http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 16  

PETITIONER: NATH BROS.  EXIM INTERNATIONAL LTD.

       Vs.

RESPONDENT: BEST ROADWAYS LTD.

DATE OF JUDGMENT:       27/03/2000

BENCH: D.P.Wadhwa, S.S.Ahmad

JUDGMENT:

S.SAGHIR AHMAD, J.       The  appellant had booked a consignment of 77 packages of  mulberry/natural  silk garments with the respondent  for being carried from Noida (U.P.) to Bombay to be delivered to M/s  Jeena  &  Co.,  who were the  clearing  agents  of  the appellant.  The consignment was to be exported to the United Kingdom  as  the  appellant had imported raw  silk  free  of custom duty for manufacture of garments, to be exported back to  the  United  Kingdom.  The goods along  with  copies  of Invoice  No.  NBI-7493 dated 9.3.1994 were entrusted to  the respondent  who  issued  Consignment   Note  No.52330  dated 11.3.1994  to the appellant.  Since the consignment was  not delivered  at  Bombay, the appellant wrote a letter  to  the respondent   on   21st  of   March,  1994   mentioning   the non-delivery  of  consignment.   On   March  24,  1994,  the appellant  received  a letter dated March 19, 1994 from  the respondent   through  which  he  came   to  know  that   the consignment  which  was stored at a godown in  Bhiwandi  was completely destroyed by fire.  After serving legal notice on the   respondent  and  after   considering  its  reply,  the appellant  filed  a  claim   petition  before  the  National Consumer  Disputes  Redressal  Commission,  New  Delhi  (for short,  ‘the National Commission’), for recovery of a sum of Rs.36,12,874.60  along  with interest at the rate of 18  per cent per annum besides costs.  The case was contested by the respondent  who  filed a written statement in which  it  was pleaded  that the goods, entrusted to them, were carried  by them  with due care and were stored in a godown at  Bhiwandi on  the instructions of the consignee, M/s Jeena & Co.,  who had indicated in their letter dated 14.3.1994 that since the shipment  was  to  take place from  C.F.S.   Kalamboli,  the consignment  may  be unloaded at Bhiwandi.   The  respondent further  pleaded that there was no negligence on their  part nor was there any deficiency in service.  It was stated that the  fire had suddenly broken out in the adjacent  warehouse from  where  it spread to the godown where  the  appellant’s consignment  was  kept and, therefore, that consignment  was also  destroyed.  The respondent also pleaded that the goods were carried at "OWNER‘S RISK" and since special premium was not  paid, they were not responsible for the loss caused  by fire.   The  National  Commission by the  impugned  judgment dated  September  2,  1996, dismissed  the  claim.   Learned counsel  for the appellant has contended that the respondent is a ‘carrier’ within the meaning of Carriers Act, 1865 and, therefore,  he  is liable for non-delivery of goods  to  the consignee  at  the  destination indicated to  them.   It  is

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 16  

contended  that non-delivery is indicative of the negligence on  the part of the respondent and, therefore, the  National Commission was not justified in rejecting the claim petition on  the ground that the goods were destroyed by fire.  It is also  contended that the goods, having been entrusted to the respondent,  for  delivery  to M/s Jeena & Co.   at  Bombay, could  not have been diverted for being unloaded at Bhiwandi or  stored there.  In any case, since the goods were  stored in  a  godown which was adjacent to another godown in  which highly  combustible articles were kept by a third person who owned  that godown, the respondent was clearly negligent  in keeping  the consignment in question, which consisted of the silk  garments, in that godown so as to expose them to  fire which  ultimately  engulfed  not only the godown  where  the combustible  material was kept but also the adjacent  godown where  the  appellant’s goods were negligently stored.   The findings  recorded by the National Commission that the goods were  diverted  at  the  instance of M/s Jeena  &  Co.   for unloading  at  Bhiwandi  have also been  assailed.   Learned counsel for the respondent has, on the other hand, contended that  the  goods were entrusted to the respondent for  being carried from Noida (U.P.) to Bombay at "OWNER’S RISK" as the appellant had not agreed to pay higher freight, as indicated in  the  terms  of contract and was content with  the  goods being carried at "OWNER’S RISK".  It is contended that since the  goods were booked at "OWNER’S RISK", the respondent was not liable for loss of those goods.  It is contended that in his  capacity  as ‘carrier’, the respondent had  taken  full care  of  the  goods entrusted to him by the  appellant  and since  the goods were directed to be unloaded at Bhiwandi on the instructions of the consignee, it could not be said that the  respondent was negligent in any manner.  The goods were stored  in  the  appellant’s own warehouse.  It  is  another matter  that  in  the adjacent  godown,  highly  combustible articles were stored which suddenly caught fire resulting in the loss of the appellant’s goods.  The outbreak of the fire was  sudden  and it could not be controlled in spite of  the services of the fire-brigade which were requisitioned by the respondent  who had duly informed the appellant not only  of the  fact  that the goods were diverted at the  instance  of consignee  but  also that they were completely destroyed  by fire  in the adjacent godown which had unfortunately  spread to  the  godown  where the appellant’s  goods  were  stored. Rights  and liabilities of common carriers are indicated  in the Carriers Act, 1865 [for short, the "Act"].  The Preamble of  the Act provides as under:- "WHEREAS It is 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." Section  3  of the Act provides that a common carrier  would not  be  liable  for  loss of, or damage  to,  the  property delivered  to it if its value exceeds one hundred rupees and it  is  of the description contained in the Schedule to  the Act,  unless  the  person  delivering such  property  to  be carried,  expressly  declares to such carrier the value  and description  thereof.   That is to say, if the value of  the property,  delivered to the common carrier, is of more  than hundred  rupees,  the person entrusting the property to  the carrier, must disclose and declare to such carrier the value and  description of that property.  The other Sections which are relevant for purposes of this case are Sections 4, 5, 6, 8  and  9 which are set out below:- "4.  For  carrying  such property payment may be required at rates fixed by carrier.-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 16  

