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Limitation of Liability in Indian

Carriages Act

1. The Carriers Act, 1865 (Repealed by The


Carriage by Road Act, 2007)
 The first statutory legislation on Common
carriers and the transport of goods, adopted
by the Government in India.
 Based on the British Carriers Act of 1830, it was
originally applied to all common carriers
operating by land, both road and railway
carriage.
 Section 3 of the act, exempts carriers from
liability for loss of certain goods above one
hundred rupees in value.
 Under the act, the aggrieved party has a right
to reclaim the amount paid to the carrier in
case of his goods being lost or damaged.
 Common carrier is liable for loss or damage
caused by neglect or fraud by the owner or his
agent. Does not apply to goods under section
3 of the act.
 In a suit for loss, damage or default of delivery
the plaintiff of such a suit need not prove that
the common carrier had exhibited negligence
or criminal acts.
 No suit for injury or loss can be made by the
aggrieved unless a notice in writing is of the loss
or injury has been given to him before the
institution of the suit and within six months of the
time when the loss or injury first came to the
knowledge of the party.
 The Act enabled a common carrier to limit his
liability by a special contract if he chose to do
so, except in case of loss caused by a criminal
act, negligence or misconduct. Else, his liability
was absolute as an insurer to the extent of
value of goods of Rs. 100, and above that if a
higher value was declared by the consignor.

Case Laws
1. Tata Chemicals Ltd. vs. Skypak Couriers Pvt.
Ltd. ( 2002 ) CPJ 24 (NC)

Facts:
 This complaint was filed on 6.4.1992 complaining
deficiency in service on the part of the opposite
party for loss/non delivery of the consignment of
the complainant containing computer hardware
valuing at Rs.36.00 lakhs which was entrusted to
the opposite party who is a common carrier as
defined in the Carriers Act, 1865.

 Negligence was alleged on the part of the


opposite party in not delivering the consignment
entrusted to it for being transported from Mithapur
(Gujarat) to Bombay. Complainant therefore,
claimed damages amounting to Rs.36.00 lakhs
with interest at 18% per annum from 10.10.1990,
the date of entrustment of the consignment, till
payment.

 Defence of the opposite party was two-fold that


(i) it did deliver the consignment though at a later
stage, and (ii) that as per the terms of the
consignment note opposite party was liable to
pay the maximum of US $ 100/- where the
consignment is international and Rs.1,000/- where
it is domestic.

 After the pleadings were complete with the


consent of the parties this Commission by its order
dated 17.7.1993 referred the dispute for
consensual settlement by Justice V.D. Tulzapurkar,
a retired Judge of the Supreme Court.

Issue: What is the value and effect of small print on


the consignment note?

 The maximum amount of compensation of US $ 100 learned


Arbitrator, referred to small print on the face of consignment
note.
 It cannot be disputed that the Consignment Note issued by
the opposite Party is in standard printed form and that the
Clause limiting the carriers liability, though appearing on the
face of it, is in a very small and fine print.

Held:
 A condition in a contract, limiting the liability of one party,
though signed by both parties must be construed strictly. The
small and fine print should be clearly discernible and should
draw the pointed attention of the consumer.
 Such a term could be in bold print and it should be easily
readable so that a consumer can read and understand it. A
condition in small print would amount to communication
only when the attention of the consumer is specifically drawn
to it.
 After considering the relevant material the arbitrator came
to the conclusion that the opposite party was liable to pay
the complainant for the loss of the consignment a sum of
Rs.34,20,000/- and then as noted earlier interest at 18% was
awarded from 10.10.90 till realisation and cost of Rs.50,000/- .

