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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL     APPEAL     NO.     7589     OF     2012   [Arising out of SLP (Civil) No. 33740 of 2011]

Shree Shyam Agency .. Appellant

Versus

Union of India & Others .. Respondents

J     U     D     G     M     E     N     T   

K.     S.     Radhakrishnan,     J.   

1. Leave granted.

2. We are, in this appeal, concerned with the question whether the  

appellant is legally entitled to be intervened in a claim petition filed by  

the 3rd respondent herein under Section 16 of the Railway Claims  

Tribunal Act, 1987 (for short ‘Tribunal Act’).    

3. The claim petition OA No. (1) 2 of 2010 was preferred by the 3rd  

respondent against the Southern and Eastern Central Railways before  

the Railway Claims Tribunal, Chennai Bench claiming an amount of

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Rs.9,46,85,726/- together with the interest @ 12% per annum from  

the date of filing of the petition till the date of payment and also for  

other consequential reliefs.    

4. In the claim petition, the appellant herein filed I.A. 3/2011 for  

intervention claiming to be an interested party stating that its  

presence is necessary for a proper adjudication of the claim.  

I.A.4/2011 was also preferred by the 2nd respondent herein Central  

Railway to implead three other parties, namely Subham Sugar  

Agencies, Umesh Chaudhary, Ex. Goods Supervisor, Tatuha and  

Ambika Sugars Ltd., contending that the Railway Claims Tribunal (for  

short ‘Tribunal’) has no jurisdiction to proceed with the case since it  

involved contractual disputes, criminal conspiracy, cheating and that a  

complaint filed by the above mentioned parties are pending before the  

Chief Judicial Magistrate, Muzaffarpur, Bihar.   

5. The Tribunal heard both the applications, i.e. I.A.3/2011 and  

I.A.4/2011 and a common order was passed on 15.4.2011, stating  

that inter se disputes between private parties cannot be decided by the  

Tribunal in a claim petition.  It also took the view that the Railway  

Administration through those parties is trying to linger on with the  

proceedings and, under no circumstance, the application for

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impleading the other three parties can be entertained.  Both  

I.A.3/2011 and I.A.4/2011 were accordingly dismissed.   

  6. Aggrieved by the order passed by the Tribunal, C.R.P. (PD) No.  

1713 of 2011 was preferred by the appellant herein, CRP (PD) No.  

2152 of 2011 and CRP (PD) No. 2153 of 2011 by Southern Railway  

and Central Railway, before the High Court of Judicature at Madras.  

All the three civil revision petitions were heard and a common order  

was passed on 9.9.2011 dismissing all the revision petitions and  

confirming the order passed by the Tribunal, against which the  

appellant in C.R.P. (PD) No. 1713 of 2011 has come up before this  

Court with the present appeal.   Railway Administration, however,  

accepted the order passed by the Tribunal which has been affirmed by  

the High Court by the impugned judgment.

7. For disposal of this appeal, reference to few facts is necessary.

Claimant, the third respondent herein a company having its head office  

at Chennai, is engaged in the business of manufacturer of white crystal  

sugar having its factories at Thirumanthankudi village, Papiasam  

Taluk, Thanjavur District and A. Chittur Village, Virudhachalam Taluk,  

Cuddalore District.  They used to sell free sugar in Northern Indian  

markets consisting of West Bengal, Bihar, etc. by transporting the

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consignments in racks through the services provided by the Railways.  

Railway receipts are made out showing the consignee as “Self” which  

are thereafter endorsed by the consignor to the buyer on payment of  

the sale price.  The endorsed consignee/buyer takes delivery of goods  

of the respective destinations by surrender of the Railway Receipts.  

