http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 8  

PETITIONER: M.G.BROTHERS LORRY SERVICE

       Vs.

RESPONDENT: PRASAD TEXTILES

DATE OF JUDGMENT28/04/1983

BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) MADON, D.P.

CITATION:  1984 AIR   15            1983 SCR  (2)1027  1983 SCC  (3)  61        1983 SCALE  (1)481

ACT:      Carriers Act,  1865-Ss.6 and  10-Indian  Contract  Act, 1872-S.23-Liability of  common carrier for loss of or injury to goods-Liability can be limited by contract made expressly and  in  writing  under  s.6  of  Carriers  Act-A  condition designed to  defeat provisions  of s  10 of  Carriers Act is void in terms of s.23 of Contract Act.

HEADNOTE:      The respondent  entrusted a consignment of goods to the appellant on  May  1,  1969  under  a  Way  Bill  for  being transported from Guntur to Vijawada. As the appellant failed to deliver  the goods  at Vijayawada,  the respondent gave a notice of  claim on  June 20,1969  and thereafter instituted suits for  recovery of damages from the appellant. The trial court held that the suit were barred by Condition. 15 of the Way Bill  which stipulate that no suit shall lie against the firm in  respect of  any consignment without a claim made in writing in that behalf and preferred within 30 days from the date  of  booking  or  from  the  date  of  arrival  at  the destination by  the party  concerned.  The  lower  appellate court confirmed  the dismissal  of the  suits but the second appeal preferred  by the  respondent was allowed by the High Court which  held that  if Condition-14  of the Way Bill was given effect  to, it would defeat the provisions of s. 10 of the Carriers Act.      Dismissing the appeals, ^      HELD: (a) Section 10 of the Carriers Act, 1865 provides that unless notice in writing of the loss or injury has been given to him before the institution of the suit and within 6 months of  time when  the loss  or injury  first came to the knowledge of  plaintiff, no suit shall be instituted against a common  carrier. In  the instant case, in order to sustain the suit,  Condition-15 of  the Way Bill makes it imperative on the  party concerned to give notice either within 30 days from the date of the booking or from the date of the arrival of the  goods at the destination. The date of arrival of the goods at  the destination  may not  be known  to  the  party concerned for  a long time. No claim can be made without the loss of  the goods  and therefore  30 days  from the date of booking  would  become  irrelevant  unless  loss  or  damage

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 8  

occurs. Even  in a  case where  the plaintiff was unaware of the arrival  of the  goods at the destination or was unaware of the  loss or  damage, the  plaintiff would  not have  any right to institute a suit if no claim was made and could not have been made within 30 days. Condition-15 of the Way Bill, therefore, was  designed to avoid the liability contemplated under s.  10 of the Carriers Act and that too in a situation where the parties had not by express contract limited their 1028 liability as  contemplated under  s. 6 thereof. Condition-15 must therefore,  be held  to be void in view of s. 23 of the Indian Contract  Act because  its object  was to  defeat the provisions of s. 10 of the Carriers Act. [1032 H,1033 A-H]      Home Insurance Company of New York v. Victoria-Montreal Fire Insurance Co.,[1907] Law Reports A.C. 59, referred to.      (b) The liability of a common carrier can be limited by agreement as  provided under  s. 6  of the  Carriers Act but that must  be limitation of the liability. The nature of the contract entered into must either have the limitation of the liability under  the Carriers  Act  made  expressly  and  in writing or  the facts  must be such that for the contract in question  the   contractor  was  departing  from  his  usual business and  engaging in  a different type of business from that of common carrier. In the instant case it is clear from Condition-15 of the Way Bill that there was no limitation of liability expressed  or intended  but what  was provided was that no  suit shall lie against the firm unless a particular claim was  made in  a particular  manner within a particular time. Their was neither any extinguishment of liability, nor contracting out of liability but what was provided was only, a special  period of limitation, other than the one in s. 10 of the Carriers Act, for issue of notice. [1032 D-G]      The India  General Navigation  and Railway  Co. Ltd. v. The Dekhari  Tea Company  ltd. and  Ors., AIR  1924 P.C., 40 referred to.      (c)  The   Contention  that   the  Carriers   Act   was essentially enacted  for the  benefit of the common carriers and therefore  s.10 should  not be  construed as  precluding notice of  a period  shorter than  6 months from the date of loss cannot  be accepted. From the preamble to the Act it is clear that  the  Act  was  passed  not  only  to  limit  the liability of  the  but  also  to  declare  their  liability. Therefore, any contract or bargain which seeks to defeat the liability of the carriers as enacted by law would defeat the provisions of the Act. [1034 A-C]

