Holding

For non‑delivery where the carrier has not informed the claimant of loss, Section 10 notice is unnecessary, the limitation period does not bar the complaint, and a contract for service exists irrespective of unpaid freight, making the carrier liable for deficiency of service.

Summary

The Transport Corporation of India Ltd, a common carrier, was entrusted by Veljan Hydra Ltd with a hydraulic cylinder consignment in 1996. The carrier repeatedly assured the consignee that it was locating the goods but never informed them of any loss, and the consignment was never delivered. Veljan Hydra filed a consumer complaint in 2001 alleging deficiency of service and seeking the value of the consignment. The carrier contended that the complaint was barred because no notice under Section 10 of the Carriers Act was given, the claim was time‑barred under Section 24A of the Consumer Protection Act, and there was no contract for service as freight charges were unpaid. The Supreme Court held that a notice under Section 10 is required only for loss or injury, not for non‑delivery where loss is not communicated; the limitation period did not start until the carrier’s last communication, making the complaint timely; and a contract for service exists despite non‑payment of freight, rendering the carrier liable for deficiency of service. Consequently, the appeal by the carrier was dismissed.

Issues considered

Whether a notice under Section 10 of the Carriers Act, 1865 is required for a claim based on non‑delivery of goods.
Whether the consumer complaint is barred by the two‑year limitation period under Section 24A of the Consumer Protection Act, 1986.
Whether a contract for service exists when the freight consideration remains unpaid, affecting liability for deficiency of service.

Legislation cited

Carriers Act, 1865s. 10
Consumer Protection Act, 1986s. 24-A, s. 2(h)

Subjects

consumer protectiondeficiency of servicecommon carriernotice requirementlimitation periodcontract for servicefreight chargesnon‑delivery

Judgment

A MIS. TRANSPORT CORPORATION OF INDIA LTD.

M/S. VELJAN HYDRA IR LTD.
-
FEBRUARY 22, 2007

B [TARUN CHATTERJEE AND R. V. RA VEENDRAN, JJ.]

Consumer Protection Act, 1986:

ss. 2(h) and 24-A-Deficiency in 'service'-Contract for carriage of
C goo<ls-Non-delivery of goods-Requirement of issuing notice under s. JO of
carriers Act-Limitation for filing claim-Common carrier by letter dated ·
3. 7.99 requesting for time to locate and deliver goods-Thereafter not
informing the status-Complaint under the Act filed on 5. 7.2001-Held,
there was no need lo issue notice uls IO of the Carriers Act and non-issue
D of such a notice did not invalidate the claim-Complaint is not barred by
limitation uls 24-A-Notice-Carriers Act, 1865-s.JO
Contract:
Contract for carriage of goods- 'Consideration '-Non-delivery of
goods-Claim resisted on ground that because of non-payment of freight
E charges, there was no consideration for contract for service-Held, contract
for transportation being for consideration (freight charges), mere fact that
such consideration is not paid would not make the service free of charge-
Carrier having misplaced goods cannot demand freight charges.
Carriers Act, 1865-s. IO-When notice not necessary.
F Respondent entrusted consignment of a machine to the appellant, a ·
'common carrier'. The said consignment did not reach its destination and
this r1~sulted in exchange of correspondence between the parties - the
respondent asking the appellant to deliver the consignment and the latter
assuring to locate and deliver the goods - the latest of such communication
from the appellant being of3.7.I999. Ultimately, the respondent after serving
G a notice dated 27.10.2000 on the appellant filed on 5.7.2001 a complaint under
the Consumer Protection Act, 1986. The appellant did not dispute the factual
position but resisted the claim on the grounds (i) that the complaint was barred
under s.10 of the Act as the respondent did not issue a notice under s.10
about loss of consignment within the specified time; (ii) that the complaint

H 1082
TRANSPORT CORPN. OF INDIA LTD.''· VEUAN HYDRAIR LTD. J083

was barred by limitation under s.24-A of the Act; and (iii) that since the A
respondent did not pa,y the freight charges, there was no 'consideration' for
the contract of 'service' and as such appellant was not liable to pay any amount
either towards loss of consignment or as damages on the ground of deficiency
in service. The State Consumer Disputes Redressal Commission allowed the
claim. After unsuccessfully approaching the National Consumer Disputes B
Redressal Commission, the 'common carrier' filed the present appeal.

