Case: Nath Bros Exim Intnl. Ltd Vs. Best Roadways Ltd

The appellant had booked a consignment of 77 packages of mulberrynatural silk garments with the respondent for being carried from Noida (U.P.) to Bombay to be delivered to Ms. Jeena & Co., who were the clearing agents of the appellant. The consignment was to be exported to the United Kingdom as the appellant had imported raw silk free of custom duty for manufacture of garments, to be exported back to the United Kingdom. The goods along with copies of Invoice No. NBI-7493 dated 9.3.1994 were entrusted to the respondent who issued Consignment Note No. 52330 dated 11.3.1994 to the appellant. Since the consignment was not delivered at Bombay, the appellant wrote a letter to the respondent on 21st of March, 1994 mentioning the non-delivery of consignment. On March 24, 1994, the appellant received a letter dated March 19, 1994 from the respondent through which he came to know that the consignment which was stored at a godown in Bhiwandi was completely destroyed by fire. After serving legal notice on the respondent and after considering its reply, the appellant filed a claim petition before the National Consumer Disputes Redressal Commission, New Delhi (for short, `the National Commission), for recovery of a sum of Rs. 36,12,874.60 along with interest at the rate of 18 per cent per annum besides costs. uld not have been diverted for being unloaded at Bhiwandi or stored there. In any case, since the goods were stored in a godown which was adjacent to another godown in which highly combustible articles were kept by a third person who owned that godown, the respondent was clearly negligent in keeping the consignment in question, which consisted of the silk garments, in that godown so as to expose them to fire which ultimately ungulfed not only the godown where the combustible material was kept but also the adjacent godown where the appellants goods were negligently stored. The findings recorded by the National Commission that the goods were diverted at the instance of Ms. Jeena & Co. for unloading at Bhiwandi have also been assailed.

Court's reasoning:
25. We have already reproduced the provisions of Sections 6, 8 and 9 above. Section 6 enables the common carrier to limit has liability by a special contract. But the special contract will not absolve the carrier if the damage or loss to the goods, entrusted to him, has been caused by his own negligence or criminal act or that of his agents or servants. In that situation, the carrier would be liable for the damage to or loss oror goods. In this situation, if a suit is filed for recovery of damages, the burden of proof will not be on the owner or the plaintiff to show that the loss or damage was caused owing to the negligence or criminal act of the carrier as provided by Section 9. The carrier can escape his liability only if it is established that the loss or damage was due to an act of God or enemies of the State (or the enemies of the King, a phrase used by the Privy Council). The Calcutta decision in The British & Foreign Marine Insurance Co. v. The Indian General Navigation and Railway Co. Ltd. (supra), the Assam decision in River Steam Navigation Co. Ltd. and another v. Syam Sunder Tea Co. Ltd. (supra), the Rajasthan decision in Vidya Ratan v. Kota Transport Co. Ltd. (supra), the Kerala decision in Kerala Transport Co. v. Kunnath Textiles (supra), which have already been referred to above, have considered the effect of special contract within the meaning of Sections 6 and 8 of the Carriers Act, 1865 and, in our opinion, they lay down the correct law.26. In the Madras decision in P.K. Kalasami Nadar v. K. Ponnuswami Mudaliar & others (supra), it was held that an act of God will be an extraordinary occurrence due to natural causes, which is not the result of any human intervention, but it was held that an accidental fire, though it might not have resulted from any act or omission of the common carrier, cannot be said to be an act of God. Similarly, in Kerala Transport Co. v. Kunnath Textiles (supra), it was held that the absolute liability of the carrier was subject to two exceptions. One of them is a special contract that the carrier may choose to enter into with the customer and the other is the act of God. It was further held that an act of God does not take in any and every inevitable accident and that only those acts which can be traced to natural causes as opposed to human agency would be said to be an act of God. In Associated Traders & Engineers Pvt. Ltd. v. Delhi Cloth & General Mills Ltd. & others, ILR Delhi 1974(1) 790, a fire which broke out in a bonded warehouse where the goods were kept was held not to be an act of God and, therefore, the carrier was held liable. This Delhi decision has been relied upon by the learned counsel for the appellant on another question also to which we shall presently come, to show that the agreement by which the liability of the carrier is sought to be limited must be signed by the owner of the goods, entrusted to the carrier for carriage.27. From the above discussion, it would be seen that 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 did servants.In view of the above, there did arise a controversy between the parties whether there was any special agreement between them which would have the effect of restricting the liability of the respondent in carrying the goods in question to Bombay for delivery to Messrs Jeena & Co. This question has not been answered in clear terms by the National Commission and a positive finding, whether or not there existed a special contract between the parties within the meaning of Section 6 of the Act, has not been recorded. The Commission, after considering various