UNIT 5 LIABILITIES AND RESPONSIBILITIES

Structure
5.1 Introduction
Objectives
5.2 Liabilities
5.2.1 Owner Liability for Injuries on the Property
5.2.2 Liability in the Legal Sense
5.3 Limited Liability and Business Types
5.3.1 Holding Companies and Liability
5.3.2 Maintenance of "Limited Liability" Protection
5.4 Liability Determination
5.5 Legal Status
5.5.1 Condition of the Property and Actions of the Owner and Visitor
5.5.2 Trespassers on Property
5.5.3 Children’s on Property
5.5.4 Comparative Faults
5.5.5 Specific Rules for Land Lords
5.6 Owners Responsibilities
5.7 Liability of owner of premises
5.7.1 Premises Liability Accidents Causes
5.7.2 Property Owner is Responsible for a Person’s Injuries
5.8 Case Study
5.9 Let Us Sum Up
5.10 Key Words
5.11 Answer to SAQ’s

5.1 INTRODUCTION

A liability of occupier is to entrant who suffered injury on his premises. A

liability is defined as an obligation of an entity arising from the Past
transactions/events and settled through the transfer of assets. The occupier
takes the lead in many areas of industrial development. One day they would
access their deep well of market knowledge to strategize and present their
vision to stakeholders. Another day they would roll up their developer sleeves
to help the team meet their goals during a sprint.
An occupier of property will generally be held responsible for injuries
occurring on the property, regardless of who the actual owner is. The typical
occupier, when it's not the property of the owner, will be a residential or
commercial tenant. However, even someone who is occupying property
without the owner’s permission or knowledge could be held responsible under
a premises liability fault theory if a judge or jury determines they were in
control of the land at the time of the accident. A widely used test goes like this:
(1) Whoever is occupying the property with intent to control it is usually liable.
(2) The last person to occupy abandoned property with intent to control is
usually liable.
(3) Whoever is legally entitled to occupy the property is liable when the first
two tests above don't apply.
So, a tenant or other occupier is not only potentially liable for
injuries occurring on that part of the property they are legally renting out, but
on any part of the property that they intentionally take control off.

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Objectives
After studying this unit, you will be able to
 understand the basics of liability
 know about owner liability for injuries on property.
 understand liability in terms of legal sense.
 know about limited liability and its maintenance
 study the various types of business liability
 determination of the liability
 clarify the legal status of visitor
 differentiate owner and visitor responsibilities and activities.
 study about liabilities of owner premises

5.2 LIABILITY
The term "liability" can have several different meanings, depending on where
it is used. In accounting, liabilities are financial obligations of a company or
individual. Common liabilities for business are loans or mortgages payable,
accrued expenses due, and accounts payable. In the law, a liability is a
responsibility for the consequence of actions or omissions. In civil law,
liability might be the damages (payments); in criminal law, the liability is
punishment.
5.2.1 Owner Liability for Injuries on the Property:
If a property is not rented out or occupied, then the owner is a potentially liable
party. However, even with a tenant or other occupier on the property, an owner
can still be liable (in whole or in part) in several situations.
First, an owner can be liable for injuries occurring on any part of the property
over which the owner has retained control. For example, common areas used
by multiple tenants are legally considered under the control of the owner. To
illustrate, if a tenant or other person invited onto the property is injured in a
common area like a hallway or staircase, then the owner (not the tenant) will
probably be held liable.
An owner can also be held liable if he /she rent out the property in a dangerous
condition without warning the tenant. In that case, even if the tenant at total
control of the property, if there are any injuries stemming from the previously
existing dangerous condition will be the owner’s responsibility. Note that if the
owner tells the tenant about the dangerous condition and notifies the tenant that
he /she must repair the condition as part of the lease, then responsibility shifts
back to the tenant.
Finally, if a lease or ordinance doesn’t make an owner responsible for
dangerous conditions that occur while the tenant is in control of the property,
the tenant will be held responsible for any injuries caused by the condition?
However, if a lease / ordinance or other regulation requires the owner to repair
certain conditions, or if the owner otherwise promises to fix a condition, but
the condition causes an injury anyway, then the owner will be liable for any
injuries despite the tenant’s control of the property.

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5.2.2 Liability in the legal sense:
(1) Negligence
It means of not doing something that a reasonable person would have done in
the situation. For example, a business might be liable if someone was injured
on the business property because of faulty equipment that should have been
repaired and wasn't. Non-payment of debts, leading to bankruptcy. The
liability, in this case, is concerned with who must pay the debt.
(2) Mismanagement of fiduciary duties:
A fiduciary is someone who is in a position of trust, with handling money, for
example, or a corporate board member managing a corporation.
(3) Limited Liability in Business:
Limited liability in general means that the liability of a business owner is
limited to the amount that the owner has invested in the company. The term
"limited liability" has been around since the formation of corporations.
Corporations are considered separate entities from their owners and
shareholders, so their liability is separate. The term "limited liability" has been
extended to the LLC (limited liability company), S corporation ownership, and
to types of partnerships.
(4) When Liability is Not Limited:
Losing the protection of limited liability is sometimes called "piercing the
corporate veil." In other words, the loss of liability opens up the owner to full
liability. The owner of a business can lose limited liability protection in several
different circumstances;
(5) Misuse of funds:
If a business owner takes business funds for personal use, or if the owner
commingles funds for his or her own gain. For example, if the owner
has mixed both business and personal funds in a personal checking account
and doesn't clearly separate the two types of funds, this may result in misuse of
the funds.
(6) Conflict of interest:
A conflict of interest happens when the duties of a person in a fiduciary
position has competing personal and business responsibilities or loyalties. If
the person lets personal interest comes before the fiduciary position, that's a
conflict of interest. An example of a conflict of interest would be if a board
member of Company A has a personal construction business and the
construction business gets the bid to build a development, even if that deal
wouldn't be best for Company A.
(7) Fraud:
Fraud is knowingly misrepresenting something for material gain. For example,
if a business owner defrauds customers by concealing the defects in a product
or commits insurance fraud by overvaluing assets, the liability protection of the
company won't protect the owner. Fraud is a breach of the duties and
responsibilities of a business owner, and it is against the law.
(8) Criminal action:
If the owner of a business or an employee assaults a customer, the business
can't hide behind the company's liability protection. In the case of professional

