UNION OF INDIA v. MOHD. NIZAM (2)

Citation: [1980] 1 S.C.R. 968

Court: Supreme Court of India

Bench: A.C. GUPTA, E.S. VENKATARAMIAH

Case summary

The trial court dismissed the suit on the ground that the plaintiff's claim was barred under rule 102 and was also not maintainable in view of the proviso to section 34 of the Indian Post Office Act.

Judgment text

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 subagent. 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 Government 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 Pakistan 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] ·G 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 -specified for recovery unless and until that sum has been received from the A. ' the commission chargeable thereon (at the rate in force for ordinary money orders drawn on the country of origin of the value-payable article), shall be collected from the addressee. The amo1mt to be remitted to the sender shall be transmitted to the latter by postal money order and the commission shall be retained by the Administration which issues the money order.

Article 9 If the addressee of a value-payable article other than a value-payable parcel, does not pay the amount of the charge within the limit of time prescribed by the internal regulations F of the country of delivery, the article shall be sent back to the office of origin. Each country shall communicate to the , other its internal regulations in this respect. Art'cle 10 In the event of the loss of a value-payable registered article or when a value-payable insured letter or a value- . payable insured or uninsured parcel has been lost or damaged or its contents abstracted, the responsibility shall be fixed and compensation paid under the same conditions as in the case of other registered articles, insured letters or insured or uninsured parcels, as the case may be. When, II however, such an article, letter or parcel has once been dcll- . vered, the Administration of the country of destination shall ...

I be responsible for the sum collected and must, if necessary, prove that it has remitted it, less the prescribed commission, to the sender~ Article 12 Each Administration is authorised, in special circumstances that would justify such a measure, temporarily to suspend the V. P. service wholly or in part, on condition that notice of such suspension be given immediately to the other Administration, and if deemed necessary, the notices of suspension shall be communicated by telegraph. When two sovereign powers enter into an agreement as above, ;.. ;neither of them can be described as an agent of the other. The plaintiff was expected to know that without such an arrangement bet- ·ween the two countries it was not possible for the Indian postal authorities to reach the postal articles to addressees in Pakistan. 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 addressees, it cannot be said that the Union of India had received the money bnt failed to pay. 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-ageut is defined in section 191 of the I -L Indian 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. We have . already referred to the evidence of Complaint Inspe~tor Om Parkash 'Sharma that since September 19, 1949 the money order service with Pakistan had remained suspended.

That being so, the proviso to section 34 of the Indian Post Office Act is attracted which absolves the Central Government from "any liability in respect of the sum ·specified for recovery unless and until that sum has been received ·from the addressee". The plaintiff's claim cannot therefore succeed. In the view we take, it is not necessary to consider whether rule 102 ;is ultra vires the Indian Post Office Act. · The appeal is allowed, the judgment and decree of the High Court care set aside and the snit is dismissed. In view of the order made A on February 26, 1969 the appellant will pay the costs of the respon- , dent. We expect the defendant to act np to the assurance given to the plaintiff as appearing in paragraph 3 of the written statement that the plaintiff's "claim will be settled" on receipt of the money from. Pakistan after resnmption of the money order service between the two. conntries. •• V. D. K. Appeal allowed. , .. • r >:·· •