial court decreed
the suit but in the matter of damages by way of loss of interest it gave 6%
per annum instead of 12 % claimed by the respondent. The District Court
dismissed the appellant's appeal, and the High Court dismissed the second appeal
in limine.
On appeal to this Court it was coq.tended for the appellant that (i) since
the cause of action was based on del~yed delivery, the case was covered bv
the Railway Act, as amended in 196l, that the applicable section is s. 76
and that. since the conditions mentiorj.ed therein had not been fulfilled.
th~
respondent was not entitled to a decree: {ii) that the respondent could claim
for loss of profit or loss of m~rket as the same was expressly barred by
s. 78(<l) oi the new Act; and {iii)
that the respondent's claim for damages
was not actionable in the absence of any agreement providing interest on
capital as a measure of damages. It was contended for the respondent that
even if s. 76 barred the remedy,
IO$S of profit or market resulting from
delayed delivery \\.'ould amount to "deterioration" contemplated by s. 76.
Dlc;missing the appeal to this Court,'
HEW : In view of the finding of fact arrived at by the courts
below,
the respondent is entitled to damages. f515 Bl
1. (a) The case is covered by the new Act and not by the old Act as con-
tended by the respondent. There could be no question of liability arising when
the goods were booked and the contract was entered into between the resp<'nd-
ent and the railways. because, there was no presumption that the contract would
result in breach.
[512B-C]
·
In the instant case, the cause of action arose when the consignment was
delivered to the respondent on July 21. 1962, that is, after the neW Act came
into force.
The reasonable transit period having expired on January 1. 1962
the breach occurred after the new Act came into force.
(b) Section 76 of the Act has a very limited scope : it contemplates clearly
those cases which fall within the contingencies contemplated bv it.
These
contingencies refer to certain physical factors. viz : actual and ohysical loss.
destruction, damage or deterioration of goods. Where due to dt>lav on the
part of the railway there is physical d¢terioration or diminishing of the value
of the goods. the plaintiff cannot claim damages by way of loss of profits or
loc;s of market plus damages sustaint>d by the actual loc;s or de"tPrioration of
the goods.
In such a case the plaintiff can claim only the actual loss in the
value of the good<I c::iuc;ed by destruction, damage or deterioration and not
loss of profit.
f512F-H]
( c) The word .. deterioration" is ui:.ed in its ordinarv parlance, so as to
include within its ambit the actual phrsicaT act of deterioration. namely, the
change for the worse in the thing itself., [514E-F]
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UNION V. STEEL STOCK SYNDICATE
505
B./. Railway Co. Ltd. v. Piana Mal Guiab Singh A.I.R. 1925 Lah. 255,
A
approved.
1
G./.P. Railway Co. & Others v. luRal Kishore
Mukat
Loi A.l.R. 1930
•
All. 132 and Union of India and others v.
Messrs. Sheobux Satya11arayan,
A.J.R. 1963 Orissa 68, not approved.
(d) The words "loss, destruction, damage or deterioration" occurring in
s. 76 must be read ejusdem generis to indicate the actual and physical loss or
change in the JZ:Oods contemplated by that section. In the instant case, since
there was no physical deterioration of the goods at all which were delivered
in the same condition in which they were booked. the case of the respondent
tloes not fall within the four corners of the section. Nor can the respondent
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