P L D 1956 (W (PLP)

A. R. CHANGEZ, J.‑--This judgment will dispose of Civil Revision Petitions Nos. 67 and 68 of 1956 arising out of two separate suits brought by the respondent against the petitioner for the recovery of Rs. 63/3/6 for non‑delivery of 58 attis of yarn out of the total consignment of 397 bales of cotton yarn booked on the 23rd of December 1953, and for recovery of Rs.95/3/6 for non‑delivery of five bundles out of a total consignment of fifty bundles of cotton yarn booked on the 11th of January 1954, from Karachi to Multan City. Both the suits have been decreed by Ch. Muhammad Siddiq, Judge, Small Cause Court, Lahore. In both these petitions the parties are the same and the points raised are identical and as such can be conveniently dealt with in one judgment. The relevant facts are as follows. The Punjab Provincial Cotton Corporation Limited had handed over two consign ments to the railway authorities at Karachi for being delivered at Multan to the Multan Central Co‑operative Bank Limited, Multan City. When the consignments reached Multan City, it was found that 58 attis of yarn were missing out of one consignment and five bundles of yarn out of the other. On 11th February 1954, the railway authorities gave the short‑delivery certificates, Exhs. P. 4 and P. 5, to the representative of the Multan Central Co‑operative Bank. The plaintiff is the insurer of the said consignments and had to pay a sum of Rs. 63/3/6 and Rs. 95/3/6 to the Punjab Provincial Cotton Corporation Limited, Karachi. Before filing the suits, the plaintiff had obtained the letters of subroga tion from the consignor. After giving the usual notices under section 77 of the Railways Act and under section 80 of the Civil Procedure Code, these two suits were filed on April 12th 1955. Syed Ali Shah, the learned counsel for the petitioner, has raised the following law points before me:‑-- (1) The plaintiff had no locus standi to file the suits. (2) The Court at Lahore had no jurisdiction to try the suits. (3) In view of the execution of the risk‑note in form B by the consignor the defendant is not liable for the non‑delivery of a portion of the consignment. (4) The suits were time‑barred. As regards point No. 1 it was urged that under section 72 of the Railways Act the responsibility of the railway adminis tration is that of a bailee under sections 151, 152 and 161 of the Contract Act. Section 161 of the Contract Act runs as follows:‑ " If, by the default of the bailee, the goods are not returned, delivered or tendered at the proper time, he is responsible to the bailor for any loss, destruction or deteriora tion of the goods for that time." Section 72 (3) of the Railways Act on which great emphasis has been laid may be reproduced here with advantage: " Nothing in the common law of England or in the Carriers Act, 1865, regarding the responsibility of common carriers with respect to the carriage of animals or goods, shall affect the responsibility as in this section defined of a railway administration." It was, therefore, argued that the responsibility of the railway administration for the loss, etc., is to the bailor, as provided under section 161 of the Contract Act, and to no one else. The plaintiff in this case was not privy to the contract between the consignor and the railway administration and by no stretch of language it can be held to be a bailor. The application of the principles of the common law of England and the provisions of the Carriers Act, 1865, have been specifically excluded under section 72 (3) of the Railways Act. It was contended that in spite of this bar the learned judge, Small Cause Court, has applied the same principles in deciding this point. In his judgment he has quoted the principles of English Law from the Law of, Contract by Muhammad Shafi, 1950, Edition, 'note 7, page 752, in support of his finding. These observations are to be found in Simpson v. Thomson (L R 3 A C 270 at p. 284) in the judgment of Lord Chancellor Earl Cairns and are as follows:‑ " It is a well‑known principle of law that where one person has agreed to indemnify another, he will, on making good the indemnity, be entitled to succeed to all the ways and means by which the person indemnified might have' protected himself against or reimbursed himself for the loss." To further supplement this argument, Raja Hasan Akhtar, the learned counsel for the respondent, has relied upon Maharana Shri Jasvatsingji Fatesingji v. The Secretary of State for India (I L R 14 Bom. 299), in which Jardine, J., quoted the above observations of Earl Cairns and held