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Indian Airlines Corporation Vs. Jothaji Maniram - Court Judgment

LegalCrystal Citation
SubjectCommercial;Contract
CourtChennai High Court
Decided On
Case NumberCivil Revn. Petn. No. 974 of 1957
Judge
Reported inAIR1959Mad285
ActsPresidency Small Cause Courts Act, 1882 - Sections 38; Railways Act, 1890 - Sections 72; Evidence Act, 1872 - Sections 101 to 104; Carriers Act, 1865 - Sections 2 and 8; Carriage by Air Act, 1934 - Sections 4; Indian Contract Act, 1872 - Sections 151 and 152
AppellantIndian Airlines Corporation
RespondentJothaji Maniram
Appellant AdvocateS. Govind Swaminathan, Adv.
Respondent AdvocateP.P. Selvarajan and ;J.W.D. Jesudasan, Advs.
Disposition Revision allowed
Cases ReferredBritish India Steam Navigation Co. Ltd. v. Sokalal Ram Sait
Excerpt:
.....misplaced during transit - respondent claimed damage for goods lost in transit - petitioner not common carrier - common carrier can fix limit of liability in case of damage - loss cannot be attributed to breach of any conditions of contract of carriage - contract limiting liability of carrier valid and enforceable. - - it is well known that, under general law a common carrier is liable practically as an insurer of the goods. this distinction between a case where a party was simply given a consignment note wherein the conditions of the carriage were endorsed and a case where he signed the consignment note agreeing to the conations, has been referred to in shawcross and beaumont on air law (2nd edn. the carrier, however, failed to deliver the box at the destination, as it had..........respondent so as to make them binding on him and after going elaborately into the liability of a common carrier under the english law for negligence, held that the petitioner would be liable under section 8 of the carriers act. on the further finding that there was negli- gence on the part of the airlines corporation, they held that the respondent was entitled to a decree as prayed for and passed one accordingly. the petitioner has filed this revision petition against the decree so passed. 2. two questions were argued before me in the revision petition by the learned advocate appearing on either side. the first was whether the terms and conditions limiting liability of the carrier were brought to the knowledge of the consignor, so that he can be held to be bound by them. the second was.....
Judgment:

Ramachandra Iyer, J.

1. The respondent a merchant at Madras sent on 9-3-1955 a parcel of pen nibs valued at Rs. 1600 to Calcutta through the Indian Airlines Corporation, the petitioner. Before accepting the goods for carriage, the petitioner issued a consignment note, Ex. P. 1. It sets out the terms andconditions of the carriage. In the front portion of Ex. P. 1 the agent of the respondent, who despatched the goods, signed a statement stating that he was aware of and was accepting the general conditions of carnage and special conditions, more particularly referred to or set out on the reverse of that document. One of the special conditions, which is legibly printed on the reverse of the consignment note was that the carrier, namely, the petitioner,

'shall he under no liability whatsoever to the consignor or to the consignee etc. for loss, damage, detention or delay to the goods arising out of the carriage ...... whether or not caused or occasioned by the act, neglect, negligence or default of the carrier or of pilots, flying operational or other staff or employees or agents of the carrier or otherwise howsoever. . . .

The said exemption from liability and indemnities in favour of the earner extend to the carriage of surface transport of the goods to or from the airport at a place of embarkation, destination etc. ... .The custody, loading or unloading of the goods into and from aircraft or surface transport and to all oilier services and operations of the carrier whatsoever.

It was, however, stipulated that in so far as any liability may be imposed on the carrier by law, such liability for loss or damage to the goods etc. would be limited and agreed to be in the aggregate the actual value thereof or the declared value thereof or Rs. 300 whichever is the lowest, notwithstanding that any loss, damage or delay may have been caused or occasioned by the act, neglect, negligence or default on the part of the carrier.'

It appears from the evidence that the goods were actually despatched from Madras to Calcutta by the night air mail service on 9-3-1958. But the goods were not delivered to the consignee. The enquiry made into the matter by the petitioner, the Indian Air Lines Corporation, did not enable them to trace the missing parcel. The respondent, thereupon, filed the suit out of which the present revision petition arises in the court of Small Causes, Madras, to recover a sum of Rs. 1858 together with costs, the said sum representing the value of the goods despatched and damage for the loss.

The petitioner contested the claim. The written plea filed on its behalf merely stated that the plaintiff had no liability under the terms and conditions of the contract. Evidence was let in on behalf of the parties, and the learned Chief Judge of the Court of Small Causes, who tried the case, held that the parties were bound by the terms and conditions of the consignment note, and that the respondent was entitled to a decree only for Rs. 300, in accordance with the conditions of the contract contained therein.