Every  such  carrier  may  require   payment  for  the  risk undertaken  in  carrying  property exceeding  in  value  one hundred  rupees  and of the description aforesaid,  at  such rate  of charge as he may fix :  Proviso.  Provided that, to entitle  such  carrier to payment at a rate higher than  his ordinary  rate  of  charge,  he  shall  have  caused  to  be exhibited  in the place where he carries on the business  of receiving  property to be carried, notice of the higher rate of charge required, printed or written in English and in the vernacular  language  of the country wherein he  carries  on such  business.   5.   The  person entitled  to  recover  in respect  of property lost or damaged may also recover  money paid  for its carriage.  - In case of the loss of or  damage to property exceeding in value one hundred rupees and of the description  aforesaid,  delivered  to such  carrier  to  be carried,  when the value and description thereof shall  have been declared and payment shall have been required in manner provided  for by this Act, the person entitled to recover in respect  of  such loss or damage shall also be  entitled  to recover  any  money  actually  paid   to  such  carrier   in consideration  of such risk as aforesaid.  6.  In respect of what  property liability of carrier not limited or  affected by  public notice.- The liability of any common carrier  for the  loss of or damage to any property (including container, pallet  or similar article of transport used to  consolidate goods)  delivered  to  him to be carried, not being  of  the description contained in the schedule to this Act, shall not be  deemed  to be limited or affected by any public  notice; but  any such carrier, not being the owner of a railroad  or tramroad  constructed  under the provisions of Act  XXII  of 1863 (to provide for taking land for works of public utility to  be constructed by private persons or Companies, and  for regulating  the  construction  and use of works on  land  so taken) may, by special contract, signed by the owner of such property  so  delivered as last aforesaid or by some  person duly  authorised  in  that behalf by such owner,  limit  his liability in respect of the same." 8.  Common carrier liable for  loss or damage caused by neglect or fraud of himself or his agent.- Notwithstanding anything hereinbefore contained, every  common carrier shall be liable to the owner for  loss of or damage to any property (including container, pallet or similar  article  of  transport used to  consolidate  goods) delivered  to such carrier to be carried where such loss  or damage  shall  have  arisen  from the criminal  act  of  the carrier  or any of his agents or servants and shall also  be liable  to the owner for loss or damage to any such property other  than  property to which the provisions of  section  3 apply  and  in respect of which the declaration required  by that  section  has not been made, where such loss or  damage has  arisen from the negligence of the carrier or any of his agents  or  servants.   9.  Plaintiffs, in suits  for  loss, damage, or non-delivery, not required to prove negligence or criminal  act.- In any suit brought against a common carrier for  the  loss, damage or non-delivery of  goods  (including containers,  pallets or similar article of transport used to consolidate  goods) entrusted to him for carriage, it  shall not  be necessary for the plaintiff to prove that such loss, damage  or  non-delivery  was  owing to  the  negligence  or criminal  act  of  the carrier, his  servants,  or  agents." Section  4  contemplates the rates fixed by the carrier  for carrying the property entrusted to it to the place indicated by  the consignor.  The Proviso to this Section contemplates a  still  higher rate than the ordinary rate of  charge  for carrying  the  goods.   The  only requirement  is  that  the carrier should have exhibited at the place of his business a

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 16  

notice  indicating  the higher rate of charge  required  for carrying  the  goods.   Section 5 provides  that  where  the property  entrusted to the carrier is lost or damaged,  then the  owner thereof would be entitled not only to recover the damages  for the loss or damage to the property, but he will also be entitled to recover any amount which might have been paid  to  the  carrier as a consideration for  carrying  the goods.   Section  6  speaks of unlimited  liability  of  the common  carrier  in  respect  of goods,  not  being  of  the description  contained  in the Schedule to the Act.   It  is provided  that  the  liability  shall not be  deemed  to  be limited  or  affected  by  any  public  notice.   Section  8 provides  in  specific  terms  that where  any  property  is entrusted   to  any  carrier  for   being  carried  to   the destination  indicated  by  the owner thereof,  the  carrier shall  be  liable  for loss or damage caused by  neglect  or fraud  of the carrier or its agent.  Section 9 provides that in  a suit for recovery of damages for loss or  non-delivery of  the  goods,  the  burden of proof would not  be  on  the plaintiff  to establish that loss or damage or  non-delivery was  caused  owing to the negligence or criminal act of  the carrier,  his  servants or agents.  Learned counsel for  the appellant has contended that under Section 151 of the Indian Contract  Act,  the carrier as a bailee is bound to take  as much  care  of the goods bailed to him as a man of  ordinary prudence would, under similar circumstances, take of his own goods.  It is contended that if that amount of care, which a person  would  have taken of his own goods, is not taken  by the  carrier,  it would amount to deficiency in service  and the  carrier would be liable in damages to the owner for the goods  bailed to him.  Before analysing the submissions made by  learned counsel for the appellant, we may reproduce  the provisions  of  Sections 151 and 152 of the Indian  Contract Act,  1872,  hereinbelow :  "151.  In all cases of  bailment the bailee is bound to take as much care of the goods bailed to  him  as a man of ordinary prudence would, under  similar circumstances,  take  of  his own goods of  the  same  bulk, quality and value as the goods bailed.  152.  The bailee, in the  absence of any special contract, is not responsible for the  loss, destruction or deterioration of the thing bailed, if  he  has  taken  the amount of care of  it  described  in section  151."  These  provisions,  in  effect,  embody  the English  Common  Law  Rule as to the  liability  of  bailee. Under  the  English  Common Law Rule, the  measure  of  care required  of  the person to whom the goods were bailed,  was the same as a man of ordinary prudence would take of his own goods.   In other words, it was a mere matter of  negligence on  which  the  liability  was founded.   If  a  person  was negligent  and  did not take as much care as he  would  have taken  of  his  own goods, he would be  liable  in  damages. These  principles  of the English Common Law Rule were  also applied  in this country as indicated in the decision of the Privy  Council in Irrawaddy Flotilla v.  Bugwandas (1891) 18 I.A.  121 = (1891) ILR 18 Cal.  620, in which, it was, inter alia,  observed  as under :  "For the present purpose it  is not  material  to inquire how it was that the common law  of England  came to govern the duties and liabilities of Common Carriers  throughout  India.   The  fact  itself  is  beyond dispute.   It is recognised by the Indian Legislature in the Carriers’  Act,  1865,  an Act framed on the  lines  of  the English Carriers Act of 1830." The law was also explained in Halsbury’s  Laws of England, IIIrd Edn., Vol.  4 at page 141 as  under :  "A common carrier is responsible for the safety of  the  goods entrusted to him in all events,  except  when loss  or injury arises solely from act of God or the Queen‘s

