Holding

Condition 15 of the Way Bill is void as it defeats Section 10 of the Carriers Act, 1865, in accordance with Section 23 of the Indian Contract Act, 1872.

Summary

M.G. Brothers Lorry Service, a common carrier, failed to deliver a consignment of yarn entrusted by Prasad Textiles. The Way Bill governing the carriage contained Condition 15, which required any claim to be made in writing within 30 days of booking or arrival. Prasad Textiles gave notice of claim on June 20, 1969, after the goods were damaged in a cyclone, and filed suits for damages. The trial court dismissed the suits on the basis of Condition 15, a decision affirmed by the lower appellate court. The Andhra Pradesh High Court held that Condition 15 was void as it sought to defeat the statutory notice requirement of Section 10 of the Carriers Act, 1865, invoking Section 23 of the Indian Contract Act, 1872. The Supreme Court upheld the High Court’s view, declaring Condition 15 void and dismissing the appeals.

Issues considered

Whether Condition 15 of the Way Bill, which imposes a 30‑day claim period, is void under Section 23 of the Indian Contract Act because it defeats the statutory notice requirement of Section 10 of the Carriers Act, 1865.
Whether a common carrier’s liability can be limited by a contractual clause that merely shortens the statutory notice period rather than expressly limiting liability.

Legislation cited

Subjects

Carriers Actcommon carrierlimitation of liabilitySection 23 Indian Contract Actnotice periodWay Billcontract voidcivil procedure

Judgment

1027

M. G. l!ROTHERS LORRY SERVICE
. v.
PRASAD TEXTILES
April 28, 1983

[D. P. MADON AND SABYASACHI MUK!IAJUI, JJ.)
B

Carriers Act, 1865-Ss. 6 and I0-1ndia.n Contract Act, 1872-S. 23-
Uabilit'y of common carrier for loss of or injury to goods-Liabili/y Can be limited
by co~raet made expressly and in writinf under s. 6 of Carriers Act-A condition
desiped to defeat provisions of s. 10 of Carriers Act is void in terms of s. 23 of
Contract Act.

The respondent entrusted a consignment of goods to the appellant on
May l, 1969 under a Way Bill for being transported from Guntur to
Vijayawada. As the appellant failed to deliver the goods at Vijayawada, the
respondent gave a notice of claim on June 20, 1969 and thereafter instituted
suits for recovery of damages from the appellant. The trial court held that
. the suit were barred by Condition-15 of the Way Bill which stipulatee that no
suit shall lie against the firm in respect of any consignment without a claim
made in writing in that behalf and prererred ·within 30 days from- the date of
booking or from the date of arrival at the destination by the party conce!ned.
TheJower appellate court cpnfirmed the dismissal of the suits but the second
appeal preferred by the respondent was allowed by the High Court which held
) that if Condition.-14 of the Way Bill was given effect to, it would defeat the E
provisions of s. 10 of the Carriers Act.

Dismbsing the appeals,

HELD : (a) Section JO of the Carriers Act, 1865 provides that unless
notice in writing of the loss or injury has been given to him before the inSti· F
tution of the suit and \\jthin 6 months of time when the Joss or injury first
carile to the knowledge of plaintiff, no suit shall be instituted against a
common carrier. In the instant case, in order to sustain the suit, Condition.:.15
of the Way Bill makes it imperative on the party concerned to give notice
either within 30 days from the date of the bookiog or from the ,Pate of the
arrival of the goods at the destination. The date of arrival of the goods at
the destination may not be known to the party concerned for a long time. No
claim can be made without the loss of the goods and therefore 30 days from
the date of booking would become irrelevant unless loss .or damage occurs.
, Even in a case where the plaintiff was unaware of the arrival of the goods at
the dCstination or was unaware of the loss or damage, the plaintiff Would not
have ang right to institute a suit if no claim was ID0.;de arid could not have been
made within 30 days. Condition-15 of the Way Bill, therefore, was designed
to avoid the liability contemplated under s. 10 of the Carriers Act and that
too in a situation where the parties had not by express contract limited thei{
1028 (1983] 2 s.c.R.

liability as contemplated under s. 6 thereof. Condition-15 must therefore, be
held to be void in view of s. 23 of the Indian Contract Act because its object
was to defeat the provisions of s. JO of the Carriers Act, [1032 H, 1033 A·H]

Home Insurance Company of New York v. Vicloria-Molltreal Fire lnsuran~e
Co., [1907] Law Reports A.C. 59, referred to.