Claimant states that a dealer, by name Shubham Sugar Agencies,  

Kolkata, placed an order with the claimant for purchase of 27000  

quintal of free sale sugar with payment conditions stipulating that the  

endorsed railway receipts would be released on receipt of entire sale  

consideration.  Claimant stated that it has booked consignment on  

1.2.2010 for transportation from Kumbakonam to Fatuha, Bihar and  

that the railway receipts were drawn as “Self” and were in the custody  

of the claimant and that the purchaser was expected to remit the sale  

price and get the railway receipts endorsed in its favour.   The goods  

reached the destination on 10.2.1010.  The buyer failed to pay the  

sale price and the goods, as stated by the appellant, were kept at the  

railway godown incurring wharfage charges.     Further, it was stated  

that the claimant then sent a letter to the Senior DGM/Southern  

Railway/Trichy on 23.4.2010 and informed that the railway receipts  

were in the custody of the claimant and requested either to shift the  

consignment to other destination or bring it back to Kumbakonam.

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The claimant was, however, informed on 4.5.2010 by the Railways  

that the consignment was delivered at Fatuha on 10.2.2010 on the  

strength of Indemnity Note without disclosing the person to whom it  

was delivered.  Claimant maintained the stand that since the  

consignments were booked under “Self”  basis, the delivery to a third  

party was without authority and amounted to negligence, misconduct  

and misappropriation and hence, the Railway Administration is legally  

liable to pay compensation being the value of the goods for non-

delivery.   

8. Appellant, however, maintained the stand that it was the  

purchaser of sugar from the claimant through broker Shubham Sugar  

Agencies, Kolkata and that the entire payment was made by it on  

instruction through various instruments like cheques/RTGS etc. which  

was accepted and acknowledged by the claimant.   Further, it was also  

pleaded that the claimant has suppressed the full facts.  It was stated  

that the appellant had not obtained the delivery of sugar without  

payment and out of the total consideration of Rs.7,87,52,850/-, it had  

already paid Rs.7,30,22,052.40 and the balance of a sum of  

Rs.57,30,797.60 was offered, but the claimant did not accept.  

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9. We are, in this appeal, primarily concerned with the question  

whether the appellant has got the right to get itself impleaded in the  

Claim Petition No. OA(1) No.2 of 2010 pending before the Tribunal and  

whether the findings recorded by the Tribunal as well as the High  

Court are legally sustainable or not.   Since the claim petition is  

pending before the Tribunal, we are not expressing any opinion on the  

merits of the case.  But the question whether the Railway  

Administration and the appellant therein are proper and necessary  

parties to the claim petition, has to be decided.

10. The Tribunal has been established under the Tribunal Act, 1987.  

Reference to its preamble would indicate the purpose and object of its  

creation. The Preamble of the Tribunal Act, 1987 reads as follows:

“An Act to provide for establishment of a Railway  Claims Tribunal for inquiring into and determining claims  against a railway administration for loss, destruction,  damage, deterioration or non-delivery of animals or goods  entrusted to it to be carried by railway or for the refund of  fares or freight or for compensation for death or injury to  passengers occurring as a result of railway accidents or  untoward incidents and for matters connected therewith or  incidental thereto.”

It is evident from the preamble that the Tribunal has been established  

for inquiring into and determining the claims against the Railway  

Administration for loss, destruction, damage, deterioration or non-

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delivery of animals or the goods entrusted to it to be carried by railway  

and not for adjudication of any claim or dispute against a third party.   

11. Chapter III of the Tribunal Act deals with the jurisdiction, powers  

and authority of the Claims Tribunal.  Section 13 of the Tribunal Acts  

reads as follows:

 “13. Jurisdiction, powers and authority of Claims  

Tribunal.-(1) The Claims Tribunal shall exercise, on and  from the appointed day, all such jurisdiction, powers and  authority as were exercisable immediately before that day  by any civil court or a Claims Commissioner appointed  under the provisions of the Railways Act,-

(a) relating to the responsibility of the railway  administrations as carriers under Chapter VII of  the Railways Act in respect of claims for-

(i) compensation for loss, destruction,  damage, deterioration or non-delivery of  animals or goods entrusted to a railway  administration for carriage by railway;

(ii) compensation payable under section 82A of  the Railways Act or the rules made  thereunder; and

(b)   in respect of the claims for refund of fares or part  thereof or for refund of any freight paid in respect of  animals or goods entrusted to a railway administration

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to be carried by railway.

