D.K. Mahajan, J.@mdashThis second appeal is directed against the concurrent decision of the Courts below dismissing ''the Plaintiff�s suit for recovery of Rs. 5,000/- against Defendant No. 1. The suit was decreed ''against Defendant No. 2 who has not appealed. The present appeal is by the Plaintiff. The claim in appeal is that the suit should have been decreed against Defendant No. 1 as well.
2. The Plaintiff is a firm of commission agent and cloth dealers running business in Maliwara, Delhi, under the name and style of Mussadi Lal-Phool Chand. This firm sent a consignment of cloth vide PWB No. 892150 to Defendant No. 2 at Meerut. Defendant No. 2 is Messrs. Bhiwani Dass Narsingh Dass, Cloth Merchants, Meerut City. The Railway Receipt was sent through Bank and. was only to be delivered to the consignee Defendant No. 2 on payment of Rs. 4814/7/6 together with bank charges and interest up to the date of payment. The amount, on the payment of which the Railway Receipt was to be delivered, was the price of the goods.
The Plaintiff also sent a letter under registered cover to the Station Master, Meerut, to the effect that the goods covered by the aforesaid P.W.B. be not delivered to the consignee without the production of the P.W.B. This letter specifically prohibited the delivery of goods to the consignee on his furnishing an indemnity bond. This letter reached the Station Master on the llth July 1952. The letter is dated the 9th July, 1952, and is Exhibit P. 1/1. In spite of this letter the Railway authorities delivered the goods to the consignee after receiving from him an indemnity bond on the 12th July, 1952. When the Railway Receipt was returned to the Plaintiff-consignor, the Plaintiff demanded the goods from the Railway authorities and was told that they had already been delivered to the consignee. This led to the present suit for recovery of the price of the goods.
The suit was filed against the Union of India through the General Manager, Northern Railway, Delhi, and Defendant No. 2, the consignee. Defendant No. 2 did not contest the suit. The suit has been contested by Defendant No. 1, the Union of India. A large number of pleas were raised and it is not now necessary to notice all of them. The principal plea taken was that the property in goods had passed to the consignee and, therefore, the direction of the Plaintiff in the letter, Exhibit P. 1. was of no consequence and would not fasten any liability on the Union of India for having disregarded the same. It may also be mentioned that a false plea was raised by the Union of India that the letter Exhibit P-1/1 reached the Railway authorities after the goods had been delivered, to Defendant No. 2, Both the Courts below have found as a fact that the letter reached the Railway authorities a day before the goods were delivered to the consignee. The trial Court held that the property in the goods had passed to the Defendant-consignee and, therefore, the Plaintiff had no right of lien over them. It was also held that the Plaintiff had no right of stoppage of goods in transit. On these findings it was held that the railway administration was not liable. This finding of the trial Court was affirmed in appeal by the Additional District Judge. He, however, also held that the railway officials concerned acted in a bona fide manner in making over the goods to the consignee on his furnishing an indemnity bond in spite of the letter Exhibit P. 1/1 which specifically prohibited them from doing so except on the production of the P.W.B.
3. The sole question that arises for determination is whether the property in goods had passed to the consignee. It is not disputed by the learned; counsel for the Union of India that if it is held that the property in goods did not pass to the consignee, the Plaintiff would be entitled to a decree against the Union of India. Though he lays stress on the finding in favour of the Union of India to the effect that the delivery of goods against the directions of P.W.B. was bona fide yet he maintains that on the admitted and proved facts, the only finding which can be arrived in the goods had passed to the consignee.
4. It is not disputed and indeed it could not be that the following facts stand proved on the record:
(1) The goods were booked at the Delhi station for Meerut by the Plaintiff in the name of Defendant No. 2. The P.W.B. was also drawn in the name of Defendant No. 2.
(2) The P.W.B. was not sent to Defendant No. 2 but was sent to the Punjab National Bank Limited, Meerut, for delivery to the Defendant on payment of the price of goods, bank charges and interest up to the elate of payment.
(3) That, a registered letter was sent by the Plaintiff to Defendant No. 1 not to deliver the goods to Defendant No. 2 without the production of the P.W.B. It was specifically made cleat in the letter that the goods are not to be delivered on furnishing of an indemnity bond by Defendant No. 2. This letter reached the Station Master a day before the Railway authorities delivered the goods to Defendant No. 2.
On the basis of these facts it has to be determined whether the property in the goods was intended to pass to Defendant No. 2 and that it did actually pass? If it is held to the contrary, the railway must be held to be liable for the price of the goods as they flouted the clear instructions of the owner in the letter Exhibit P. 1/1.
5. It is common ground that the railway is a common carrier and a bailee so far as the owner of the goods is concerned. Therefore the railway is in the position of an agent vis-a-vis the owner of the goods. It is for this reason that the only. contention that has been advanced and pressed before us is that in the present case the property in goods had passed to Defendant No. 2.
6. The rules as to when the property in goods passes from the seller to buyer are laid down in Chapter III of the Sale of Goods Act. It will be proper, therefore, to set out the relevant provisions of this Chapter so far as they are necessary for our purposes: Section 19, which is in these terms:
19. (1) Where there is a contract for the sale of specific or ascertained goods the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred.
(2) For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case.