(b) The liability of a -common carrier can be limited by agreement as
provided under s. 6 of the Carriers Act but that must be limitation of the
liability. The nature of the contract entered into must either have the limiM
taiion of the liability under the Carriers Act made expressly and in writing
or the ~actfrs Il1ushit~e such btha.t for thed contra~t i? qude~~n the contrfaclb~was
d epart1ng om s usual us1ness an engaging in a tLJerent type Q us1ness
-J..
from that of common carrier. In the instant case it is clear from Condjtion-15
of the Way Bill that there was no limitation of liability expressed or intended
but what was provided was that no suit shall lie against the firm unless a
particular claim was made in a particular manner within a particular time.
Their was neither any ex.tinguishment of liability, nor contracting out oflia~i-
lity but what was provided was only, a special period of limitation, other than
,the one ins. 10 of the Carriers Act, for issue of notice. [1032 D-G]

The India General Navigation and Railway Co. Ltd. v. The Dekhari Tea
Company Ltd. and Ors., AIR 1924 P. C., 40 referred to.

(c) :J'he Contention that the Carriers Act was essentially enacteQ for
the Cenefit of the common carriers and therefore s.10 should not be conStrued
E as precluding notice of a period shorter than 6 inonths from the date of loss
cannot be accepted. Fro1n the preamble to the Act it is cleir that the Act was '·
passed not only to limit.the liability of the carriers but also to declare their
liability. Therefore, any contract or bargain which seeks to ,defeat the
liability of the carriers as enacted by law would defeat the pfovisions of
the Act. [1034 A-CJ
F
.CtVIL APPELLATE JURISDICTION : Civil Appeal Nos. 954-959 of
1978.

Appeals by Special leave from the Judgment and Order dated
the 22nd November, 1976 of the Andhra Pradesh High Court in
Second Appeal Nos. 76, 83, 84, 91, LOO and 152 of 1975.

A. Subba Rao for the Appellant.
H
A. K. Ganguli, L, K. Gupta and Somnath Mukherjee for t~
Responden\.
M.G. !IROTHERS v. PkASAD TEXTILES (S. Mukharji, J.) 1029
. 'Dre Judgment of the Court was delivered by
A
1 'r SABYASACHI MuKHARJI, J. M/s M. G. Brothers Lorry Service,
the appellant is a firm, whlch carried on at the relevant time trans·
port business and on the !st of May, 1969 under a Way Bill, the
. plaintiff firm, M/s Prasad Textiles, the respondent herein had. con·
signed one bale of yarn worth about Rs. 5,000 from their head
office at Guntur to Vijayawada, at whlch place there was a branch
office consigned "to self". The Way Bill and the invoice were in the
•
usual course delivered to the State Bank of India with the instruc·
tions to deliver the same to the plaintiff-respondent M/s Prasad
Textiles at Vijayawada. It appears that the defendaqt-appellant
M/s. M. G. Brothers Lorry Service failed to deliver the said goods
to the respondent-plaintiff at Vijayawada. The appellant's case was
that the said goods had actually arrived at Vijayawada on the very
next day, but the same were, however, not taken delivery of at
Vijayawada for some time and that between 16th and 20th of May,
1969 there was a cyclone at Vijayawada a:s a result of which the said
goods were damaged in their godown and when the said goods were
opened on 20th May, 1969 in the presence of the representative of
the appellant at Vijayawada, that the damage was discovered.
·~
\