JUDGMENT:      CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 954-959 of 1978.      Appeals by  Special leave  from the  Judgment and Order dated the  22nd November,  1976 of  the Andhra  Pradesh High Court in  Second Appeal  Nos. 76, 83, 84, 91, 100 and 152 of 1975.      A. Subba Rao for the Appellant.      A. K. Ganguli, L. K.Gupta and Somnath Mukherjee for the Respondent. 1029      The Judgment of the Court was delivered by      SABYASACHI MUKHARJI,  J,M/s M.G.Brothers Lorry Service, the appellant  is a  firm, which  carried on at the relevant time trans-port business and on the 1st of May, 1969 under a Way Bill,  the plaintiff  firm,  M/s  Prasad  Textiles,  the respondent herein had consigned one bale of yarn worth about

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 8  

Rs. 5,000 from their head office at Guntur to Vijayawada, at which place  there was  a branch office consigned "to self". The Way  Bill and  the invoice  were  in  the  usual  course delivered to  the State  Bank of India with the instructions to deliver  the same  to the plaintiff-respondent M/s Prasad Textiles at  Vijayawada.  It  appears  that  the  defendant- appellant M/s. M.G. Brothers Lorry Service failed to deliver the said  goods to  the respondent-plaintiff  at Vijayawada. The appellant’s  case was  that the  said goods had actually arrived at  Vijayawada on  the very  next day.  but the same were, however,  not taken delivery of at Vijayawada for some time. and  that between 16th and 20th of May, 1969 there was a cyclone  at Vijayawada as a result of which the said goods were damaged  in their  godown and  when the said goods were opened  on   20th  May,   1969  in   the  presence   of  the representative of  the appellant  at  Vijayawada,  that  the damage was discovered.      On 20th June, 1969, the plaintiff firm gave a notice of claim to  the defendant  firm and  thereafter instituted six suits for recovery of various sums of money as claims on the ground that the plaintiff had entrusted the said consignment to the  lorry service  of the defendant firm to be delivered at Vijayawada  and they  had failed  to do  so and hence the plaintiff was  obliged to  file those suits. All these suits were tried together by the learned trial Judge on the ground that common  issues arose  in each  of those  suits and  the question to be considered was the same. The lower court gave a common  finding. We  are not  concerned, in  view  of  the points arising  in these  appeals before us, to consider all the points  For our  purposes it  is sufficient to note that the trial  Court held that the defendant being the appellant before us  had failed  to prove that the non-delivery of the six consignments  was not  due  to  the  negligence  of  the defendant or  his men  and the  defendant was liable for the damages of  Rs. 2,220 in each of the suits towards the value of the  consignment which was not delivered by the defendant and it was also held that the plaintiff would be entitled to claim interest  on the  amount so  decreed. The trial Court, however, ultimately held that the suits were barred by 1030 virtue of  Condition 15  of the  Way Bill.  The  goods  were consigned under  terms and  conditions mentioned  in the Way Bill. Thereafter all the suits were dismissed.      Being aggrieved  by the  said decision,  the  defendant went up  in appeal  before the  court of Sub-ordinate Judge, Vijayawada. The  only point which is material for us to note is that the contention was that the consignment was accepted for transport by the appellant herein which was defendant in the original  suit, at  Guntur subject to special conditions printed on the reverse of the Way Bill.      Condition 15  which is  material for  our purpose is as follows:           "No suit  shall lie against the firm in respect of      any consignment without a claim made in writing in that      behalf and  preferred within  thirty days from the date      of  booking   or  from  the  date  of  arrival  at  the      destination by the party concerned."      The trial  Court’s dismissal of the plaintiff’s suit on the ground  that these  were barred  because of Condition 15 was confirmed by the Lower Appellate Court. There was second appeal to  the High Court before learned Single Judge of the High Court of Andhra Pradesh, Hyderabad. The High Court held that if  Condition 15 of the Way Bill was given effect to it would clearly  defeat the  provisions of  section 10  of the Carriers Act  and as  such would  be  void.  It,  therefore,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 8  