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 16  

enemies or from the fault of the consignor, or inherent vice in the goods themselves.  He is, therefore, liable even when he  is  overwhelmed and robbed by an irresistible number  of persons.   He  is  an  insurer of the safety  of  the  goods against everything extraneous which may cause loss or injury except  the  act of God or the Queen‘s enemies and if  there has  been an unjustifiable deviation or negligence or  other fundamental  breach  of  contract on his part,  he  will  be liable  for loss or injury due to the Queen‘s enemies or, it would  seem,  due to act of God.  This responsibility as  an insurer  is  imposed upon a common carrier by the custom  of realm,  and it is not necessary to prove a contract  between him  and  the  owner  of the goods  in  order  to  establish liability.   Failure  on the part of the carrier to  deliver the  goods safely is a breach of the duty placed upon him by the  common  law;   and  therefore an action  of  tort  lies against  him  for such breach, the owner not being bound  to prove  any  contract.  Where, however, there is a  contract, liability  may  arise  either  at common law  or  under  the contract,   and  the  contract   may  limit  the   carrier‘s responsibility.   A  common  carrier is liable for  loss  or injury caused wholly by the negligence of other persons over whom  he has no control;  as where the carrier‘s barge  runs against  an  anchor  wrongfully  left  in  the  water  by  a stranger,  or  where  the  goods which he  is  carrying  are destroyed  by accidental fire or by rats, or where they  are stolen  from  him, even though taken by force.  The  general obligation  of a common carrier of goods to carry the  goods safely  whatever  happens renders it unnecessary  to  import into  the  contract for carriage a special warranty  of  the roadworthiness  of  the vehicle or the seaworthiness of  the vessel, for if the goods are carried safely the condition of the  vehicle or vessel is immaterial, and, if they are  lost or damaged it is necessary to inquire how the loss or damage occurred;   where  however,  a common carrier  of  goods  is seeking  relief  from  liability  by reason of  one  of  the excepted  perils  the condition of the vehicle or vessel  is material  in determining the question of negligence, and  if the  carrier  fails  to  prove   a  sufficient  and   proper conveyance  and loss or damage results therefrom he will  be liable,  it is unnecessary to inquire how the loss or damage occurred;   where  however,  a common carrier  of  goods  is seeking  relief from liability by reason one of the excepted perils the condition of the vehicle or vessel is material in determining  the question of negligence, and if the  carrier fails  to prove a sufficient and proper conveyance and  loss or  damage  results  therefrom he will be  liable."  In  the meantime,  the  Parliament intervened and the Carriers  Act, 1865  was  enacted with the result that the liability  of  a common  carrier  came to be considered in the light  of  the provisions  contained in that Act.  It is true that  Section 158  of  the Indian Contract Act speaks of bailment  of  the goods  for being carried on behalf of the bailor, but it  is also  to  be  noticed that the bailment spoken  of  in  that Section  is  gratuitous as it is specifically provided  that "the  bailee is to receive no remuneration." That apart, the definition  of  ‘bailment’ as set out in Section 148 of  the Indian  Contract Act may be said to be wide enough so as  to cover ‘entrustment of goods’ to a carrier for carriage.  But as  pointed  out above, with the enactment of Carriers  Act, 1865, the extent of liability of the carrier has to be found in  that Act.  The question of liability of a common carrier was   considered  by  various   High  Courts  in  subsequent decisions.   In  The British & Foreign Marine Insurance  Co. v.   The  Indian General Navigation and Railway  Co.   Ltd.,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 16  

Calcutta Weekly Notes (15) 226, the Calcutta High Court held that  the relative rights and liabilities of common carriers and  those  for  whom  they carry  are  outside  the  Indian Contract  Act  and  are  governed by the  principle  of  the English  Common Law as modified by the Carriers Act of 1865. A  common  carrier,  therefore, in India is subject  to  two distinct  classes  of liability, the one for the losses  for which  he is liable as an insurer, and the other for  losses for which he is liable under his obligation to carry safely. Speaking  generally, the first of these are insurable  risks from  which the element of default is absent, the second are risks  of conveyance in which that element is present.   The Carriers  Act  of  1865  has in some  degree  modified  this position.  The Court was also of the opinion that the effect of  Sections 6, 8 and 9 of the Carriers Act of 1865 is  that the liability of a common carrier for the loss of goods, not being  of  the description contained in the schedule to  the Act,  may be limited by special contract signed by the owner save  where such loss shall have arisen from the  negligence or  criminal  act  of the carrier or any of  his  agents  or servants.   The extent of liability of a common carrier also came to be considered by the Assam High Court in River Steam Navigation  Co.   Ltd.   & Anr.  vs.  Syam  Sunder  Tea  Co. Ltd., AIR 1955 Assam 65, wherein it was laid down as under : "The  common law of England regulating the responsibility of common  carrier  was in force at the time of the passing  of the  Carriers  Act (Act 3 of 1865) and is still in force  in this  country, being almost unaffected by the provisions  of the Indian Contract Act.  Section 6 Carriers Act, to which I have  referred earlier, enables the common carrier to  limit his   liability  by  a   special  contract;   otherwise  the liability  which the common law imposes is there.  Even  the special  contract  contemplated by S.6 would be of no  avail where  the  loss or damage has been caused by negligence  or any criminal act on the part of the carrier or his agents or servants.  Where the loss or damage arises from any criminal act  of  the carrier or any of his agents or  servants,  the common  carrier shall be liable to the owner for the loss or damage,  and S.9 of the Act relieves the plaintiff from  the burden  of  showing that the loss or damage or  non-delivery was  owing  to any such negligence or criminal  act.   These sections, therefore, recognise the common law doctrine, save in  so  far  as  the liability is limited  by  some  special contract,  as  provided by S.6.  Therefore, even if it  were found  that the defendants took as much care of the goods as a   man   of   ordinary   prudence  would,   under   similar circumstances,  the  defendants would be liable if the  loss was  not occasioned by any act of God or the King’s enemies, which,  in case of republican States, would mean the enemies of  the State.  There is a third exception recognised  where there  is  some  intrinsic  vice  or  defect  in  the  goods themselves  or  where they are of a perishable nature.   The liability  of the ‘carrier’ is not that of a mere bailee, as defined  by Sections 151 and 152 of the Indian Contract Act. The  extent of his liability is very often described as  the liability  of an insurer against all risks;  but it is not a question  of  any contract to insure and no contract of  any insurance has to be made out.  If, therefore, the boat, ship or  steamer  sank on account of its having struck upon  some snag  and  the cargo was lost, that may be a mere ‘peril  of navigation’,  but  not  an  act  of  God,  and  the  steamer companies  would  still  be  liable   even  if,  under   the circumstances, they were found to have acted with reasonable care  and  prudence."  In  P.K.    Kalasami  Nadar  v.    K. Ponnuswami Mudaliar & Ors.  AIR 1962 Madras 44, in which the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 16  

