K. Venkat Rao vs Commercial Goods Transport Firm, Vizianagaram

P.A. Choudary, J.—This second appeal is filed by the defendant. This suit is filed by Messrs. Commercial Goods Transport Firm to recover an amount of Rs. 3,581 from the present appellant K. Venkatarao and his driver P. Apparao who died pending the trial of the suit and whose legal representatives had been added as party defendants. The facts giving rise to the suit are:--

The plaintiff is a common carrier carrying goods from one place to another an hire and accepting the business from all. The Premier Tyres Limited, Hyderabad, entrusted the plaintiff with certain number of articles to be delivered to two parties at Srikakulam. The plaintiff-firm accepted those goods and agreed to carry and deliver them at Srikakulam for hire. Accordingly, it carried those goods up to Vizianagaram where it has got branch office. At Vizianagaram it had entrusted 70 articles to the 1st defendant which included the thirteen articles carried from Hyderabad to be delivered to the plaintiff''s branch at Srikakulam. This entrustment was done on 13-8-1974. That the 70 articles were entrusted to the 1st defendant for being carried to Srikakulam is borne out by Ex. A-2, log sheet. Under an agreement, Ex. A-3, the 1st defendant has undertaken, in consideration of the payment of hire charges by the plaintiff, to reimburse the plaintiff for loss of any goods entrusted to him for being carried to Srikakulam from Vizianagaram. Under that agreement, the 1st defendant carried these goods to Srikakulam from Vizianagaram. But two articles out of 70 articles entrusted at Vizianagaram were found missing. These two articles were automobile tyres which the Premier Tyres Limited. Hyderabad had entrusted to the plaintiff for safe delivery to the third party at Srikakulam who had purchased them. On the failure of the plaintiff to deliver those two articles to the third party, the person who purchased those tyres, called upon the plaintiff to pay the value of the lost goods. Accordingly, under Exs. A-16 and A-17 the plaintiff paid the amount to third party-consignee and called upon the 1st defendant to reimburse the loss sustained by it. Ex-A-9 is the office copy of the registered notice sent by the plaintiff to the 1st defendant. The 1st defendant denied his liability and disputed the quantum of damages and contested the matter. The plaintiff filed O. S. 370/75 on the file of the Principal District Munsifs Court, Vizianagaram. The learned District Munsif after framing necessary issues and recording evidence, decreed the suit which was confirmed by the appellate Court in A.S. 31/77. The 1st defendant having been aggrieved by the decree of the appellate Court, has filed this second appeal.

In this appeal, it is not necessary to consider the points that would otherwise arise for consideration in a first appeal relating to the entrustment of the articles to the 1st defendant by the plaintiff at Vizianagaram and the short delivery thereof and the quantum of damages etc., because the concurrent findings of both the Courts on these issues were based upon an appreciation of documentary evidence which cannot be interfered with in this second appeal. The only point that has been argued by Mr. Sarma with great enthusiasm is based upon the statutory provisions of the Carriers Act and the decided cases. That point is that the suit filed by the plaintiff is not maintainable at all in law. His argument is that the plaintiff is not the owner of the goods and that therefore the plaintiff cannot file the suit to recover the damages from the 1st defendant. His argument is based upon Sec. 8 of the Carriers Act (Act III of 1865) which reads thus:

Section 8. 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 the 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 to which the provisions of Sec. 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.

The learned counsel for the appellant submits that this section debars the plaintiff from suing his client, because that Section permits a suit of this nature to be brought against his client only by the owner of the goods lost and not by a common carrier. In support of this argument, Mr. Sarma relied upon a judgment of this Court in D.P. Narasa Reddy Vs. Ellisetti China Venkata Subbayya and Another,