allowed the appeal.      Thereafter the  question arose  as to  whether  further appeal would  lie from the decision of a single Judge of the High Court  in second  appeal to  the Division  Bench of the Andhra Pradesh  High Court.  In that  view  of  the  matter, special leave  application was filed before this Court. This Court was  of the  view, that  whether under Section 100A of Civil Procedure  Code, any  appeal would lie to the Division Bench of the High Court, should be decided by the High Court itself. The  special leave  application was  adjourned for a period of  four months  pending disposal of this question by the Division  Bench of the High Court. The Division Bench of the High  Court held subsequently that Letters Patent Appeal was no  longer maintainable  after coming  into operation of Section, 100A  of the  Code of  Civil  Procedure.  In  those circumstances 1031 special leave  to appeal  was granted  by this Court on 20th April, 1978. Thus this appeal comes up before us.      In view  of the  contentions raised  before  the  trial Court and  the High  Court, the only question that falls for our consideration  in this  appeal, is,  whether  clause  or condition 15  of the  Way Bill as set out hereinbefore under which the  goods were  carried by  the carrier in this case, was contrary  to section 10 of the Carriers Act, 1865 and as such the said condition 15 was void in view of section 23 of the Contract Act.      Section 10  of  the  Carriers  Act,  1865  provides  as follows:           "No suit  shall be  instituted  against  a  common      carrier for  the loss of, or injury to, 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." The section  was added  by Act  10  of  1899.  The  original section was repealed by Act 9 of 1890.      In order  to consider  the contentions  urged  in  this case,  it  is  therefore  necessary  to  bear  in  mind  the provisions of  the Carriers Act, 1865 and the purpose of the same and to determine whether in fact by Condition 15 of the Way Bill,  the liability  of the carrier was limited, and if so to what effect.      The Carriers  Act, 1865,  as the  preamble states,  was enacted because  it was thought expedient not only to enable common carriers  to limit  their liability  for loss  of  or damage. to property delivered to them to be carried but also to declare  their liability  for loss  of or  damage to such property occasioned  by the  negligence or  criminal acts of themselves,  their  servants  or  agents.  Therefore  it  is important to  keep in the background that the Act was passed for both  the  purposes;  to  limit  the  liability  of  the carriers, as  well  as  to  declare  the  liability  of  the carriers. Section 6 of the Act stipulates that the liability of any  common carrier  for the  loss of  or damage  to  any property delivered  to him  to be  carried, not being of the description contained  in the  Schedule to  the Act, (and in this connection it may 1032 be stated  that the  goods in  question with  which  we  are concerned in  this appeal are not type of goods described in the schedule)  shall not be deemed to be limited or affected by any  public notice. It further provides that such carrier may, by  special contract,  signed  by  the  owner  of  such