earlier   decision  of  the   Privy  Council  in   Irrawaddy Flotilla’s  case  (supra) was relied upon, it was held  that where  loss has occurred to cotton bales in transit,  cotton being  one of the goods not mentioned in the schedule to the Carriers  Act, 1865 and in respect of which the liability of the common carrier is not limited by a special contract, the owner  of the goods in a suit against the common carrier for loss, damage, or non-delivery of articles or goods entrusted to  the  carrier is not required to prove  negligence;   the reason  is that the liability of a common carrier is that of an  insurer.   It, therefore, follows that,  notwithstanding the  fact  that  there is no negligence on the part  of  the common  carrier,  he  is liable to compensate the  owner  of goods  for  the loss of the goods that occurred  during  the transit  thereof by the lorry belonging to the carrier.   In another  Madras decision in Messrs Konda Rm.  Eswara Iyer  & Sons, Madurai & Ors.  vs.  Messrs Madras Bangalore Transport Co.,  Madurai  &  Ors.  AIR 1964 Madras 516 it was  held  as under  :  "The liability of a common carrier is not  limited only to negligence.  In the case of loss or damage he cannot plead  that  he has exercised all reasonable  diligence  and care.  He must be liable in spite of taking all due care and precautions.   As  Chief  Justice Hale observed in  Mors  v. Slew  (1672)  1  Vent 190 at p.239 -- "And if a  carrier  be robbed by a hundred men, he is never the more excused." Thus the  general principle of the common law is a common carrier is  insurer  of goods which he contracts to carry and he  is liable  for all loss of, or injury to those goods while they are  in the course of transit unless such loss or injury  is caused  by the act of God or by the State enemies or is  the consequence  of  inherent  vice in the thing carried  or  is attributable  to consignor‘s own fault." It was further held as under :  "The law is the same in India.  The Carriers Act No.   III of 1865 is framed on the same lines of the English Carriers  Act of 1830." The Bombay High Court in Hussainbhai Mulla  Fida  Hussain v.  Motilal Nathulal & Anr.   AIR  1963 Bombay 208, held that the liability of common carriers under the Common Law and the Carriers Act, 1865 is not affected by the  provisions  of  the  Contract Act  and  by  law  common carriers  are  liable  as  insurers of goods  and  they  are responsible  for any injury caused to the goods delivered to them,  howsoever caused except only by act of God or  action of  alien enemies.  The Court further held that no proof  of negligence  is, in such a case, needed and the defendant has to  establish the exception.  The Assam and Madras decisions as  also  the Privy Council decision referred to above  were relied  upon.   To  the same effect is the decision  of  the Rajasthan  High Court in Vidya Ratan vs.  Kota Transport Co. Ltd.   AIR  1965 Raj.  200.  In R.R.N.  Ramalinga Nadar  vs. V.Narayana Reddiar AIR 1971 Kerala 197, it was held as under :  "A common carrier is not a mere bailee of goods entrusted to  him.   He is an insurer of goods.  He is answerable  for the  loss  of  goods even when such loss is  caused  not  by either  negligence  or want of care on his part, act of  God and  of  King‘s  enemies   excepted.   This  arises  because responsibility attached to the public nature of the business carried  on  by him.  He holds out as a person who  has  the expertise  and  the  facilities to conduct the  business  of transport;   consequently he is treated as an insurer of the goods  and  is answerable for its loss.  This concept as  to the  liability of a common carrier has been applied in India uniformly.  The rule of the Roman law as to the liability of a carrier is different.  It does not conceive of an absolute liability  as in the English Common Law and the rule of  the Roman  Law has been adopted by many States in the continent.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 16  

The  extent of liability of a bailee under Ss.  151 and  152 of  the  Indian  Contract Act, 1872, is different  from  the extent  of liability of a common carrier.  A bailee is  only bound  to take proper care of the goods and for loss  beyond his control he is not answerable.  But the provisions of the Indian  Contract Act do not govern the liability of a common carrier  nor do they override the provisions of the Carriers Act,  1865.   This  question  was considered  by  the  Privy Council  in (1891) ILR 18 Cal.620 (PC) and it was held  that notwithstanding  the provisions of the Indian Contract  Act, the  liability of a common carrier continues to be  absolute subject  to any special contract entered into by him."  This decision  was  followed by the Kerala High Court  in  Kerala Transport  Co.   v.  Kunnath Textiles 1983 Kerala Law  Times 480.   A  perusal of the decisions referred to  above  would indicate  the  extent  of liability of a carrier.   We  have already  reproduced  the provisions of Sections 6, 8  and  9 above.   Section  6 enables the common carrier to limit  his liability  by a special contract.  But the special  contract will  not  absolve the carrier if the damage or loss to  the goods,  entrusted  to  him,  has  been  caused  by  his  own negligence  or  criminal  act  or  that  of  his  agents  or servants.   In  that situation, the carrier would be  liable for the damage to or loss or non-delivery of goods.  In this situation,  if a suit is filed for recovery of damages,  the burden of proof will not be on the owner or the plaintiff to show  that  the  loss  or damage was  caused  owing  to  the negligence  or  criminal act of the carrier as  provided  by Section  9.  The carrier can escape his liability only if it is  established that the loss or damage was due to an act of God  or enemies of the State (or the enemies of the King,  a phrase used by the Privy Council).  The Calcutta decision in The  British & Foreign Marine Insurance Co.  vs.  The Indian General  Navigation and Railway Co.Ltd.  (supra), the  Assam decision  in  River  Steam Navigation Co.  Ltd &  Anr.   vs. Syam  Sunder Tea Co.  Ltd.  (supra), the Rajasthan  decision in  Vidya  Ratan vs.  Kota Transport Co.Ltd.   (supra),  the Kerala  decision  in  Kerala  Transport  Co.   vs.   Kunnath Textiles (supra), which have already been referred to above, have  considered  the effect of special contract within  the meaning  of Sections 6 and 8 of the Carriers Act, 1865  and, in  our  opinion,  they lay down the correct  law.   In  the Madras  decision in P.K.  Kalasami Nadar v.  K.   Ponnuswami Mudaliar  &  Ors.  (supra), it was held that an act  of  God will  be an extraordinary occurrence due to natural  causes, which  is  not the result of any human intervention, but  it was  held that an accidental fire, though it might not  have resulted  from  any act or omission of the  common  carrier, cannot  be  said to be an act of God.  Similarly, in  Kerala Transport  Co.   v.  Kunnath Textiles (supra), it  was  held that  the  absolute liability of the carrier was subject  to two  exceptions.  One of them is a special contract that the carrier  may choose to enter into with the customer and  the other is the act of God.  It was further held that an act of God  does not take in any and every inevitable accident  and that  only those acts which can be traced to natural  causes as  opposed  to human agency would be said to be an  act  of God.   In  Associated  Traders & Engineers  Pvt.   Ltd.   v. Delhi Cloth & General Mills Ltd.  & Ors.  ILR Delhi 1974 (1) 790,  a fire which broke out in a bonded warehouse where the goods  were  kept  was  held not to be an act  of  God  and, therefore, the carrier was held liable.  This Delhi decision has  been  relied  upon  by  the  learned  counsel  for  the appellant  on  another  question  also  to  which  we  shall presently  come,  to  show that the agreement by  which  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 16  