(1A) The Claims Tribunal shall also exercise, on and  from the date of commencement of the provisions of  section 124A of the Railways Act, 1989 (24 of 1989),  all such jurisdiction, powers and authority as were  exercisable immediately before that date by any civil  court in respect of claims for compensation now  payable by the railway administration under section  124A of the said Act or the rules made thereunder.

(2)  The provisions of the Railways Act 1989 (24 of  1989) and the rules made thereunder shall, so far as  may be, be applicable to the inquiring into or  determining, any claims by the Claims Tribunal under  this Act.”

Section 16 of the Tribunal Act deals with the application to Claims  

Tribunal and reads as follows:

“16. Application to Claims Tribunal.- (1) A person  seeking any relief in respect of the matters referred to in sub- sections (1) or sub-section (1A) of section 13 may make an  application to the Claims Tribunal.

(2) Every application under sub-section (1) shall be in such form  and be accompanied by such documents or other evidence and  by such fee in respect of the filing of such application and by  such other fees for the service or execution of processes as may  be prescribed :

   Provided that no such fee shall be payable in respect of an  application under sub-clause (ii) of clause (a) of sub-section (1)  or, as the case may be, sub-section (1A) of section 13.”

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Section 18 of the Tribunal Act deals with the procedure and powers of  

Claims Tribunal and the same reads as follows:

“18. Procedure and powers of Claims Tribunal.-  (1) The Claims Tribunal shall not be bound by the  procedure laid down by the Code of Civil Procedure, 1908  (5 of 1908), but shall be guided by the principles of nature  justice and, subject to the other provisions of this Act and  of any rules, the Claims Tribunal shall have powers to  regulate its own procedure including the fixing of places and  times of its enquiry.

(2) The Claims Tribunal shall decide every application as  expeditiously as possible and ordinarily every application  shall be decided on a perusal of documents, written  representations and affidavits and after hearing such oral  arguments as may be advanced.

(3) The Claims Tribunal shall have, for the purposes of  discharging its functions under this Act, the same power as  are vested in a Civil Court under the Code of Civil  Procedure, 1908 (5 of 1908), while trying a suit, in respect  of the following matters, namely :

(a) summoning and enforcing the attendance of any  person and examining him on oath;

(b) requiring the discovery and production of  documents;

(c) receiving evidence on affidavits; (d) subject to the provisions of sections 123 and 124  

of the Indian Evidence Act, 1872 (1 of 1872),  requisitioning any public record or document or  copy of such record or document from any  office;

(e) issuing commissions for the examination of  witnesses or documents;

(f) reviewing its decisions; (g) dismissing an application for default or deciding  

it ex parte;

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(h) setting aside any order of dismissal of any  application for default or any order passed by it  ex parte;

(i) any other mater which may be prescribed.”

Rule 44 of the Railway Claims Tribunal (Procedure) Rules, 1989  

confers inherent powers on the Tribunal to meet the ends of justice.  

On a conjoint reading of the above mentioned provisions, it is clear  

that the Tribunal has been constituted to adjudicate the claim made  

against the Railways and not against a third party.  The claim petition,  

it is seen, is based on the contract of carriage entered into between  

the claimant and the railways.   

12. The question to be decided by the Tribunal is whether the  

Railway administration has caused any loss, destruction, damage,  

deterioration or non-delivery of animals or goods entrusted to it to be  

carried by railway or the refund of fares or freight or for compensation  

for death or injury to the passengers as a result of railway accidents or  

untoward incidents etc.  Chapter III of the Act deals with the  

jurisdiction, powers and authority of the Tribunal.     

13. Section 13(1)(a) of the Tribunal Act, as already indicated, confers  

exclusive jurisdiction on the Tribunal to decide the responsibilities of  

the Railways as carriers under Chapter VII of the Railways Act, 1989 in

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respect to the above mentioned claims made against the railways.  