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 8  

property so  delivered or  by some person duly authorised in that behalf by such owner, limit his liability in respect of the same.      Section 8 of the Carriers Act provides inter alia, that common carrier  shall be  liable for  loss and damage to any property when such loss or damage shall have arisen from the criminal act  of  the  carrier  or  any  of  his  agents  or servants.      As we  have noted  before the  liability  of  a  common carrier can  be limited  by agreement  under the  provisions noted hereinbefore  but  that  must  be  limitation  of  the liability.  This  position  was  highlighted  by  the  Privy Council in  the case  of The  India General  Navigation  and Railway Co. Ltd. v. The Dekhari Tea Co. Ltd, and Ors.(1) the Privy Council reiterated on the construction of Section 6 of the Carriers  Act that  what was  required in  the case of a person who answered the definition under the Indian Carriers Act, viz.,  was that the nature of the contract entered into must either  have the  limitation of the liability under the Indian Carriers  Act made  expressly and  in writing  or the facts must  be such  that for  the contract  in question the contractor  was   departing  from  his  usual  business  and engaging in a different type of business from that of common carrier.      In this  connection, it  appears  to  us  that  on  the construction of  condition 15 of the Way Bill that there was no limitation  of liability  expressed or  intended but what was provided  was that  no suit  shall lie  against the firm unless a  particular claim  was made  in a particular manner within a particular time. In this case there was neither any extinguishment of  liability or contracting out of liability but only  a special  period  of  limitation  of  notice  was provided other than section 10 of the Carriers Act, 1865.      Section 10  of the  Carriers  Act,  as  we  have  noted before, provides  that 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 no suit shall be instituted. Condition 15 of the Way Bill in the 1033 instant case  makes it  imperative  to  give  notice  either within 30 days from the date of the booking or from the date of the arrival of the  goods at the destination by the party concerned, to  sustain a  suit. The  date of  arrival of the goods at  the destination  by the  party may not be known to the party  concerned for  long time.  No claim  can be  made without the loss of the goods and therefore 30 days from the date of  booking would  become  irrelevant  unless  loss  or damage, occurs.  Therefore, it  appears to us that condition 15 of  the Way  Bill was  designed to  avoid  the  liability contemplated under  section 10 of the Carriers Act, 1865 and that too in a situation where the parties had not by express contract  limited  their  liability  as  contemplated  under section 6  of the Carriers Act. It appears to us, therefore, that the  learned Judge of the Andhra Pradesh High Court was right in  the view  he took.  The trial  court and the first appellate court  had held  that condition 15 of the Way Bill was not  violative of section 28 of the Indian Contract Act, That view of the lower courts has not been challenged before the High  Court in  the second  appeal. Before  us also that view was  not seriously  challenged. It  also appears  to us that neither  there is restriction absolutely from enforcing rights by the usual legal proceedings nor limitation of time within which  such rights  might be  enforced in the instant case but condition 15 was only intended to defeat or by-pass

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 8  

the provisions of section 10 of the Carriers Act. Section 23 of the  Indian Contract  Act provides that the consideration or object  of agreement  was lawful,  unless, inter alia, it was of  such a  nature, that, if permitted, would defeat the provisions of any law. In the instant case, it appears to us that if  condition 15  be permitted  then it will defeat the provisions of section 10 of the Carriers Act, even in a case where notice in writing of the loss or injury has been given to 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. Even in a case where the plaintiff was unaware of the arrival of the goods at the destination  or  was  unaware  of  a  loss  or  damage,  the plaintiff would not have any right to institute a suit if no claim was  made and  could not have been made within 30 days as stipulated in condition 15 of the  Way Bill. In that view of the matters, we are of the opinion that condition 15 must be held  to be  void in  view of  section 23  of the  Indian Contract Act because its object was to defeat the provisions of section  10 of  the Carriers Act. This conclusion, in our opinion, follows  from the  construction of  the section and condition 15 of the Way Bill.      It was  contended before  the courts  below and  it was reiterated before  us  that  Carriers  Act  was  essentially enacted for the benefit of 1034 the common  carriers and  section 10 of the Act should be so construed. It  was, therefore,  urged that  it could  not be construed as  precluding notice  for a shorter period than a period of  six  months  from  the  date  of  loss  specified therein. But  the preamble as we have noted before indicates that the  Act was passed, not only to limit the liability of the carriers,  but also  to declare  the  liability  of  the carriers. Therefore,  any contract or bargain which seeks to defeat the  liability of  the carriers  as enacted  by  law, would, in  our opinion,  defeat the  provisions of  the Act. Furthermore,  as  we  have  noted  hereinbefore  in  essence condition 15  is to  impose additional  obligation upon  the owner or  consignee because  it  stipulates  giving  of  the notice either  from the  date of the arrival of the goods at the destination  which more  often than not, is not known to the owner  of the  goods, or from the date of booking, which again is  useless because  unless loss  or damage  occurs no liability arises.      In the  decision of  the Privy  Council in  the case of Home Insurance Company of New York v. Victoria-Montreal Fire Insurance Company,(1)  to which  our  attention  was  drawn, there was  a contract of re-insurance which was engrafted on an ordinary  printed from  of  fire  insurance  policy,  and incorporated  all  its  terms,  there  was  a  clause  which purported to  prohibit an  action thereon  unless  commenced within twelve months next after the fire. It was held by the Judicial  Committee   that  having   regard  to   the   true construction of the contract, which had carelessly purported to include  many conditions inapplicable to reinsurance, the above clause  must also  be regarded as inapplicable. Such a clause is  reasonable  in  the  original  policy  where  the assured can  sue immediately  on incurring  loss, it  cannot apply where  the insured  was unable to sue until the direct loss was ascertained between the parties over whom he had no control.      Though the  facts of the instant case and the condition with which  we are concerned are different, the observations of Lord Macnaghten at page 64 are of some relevance that the clause prescribing  legal proceedings after a limited period