as follows:‑ " The Indian Contract Act, IX of 1872, section 141, applies this principle to the contract of suretyship; but sections 124 and 125, which deal with the contract of indemnity, are silent on this point; only the rights of the promisee are stated ; those of the promisor are not mentioned. The learned counsel for plaintiff did not notice this omission when arguing for the application' of the doctrine of subrogation. In the absence of reported decisions, I am of opinion that the doctrine is to be applied for the following reasons. It is an essential part of the law about indemnity. It is clearly based on natural equity, and is thus of general application. The Indian Contract Act does not impair it, and is itself only a partial measure, as the preamble shows." That suit had been brought on the basis of a contract of indemnity. The plaintiff, who was the insurer of the grassias against the exaction of jama, had paid the jama to Govern ment. Jardine, J., applied the equitable principles of English law as enunciated in Simpson v. Thomson in deciding the questions involved in that suit. It will be noticed that this authority did not deal with the responsibility of the railway administration which is governed by the Railways Act and section 72 (3) of this Act excludes the application of the principles of the common law of England. Both these authorities are, therefore, not a sure guide for the decision of the point involved. The learned counsel for the respondent could not point out any authority in any text‑book or in any decided case that such an action could be maintained by the insurer in spite of the provisions of section 72 of the Railways Act. The question whether the plaintiff, who was not a privy to the contract, could have filed the suits or not shall have to be determined in accordance with the provisions of the Railways Act. Generally speaking, a person not privy to a contract is not entitled to sue on the basis of such a contract unless the right is recognised in any specific provision of law. For example, under section 141 of the Contract Act, the surety is entitled to the benefit of security which the creditor has against the principle debtor at the time when the contract of suretyship is entered into, whether the surety knows of the existence of such security or not, and, if the creditor loses or, without the consent of the surety, parts with such security, the surety is discharged to the extent of the value of the security. Section 125 of the Contract Act which deals with the contract of indemnity, states only the rights of the promisee but it is silent as regards the rights of the promisor. The Contract Act may not be exhaustive and where the Act is silent, equitable principles of English law may be applicable. But in this case where there is a clear bar to the application of the common law of England, is it permissible to seek guidance from that very law in coming to a decision? In my opinion, the legislature, by enacting section 72 of the Railways Act, had intended to restrict the responsibility of the railway administration in such cases and, therefore, the principles of the common law of England cannot be availed of by the plaintiff. The plaintiff in this case is not really suing the railway administration for the loss of the goods. The basis of its suits is the payment of the amounts to the insurer. The letters of subrogation obtained from the consignor do not in the least effect the liability of the defendant. It is important to note that although the consignments were handed over to the railway authorities on 15th December 1953, and 11th January 1954, the certificate of insurance Exh. P. 5 was issued on 5th January 1954, for the first consignment, and Exh. P. 6 on 18th January 1954, for the second consignment. This shows that the plaintiff had no interest whatsoever in the consign ments on the dates they were handed over to the railway authorities. The letters of subrogation were obtained on March 26, 1954, by which the consignor had assigned to the plaintiff all rights, etc., against the Government arising out of the loss of the said consignments and had granted to the plaintiff full power to take and use all lawful ways and means in the name of the plaintiff at its risk and expense to prosecute such rights. This surely amounts to assigning to the plaintiff the right to sue which had accrued to the consignor. Legally such a right could not have been the subject matter of any assignment. Section 6 (e) of the Transfer of Property Act lays down:‑ " A mere right to sue cannot be transferred ".