liability  of  the carrier is sought to be limited  must  be signed  by the owner of the goods, entrusted to the  carrier for  carriage.  From the above discussion, it would be  seen that  the  liability  of  a carrier to whom  the  goods  are entrusted for carriage is that of an insurer and is absolute in  terms, in the sense that the carrier has to deliver  the goods safely, undamaged and without loss at the destination, indicated by the consignor.  So long as the goods are in the custody  of  the carrier, it is the duty of the  carrier  to take due care as he would have taken of his own goods and he would  be  liable  if any loss or damage was caused  to  the goods  on  account of his own negligence or criminal act  or that  of  his agent and servants.  Learned counsel  for  the respondent  contended that the goods were booked at "OWNER‘S RISK"  and, therefore, if any loss was caused to the  goods, may  be  on  account of fire, which  suddenly  engulfed  the neighbouring  warehouse  and spread to the godown where  the goods  in  question  were stored, the carrier would  not  be liable.   "OWNER‘S  RISK"  in the realm of  commerce  has  a positive  meaning.   It is understood in the sense that  the carrier  would not be liable for damage or loss to the goods if it were not caused on account of carrier‘s own negligence or  the negligence of its servants and agents.  In Burton v. English  (1883)  12  Q.B.D.   218   and  again  in  Wade  v. Cockerline (1905) 10 Com.Cas.  47, it was held that in spite of  the goods having been booked at "OWNER‘S RISK", it would not  absolve  the carrier of its liability and it  would  be liable   for  the  loss  or   damage  to  the  goods  during trans-shipment   or  carriage.    These  decisions   granted absolute  immunity to the carrier, but they have lost  their efficacy  on account of subsequent decisions in Svenssons v. Cliffe  S.S.Co.  (1932) 1 K.B.  490, which was considered in Exercise  Shipping  Co.  Ltd.  v.  Bay Maritime  Lines  Ltd. (The  Fantasy)  (1991)  2 Lloyd‘s Rep.  391  [Queen‘s  Bench Division],  in  which  it  was observed  as  under  :   "The question  whether  words such as "at charterer‘s  risk"  can operate  as  an  exemption  clause  in  favour  of  a  party otherwise  liable for negligence was decided by Mr.  Justice Wright  (as  he then was) in Svenssons Travaruaktiebolag  v. Cliffe  Steamship  Co.  (1931) 41 Ll.L.Rep.  262;  (1932)  1 K.B.   490.   He  considered the authorities in  detail  and concluded  :   It  is quite clear, in my  judgment,  on  the authorities   as  they  now  stand,   that  the  words   "at charterers’  risk", standing alone and apart from any  other exception  in the charter-party, do not excuse the shipowner in  the  case  of a loss due to the breach  of  warranty  of seaworthiness...   I  think  that   the  words  standing  by themselves  have  also to be read as limited to  losses  and damages  where  there has been no negligence on the part  of the  shipowner or his servants.  He went on to consider  the charter-party  terms  in  that case which also  included  an exceptions clause, cl.  11.  He held that that clause should have  its  full effect whereas if "at charterers’ risk"  had included  an exception of negligence, it might not have done so.  That judgment has been followed since 1932, for example in  The Stranna (1937) 57 Ll.L.Rep.  231;  (1937) P.130  and East  &  West Steamship Co.  v.  Hossain Brothers, (1968)  2 Lloyd‘s  Rep.   145 (Supreme Court of Pakistan) and  it  has not, so far as I am aware, been dissented from." In Mitchell v.   Lanc.  & Y.R., 44 LJQB 107 = LR 10 QB 256, it was  held that  "OWNER‘S  RISK"  only  exempts the  carrier  from  the ordinary  risks  of  the  transit and  does  not  cover  the carrier‘s  negligence or misconduct.  So also, in Lewis  vs. The  Great Western Railway Company 3 Queen‘s Bench 195,  the words "OWNER‘S RISK", were held to mean, "at the risk of the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 16  

owner, minus the liability of the carrier for the misconduct of  himself  or servants." Thus the expression  "at  owner‘s risk"  does not exempt a carrier from his own negligence  or the  negligence  of  his  servants or agents.   We  may  now consider  the facts of this case.  The Consignment Note  No. 52330  dated 11th March, 1994, through which the goods  were booked  with the respondent says "AT OWNER‘S RISK".  In  the column  meant  for insurance, again, the alphabets "OR"  are mentioned,  which obviously mean "OWNER’S RISK".  The  terms and  conditions  are printed at the back of the  Consignment Note.   Condition  No.   1,  inter alia, reads  as  under  : "1.........   The Company carries the goods at Owner‘s  Risk unless  a  special  insurance of Rs.0.80 for  every  hundred rupees  of value declared by the sender having been  charged and  paid.   Payment  of such Insurance  charges,  if  made, should  be mentioned on the G.C.  Note at the space provided for  the same." The name of the consignee indicated  therein is "Messrs Jeena & Co., Bombay." The address of the ultimate consignee  is  mentioned as :  "Sears Womenswear Limited,  1 Garrick  Road, Hendon, London NW9 6AU, U.K.".  It is further indicated  that  the goods are to be loaded at Bombay.   The nature  of  the  goods  indicated in the  invoice  is  "100% Natural  Silk Readymade Garments" consisting of 3672  pieces of the value of GBP 48,470.40.  The description of the goods indicated  in  the Consignment Note was "Mulberry  Raw  Silk Garments  (Natural  Silk Readymade Garments)  comprising  77 packages.   The  contention of the learned counsel  for  the respondent  that  since  the goods were booked  at  "OWNER‘S RISK"  the  respondent would not be liable for any  loss  to those goods, is not acceptable to the appellant who contends that  before the liability of the carrier can be restricted, there  has to be an agreement in writing as contemplated  by Section 6 of the Act, which has to be signed by the owner of the  goods, and since the Consignment Note, even if it is to be  treated  to be an agreement between the parties, is  not signed  by the owner or the appellant, there was no contract between  the parties within the meaning of Section 6 of  the Act  and,  therefore,  in  spite  of  the  mention  in   the Consignment Note that the goods would be carried at "OWNER‘S RISK",  the liability of the carrier would not be restricted and  it  would  still be liable for the loss caused  to  the undelivered goods at Bhiwandi by the outbreak of fire in the godown  where  they  were  stored.    When  the  goods  were entrusted  to  the carrier for delivery at Bombay to  Messrs Jeena  &  Co., the Consignment Note which was issued to  the appellant,  mentioned  that the goods were to be carried  at "OWNER‘S RISK." The appellant did not, at that stage, object to  the  words  "OWNER‘S  RISK"   being  mentioned  in   the Consignment  Note.   On  19th March,  1994,  the  respondent informed  the  appellant  that the goods were  destroyed  by fire.   In this letter, it was, inter alia, mentioned by the respondent  as  under  :   "In   the  meantime,  since   the consignment  was  booked  at  Owner‘s Risk  basis,  you  are requested  to please take up the matter with your  Insurance Company."  Although it was clearly mentioned that the  goods were  booked at "OWNER‘S RISKS" in the aforesaid letter, the appellant  in  his  reply  dated 26th March,  1994  did  not repudiate  the  assertion of the respondent that  the  goods were  booked  at "OWNER‘S RISK." Even in his earlier  letter dated  21st  March, 1994, the appellant did not say  a  word about  "OWNER‘S  RISK."  Thereafter, the  appellant  sent  a notice  dated 22nd April, 1994 to the respondent through Mr. S.K.   Kaul, Advocate, but in that notice also the fact that the  goods were booked at "OWNER‘S RISK" was not repudiated. Even  in  the subsequent notice dated 30th May,  1994,  sent