Dismissing the appeal, the Court

HELD: 1.1. Where the common carrier informs the person entitled to
delivery (consignor/consignee/owner) that the consignment is being traced
and process of tracing it is still going on, and requests him to wait for the C
consignment to be traced and delivered, but does not suhsequently inform him
either about the loss of the consignment, or about its inability to trace and
deliver the consignment, the claim by the consignor/consignee, will not be
for loss or injury to goods but for non-delivery of goods. In such
circumstances, it is not possible to attribute knowledge of 'loss' to the person
instituting the action for non-delivery. The requirement relating to notice D
within six months in Section 10 of the Carriage Act, 1865 will not apply to a
claim based on such non-delivery. In fact Section JO does not use the word
'non-delivery' of goods, but uses the words 'loss of, or injury to, goods'. A
case of 'non-delivery' will become a case of 'loss' of consignment, only when
the common carrier informs the consignor/consignee about the loss of the E
consignment. In the instant case, the appellant-carrier did not inform the
respondent that the goods were lost. Therefore, there was no need to issue a
notice under section 10, and non-issue of such a notice did not invalidate the
claim or the complaint. (Para 7 and 9) (1088-G-H; 1089-C-E(

Arvind Mills Ltd. v. Associated Roadways, (2004) 11 SCC 545, held
f- inapplicable.
F
2.1. In the context of limitation with reference to a contract for carriage
of goods, the date of cause of action as envisaged by s.24-A of the Consumer
Protection Act, 1986 may refer to the date on which the goods are entrusted,
date of issue of consignment note, the date stipulated for delivery, the date of G
delivery, the date of refusal to deliver, the date of intimation of carrier's
request to wait for delivery as the goods are being traced, the date of intimation
of loss of goods, or the date of acknowledgement ofliability. (Para 11 J
(1090-A-BJ

2.2. In the instant case, the appellant by letters of various dates including
3.7.1999, informed the respondent that it was in the process of locating the H
1084 SUPREME COURT REPORTS [2007] 2 S.C.R.

A goods and requested the respondent to wait and assured that it will inform
about the status. Thereafter the appellant did not inform the status. The i
~om plaint has been filed within two years from the date of receipt of the said
letter dated 3. 7.1999 and is in time. In fact in view of the request of the
appellant to the respondent to wait till the consignment was traced, the
limitation for an action would not start to run until there was a communication
B from the appellant either informing about the loss or expressing its inability
to deliver or refusal to deliver, or until the respondent makes a demand for
delivery or payment of value of the consignment after waiting for a reasonable
period and there is non-compliance. Therefore, the complaint is not barred
under section 24A ofCP Act. (Para 12( (1090-C-E(
c 3. When a person entrusts goods to a common carrier for transportation
for a consideration (freight charges) and the carrier accepts the same, there
is a contract for "service" within the meaning of CP Act and, if the goods are
not delivered, there is a deficiency of service; the mere fact that consideration 'y
is not paid, would not make the service 'free of charge'. In such a case, the
D common carrier cannot demand the freight charges, nor can it contend that
non-payment of freight charges exonerates it from liability for the loss or
non-delivery. (Para 13111090-G; 1091-B(

Patel Roadways Ltd. v. Bir/a Yamaha Ltd., (2000( 4 SCC 91 1, relied on.

E 4. The State Commission ought to have awarded the entire cost oftlie "
consignment. It committed an error in deducting the freight charges from
th€: amount payable to the respondent. No liability to pay the freight charges
arises where the consignment is lost or where there is non-delivery. However,
as there was no appeal by the respondent on this issue, there is no question ~
of increasing the amount awarded. (Para 14( (1091-DI
F ~
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3096 of2005.

