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Smart Summary

Factual and Procedural Background

The defendant, a firm engaged in the business of sale of goods, was entrusted with 15 cases of baniyans by the plaintiff for transportation from Trichur to Willingdon Island. The plaintiff paid the lorry charges and booked the goods on 14.12.1974. Upon arrival at Willingdon Island, the goods were not delivered; the plaintiff was informed that the goods had been lost in a fire on 19.12.1974, five days after consignment. The defendant admitted the loss by fire, allegedly caused by a short circuit, but denied liability on grounds of absence of negligence. The trial court found the defendant liable as a carrier and granted a decree for damages to the plaintiff. The defendant appealed against this decree.

Legal Issues Presented

  1. Whether the defendant, as a common carrier, is liable for loss of goods caused by fire even if there was no negligence or carelessness on their part.
  2. Whether the fire causing the loss qualifies as an "act of God" or inevitable accident exempting the defendant from liability.
  3. Whether the defendant can rely on a special contractual clause excluding liability for fire if reasonable precautions were not taken.

Arguments of the Parties

Defendant's Arguments

  • The loss of goods was caused by fire due to a short circuit, which was not due to negligence or carelessness by the defendant.
  • The defendant contended that the fire was an inevitable accident or "act of God," exempting them from liability.
  • The defendant relied on clause 4 of the parcel way bill, which excludes liability for loss due to fire if reasonable precautions are taken.

Plaintiff's Arguments

  • The plaintiff argued the defendant, as a common carrier, is liable as an insurer of goods regardless of negligence.
  • The fire cannot be considered an act of God as it was caused by human agency (short circuit) and not natural causes.
  • The defendant did not take reasonable precautions against fire, as evidenced by absence of fire extinguishers, sand buckets, or even a watchman, and thus cannot rely on the exclusion clause.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
R.R.N Ramalinga v. Narayana, A.I.R 1971 Kerala 197 Confirmed that a common carrier is an insurer of goods and liable for loss even without negligence, except for acts of God or King's enemies. The court relied on this case to affirm the absolute liability of common carriers in India and to distinguish it from the liability of bailees under the Indian Contract Act.
Chidambarakrishna Iyer Nataraja Iyer v. South Indian Railway Co. Clarified that acts of God do not include accidents caused by human agency and that absolute liability of carriers is subject only to special contracts or acts of God. The court used this precedent to reject the defendant’s claim that the fire was an act of God, emphasizing that human agency excludes such classification.
Nugent v. Smith Distinguished between acts of God (natural causes) and inevitable accidents caused wholly or partly by human agency. Quoted to reinforce that only natural causes qualify as acts of God, thus excluding the fire caused by electrical short circuit from this exemption.
Forward v. Pittard Defined inevitable accidents and acts of God, emphasizing that acts of God are extraordinary natural events without human intervention. Supported the court’s interpretation limiting the scope of acts of God exemption in carrier liability.

Court's Reasoning and Analysis

The court began by affirming the absolute liability of a common carrier for the loss of goods entrusted to it, regardless of negligence, except in cases of acts of God or King's enemies, as established in precedent. The court analyzed the nature of the fire, concluding it was caused by human agency (an electrical short circuit) rather than natural forces, and therefore did not qualify as an act of God. The court rejected the defendant's contention that all inevitable accidents amount to acts of God, emphasizing the legal distinction between natural causes and human agency in such classification.

Regarding the special contract clause excluding liability for fire, the court noted that such exclusion is contingent upon the carrier taking all reasonable precautions against the risk. The evidence disclosed a complete absence of fire safety measures, such as fire extinguishers, sand buckets, or a watchman. The court found that no reasonable precautions were taken by the defendant, rendering the exclusion clause inapplicable.

Accordingly, the court upheld the trial court’s finding of liability and the decree for damages in favor of the plaintiff, dismissing the appeal.

Holding and Implications

The court's final decision is APPEAL DISMISSED, affirming the trial court's decree holding the defendant liable as a common carrier for the loss of goods by fire.

The direct effect is that the defendant must compensate the plaintiff for the lost goods. No new precedent was set; the decision reiterates established principles regarding the absolute liability of common carriers, the limited scope of the act of God defense, and the requirement that exclusion clauses be supported by reasonable precautions.