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 16  

through  Shri  R.C.  Gupta, Advocate, the appellant did  not say  anything  about  "OWNER‘S  RISK."  Even  in  the  Claim Petition filed before the National Commission, the appellant did  not say anything about "OWNER‘S RISK." The  respondent, however, in para 4 of the Written Statement filed before the Commission  stated,  inter alia, as under :  "4.   That  the Opposite  party had carried the goods at the "Owner risk" as offer  to  the complainant to get the goods insured by  them was declined.  That the terms and conditions of the contract of the carriage as incorporated in the Goods Consignment No. 52330  dated  11th March, 1994 under which  the  complainant booked  the goods with the opposite party for transportation provides:   1.   The Company (opposite party) carriages  the goods  at owners risk, unless a special Insurance of Rs.0.80 for  every  hundred rupees of value declared by the  vender, having  been  charged and paid.  Payment of  such  insurance charges,  if  made,  should  be   mentioned  on  the   goods consignment  note  at the space provided for the  same.   2. The  Company  (opposite party) shall not be responsible  for any loss or damage due to theft, fire explosion or accident, unless  the special insurance charges, as stated in clause 1 above  is  charged and paid.  An affidavit duly attested  by Sukhbir  Singh, the Booking Clerk of the opposite party, who had  booked  the goods of the complainant on behalf  of  the opposite party is annexed as Annexure A-1." It was then that the  appellant  in his rejoinder, raised the  question  that there  was  no agreement in writing between the  parties  so and,  therefore,  the liability of the carrier would not  be restricted.  The appellants pleaded in paragraph 4, as under :   "That  the  submissions  made  in para  No.   4  of  the preliminary  objection  are not correct.  The term  "Owner‘s risk"  has  not  been defined in the Carriers Act.   As  per Section 6 of the Carrier Act, a common carrier can limit his liability not by means of public notice but by entering into a  special  contract.  If there is no special contract,  the liability  of carrier remains absolute.  It is not the  case of  parties  herein that they had entered into  any  special contract or the consignment note bears the signatures of the complainant in token of their acceptance that the goods were booked  at  owner‘s  risk.  The  agreement/contract  becomes binding when the parties so agree and execute such contract. The complainant has not signed any document/contract wherein the  complainant  has accepted the goods were booked at  the owner‘s  risk.   It is submitted that even where  the  goods were  carried at "Owner‘s Risk", the carrier is not absolved from his liability for loss of or damage to the goods due to his  negligence or criminal acts.  Section 9 of the Carriers Act  provides  that the common carriers are liable  for  the loss  if  any caused to the goods entrusted to the  carriers and it is the duty of the carriers to carry the goods to the destination  station.   It is absolutely incorrect that  the opposite  party  made  any offer to get the  goods  insured. Section  8  of the Carriers Act deals with the liability  of the common carriers for loss or damage caused by the neglect of  the carriers or his agent.  The opposite party is liable to  pay the damages to the complainant even if the goods are not insured.  Thus the question of insurance of goods is not at  all relevant.  In any case, the opposite party could not have asked for the payment of insurance charges as mentioned by  them  in  the reply i.e.  80 paisa per  100/-  of  value because  carriers  cannot  in law collect  the  premium  for insurance  of goods and issue any valid receipt of Insurance Premium.   The  opposite  party  cannot  work  in  place  of Nationalised Insurance Companies who perform their duties by virtue  of  statute, i.e.  Insurance Act.   The  complainant

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 16  

could not have been asked to enter into an illegal contract. As  such the submissions made in para No.  4 of the  written statement  are  incorrect,  hence   denied.   The  affidavit (Annexure  I) to W.S.) is collusive and managed one.  In any case  the  contents of affidavit are false and denied.   The complainant  submits herewith affidavit of its employee Shri Puran  Singh  to establish that the opposite  party  brought their truck to the factory of the complainant and loaded the goods  there  for  carrying  the  same  to  Bombay  and  the representative of the opposite party issued consignment note in  the  factory  of  the complainant and at  no  stage  the opposite  party asked the complainant to get the consignment insured.   The  affidavit of Shri Puran Singh  is  submitted herewith  as  ANNEXURE-J  to   the  rejoinder.   [  Emphasis supplied  ]  In  view  of  the  above,  there  did  arise  a controversy  between  the  parties  whether  there  was  any special  agreement between them which would have the  effect of  restricting the liability of the respondent in  carrying the goods in question to Bombay for delivery to Messrs Jeena & Co.  This question has not been answered in clear terms by the  National Commission and a positive finding, whether  or not  there  existed a special contract between  the  parties within  the  meaning of Section 6 of the Act, has  not  been recorded.    The  Commission,   after  considering   various provisions  of  the Act came to the conclusion that EVEN  IF the  goods were carried at "OWNER‘S RISK", the carrier would not  be fully absolved of his liability to pay  compensation if  the loss was occasioned on account of his negligence  or the  negligence of his servants and agents.  The Commission, to  this extent, is right and, therefore, a positive finding on  the existence of a special contract is not insisted upon but  what is now questioned is the finding of the Commission on  the  question of negligence.  The Commission  held  that since  the goods were diverted to Bhiwandi by the consignee, Messrs  Jeena & Co., to whom the goods were to be delivered, and  they  were destroyed by the fire which initially  broke out  in the adjacent godown and subsequently spread to their own  godown,  the respondent would not be liable as  he  had taken  all  possible  care  which was  expected  of  him  as carrier.  This, we feel, is not the correct approach.  There was  a  serious dispute between the parties not only on  the existence  of  a  special  contract within  the  meaning  of Section  6  of the Act, but there also arose a dispute  with regard  to the diversion of goods to be unloaded at Bhiwandi instead of being delivered to Messrs Jeena & Co.  at Bombay. This  question, namely, diversion of goods, has been decided by   the  Commission  without   scrutinising  the   relevant pleadings  of  the  parties.  The goods,  according  to  the learned   counsel  for  the   respondent,  had  reached  the destination,  but  when the consignee was informed that  the goods  have  arrived,  the  carrier was  instructed  by  the consignee,  Messrs Jeena & Co., to unload the consignment at Bhiwandi  as  the  shipment of the 77 packages,  which  were delivered to the carrier by the appellant, was to take place at  C.F.S.   Kalamboli (Nhava Sheva Port).  It is  contended that  the  consignee was the agent of the appellant and  the goods  were to be delivered to him and if the consignee,  on information  that the goods have arrived at Bombay, diverted the  carrier to Bhiwandi for unloading the goods there,  the carrier  shall be deemed to have delivered the goods to  the consignee,  namely,  Messrs  Jeena & Co.   and  the  carrier cannot be held liable for any loss caused to the goods after delivery  thereof  to the consignee.  Whether or not  Messrs Jeena & Co.  had directed the respondent to unload the goods at  Bhiwandi,  is a question of serious dispute between  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 16  

