Rivers Steam Navigation Co. Ltd. and Another vs State of Assam and Another

G. Mehrotra, C.J.—A consignment containing 48 maunds Suji and 548 maunds of Atta was booked at Jagannath Ghat on the 20th June, 1948 to Dibrugarh by Messrs. Rivers Steam Navigation Co. Ltd. Defendant No. 1 and Messrs. India General Navigation and Railway Co. Ltd. Defendant No. 2 in their vessels. The consignor was M/s. Shaw Wallace and Co. Ltd. Defendant No. 3 and the consignee was the Deputy Commissioner, Lakhimpur, agent of the Plaintiff the State of Assam. The consignment was indented by the State of Assam for distribution as food-stuff and was valued at Rupees 8,687/8/- according to the bill submitted by Defendant No. 3. On receipt of the consignment the Deputy Commissioner asked Messrs. Saligram Rai Chunilal Bahadur and Company, Sub-divisional Agent of Dibrugarh to take the delivery of the consignment on behalf of the State of Assam.

Messrs. Saligram Rai Chunilal Bahadur and Company suspecting that the consignment had been damaged, informed the Superintendent of Supply, Dibrugarh by letter dated the 21st September 1948 to arrange for examination of the consigned goods. The Urban Health Officer examined the goods on the 23rd September 1948 and the goods were found to be unfit for human consumption. The District Medical Officer, Health, Lakhimpur by his letter dated the 30th September 1948 confirmed the findings of the Urban Health Officer. The Deputy Commissioner refused to take delivery of the same and a claim for Rs. 8,687/8/- was made to the Joint Claims Superintendent of both Defendant 1 and Defendants 2 on the 1st October 1948. The Joint Agent of Defendants 1 and 2 got the goods sold at Dibrugarh Ghat by auction on the 30th November 1948 and realised Rs. 1,100/- as sale proceeds and adjusted the amount towards the demurrage. On the 8th March 1949, the Defendants 1 and 2 were again asked to pay up the claim. But they refused to make the payment. On these facts the State of Assam brought the present suit, out of which this appeal arises for recovery of a sum of Rs. 8,687/8/- against the Defendants 1 and 2 and alternatively for a decree for the said amount against the Defendant No. 3.

The suit was resisted by Defendants 1 and 2 on various questions of law and facts.

The trial court decreed the suit against Defendants Nos. 1 and 2 but dismissed it against Defendant No. 3. The present appeal has been filed by Defendants 1 and 2.

Mainly the Plaintiff''s claim is cased on the fact that there was unusual delay in carrying the said consignment to its destination and further that there was negligence and carelessness on the part of Defendants 1 and 2 in not taking care of the consignment during transit, resulting in the consignment being damaged. The Appellants contend that the consignment was booked at Jagannath Ghat on 20-06-1948 reached Dibrugarh on 13-09-1948 and was off loaded to the Receiving flat on 16-09-1948.

On 17-09-1948 arrival notice was given Messrs. Saligram Rai Chunilal was asked by the deputy Commissioner to take delivery of the consignment for and on behalf of the Plaintiff. It was only on 21-09-1948 that Messrs. Saligram Rai Chunilal wrote a letter to the Superintendent of Supply informing the condition of the consignment. The Urban Health Officer found the commodities unfit for human consumption. His opinion was confirmed by the District Medical Officer on the 30th September 1948. Thereafter on the 1st October 1948 the Deputy Commissioner informed the Joint Agent that the goods could not be taken delivery of and thereafter the goods were auctioned. It is urged by the counsel for the Appellants that the Plaintiff''s agent could not refuse to take delivery of the goods even if they were in a damaged condition on receipt of the notice of its arrival. They should have taken delivery of the goods and sold the goods in the open market and then alone they could have claimed damages for damage to the goods against the carriers. Without taking delivery of the goods it will not be open to the Plaintiff to claim any damages on the basis of the total loss to them of the goods.

On the 18th December 1947 an agreement was entered into between the Governor of Assam and M/s. Shaw Wallace and Company Ltd. under which M/s. Shaw Wallace and Company Ltd. were authorised to purchase on behalf of the Government sugar, wheat and wheat products and such other food-staffs as may from time to time be mutually agreed upon and despatch and deliver the same to destinations in accordance with the direction of the Government. It was in pursuance of this agreement that Shaw Wallace and Company purchased for the Government of Assam the goods sent under the consignment in question and despatched them on the 20th June 1948 at Jagannath Ghat, Calcutta for Dibrugarh Ghat. The goods arrived at Dibrugarh on the 13th September 1948 and were unloaded to the receiving flat on the 16th September 1948. It is not disputed that the Deputy Commissioner was informed of the arrival of the consignment on the 17th September 1948 and he asked M/s. Saligram Rai Chunilal to take delivery of the consignment for and on behalf of the Plaintiff.

