The movement of goods and services are integral part of an economy and their development is entwined with economic growth. The Carriers Act 1865 lays down the rights and liabilities of the Common Carrier. The objective of the act was not only to limit the liability of the carrier for loss or damage to goods delivered to them for carriage but also to declare the liability of the carriers for loss or damage to such goods due to negligence or criminal act by themselves or their employees or agents. However the transport scenario has undergone significant changes with increases sophistication and complexity.
The changes which have taken place since the enactment of the Act can be summarised as under.
- Various modes of transport now have separate enactments like transport by the railways being regulated by the Railways Act 1989.
- The transport industry has undergone a major change. A number of players and middlemen like brokers and agents have come into existence who play a significant role in the process of movement by road.
- The liability specified in the existing Act a one hundred rupees has also become inadequate and irrelevant.
A number of differences have been noticed in the course of enforcement of the provisions of the Carriers Act 1865. The Act has no provision for registration of Common Carriers. It has also not envisaged the extent of sophistication and complexity of the transport trade.
Consequently the Transporter’s Associations have repeatedly demanded that the existing Act be repealed and replaced by a new Act to cater to the present day requirements of transport, trade and commerce.
A committee set up by the government to review the Act in view of,
- Other modes of transport are already covered under separate enactments,
- Need for redefining the common carrier
- Regulation of the common carriers by State
- Provision for a transport framework of rights and liabilities to govern the transactions of Common Carriers and the customer.
The Committee had recommended repeal of the Carriers Act 1865 and the re-enactment incorporating the above requirements and to achieve the following objectives.
- to regulate and limit the liability of the Common Carriers,
- to provide for registration of Common Carriers,
- to ensure proper statistical reporting in the transport sector by persons involved in the transportation business,
- to regulate carriage of hazardous and dangerous goods,
- to provide for rule making powers to deal with emerging and changing scenario time
- to from time to repeal the Carriers Act 1865
On 29th Sep 2007, the said bill was passed by the parliament and it came to be known as “The carriage by Road Act 2007”.
Common Carrier
Under the Carriage by Road Act 2007, a Common Carrier defined as a person other than the government engaged in the business of transporting goods or people from place to place on hired basis by motorised transport on road for all persons indiscriminately.
A person under this Act includes goods broking company, contractor, agent, broker and courier agency engaged in the door-to-door transportation of documents either directly or indirectly.
However a carrier who is employed to transport goods for people for specific needs on an individual case basis is a Private Carrier. For example, city buses are a common carrier, but a moving company which is hired on a one-time basis is a private carrier. A common carrier runs according to a regular schedule on a designated route.
The Act provides that a person cannot engage in business of common carrier wholly or partly without registration and a certificate of registration is mandatory.
Liability of Common Carrier
- The liability of the Common Carrier for loss of, or damage to any consignment, shall be limited to such amount as may be prescribed having regard to the value, freight and nature of goods, documents or articles of the consignment, unless the consignor or any person duly authorized in that behalf have expressly undertaken to pay higher risk rate fixed by the common carrier.
- The liability of the common carrier in case of any delay up to such period as may be mutually agreed upon by the consignor and the common carrier and specifically provided in the goods forwarding note including the consequential loss or damage to such consignment shall be limited to the amount of freight charges where such loss, damage or delay took place while the consignment was under the charge of such carrier.
For delay beyond the period agreed upon in the goods forwarding note, compensation shall be payable in accordance with the value, freight and nature of goods, documents or articles of the consignment or as maybe specified in accordance with the terms of higher risk rate.
However the Common Carrier shall not be liable if such carrier proves that loss of, or damage to the consignment or delay in delivery thereof, did not take place due to his fault or neglect or that of his servants or agents.
Conditions limiting exonerating the liability of the common carrier
- Every common carrier shall be liable to the consignor for the loss or damage to any consignment in accordance with the goods forwarding note, where such loss or damage has arisen on account of any criminal act of the common carrier, or any of his servants or agents.
- In any suit brought against the common carrier for the loss, damage or non-delivery of consignment, it shall not be necessary for the plaintiff to prove that such loss, damage or non-delivery was owing to the negligence or criminal act of the common carrier, or any of his servants or agents.