Chapter IX of the Railways Act, 1989 deals with carriage of goods.  

Section 61 of the Railways Act, 1989 says that every railway  

administration shall maintain the rate-books etc. for carriage of goods  

and Section 62 imposes conditions for receiving etc. of goods.  Section  

65 is also important for the purpose of disposal of this case and hence  

extracted hereunder:

“65. Railway receipt. (1) A railway administration  shall,-

(a) in a case where the goods are to he loaded by a  person entrusting such goods, on the completion  of such loading; or

(b) in any other case, on the acceptance of the goods  by it, issue a railway receipt in such form as may  be specified by the Central Government.

(2) A railway receipt shall be prima facie evidence of  the weight and the number of packages stated therein:

Provided that in the case of a consignment in wagon- load or train-load and the weight or the number of  packages is not checked by a railway servant authorized in  this behalf, and a statement to that effect is recorded in  such railway receipt by him, the burden of proving the  weight or, as the case may be, the number of packages  stated therein, shall lie on the consignor, the consignee or  the endorsee.”

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Section 74 of the Railways Act, 1989 deals with the passing of  

property in the goods covered by railway receipt and the same reads  

as follows:

“74.  Passing of property in the goods covered by  railway receipt.-  The property in the consignment  covered by a railway receipt shall pass to the consignee or  the endorsee, as the case may be, on the delivery of such  railway receipt to him and he shall have all the rights and  liabilities of the consignor.”

Section 76 of the Railways Act, 1989 deals with the surrender of  

railway receipt and reads as follows:

“76. Surrender of railway receipt.-  The railway  administration shall deliver the consignment under a  railway receipt on the surrender of such railway receipt:

Provided that in case the railway receipt is not  forthcoming, the consignment may be delivered to the  person, entitled in the opinion of the railway administration  to receive the goods, in such manner as may be  prescribed.”

Section 77 deals with the power of railway administration to deliver  

goods or sale proceeds thereof in certain cases which reads as follows:

“77. Power of railway administration to deliver  goods or sale proceeds thereof in certain cases.- Where no railway receipt is forthcoming and any  consignment or the sale proceeds of any consignment are  claimed by two or more persons, the railway administration  may withhold delivery of such consignment or sale  proceeds, as the case may be, and shall deliver such

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consignment or sale proceeds in such manner as may be  prescribed.”

Section 87 of the Railways Act, 1989 confers rule making power on the  

Central Government, the relevant portion of which reads as under:

“87. Power to make rules in respect of matters in  this Chapter.- (1) The Central Government may, by  notification, make rules to carry out the purposes of this  Chapter.

(2) In particular, and without prejudice to the  generality of the foregoing power, such rules may provide  for all or any of the following matters namely:-

xxx xxx xxx xxx xxx xxx

(e) the manner in which the consignment may be  delivered without a railway receipt under section  76;

(f) the manner of delivery of consignment or the  sale proceeds to the person entitled thereto  under section 77;

xxx xxx xxx xxx xxx xxx”

14. The Central Government in exercise of its powers conferred by  

Clauses (e) and (f) of Section 87(2) of the Railways Act, 1989 read  

with Section 22 of the General Clauses Act, 1897 has framed the  

Railways (Manner of Delivery of Consignments and Sale Proceeds in  

the Absence of Railway Receipt), Rules, 1990 (for short “1990 Rules”).

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15. The appellant or the Railway administration has no case that M/s  

Subham Sugar Agencies, Calcutta, the consignee had presented the  

railway receipt for claiming the goods.  On the other hand, it has been  

the specific stand of the railway administration that the consignment  

was delivered at Fatuha on 10.2.2010 to a third party on the strength  

of “Indemnity Note”  and not on production of the “Railway Receipt”.  

1990 Rules, as already indicated, deals with the manner of delivery of  

consignments and sale proceeds in the absence of railway receipt.  

