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Smart Summary

Factual and Procedural Background

The appellant was entrusted with a consignment of 530 tins of Torch Branch Coconut Oil, valued at Rs. 93,000/-, to be delivered to the 2nd respondent at Bombay. The consignment was transported by lorry, which met with an accident on 8-6-1977. The respondents alleged the accident was due to the negligence of the lorry driver. A crime was registered regarding the accident. The 1st respondent had damages assessed by an independent surveyor, who calculated the loss at Rs. 26,910/-. The 1st respondent claimed damages from the appellant, who denied liability, attributing the accident to an act of God and directing the claim to the insurance company (3rd respondent). The insurance company settled the claim but the appellant repudiated liability on the basis that the goods were carried at "Owner's risk." Consequently, the respondents filed suit. The appellant contended the suit was not maintainable, denied liability on grounds of act of God and non-ownership of the lorry, and stated the claim was settled by the insurance company which had no cause of action to sue. The lower court, after examining evidence, rejected the appellant's defenses and passed a decree in favor of the respondents. The appellant appealed the decision.

Legal Issues Presented

  1. Whether the appellant is liable for damages for loss to the goods caused by the accident despite the condition on the consignment note excluding liability for accidents.
  2. Whether the accident qualifies as an act of God, thereby absolving the appellant from liability.
  3. Whether the appellant, not owning the lorry used for transport, qualifies as a common carrier liable under the Carriers Act.

Arguments of the Parties

Appellant's Arguments

  • Condition No. 3 on the consignment note excludes liability for loss or damage caused by accidents, constituting a special contract absolving the appellant.
  • The accident was caused by an act of God, thus the appellant is not liable for damages.
  • The lorry did not belong to the appellant; hence, the appellant is not a common carrier and cannot be held liable under the Carriers Act.

Respondents' Arguments

  • The accident was due to negligence of the lorry driver and not an act of God.
  • The appellant admitted entrustment of goods and is liable as a common carrier.
  • The condition excluding liability was not a special contract signed by the owner or authorized agent, thus not enforceable.
  • The claim settled by the insurance company does not absolve the appellant of liability.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
United India Insurance Co. Ltd. v. Associate Corporation Ltd., 1987 (1) KLT Short Notes 46 Printed conditions on consignment notes do not constitute special contracts without meeting of minds and specific agreement. The court held that the printed exclusion clause on the consignment note did not amount to a special contract absolving the appellant.
R.R.N Ramalinga Nadar v. V. Narayana Reddiar, A.I.R 1971 Ker. 197 Definition and scope of "act of God" excludes accidents involving human agency; carrier liable unless loss caused exclusively by natural forces. The court rejected the defense of act of God, holding that the accident was not caused purely by natural forces and involved human agency.
General Traders Ltd. v. Pierce Leslie (India) Ltd., A.I.R 1987 Kerala 62 Act of God defense requires extraordinary natural events beyond reasonable foresight and precaution. The court held that loss due to ordinary weather deterioration was not an act of God and carrier liability was not excluded.
Kerala Transport Co. v. Kunnath Textile, 1983 KLT 480 Carrier’s absolute liability subject only to special contract or act of God; act of God excludes only natural causes without human intervention. The court reaffirmed that liability is strict except for special contract or act of God, and rejected the act of God plea raised by the appellant.
Forward v. Pittard (cited in Nugent v. Smith, 1876-1 CPD 423) Distinction between acts of God and inevitable accidents caused wholly or partly by human agency; only natural force-caused events qualify as acts of God. The court applied this principle to distinguish the accident as not an act of God since human agency was involved.

Court's Reasoning and Analysis

The court first examined the appellant's reliance on the exclusion clause (Condition No. 3) on the consignment note, holding that under Section 6 of the Carriers Act, a common carrier’s liability cannot be limited by any public notice unless there is a special contract signed by the owner or authorized agent. Since no such special contract existed, the clause was ineffective to absolve the appellant.

Next, the court analyzed the act of God defense. Section 9 of the Carriers Act places the burden on the carrier to prove that loss was due to an act of God. The court found no evidence supporting this claim. The accident involved human agency, including a collision with another vehicle, and lacked proof that reasonable care was exercised to prevent the accident.

The court further elaborated on the legal definition of "act of God," citing authoritative precedents and legal treatises, emphasizing that only extraordinary natural events without human intervention qualify. The accident here did not meet this standard.

Finally, the court addressed the appellant’s contention that it was not a common carrier because it did not own the lorry. The court referred to Section 2 of the Carriers Act, which defines a common carrier by function rather than ownership. The appellant's own consignment note identified it as a common carrier, and the court rejected this argument.