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misconduct, you should have malpractice insurance or other professional
liability insurance.
(9) Personal guarantees:
In some circumstances, a business owner must personally guarantee a business
contract; in this case, the personal liability of the owner to fulfill the contract
overrides the "limited liability" circumstances. The best example of this
situation is when a business owner must personally guarantee a loan to the
business with personal assets. If the business cannot make the loan payments,
the business owner is personally responsible for these payments and must
pledge personal assets to pay off the loan.

5.3 LIMITED LIABILITY AND BUSINESS TYPES

The limited liability concept is applicable for all business types except the sole
proprietorship. A sole proprietorship doesn't separate the owner from the
business, so the business' liability is the owner's, with no limits. That's why
most businesses prefer to limit their liability by forming a corporation, LLC, or
partnership.
5.3.1 Holding Companies and Liability
A holding company is an umbrella organization that owns one or more
businesses, called subsidiaries. The holding company manages the companies
it owns. One purpose of forming a holding company is to separate the liability
of each company from that of the others. For example, a holding company
might own a rental property and the offices of a dentist. Each has separate
liabilities.
5.3.2 Maintenance of "limited liability" protection:
It is not always possible to avoid some circumstances that may invalidate
or cancel limited protection, but there are some measures you and other owners
of your business can take to maintain limited liability protection:
 Avoid actions that will be charged with negligence, fraud, or other
criminal acts. Sure, you may not have complete control of other
corporate shareholders or officers or other LLC members, but
monitoring each other and sharing information on possible issues may
help keep you out of such lawsuits.
 Keep excellent corporate and LLC records. Don't assume that having
an LLC rather than a corporation absolves you of the responsibility to
keep records. Record all meetings and actions of the board and LLC
membership.
 Don't mix business and personal funds. Mixing business and personal
funds gives the appearance that the two entities are not separate.
 If one of the owners takes money from the business, be sure to record
this as either a loan or a disbursement and include the proper
documentation of the transaction. A loan to the business or capital
contribution should also be recorded and the transaction appropriately
documented.

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5.4 LIABILITY DETERMINATION
1. The legal status of the visitor;
2. The condition of the property and the actions of both the owner and the
visitor;
3. If the person injured is a trespasser or a child;
4. When both the owner and the visitor is at fault for an injury; and
5. Special rules for landlords.
Liability is determined by the laws and procedures of the state in which the
injury occurred. In some states, the court will focus on the status of the injured
visitor in determining liability. In other states, the focus will be on the
condition of the property and the activities of both the owner and visitor. It's
also important to remember that the person occupying a property, such as an
apartment tenant, is treated in the same manner as a landowner in many
situations.

5.5 LEGAL STATUS OF VISITOR

In states that focus only on the status of the visitor to the property, there are
generally four different labels that may apply: invitee, social guest, licensee, or
trespasser.
 An invitee is someone who is invited onto the property of another, such
as a customer in a store. This invitation usually implies that the
property owner/possessor has taken reasonable steps to assure the
safety of the premises.
 A licensee enters a property for his own purpose, or as a guest, and is
present at the consent of the owner.
 A social guest is just that, a welcome visitor to the property.
 Finally, a trespasser enters without any right whatsoever to do so. In
the case of licensees and trespassers, there is no implied promise that
reasonable care has been made to assure the safety of the property.
5.5.1 Condition of the property and actions of the Owner and Visitor
In states where consideration is given to the condition of the property and the
activities of the owner and visitor, a uniform standard of care is applied to both
invitees and licensees. This uniform standard requires the exercise of
reasonable care for the safety of any visitor, except trespassers.
Determining whether the standard of reasonableness required by an
owner toward licensees (and in some states, both licensees and invitees) has
been met requires an examination of numerous factors including:
 Circumstances under which the visitor entered the property;
 How the property is being used;
 Foresee ability of the accident or injury that occurred; and
 Reasonableness of the owner/possessor's effort to repair a dangerous
condition or warn visitors of the dangerous condition.
5.5.2 Trespassers on Property:
With respect to trespassers, if the owner knows that it is likely trespassers will
enter the property; he or she may have a duty to give reasonable warning to

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prevent injury. This requirement applies only with respect to artificial
conditions that the owner has created or maintains, and knows may be likely to
cause serious injury or death.
5.5.3 Children on Property
A landowner's duty to warn is different with respect to children who aren't
authorized to be on the property. A property owner/possessor must give a
warning if he or she knows (or should know) that children are likely to be on
the premises, and that a dangerous condition on the premises is likely to cause
serious bodily injury or death. The special duty to children is generally referred
to as the "attractive nuisance" doctrine.
5.5.4 Comparative Fault
One of the most commonly used limitations on a property owner/possessor's
liability is the argument that the injured person was partially at fault for what
happened. A visitor has a duty, in most cases, to exercise reasonable care for
his or her own safety. Where that care is not exercised appropriately, the
plaintiff's recovery may be limited or reduced by his or her own negligence.
Most states adhere to a "comparative fault" system in personal injury cases,
meaning that an injured person's legal damages will be reduced by a
percentage that's equivalent to his or her fault for the incident.
5.5.5 Special Rules for Landlords
Special rules of liability may apply in cases of lassoers, commonly called
landlords, of property. The general rule holds that a landlord isn't liable to a
tenant, or anyone else, for physical harm caused by a condition on the property.
This general rule is based partially on the landlord's presumed lack of control
over the property once it's leased, but the rule has numerous
important exceptions.

