Book Name: Commercial Law and Industrial Law 26th Edition
Writer: Arun Kumar Sen, Jitendra Kumar Mitra
CARRIAGE BY LAND
LEGISLATION RELATING TO CARRIAGE
The law relating to carriage may be studied under three heads :
(i) Carriage by Land, including inland navigation,
(ii) Carriage by Sea and
(iii) Carriage by Air.
This is a convenient classification because these three branches of the law of carriage are governed by different principles and different statutes. Indian statutes relating to the law of carriage are mentioned below :
l. Carriage by Land
(i) The Common Carriers Act, 1865, which deals with – Common carriers of goods over land and inland water ways.
(ii) The Railways Act, 1890, which deals with carriage by railways.
2. Carriage by Sea
(i) The Indian Bills of Lading Act, 1856.
(ii) The Carriage of Goods by Sea Act, 1925.
(iii) The Merchant Shipping Act, 1958.
(iv) The Marine Insurance Act, 1963.
3. Carriage by Air-Carriage by Air Act, 1972.
The statutes mentioned above are not exhaustive. On all points not specifically covered by them, Indian courts apply principles of English law as rules of equity and goods conscience.
CARRIERS : DEFINITION, CLASSIFICATION AND CHARACTERISTICS
Any person or an organization, by an express or implied contract, with or without remuneration,- carries goods and/or passengers, is called a Carrier. Government services can be called carrier if it comes within the above definition, e.g., Indian Railways, Calcutta State Transport Corporation,C.T,C etc.
Carriers may be classified into carriers of goods and carriers of passengers. The same carrier may of course carry both goods and passengers. It is more usual to classify carriers into Common Carriers or Public Carriers, and Private Carriers.
Common Carriers or Public Carriers
In English law a Common carrier is defined as one who undertakes to carry for hire, from place to place, the goods of anyone who employs him. The essential features of a common carrier, according to English law, is that he is prepared to carry the goods _of anyone without discrimination. If a carrier reserves to himself the right to reject an offer (even if there is accom modation in the carriage and the offeror is prepared to pay the usual freight) he is not a common carrier. Belfast Rope work Co. v. Bushell. Example : A lorry of a Transport Company or a Tempo.
In Indian law the term common carrier is used in a restricted sense. The Common Carriers Act of 1865 defines a common carrier as any individual, firm; or company (other than the government) who transport goods, as a business, for money, over land or inland waterways, without discrimination between different consignors. '
Is the Post-Office a Common Carrier ?
The post office is not a common carrier. It is not an agent of the sender to deliver a postal article to the addressee. 1t is really a branch of the Public Service providing postal services subject to the provisions of the Post Office Act and the rules made there under.
A resident of India sent value-payable article to an addressee in Pakistan and the Pakistan Government, though realised the value of the article, did not hand it over to the Government of India. Held, the Government of India is not liable. Union of Indiav. Mohd Nazim.
Characteristics of Common Carriers
The characteristics of a common carrier in India are as follows:
1. It may be a firm or an individual or a company. But the government is not included in the category. The post office is not a common carrier, Although it may carry goods.
2. Only carriers of goods come within the definition. A carrier of passengers is not a common carrier.
3. A common carrier is one who carries goods for business and money. From this it follows that one who carries goods occasionally is not a common carrier. Also one who carries' goods free is not a common carrier.
4. A common carrier is one who is ready to carry the goods of any person without any discrimination.
5. The term common carrier is applied only in the case of carriage by land and over inland water-ways.
Private Carrier .
A private carrier is one who does not do regular business as a carrier but' occasionally carries goods for money. Suppose that a contractor has a .lorry which he uses mainly for transporting his own goods but sometimes he lets it out on hire to others. The contractor is a private carrier. From the occasional nature of a private carrier's job, it follows that he can discriminate between different hirers. He is not bound to carry the goods of any and everybody. A common carrier (subject to certain exception) is bound to do so. Example : A private lorry.
A gratuitous carrier is one who carries goods (or passengers) without any charge. The owner of a motor car who gives a lift to a friend is a gratuitous carrier.
DIFFERENCES BETWEEN COMMON CARRIERS AND PRIVATE CARRIERS
l. A common carrier is one whose business is carriage of goods for hire. A private carrier is an occasional carrier.
2. A common carrier is bound to carry the goods of any person who is ready to pay the usual freight, provided certain conditions (relating to space, type of goods, etc) are fulfilled.