On 20th June, 1969, the plaintiff firm gave a notice of claim
to the defendant firm and thereafter instituted six suits for recovery I
'
'
of various sums of money as claims on the ground that the plaintiff
had entrusted the said consignment to the lorry service of the defen·
dant firm to be. delivered at Vijayawada and they had failed to do so
and hence the piaintiff was obliged to file those suits. All these suits
were tried together by the learned trial Judge on the ground that F
common issues arose in each of those suits and the qnestion to be
considered was the same. The lower court gave a common finding.
We are not concerned, in view of the points arising in these appeals
before us, to consider all the points For our purposes it is sufficient
to note that the trial Court held that the defendant being the appellant
before us had failed to prove that the non-delivery of the six con•
signments was not due to the negligence of the defendant or his men
and the defendant was liable for the damages of Rs. 2,200 in each
. of ~he suits towards the value of the consignment which was not ·

•
I
__,.-, delivered by the defendant and it was also held that the plaintiff
would be entitled to claim interest on the amount so decreed. The
wi-1 Court, however, ultimately held that the suits were barred by
SUPREME CoURT REPORTS [1983! 2 s.c.il.
virtue of Condition 15 of the Way Bill. The goods were consigned
under terms and conditions mentioned in the Way Bill. Thereafter )-
all the suits were dismissed. l
Being aggrieved by the said decision, the defendant went up in .
appeal before the court of Sub-ordinate Judge, Vijayawada. The
8 only point which is material for us to note is that the contention was
that the consignment was accepted for transport by the appellant
herein which was defendant in the original suit, at Guntur subject to
special conditions printed on the reverse of the Way Bill.

Condition 15 which is material for our purpose is as follows:

"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
D the party concerned."

The trial Court's dismissal of the plaintiff's suit on the ground
that these were barred because of Condition 15 was confirmed by
the Lower Appellate Court. There was second appeal to the High
E Court before learned Single Judge of the High Court of Andhra
Pradesh, Hyderabad. The High Court held that if Condition 15 of
the Way Bill was given effect to it would clearly defeat the provisions·
of section 10 of the Carriers Act and as such would be void. It,
therefore, allowed the appeal.

F
Thereafter the question arose as to whether further appeal
would lie from the decision of a single Judge of the High Court in r
second appeal to the Division Bench of the Andhra Pradesh High
'court. In that view of the matter, special leave application was
. c filed before this Court. This Court was of the view, that whether
under Section IOOA of Civil Procedure Code, any appeal would lie
to the Division Bench of the High Court, should be decided by
the High Court itself. The special leave application was adjourned
for a period of four months pending disposal of this question .
by the Division Bench of the High Court. The Division Bench
H of the High Court held subsequently that Letters Patent° Appeal
was no longer maintainable after coming into operation of Secti_oa,
lOOA of the Code of Civil Procedure. In those circumstances
t.i.o. llRo'l'illlRS v. i>llASAD TEicntEs (S. Mulcharji, I,) 1031 ··

specialleave to appeal was granted by this Court on 20th April;
1978. Thus this appeal comes up before us. A
i
In view of the contentions raised before the trial Court and the
High Court, the only question that falls for our considesation in this
appeal, is, whether clause or condition 15 ()f the Way Bill as set out
hereinbefore under which the goods were carried by the carrier in B
this case, was contrary to section 10 of the Carriers Act, 1865 and
as such ihe said condition 15 was void in view of section 23 of the
Contract Act. ..

Section 10 of the Carriers Act, 1865 provides as follows :
c
"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."
D

-< The section was added by Act 10 of 1899. The original section was
repealed by Act 9 of 1890. '
E
In order to consider the contentions urged in this case, it is
therefore necessary to bear in. mind the provisions of the Carriers
Act, 1865 and the purpose of the same and to determine whether
in fact by Condition 15 of the Way Bill, the liability of the carrier
was limited, and if so to what eff~ct.