On the 21st September 1948 M/s. Saligram Rai Chunilal Bahadur and Company (hereinafter called ''the Sub Agent'') wrote a letter to the Superintendent of Supply, Dibrugarh in which they stated that they had examined the consignment which was despatched over three month ago and the whole consignment was likely to be unfit for human consumption. It was apprehended that the Sooji and Atta will not be accepted by the retailers and before they arranged for taking delivery of the goods it must be clearly arranged that in the event of the stock remaining unsold necessary refund should be made to them. They asked for the Inspector and Town Health Officer to examine the stuff and further insisted that the certificate of the Health Officer should be obtained before accepting the consignment.

In this letter it is also mentioned that the consignment had been in transit for over three months. The conditions of the bags indicated heavy shortage. This letter is marked Ext. 10. On this letter the Urban Health Officer, Dibrugarh examined the consignment on the 23rd September 1948. The report is marked Ext. 2, which is as follows:

I accompanied by S.S.I. went to steamerghat and examined at random 584 maunds of Atta and 48 maunds of Suji which I find that the stuff is with abnormal smell and with acid taste. I therefore declare the stuff to be unfit for human consumption. This is for your information and necessary action.

On the 30th September 1948 the District Medical Officer of Health, Lakhimpur gave a certificate which is marked Ext. 3. In his certificate the District Medical Officer states that he found the stuff deteriorated with abnormal smell and acid taste. He therefore confirmed the declaration on the Urban Health Officer and stated that the stuff was unfit for human consumption.

On this the Deputy Commissioner refused to take delivery of the goods and wrote a letter to the Joint Agent of both the Companies on the 1st October 1948. This letter is marked Ext. 1. It is stated therein as follows:

The goods under reference have been declared unfit for human consumption by the Urban Health Officer, Dibrugarh. I have to inform you that the goods cannot be taken delivery of as the responsibility for deterioration rests with your company. The consignment reached destination after three months.

The claim for the amount under reference is therefore, hereby preferred.

On the 8th March 1949 a letter was sent by the Superintendent of Supply to the Superintendent of Joint Claims I.G.N. and R.S.N. Co. Ltd. in which the Superintendent of Joint Claims was informed that the Deputy Commissioner has already preferred the claim for the consignment in question. Before this letter was sent, the Joint Agent of the two companies had sent a letter to the Deputy Commissioner on 3rd November 1948 in reply to his claim dated the 1st October 1948 and by this letter they repudiated liability. In this letter it was clearly stated that the Company was not responsible for the contents or quality of the bags nor did they undertake any responsibility to deliver goods within any stipulated time. They also protested against the refusal to take delivery on account of any shortage or damage and stated that if goods are not taken delivery of, such goods will remain on the company''s premises at the entire risk and expense of the owner.

Thereafter the goods were sold on the 30th November 1948 for Rs. 1,100. Before this a notice was given by the Joint Agent of the two companies that the goods were going to be sold as a cattle fodder on the 22nd November 1948. On the 3rd December 1948 the Joint Agent sent a letter to the Deputy Commissioner informing him of the sale and asking him to send the permit. On the 30th May 1949 the Superintendent of Supply, Dibrugarh wrote a letter to the joint Agent which reads as follows:

Please report if the reported sale proceeds Rs. 1,100 of the wheat product under reference have been credited into the treasury under the head 85A. Capital Outlay etc. or if not whether you propose to do the same without delay. An early compliance is solicited.

This letter is marked Ext. K. In reply to this letter the Joint Agent wrote to the Superintendent of Supply, Dibrugarh on the 1st June 1949 stating that the sale proceeds of Rs. 1,100 had been credited to the Company against the dues for Rs. 2,170-10-0 on account of demurrage charges etc. accrued and the balance amount of Rs. 1,070-10-0 was still due. This letter is marked Ext. L.

Two points have been submitted by the counsel for the Appellants. Firstly it is urged by him that even if the consignment was damaged, the consignee could not refuse to take delivery. He should have taken delivery, sold the goods in the open market and thus minimised the damages. The Plaintiff could not claim damages on the ground that there has been total loss of the goods. Secondly it is contended that no negligence on the part of the carrier during the course of the transit has been proved in the present case and in the absence of any special contract as to the time within which the consignment is to reach its destination, mere delay will not give the Plaintiff any right to sue for damages.

It is convenient to refer to some of the provisions of the Carriers Act. Section 6 reads as follows

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 person 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 authorized in that behalf by such owner, limit his liability in respect of the same.

Section 8 reads as follows:

Notwithstanding anything hereinbefore contained, every common carrier shall be liable to the owner for loss of or damage to any property delivered to such carrier to be carried where such loss or damage shall have arisen from the criminal act of 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 1962 Assam D.F./8(1) 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.