    Kerala Transport Co. v. Kunnath Textile .

    Subramonian Poti, ACJ:— The defendant, a firm engaged in the business of sale of goods, challenges in this appeal a decree for damages granted to the plaintiff for loss of goods of the plaintiff entrusted to the defendant at Trichur as a carrier to be transported to Willingdon Island and delivered there. The plaintiff firm booked 15 cases of baniyans to self on 14.12.1974 at Trichur and paid the lorry charges. The destination was Willingdon Island. But the office at the Willingdon Island did not deliver the goods and the plaintiff was informed that the goods had been lost by fire. The fire was on 19.12.1974, five days after consignment of the goods. According to the defendant the goods were lost by fire and such fire was caused by short circuit of electric wires. That was said to be not on account of negligence or carelessness of the defendant and hence the defendant urged that he was not liable. The facts are more or less admitted and on these facts the trial court found that the defendant as carrier must answer for the loss of the goods. Accordingly a decree was granted for the value of such goods.

    2. The entrustment of the goods, arrival of the goods at Willingdon Island, the fire that broke out in the premises of the defendant at Willingdon Island at 3 a.m on 19.12.1979, the loss of the goods and consequently the non delivery are all admitted in this case.

    3. If the defendant has failed to deliver the goods not on account of any negligence or carelessness, would the defendant be liable is the question which naturally arises for consideration. If the defendant was merely a bailee of goods he would not be liable to answer as an insurer. But the liability of a carrier in India, as in England, is more extensive and that liability is that of an insurer. We do not want to go into this question in detail because we are in agreement with the view expressed by one of us in R.R.N Ramalinga v. Narayana . A.I.R 1971 Kerala 197., where there has been a very detailed consideration of this question. We refer to paragraphs 11 to 15 of that judgment:

    “11. 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.

    The extent of liability of a bailee under sections 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 contracts entered into by him.

    12. Section 6 of the Carriers Act, 1865, enables common carriers to enter into special contracts so as to limit or restrict their liability. But this cannot be so restricted or limited as to avoid liability to answer even when the loss is caused by negligence or criminal acts of the common carrier or its agents. This is the purport of section 8 of the Act. Therefore, it is open to any common carrier to keep himself out of the scope of absolute liability with regard to any particular contract of carriage by entering into special contracts with regard to the particular carriage with his customer. But no such contract would avail against gross negligence and criminal acts.

    13. Based on certain observations in Oito Khan-Freund's Treatise referred to by me earlier and in Halsbury's Laws of England, Vol. 4, Paragraph 368 learned counsel would contend that in England the liability of common carriers for road transport is not held to be absolute. According to him the law as developed in England indicates that the Courts in England have not recognised such absolute liability on the part of common carriers undertaking road transport. I do not see how the contention canvassed by learned counsel could be supported on the basis of the passages relied on by him. It has been noticed that in England carriers operating road transport have generally protected themselves by the method of entering into special contracts, so much so, that their absolute liability as common carriers do not normally arise. That and that alone, according to me has been said in the passages relied on by learned counsel. In fact, it is the decision in (1918-1 KB 210), that is cited in support of these passages. What was found by Bailhache, J. in that case was that on the facts of that case the defendant was not shown to be a common carrier. The learned Judge said in conclusion:

    ‘After all, the question is one of fact, and I am not sure that this elaborate discussion of textbooks and cases and questions and answers is very useful.’

    I do not think that the scope of liability of a common carrier engaged in road transport is in any way different from that of other common carriers by land.

    14. There is no case that the defendant entered into any special contract with the plaintiff negativing liability in the event of loss being caused due to causes occasioned by events beyond his control. The only exception to such absolute liability is the event of loss caused by act of God or King's enemies. It is finally urged before me by learned counsel for the defendant, that the exception applies to the case before me as according to counsel, any event beyond the control of the defendant, any circumstances not of his creation, must be taken to be an inevitable accident, and, that according to him, is synonymous with what is generally understood as vis major or act of God.