parties.   The respondent relied upon the letter dated  14th March,  1994 from Messrs Jeena & Co.  which reads as under : "This  has  reference  to  the   information  given  by  you regarding arrival of 77 packages at Mulund Check Post of M/s Nath Brothers, Exim International Ltd., New Delhi, booked by you  under your G.C.  No.  52330 dt.  11.3.94 Ex.  Delhi  to Bombay.   In this connection we hereby advise you to  unload the  said  consignment of 77 packages of the above party  at Bhiwandi as the shipment of the same will take place at CFS, Kalamboli  (Nhava  Sheva Port)." The appellant disputed  the genuineness  of  this  letter and contended that  it  was  a forged letter.  It was contended that 14th March, 1994 was a public  holiday at Bombay on account of "Idul-Fitr" and  the offices  of  the banks including that of Messrs Jeena &  Co. were  closed.  It was also contended that Messrs Jeena & Co. had  addressed  a  fax message on 15th March,  1994  to  the appellant  complaining of non-receipt of the goods.  It  was contended  that if the goods had arrived at Bombay and  were diverted  by  Messrs  Jeena  & Co.  to  Bhiwandi  for  being unloaded  there, they would not have issued the fax  message of 15th March, 1994 complaining of non-receipt of goods.  It is  also  pointed  out that in none  of  the  communications earlier  exchanged  between  the   parties,  respondent  had indicated  about the letter dated 14th March, 1994 of Messrs Jeena  & Co.  by which they had instructed the respondent to divert  the goods to Bhiwandi.  It is also pointed out  that when a notice was issued by the appellant to the respondent, the  latter,  namely,  the respondent sent a  reply  through their  counsel  on 27th June, 1994, but in that  reply  also they  did  not mention about any written  instructions  from Messrs Jeena & Co.  for unloading the goods at Bhiwandi.  In the  Claim  Petition also, the appellant did not say a  word about  diversion of goods at the instance of Messrs Jeena  & Co.  But when the respondent filed his Written Statement and pleaded  that the goods had been diverted to Bhiwandi on the express  written  instructions  of Messrs Jeena &  Co.,  the appellant  raised  a  dispute  about that  question  in  his rejoinder.   In  para  10  of  the  Written  Statement,  the respondent  stated  as  under :  "That para No.  10  of  the complaint  as  stated is wrong and denied, while it  is  not denied  that  the booked consignment had to be delivered  at Bombay,  but  the  same  had to be  taken  to  Bhiwandi  and unloaded  of the opposite party godown as there was specific instruction  from  the consignee and freight  Forwarder  M/s Jeena  & Company, Bombay.  The opposite party had received a letter  dated  14.3.1994 wherein M/s Jeena and  Company,  on receipt of the information from the opposite party about the arrival  of  the consignment at Mulund Check post,  directed the  opposite  party  to  unload  the  said  consignment  at Bhiwandi  as  the shipment of the same will take place  from C.F.S.   Kalamboli (Nava Sheva Port).  The letter dated 14th March,  is  annexed as Annexure A-2.  The true facts of  the case  are that opposite party had booked the consignment  of 77  boxes  for  delivery to their clearing,  forwarding  and shipping  agents  M/s  Jeena & Co.  at  Bombay  under  goods consignment  note No.  52330 dated 11th March, 1994 which is Annexure  B to the complaint.  As per the instruction of the complainants   consignees  at  Bombay,   M/s  Jeena  &  Co., International  Freight forwarders the consignment was to  be shipped from Nhava Sheva Port and not from Bombay Docks.  As soon  as  the consignment reached the Muland Check  Post  on 14th  March,  1994,  the said consignee  vide  letter  dated 14.3.1994 which is Annexure A-2, directed the opposite party to  offload the cargo at Bhiwandi situated at the  outskirts of Greater Bombay where no octroi duty was payable and which

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 14 of 16  

was  meant for despatch from the newly set-up port at  Nhava Sheva  via  the  ship/vessel CMB Medal V-212,  Rotation  No. 405,  which  was expected to depart on any  day  immediately after  16th  March,  1994.  Annexure A-3 is the map  of  the Greater Bombay showing the location of the Mulund Check post of the Greater Bombay, where Octroi duty is collected by the Municipal Corporation on the entry of the goods, Bhiwandi on the outskirts of the Greater Bombay and the situation of the Bombay  Docks  and  Nhava  Sheva Port across  the  Creek  of Bombay.   It  is,  therefore, not true that  opposite  party wrongly  unloaded  the consignment at Bhiwandi, outside  the Bombay Octroi check post and hence it can easily be inferred from the facts as stated above, that storing of the goods at Bhiwandi  instead of directly taking it to Bombay, does  not speak  of any deficient and in-adequate service on the  part of the opposite party.  The opposite party will further like to  add that complainant was bound to have complied with the requirement   and   provision  of   the   Bombay   Municipal Corporation  Exemption  from Octroi (Export) Promotion  Rule 1976,  copy of which is annexed as Annexure A-4, in  respect of the articles imported into Greater Bombay for the purpose of  export  to  foreign countries, as such  registration  as exporters  with the Municipal Corporation of Greater Bombay, delcaration  that cargo was to be shipped from Bombay  Docks and  comply with all other procedure and formalities in this particular  case, the consignment was to be shipped from the Port  at  Nhava Sheva, situated across the creek of  Greater Bombay  and  as  such  the consignment was  intended  to  be imported  within  the  Octroi limits of the  Greater  Bombay which would have attracted Octroi duty of 2% of the value of the  consignment,  failing which the goods would  have  been seized by the Municipal Corporation of the Greater Bombay at Octroi  check post.  It is only when the consignee or  their forwarding  agents desired this extra facility in respect of the export cargo to save octroi that the opposite party take this   extra  responsibility  and   incur  expenditure,   in unloading which involves heavy labour charges.  It is denied that  the  complainant has suffered loss of goods  including profits  as  per price settled.  It is denied that  loss  of reputation  has  been  caused to the  complainant.   As  the complainant  was  immediatley  informed  vide  letter  dated 19.3.1994 (which is annexure "E" in the complaint) about the loss of the goods due to accidental fire and hence there was no  occasion  for  the  complainant to  have  suffered  huge expenses  on  travelling.    The  complainants  apprehension regarding  claims from foreign customers, at this stage,  is unfounded  and  pre-mature to be considered by  the  Hon’ble Commission.   In any case loss if suffered any is too remote and indirect under section 73 of the Indian Contract Act and could  not be considered." The letter dated 14th March, 1994 from  Messrs  Jeena  &  Co.   was  filed  with  the  Written Statement  as Annexure A-2.  The appellant in his  rejoinder to  the  Written Statement of the respondent repudiated  the above  pleadings  of  the respondent and stated in  para  10 thereof,  inter alia, as under :  "Para 10 of reply is wrong and  false and, therefore, denied.  It has been admitted  by the  opposite  party that the booked consignment had  to  be delivered  at Bombay.  Thus it is not in dispute that  there was  no  agreement for carriage of goods to Bhiwandi or  its storage  at Bhiwandi.  It is not the case of opposite  party that complainant had directed them to change the destination of goods from Bombay to Bhiwandi or to store them there.  It was  further  stated as under :  10(1) Without prejudice  to the  above  submissions  it  is   stated  that  the   letter dt.14.3.94  purported  to  have been issued by Jeena  &  Co.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 15 of 16  