Sub-rules (1) and (2) of Rule 3 of 1990 Rules is relevant for our  

purpose and the same is extracted hereunder:

“3. Delivery of consignments when the railway  receipt is not forthcoming:- (1) Where the railway  receipt is not forthcoming, the consignment may be  delivered to the person, who in the opinion of the railway  administration is entitled to receive the goods and who shall  receive the same on the execution of any Indemnity Note  as specified in Form I:

Provided; however, that if the consignee is a  Government official in his official capacity, such delivery  may be made on unstamped Indemnity Note).

(2) Where the railway receipt is not forthcoming and  the consignment is addressed by the sender to self, delivery  shall not be made unless Indemnity Note, duly executed in  Forms I-A and I-B are produced by the persons claiming  delivery of the consignment.”

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Rule 5 of the 1990 Rules deals with delivery of perishable articles when  

the railway receipt is not forthcoming and the same reads as follows:

“(5) Delivery of perishable articles when the  railway receipt is not forthcoming:- (1) notwithstanding  anything contained in these rules, where the consignment  consists of perishable articles and the railway receipt is not  forthcoming, such consignment may be delivered to the  person who, in the opinion of the railway administration is  entitled to receive such consignments, and such person  shall take delivery subject to the following conditions,  namely:-

(a) if the invoice copy of the railway receipt is  available at the time of taking delivery and the  booking is to be named consignee who is  claiming delivery, such person shall, before  taking delivery execute an Indemnity Note  specified in Form I; or  

(b) (i) if the invoice copy of the railway receipt is not  available at the time of taking delivery; or

(ii) if such invoice copy is available and the  consignment is booked to “self”,

 Such person shall, deposit an amount equivalent to  the cost of consignment by way of security apart from  freight and other charges before taking delivery of  such consignment.

(2) If any amount has been deposited by way of  security under clause (b) of sub-rule (1), such amount shall  be refunded by the railway administration on production of  the original railway receipt within six months from the date  of taking such delivery.

(3) In the absence of original railway receipt refund  may be granted on execution of an Indemnity Note in Form

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I or I-A and I-B, as the case may be, provided the invoice  copy of the railway receipt is available and the particulars of  consignment can be connected with reference to the invoice  copy, within six months from the date of taking delivery.”

16. Form I under Rule 3(1) of the 1990 Rules deals with the  

“Indemnity Note” that when the consignment is to be delivered to the  

‘person’, not to ‘self’.  If it is to a ‘person’  then he has to furnish an  

indemnity note signed by the ‘consignee’.  Sub-rule (2) of Rule 3  

specifically states that, when the railway receipt is not forthcoming and  

the consignment is addressed to “Self”, delivery shall not be made  

unless Indemnity Note, duly executed in Forms I-A and I-B are  

produced by the persons claiming delivery of the consignment.  The  

relevant portion of Form I-A and I-B are extracted below for easy  

reference:

“Form I-A

[See Rule 3(2)] FORM OF INDEMNITY NOTE

_______ RAILWAY

INDEMNITY NOTE

** I/We hereby acknowledge to have received from  

_________ Railway ______ valued at Rs.___________ which  

was dispatched by ** me/us and booked to self/as value

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payable, from the _______ Station of the ________ Railway  

on or about the ________ day of _____ the railway receipt for  

which has been ______________ and ** for myself, my heirs,  

executors and administrators / and for our Company / Firm,  

their assigns, and successors.

       ** I/We undertake in consideration of such delivery as  

aforesaid to hold.

*  President of India, his agents and servants the  

____________ railway administration, its agents and servants  

harmless and indemnified in respect of all claims to the said  

goods.

** I/We also undertake to pay on demand to the railway  

administration freight charges, undercharges, wharfage and  

any other charges that may be subsequently found due in  

respect of this transaction.