    15. Act of God is one arising from natural causes. Some of the well-known instances of acts of God are the storms, the tides and the volcanic eruptions. They are, in a sense, inevitable accidents beyond the control of man. What is urged in this case is that all inevitable accidents must be taken as acts of God. Matters which are not within the power of any party to prevent, is according to learned counsel, inevitable accidents so far as he is concerned and consequently it is to be considered as acts of God. I cannot agree. Accidents may happen by reason of the play of natural forces or by intervention of human agency or by both. It may be that in either of these cases accidents may be inevitable. But it is only those acts which can be traced to natural forces and which have nothing to do with the intervention of human agency that could be said to be acts of God.

    4. Cockburn, C.J, in the leading case in Nugent v. Smith said:

    “It is at once obvious, as was pointed out by Lord Mansfield in Forward v. Pittard, that all causes of inevitable accident—fortuitous—may be divided into two classes—those which are occasioned by the elementary forces of nature unconnected with the agency of man or other cause, and those which have their origin either in the whole or in part in the agency of man, whether in acts of commission or omission, of non-feasance or of misfeasance, or in any other cause independent of the agency of natural forces. It is obvious that it would be altogether incongruous to apply the term ‘act of God’ to the latter class of inevitable accident. It is equally clear that storm and tempest belong to the class to which the term ‘act of God’ is properly applicable.”

    5. In Halsbury's Laws of England, Vol. 8, 3rd Edition, page 183, this question is dealt with as under:

    “An act of God, in the legal sense of the term, may be defined as an extraordinary occurrence or circumstance which could not have been foreseen and which could not have been guarded against; or more accurately, as an accident due to natural causes, directly and exclusively without human intervention, and which could not have been avoided by any amount of foresight and pains and care reasonably to be expected of the person sought to be made liable for it, or who seeks to excuse himself on the ground of it. The occurrence need not be unique, nor need it be one that happens for the first time; it is enough that it is extraordinary, and such as could not reasonably be anticipated. The mere fact that a phenomenon has happened once, when it does not carry with it or import any probability of a recurrence (when, in other words, it does not imply any law from which its recurrence can be inferred) does not prevent that phenomenon from being an act of God. It must, however, be something overwhelming and not merely an ordinary accidental circumstance, and it must not arise from the act of man.”

    6. I see nothing in the decision in Chidambarakrishna Iyer Nataraja Iyer v. South Indian Rly. Co., to which my attention has been drawn by learned counsel for the defendant towarrant the view that even when the accidents are purely the result of acts of human agency, it could be taken to be acts of God.

    7. The absolute liability of the carrier is subject to two exceptions. One of them is any special contract that the carrier may choose to enter into with the customer and the other is act of God. That act of God does not take in any and every inevitable accident, has been indicated in that decision. It is only those acts which can be traced to natural causes as opposed to human agency that can be said to be acts of God was held in the case. If so the fire that took place in the godown cannot be said to be an act of God and that cannot therefore be an answer to the claim for absolute liability.

    8. It is contended that in this case the absolute liability is restricted by a special contract between the parties and reference is made to clause 4 in the terms and conditions of the parcel way bill. Clause 4 reads thus:

    “4. The Company shall not be liable for any loss or damage due to pilferage, theft, weather conditions, strike, riots, disturbances, fire, explosion or accident provided however, all reasonable precautions are taken to provide against such contingencies.”

    9. The exclusion clause is no doubt very wide in scope and certainly takes in fire as in this case. But that is subject to the condition that the defendant takes all reasonable precautions to provide against such contingency. Naturally therefore if defendant is trying to answer the liability on the basis of the term of special contract he would have to show what reasonable precaution he took against fire, the evidence in this case discloses not only absence of reasonable precaution but absence of any precaution whatsoever which normally a person engaged in transport business would be expected to take. It is agreed that in the premises where the goods were stocked there were no fire extinguishers, there were no buckets with sand and there was not even a watchman. It is the watchman in the neighbouring premises who was good enough to notify about the fire long after the fire started. That was responsible for inviting the fire fighting force to the place. The officers of the defendant company reached the place long thereafter. That shows that no precaution had been attempted against the possibility of a fire. In this view, the above said clause cannot be invoked by the defendant and the defendant would be liable to answer the plaintiff's claim. We therefore hold in agreement with the court below that the plaintiff is entitled to the decree sought. No interference is called for in appeal. The appeal is dismissed with costs.

    10. Appeal dismissed.

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    Comments

    Kerala Transport Co. v. Kunnath Textile .
    (Oct 21, 1982)