The Carriers Act, 1865, as the preamble states, was enacted
because it was thought expedient not only to enable common carriers
to limit their liability for loss of or damage to property delivered to
them to be carried but also to declare their liability for loss of or
dam~e to such property occasioned by the negligence or criminal
acts of themselves, their servants or agents. Therefore it is important
to l>eep in the background that the Act was passed for both the
purposes; to limit the liability of the carriers, as well as to declare
1
.?-- the liability of the carriers. Sec.tion 6 of the Act stipulates that the H
liability of any common carrier for the loss of or damage to any
property delivered to him to be carried, not being of the description
~ntained in the Schedule to the Act, (and i~ this connection it may
i@i SiJPkEME COURT REPOlt'tS lt9S3i 2s.c.R..
be stated lib.at the goods in question with which we are concerned in
this appeal are not type of goods described in the schedule) shall not
be deemed to be limited or affected by any public notice. It further -f
provides that such carrier may, by special contract, signed by the
owner of such property so delivered or by some person duly autho-
rised in that behalf by such owner, limit his liability in respect of the
same.
JJ
Section 8 of the Carriers Act provides ;nter alia, that common
carrier shall be liable for loss and damage to any property when such
loss or damage shall have arisen from the criminal act of the carrier
or any of his agents or servants.

As we have noted before the liability of I.I common carrier can
be limited by agreement under the provisions noted hereinbefore but
that must be limitation of the liability. This position was highlighted
· by the Privy Council in the case of The India General Navigation and
Railway Co. Ltd. v.The Dekhari Tea Co. Ltd., and Ors.( 1) the
D Privy Council reiterated on the construction of Section 6 of ihe
Carriers Act that what was required in the case of a person who
answered the definition under the Indian Carriers Act, viz., was that
the nature of the contract entered into must either have the limitation
of the liability under the Indian Carriers Act made expressly and in
writing or the facts must be such that for the contract in question
the contractor was departing from his usual business and engaging in
a different type of business from that of common carrier.

· In this connection, it appears to us that on the construction of
condition 15 of the Way Bill that there was no limitation of liability
expressed or intended but what was1'rovided was that no suit shall
lie against the firm unless a particular claim was made in a particular
manner within a particular time. In this case there was neither any
extinguishment of liability or contracting out of liability but only a
special period of limitation of notice was provided other than section
10 of the Carriers Act, 1865.

Section I 0 of the Carriers Act, as we . have noted before, pre-
vides th!lt unless notice in writing of the loss or injury has been given
to him before the iustitution of the suit and within six months of the
time when the loss or injury first came to the knowledge of the plain-
tiff no suit shall be instituted. Condition 15 of the Way Bill in the

(I) A.I.R. l9Z4 P.C. p, 40.
M.Cil. BllOTHERS v. PRASAD TEXTILES (S. Mukharji, J.) 1oh