- Where any consignment has been detained for examination or scrutiny by a competent authority and upon such examination or scrutiny it is found that certain prohibited goods or goods on which due tax was not paid or insufficiently paid have been entrusted to the common carrier by the consignor which have not been described in the goods forwarding note, the cost of such examination or scrutiny shall be borne by the consignor and the common carrier shall not be liable for any loss, damage or deterioration caused by such detention of the consignment for examination or scrutiny. However the onus of proving that such incorrect description of goods in the goods forwarding note was received from the consignor shall be on the common carrier.
Provision for carriage of goods of dangerous or hazardous nature to human life
The Act specifies the following in the context of goods of dangerous or hazardous nature to human life.
- No goods of dangerous or hazardous nature to human life shall be carried by a common carrier except in accordance with such procedure and after complying with such safeguards as may be prescribed.
- The Central Government may, by rules made in this behalf, specify the goods of dangerous or hazardous nature to human life and the label or class of labels to be carried in, or displayed on, the motor vehicle or such goods in the course of transportation.
- Notwithstanding anything contained in any other law for the time being in force, every common carrier shall scrutinise and ensure before starting transportation of any consignment containing goods of dangerous or hazardous nature to human life that the consignment is covered by, one or more insurance policies under a contract of insurance in respect of such goods providing relief in case of death or injury to a person or damage to any property or the consignment, if an accident takes place.
Rights of Common Carrier in case of consignee’s default
- If the consignee fails to take delivery of any consignment of goods within a period of thirty days from the date of notice given by the common carrier, such consignment may be deemed as unclaimed. In case of perishable consignment, the said period shall be a period of twenty-four hours or any lesser period as may be mutually agreed between the common carrier and the consignor.
- In the case of an unclaimed consignment the common carrier may :
- if such consignment is perishable in nature, have the right to sell the consignment; or
- if such consignment is not perishable in nature, can serve a notice to the consignee or to the consignor if the consignee is not available, requiring him to remove the goods within a period of fifteen days from the date of receipt of the notice and in case of failure, the common carrier shall have the right to sell such consignment without any further notice to the consignee or the consignor, as the case may be.
- The common carrier shall, out of the sale proceeds, retain a sum equal to the freight, storage and other charges due including expenses incurred for the sale, and the surplus, if any, from such sale proceeds shall be returned to the consignee or the consignor, as the case may be.
- Unless otherwise agreed upon between the common carrier and consignor, the common carrier shall be entitled to detain or dispose of the consignment in part or full to recover his dues in the event of the consignee failing to make payment of the freight and other charges payable to the common carrier at the time of taking delivery.
The General responsibility of common carrier
A Common Carrier shall be responsible for the loss, destruction, damage or deterioration in transit or non-delivery of any consignment entrusted to him for carriage, arising from any cause except the following, namely.
- act of God;
- act of war or public enemy;
- riots and civil commotion;
- arrest, restraint or seizure under legal process;
- order or restriction or prohibition imposed by the Central Government or a State Government or by an officer or authority Central Government or a State Government may authorize
However the common carrier shall not be relieved of its responsibility for the loss, destruction, damage, deterioration or non-delivery of the consignment if the common carrier could have avoided such loss, destruction, damage or deterioration or non-delivery by exercising due diligence and care in the carriage of the consignment.
Scheduled and Non-scheduled Goods
Under the Carriers Act, 1865, the liability of a common carrier of goods has been laid down. For this purpose, the Act has classified the goods into two categories.
- Scheduled goods
- Non-scheduled goods.
The scheduled goods are those which are mentioned in a Schedule to the Act. These are articles of value. All other goods are non-scheduled.
For scheduled articles exceeding Rs. 100 in value, the carrier is liable for loss and damage only,
- If the value and the description of the goods are disclosed by the consignor to the carrier, or
- If the loss or damage is due to a criminal act of the carrier, his agent or servant.
The carrier can charge extra for carrying scheduled articles, but he cannot limit his statutory liability by any special agreement. However in case of non-scheduled articles, a common carrier can limit his liability by special agreement with the consignor. But even in this section case he will be liable under section 8 of the Act.
In case of loss or damage, the claimant must notify the carrier within six months of the date of knowledge of the loss or damage.