(Annexure  2  to W.S.) relied upon by the opposite party  to justify the change of destination of consignment from Bombay to  Bhiwandi is totally false, collusive, an after  thought, managed  one  and mischievous in view of earlier fax of  dt. 15.3.94  of Jeena & Co.  (Annexure K) in which they informed the  complainant  regarding  77   packages  (Consignment  in question)  "CARGO AWAITED".  Furthermore, the opposite party could  not have informed Jeena & Co.  on 14.3.94 and Jeena & Co.   could not have issued impugned letter dt.  14.3.94  on that  date itself as this day was a holiday under Negotiable Instruments  Act  on account of Id-ul-Fitr when  undoubtedly Govt.   Offices  and  Bank were closed in Bombay.   To  this effect  a  telex confirmation dt.  29.4.95 issued by  Indian Overseas  Bank R.O.  (Metro) Bombay to Indian Overseas Bank, Parliament Street, New Delhi (Bankers of the Complainant) is enclosed herewith as Annexure L.  Furthermore, the office of Jeena  &  Co.  itself was closed on 14.3.94 as certified  by them  in  the  fax message dt.  22.4.95  which  is  enclosed herewith as Annexure M.  Furthermore, the opposite party had not taken any plea based on the letter dt.  14.3.94 in their first  official  communication  being  letter  dt.   19.3.94 (Annexure 5 to W.S.).  This proves that letter dated 14.3.94 is  after  thought.   10(2) In the above  connection  it  is further  submitted  that the veracity of claim  of  opposite party   that  it  changed  the   destination  of  goods   on instruction  of Jeena & Co.  is highly dubious for two  more reasons.                                           ......... ............................................".   [  Emphasis supplied  ] It was further stated in paragraph 10(4) of  the rejoinder  as  under  :  "It is submitted that  above  facts clearly show that the story of giving information of arrival of   goods  at  Bombay  to   Jeena  &  Co.   and   receiving instructions  from  them  to  unload goods  at  Bhiwandi  on 14.3.1994 is totally false and the opposite party stored the goods  at Bhiwandi of their own volition.  The  implantation of  letter  dated  14.3.1994  is, therefore,  only  a  crude attempt  to  justify  their unauthorised action  of  storing goods  at  Bhiwandi."  In  view of the  above  pleadings,  a serious  dispute  had arisen between the parties as  to  the genuineness  of  the letter dated 14th March, 1994, said  to have  been written by Messrs Jeena & Co.  to the  respondent to  unload  the goods at Bhiwandi instead of delivering  the consignment  at  Bombay.   The National Commission  did  not advert  itself to these questions and disposed of the  whole matter  observing, inter alia, as under :  "The carrier has, however, pointed out that they had taken the consignment, as per  the  instructions of the petitioner, and  informed  the consignee  that the goods were ready for delivery at Bombay, but  the  consignee  directed  them   to  unload  the   said consignment  of  77 packages at Bhiwandi.  The diversion  of the  consignment to Bhiwandi was thus made at the  direction of  the  consignee  himself.  In this regard,  the  Opposite Party has produced a letter from M/s Jeena & Co., dated 14th March,  1994 which reads as follows :  "This has a reference to  the  information  given by you regarding arrival  of  77 packages  at  Mulund Check Post of M/s Nath  Brothers,  Exim International Ltd., New Delhi, booked by you under your G.C. No.   42330  dt.   11.3.94 Ex.  Delhi to  Bombay.   In  this connection  we  hereby  advise  you   to  unload  the   said consignment of 77 packages of the above party at Bhiwandi as the  shipment of the same will take place at CFS,  Kalamboli (Nhava Sheva Port)." The argument of the Opposite Party, the carriers,  is  that on these specific instructions from  the consignee and freight forwarder M/s Jeena & Co., Bombay, the said  consignment was unloaded and stored at Bhiwandi.  That

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 16 of 16  

was done, according to them, since the consignment was to be shipped  from Nhava Sheva Port and not from Bombay Port and, therefore,  the  consignee  diverted  the  consignment  from Mulund  Check  Post to Bhiwandi, which was nearer  to  Nhava Sheva  Port,  and at the same time also avoided  the  octroi duty  which  had to be paid, had the delivery been taken  at Mulund  Check Post when the consignment reached there.   The goods  were  stored at Bhiwandi in godown Nos.  5 & 6,  Wadi Compound,  Anjur  Village,  Anjurphate, outside  the  octroi limits   of   Greater  Bombay   along  with   other   export consignments,  the  total value of which, according  to  the Opposite Party, was more than Rs.  2 crores and all of which were to be shipped from Nhava Sheva port across the creek of the  Greater Bombay.  All those goods were destroyed  around noon  on 16.3.1994 because of a huge fire and explosion that occurred  in  the adjoining godown No.  7 belonging to  Shri Rati  Bhai  were drums containing hazardous  chemicals  were stored.  The fire spread to the Opposite Party‘s godown Nos. 5 and 6 as well as other adjoining godowns.  In spite of all efforts  by the fire fighting engines, the fire could not be contained  in time.  The accidental fire was reported to the Police  Station, Bhiwandi, and an FIR was also lodged on the 16th  March, 1994 itself.  The Police prepared a  Panchanama in  front of independent witnesses and the fire brigades  of Bhiwandi   and  Nizampur  Nagar   Parishad  confirmed   this accidental  fire.   This  fire  was  also  reported  in  the newspapers on 16th and 17th March, 1994.  It is not the case of  the  Petitioner that the carrier did not  take  adequate precautions  or steps to save the goods from the loss by the fire.  On the other hand, it has been successfully proved by the  carrier  that  the consignment of  the  Petitioner  was diverted  from Mulund Check Post to Bhiwandi on the specific instructions  of the consignee and further that the loss was caused  by fire which was beyond their control.  It has been mentioned  by  them  that they took due care,  within  their capacity  and  now they have lodged a claim on the owner  of the adjoining godown from where the fire started." The above will show that the National Commission acted upon the letter dated  14th  March,  1994  of Messrs Jeena  &  Co.   without deciding  the question whether it was genuine and was at all issued by Messrs Jeena & Co.  as the appellant had contended that  the  letter  was forged or was  procured  collusively. Since the above aspects have not been considered and decided by  the  Commission,  we cannot uphold the judgment  of  the National  Commission.   The appeal is consequently  allowed, the  impugned judgment dated 2.9.1996 passed by the National Commission  is  set  aside and the case is remanded  to  the Commission  for  disposal  afresh  in   the  light  of   the observations made above and in accordance with law.