SAQ 1
I. Property insurance protects the property holder against
(a) Direct losses and indirect losses.
(b) Nondirective losses and indirect losses.
(c) Direct losses and non direct losses.
(d) Direct loss
II. In property insurance terminology, direct losses are all except
(a) Replacing property destroyed.
(b) Repairing property destroyed.
(c) Replacing third party property damaged.
(d) Repairing property damaged.
III. In property insurance terminology, indirect losses are the costs of
(a) Replacing property destroyed.
(b) Repairing property destroyed.
(c) Additional living expenses following a direct loss.
(d) Personal liability overages.

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5.6 OWNER’S RESPONSIBILITIES
(1) Defining the vision:
Occupier is the point person on the industrial team, using their high-level
perspective to define goals and create a vision for development projects.
Product owners are responsible for communicating with stakeholders across
the board, including customers, business managers, and the development team
to make sure the goals is clear and the vision is aligned with business
objectives.
Having a product owner with a higher perspective ensures that the team
maintains a cohesive vision despite the flexible and often fast-paced nature of
product development. Everyone needs to be on the same page in order for a
project to work effectively.
A product owner can help the team maintain that vision is by creating a
product roadmap. The product roadmap is a high-level, strategic visual
summary that outlines the vision and direction for the product offering over
time. It is both a strategic guide for stakeholders to reference as well as a plan
for execution.
Functionality is needed to create a clear and thorough product roadmap,
combined with collaborative features that make it easy to share the vision
across the organization. Link data can be made to the document and use
conditional formatting to view the status of each milestone at a glance as
shown in the following project roadmap template as shown Figure 5.1 below.

Figure 5.1: Product Roadmap

(2) Managing the product backlog:
One of the most important responsibilities for occupier is managing the
product backlog. This is the development team’s project to-do list. The
occupier’s responsibility is to create the list of backlog items and prioritize
them based on the overall strategy and business objectives. Additionally, the
product owner will need to map out project dependencies to inform the
necessary sequence of development.

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The product backlog isn’t a static to-do list though. It is a live document that
should be continually updated based on evolving project needs throughout
development. Because the product backlog will change frequently; the product
owner must make the list accessible and available to all stakeholders
(particularly developers) to ensure optimized performance and project
outcomes.
(3). Prioritizing needs:
Another key role of the product owner is to prioritize needs. In other words,
they must juggle the triangle of scope, budget, and time, weighing priorities
according to the needs and objectives of stakeholders.
For example, if the product under development needs to launch within six
months, that constrains the scope of the project. As the project evolves, the
product owner will have to gauge which areas have flexibility and which don’t
to determine how and when each iteration and product element will be
developed.
(4). Overseeing development stages:
With the vision, strategy, and product priorities set, the product owner should
spend a significant amount of time overseeing the actual development of the
product. They are a key player throughout each event, including planning,
refinement, review, and sprint. During the planning stages, the agile product
owner works with stakeholders to identify and organize the steps required for
the next iteration. They will then meet with their team to refine the process,
identify areas for improvement, and support the sprint.
(5). Anticipating client needs:
The successful product owner will be an expert at understanding and
anticipating the client’s needs to more effectively manage the development
process. Their deep market knowledge and communication skills allow them to
anticipate problems or needs and address them.
The following customer journey mapping creates a shared vision for the
customer experience. This customizable template saves the time and effort that
can put all energy into reading customers’ minds and wowing clients. The
customer journey template as shown in Figure 5.2.

Figure 5.2: Customer Journey Map Template

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(6) Acting as primary liaison:
The product owner is also the primary communicator and link between
stakeholders and teams. As such, they have to be expert communicators,
making sure there’s buy-in from stakeholders on all major decisions and
strategy and clear instructions and deliverables for the developers.
(7) Evaluating product progress at each iteration:
The product owner is accountable for each stage of the development process
and the final product. They take a primary role in inspecting and evaluating
product progress through each iteration. The product owner makes the
judgment call on the performance, deciding if the team needs to go back to the
drawing board or if they can move on to the next steps.