instant case makes it imperative to give notice either within 30 days
from the date of the booking or from the date of the arrival of the A
r goods at the destination by the party concerned, to sustain a suit.
The date of arrival of the goods at the destination by the party may
not be known to the party concerned for long time. No claim can be
made without the loss of the goods and therefore 30 days from the
date of booking would become irrelevant unless loss or damage,
occurs. Therefore, it appears to us that condition 15 of the Way Bill
B
was designed to avoid the liability contemplated under section 10 of
the Carriers Act, 1865 and that too in a situation where the parties
ha0 not by express contract limited their liability as contemplated
under section 6 of the Carriers Act: It appears to us, therfore, that
the learned Judge of the Andhra Pradesh High Court was right in the c
view he took. The trial court and the first apjiellate court had held
that condition 15 of the Way Bill was not viblative of section 28 of
the Indian Contract Act, That view of the lower courts has not
been challenged before the High Court in the second appeal.
Before us also that view was not seriously challenged. It also appears
to us that neither there is restriction absolutely ~rom enforcing rights D
by the usual legal proceedings nor limitation of time within which
sucll rigbts might be enforced in the instant case but condition 15
-<'
\
was only intended to defeat or by-pass the provisions of section I 0 of
t!\e Carriers Act. Section 23 of the Indian Contract Act provides
that the consideration or object of agreement was lawful, unless, E
inter-alia, it was of such a nature, that, if permitted, would defeat
the provis.ions of any Jaw. In the instant case, it appears to us that
if condition 15 be permitted then it will defeat the provisions of
section 10 of the Carriers Act, even in a case where notice in writing
of !he Joss 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 F
first came to the knowledge of the plaintiff. Even in a case where
the plaintiff was unaware of the arrival of the goods at the destination
or was unaware of a loss or damage, the plaintiff would not have
any right to institute a suit if no claim was made and could not have
been made within 30 days as stipulated in condition 15 of the Way
G
Bill. Jn that view of the matters, we are of the opinion that condi-
tion 15 must be lield to be void in view of section 23 of the Indian
·Contract Act because its object was'.to defeat the proVisions of section
IO of the· Carriers Act. This conclusion, in our opinion, follows from
. the construction of the section and condition 15 of the Way Bill.
H
It was contended before the courts below and it was reiterated
before us that Carriers Act was essentially enacted for the benefit of
'' ~lJPRBi.iE cmiRt REl>oR.Ts !1983) 2 s.c.ii..
ihe tom~on ~arriers and section 10 of the Act should be so cons·
A trued. It was, therefore, urged that it could not be construed as -( .,_
precluding notice for a shorter period than a period of six months
from the date :ofloss specified therein. But the preamble a.s we have
noted before indicates that the Act was passed, not. only to limit the
liability of the carriers, but also to declare the liability of the carriers.
Therefore, any contract or bargain which seeks to defe.1t the liability
of the carriers as enacted by Jaw, would, in our opinion, defeat the
provisions of tji.e· Act.· Furthermore, as we have noted hereinbefore
in essence condition 15 is to impose additional obligation upon the
owner or consignee because it stipulates giving of the notice either . --/,..
from the dale of the arrival of the g~ods at the destination which
more often than not, is not known to the owner of the goods,
or from the date of booking, which 'again is useless because unless
loss or damage occurs. no liability arises.

. In the decision of the Privy Council in the ~ase of Home
D Insurance Company of New York v. Victoria-Montreal Fire Insurance
Company,:1) to which our attention was drawn, there was a contract
·of re-insurance which.was engrafted on an ordinary printed from of
fire insurance policy, and incorporated all its terms, there was a·clause
which purported to prohibit an action· thereon unless commenced
E within twelve months next after the fire. It was held by the Judicial
Committee that having regard to the true construction of the con-
. tract, which had carelessly purported· to include many .conditions '·
inapplicable to reinsurance, the above clause ·must also be regarded
as inapplicable. Such a clause is reawnable in the original policy
where the assured can sue immediately on incurring loss, it cannot
·apply where the insured was unable to sue until the direct loss wa~
ascertained betw~en the parties over whom he had no control.
r
though the facts of the instant case and the condition with
which we are concerned are different, the observations or' Lord
G . Macnaghten at page 64 are of some relevance that the clause pres-
cribing legal proceedings after a limited period was a reasonable
provision in a policy of insurance against direct loss to specific pro-
. perty, in such a case the insured was master of the situation, ~nd he
could, bring his action immediately, but in a case of re-insurance )....__
H against liability th~ insured was helpless, would throw lighi on the

(I) [1907] La,v R.cports-Appeal Cases p. 59,
. I

l.i.o. !IR.or!IERs v~ PRASAD TEXTILES (S. Mukharji, i.) io35
present condition· 15 in the instant case as we have noted herein·
before. In the instant case as we have noted hereinbefore, · the A
·r arrival at the destination of the goods may not be . known to the
owner or the consignee for a considerable period of time.

Learned advocate for the appellant also drew our attention to
the decision of the Court of Appeal in England in the case of Bank
of Australasia and Others v. Clan Line Steamers Limited.(') In the
B
facts of this case, in our opinion, the said decision is not relevant for
the controversy before us.

