Indian Kanoon - Search engine for Indian Law

44. Whenever I refer to negligence, I mean negligence in not taking reasonable care or the care required by Section 151 of the Indian Contract Act.

45. How far this common law liability could be modified by contract between the parties was stated by Mr. Story in his book on Bailments, Section 549, published in 1832. "It was," he says, "formerly a question of much doubt, how far common carriers on land could by contract limit their responsibility, upon the ground, that exercising a public employment, they are bound to carry for a reasonable compensation, and have no right to change their common law rights and duties, and it was said, that, like innkeepers they are bound to receive and accommodate all persons, so far as they may, and cannot insist upon special and qualified terms. The right, however, of making such qualified acceptances by common carriers seems to have been asserted in early times. Lord Coke declared it in a note to South cote's case 4 Co. Rep., 84; and it was admitted in Morse v. Slue I Vent. R., 238. It is now settled and recognised beyond all reasonable doubt. Still, however, it is to be understood, that common carriers cannot, by any special agreement, exempt themselves from all responsibility, so as to evade altogether the salutary policy of the common law. They cannot, therefore, by a special notice, exempt themselves from all responsibility in cases of gross negligence, or fraud; or, by demanding an exorbitant price, compel the owner of the goods to yield to unjust and oppressive limitations of his rights. The carrier will also be equally as liable in case of the fraud or misconduct of his servants, as he will be in case of his own fraud or misconduct."

48. The Carriers Act of 1830 enabled the inland common carriers to exempt themselves from liability by special agreement and as there was no reason to treat carriers by sea differently from the carriers by land, the Judges held that they came within the reason of the statute and were, therefore, similarly entitled to enter into contracts of non-liability. Let us see how these questions have in the meantime been dealt with in India.

49. The corresponding Indian Act is the Common Carriers Act of 1865, based mainly on the English Act of 1830. Before 1865, there was Act XVIII of 1854 relating to Railway Companies, and, it may be noticed that, the right of limiting their liability by private contract even when such contract was reasonable was not given to them as in the case of English Railway Companies by the corresponding English statute passed about the same time, and the companies were expressly made answerable for the gross negligence or misconduct of their servants. The earlier sections of Act III of 1865 extend to India the principles embodied in the English statute of 1830 relating to carriers. Section 6 of the Act, like Section 6 of the Statute, declares that common carriers may limit their liability by contract with the important limitation that in the case of an agent of the owner of the goods he must be duly authorised in that behalf. This deviation from the English law was made to prevent common carriers from securing the signature of the cooly to what may afterwards be pleaded as a contract against the owner. Then we have the two important sections which I place below side by side for contract and comparison.

Section 8 of Act III of 1865.

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 or such loss or damage shall have arisen from the negligence or criminal act of the any carrier or any of his agents or servants.

50. It is difficult for any one to read these two sections without coming to the conclusion that it is an emphatic repudiation by the legislature of the doctrine of English law that a common carrier may exempt himself from liability for the negligence of his agents or servants. If we follow the process of reasoning adopted by the English Judges and apply to the steamship companies the rules of law declared applicable to inland common carriers, there is no reason why this principle embodied in Act III of 1865, Section 8, should not be applied to them as a rule of justice and equity. It is impossible to hold that the law of common carriers in this respect is the same in India as in England. When the Madras Government suggested that the railway companies in India might be allowed the same liberty as in England to enter into reasonable contracts, it was the opinion of Story quoted above and the American law that was expressly relied upon by Sir Henry Maine for not following the English law. The rule of English common law adopted in India before 1865 was, as stated by the Chief Justice and Mitter, J., Moothora Kanto Shaw v. The India General Steam Navigation Company 10 C. 166, the rule which imposes upon the common carrier the liability of an insurer. There is nothing to show that the right of exemption by contract was ever recognised. It was the attempt of the common carriers to do so that led to this legislation. Is there any reason why in the absence of any legislation a different rule should be applied to carriers by sea in deviation of the course followed by the English Judges. If we adopt the conclusion of Brett, J.--Liver Alkali Company v. Johnson L.R., 9 Ex., 338 and Nugent v. Smith 1 C.P.D., 19 and 423 that the law relating to the shipowners who carry goods for hire whether by inland navigation or abroad is based upon a custom, which he traces to Roman law, by which no insurer's liability attached to carriers by land, then we may possibly be justified in treating such carriers on a different footing. But this view has been strongly dissented from by Cockburn, C.J., in the Court of Appeal in Nugent v. Smith 1 C.P.D., 19 and 423 and is not now accepted. On the other hand it is now settled beyond doubt that the liability of a shipowner is the same as that of a common carrier.

52. The next question is whether the contract exempting a shipowner from the consequences of the negligence of himself or his servants in not taking reasonable care or the care referred to in Section 151 of the Indian Contract Act is opposed to public policy and is, therefore, void. See Section 23, Indian Contract Act.

53. I have already pointed out that I can see no consideration for this stipulation. It has been held to be unreasonable in the case of railway companies (Peek v. North Staffordshire Railway Company 10 H.L.C. 473 and in Carver's book it is admitted that the contract need not be reasonable. If the obligation is imposed upon a common carrier for the benefit of the public, he cannot claim exemption by virtue of an unreasonable stipulation. The reason why a common carrier is bound to receive goods tendered and the great responsibility of an insurer is imposed upon him is that necessity compels the owners of goods to trust him. This liability is imposed upon him in the words of Lord Mansfield, "to prevent litigation, collusion and the necessity of going into circumstances impossible to be unravelled." As Best, C.J., puts it in Riley v. Home 5 Bing. Rep. 217, at p. 220 "When goods are delivered to a carrier, they are usually no longer under the eye of the owner.... If they should be lost or injured by the grossest negligence of the carrier or his servants, or stolen by them, the owner would be unable to prove either of these causes of loss; his witnesses must be the carrier's servants, and they, knowing that they could not be contradicted, would excuse their masters and themselves."For the above reasons it is essential that common carriers must in India also be subject to the English common liability, and the Privy Council have now placed the matter beyond dispute. Where the obligation is imposed upon the common carrier for the benefit of the public he cannot get rid of that obligation by agreement, if it is not reasonable. The Act III of 1865 has declared that the common carriers governed by that Act should not be allowed to claim exemption for negligence by contract and so far as they are concerned any such provision would be illegal. If the English law applies a shipowner may get the signature of a cooly who brings the goods, to any document which will be treated as binding on the cargo-owner, and this, in express terms, is prohibited by Act III of 1865.