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CASE NO.: Appeal (civil)  3096 of 2005

PETITIONER: M/s. Transport Corporation of India Ltd

RESPONDENT: M/s. Veljan Hydrair Ltd

DATE OF JUDGMENT: 22/02/2007

BENCH: Tarun Chatterjee & R. V. Raveendran

JUDGMENT: J U D G M E N T

RAVEENDRAN, J.

       This appeal is directed against the order dated 11.8.2004 of the  National Consumer Disputes Redressal Commission (’National  Commission’ for short) affirming the order dated 14.6.2004 passed by the  Andhra Pradesh State Consumer Disputes Redressal Commission (’State  Commission’ for short).  

2.      The appellant is a ’common carrier’ as defined in the Carriers Act,  1865 (’Act’ for short). The respondent entrusted a consignment (an  Hydraulic Cylinder) measuring 2700 kg, covered by sale invoice dated  30.4.1996  to the Appellant for transportation from Patancheru to Bharuch,  the consignee being "self." The Appellant issued Consignment Note/Lorry  Receipt  dated 10.5.1996 to the Respondent in that behalf, wherein the  declared value of the consignment was shown as Rs.583440/=. As M/s  Prakash Industries Ltd., Bharuch, the customer for whom the consignment  was intended was not in a position to clear the consignment, the Respondent,  by letter dated 8.11.1996  instructed appellant’s Patancheru Branch  to re- book the consignment from Bharuch to Patancheru. For this purpose, the  respondent enclosed the original (consignee’s copy) of the lorry receipt as  also its invoice dated 30.4.1996, with the letter dated 8.11.1996. The  respondent assured that they will clear all dues including up and down  freight charges at appellant’s Patancheru office. In view of it, the appellant’s  Patancheru Branch instructed its Baruach Branch by letter dated 14.11.1996  to rebook the consignment and endorsed a copy of the said communication  to the Respondent. The appellant sent a letter dated 22.11.1996 instructing  the respondent to send the consignee copy with all freight and demurrage  charges by a Demand Draft to the Bharuch office to enable the Bharuch  office to re-book the consignment to Patancheru. The Respondent  approached the appellant’s Patancheru office several times and explained  that it had already furnished the consignee copy and that it had also assured  that payment will be made at Patancheru, and therefore, the consignment  should be re-booked. Finally the Appellant’s Patancheru office informed  Respondent that the consignment was re-booked vide LR No. 21401 dated  22.1.1997 from Bharuch to Patancheru. As there was no information about  the arrival of goods at Patancheru, inspite of constant follow up, the  respondent sent letters dated 8.8.1998, 13.10.1998, 7.11.1998 and 8.12.1998  to the appellant, calling upon it to locate the consignment and deliver it,  making it clear that if the consignment was not delivered, it will claim  Rs.5,83,440/- being the cost of the consignment. Respondent also stated that  it will not pay any charges for the consignment. The appellant sent a reply  dated 15.12.1998 stating that "the matter is under process to locate the  goods" and requested the respondent to "bear" with it for some more time to  enable it to revert back with reference to the status of the matter. This was

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followed by letter dated 21.6.1999 wherein the appellant assured the  respondent that "the matter is under inquiry" and that the status of the  consignment will be confirmed within a short while. By another letter dated  3.7.1999, the appellant informed that "the process of locating the goods is  going on" and requested the respondent to furnish another copy of the  invoice as also the sketch of the machine. The respondent’s Senior Officer,  Marketing, (Sri Sriramamurthy) visited the appellant’s office and furnished  them. Even thereafter, the consignment was not delivered. Therefore, after  serving a notice dated 27.10.2000, through counsel, demanding payment, the  respondent filed a complaint before the District Forum on 5.7.2001, alleging  that the non-delivery of consignment amounted to deficiency of service and  therefore, the appellant was liable to pay Rs.5,83,440, being the cost of  consignment with interest at the rate of 24% per annum from 8.11.1996 as  damages for deficiency of service. Subsequently, as the District Forum did  not have pecuniary jurisdiction, return of the complaint was obtained and re- presented before the State Commission on 17.8.2001.  

3.      The appellant did not dispute the factual position alleged by the  Respondent. It resisted the claim on the following three grounds :

(i)     The respondent did not issue a notice under Section 10 of the Act,  about the loss of the consignment, within six months of the time when the  loss first came to its knowledge. Therefore, the complaint was barred under  Section 10 of the Act.  

(ii)    The cause of action arose on 8.11.1996 when the respondent  instructed the appellant to re-book the consignment and on 22.1.1997, when  the consignment was re-booked. The complaint, filed beyond two years from  that date, was barred by limitation under section 24A of Consumer  Protection Act, 1986 (’CA Act’ for short).

(iii)   The respondent did not pay the freight charges and that therefore,  there was no ’consideration’ for the contract for ’service’. Therefore, the  appellant was not liable to pay any amount, either towards loss of the  consignment or as damages, on the ground of deficiency of service.  