A private carrier is free to carry goods or not as he pleases.
3. The liabilities of a common carrier are determined by the Common Carriers Act, 1865. A private carrier is not governed by this Act. His position is that of a bailee.
DUTIES OF A COMMON CARRIER
The duties of a common carrier in India are determined by the Common Carriers Act and (as regards points not covered by this Act) by the rules of English law. The duties can be summed up as follows:
1. Must carry goods without Discrimination
A common carrier is bound to carry the goods of every person, without any distinction. But certain exceptions are recognised. A common carrier can refuse to carry under the following circumstances
(a) if the customer is not willing to pay reasonable charges for the carriage ;
(b) if there is no accommodation in the carriage ;
(c) if the goods are dangerous or are of a type which the Carrier is not accustomed to. carry ; arid
(d) if the goods are to be carried over a route with which the carrier is not familiar. (A carrier is entitled to confine himself to the carriage of a particular type of goods and/or over particular route. In such cases the carrier can refuse to carry the goods over unaccustomed routes and to carry goods which he does not usually carry.)
If a carrier, without any of the reasons mentioned above, refuses to carry the goods of a person, he can be sued and the customer can recover damages. G. W. Rly Co. v. Sutton.
2, Within time and at the place
The carrier must deliver the goods at the agreed time -or (if no time had been agreed upon) within a reasonable time. The place of delivery is subject to contract:-Bontex Knitting Works Ltd. v. St. John's Garage. See p. 164.
3. With Safety
The goods must be carried with reasonable precautions for their safety and over the usual and ordinary route. .
4. Must Insure
According to English Common Law a common carrier of goods is an insurer, . i.e., he is bound to indemnify the owner in full for loss or damage to the goods in course of carriage. This liability is to subject to certain exceptions. (See next section). This principle has been applied in a Madras Case. B. Chalapathi v. Official Assignee. J There is no decision on the subject in the Supreme Court of India yet.
5. Without Deviations
Deviations are not -permitted unless rendered necessary by exceptional circumstances.
RIGHTS OF A COMMON CARRIER –
1. When not bound to carry goods : A common carrier is not bound to carry goods under certain circumstances, e.g., when he has no room, when the goods are dangerous or not of a type he, is accustomed to carry, or when he is asked to carry goods to a destination to which he does not ordinarily travel.
2. Entitled to reasonable charges : He is entitled to reason able charges for his work. He can allow concession rates to some customers but cannot demand unreasonably high payments from anybody. What is reasonable depends on the circumstances of the case.
3. Has lien : He has lien on the goods for his remuneration and can refuse to deliver the goods until his dues are paid. This is known as the Carrier's Lien.
4. Steps for refusal of delivery : If the consignee refuses to accept delivery of the goods, the carrier is at liberty to take such steps as are reasonable and prudent under the circumstances. He can recover all reasonable expenses incurred by him in this connection from the party with wham the contract of carriage was entered into.
5. Damages : The carrier is entitled to recover damages from the consignor if the goods given for carriage are dangerous or are loosely packed and the carrier suffers injury therefrom. Bamfield v. Goole & Sheffield Transport Co.
6. Exemptions : The carrier can, subject to the. provisions of the Carriers Act, enter into special contracts exempting him from liability under stated circumstances. .
THE LIABILITIES OF A COMMON CARRIER
According to English Common Law a common carrier of goods is an insurer, i.e. he is bound to indemnify the owner in full for any loss or damage to the goods in course of carriage. This rule of full liability is subject to certain exceptions. The carrier is not liable in the following cases :
(a) When damage is caused by an Act of God, by which is meant a natural calamity like a storm or earthquake.
(b) When damage is caused by the enemies of the state, e.g., during wars.
(c) When damage is caused by some inherent defect in the .goods or negligence of the consignor.
(d) When there is a special agreement limiting the liability of the carrier.
(e) There is no liability for damages caused after the goods arrive at their destination.
The liabilities of a common carrier of goods in India are laid down in the Common Carriers Act of 1865. This Act divides goods into. two categories :
- Scheduled and
Scheduled goods are certain articles enumerated in a schedule to the Act. They are valuable articles like gold, silver, jewellery,. paintings, silk, title deeds, currency notes and coins etc. All other articles are non-scheduled.