2. A. S. Navigation Co. vs. Jethala AIR 1959


Cal 479

Facts:
 Two plaintiffs brought this suit for the recovery of a sum of Rs.
3, 40,243 as damages for non-delivery of 1472 bags of Indian
“biri” tobacco entrusted to the defendant shipping
company for carriage by sea from Bombay to Calcutta,
under eight days of loading between the dates 20th
November 1948 and 27-11-1948, by the defendant's steamer,
S.S. Pasha.
 The Pasha left Bombay on or about the 4th December and
arrived at Calcutta on the 24th December 1948 after
stopping en route at Tuticorin and Madras. The defendant
failed to deliver the said cargo of 1472 bags to the plaintiffs
in Calcutta. On 16-3-1949, the defendant called upon the
first plaintiff to clear 212 bags alleged to be part of the
consignment of 1472 bags and also, made an offer of 1260
bags which were no part of the consignment but were
offered in satisfaction of the same under certain terms of the
bill of lading.
 The plaintiffs refused to take delivery of 212 bags on the
ground that they were damaged and were useless and
unmerchantable goods of no value and also refused to
accept the offer of 1260 bags on the ground that the goods
were not of the like Kind and quality as the goods of the
plaintiffs. As between the two plaintiffs, it is pleaded that the
first plaintiff is the owner of those 1472 bags of cargo and
that in any event the property in those goods passed to the
first plaintiff by the endorsement of the relative bills of lading
by the second plaintiff in favour of the first plaintiff. The
contract of carriage as contained in the bills of lading was
between the second plaintiff and the defendant. The cargo
of tobacco appeared in the port of Calcutta as a charred
mass and, in fact, steaming,
 The plaintiffs' claim for Rs. 3, 40,243 consists of Rs. 2, 25,902/-
as the value of 1,472 bags of Indian Bin tobacco and Rs. 1,
02,331/- as excise duty paid or payable thereupon and
Rupees 12,010 as loss of profit or damage on the basis of the
contract rate or the market rate.

Issue: Whether the goods were properly or


negligently stowed.
 If the damage to or loss of goods was caused by the
negligence of the carriers in stowing and stacking the goods
during voyage while the goods were in their charge or
custody, then they are liable.

Held:
 No attention or care was bestowed on this stack of tobacco
in Hold No. 4 throughout the journey from Bombay to
Calcutta. There was no supervision whatever of this stack of
tobacco during the entire voyage.
 No better proof of this negligence or lack of care can be
furnished than by the circumstance that when these goods
arrived in the port of Calcutta, it was only then that they
were found to be steaming which excited one of the ship's
men to explain to one of the ship's officers that it was "fire".
 This "fire" or combustion must have been going on for days
with none in the ship to see or attend to. Here again the
evidence of this complete lack of supervision is quite
conclusive on the point
 If the loss or damage arises from the neglect, fault or failure
in the duties and obligations as provided in the statutory
Articles or rules then a clause in the bill of lading exempting
the carrier from liability for such loss and damage would be
null and void and of no effect.
 Thus, the learned judge ruled in favour of the two plaintiffs
and awarded them the sum of Rs. 2, 40,811/- with interest
and costs. As allowed by the learned trial Judge and dismiss
this appeal with costs.
2. The Carriage by Road Act, 2007

 The Carriage by Road Act, 2007 is an Act


of the Parliament of India which provides
for the regulation of common carriers of
goods by roads. The Act was published
on 29th September 2007.
 It is basically an Act to provide for the
regulation of common carriers, limiting
their liability and declaration of value of
goods delivered to them to determine
their liability for loss of, or damage to,
such goods occasioned by the
negligence or criminal acts of
themselves, their servants or and for
matters connected there with or
incidental thereto.
 This Act explains the relationship,
responsibility and legal liability of
common carrier, Transport Company,
goods booking agent, logistic firm with
the consignor, trader in transportation of
goods by road against payment of
freight to the common carrier by the
consignor or consignee in the country.
 Section 3(1) of the Act states that no
person shall engage in the business of
common carrier, after the
commencement of the Act, unless a
certificate of registration has been
granted to him.
 Persons engaged in the business of
common carrier before the
commencement of the Act, were
required to either apply for a registration
within 90 days from the date of
commencement of the Act [IV] or [V]
cease to engage in such business on the
expiry of 180 days from the date of
commencement of the Act.

The Act:

(A) Provides for registration of common


carriers;

(B) Provides for execution of a goods


forwarding note which describes goods,
and goods receipt;

(C) Allows limits of liability of common


carriers, except in case of loss caused by
criminal act;

(D) Provides that consignor/consignee


need not prove negligence; regulates the
carriage of dangerous and hazardous
goods;

(E) Provides that no suit can be filed


against a common carrier for loss, unless
notice in writing is given within 180 days
from date of booking of the consignment.