From the Judgment/Order dated 11.8.2004 of the National Consumer
Disputes Redressal Commission, New Delhi in F.A. No. 254/2004.

G Rajiv Dutta, Jeetendra, M.F. Humayunsa and Dharmendra Kumar Sinha
for the Appellant.

Rana Mukherjee, Siddharth Gautam and Goodwill lndeevar for the
Respondents.
H j. 12002] 2 SCR 665.
TRANSPORT CORPN. OF INDIA LTD. i·. VELJAN HYDRATR LTD. [RA VEENDRAN, J] J085
,.
The Judgment of the Court was delivered by A
RA VE END RAN, J. \, This appeal is directed against the order dated
11.8.2004 of the National Consumer Disputes Redressal Commission ('National
Commission' for short) affirming the order dated 14.6.2004 passed by the
Andhra Pradesh State Consumer Disputes Redressal Commission ('State
Commission' for short). B
2. The appellant is a 'common carrier' as defined in the Carriers Act,
1865 ('Act' for short). The respondent entrusted a consignment (an Hydraulic
Cylinder) measuring 2700 kg, covered by sale invoice dated 30.4.1996 to the
Appellant for transportation from Patancheru to Bharuch, the consignee being C
"self." The Appellant issued Consignment Note/Lorry Receipt dated I 0.5.1996
to the Respondent in that behalf, wherein the declared value of the consignment
was shown as Rs.583440/=. As M/s Prakash Industries Ltd., Bharuch, the
customer for whom the consignment was intended was not in a position to
clear the consignment, the Respondent, by letter dated 8.11.1996 instructed
appellant's Patancheru Branch to re-book the consignment from Bharuch to D
Patancheru. For this purpose, the respondent enclosed the original (consignee's
copy) of the lorry receipt as also its invoice dated 30.4.1996, with the letter
dated 8.11.1996. The respondent assured that they will clear all dues including
up and down freight charges at appellant's Patancheru office. In view of it,
the appellant's Patancheru Branch instructed its Baruach Branch by letter
dated 14.11.1996 to rebook the consignment and endorsed a copy of the said E
communication to the Respondent. The appellant sent a letter dated 22.11.1996
instructing the respondent to send the consignee copy with all freight and
demurrage charges by a Demand Draft to the Bharuch office to enable the
Bharuch office to re-book the consignment to Patancheru. The Respondent
approached the appellant's Patancheru office several times and explained that F
it had already furnished the consignee copy and that it had also assured that
payment will be made at Patancheru, and therefore, the consignment should
be re-booked. Finally the Appellant's Patancheru office informed Respondent
that the consignment was re-booked vide LR No. 2140 I dated 22.1.1997 from
Bharuch to Patancheru. As there was no information about the arrival of
goods at Patancheru, inspite of constant follow up, the respondent sent G
letters dated 8.8.1998, 13.10.1998, 7.11.1998 and 8:12.1998 to the appellant,
calling upon it to locate the consignment and deliver it, making it clear that
ifthe consignment was not delivered, it will claim Rs.5,83,440/- being the cost
of the consignment. Respondent also stated that it will not pay any charges
for the consignment. The appellant sent a reply dated 15.12.1998 stating that H
(.

1086 SUPREME COURT REPORTS [2007] 2 S.C.R.

A "the matter is under process to locate the goods" and requested the' respondent
to "bear" with it for some more tillle to enable it to revert back with reference ·i
to the status of the matter. This was followed by letter dated 21.6.1999 wherein
the appellant assured the respondent that "the matter is under inquiry" and
that.the status of the consignment will be confirmed within a short while. By
B another letter dated 3.7.1999, the appellant informed that "the process of
locating the goods is going on" and requested the respondent to furnish
another copy of the invoice as also the sketch of the machine. The respondent's
Senior Officer, Marketing, (Sri Sriramamurthy) visited the appellant's office
and furnished them. Even thereafter, the consignment was not delivered.
Therefore, after serving a notice dated 27. I0.2000, through counsel, demanding
C payment, the respondent filed a complaint before the District Forum on 5.7.2001,
alleging that the non-delivery of consignment amounted to deficiency of
service and therefore, the appellant was liable to pay Rs.5,83,440, being the
cost of consignment with interest at the rate of 24% per annum from 8.11.1996
as damages for deficiency of service. Subsequently, as the District Forum did
not have pecuniary jurisdiction, return of the complaint was obtained and re-
D presented before the State Commission on 17.8.200 I.