Rules : The rules regarding the liability of common carriers in India are summarised below:
l. For Scheduled articles exceeding Rs.100 in value, the carrier is liable for all loss and damage,,
(a) If the value and the description of the goods are disclosed by the consignor to the carrier, or
(b) If the loss or damage is due to a criminal act of the carrier, his agent or servant.
2. The common carrier can charge extra for carrying scheduled articles but cannot limit his statutory liability by any special agreement.
3. "The liability of a common carrier can be limited h;. agreement under the provisions of Sections 6 and 8 of the Act
of 1965 but that there must be a limitation of the liability". M. G. Brothers Lorry Set-vice v. Prasad Textiles.
4. The common carrier is responsible for loss or damage caused by negligence of criminal acts done by himself, his agents or servants. Bontex Knitting Works Ltd v. St. John's Garage.
5. In case of loss or damage, the claimant must notify the carrier within six months of the date of knowledge of the loss or damage.
6. The above rules apply only to common carriers as defined by the Common Carriers Act of 1865. Thus, they do not apply to carrier of passengers or to railways.
7. Measure of damages : The measure of damages for delay for goods lost or damaged, is the difference between the value of the goods at the time when they ought to have been delivered and at the time when they were actually delivered. Wilson v.Lancashire and Yorkshire Railway Co.
“It is well settled that it is the market price at the time the damage occurred which is the damage to be awarded." Union ofIndia v. West Punjab Factories Ltd"
RIGHTS, DUTIES AND LIABILITIES OF OTHER CARRIERS
A private carrier is not governed by the Common Carriers Act, 1865. Hence his position is that of a bailee. He has the same rights, duties and liabilities as a bailee under the Contract Act. Thus he is bound to take as much care of the goods entrusted to him as a man of ordinary prudence would take under similar circumstances. of his own goods of the same quality, bulk and size. (Sections 151, 152, and 161, Contract Act. See pp. 162, 164)
A gratuitous carrier is in a position of a bailee. But if such a carrier agrees to carry the goods, he mu5t also do the duties the carrier. If a person undertakes to perform a voluntary act, he is liable if he performs it improperly. Negligence by the carrier is actionable.
It is to be noted that an agreement-of carriage with a gratuitous carrier is void because of want of consideration. Therefore no action can be taken against him for refusing to carry the goods' even though he has undertaken to do so.
CARRIERS OF PASSENGERS
A carrier of passengers may be a common carrier or a private carrier or a gratuitous carrier. A common carrier of passengers is one who is ready and willing to accept anybody as a passenger e.g., a bus, a train or a taxi. A private carrier of passengers is one who occasionally carries passengers for hire. –A gratuitous carrier of passengers is one who takes a passenger without charge.
Carriers of passengers are not subject to the Common Carriers Act of 1865. Some rules concerning such carriers are to be found in local statues like the Motor Vehicle Acts and the Police Acts. The important rules regarding carriage of passengers are given below :
1. In the absence of any Indian statute dealing with the matter, the general principles concerning carriage of passengers must be deduced from the English common law.
2. A common carrier of passengers is bound to carry any member of the public who is desirous of being carried, except in the following cases :
(a) When the passenger is not willing to pay the stated fare.
(b) When the passenger is unfit, i.e., suffering from some disease or infirmity.
(c) When there is no accommodation.
3. The common carrier of passengers is not an Insurer. He must, however, take due care and exercise due diligence. He is liable for injuries caused by negligence to paid passengers and also to passengers traveling free with his knowledge and consent. But a passenger who, without the consent of the carrier is traveling without payment, is a trespasser and is not entitled to damages even though caused by negligence.
4. A passenger injured by negligence is not entitled to damages if he is himself guilty of negligence. This is known as the principle of contributory negligence.
5. The common carrier of passengers can limit his liabilities by contract with his passenger.
6. Private and gratuitous carriers of passengers are not bound to accept any person as passenger. They can choose which passenger to carry. But they are liable for loss or damage to the passenger in case of negligence.
DUTIES OF RAILWAYS
Under the Railways Act, the railway administration has certain statutory duties. These duties are similar to the duties of a common carrier as provided under the Common Carriers Act of 1865 and the rules of English common law. Section 28 of the Railways Act of 1890 provides as follows :
"A railway administration shall not make or give any undue or unreasonable preference or advantage to, or in favour of, any particular person of. railway administration, or any particular description of traffic, . in any respect whatsoever, or subject to any particular person or railway administration or any particular description of traffic to any undue or unreasonable prejudice or disadvantage in any respect whatsoever."