(3) Unless a different intention appears, the rule contained in Sections 20 to 24 are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer is the basic provision. It specifically lays down that property in goods will only pass when it is intended to pass and not otherwise. That intention has to be gathered from the terms of the contract, the conduct of the parties and the circumstances of the case. The rules in Sections 20 to 24 will only apply where there is no indication as to the intention of the parties. All that can be said in the present case is that the act of the Plaintiff in taking the goods to the Railway Station land in getting the P.W.B. made out in the name of Defendant No. 2 amounted to appropriation of goods to the contract; but the question still remains as to whether this appropriation was unconditional. For if it was unconditional, the property in goods will certainly pass to Defendant No. 2, but if on the other hand it was not so, or in other words the appropriation was conditional, the property in. the goods will not pass to Defendant No. 2. In this connection, reference may also be made to Section 23(1) and Section 25(1) of the Act, which are in these terms:
23. (1) Where there is a contract for the sale of unascertained or future goods by description and goods of that description and in a deliverable state are unconditionally appropriated to the contract, either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be express or implied, and may be given either before or after the appropriation is made.
25. (1) Where there is a contract for the sale of specific goods or where goods are subsequently appropriated to the contract, the seller may, by the terms of the contract or appropriation, reserve the right of disposal of the goods until certain conditions are fulfilled. In such case, notwithstanding the delivery of the goods to a buyer, or to a carrier or other bailee for the purpose of transmission to the buyer, the property in the goods does not pass to the buyer until the conditions imposed by the seller are fulfilled.
The fact that the P.W.B. was taken in the name of Defendant No. 2 is not conclusive evidence of the fact that the appropriation of goods to the contract was unconditional. In this connection, reference may be made to the decision in
* * * * but there is abundant authority for the view that the taking of a bill of lading in the name of a buyer does not ipso jure negative a conditional appropriation or the reservation of a right of disposal.
The authorities relied upon by the learned Judge for the aforesaid observation are Maokes v. Nicolson (1865) 19 CB (NS) 290 and the Kron-prinsessan Margareta. The Parana, 1921-1 AC 486. Moreover, on the facts of this case the P.W.B. in the nature of things had to be made in the name of the Defendant (No. 2). The goods Were a controlled item under the Cloth and Yarn Control Order and had to be booked in the name of the person in whose name the permit was issued, that is. the buyer, Defendant No. 2 there-fore, from the circumstances that P.W.B, was made out in the name of Defendant No. 2 will not in the least lead to the inference that the goods had been unconditionally appropriated to the contract so as to pass the property in them to Defendant 2.
7. The circumstances that the P.W.B. was not sent direct to Defendant No. 2, that its custody was retained by the Plaintiff and that it had to be delivered to Defendant No. 2 after payment and the further fact that letter Exhibit P. 1 was sent the same day by the Plaintiff to the Station Master, Meerut, leave no room for doubt that the appropriation of the goods was conditional and that the property in them was intended to pass when the P.W.B. was retrieved from the Bank on payment of the price. The decision in
8. There is no force in the contention of the learned Counsel for the Railway that the finding that the property in goods had passed to Defendant No. 2 is a finding of fact and is not open to challenge in second appeal. It is no doubt true that the question of intention is a question of fact but in the present case the question of intention was not determined. The Courts below have determined the matter as to the passing of property in the goods from the seller to the buyer on the basis of certain provisions in the Act, In this view of the matter, the argument that this Court cannot interfere in second appeal with this finding cannot be countenanced.
9. The only matter which remains to be settled is regarding the finding of the Additional District judge that the delivery of the goods by the Railway authorities to Defendant No. 2 was bona fide. It may be said at the very outset that there is no evidence on the basis of which this finding can be based. It is patent on the facts of this case that the railway staff at Meerut was highly negligent and it cannot be countenanced that negligence and bona fides can stand together. Moreover, the position of the railway being that of an agent of the Plaintiff it was bound to carry out the directions of the Plaintiff and cannot take shelter behind the incompetence of its employees. It is a matter of common knowledge that all P.W.Bs. are entered in a register and any directions qua them have to be noted therein. The intimation that the goods be not delivered on the furnishing of an indemnity bond by the Defendant but only on the production of the P.W.B. reached a day in advance and there is not earthly justification for not implementing them on that date. It is rattier distressing to note that the railway authorities should have set up a false defence against a genuine claim by a citizen by denying the receipt of the letter Exhibit P. 1/1 before the delivery of the goods. We are not therefore at all impressed with the casual finding of the learned Additional District Judge that the delivery of the goods to Defendant No. 2 was bona fide. The learned Judge did not consider the entire evidence and the circumstances proved in the case and therefore his finding on this part of the case is vitiated.
10. The learned Counsel for the Railway placed reliance on Section 57 of the Indian Railways Act for the proposition that the railway was within its rights to deliver the goods to Defendant No. 2 on furnishing an indemnity bond. The provisions of this Section will be of no avail to the railway in view of the specific directions in the letter Exhibit P. 1/1. No enquiry was made before the delivery of goods as to whether the same should be delivered on the basis of the indemnity bond. If an enquiry had been made, Exhibit P. 1/1 would have come to the forefront and no authority would then have acted u/s 57. There-fore this argument must also be repelled.
11. For the reasons given above we are clearly of the view that on the facts and in the circumstances of this case the property in goods did not pass to Defendant No. 2 and that the railway was negligent in not complying with the Plaintiff�s directions in letter Exhibit P. 1/1 and therefore are liable to make good the loss to the Plaintiff. The result, therefore is that this appeal is allowed, the judgments and decrees of the Courts below are set aside and the Plaintiffs'' suit is decreed with costs throughout.
Shamsher Bahadur, J.
12. I agree.