It is not in dispute in this case that the goods which were short delivered by the 1st defendant at Srikakulam were the property of the consignee of those goods and did not, in any way, belong to the plaintiff. The consignee had purchased those goods at Hyderabad and paid for the same. The Premier Tyres Limited, Hyderabad which had sold those goods to the consignee entrusted those goods to the plaintiff merely for being transported to Srikakulam. The way bills and other documents clearly establish that the title in these tyres had passed to the consignee even before those goods were entrusted to the plaintiff at Hyderabad for being delivered at Srikakulam to the consignee. Based upon these admitted facts, Mr. Sarma has argued that Section 8 of the Carriers Act bars the present suit brought not by the owner but by a carrier. He relies upon the words occurring in Section 8 "every common carrier shall be liable to the owner for loss of or damage to any property delivered to such carrier to be carried." This simple, but attractive, argument appears to be supported by the decision of Satyanarayan Raju J., (as he then was) in D.P. Narasa Reddy Vs. Ellisetti China Venkata Subbayya and Another, In that case, the manufacturers of "Gopuram Beedies", M/s. Syed Trading Company, Madras, sold two bags of their produce to a merchant at Tadipatri. M/s. Syed Trading Company entrusted the consignment to Sri Subramanyan Lorry Service, common carrier, for the purpose of delivery of those two bags of Gopuram Beedies to the merchant at Tadipatri which in its turn entrusted the goods to the plaintiff who transported them from Madras to Proddatur. At Proddatur the plaintiff entrusted them to the 1st defendant for their transport to Tadipatri where the consignee had his place of business. But in the transit the goods were lost and they were not delivered to the consignee at Tadipatri. The plaintiff, therefore, sued the 1st defendant and his driver, the 2nd defendant, for the recovery of the value of the lost goods. The trial Court found that the entrustment of the consignment by the plaintiff to the defendants was true and that the goods were lost in transit. On that basis, the learned Munsif decreed the suit against the 1st defendant as well as his driver, the 2nd defendant. The 1st defendant had preferred a revision petition to this Court against that. The only point that was argued in that case was that the "plaintiff was not entitled to maintain the suit by reason of the fact that he was not the owner of the goods, which is a necessary prerequisite for the plaintiff sustaining the claim under the Carriers Act" (see para 10 of the judgment). Satyanarayana Raju J., had examined this question on the basis of the language contained in S. 8 of the Carriers Act and ruled that the Carriers Act while restricting the powers of a common carrier of exempting himself from his common law liability, by Section 8 creates a liability and gives the benefit of that liability to the owner. The learned Judge held that it is only the owner that is entitled to the benefit of that section. The plaintiff who is himself "common carrier", undertook to carry the goods belonging to M/s. Syed Trading Company from Madras to Tadipatri and he engaged the 1st defendant, another "common carrier", to carry them from Proddatur to Tadipatri. The learned Judge held that the plaintiff, not being the owner of the goods, is not entitled to maintain a suit under S. 8 of the Carriers Act against the 1st defendant.

There is little doubt that this judgment of the learned Judge, Satyanarayana Raju J., fully supports the contention of Sri Sarma. But I must say that the fundamental assumption on the basis of which that judgment was rendered by the learned Judge is not correct. The judgment of Satyanarayana Raju J., proceeds on the assumption that the right to sue a common carrier is governed by the provisions of the Carriers Act and belongs, under the provisions of that Act, only to the owner of the lost goods. The judgment derives support for this view from the language of Section 8 of the Act. It appears to me that this reasoning is not well founded. The question who should sue is not the subject matter of the Carriers Act. Particularly that question has not at all been dealt with by Section 8 of that Act. The purpose of the Carriers Act, as its preamble says, is to limit the liability of the common carriers for loss of or damage to property delivered to them to be carried and to declare the liability for loss of or damage to such property occasioned by the negligence or criminal acts of the carriers or any of their servants or their agents. Now in pursuance of this perambulatory objects of the Act, S. 3 limits the liability of a common carrier in certain case where the schedule goods entrusted to a common carrier without declaring to such carrier the value and description of those goods were lost or damaged. This Section obviously does not deal with the question who can sue the common carrier. The next relevant Section is Section 6. It similarly deals with the question of liability of a common carrier for the loss of or damage to the goods entrusted to him, but not falling under S. 3 of the Act. S. 6 says that in case of such non-scheduled goods, the liability of the common carrier cannot be restricted or affected by any public notice made by the common carrier. Such restriction and the liability of the common carrier, S. 6 says, can only be brought about by a special contract entered into between the owner of the goods and the common carrier or somebody who is duly authorised by the owner to enter into such an agreement S. 6 has nothing to say whether the common carrier can sue or cannot sue. Now S. 8, on which the whole judgment of Satyanarayana Raju J., turned says, that notwithstanding the provisions of S. 3 and S. 6 limiting the liability of a common carrier where the goods are lost or damaged by reason of the criminal act of the carrier or of his agents or servants or negligence, the common carrier''s liability shall be unlimited. In other words, the liability of the common carrier that is limited to rupees one hundred under S. 3 of the Act or limited in accordance with the special agreement under S. 6 of the Act would not absolve the common carrier from the unlimited liability to compensate in case where the goods are lost by reason of the criminal conduct or negligence. S. 8 has, therefore, nothing to say upon the question as to who should sue the common carrier for the loss of the goods. I am, therefore, unable to agree with Satyanarayana Raju J., in holding that S. 8 of the Act lays down any principle denying the right to sue the common carrier to anyone other than the owner of the goods. It is clear to my mind that the question of right to sue the carrier has to be considered and answered by the general provisions of law and not by reference to the Carriers Act which in my opinion has nothing to say upon that question. Now under the general law the right to sue belongs only to a person whose civil rights are injured. In the now familiar legal parlance it is only the person aggrieved that can bring a suit. In conceivable cases a person other than an owner can also be aggrieved. In this case, the suit was brought by the plaintiff against the defendant carrier both on the basis of the breach of contract (Ex. A-3 dated 13-8-1974) committed by the defendant and also under S. 69 of the Contract Act, Under Ex. A-3 a valid and binding contract was entered into between the plaintiff and the 1st defendant whereunder the 1st defendant undertook, in consideration of the payment of hire charges, to deliver those entrusted articles to the plaintiffs office at Srikakulam. He also undertook under that agreement to reimburse the plaintiff for any loss that might be occasioned to the plaintiff by reason of the 1st defendant not performing his part of the agreement. The failure of the 1st defendant to deliver the two tyres is a clear breach of the terms of Ex. A-3. The plaintiff as a party and as a privy to Ex. A-3 has a right to sue for damages. This general right flowing from the breach of the contract Ex. A-3 and belonging to the plaintiff is not denied by any provisions of the Carriers Act. Long years ago, Lord Mansfield ruled in Davis v. James (1770) 5 Burr 2680 that the consignor might maintain the action against the defendants on the basis that the defendants had made themselves responsible to the consignors for the safe delivery of the goods. Lord Mansfield said, "there was no question in the case as to the vesting of the property; for the action was founded on the agreement between the carrier and the plaintiffs who were to pay him."