5.7 LIABILITY OF OWNER OF PREMISES

1. Where in any premises separate buildings are leased to different occupiers
for use as separate factories, the owner of the premises shall be
responsible for the provision and maintenance of common facilities and
services, such as approach roads, drainage, water supply, lighting and
sanitation.
2. The Chief Inspector shall have, subject to the control of the State
Government, power to issue orders to the owner of the premises in respect
of the carrying out of the provisions of sub-section (1).
3. Where in any premises, independent or self contained, floors or flats are
leased to different occupiers for use as separate factories, the owner of the
premises shall be liable as if he were the occupier or manager of a factory,
for any contravention of the provisions of this Act in respect of-
i. Latrines, urinals and washing facilities insofar as the
maintenance of the common supply of water for these purposes
is concerned;
ii. Fencing of machinery and plant belonging to the owner and not
specifically entrusted to the custody or use of occupier;
iii. Safe means of access to the floors or flats and maintenance and
cleanliness of staircases and common passages
iv. Precautions in case of fire
v. Maintenance of hoists and lifts
vi. Maintenance of any other common facilities approved in the
premises.
4. The Chief Inspector shall have, subject to the control of the State
Government, power to issue orders to the owner of the premises in respect
of the carrying out the provisions of sub-section (3).
5. The provisions of sub-section (3) relating to the liability of the owner shall
apply where in any premises independent rooms with common latrines,
urinals and washing facilities are leased to different occupiers for use as
separate factories Provided that the owner shall be responsible also for
complying with the requirements relating to the provisions and
maintenance of latrines, urinals and washing facilities.
6. The Chief Inspector shall have, subject to the control of the State
Government, the power to issue orders to the owner of the premises

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 referred to in sub-section (5) in respect of the carrying out of the
provisions of section 46 or section 48.
7. Where in any premises portions of a room or a shed are leased to different
occupiers for use as separate factories, the owner of the premises shall be
liable for any contravention of the provisions of Provided that in respect
of the provisions of sections 21, 24 and 32 the owner's liability shall be
only in so far as such provisions relate to things under his control
Provided Further that the occupier shall be responsible for complying with
the provisions of Chapter IV in respect of plant and machinery belonging
to or supplied by him
8. The Chief Inspector shall have, subject to the control of the State
Government, power to issue orders to the owner of the premises in respect
of the carrying out of the provisions of sub-section (7).
9. In respect of sub-sections (5) and (7), while computing for the purposes of
any of the provisions of this Act the total number of workers employed,
the whole of the premises shall be deemed to be single factory.
5.7.1 Premises liability accidents causes:
 Ceiling collapse
 Slip and fall
 Elevator accident
 Defective stairways
 Negligent security
 Fire safety and building code violations
 Inadequate lighting
 Supermarket accidents
 Dog or animal attacks
 Sidewalk trip and fall
5.7.2 Property owner is responsible for a person’s injuries
 After being injured on someone else’s property, the first thing on your
mind is likely the pain of the injury. Then you may wonder what sort of
medical treatment you’ll need and for how long. Will the injury affect
your ability to work? How might your family be affected? These are all
natural considerations after an injurious accident.
 At some point, you may realize all too clearly that your injury was
preventable and not your fault. If that is the case, then you should be
aware of your options under the Occupiers’ Liability Act. With that in
mind, let’s consider the duty of care a property owner owes to people
who enter on the premises.
 An occupier is a person who owns the premises or has control over the
condition of the property. The property could be a wide range of things,
including restaurants, stores, amusement parks, swimming pools,
parking lots and residences. An occupier doesn’t necessarily have to
own the property to be liable for injuries suffered on the premises.
 An occupier’s duty of care applies both to the condition of the premises
and to the activities that take place there. For example, there is the risk

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 of a slip-and-fall accident if liquid has spilled from a broken jar onto
the aisle of store. The store has a duty to clean up the liquid in a timely
manner to protect customers from injury.
 Likewise, the owner of a recreational facility must ensure that people
who use the premises are not subject to undue risk related to other
users’ actions.
 Often in occupiers’ liability cases, there is the question of whether the
property owner was aware of the unsafe condition of the premises.
There may also be questions of whether the person who was injured
willingly assumed the risk of entering the property. If these matters
arise, a thorough investigation of the injury can determine the exact
cause and who is responsible.

SAQ 2
I. The law of large numbers makes it possible for a company to assume
risk for an insured party through a _______ upon payment of a
_______.
(a) Policy, premium
(b) Contract, fee
(c) Policy, fee
(d) Any of the above
II. Homeowner’s policies provide coverage of losses from
(a) Fire or other perils.
(b) Loss of use.
(c) Personal property.
(d) All of the above
III. Which of the following does not fall into one of the broad categories of
insurable risk?
(a) Gambling losses at a casino
(b) Loss of property due to fire
(c) Liability for loss resulting from negligent use of the property
(d) Financial loss, particularly inability to make mortgage
payments, as a result of death of the wage earner

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5.8 CASE STUDY
Hindustan Steel Work Vs Southern Central Roadways on 25 August, 2009
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 25.8.2009
CORAM
THE HONOURABLE MR.JUSTICE K.K.SASIDHARAN
A.S.NO. 443 OF 1999

1. Hindustan Steel Work

Construction Limited
Ennoor
By Mr.G.V.Subramanyam
Senior Manager

2. Resident Engineer
Officer in Charge of
Hindustan Steel Works
Construction Ltd.
Eranavoor.
..Appellants
-Vs.-
Southern Central Roadways
by its Partner
At No.31-33-58, Neelamm
Vepachetta Assam Gardens
Visakapatnam-530 020.
..Respondent

Appeal against the judgment and decree dated 8.6.1994 in

O.S.No.165 of 1990 on the file of Sub Judge,Thiruvallur.

For Appellants : Mr.P.Ranganatha Reddy

For M/s.King and Patridge.
For Respondent : No Appearance
JUDGEMENT
1. This first appeal is directed against the judgment and decree dated
8.6.1994 in O.S.No.165 of 1990 on the file of the learned Subordinate
Judge, Thiruvallur.