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 8  

was a  reasonable provision in a policy of insurance against direct loss to specific property, in such a case the insured was master  of the  situation, and he could bring his action immediately, but in a case of re-insurance against liability the insured was helpless, would throw light on the 1035 present condition  15 in  the instant  case as we have noted hereinbefore.  In   the  instant   case  as  we  have  noted hereinbefore, the  arrival at  the destination  of the goods may not  be known  to the  owner  or  the  consignee  for  a considerable period of time.      Learned  advocate  for  the  appellant  also  drew  our attention to  the decision of the Court of Appeal in England in the  case of  Bank of Australasia and Others v. Clan Line Steamers Limited.(1)  In the  facts of  this  case,  in  our opinion,  the   said  decision   is  not  relevant  for  the controversy before us.      Our attention  was also drawn to a decision in the case of India  General Steam  Navigation Company  (Defendants) v. Joykristo Shaha  and Others  (Plaintiffs)(2) where the point on which the Court rested its decision was that the contract in question  was a  divisible one.  No such  problem  arises here. So it is not necessary to discuss the decision.      In the  case of  Haji Shakoor Gany v. H.E. Hinde & Co., Ltd.,(3) the plaintiffs under a bill of lading incorporating the provisions  of the English Carriage of Goods by Sea Act, had  shipped  sugar  on  defendant  1’s  ship.  One  of  the provisions of the Act on the bill of lading was as follows : "In any  event the  carrier and the ship shall be discharged from all  liability in respect of loss or damage unless suit was brought  within one  year after delivery of the goods or the date  when the  goods should  have been  delivered." The ship arrived  in Bombay  on 4th May, 1929 and was completely discharged on 8th May, 1929. The plaintiffs had sued on 27th June, 1930 to recover the value of the sugar short-delivered to them  from defendants  1 and 2 who were the Bombay agents of defendant  1 and  who gave  a declaration  to the customs authorities that  they were  answerable for the discharge of all claims  for damage  or  short-delivery  which  might  be established by  the owner  of any  goods  comprised  in  the import cargo  in respect of such goods. It was held that the effect of the incorporation of the provisions in the bill of lading  was   that  the   rights  of   the  plaintiffs  were extinguished in respect of the claim made after one year, As we  have  mentioned  hereinbefore,  if  under  a  particular bargain the  rights of  the parties  were extinguished  that would be 1036 permissible, that  will not hit the provisions of section 28 of Contract  Act and  as such  would  not  be  violative  of section  23   of  the  said  Act.  But  if  rights  are  not extinguished but  only the  remedies  are  barred  different consideration would apply.      As in  the cases of The Ruby General Insurance Co. Ltd. v. The  Bharat Bank,  Ltd. and others,(1) Dawood Tar Mahomed Bros. and  others v. Queensland Insurance Co. Ltd.,(2) Pearl Insurance Co.  v. Atma  Ram,(3) Baroda  Spinning and Weaving Co. Ltd.  v. Satyanarayan  Marine  and  Fire  Insurance  Co. Ltd.,(4)  Assam  Roadways  v.  National  Insurance  Co.  and others,(5)  M/s   Indian  Drugs   and  Pharmaceuticals  Ltd. Hyderabad v.  M/s Savani  Transport P.  Ltd.,  Hyderabad,(6) Rivers Steam  Navigation Co.  Ltd., and another v. Bisweswar Kundu(7) and  Vulcan Insurance  Co Ltd. v. Maharaj Singh and another,(8) the  points decided  and  views  expressed  were different from  the present controversy, it is not necessary

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 8  

to refer to those decisions or express any opinion on those.      For the  reasons we have mentioned hereinbefore, we are of the opinion that the decision of the learned single Judge of the  Andhra Pradesh High Court on appeal must, therefore, be upheld.  These appeals accordingly fail and are dismissed with costs. H.L.C.                                    Appeals dismissed. 1037