And ** I/We the undersigned, signing below the  

consignor of these goods certify that the first signor is the  

bona fide owner of the goods; and that ** I/We undertaken  

the whole of the said liability equally with the consignor, and  

for this purpose ** I/We affix ** my/our signature hereto.

Signature of Witness _______   Signature of Consignor______

Father’s name ____________   **Father’s name __________

Age ____________________   Age _____________________

Profession _______________   Profession ________________

Residence _______________   Residence ________________

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_______________________________ Designation and Seal of the Co./Form

_____________________________ Registered Office/Place of business”

Signature of witness___________ Signature of Surety__________ Father’s name________________ **Father’s name____________ Age________________________ Age______________________ Profession___________________ Profession_________________”

“Form I-B

[See Rule 3(2)] FORM OF INDEMNITY NOTE

_______ RAILWAY

INDEMNITY NOTE

** I/We hereby acknowledge to have received from  

_________ Railway ______ valued at Rs.___________ which  

was dispatched by ________ from _____ Station of the  

________ Railway on or about the ________ day of _____  

and booked to self/as value payable, the railway receipt for  

which has been ______________ and ** for myself, my heirs,  

executors and administrators / and for our Company / Firm,  

their assigns, and successors.

       ** I/We undertake in consideration of such delivery as  

aforesaid to hold.

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*  President of India, his agents and servants the  

____________ Railway Administration, its agents and  

servants harmless and indemnified in respect of all claims to  

the said goods.

** I/We also undertake to pay on demand to the railway  

Administration freight charges, wharfage and any other  

charges that may be subsequently found due in respect of this  

transaction.

** I enclose a copy of a stamp Indemnity Note executed  

by the consignor and countersigned by the Station Master of  

the Forwarding Station which has been duly endorsed by the  

Consignor in my favour authorizing me to take delivery of the  

consignments on his behalf.

And ** I/We the undersigned, signing below the person  

authorized by the consignor to take delivery of the goods.  I  

hereby certify that the first signor is the bona fide owner of  

the goods and ** I/We undertake the whole of the said  

liability equally with the signor, and for this purpose **I/We  

affix ** my/our signature hereby.

Signature of Witness _______   Signature of Consignor______

Father’s name ____________   Father’s name __________

Age ____________________   Age _____________________

Profession _______________   Profession ________________

Residence _______________   Residence ________________

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_______________________________ Designation and Seal of the Co./Form

_____________________________ Registered Office/Place of business”

Signature of witness___________ Signature of Surety__________ Father’s name________________ **Father’s name____________ Age________________________ Age______________________ Profession___________________ Profession_________________”

17. In Form 1-A, Indemnity Note, the consignor has to sign certifying  

that his is the bona fide owner of goods.  Form 1-B, Indemnity Note,  

has to be signed by the consignor authorizing the person to take  

delivery.  The copy of a stamped Indemnity Note has to be executed  

by the consignor and counter signed by the Station Master of the  

forwarding station.  In other words, all the formalities prescribed under  

Form 1-A and Form 1-B have to be complied with, when the Railway  

Receipt is not forthcoming and the consignment is addressed by the  

sender to Self.  The Railways cannot effect delivery unless those  

formalities have been complied with.

18. On going through the Railways Act, 1989, the Tribunal Act as  

well as the 1990 Rules and the statutory forms, we are of the  

considered view that what the Tribunal has to inquire into and

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determine is the claim against the Railway Administration, that is  

whether the Railway Administration is at fault in discharging its  

responsibilities under the Railways Act, Rules and Regulations and not  

the inter se disputes between the claimants and third parties.   

19. In view of the above facts and circumstances of the case, we find  

no error in the view taken by the Tribunal, which was affirmed by the  

High Court.  Consequently, the appeal is dismissed.  We, however,  

make it clear that we are not expressing our opinion on the merits of  

the case and the same has to be adjudicated by the Tribunal in  

accordance with law.

……………………………………….…J (K. S. RADHAKRISHNAN)

………………………………………..J. (DIPAK MISRA)

New Delhi, October 18, 2012