This case was followed by a single Judge of Kerala High Court in St. Joseph Union Tile Works v. Rappai, 1978 Ker LT 117. The Kerala High Court ruled that the consignor is entitled to sue the carrier either on the basis of title if the property in the goods has not passed from him or on the basis of privity of contract between himself and the carrier for the carriage of goods.

My learned brother Madhava Reddy J., in Sabani Transport Private Limited v. C. Ahmed Shariff Saheb, (1980) 1 Andh WR 306 took the same view by holding.

One need not be the owner of the goods to claim damages if there be a special contract; the carrier would be liable under the contract. In this case the defendant would be liable because he had obtained possession of the goods as a result of the entrustment by the plaintiff and also because of the special contract under Ex. A. 1.

The law laid down by several authoritative writers is to the same effect Otto Kalm-Freund on the Law of Carriage by Inland Transport, 4th Ed. page 209 after observing,

who is in a position to proceed against the carrier for default in the carriage of goods? The answer is that the owner of the goods is regarded as the person with whom the contract of carriage is made, and that he, therefore, is the proper person to sue the carrier.

noted at page 211 of that book that on the authority of Freeman v. Birch, (1833) 3 QB 492 a consignor can sue the carrier. The author says that if the consignor was entrusted by the consignee with the possession of the goods that is, if the consignor is the consignee''s bailee, the contract is deemed to be made between the consignor (bailee) and the carrier.

Chitty on Contracts, 23rd Ed. in para 519 lays down the law in the following terms:--

If goods are lost or damaged during transit, the question arises who can sue the carrier for breach of the contract of carriage. The general rule is that the owner of the goods is the proper person to sue, because the goods are at his risk. But a bailee may be able to do so at any rate if he is responsible to his bailor for the safety of the goods. And the general principle that the owner is the proper plaintiff may be varied by special agreement between the consignor and consignee (e.g. that the risk is to remain with the former) or between the consignor and the carrier.

The position of law is clearly stated in Halsbury''s Laws of England, 4th Ed. Vol. 5, para 452 in the following words:--

Where goods have been delivered to a carrier and they are lost or injured, the owner of the goods is the proper person to sue for damages. A consignor who consigns only as agent, and has no property in the goods, has no right of action unless it is given to him by the terms of the contract. Nevertheless where the goods are at the consignor''s risk until delivery to the consignee, the consignor may have a special property in the goods, as bailee, sufficient to entitle him to sue.

G.W. Paton on Bailment in the Common Law at page 239 is even more explicit and categorical. He says:--

Normally the owner of the goods is the person who makes the contract with the carrier and in such a case he alone can sue in contract or in tort, subject to the following:--

(a) So far as the carrier is concerned, he must treat the person in possession as the owner, at least in the absence of a claim by the real owner. The carrier is bound to receive the goods for carriage and can make no inquiry as to title. Jus Tertii cannot be raised by the carrier of his own volition, for it is the general rule of bailment that the bailee is estopped from denying the bailor''s title...............

(b) If the goods are consigned by a bailee, he alone can sue in contract, though the true owner may also sue in tort.

(c) x x x x

(d) The consignor may make a special contract with the carrier which will retain the consignor''s right of action, although property has passed to the bailee. Apart from such a case, if the goods are lost, the carrier will pay the consignor at his peril.

It, therefore, follows that the argument of Mr. Sarma, though fully supported by the judgment of the learned Judge Satyanarayana Raju, J., cannot be accepted. In view of the above it is not necessary to consider the question whether Section 69 of the Contract Act enables the plaintiff to recover the amount paid by it, not to the Premier Tyres Limited, but to the consignee. The second appeal is accordingly dismissed. There shall be no order as to costs.