4.      The State Commission, allowed the complaint by order dated  14.6.2004. It held that the failure of appellant to deliver the consignment  amounted to deficiency of service. The State Commission also held that  having lost the consignment and failed to deliver the same, the Appellant  could not put forth non-payment of freight, as a ground to avoid liability.  The State Commission noted that the only question that arose for its  consideration on the contentions urged was whether there was deficiency of  service or not. The State Commission did not go into the other two questions  relating to limitation and want of notice under section 10 apparently as the  said contentions were not specifically urged at the time of arguments. The  State Commission directed the appellant to pay the value of the  consignment, (Rs.5,83,440/-) less the freight charges, with interest at the rate  of 9% per annum from the date of booking, and costs of Rs.2000/-.  

5.      The appeal filed by the appellant against the order dated 14.6.2004 of  the State Commission, was dismissed by the National Commission by a brief  order dated 11.8.2004. It found no substance in the appeal, as hiring (for  transportation of the goods) was covered by CP Act, and the appellant as  carrier, did not deliver the consignment. In this appeal against the order of  the National Commission, the appellant reiterated its contentions and also  made a grievance that the State Commission and National Commission had  failed to consider its contentions relating to maintainability and limitation,  inspite of those contentions being specifically raised. On the contentions  urged, the following three points arise for our consideration in this appeal :  

(i)     Whether the complaint was barred by the provisions of Section 10  of the Carriers Act, 1865?

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(ii)    Whether the complaint was barred by limitation under Section 24A  of the Consumer Protection Act, 1986?               

(iii)   Whether there was no contract for service, as the respondent had  refused to pay the freight charges?

Re : Point No.(i) :

6.      Section 10 of the Act provides that no suit (or complaint) could be  instituted against a common carrier for the loss of goods, unless a notice in  writing, of the loss, had been given to the carrier before the institution, but  within six months of the time when the plaintiff (or complainant) came to  know about the loss. The appellant contends that the respondent can be said  to have become aware of the loss of the consignment on 8.8.1988 (when it  demanded delivery), but issued the legal notice demanding the value of  consignment only on 27.10.2000 long after the expiry of six months from  the date of knowledge. It further contended that even the notice dated  27.10.2000 did not purport to be one under Section 10 of the Carriers Act.  Reliance is placed on the decisions of this Court in Arvind Mills Ltd. v.  Associated Roadways [2004 (11) SCC 545] to contend that the complaint is  barred without a notice under section 10 of the Act.  

7.      Section 10 of the Act requiring notice, is extracted below:  "10.    Notice of loss or injury to be given within six months.\027No suit  shall be instituted against a common carrier for the loss of, or injury to,  goods (including containers, pallets or similar article of transport used to  consolidate goods) entrusted to him for carriage, unless notice in writing  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 plaintiff."

Section 10 requires a notice in the manner set out therein, for initiation of a  proceedings against a common carrier for loss of goods or injury to goods  entrusted for carriage. The notice need not say specifically that it is issued  under section 10 of Carriage Act, 1865. It is sufficient if the notice fulfils the  requirement of section 10, that is to inform the carrier about the loss or  injury to the goods. Such notice under Section 10 will certainly be required  where the common carrier delivers the goods in a damaged condition, or  where the common carrier loses the goods entrusted for carriage and informs  about such loss to the consignor/consignee/owner. The object of the section  is to put the carrier on notice about the claim in respect of the loss or damage  to the consignment so that it can make good the loss occasioned. But where  there is no loss or injury to the goods, but the common carrier wrongly or  illegally refuses to deliver goods and the person entitled to delivery initiates  action for non-delivery, obviously section 10 will not apply. Similarly,  where the common carrier informs the person entitled to delivery  (consignor/consignee/owner) that the consignment is being traced and  process of tracing it is still going on and requests him to wait for the  consignment to be traced and delivered, but does not subsequently inform  him either about the loss of the consignment, or about its inability to trace  and deliver the consignment, the claim by the consignor/consignee, will not  be for loss or injury to goods but for non-delivery of goods. The requirement  relating to notice within six months in section 10 will not apply to a claim  based on such non-delivery. In fact section 10 does not use the word ’non- delivery’ of goods, but uses the words ’loss of, or injury to, goods’. A case  of ’non-delivery’ will become a case of ’loss’ of consignment, only when the  common carrier informs the consignor/consignee about the loss of the  consignment.  

8.      In Arvind Mills (supra) relied on by the Appellant, this Court held that  the word "suit" used in Section 10 will include a complaint under the  Consumer Protection Act, 1986 and that in the absence of a notice under  Section 10 of the Carriers Act, a complaint against a common carrier for

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compensation for loss suffered by the complainant cannot be entertained.  But that decision did not relate a claim regarding non-delivery of the  consignment, where the carrier failed to inform that the goods have been  lost. The said decision does not, therefore, help the Appellant.   