Section 9 reads as follows:

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.

The trial court held that the consignment did not consist of perishable goods. There was an obligation on the carrier to carry the goods safely and in the absence of any special contract the goods must be delivered within a reasonable time. In the present case the goods were not delivered within a reasonable time. The negligence is not to be proved by the Plaintiff. Defendants have not shown in the present case how they dealt with the goods during the period during which the goods were under their custody. He has thus decreed the suit in its entirety against the carriers. P.W.1 Badrul Haque in examination has not said anything about the normal time which a consignment is likely to take. Subodh Kumar Sarkar, a witness for the Defendant states that he is the Head Clerk of the Shaw Wallace and Company Ltd. He has stated in the cross examination that it takes three to four weeks for the goods to reach the destination and the commodities are likely to deteriorate if they take two or three months to reach their destination. The goods were despatched in a good condition. There is no other evidence to show what would be the normal time taken for the consignment to reach Dibrugarh.

The liability of a common carrier is not that of a bailee under Sections 151 and 152 of the Contract Act but is that of an insurer. 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 from the fault of the consignor, or inherent vice in the goods themselves. Section 6 of the Carriers Act, 1865 only empowers a common carrier to limit his liability by special contract. It does not in any way affect the common law liability of a common carrier. Section 8 provides that notwithstanding the special contract, the common carrier shall be liable to the owner for loss or damage as arises from the criminal act of the earner or from the negligence of the carrier or any of his agents or servants. In spite of a special contract limiting the liability of the common carrier Section 8 makes it liable for its criminal act and negligence. Section 9 is a rule of evidence and lays down that in a suit against a common carrier for the loss or damage or nondelivery of goods, the Plaintiff need not prove that such loss, damage or nondelivery was owing to the negligence or criminal act of the carrier. Section 9 thus casts the burden on the common carrier to prove that the loss was not due to any criminal act or negligence of the carrier. As I have indicated above, the liability of the common carrier is for the safety of the goods entrusted to him.

In the case of River Steam Navigation Co. Ltd. v. Messrs. Milapchand Hiralal Firm AIR 1958 gh 115 it was held by a bench of this Court that:

In a suit for damages caused to the Plaintiff''s goods entrusted for carriage by the Defendant''s ship, it is for the Defendant to plead and prove perils of sea. If he makes out a prima facie case, it can be rebutted by proving negligence. Each case will however, depend upon its own facts and circumstances".

It was further observed in this case that the burden lies upon the carrier to establish the absence of negligence. In the absence of any proof by the carrier, it will be liable to make good the lose.

Reliance was placed in this case on the earlier decision this court in the case of River Steam Navigation. Ltd. v. Syam Sunder Tea Co. Ltd. AIR 1955 Assam 65. This case laid down that Section 6 of the Carriers Act, 1865 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 Section 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. In such a case the common carrier shall be liable to the owner for the loss or damage, and Section 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. Even if the carrier took as much care of the goods as a man of ordinary prudence would, under similar circumstances, they would be liable if the loss was not occasioned by any act of God or the King''s enemies, which, in case of Republic State, would mean the enemies of the State. The liability of the earner is not that of a mere bailee as defined by Sections 151 and 152 of the Contract Act.

The contention of the Appellants therefore is that in the present case the inherent nature of the goods was such that they were liable to perish and be destroyed in the course of transit. The Plaintiff thus could not get any damages. The following statement of law by Story was said by Willes, J. in the case of Blower v. Great Western Rly. Co.(1872) 7 C.P. 655 at page 663:

Although the rule is thus laid down in general terms at the common law that the carrier is responsible for all losses not occasioned by the Act of God, or of the King''s enemies, yet it is to be understood in all cases that the rule does not cover any losses, not within the exception, which arise from the Ordinary wear and tear and chafing of the goods in the course of their transportation, or from their ordinary loss, deterioration in quantity or quality, in the course of the voyage, or from their inherent natural infirmity and tendency to damage or which arise from the personal neglect or wrong or misconduct of the owner or shipper thereof. Thus, for example, the carrier is not liable for any loss or damage from the ordinary decay or deterioration of oranges or other fruits in the course of the voyage from their inherent infirmity or nature, or from the ordinary diminution or evaporation of liquids, or the ordinary leakage from the cases in which the liquors are put, in the course of the voyage, or from the spontaneous combustion of goods, or from their tendency to effervescence or acidity, or from their not being properly put up and packed by the owner or shipper; for the currier''s implied obligations do not extend to such cases.