Aggrieved by this, the respondent filed an application for a new trial before the Full Bench of the Court of Small Causes. The Judges, constituting a Full Bench held that the terms and conditions printed on the reverse of Ex. P. 1 was not brought to the knowledge of the respondent so as to make them binding on him and after going elaborately into the liability of a common carrier under the English law for negligence, held that the petitioner would be liable under Section 8 of the Carriers Act.

On the further finding that there was negli- gence on the part of the Airlines Corporation, they held that the respondent was entitled to a decree as prayed for and passed one accordingly. The petitioner has filed this revision petition against the decree so passed.

2. Two questions were argued before me in the revision petition by the learned Advocate appearing on either side. The first was whether the terms and conditions limiting liability of the carrier were brought to the knowledge of the consignor, so that he can be held to be bound by them. The second was whether the carrier was liable to pay the entire damage claimed, notwithstanding the limitation of the liability contained in the consignment note.

On the first question, the learned Judges who heard the new trial application held that what the petitioner did was not reasonably sufficient to make the contents of Ex. P. 1 known to the consignor. Prima facie the question involves a finding of fact, which the Judges constituting the Full Bench on the terms of Section 38 of the Madras Presidency Small Cause Courts Act are not competent to give. But even apart from that question, I am of opinion that the conclusion arrived at by the learned Judges is incorrect.

It is well known that, under general law a common carrier is liable practically as an insurer of the goods. That liability can be regulated by a contract entered into between the parties. It isi comparatively rare to find any common carrier to convey goods under such liability, as it is invariably the practice for common carriers to enter into a contract, defining and limiting their liability. That practice is so universal that in the normal course of things one would expect any consignor of goods to look into such conditions which arc found in consignment notes.

To say that in every case the carrier should prove that he drew the attention of the consignor to the clause in the consignment note regarding limitation of its liability is extending the rule beyond its limits. It is, however, unnecessary to pursue this point, a? I am of opinion that under the law where a consignor or his agent has signed a declaration and expressly agreed to all the conditions in the consignment note, the burden would be upon| him to show that his signature was secured by fraud or misrepresentation or that he had no notice of the conditions. As stated already, the consignment note, which contained on its reverse the terms and conditions of the carriage of goods, was signed by the agent of the respondent stating that he expressly agreed to the special conditions contained in that document.

In Luddit v. Ginger Coote Airways, 1947 AC 233, a similar question arose. In that case an action was laid for damages for injuries caused to the passengers by the negligence of the carrier's servants in an aircraft. In the ticket issued to the passengers conditions limiting the liability of the carrier were printed. The question arose whether the passenger would be bound by ihe limitation of liability of the carrier contained in the tickets.

The Privy Council proceeded on the footing that as the passengers had signed the tickets it was for them to show that they had not sufficient notice of the conditions.

3. A contract of the carriage is generally accompanied by a ticket or consignment note embodying the terms and conditions on which the carrier is willing to convey the passengers or the goods. A passenger, accepting the document, very often docs not care to read the conditions printed on the ticket or consignment note which are often found in small print. In such a case where a party denies that he was aware of the conditions of the contract of carriage, it would be for the carrier to establish that the party knew that the document contained the conditions or that he did his duty of calling his attention to it.

But in a case where the signature of a party is taken to the contract itself, the matter should stand on a different footing. The party who expressly contracts stating that he is aware of the terms and conditions, should not be allowed to say that he was not aware of the terms and conditions unless he proved that he was not so aware. This distinction between a case where a party was simply given a consignment note wherein the conditions of the carriage were endorsed and a case where he signed the consignment note agreeing to the conations, has been referred to in Shawcross and Beaumont on Air Law (2nd Edn.) In Art. 350 the learned authors say this :

'But when the document relied on by the carrier has been signed by the other party (as in the recent case of 1947 AC 233, in which all liability was excluded) he is (in the absence of fraud or misrepresentation) bound by its terms and conditions whether he knew, or had notice of them, or not.'

In the present case there is no evidence on behalf of the respondent to show that there was any fraud or misrepresentation in securing the signature of his agent to the consignment note. There is no reason to presume that the respondent's agent did not know the terms and conditions printed on the reverse of the consignment note, or that he signed the declaration in utter ignorance of the conditions. In my opinion, the petitioner has done all that is reasonable and necessary in the circumstances to put the respondent on notice of the terms and conditions on which he was willing to carry the goods. It follows that the conditions found on the reverse of Ex. P. 1 would govern the rights of the parties.