‑Such an assignment could not, therefore, invest the plaintiff with any title to claim compensation. In Jangli Mal v. Pioneer Flour Mill (106 P R 1914), it was held by a Division Bench of the Chief Court of Punjab, that a claim for damages for breach of contract after breach, is not an actionable claim, but is a " mere right to sue" and cannot, therefore, be transferred. This was followed by Martineau, J., in Jai Chand‑Jai Ram v. Narain Das‑Ram Kishan (A I R 1925 Lah.548). It is not a case of endorsement of the railway receipt which being a document of title is negotiable. The case of an endorsee of a railway receipt is governed by different principles. The contract of carriage, which had been entered into by the consignor and the railway company, would not, on account of subsequent dealings between the consignor and the plaintiff, confer any such right upon the plaintiff to sue under the contract. As a result of the considerations which I have set out above, I have no doubt that in the event of loss, destruction or' deterioration of the goods represented by the railway receipt,) the consignor would be the only person entitled to sue the railway company for compensation. The plaintiff, who is1 merely an insurer, cannot step into the shoes of the consignor by obtaining letters of subrogation from the latter. I, there fore, hold that in the circumstances of the case the plaintiff was not entitled to file the suits. The above finding is sufficient to dispose of these revision petitions, but, in view of the importance of the other points raised, I shall now proceed to deal with them. As regards point No. 2, it was urged that, it being a case of non‑delivery, the cause of action arose either in Karachi or in Multan and, therefore, the Court at Lahore had no jurisdic tion. The Federation of Pakistan could not be sued in Lahore on the basis of residence as the word "resides" in section 20 of the Civil P. C. refers to natural persons. Section 20 (a), however, provides that the defendant can be sued in a Court within the local limits of whose jurisdiction the defendant resides or carries on business etc. Surely the defendant is carrying on business through its railway departments and the head‑office of the railway departments is in Lahore. The suit is on the basis of the commercial activities of the State and not on the basis of its executive activities. The Chief officer of the railway department is the General Manager who has his office in Lahore and it is to this officer that notices under section 77 of the Railways Act and under section 80 of the Civil P. C. can be legally given. Under the circumstances there is not the least doubt in my mind that the defendant' carries on business in Lahore in connection with its railway departments and as such the Court at Lahore had jurisdiction to try the suits. As regards point No. 3 it is conceded by the respondent that the consignor had handed over the consignments to the railway authorities on the basis of the risk note in form B which is an approved form under section 72 (2) (b) of the Railways Act. The responsibility of the railway administration is, therefore, governed by the terms of this form. This form is used when the sender elects to despatch the articles at a "special reduced" or "owner's risk" rate and in consideration of such lower charge the sender agrees and undertakes to absolve the railway administration from a responsibility for any loss except upon proof that such loss etc. arose from the misconduct on the part of the railway administration or its servants, provided that in the following cases:‑ (a) Non‑delivery of the whole of the said consignment or of the whole of one or more packages forming part of the said consignment packed in accordance with the instructions laid down do the Tariff or, where there are no such instruc tions, protected otherwise than by paper or other packing readily removable by hand and fully addressed, where such non‑delivery is not due to accidents to trains or to fire. (b) Pilferage from a package or packages forming part of the said consignment 'properly packed as in (a), when such pilferage is pointed out to the servants of the railway admi nistration on or before delivery, the railway administration shall be bound to disclose to the consignor how the consignment was dealt with throughout the time it was in its possession or control and, if necessary, to give evidence thereof before the consignor is called upon to prove misconduct, but, if misconduct on the part of the railway administration or its servants cannot be fairly inferred from such evidence, the burden of proving such misconduct shall lie upon the consignor. It will thus be noticed that, except in cases governed by the provisos mentioned above, the railway administration can be made liable only if the consignor proves that the loss etc. was due to the misconduct of the railway administration or its servants. But if the case is governed by the provisos then the railway administration shall be bound to disclose to the con signor how the consignment was dealt with throughout the time it was in its possession or control and, if necessary to give evidence thereof before the consignor is called upon to prove misconduct. The short delivery certificates given by the railway autho rities clearly show that the bales had been tampered with. The coverings of the three bales had been found to be loose and contents had been extracted partially from the top. The weight of the consignment was found to be