Holding and Implications

The appeal was dismissed with costs. The court held that the appellant is liable for damages arising from the loss of goods caused by the accident. The exclusion clause was not enforceable due to lack of a special contract, the act of God defense failed for want of evidence, and the appellant qualifies as a common carrier notwithstanding non-ownership of the lorry.

The direct effect is that the appellant must pay damages to the respondents as decreed by the lower court. No new precedent was established beyond reaffirming established principles regarding common carrier liability and the act of God defense under the Carriers Act.

    Orient Road Lines v. M.B Mohammed Hassan Sahib & Co. & Others

    Shamsuddin, J.:— The defendant in O.S No., 6 of 1979 on the files of the Court of Additional Subordinate Judge, Cochin is the appellant.

    2. The appellant was entrusted with a consignment of 530 tins of Torch Branch Coconut Oil each tin weighing 15.900 kgs. to be delivered to the 2nd respondent at Bombay. As per the goods consignment note dated 7-6-1977, evidenced by Ext. A2 the value of the consignment was Rs. 93,000/-. The lorry in which the consignment was transported was involved in an accident. According to the respondents, the accident took place as a result of the negligence and carelessness of the driver of the lorry. The accident took place on 8-6-1977. A crime was registered at the Payyannur Police Station as Crime No. 121/77 in respect of the accident. The 1st respondent went to the scene of accident. The damages were got assessed through an independent Surveyor and Ext. A1 dated 11-6-1977 is the report of the, Surveyor. The loss was calculated at Rs. 26,910/-. On 29-6-1977 a claim was preferred by the 1st respondent with the appellant. To this, the appellant sent a reply stating that the accident occurred as a result of act of God and directing the 1st respondent to prefer the claim with the 3rd respondent, the Insurance Company. Thereafter, the third respondent Insurance Company settled the claim for Rs. 27,540/- and addressed the appellant to pay the amount since it had settled the claim with the 2nd respondent. The appellant repudiated the claim alleging that the goods were carried at ‘Owner's risk’. It is in these circumstances that the above suit was filed. In the written statement, the appellant contended that the suit is not maintainable since the damage to the consignment w?s occasioned in an accident which is an act of God and therefore the appellant is not liable to pay the damages. The entrustment of the consignment with the appellant was admitted by the appellant. It was further contended that the appellant was only an agent for transport of goods engaging various lorries owned by different people. It was also contended that the claim was settled by the 3rd respondent and the 3rd respondent has no cause of action to prefer the suit.

    3. In support of the respondent's case, P.Ws 1 to 3 were examined and Exts. A1 to A9 were marked. On behalf of the appellant, D.W 1 was examined.

    4. After consideration of the oral and documentary evidence, the lower court held that the respondents have not established that the accident took place as a result of an act of God. The lower court also rejected the plea of the appellant that the goods were transported at ‘owner's risk’ and passed a decree as prayed for with costs and future interest at the rate of 6% per annum till the date of recovery.

    5. The learned counsel for the appellant raised three contentions in the appeal: (1) Condition No. 3 on the reverse of Ext. A2 consignment note to the effect that the Company shall not he liable for any loss or damage due to pilferage, theft, weather, conditions, strikes, riots, disturbances, fire explosion or accident is a special contract and since the damage was caused as a result of accident the appellant is not liable to pay any damage; (2) Since the accident took place as a result of an act of God, the appellant is not liable to pay damages for the loss; and (3) the lorry in which goods were transported did not belong to appellant and therefore in is not a common carrier and no liability is fastened on him under the Carriers Act.

    6. Learned counsel heavily relied on condition No. 3 on the reverse of Ext. A1 consignment note and contended that this condition absolved the appellant of any liability to pay damages caused in an accident. To appreciate the tenability of this contention, it is relevant to notice the provisions in Section 6 of the Carriers Act, Section 6 of the Act reads as follows:

    “6. 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 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 wars 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.”

    7. It is clear from this provision that in the absence of a Special contract, signed by the owner of the property, or by some person duly authorised, by such owner limiting the liability a common carrier cannot escape the liability. Admittedly, neither the owner of the property nor any agent duly authorised by him had entered into any special contract signed by the owner or by some person duly authorised in that behalf by such owner, limiting the liability. In the circumstances. Condition No. 3 contained on the reverse of Ext. A2 will not be of any help to the appellant.