3. The appellant did not dispute the factual position alleged by the
Respondent. It resisted the claim on the following three grounds :

(i) The respondent ,did not issue a notice under Section 10 of the Act,
E about the loss of the consignment, within six months of the time when
the loss first came to its knowledge. Therefore, the complaint was
barred under Section I0 of the Act.

(ii) The cause of action arose on 8.11.1996 when the respondent
instructed the appellant to re-book the consignment and on 22.1.1997,
F when the consignment was re-booked. The complaint, filed beyond
two years from that date, was barred by limitation under section 24A
of Consumer Protection Act, 1986 ('CA Act' for short).

(iii) The respondent did not pay the freight charges and that therefore,
there was no 'consideration' for the contract for 'service'. Therefore,
G the appellant was not liable to pay any amount, either towards loss
of the consignment or as damages, on the ground of deficiency of
service. '

4. The State Commission, allowed the complaint by order dated 14.6.2004.
H It held that the failure of appellant to deliver the consignment amounted to

'
I
TRANSPORT CORPN. OF INDIA LTD. 1·. VEUAN HYDRAIR LTD. [RA VEENDRAN. J J I087

., deficiency of service. The State Commission also held that having lost the A
consignment and failed to deliver the same, the Appellant could not put forth
non-payment of freight, as a ground to avoid liability. The State Commission
noted that the only question that arose for its consideration on the contentions
urged was whether there was deficiency of service or not. The State
Commission did not go into the other two questions relating to limitation and B
want of notice under section 10 apparently as the said contentions were not
specifically urged at the time of arguments. The State Commission directed
the appellant to pay the value of the consignment, (Rs.5,83,440/-) less the
freight charges, with interest at the rate of 9% per annum from the date of
booking, and costs of Rs.2000/-.

5. The appeal filed by the appellant against the order dated 14.6.2004
c
of the State Commission, was dismissed by the National Commission by a
brief order dated 11.8.2004. It found no substance in the appeal, as hiring (for
transportation of the goods) was covered by CP Act, and the appellant as
carrier, did not deliver the consignment. In this appeal against the order of
the National Commission, the appellant reiterated its contentions and also D
made a grievance that the State Commission and National Commission had
failed to consider its contentions relating to maintainability and limitation,
inspite of those contentions being specifically raised. On the contentions
urged, the following three points arise for our consideration in this appeal :

(i) Whether the complaint was barred by the provisions of Section E
10 of the Carriers Act, I 865?
(ii) Whether the complaint was barred by limitation under Section
24A of the Consumer Protection Act, I 986?
(iii) Whether there was no contract for service, as the respondent had F
refused to pay the freight charges?

Re : Point No. (i) ·

6. Section 10 of the Act provides that no suit (or complaint) could be
instituted a.gain st a common carrier for the loss of goods, unless a notice in
writing, of the loss, had been given to the carrier before the institution, but G
within six months of the time when the plaintiff(or complainant) came to know
about the loss. The appellant contends that the respondent can be said to
have become aware of the loss of the consignment on 8.8.1988 (when it
demanded delivery), but· issued the legal notice demanding the value of
consignment only on 27.10.2000 long after the expiry of six months from the H
(

1088 SUPREME COURT REPORTS [2007) 2 S.C.R.

A date of knowledge. It further contended that even the notice dated 27.10.2000
did not purport to be one under Section I0 of the Carriers Act. Reliance is
placed .on the decisions of this Court in Arvind Mills Ltd. v. Associated
Roadways, (2004] 11 SCC 545 to contend that the complaint is barred without
a notice under section I0 of the Act.