Our attention was also drawn to a decision in the case of India
'
General Steam Navigation Company (Defendants) .
v. Joykristo Shaha c
and Others (Plaintiffs)(') where the point on which the Court rested
its decision was that the contract in question was a divisible one.
No such problem arises here. So it is not necessary to discuss the
decision.

In the case of Haji Shakoor Gany v. H.E. Hinde & Co., Ltd.,(') D
the plaintiffs under a bill of Jading incorporating the provisions of the
English Carriage of Goods by Sea Act, had shipped sugar on
defendant l's ship. One of the provisions of the Act on the bill of
lading was as follows : "In any event the carrier and the ship shall be
discharged from all liability in respect of Joss or damage unless suit E
y
was brought within one year after delivery of the goods or the date
'
when the goods should have been delivered." The ship arrived in
Bombay on 4th May, 1929 and was completely discharged on 8th
May, 192~. The plaintiffs had sued on 27th June, 1930 to recover
the value of the sugar short-delivered to them from defendants 1 and
2 who were the Bombay agents of defendant 1 and who gave a dee· F
Jaration to the customs authorities that they were answerable for the
discharge of all claims for damage or short-delivery which might be
established by the owner of any goods comprised in the import
cargo in respect of such goods. It was held tliat the effect of the
incoporation of the provisions in the bill of lading was t~t the rights G
of the plaintiffs were extinguished in respect of the claim made after
one year, As we have mentioned hereinbefore, if under a particular
bargain the rights of the parties were extinguished that would be
.
- (I) [1916) I Law Reports K.B. p. 39. H
(2) I.L.R. 1890 Vol, 17 Calcutta 39.
(3) A.1.R. 1932 Bombay p, 330,
i@36 SUPREME COUR 1' REPORTS ft98~) 2 s.c.R.

permiSl;ible, tl\at will not hit the provisions of sectio~ 28 of Contract
A Act and as such wottld not be violative of section 23 of the said Act. ,-
Bnt lf right~ ate not extinguished but only the remedies are ba:rred _,-
different consroerntion would· a)'pfy.

As in the cases of The Ru/Jy General Insurance Co. Ltd. v. The
B Bharat Bank, Ltd. and others,(1) Dawood Tar Mohomed Bros. and
others v. Queensland Insurance Co. Ltd.,(') Pearl Insurance Co. v.
Atma Ram,(8 i Baroda Spinning and Weaving Co. Ltd. v. Satyanarayan
Marine and Fire Insurance Co. Ltd.,(') Assam Roaaways v. National
Insurance Co. and others,(') M/s Indian Drugs and Pharmaceuticals
Ltd. Hydera/Jad v. M/s Savani Transport P. Ltd, Hydert!bad,(') Rivers
.'!team Navigation Co. Ltd., and another v. Bisweswar Ku1tdu(1) (lfld
c Vulcan Insurance' Co Ltd. v. Maharaj Singh and another,(') the pt>mts
decided and views expressed were different from the present contro·
versy, it is not necessary to refer to those decisions or express any
opinion on those.

D For the reasons we have mentioned hereinbefore, we are of the ·'
opinion that the decision of the learned single Judge of !he Andhra
Pradesh High Court on appeal must, therefore, be upheld. 1hese
appeals accordingly fajj. and are dismissed with costs.

E H.L.C. Appeals dismissed.

•
(I) A.l.R. 1950 East Punjab p. 352.
(2) A.T.R. 1949 Vol. 36 Calcutta p, 390.
(3) A.I.R. 1960 Vol. 47 Punjab p .. 236.
(4) A I.R. 1914 Bombay p. 225.
(5) A.l.R. 1979 Vol. 66 Calcutta p. 178.
(6) A.l.R. 1979 Vol. 66 Andhra Pradesh p. 41.
(7) A.I.R. 1928 Calcutta p. 371.
(8) [1976] 2 S.C.R. p. 62.