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2. The parties in this appeal would hereinafter be referred to as "plaintiff"
and "defendants".
3. The suit in O.S.No.165 of 1990 was preferred by the plaintiff against the
defendants praying for a decree directing them to pay a sum of
Rs.49,305.49 with interest at 18% per annum till the date of payment.
4. In the plant in O.S.No.165 of 1990 the plaintiff contended thus:-
(a) The first defendant's office at Vizag contacted the plaintiff and
sought the services of the plaintiff for transporting Cole’s crane
weighing 13 to 14 tones approximately from Vizag to Madras. The
plaintiff as per its letter dated 11.8.1989 quoted the rates for 13 to
14 tones crane on owner's risk basis, The first defendant gave its
work order accepting the rate quoted by the plaintiff for
transportation as per letter dated 14.8.1989.
(b) The plaintiff arranged a trailer for carrying the consignment and
agreed to transport the consignment as per the consignment note
No.3128 dated 24.8.1989. Unfortunately the trailer, which was
carrying the crane met with an accident near Mylavaram in Andhra
Pradesh as the trailer was toppled due to sudden gush of flood water
on the road and the crane fell on the sand bed. The accident was due
to bad weather, bad road condition and extra weight of the material.
The accident was immediately reported to the first defendant by
way of telegram on 2.9.1989 and it was followed by a letter sent by
the plaintiff on 19.9.1989. The plaintiff made it specifically clear in
the letter that in the event of their arrangement to reload the
consignment and transport it to the destination, an additional
expenditure should have to be incurred, as it involves lifting the
materials with the help of two cranes, hired from third parties.
(c) The first defendant thereafter contacted the plaintiff by telephone
and instructed them to arrange for reloading and transporting the
same to the destination agreeing to reimburse the additional costs
demanded and incurred by the plaintiff. The first defendant as per
their communication dated 19.9.1989 called upon the plaintiff to
make all out efforts to reload and dispatch the crane to the
destination immediately. This was confirmed further by the letter of
the first defendant dated 29.9.1989 addressed to the plaintiff. The
plaintiff thereafter arranged for lifting and re-loading the
consignment by hiring the services of M/s. Coromandel
Engineering Works at Ibrahimpatnam on payment of Rs.25,000/-
and accordingly the crane was duly transported by way of
consignment to the destination.
(d) The accident spot was inspected by the surveyors deputed by M/s.
New India Assurance Company, Vijayawada, Andhra Pradesh and
a First Information Report was also lodged with the police
authorities. The defendants also requested for arranging security
and accordingly due security was given to the consignment.
(e) The plaintiff after transportation of the consignment presented their
bill for payment to the first defendant for a sum of Rs.43,441.00
which includes additional cost and expenses incurred by them for
re-loading the consignment, for extra weight and incidental charges.
However the first defendant, who was contacting the plaintiff at all
times and issuing instructions by telephone as well as by letter

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 regarding the reloading and transporting the consignment to the
destination, was not agreeable for payment of the bill raised by the
plaintiff. In fact the first defendant also stated that instruction was
given to the second defendant by way of correspondence to honor
the bill raised by the plaintiff. It was only as per the advice given by
the first defendant the plaintiff presented their bill with their letter
dated 5.2.1990 to the second defendant. However the second
defendant as per their letter dated 15.2.1990 repudiated their
liability to pay the claim for payment of additional costs and
expenditure claimed by the plaintiff. In such circumstances, the
plaintiff has laid the suit.
5. The first defendant in their written statement inter alia contended thus:-
(a) The plaintiff offered and accepted to transport Cole’s crane and its
accessories as per terms and conditions enclosed with the work order
dated 19.8.1989. It was not at the risk of the owner as alleged in the
plaint. The transaction was accepted by the plaintiff after viewing the
equipment as called for in the defendant's enquiry on 8.8.1989 and
lying in the stores of the first defendant at Visakhapatnam. The job
description and freight charges were also specifically stated and
accepted.
(b) The plaintiff was given seven days time for transporting the materials
and it was also stipulated that the transporter shall be responsible for
the safe delivery of the items at the destination. The conditions further
provided that no transshipment en-route will be permitted. It is also
stated that the first defendant shall be entitled to claim compensation
from the transporter in case of any damages caused to the materials
during transit. The plaintiff accepted the terms and conditions and
agreed to transport the materials as per their consignment dated
24.8.1989.
(c) The first defendant denied the contention that the accident was caused
on account of sudden gush of flood water. A representative of the first
defendant visited the spot soon after the accident and found that the
crane etc., were lying upside down submerged in four feet deep water
on the road side with considerable damage to various parts of the Crane.
The first defendant denied the alleged telephone message or instruction
given to the plaintiff to re-load the crane at the risk and cost of the
defendants. The defendants as per letter dated 19.9.1989 further stated
that reasonable action would be taken after receipt of the crane in
assessing the damages and loss in detail.
(d) The surveyor deputed by the plaintiff found that damage was caused to
the crane. The defendants denied that the plaintiff had expended a sum
of Rs.25,000/- in connection with re-loading. According to the
defendants, the plaintiff has agreed to transport the materials by fixing
the tariff at Rs.11,815 /- and as such they are not liable to pay any
amount by way of extra charges. In short, the first defendant denied the
manner of accident as well as their liability to reimburse the plaintiff.
6. The learned trial Judge on the basis of pleadings framed the following
issues:-
(a) Whether the plaintiff is entitled to the relief claimed in the plaint?