B 7, Section I0 of the Act requiring notice, is extracted below:

"I 0. Notice of loss or in)WJ' to be given within six months.-No suit
shall be instituted against a common carrier for the loss of, or injury
to, goods (including containers, pallets or similar article of transport
used to consolidate goods) entrusted to him for carriage, unless
c 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."

Section I0 requires a notice in the manner set out therein, for initiation of a
D proceedings against a common carrier for loss of goods or injury to goods
entr:Jsted for carriage. The notice need n-ot say specifically that it is issued
under section I0 of Carriage Act, 1865. It is sufficient if the notice fulfils the
requirement of section 10, that is to inform the carrier about the loss or injury
to the goods. Such notice under Section 10 will certainly be required where
the common carrier delivers the goods in a damaged condition, or where the
E common carrier loses the goods entrusted for carriage and informs about such
loss to the consignor/consignee/owner. The object of the section is to put
the carrier on notice about the claim in respect of the loss or damage to the
consignment so that it can make good the loss occasioned. But where there
is no loss or injury to the goods, but the common carriter wrongly or illegally
refuses to deliver goods and the person entitled to delivery initiates action
F r
for non-delivery, obviously section JO will not apply. Similarly, where the
common carrier informs the person entitled to delivery (consignor/consignee/
owner) that the consignment is being traced and process of tracing it is still
going on and requests him to wait for the consignment to be traced and
delivered, but does not subsequently inform him either about the loss of the
G consignment, or about its inability to trace and deliver the consignment, the
claim by the consignor/consignee, will not be for loss or injury to goods but
for non-delivery of goods. The requirement relating to notice within six
months in section I0 will not apply to a claim based on such non-delivery.
In fact section I0 does not use the word 'non-delivery' of goods, but uses
the words 'loss of, or injury to, goods'. A case of 'non-delivery' will become
H
>
TRANSPORT CORPN. or INDIA LTD.\'. VELJAN HYDRA!R LTD. [RA VEENDRAN, 11 1089

a case of 'loss' of consignment, only when the common carrier informs the A
consignor/consignee about the loss of the consignment.

8. In Arvind Mills (supra) relied on by the Appellant, this Court held
that the word "suit" used in Section I 0 will include a complaint under the
Consumer Protection Act, 1986 and that in the absence of a notice under
Section I 0 of the Carriers Act, a complaint against a common carrier for B
compensation for loss suffered by the complainant cannot be entertained. But
that decision did not relate a claim regarding non-delivery of the consignment,
where the carrier failed to inform that the goods have been lost. The said
decision does not, therefore, help the Appellant.

9. In this case, the appellant-carrier did not inform the respondent that
c
the goods were lost. The respondent was constantly in touch with the
appellant and demanding delivery. By letters dated 15. 12. 1998, 21.6. 1999 and
3. 7.1999, the appellant repeatedly informed the respondent that it was in the
process of locating the goods, sought time to report about the status and
requested the Respondent to wait. Even when the respondent issued a notice D
through counsel on 27. I 0.2000 (served on 30. I0.2000) demanding the cost of
the consignment, the appellant did not say that the consignment was lost. In
such circumstances, it is not possible to attribute knowledge of 'loss' to the
person instituting the action for non-delivery. Therefore, there was no need
to issue a notice under section I 0, and non-issue of a notice under Section
I 0, did not invalidate the claim or the complaint. E
Re : Point (ii) :

I 0. In the objection filed before the State Commission, the Appellant
contended that the cause of action arose on 8.11.1996 and having regard to
the limitation of two years prescribed under the CP Act, the complaint filed F
on 5.7.2001, was time-barred. However, in the special leave petition, the
Appellant contended that the cause of action arose on 8.8.1998 and therefore,
the claim ought to have been filed on or before 8.8.2000.