    8. In United India Insurance Co. Ltd. v. Associate Corporation Ltd. (1987 (1) KLT Short Notes 46), a Division Bench of this court had occasion to consider whether printing of words ‘subject to Bombay jurisdiction alone’ in way bill will amount to a special contract. The court held, apart from the existence of these printed words, respondent has no case that there was a meeting of minds between the consignor and the carrier and there was a specific agreement in that behalf. In those circumstances, the Division Bench refused to treat the printed words as a special contract conferring exclusive jurisdiction to Bombay Court. Here also, apart from condition No. 3 printed on the reverse of consignment note, there is nothing to show that there was a meeting of mind between the parties and resultant agreement absolving of the carrier of all liability for the loss of goods entrusted to the carrier.

    9. The next contention raised by the counsel for the appellant is that the accident occured as a result of act of God and therefore the appellant is not liable to compensate for the loss. Section 9 of the Carriers Act provides that in any suit brought against a common carrier for the loss, damage or non-delivery of 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. Therefore, the burden is on the appellant to prove that the accident occurred as a result of an act of God. There is absolutely no evidence in the case to substantiate the case of the appellant that the accident took place as a result of act of God and not as a result of negligence or misconduct in the carriage of goods or to show that reasonable care, skill and diligence had been used and despite that accident took place. There is no factual foundation to support the contention of the appellant on this aspect. The only circumstance pointed out is that Ext. A1 report shows that another bus came in the opposite direction at a high speed and hit against the lorry. P.W 2 who prepared Ext. A1 did not question the drivers of the lorry or the bus. The report also does not indicate whether the bus came along the wrong side. D.W 1 had no direct information about these facts. Further these circumstances are insufficient to treat the accident as being an act of God.

    10. 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 not caused by negligence or want of care on his part. The only exception recognised by law is acts of God and of State's enemies.

    11. In R.R.N Ramalinga Nadar… v. V. Narayana Reddiar…. (A.I.R 1971 Ker. 197.), P. Subramonian Poti, J. (as he then was) had to consider the question whether the carrier is liable for the loss and damage caused on the way by unruly mob. Rejecting the plea that it is an act of God, the Court observed as follows:—

    “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. Cockburn C.J, in the leading case in Nugent v. Smith, (1876-1 CPD 423) said.

    “It is at once obvious, as was pointed out by Lord Mansfield in Forward v. Pittard, that all causes of inevitable accident “fortuitus” 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 halve their origin either in the whole or in part in the agency of man, whether in acts of commission or omission, of nonfeasance or of misfeasance, or in any other cause independent of the agency of natural forces. It is obvious that it would be altogther 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.”

    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 add 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”.

    I see nothing in the decision in Chidambara krishna Iyer Natarja Iyer v. South Indian Rly. Co. (21 Tra V. LJ. I) to which my attention has been drawn by learned counsel for the defendant to warrant the view that even when the accidents are purely the result of acts of human agency, it should be taken to be acts of God”.

    12. In General Traders Ltd. v. Pierce Leslie (India) Ltd. (A.I.R 1987 Kerala 62) a Full Bench of this Court had occasion to consider the plea of defence of act of God, in a suit for damages due to shortage of property carried by ship. A defence of act of God was raised on the ground that goods had to be jettisoned due to sudden deterioration of weather. It was not made out that the tempest or gale in the sea was so heavy or so unprecedented that the sailors could not have taken precautionary measures with reasonable foresight and in those circumstances the court held that it was not established that loss was caused as a result of ‘act of God’.

    13. In Kerala Transport Co.… v. Kunnath Textile…. (1983 KLT 480), a Division Bench of this Court again considered the extent of liability of the carrier in respect of goods lost. The Division Bench quoted with approval the ruling in AIR 1971 Kerala 197 and extensively quoted paragraphs 11 to 15 of that judgment. The court finally held that the absolute liability of the carrier is subject to only 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. It was further held that act of God does not take in any and every inevitable accident. 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. In this view of the matter, the Division Bench rejected the plea of “act of God” raised by the defendant.

    14. Foregoing discussion would show that there is no merit in the contention of the appellant that the accident is the result of act of God and that therefore the appellant is not liable for damages. Lastly, the learned counsel for the appellant argued that the appellant is not the owner of the lorry in which the goods were carried and is not a common carrier. Section 2 of the Carriers Act defines common carrier as a person other than the Government, engaged in the business of transporting for hire property from place to place, by land or inland navigation, for all persons indiscriminately. In view of this definition, it is not possible to accept the contention that the appellant was not carrier even assuming that the lorry used by the appellant for transporting the goods did not belong to him. Further Ext. A2 consignment note clearly indicates that the appellant is a common carrier and there is no substance in this contention of the appellant also.

    15. There is no merit in the appeal and it is accordingly dismissed with costs.

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    Orient Road Lines v. M.B Mohammed Hassan Sahib & Co. & Others
    (Jun 7, 1988)