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 (b) Whether the accident took place due to act of God. Whether the
accident was caused partly due to the fault of the plaintiff or by the
defendants or due to the negligence of the plaintiff?
(c) To what relief is the plaintiff entitled to?
7. During the course of trial, P.W.1 was examined on the side of the plaintiff
and Exs.A.1 to A.21 was marked. The defendants also examined one
witness on their side and Exs.B.1 to B.7 was marked.
8. The trial court mainly relied on the surveyors report marked as Ex.A.9 to
come to the conclusion that the accident was not on account of the rash
and negligent driving of the driver employed by the plaintiff. According to
the trial court, the accident was only on account of heavy rain, flood and
bad weather for which the plaintiff cannot be found fault with. However
the trial court found that the plaintiff was not entitled to collect additional
cost by way of extra load and accordingly the plea for inclusion of Rs.2,
832/- by way of such extra load was rejected.
9. The learned trial Judge on the basis of the correspondences exchanged
between the parties arrived at a factual finding that the defendants have
agreed to reimburse the claim with respect to the additional re-loading
charges and as such the defendants are legally liable to pay the said
amount to the plaintiff. Accordingly the suit was decreed with interest at
18% per annum. It is the said judgment and decree which is impugned in
the first appeal.
10. The point for consideration:-
"Whether the plaintiff is entitled to claim extra charges on account of re-
loading and transportation of materials to the point of destination?"
11. The learned counsel appearing on behalf of the defendants contended that
the plaintiff miserably failed in their attempt to prove that the accident
was on account of the sudden rain and bad weather conditions coupled
with the factum of poor road condition. According to the learned counsel
the best witness to speak about the accident and the absence of negligence
was only the driver. However the driver of the vehicle was not examined
as a witness on the side of the plaintiff and as such it cannot be said that
the driver was not negligent. The learned counsel also contended that the
crane was entrusted to the plaintiff for safe transport by way of way bill
and as such the provisions of the Carriers Act would come into operation.
As per the said Act, the ultimate responsibility to deliver the material at
the point of destination lies only with the carrier and as such it was not
permissible for the carrier to maintain action against the owner of the
product for the purpose of claiming damages or for claiming the extra
amount spent by them for reloading the material. The learned counsel also
placed reliance on the judgments of this Court reported in 2000(1) CTC
346 (SHANMUGA SUNDARAM PILLAI ALIAS SOMASUNDARAM
PILLAI vs. NATIONAL INSURANCE CO., LTD.) & 2001 (1) CTC 415
(ECONOMIC ROADWAYS CORPORATION v. SOUNDARARAJA
MILLA LTD.) in support of his contention.
12. This appeal was originally fixed for hearing on 14.8.2009 and the learned
counsel for the defendants argued the matter. However there was no
representation on behalf of the plaintiff and as such without passing orders,
I have posted the matter to 18.8.2009 so as to enable the respondent to
submit their arguments. I have also directed the Registry to print the name
of the plaintiff as well as his counsel in the cause list. Accordingly the

19
 name of the counsel for the plaintiff as well as the name of the plaintiff
was printed in the cause list. The matter was posted on 19.8.2009. Even on
19.8.2009 there was no representation on behalf of the plaintiff and as
such the matter was reserved for judgment, after hearing the counsel for
the defendants.
DISCUSSION:-
13. The defendants approached the plaintiff to transport their Coles crane and
its accessories and spare parts from Vizag to Madras and the said proposal
was accepted by the plaintiff and accordingly the plaintiff agreed to
transport the goods for a sum of Rs.11,815/-. The consignment No.3128
dated 24.8.1989 marked as Ex.A.4 shows the factum of such agreement
for transportation. It was only in pursuance of the said agreement the
plaintiff has undertaken the transportation of goods from Vizag to Madras.
The vehicle met with an accident at Mylavaram in Andhra Pradesh on
2.9.1989. According to the plaintiff the accident was only on account of
sudden gush of flood water and as a result, the crane fell on the sand bed.
14. The accident was on account of bad weather and bad road condition and
extra load of materials. The plaintiff as per their telegram dated 2.9.1989
followed by the letter dated 19.9.1989 informed the first defendant about
the accident. According to the plaintiff it was only as per the instruction
received from the first defendant they have taken steps to reload the
consignment for the purpose of transportation to Madras. In order to claim
the additional freight charges and incidental charges for reloading, the
plaintiff has contended that they have hired the services of M/s.
Coromandal Engineering Works at Ibrahimpatnam and a sum of
Rs.25,000/- was paid on that account.
15. The plaintiff has relied on the letters sent by the first defendant dated
19.9.1989 marked as Exs.A.7 & A.8. It was their contention that the first
defendant has agreed to reimburse the entire charges for reloading the
consignment and transporting the same to the destination at Madras. It
was only on the said undertaking they have transported the material and as
such the first defendant was liable to reimburse the entire amount.
16. The primary issue which was framed by the learned trial Judge was
regarding the cause of accident and as to whether the accident was due to
the act of God. Admittedly the witness examined on the side of the
plaintiff was not the driver of the vehicle. The said witness has no
personal knowledge about the accident in question. When it was the case
of the plaintiff that the accident was caused on account of poor weather as
well as bad condition of road, the burden was clearly on them to prove
that the accident was beyond their control and it was in fact, the act of
God. However very strangely the driver of the vehicle was not examined.
The learned trial Judge relied on the report filed by the surveyor which
was marked as Ex.A.9 to come to the conclusion that the accident was not
due to the rash and negligent driving by the driver.
17. The vehicle was inspected by the surveyor long after the incident and as
such it was practically impossible for the surveyor to conclude that the
accident was not due to the negligence of the driver. The best person to
depose about the nature of the accident was the driver of the vehicle which
was involved in the accident. However for the reasons best known to the
plaintiff they have not chosen to examine the said witness and as such the
best evidence was not produced before the court to substantiate their

