1980 Supreme(Bom) 105

IN THE HIGH COURT OF BOMBAY
(M.P. Kanade and R.S. Bhonsale JJ.)
ROAD TRANSPORT CORPORATION and others - Appellants
Versus

KIRLOSKAR BROTHERS LIMITED and others - Respondents
F. A. No. 811 of 1971
Decided on 9/10-4-1980
Advocates appeared
For appellants - M.P. Vashi
For respondents - M.R. Kotwal

Headnote:

CARRIERS ACT - SECTION 8 - LIABILITY OF CARRIERS - EXEMPTION CLAUSES - JURISDICTION - CONTRACTUAL DOCUMENT - UNSIGNED CONSIGNMENT NOTE - NOTICE OF TERMS AND CONDITIONS - REASONABLENESS OF EXEMPTION CLAUSE - BURDEN OF PROOF - OUSTER OF JURISDICTION.

Fact of the Case:

Plaintiffs, a well-known manufacturer of farm machinery and pumps, instructed National Pipes and Tubes Co. Ltd., Calcutta, to supply high-tensile brass rods. National Pipes and Tubes Co. Ltd. entrusted the rods to the defendants, common carriers, for transportation to the plaintiffs at Kirloskarwadi. The defendants delivered part of the goods but short delivered 53 rods. Plaintiffs addressed a notice to the defendants setting out the price of the short-delivered goods. The defendants delivered part of the short-delivered goods but admitted that 53 rods were short-delivered. The plaintiffs, who had insured the consignment with the plaintiff insurance company, claimed the amount of Rs. 16,252.06, the value of the short-delivered consignment, from the insurance company, which paid the amount and stepped into the shoes of the plaintiffs as a result of the letter of subrogation. The defendants contested the suit on merits and challenged the letter of subrogation. They also maintained that National Pipes and Tubes Co. Ltd. was a necessary party to the suit. The defendants further denied their liability for payment of Rs. 16,252.06 as the price of the short-delivered rods, claiming that they had agreed to carry the goods as a public carrier subject to the terms and conditions printed overleaf of their consignment notes, which were binding on all parties concerned. The defendants claimed that the goods were stolen during transit and that they had filed a complaint at the police station. The police recovered 75 rods from the river where they were submerged. The defendants delivered all the rods to the plaintiff. The trial court held that the suit was not barred by non-joinder of National Pipes and Tube Company as a party, that the plaintiffs had proved that the short delivery of rods was caused due to the negligence of the defendants or their servants or agents, and that they had not taken reasonable care and precaution to keep the goods in order to protect them from loss or damage. The court also held that the subrogation of plaintiff number 2 in place of plaintiff No.1 was legal and valid and decreed the entire claim of the plaintiffs against the defendants.

Finding of the Court:

1. The defendants were liable to the plaintiffs for the short delivery of goods under section 8 of the Carriers Act, 1865, notwithstanding the exemption clauses in the consignment note, as such clauses were not binding on the plaintiffs. 2. The insurance policy taken out by the plaintiffs was valid and the plaintiff insurance company had locus standi to claim recovery of the amount for short delivery of the consignment goods. 3. The letter of subrogation executed by the plaintiffs in favor of the plaintiff insurance company was valid and the insurance company was entitled to recover the suit amount from the defendants. 4. The consignment note, which was not signed by either the consignor or the consignee, did not constitute a contractual document or an integral part of the contractual document and the defendants failed to prove that the plaintiffs were bound by the last clause of the consignment note restricting jurisdiction to Calcutta Courts alone. 5. The defendants failed to give adequate and specific notice to the plaintiffs of the term excluding the jurisdiction of other competent Courts and therefore could not rely on such clause in the consignment note.

Issues: 1. Whether the suit was barred by non-joinder of National Pipes and Tube Company as a party? 2. Whether the plaintiffs had proved that the short delivery of rods was caused due to the negligence of the defendants or their servants or agents? 3. Whether the defendants had taken reasonable care and precaution to keep the goods in order to protect them from loss or damage? 4. Whether the subrogation of plaintiff number 2 in place of plaintiff No.1 was legal and valid? 5. Whether the defendants were liable to pay the plaintiffs Rs. 16,252.06 as the price of the short-delivered rods? 6. Whether the insurance policy taken out by the plaintiffs was valid and the plaintiff insurance company had locus standi to claim recovery of the amount for short delivery of the consignment goods? 7. Whether the Court at Sangli had jurisdiction to try the suit? 8. Whether the consignment note constituted a contractual document or an integral part of the contractual document? 9. Whether the defendants had given adequate and specific notice to the plaintiffs of the term excluding the jurisdiction of other competent Courts?

Ratio Decidendi: 1. Under section 8 of the Carriers Act, 1865, every common carrier is liable to the owner for loss or damage to any property caused by the negligence or fraud of the carrier or their agents, notwithstanding anything contained in the terms and conditions of the consignment note. 2. An exemption clause in a consignment note, which seeks to limit the liability of the carrier, is not binding on the consignor or consignee unless it is brought to their notice specifically and adequately before the contract is concluded. 3. In the absence of a signed contractual document or an integral part thereof, the carrier must give sufficient and adequate notice to the consignor or consignee of any terms or conditions, including those limiting the carrier's liability or excluding the jurisdiction of certain courts, before the contract is concluded. 4. Ouster of jurisdiction should not be easily construed or presumed and must be proved by express words or by necessary or inevitable implication.

Final Decision: The appeal was dismissed, and the judgment and decree of the trial court were confirmed.