9.      In this case, the appellant-carrier did not inform the respondent that  the goods were lost. The respondent was constantly in touch with the  appellant and demanding delivery. By letters dated 15.12.1998, 21.6.1999  and 3.7.1999, the appellant repeatedly informed the respondent that it was in  the process of locating the goods, sought time to report about the status and  requested the Respondent to wait. Even when the respondent issued a notice  through counsel on 27.10.2000 (served on 30.10.2000) demanding the cost  of the consignment,  the appellant did not say that the consignment was lost.  In such circumstances, it is not possible to attribute knowledge of ’loss’ to  the person instituting the action for non-delivery. Therefore, there was no  need to issue a notice under section 10, and non-issue of a notice under  Section 10, did not invalidate the claim or the complaint.  

Re : Point (ii) :  

10.     In the objection filed before the State Commission, the Appellant  contended that the cause of action arose on 8.11.1996 and having regard to  the limitation of two years prescribed under the CP Act, the complaint filed  on 5.7.2001, was time-barred. However, in the special leave petition, the  Appellant contended that the cause of action arose on 8.8.1998 and  therefore, the claim ought to have been filed on or before 8.8.2000.  

11.     Section 24A of the Consumer Protection Act, 1986 provides that  neither the District Forum nor the State Commission nor the National  Commission shall admit a complaint unless it is filed within two years from  the date on which the cause of action has arisen. The term "cause of action"  is of wide import and has different meanings in different contexts, that is  when used in the context of territorial jurisdiction or limitation or the accrual  of right to sue. It refers to all circumstances or bundle of facts which if  proved or admitted entitles the plaintiff (complainant) to the relief prayed  for. In the context of limitation with reference to a contract for carriage of  goods, the date of cause of action may refer to the date on which the goods  are entrusted, date of issue of consignment note, the date stipulated for  delivery, the date of delivery, the date of refusal to deliver, the date of  intimation of carrier’s request to wait for delivery as the goods are being  traced, the date of intimation of loss of goods, or the date of  acknowledgement of liability.  

12.     In this case, the consignment was entrusted to the appellant on  10.5.1996. On 8.11.1996, the respondent instructed the appellant to re-book  the consignment. On 8.8.1998, 13.10.1998, 7.11.1998 and 8.12.1998, the  respondent demanded delivery. By letters dated 15.12.1998, 21.6.1999 and  3.7.1999, the appellant assured the respondent that it was in the process of  locating the goods and requested the respondent to wait and assured that it  will inform about the status. Thereafter the appellant did not inform the  status. The complaint has been filed within two years from the date of  receipt of the said letter dated 3.7.1999 and is in time. In fact in view of the  request of the appellant to the respondent to wait till the consignment was  traced, the limitation for an action would not start to run until there was a  communication from the appellant either informing about the loss or  expressing its inability to deliver or refusal to deliver, or until the respondent  makes a demand for delivery or payment of value of the consignment after  waiting for a reasonable period and there is non-compliance. Therefore, the  complaint is not barred under section 24A of CP Act.  

Re : Point No. (iii)

13.     In Patel Roadways Ltd. v.  Birla Yamaha Ltd. [2000 (4) SCC 91], this  Court held that loss of goods or injury to goods or non-delivery of goods,

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entrusted to a common carrier for carriage, would amount to a deficiency of  service and, therefore, a complaint under the Consumer Protection Act, 1986  would be maintainable. When a person entrusts a goods to a common carrier  for transportation and the carrier accepts the same, there is a contract for  "service", within the meaning of CP Act. Therefore, when the goods are not  delivered, there is a deficiency of service. It is no doubt true that ’service’  for purposes of CP Act does not include rendering of service free of charge.  Where the contract for transportation is for a consideration (freight charge),  the mere fact that such consideration is not paid, would not make the service  ’free of charge’. There is difference between contract without consideration,  and contract for consideration, which is not paid. If there is non-payment of  the freight lawfully due, the carrier may sue for the charges, or withhold the  consignment and call upon the owner/consignor/consignee to pay the freight  charges and take delivery, or on failure to pay the freight charges, even sell  the goods with due notice to recover its dues, where such right is available.  But where the common carrier has misplaced or lost the goods and,  therefore, not in a position to deliver the goods, it obviously cannot demand  the freight charges, nor contend that non-payment of freight charges  exonerates it from liability for the loss or non-delivery. When the carrier  informs that the consignment is not traced and is under the process of being  traced, obviously the owner/consignor/consignee cannot be expected to pay  the freight charges. In the circumstances, the third point is also answered  against the appellant.

Conclusion :

14.     The State Commission ought to have awarded the entire cost of the  consignment. It committed an error in deducting the freight charges from the  amount payable to the respondent. There was no liability to pay the freight  charges where the consignment is lost or where there is non-delivery. Be that  as it may. As there was no appeal by the Respondent on this issue, there is  no question of increasing the amount awarded.  

15.     As all the three contentions are rejected, and as we find no infirmity in  the order of the State Commission, as affirmed by the National Commission,  the appeal is dismissed with costs of Rs.5000/- payable to the Respondent.