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December 2011

Damages — Goods carried at ‘Owners Risk’ — Carrier cannot escape from the liability to make good loss — Contract Act, section 151 and Carriers Act, 1865, section 9.

By Anup P. Shah, Chartered Accountant
Reading Time 2 mins
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[ M/s. Sirmour Truck Operators Union (Regd.) v.National Insurance Co. Ltd., AIR 2011 (NOC) 389 (H.P.)]

In
a suit filed against the carrier for damage caused to insured goods the
Court observed that u/s.151 of the Contract Act, the carrier, as a
bailee, is bound 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. If that amount of care, which a person would have taken of
his own goods, is not taken by the carrier, it would amount to
deficiency in service and the carrier would be liable in damages to the
owner for the goods bailed to him. The liability of a carrier to whom
the goods are entrusted for carriage is that of an insurer and is
absolute in terms, in the sense that the carrier has to deliver the
goods safely, undamaged and without loss at the destination, indicated
by the consignor. So long as the goods are in the custody of the
carrier, it is the duty of the carrier to take due care as he would have
taken of his own goods and he would be liable if any loss or damage was
caused to the goods on account of his own negligence or criminal act or
that of his agent and servants.

The plea that since the goods
were booked at ‘Owner’s Risk’ the carrier would not be liable for any
loss to those goods, is not acceptable because even where the goods were
carried at ‘owner’s risk’, the carrier is not absolved from his
liability for loss of or damage to the goods due to his negligence or
criminal acts. Section 9 of the Carriers Act provides that the common
carriers are liable for the loss, if any, caused to the goods entrusted
to the carriers and it is the duty of the carriers to carry the goods to
the destination station.

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