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Report No. 97

2.7. Supreme Court judgment relating to Carriers Act, 1855.-

The present discussion is not concerned with special Acts containing elaborate provisions declaring the liability of certain persons or regulating the institution of legal proceedings against them. One such special Act is the1 Carriers Act, 1865 which, in section 10, provides as follows:-

"10. No suit shall be instituted against a common carrier for the loss of, or injury to, goods entrusted to him for carriage, unless notice in writing of the loss or injury has been given to him before the institution of the suit and within six months of the time when the loss or injury first came to the knowledge of the plaintiff."

Recently,2 the Supreme Court was called upon to decide the question whether a contractual clause in a Way Bill, seeking to by-pass the provisions of section 10, Larriers Act (quoted above), could be regarded as valid. The condition in the Way Bill was as under:-

"15. No suit shall lie against the firm in respect of any consignment without a claim made in writing in that behalf and preferred within thirty days from the date of booking, or from the date of arrival at the destination by the party concerned."

It was held that the above condition was intended to defeat section 10 of the Carriers Act, 1865, and was therefore void, under section 23, Contract Act. According to the Supreme Court, the effect of permitting such a. condition would be that even in a case where written notice of the loss or injury has been given prior to instituting the, suit and within six months of the loss or injury coming to the plaintiff's knowledge (thereby satisfying section 10, Carriers Act), the contractual condition would still remain unfulfilled and the suit would, therefore, become barred. Thus, section 10 would be defeated. The Court, for the purpose of so construing section 10, emphasised that the Carriers Act had been enacted to declare the liability of the Carriers (and not merely to limit their liability). A bargain that would defeat the liability of the Carriers as enacted by law should, in the Court's view, be treated as defeating the provisions of the law.

The Court further emphasised the fact that the condition in the contract stipulated the giving of notice either from the date of arrival of the goods at the destination or from the date of booking. The first event (arrival of goods) was, more often than not, unknown to the owners of the goods-an aspect which, according to the Supreme Court was relevant in construing the true object of section 10, Carriers Act. In this context, the Court referred to Lord Macnaghten's dictum in a Privy Council appeal from Canada,3 where it had been stated that while a time-limit clause in an insurance policy, computing the period from the date of loss, would be reasonable (because the insured would always know when the loss occurred), such a clause, carelessly included in a re insurance policy, must be regarded as inapplicable, since the person reinsured would have no direct contact with the loss.4

As to computing the period trom the date of booking-which was the second alternative event mentioned in the contractual condition the court pointed out that that was useless as no liability could arise unless loss or damage occurred.

1. Section 10, Carriers Act, 1865.

2. M.G. Brothers Lorry Service v. Prasad Textiles (Civil Appeal Nos. 954-959 of 1978, decided on 28 April, 1983, Supreme Court) D.P. Madon and Sabyasachi Mukharji, JJ.).

3. Home Insurance Co. v. Victoria Montreal Fire Insurance Co., 1907 AC 59 (64) (PC).

4. This case will again he referred to in para. 3.10, infra.

Section 28 of the Indian Contract Act, 1872 - Prescriptive Clauses in Contracts Back

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