short and there was room to put in the missing yarn. From the other consign ment, five bundles of yarn were found missing in similar circumstances. From these facts, there is not the least doubt about it that it was a case of pilferage. The defendant did not make any attempt to disclose how it dealt with the consign ments throughout the period in which they remained in their possession. From the circumstances narrated above it is quite clear that the case in hand is governed by the provisos mentioned in the risk note and the inference is irresistible that the loss had occurred on account of misconduct on the part of the railway administration or its servants. The railway administration was, therefore, clearly liable for the loss in spite of the execu tion of the risk note form B by the consignor. I shall now take up the last point which pertains to the question of limitation. According to the plaints the consign ments were actually delivered at Multan on 11th February 1954. The defendant had taken up the plea in the written state ments that they had been delivered in January 1954, but there is no evidence in support of it. The short‑delivery certificates are dated 11th February 1954. The consignments had there fore, been delivered on or before that date, but as there is no evidence about their delivery before 11th February 1954, it shall have to be presumed that the same had been delivered on 11th February 1954. Both the parties conceded before me that Article 31 of the Limitation Act is applicable to these suits.1 The period of limitation provided by this Article is one year and it begins to run from the date when the goods "ought to be delivered". In this case, the goods were actually delivered on 11th February 1954. It was not alleged by the plaintiff that the defendant had promised to search for the missing articles. In the absence of any such evidence, it shall have to be presumed that the goods ought to have been delivered on 11th February 1954. In Secretary of State v. Dunlop Rubber Company (A I R 1925 Lah. 478), it was held by a Division Bench of the Lahore High Court as follows:‑ "Under Article 31, time runs from the date on which the goods ought to be delivered, and the question considered by the learned District Judge as to when the recovery of the plaintiffs' goods became hopeless appears to us immaterial. The present case is distinguishable from the cases relied on by the learned District judge by the fact that one of the plaintiffs' bundles was actually delivered to them on the 25th February 1921. Clearly the four remaining bundles ought to have been delivered to them on the same date so that the 25th February 1921 must be taken to be the date from which the period of limitation is to be computed." The learned counsel for the respondent has relied on Palani chami v. Governor‑General‑in‑Council (A I R 1946 Mad. 133) and Raigarh Jute Mills v. Commissioners, Calcutta Port (A I R 1947 Cal. 98), but the facts of those cases are distinguishable from the facts of the present case. In those cases there was evidence that the railway departments had promised to search for the missing articles, but in the case in hand there is no such evidence. In my opinion, Secretary of State v. Dunlop Rubber Co. is fully applicable to the facts of the present case. The time, therefore, began to run from 11th February 1954. Excluding the day on which the cause of action arose as provided by section 12 of the Limita tion Act, these suits should have been filed on or before 11th February 1955. But under the provisions of clause (2) of section 15 of the Limitation Act, the period of two months' notice, as required under section 80 of the Civil P. C., is to be excluded. The notices were given on 14th December 1954. The suits, therefore, could not have been brought until the expiry of two months next after the notices had been delivered. The word "next" cannot mean anything else except "imme diately following or succeeding". The defendant is allowed the full period of two months to deliberate over the matter and to make amends, if so advised, and no suit can be brought until the expiry of that period. The day on which the notice is delivered and the day on which such period expires shall have to be excluded. The law on the subject is summed up in Halsbury's Laws of England, Second Edition, Volume 32, paragraph 140 "When a period is fixed before the expiry of which an act may not be done the person for whose benefit this time is prescribed has the benefit of the entire period and accordingly in computing it the day from which it runs as well as the day on which it expires must be excluded." This was also the view of a Division Bench of the Calcutta High Court taken in Province of Bengal v. Midnapure Zamindari Company, Limited (A I R 1945 Cal. 341). It is, therefore, clear that in computing the period of limitation of one year under Art. 31 of the Limitation Act this period shall have to be excluded and after excluding this period it appears that these suits could have been filed on 12th April 1955. I, therefore, hold that the suits were not barred by limitation: The result is that in view of my finding on point No. 1 that the plaintiff had no locus standi to file the suits, these revision petitions are accepted, the judgment and decree of the lower Court is set aside in both the cases and the suits are dismissed. But in view of the complicated questions of law involved, the parties are left to bear their own costs throughout. A. H. Petitions accepted.