20
 contention that the accident was solely due to the act of God and poor
weather condition, for which the plaintiff was no way responsible.
Therefore the finding rendered by the learned trial Judge to the effect that
the accident was not due to the negligence of the driver of the vehicle is
necessarily to be set aside.
18. The next issue relates to the liability of the defendants to reimburse the
plaintiff, the amount spent by them for the purpose of reloading the
material and transporting the same to the place of destination.
19. The plaintiff is a public carrier and the transaction in question is covered
by the provisions of the Carriers Act. The said Act enjoins the carrier to
deliver the materials to the owner in good condition. Merely by printing
that the transport was at owner's risk by way of affixing the seal, would
not serve the purpose, as the endorsement would not absolve the carrier
from its liability. The position of a carrier under the Carriers Act is that of
an insurer with regard to the goods transported by the owner of the goods.
Any loss to the goods has to be compensated only by the transporter. In
fact, it was a transaction in good faith as the carrier was transporting the
goods as an authorized agent of the owner. The carrier was having the
responsibility to transport the materials in safe condition and to deliver the
same to the owner.
THE LAW ON THE POINT:-
20. In SHANMUGA SUNDARAM PILLAI ALIAS SOMASUNDARAM
PILLAI v. NATIONAL INSURANCE CO., LTD. (2001 CTC 346) the
issue before a learned Judge of this court was as to whether the defendant
as a common carrier can avoid their liability to the plaintiff based on the
specific contract which contains a clause that the goods are carried at
owner's risk. The learned Judge following the judgment of this court in
1988 (1) MLJ 64 (Thiruppathi Venkatachalapathy Lorry Service v. New
India Assurance Company Ltd., & 1996 TNLJ 127 (The Divisional
Manager, The New India Assurance Company Ltd., v. Murugan) negative
the defense and observed thus:-
"7......As far as issue (a) is concerned it should not detain this court even for a
minute more than it is required. This issue is covered by two judgment of this
court in Thiruppathi Venkatachalapathy Lorry Service v. New India Assurance
Company Ltd., 1988 (1) MLJ 64 & The Divisional Manager, The New India
Assurance Company Ltd., v. Murugan (1996 TNLJ 127). In these cases a
similar argument has been raised and this court had repelled the argument of
the common carrier and held that the liability of the common carrier is absolute.
Therefore this issue goes against the defendant. As far as the issue (b) is
concerned under Section 9 of the Carriers Goods Act, any suit brought against
the common carrier for loss, damage etc., etc. entrusted to the carrier for
carriage, it shall not be necessary for the plaintiff to prove that such a loss or
damage etc., was due to negligence or criminal act of the carrier his servant or
agent. Therefore it is clear that the burden is on the carrier to prove that there
was no negligence or any criminal act. Under Section 8 of the Carrier Act the
common carrier is made liable to the owner for loss or for damage to any
property delivered to such a carrier to be carried when such loss or damage
shall have arisen from the criminal act or negligence of the carrier or of his
gent or servants. Reading Sections 8 and 9 of the Carriers Act together it is
clear that the burden is on the carrier to prove that there was neither a criminal
act nor any negligence committed by either the carrier or by his agent or his
servant. In this case, the driver of the vehicle had not been examined at all and

21
he would be the competent person to speak about the accident. The evidence of
D.W.1 who was not in the vehicle at the time of the accident is no use. At best
his evidence regarding the manner in which the accident took place would be
only hear-say. Going by the materials available on record I am of the opinion
that the carrier had not discharged the onus or proved that there was neither
negligence nor any criminal act on his part or on the part of his servant or
agent. The issue of negligence goes against the carrier....."
21. The Supreme Court in PATEL ROADWAYS LTD., v. BIRLA
YAMAHA LTD. (2000(4) SCC 91) on an evaluation of the judgments
rendered by various High Courts as well as the earlier judgments of the
Supreme Court, indicated the liability of a carrier thus:-
` "47. From the conspectus of views taken in the decisions of different High
Courts noted above it is clear that the liability of a common carrier under the
Carriers Act is that of an insurer. This position is made further clear by the
provision in Section 9, in which it is specifically laid down that in a case of
claim of damage for loss to or deterioration of goods entrusted to a carrier it is
not necessary for the plaintiff to establish negligence. Even assuming that the
general principle in cases of tortuous liability is that the party who alleges
negligence against the other must prove the same, the said principle has no
application to a case covered under the Carriers Act. This is also the position
notwithstanding a special contract between the parties. These principles have
held the field over a considerable length of time and have been crystallized into
an accepted position of law." ON POINT:-
22. As per Ex.A.2 dated 11.8.1989 and A.3 dated 14.8.1989 the liability of the
first defendant was restricted to a sum of Rs.11,815/- which was the
transportation charges agreed to between the parties for the purpose of
transporting the materials from Vizag to Madras. The trial Court has
misinterpreted the document marked as Ex.A.8 as according to the trial
Judge the defendants have agreed to reimburse the amount necessary for
re-transportation of the materials on the basis of the said letter. It is true
that the first defendant as per letter dated 19.9.1989 called upon the
plaintiff to arrange for proper guarding of the crane and to take all out
efforts to re-load and dispatch the crane to the destination immediately.
The said request was taken as an agreement to pay the charges necessary
for reloading the material and for transportation to the place of destination.
However nothing was stated in the said letter that the defendants have
agreed to re-imbrues the plaintiff, any such expenses incurred by them. In
fact the first defendant has stated that actual assessment of damage and
loss to the crane will be done at the destination for further action, which
was indicative of the fact that the first defendant has reserved their right to
proceed against the plaintiff for damages. Therefore the document in
Ex.A.8 would not come to the rescue of the plaintiff for the purpose of
claiming the cost for reloading and transportation, from the first
respondent.
23. It is true that the plaintiff as per their letter dated 19.9.1989 marked as
Ex.A.7 wanted the defendants to pay a sum of Rs.29,000/- by way of
additional expenses to be incurred for the purpose of lifting the materials.
However there was nothing to indicate that the defendants have agreed to
pay the said amount to the plaintiff. The first defendant has only called
upon the plaintiff to take steps for re-loading the crane and to dispatch the
same to the destination. As the owner of the goods, the defendants were
eager to get the materials at the point of destination. Therefore it was quite