The railway administration is bound (like a common carrier) to carry goods of every person provided the necessary freight is paid and the regulation concerning packing etc, are observed. The railway administration is also bound to carry every passenger who pays the necessary fare. It cannot discriminate between different passengers on any ground. It can therefore be said that the railway administration is a common carrier, so far as its duties are concerned.
LIABILITIES OF RAILWAYS
The responsibility of the railway administration as carriers is stated in detail in Ch: VII of the Railways Act. The important provisions are summarised below.
1. Responsibility as Bailee
A railway administration is responsible as a bailee under sections 151, 152 and 161 of-the Contract Act for the loss. destruction, damage, deterioration of non-delivery of goods carried by railway within a period of seven -days after the termination of transit. This rule does not apply in the case of goods carried at owner's risk rates, certain valuable goods, animals and dangerous goods. (See below under paras 6, 13 and 14).
2. General Responsibility
Subject to the rules stated in para 3, a railway administration is responsible for the loss, destruction, damage, deterioration or wastage in bulk or weight due to inherent defect, to the administration to be carried by railway, arising from any cause except the following :
(a) act of God
(b) act of war
(c) act of public enemies
(d) arrest, restraint or seizure under legal process
(e) orders or restrictions imposed by the Central Government or a State Government or by any officer or authority subordinate to them, authorised in this behalf
(f) act or omission or negligence’ of the' consignor or the consignee or their agent or servant ;
(g) natural deterioration or wastage in bulk or weight due to inherent defects, quality or vice of the goods
(h) latent defects
(i) fire explosion or any unforeseen risk.-Sec. 73.
3. Reasonable Foresight and Care
Even in the exceptional cases noted above, the railway administration shall not be relieved of its responsibility unless it proves that it has used reasonable foresight and care in the carriage of the animals or goods.-Sec. 73.
4. When not Responsible for Damages
Notwithstanding any of the provisions stated above, the railway administration is not responsible for damages in the following cases :
(a) Where goods have been dispatched with a description which is materially false, and the damages have been brought about by such false description.
(b) Where there has been fraud practiced by the consignor or the consignee or their agents.
(c) Where it is proved that damages or non-delivery is caused by
(i) improper loading or unloading by the consignor or the consignee or their agents; or
(ii) riot, civil commotion, strike,
lockout, stoppage or restraint of labour from whatever cause, partial or general.
(d) For any indirect or consequential damages or for loss of particular market.-Sec. 78.
5. Forwarding Note
Every consignor of goods or animals must execute a Forwarding Note in the form prescribed by the railway admin station and approved by the Central Government. Four types of Forwarding Notes are in general use. Each type covers a particular kind of goods. Each Forwarding Note contains.
(a) particulars of the goods carried and
(b) the terms of carriage including a statement of the extent of the liability of the railway administration for loss or damage.-Sec. 72.
6. Goods at Owner's Risk Rates
Goods may be carried, if the sender so requests, at what is called owner's risk rates. The rates are tow and the railway administration is not responsible for any loss except in cases of negligence and misconduct by the railway or its servants. When goods are sent at owner's risk rates, a particular form of Forwarding Note is used. If goods, carried at owner's risk rates, are damaged, the railway administration is bound to disclose how the consignment was dealt with during carriage. Where, from the disclosure made, it cannot fairly be inferred that there was negligence or misconduct the burden of proof that there was negligence or misconduct is upon the consignor.-Secs.74, 76F.
7. Delay or Detention
The railway administration is responsible for damages caused by delay or detention in transit unless it proves that the delay or detention arose without negligence or misconduct on its part or any of its servants.–Sec. 76.
There is no breach of contract by reason only of deviation of route, if such deviation is due to reasons beyond the control of the administration, e.g congestion in the yard.Section 76 A 9 Forgery or defective Receipt delivery is given to the person who produces the original railway receipt, the railway administration is not responsible if it turns out that he was not legally entitled to delivery or that the endorsement on the receipt was forged or otherwise defective.-Sec. 7613.
10. Termination of Transit
The railway administration is not responsible for damage after the wagon is placed at the siding where delivery is to be taken and the owner has been informed in writing.-Sec. 76C.
The Railway administration is not responsible in any case for damage etc. after the expiry of seven days after the termination of transit.-Sec.77. (The Railway Act was amended on 22nd December, 1972, providing that the period of termination of transit is 7 'days. Formerly it was 30 days).