Case Laws:

1. Nagpur Golden Transport Co. vs. Nath Traders


AIR 2012 SC 357

Facts:
 Respondent No.3 booked a consignment of
monoblock pumps with the appellant for
transportation from Coimbatore to respondents
No.1 and No.2 at Gwalior in March, 1997. While
the appellant was transporting the consignment in
a truck, there was an accident and the
monoblock pumps were damaged. The
respondents No.1 and 2 2, therefore, did not take
delivery of the 198 damaged monoblock pumps
at Gwalior.
 In the circumstances, the appellant returned the
198 damaged monoblock pumps to the
respondent No.3. The respondents No.1 and 2
then filed Complaint No.101 of 1998 before the
Consumer Disputes Redressal Forum, Gwalior, and
their case in the complaint was that they had
paid the price of the consignment to respondent
No.3 and were entitled to Rs.3, 61,131/- towards
the price of the monoblock pumps and damages
of Rs.70, 000/-, loss of profit Rs.14, 000/- as well as
cost of Rs.5, 000/- and interest @ 18% per annum
on the amount claimed by them.
 At the hearing of the appeal, learned counsel for
the appellant submitted that the District Consumer
Disputes Redressal Forum should have directed
the respondent No.3 to return the 198 monoblock
pumps to the appellant when the appellant has
been held liable for the price of the monoblock
pumps to the respondents No.1 and 2, who had
paid for the same to respondent No.3. He
submitted that the appellant cannot be held
liable to pay the price of the monoblock pumps to
respondents No.1 and 2 and at the same time not
entitled to the return of the 198 monoblock pumps
from respondent No.3.

Issue: Would a common carrier be entitled to the


damaged goods after paying for the damage
caused during transportation?

 If the damaged monoblock pumps are not


returned by respondent No.3 to the appellant or if
the value of the damaged monoblock 6 pumps
realized by respondent No.3 are not paid to the
appellant, respondent No.3 would stand unjustly
enriched.

Held: The common carrier would be


entitled to the value of the damaged
goods; else the consignee would stand
unjustly enriched.

2. Brakes India Ltd. & Ors. Vs. BIC Logistics Ltd 329
of 2010 (Mad HC)

Facts:
 In the plaint, it is averred that the first plaintiff has
entrusted certain automobile spare parts to the
defendant, who is a public carrier within the
meaning of Carriers Act, 1865 at Tamil Nadu. The
same has to be transported to M.V.Axles Ltd,
Jamshedpur. The goods have been insured by the
first plaintiff with the second plaintiff (insurer).
 The goods have not been received by the
consignee and subsequently it is found that the
driver and cleaner of the container have been
murdered. Since the defendant has failed to
deliver the goods to the consignee, the
defendant is liable to pay the suit amount. Under
the said circumstances, the defendant has not
been able to deliver the goods due to murder of
driver and cleaner. The present suit has been
instituted for the relief sought therein.
 The learned counsel appearing for the
appellants/plaintiffs has argued to the effect that
the goods in question have not been plundered
by interstate enemies, thus subject to the
provisions of Sec 17 of the Carriage by Road Act,
2007.

Issue: Liability of the carrier to pay compensation in


the said circumstances.
 From the decision referred to in Nath Bros. Exim International
Ltd., v. Best Roadways Ltd, wherein the Hon'ble Supreme
Court has held that no burden is on the owner to show that
the loss or damage was caused owing to negligence in
criminal act of carrier, provided under Section 9 of the
Carriers Act, 1865. The carrier can escape liability only if it is
due to act of God or enemies of State, the Court can easily
deduce that if loss has occurred due to act of God or
enemies of State, common carrier is not liable.
 In the instant case, as noted down earlier, as per Clause 17
of the Carriage by Road Act, 2007, if a loss has been
occasioned by a public enemy, the common carrier is not
liable. Therefore, viewing from any angle, the contention put
forth on the side of the respondent/defendant is really
having acceptable force.

Held: On consideration of the evidence on record,


it was held that the Defendant was not liable to
pay the amount claimed in the suit, as per Clause
17 of the Carriage by Road Act, 2007.