4. The learned Judges of the Full Bench of the Court of Small Causes relied upon Section 8 of the Carriers Act (Act III of 1865) for the purpose of holding the petitioner liable for the loss or damage caused by its neglect. The Carriers Act cannot apply to the case of carriage of goods by Air, for the term 'common carrier' is defined under Section 2 of that Act

'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.' This does not include a carrier by air and its liability cannot be found on the basis of that section. But before me the learned counsel for the respondent put his case in a wider basis. He contended that the petitioner was a common carrier, and as a common carrier was liable for the loss of the goods occasioned by its negligence. The liability of a carrier of goods by air has not been completely put on a statutory basis. The convention of Warsaw which was signed on 12th October, 1929 is expressed to he a convention for the unification of certain rules relating to International carriage by air.

That established uniform rule governing the rights, duties and liabilities of carriers and their passengers and of consignors, carriers and consignees of goods by air, in the case of carriage to which the convention applied. India was one of the contracting parties to that convention, and in pursuance of the convention, the Carriage by Air Act (Act XX of 1934) was passed by the Indian Legislature. That relates only to the international carriage and cannot apply to the case of carriage of passengers or goods by air within India. Section 4 of the Act states,

'The Central Government may, by notification in the Official Gazette' apply the rules contained in the first schedule and any provision of Section 2 to such carriages by air, not being international carriage by air as defined in the first schedule, as may be specified in the notification, subject, however to puch exceptions, adaptations and modifications, it- any, as may be so specified.'

There has been no notification of the kind contemplated under Section 4, with the result that in India there are no statutory rights, duties and liabilities of carriers and their passengers and of consignors, carriers and consignees of goods in respect of non-international carriage by air. In England such notification appears to have been made in the year 1952 styled as the Carriage of Non-International Carriage, United Kingdom, Order 1952. There being thus no statute governing the rights, duties and liabilities of carriers and their passengers and of consignors, carriers and consignees of goods by air, applicable to the present case the matter has to be decided on the principles of ordinary law, that is, those contained in the Indian Contract Act and the principles of English law which have been held to be applicable to common carriers in India.

5. Before proceeding to consider the liability of the carrier under the Indian Contract Act, it is necessary to ascertain whether the petitioner is a common carrier. In Ex. P. 1 it is expressly stated when setting out the conditions of the carriage as follows :

'The carrier declares that it is not a common carrier and does not accept the obligation or liability of a common carrier.'

Then the question would arise as to what type of the carrier the petitioner is. A common carrier is a person who professes himself ready to carry goods for everybody. Any carrier which is not a common carrier is called a private carrier. Such a private carrier would where goods are entrusted to him for carriage be liable as bailee of be goods and tin's liability as would be stated hereafter could be limited or excluded by the contract between the parties.

In the case of a common carrier the liability under similar circumstances would be higher. Common carriers are considered to be in the position of insurers with regard to the goods entrusted to them of In Asian v. Imperial Airways Ltd., 38 Com Case 227, a box containing bullion was handed over to the Airways Company for carriage. The carrier, however, failed to deliver the box at the destination, as it had disappeared and could not be traced. In an action by the consignor against the carriers it was held that the carriers were not common carriers, but were only bailees for i reward and as such would have been liable only for negligence; and that even if it were that the defendants had-been negligent in relation to the custody of the box, they had protected themselves from liability by the terms of the contract. The question whether the-carrier was a common carrier or undertook the responsibility of a common carrier, was considered by Mackinnon J. The learned Judge observed at page 235,

'I see no reason why a man who carries goods by a machine that travels through the air should' not be a common carrier or assume the liabilities of a common carrier if he acts in a certain way .... and if a man who owned an aeroplane or a seaplane chose to engage in the trade of carrying goods as a regular business and to hold himself out as ready to carry for any who wished to cm-ploy him so far as he had room in his airship or aeroplane for their goods, very likely he would become a common carrier or be under the various liabilities of a common carrier.'

But the learned Judge held that the question whether the carrier was a common or private carrier had to be considered on the terms of the contract between the parties. The learned Judge when re- ferred to the conditions printed in the back of the consignment note which was in evidence in that case and came to the conclusion that the carrier was not a common carrier. In the instant case even apart from the construction of any condition in the contract which would militate against the petitioner being a common carrier, it is expressly stipulated between the parties that the petitioner is not a common carrier.