provisions of the Act came to the conclusion that even if the goods were carried at "Owners Risk", the carrier would not be fully absolved of his liability to pay compensation if the loss was occasioned on account of his negligence or the negligence of his servants and agents. The Commission, to this extent, is right and, therefore, a positive finding on the existence of a special contract is not insisted upon but what is now questioned is the finding of the Commission on the question of negligence.38. The Commission held that since the goods were diverted to Bhiwandi by the consignee, Messrs Jeena & Co., to whom the goods were to be delivered and they were destroyed by the fire which initially broke out in the adjacent godown the subsequently spread to their own godown, the respondent would not be liable as he had taken all possible care which was expected of him as carrier. This, we feel, is not the correct approach.39. There was a serious dispute between the parties not only on the existence of a special contract within the meaning of Section 6 of the Act, but there also arose dispute with regard to the diversion or goods to be unloaded at Bhiwandi instead of being delivered to Messrs Jeena & Co. at Bombay. This question, namely, diversion of goods, has been decided by the Commission without scrutinising the relevant pleadings of the parties.In view of the above pleadings, a serious dispute had arisen between the parties as to the genuineness of the letter dated 14th March, 1994, said to have been written by Messrs Jeena & Co. to the respondent to unload the goods at Bhiwandi instead of delivering the consignment at Bombay.47. The National Commission did not advert itself to these questions and disposed of the whole matter observing, inter alia, as undercarrier has, however, pointed out that they had taken the consignment as per the instructions of the petitioner, and informed the consignee that the goods were ready for delivery at Bombay, but the consignee directed them to unload the said consignment of 77 packages at Bhiwandi. The diversion of the consignment to Bhiwandi was thus made at the direction of the consignee himself. In this regard the Opposite Party has produced a letter from Ms. Jeena & Co., dated 14th March, 1994 which reads as follows :"This has a reference to the information given by you regarding arrival of 77 packages at Mulund Check Post of Ms. Nath Brothers, Exim International Ltd., New Delhi, booked by you under your G.C. No. 42330 dt. 11.3.94 Ex. Delhi to Bombay. In this connection we hereby advise you to unload the said consignment of 77 packages of the above party at Bhiwandi as the shipment of the same will take place at CFS, Kalamboli (Nhava Shevaargument of the Opposite Party, the carriers, is that on these specific instructions from the consignee and freight forwarder Ms. Jeena & Co., Bombay, the said consignment was unloaded and stored at Bhiwandi. That was done, according to them, since the consignment was to be shipped from Nhava Sheva Port and not from Bombay Port and, therefore, the consignee diverted the consignment from Mulund Check Post to Bhiwandi, which was nearer to Nhava Sheva Port, and at the same time also avoided the octroi duty which had to be paid, had the delivery been taken at Mulund Check Post when the consignment reached there. The goods were stored at Bhiwandi in godown Nos. 5 & 6, Wadi Compound, Anjur Village, Anjurphate, outside the octroi limits of Greater Bombay along with other export consignment, the total value of which, according to the Opposite Party, was more than Rs. 2 crores and all of which were to be shipped from Nhava Sheva port across the creek of the Greater Bombay. All those goods were destroyed around noon on 16.3.1994 because of a huge fire and explosion that occurred in the adjoining godown No. 7 belonging to Shri Rati Bhai were drums containing hazardous chemicals were stored. The fire spread to the Opposite Partys godown Nos. 5 and 6 as well as other adjoining godowns. In spite of all efforts by the fire fighting engines, the fire could not be contained in time. The accidental fire was reported to the Police Station, Bhiwandi, and an FIR was also lodged on the 16th March, 1994 itself. The Police prepared a Panchanama in front of independent witnesses and the fire brigades of Bhiwandi and Nizampur Nagar Parishad confirmed this accidental fire. This fire was also reported in the newspapers on 16th and 17th March, 1994.It is not the case of the petitioner that the carrier did not take adequate precautions or steps to save the goods from the loss by the fire. On the other hand, it has been successfully proved by the carrier that the consignment of the petitioner was diverted from Mulund Check Post to Bhiwandi on the specific instructions of the consignee and further that the loss was caused by fire which was beyond their control. It has been mentioned by them that they took due care, within their capacity and how they have lodged a claim on the owner of the adjoining godown from where the fire started.The above will show that the National Commission acted upon the letter dated 14th March, 1994 of Ms. Jeena & Co. without deciding the question whether it was genuine and was at all issued by Ms.. Jeena & Co. as the appellant had contended that the letter was forged or was procured collusively. Since the above aspects have not been considered and decided by the Commission, we cannot uphold the judgment of the National Commission. The appeal is consequently allowed, the impugned judgment dated 2.9.1996 passed by the National Commission is set aside and the case is remanded to the Commission for disposal afresh in the light of the observations made above and in accordance with law.