11. Defective Goods
When the goods are in a defective condition or are defectively packed and -the fact is noted in the forwarding note, the railway administration is not responsible for loss or damage except upon proof of negligence or misconduct on its part or on the part of its servant.-Sec. 77C.
12. Open Trucks .
When goods which, under ordinary circumstances, would be carried in closed trucks are at the request of the sender carried in open trucks, the railway administration is not responsible for damages that may arise from such carriage in open trucks. Sec. 75A.
In the case of animals, the railway administration is not liable for toss or damage beyond certain amounts mentioned in the 1st Schedule to the Act. They are as follows : elephants Rs. 1500 per head ; horses—Rs. 750 per head ; mules, horned cattle, and camels-Rs. 200 per head ; and in all other cases-Rs. 30 per head. The railway may accept a higher liability if the animal is specially valuable. In such cases the value of the animal must be mentioned in the. forwarding note and a higher freight must be paid. The railway is in no case responsible if the loss or damage is due to any action of the animal itself.-Sec, 77A.
14. Valuable Goods
When the parcel or package delivered for carriage contains goods of the kind mentioned in the 2nd schedule to the Act, the consignor is required (if the.-value of the goods exceeds Rs. 500) to disclose the value and contents of the parcel or package. (The goods mentioned in the schedule are valuable goods like gold, silver, silk, coins and notes etc.) The railway can demand additional freight for such consignments. When such additional freight is paid and the requisite declaration is made, the railway is liable to make good any loss or damage to the article. If no declaration is made, the railway is not responsible. The railway officials may examine the contents of the package to be sure of the description and valuation.-Sec. 77I3.
15. Passengers' Luggage
The railway administration is responsible for luggage which is booked and handed over to it for carriage in the luggage 'van. For goods carried by the passenger in his charge; the railway is notresponsible unless it is shown that damage was caused by negligence or misconduct on its part or any of its servants -Sec. 75.
16. Injury and Death in Accidents
The railway administration is liable to pay compensation for death and personal injury– to a passenger and damages to goods . and animals (owned by the passenger and accompanying him) caused by a railway accident. The compensation will have to be paid even if the accident is not caused by wrongful act, neglect or default of the railway administration. The maximum amount for which the railway is liable is Rs. 50,000 in respect of any one person. But according to the Indian Railways (Amendment) Act, 1983, the amount have been raised to Rs. 1 lakh in respect of any one person.-Sec. 82A.
The Government of India has framed certain Rules under the Railways Act for injuries in accidents which compensation will be paid. Some examples are stated below-amputation before shoulder-Rs. 40,000 ; loss of one eye-Rs. 20,000 ; loss of thumb-Rs. 15,000 etc.
(i) Some goods were consigned on a railway at "owner's risk". At night the goods were stolen. There was no watchman at that time. Held, the loss of goods was due, to negligence of the Railway Administration. Juggal Kishore v. Union of India.
(ii) Some goods were destroyed by fire. The Railway extinguish the fire after six hours. There was no explanation for the delay. For negligence, damages were awarded. Union of India v. Shri Ramesh Cotton Mills Ltd
RIGHTS OF RAILWAYS
The Act gives certain privileges to the railway administration. Bye-laws may be framed regarding 'the mode of carriage of goods and passengers. No person is allowed to carry dangerous or offensive goods. Violation of the provision of the Railways Act and of the bye-laws are punishable by the court (e.g.. traveling without tickets, carrying dangerous goods etc.). The railway possesses a lien on the goods carried, for freight and other charges, if any.
Notice of Claim
In case of loss, destruction, damage, deterioration or non delivery of animals or goods, there must be notice in writing within six months of the date of delivery. The claim must be submitted to the railway administration
(a) to whom goods were delivered for carriage, or
(b) to the station which is likely due to arrive.
Disposal of Unremoved Goods
The Indian Railways Act was amended in 1976 providing that essential goods booked to certain notified stations must be removed within seven days- from the termination of transit. Essential goods means food stuffs, sugar etc. Stations means certain prescribed stations. If the goods are not removed within seven days, the goods are to be confiscated and to be sold by public auction. The sale is to be notified to local newspapers or any other prescribed manner. The goods may be sold to co operatives. The sale proceeds will be given to the owners, less the expenses of the railways.-Sec. 56 B to E.
l. A common carrier is one whose business is carriage of goods for hire. A private carrier is an occasional carrier.