In my opinion, that would conclusively show that the petitioner cannot be made liable as a common carrier. If the petitioner is not a common carrier but only a private carrier, there is no doubt that its liability being that of a bailee, Sections 151 and 152 of the Indian Contract Act would apply.

6. Even assuming that the petitioner could be deemed to be a common carrier or held liable as such, I am of opinion that in the present case the petitioner has validly contracted by limiting the liability to Rs. 300. Under the English law there were two classes of bailees upon whom the law imposed a greater degree of liability than that' of an ordinary bailee. They were (1) common carriers and (2) inn-keepers.

These persons were held liable for safety of the goods entrusted to them in all events except the loss or injury occasioned by act of God or King's enemies or from the fault of the consignor or inherent defect in the goods. Such a liability of the carrier may however be varied or abrogated by a contract between the parties. In 1947 AC 233, the question arose with reference to the carriage of passengers.

The tickets given to the passengers exonerated the liability of the carrier for loss, damage or injury by the aeroplane operator, including those caused by negligence, default or misconduct of the carrier. Injuries were sustained by some of the passengers, and the question arose as to whether the carrier was liable. The Privy Council held that the contract embodied in the ticket containing the conditions was valid and enforceable and the claim of the injured passengers failed. In the course of their judgment, their Lordships referred to the observations of Maule, J. quoted by Atkin, J. in Great Northern Rly. Co. v. L. E. P. Transport and Depository Ltd., 1922 2 KB 742, which were as follows ;

'I deny the truth of the position that a man who is not an insurer is therefore not a common carrier. A common carrier who gives no notice limiting his responsibility is an insurer; but if he gives notice that he will contract only to a limited -extent, and with respect of articles of a given value, he ceases to be an insurer beyond that, though in all other respects he remains a common carrier.'

The result is that it would be open to a common carrier to contract himself put of liability as common carrier, or fix the limit of his liability as he has done in the present case. The learned advocate for the respondent referred me to a decision in Woolmer v. Delmer Price Ltd., (1955) 1 All ER 377. In that case the plaintiff left her fur coat with the defendants for them to store it during summer months.

A receipt which was granted to the plaintiff stated 'all goods left at customer's risk'. The defendant failed to return it on demand, and an action was brought for return of the coat or its valup, or alternatively damages for breach of contract. It was held that unless the defendants established that the loss occurred in some way not involving negligence or loss, they were liable and they could not be protected, by the 'customer's risk' clause.

In that case as the defendants had not shown as to how the loss occurred, it was held that there was a possibility of loss having occurred on breach of conditions of the contract and that, therefore, the 'customer's risk' clause would not apply. In my, opinion, the principle of that decision has no bearing on the facts of the present case. Here there is a loss on account of the negligence of the carrier in respect of which a contract has been entered into limiting the liability of the carrier to a sum of Rs. 300, and it has been found that the loss is attributable to negligence.

There is no case that the loss could be attributed to the breach of any of the conditions of the contract of carriage. The question then arises whether the respondent could be entitled to a decree on the basis of Section 151 of the Indian Contract Act. Section 151 imposes on the bailee a duty 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. The section does not say that it is subject to a contract between parties.

Prima facie, it appears to lay down irreducible minimum care required as a bailee. Sankaran Nair J. in Sheik Mahanied v. B.I.S.N. Co. Ltd., ILR 32 Mad 95, observed that a contract by a bailee to exempt himself from liability for the negligence of himself was not valid. That was, however, only a dissenting judgment. The other two Judges, who constituted the special Bench, were of opinion that there was no difference between English law and Indian law on the question, and it was open to the parties to enter into contract reducing the liability under Section 151 of the Indian Contract Act.

It is unnecessary to consider the decisions of other High Courts in regard to that matter, as the question has been fully considered in the judgment of a Bench of this court in British India Steam Navigation Co. Ltd. v. Sokalal Ram Sait, : AIR1953Mad3 , where the learned judges held that the liability of a common carrier for loss may be varied by contract. If the liability under Section 151 of the Indian Contract Act would be modified or abrogated by a contract between parties, the contract in the present case would be a valid one whether the petitioner is regarded as a common carrier or a private carrier.

7. I am of opinion that the contract limiting the liability of the carrier as contained in Ex. P. 1 is valid and enforceable. The result is that the judgment and decree of the Full Bench of the Court of Small Causes should be set aside and those of the Chief Judge be restored. I order accordingly. This civil revision petition is allowed. There will he no order as to costs in any of the courts.


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