22
 natural on the part of the defendants to address letters to the plaintiff,
being the carrier to take efforts for reloading the crane and dispatching the
same to Chennai. However there was nothing in the said letter indicative
of the fact that the defendants have agreed to pay the charges necessary
for such reloading and re-transportation, to the plaintiff. In the absence of
any such undertaking on the part of the defendants it was not possible for
the plaintiff to claim the amount.
24. The learned trial Judge was not correct in his finding that the defendants
were liable to pay the amount incurred by the plaintiff on account of re-
loading and dispatching the crane to the place of destination. Therefore
necessarily the finding on issue No.2 framed by the trial Judge is liable to
be set aside. The point is answered against the plaintiff.
25. The claim made by the plaintiff for a sum of Rs.43,441/- was inclusive of
a sum of Rs.11,815/- fixed as the freight charges. Though the plaintiff is
not entitled to the extra charges on account of re-loading and
transportation, the defendants are liable to pay the agreed amount with
interest.
26. In the result, the judgment and decree dated 8.6.1994 in O.S.No.165 of
1990 is set aside in part and a decree for a sum of R.11,815/- is granted to
the plaintiff with interest at 12% from the date of presentation of plaint
with proportionate cost.
27. The plaintiff has withdrawn the decree amount with interest and the
application filed by the defendants in C.M.P.No.20361 of 1999 for a
direction to re-deposit the amount was dismissed by this court as per order
dated 8.12.1999 with liberty to the defendants to invoke Section 144(1) of
the Code of Civil Procedure in the event of their success in the appeal.
Therefore it is open to the defendants to move the trial Court for
restitution.
28. The appeal is allowed in part as indicated above. No costs.
25.08.2009 Index: Yes/No Internet: Yes/No Tr/ To
1. The Sub-Judge Trivellore.
2. The Section Officer VR Section High Court Madras-104.
K.K.SASIDHARAN, J TR PRE-DELIVERY ORDER IN A.S.No. 443 of 1999
25.08.2009
Questions:
1. Briefly explain the terms and conditions of agreement between plaintiff
and defendants?
2. When was the accident occurred and what were the reasons for the
accident?

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 SAQ 3
I. Which of the following is not a category of property risk?
a. Loss of property due to fire, wind, water or other hazards
b. Liability losses resulting from negligent use of property
c. Loss of value through economic obsolescence
d. Financial loss resulting from death or disability of the wage
earner
II. Property insurance protects the policyholder against
a. all direct and indirect losses.
b. all direct losses.
c. losses from insured risks only.
d. living expenses or loss of business income.
III. An example of a direct loss is
a. additional living expenses due to loss.
b. loss of business income before restoration.
c. loss of use of the property.
d. costs of replacing or repairing damaged property
IV. Homeowner’s policies provide coverage of losses from
a. fire or other perils.
b. loss of use.
c. personal property.
d. All of the above

5.9 LET US SUM UP

Liability of owners is a concept for owners to understand as it describes their

personal legal responsibility for business debts and lawsuits. Property owners
(or non-owner residents) have a responsibility to maintain a relatively safe
environment so that people who come onto the property don't suffer an injury.
This responsibility is known as "premises liability," which holds property
owners and residents liable for accidents and injuries that occur on their
property. The types of incidents that may result in premises liability claims can
range from a slip and fall on a public sidewalk to an injury suffered on an
amusement park ride. For example, a courier delivering a package may sue you
for injuries if he slips and falls on an oil slick in the driveway although if the
courier acted in an unsafe way, he or she may not have a valid claim. Some of
the most common business liabilities for which an owner can find him or
herself personally responsible include:
 Loans, mortgages, and other types of debt
 Income tax and other taxes payable
 Employee wages and salaries

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  Prepayments and deposits
 Personal injuries that occur on the business property
 Employee injury that results from lack of safety training or neglect of
safety regulations
 Injury caused by a defective product
 Violation of wage laws
 Malpractice and other forms of negligence
 False advertising
 Leaking customer or employee data
 Environmental damage
 Negligence of local zoning laws
 Violation of intellectual property laws

5.10 KEYWORDS

Liabilities, Liability Determination, trespassers on property, children on

property, comparative faults, specific rules for land lords, liability losses and
property risk.

5.11 ANSWER TO SAQS

SAQ 1
(I) (c) Direct losses and indirect losses.
(II) (c). Replacing third party property damaged.
(III) (c). Additional living expenses following a direct loss.
SAQ 2
(I) (a). Policy, Premium
(II) (d). All of the above
(III) (a). Gambling losses at a casino
SAQ 3
(I) (c). Loss of value through economic obsolescence
(II) (a). All direct and indirect losses
(III) (c). Loss of use of property
(IV) (d). All of the above.

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