It was contended that the goods if at all deteriorated due to its ''inherent vice''. From the very nature of the goods they were liable to be damaged and deteriorated during the course of the transit and as such there was no liability of the common carrier in the absence of any evidence to the effect that they failed to take proper care of the goods. It cannot be said that from the very nature of the goods, they were perishable. If the goods had reached the destination within a reasonable time, they would not have deteriorated. I have already referred to the evidence of Subodh Kumar Sarkar. He has said that if the consignment takes two to three months to reach its destination the commodities are likely to deteriorate. No attempt has been made on the part of the Appellants to show the reason for the delay in transit. It can thus be safely assumed that the delay was not due to any accident or any other peril of navigation. The consignment was delayed in the normal course. There was no time mentioned in the contract within which the consignment was to reach Dibrugarh. But as disclosed in the evidence normally the consignment would not take two to three months to reach Dibrugarh from Jagannath Ghat and the deterioration in the goods was undoubtedly caused by the delay. The Plaintiff thus will be entitled to damages on account of the deterioration.

The next question is about the quantum of damages to which the Plaintiff will be entitled under the circumstances. The case of the Appellants is that the Plaintiff was not entitled to refuse delivery of the goods. The proper course which the Plaintiff should have adopted was to take delivery of the goods and then sell the goods in the open market and claim the difference between the price of the goods which the consignee had to pay and the price which the goods fetched in the open market. The Plaintiff could not refuse to take delivery of the goods. It is also contended that the Plaintiff was informed of the arrival of the goods on 17-09-1948 and it is difficult to say how much loss has been caused to the goods on account of the delay in transit and how much during the period from the arrival of the goods at Dibrugarh and the sale of the goods as the Plaintiff failed to take delivery. In the absence of any evidence to assess the value of the loss caused by the delay in transit no decree for the damages could be awarded.

On the 17th September 1948 the Deputy Commissioner was informed of the arrival of the consignment and M/s. Saligram Rai Chunilal were asked to take delivery of the consignment. On the 21st September 1948 M/s. Saligram Rai Chunilal sent a letter to the Superintendent of Supply, Dibrugarh. In that letter it is clearly stated that on examination they had found the consignment to be unfit for human consumption and they asked for the examination or the stuff. This letter must have been written by then after they had personally seen the consignment. On the 23rd September 1948 the stuff was examined by the Urban Health Officer. It cannot therefore be said that the goods deteriorated during the period they remained undelivered to the Plaintiff. It is clear from the evidence on the record that the goods were brought to Dibrugarh for the purpose of being sold to the consumers as a food stuff. From the notice is sued by the Company for the auction of the goods it will be evident that the goods were to be sold as cattle-folder and not as food stuff for human consumption. The goods thus when they arrived, were unfit for human consumption. They could not be used for the purpose for which they were sent and thus it cannot be said that the Company carried out its obligation in delivering the goods which were entrusted to it for transit in a proper condition.

The goods were sold for Rs. 1,100/-. The Plaintiff thus is not entitled to get a decree for the full amount of Rs. 8,687/8/-. The price of the goods sold will have to be deducted from the amount of the claim. When the Steamer Company adjusted the sale price towards the payment of demurrage, it did so as the money belonging to the Plaintiff and not as their own money. This amount was credited towards the payment of the amount of demurrage due from the Plaintiff to the Defendant Company. The Plaintiff thus got Rs. 1,100/- worth goods out of the goods worth Rs. 8,687-8-0. The Plaintiff is thus entitled to a decree for Rs. 7,587/8/-.

A point is taken that no proper notice was served on the Defendants. The Deputy Commissioner sent a claim to Defendants 1 and 2 and it is proved by the evidence of Devendranath Guha, an employee of the Defendant company that the said notice was received on the 1st October 1948. A copy of this letter was also sent by the Deputy Commissioner to the Superintendent of Joint Claim Department of Defendants 1 and 2. Thus there was a valid notice u/s 10 of the Carriers Act.

Reliance is placed on Clause 17 of the special contract which provides as follows:

Unless there is any agreement to the contrary in writing no claim of any kind whatsoever in respect of this contract shall be valid unless in writing and delivered at the offices of the Company, in Calcutta within six months from the date of any default loss or damage in respect of which such claim arises. No person shall be entitled to a refund of any overcharge in respect to this contract or to compensation for loss, damage or injury to the goods, unless his claim to the refund or compensation has been preferred in writing by him or on his behalf to the Company in Calcutta within six months from the date of delivery of the goods to the Company.

It is contended that unless the claim was preferred in writing to the Company in Calcutta, no claim for compensation for loss or damage was entertainable. The Joint Agent was informed of the claim. There was thus compliance with the provisions of the term of the contract and there as no force in the contention that the suit should fail for want of proper notice.

In the result therefore, the appeal is allowed in so far that the suit of the Plaintiff is decreed for Rs. 7,587/8/- instead of Rs. 8,687/8/- . In other respects the appeal fails. Parties will receive and pay costs in proportion to their failure and success in this appeal.

Dutta, J.

I agree.