11. Section 24A of the Consumer Protection Act, 1986 provides that G
neither the District Forum nor the State Commission nor the National
Commission shall admit a complaint unless it is filed within two years from
the date on which the cause of action has arisen. The term "cause of action"
is of wide import and has different meanings in different contexts, that is when
used in the context of territorial jurisdiction or limitation or the accrual of right
to sue. It refers to all circumstances or bundle of facts which if proved or H
(

1090 SUPREME COURT REPORTS [2007) 2 S.C.R.

A admitted entitles the plaintiff (complainant) to the relief prayed for. In the
context of limitation with reference to a contract for carriage of goods, the
date _of cause of action may refer to the date on which the goods are
entrusted, date of is,ue of consignment note, the date stipulated for delivery,
the date of delivery, the date of refusal to deliver, the date of intimation of
B carrier's request to wait for delivery as the goods are being traced, the date
of in\imation of loss of goods, or the date of acknowledgement of liability.

12. In this case, the consignment was entrusted to the appellant on
I 0.5.1996. On 8.11.1996, the respondent instructed the appellant to re-book the
consignment. On 8.8.1998, 13.10.1998, 7.11.1998 and 8.12.1998, the respondent
C demanded delivery. By letters dated 15.12.1998, 21.6.1999 and 3.7.1999, the
appellant assured the respondent that it was in the process of locating the
goods and requested the respondent to wait and assured that it will inform
about the status. Thereafter the appellant did not inform the status. The
complaint has been filed within two years from the date of receipt of the said
letter dated 3.7.1999 and is in time. In fact in view of the request of the
D appellant to the respondent to wait till the consignment was traced, the
limitation for an action would not start to run until there was a communication
from the appellant either informing about the loss or expressing its inability
to deliver or refusal to deliver, or until the respondent makes a demand for
delivery or payment of value of the consignment after waiting for a reasonable
E period and there is non-compliance. Therefore, the complaint is not barred
under section 24A of CP Act.

Re : Point No. (iii}

13. In Patel Roadways Ltd. v. Bir/a Yamaha Ltd, (2000] 4 SCC 91, this
F Court held that loss of goods or injury to goods or non-delivery of goods,
entrusted to a common carrier for carriage, would amount to a deficiency of
service and, therefore, a complaint under the Consumer Protection Act, 1986
would be maintainable. When a person entrusts a goods to a common carrier
for transportation and the carrier accepts the same, there is a contract for
"service", within the meaning of CP Act. Therefore, when the goods are not
G delivered, there is a deficiency of service. It is no doubt true that 'service'
for purposes of CP Act does not include rendering of service free of charge.
Where the contract for transportation is for a consideration (freight charge),
the mere fact that such consideration is not paid, would not make the service
'free of charge'. There is difference between contract without consideration,
H and contract for consideration, which is not paid. If there is non-payment of
TRANSPORT CORPN. OF INDIA LTD. v. VELlAN HYDRAIRLTD. [RA VEENDRAN,l] J09 J

the freight lawfully due, the carrier may sue for the charges, or withhold the A
consignment and call upon the owner/consignor/consignee to pay the freight
charges and take delivery, or on failure to pay the freight charges, even sell
the goods with due notice to recover its dues, where such right is available.
But where the common carrier has misplaced or lost the goods and, therefore,
not in a position to deliver the goods, it obviously cannot demand the freight B
charges, nor contend ihat non-payment of freight charges exonerates it from
liability for the loss or non-delivery. When the carrier informs that the
consignment is not traced and is under the process of being traced, obviously
the owner/consignor/consignee cannot be expected to pay the freight charges.
In the circumstances, the third point is also answered against the appellant.

Conclusion :
c
14. The State Commission ought to have awarded the entire cost of the
consignment. It committed an error in deducting the freight charges from the
amount payable to the respondent. There was no liability to pay the freight
charges where the consignment is lost or where there is non-delivery. Be that D
as it may. As there was no appeal by the Respondent on this issue, there is
no .question of increasing the amount awarded.

15. As all the three contentions are rejected, and as we find no infirmity
in the order of the State Commission, as affirmed by the National Commission,
the appeal is dismissed with costs of Rs.5000/- payable to the Respondent. E
RP. Appeal dismissed.