The River Steam Navigation Co., Lt.D vs Shyam Sundar Tea Co., Ltd

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: supreme-court

Case Number: Civil Appeal No. 401 of 1957

Decision Date: 05 May 1961

Coram: K.C. Das Gupta, P.B. Gajendragadkar, K.N. Wanchoo

The case titled The River Steam Navigation Co., Ltd. versus Shyam Sundar Tea Co., Ltd. was decided on the fifth day of May, 1961 by the Supreme Court of India. The opinion was authored by Justice K. C. Das Gupta and the bench was composed of Justice K. C. Das Gupta, Justice P. B. Gajendragadkar and Justice K. N. Wanchoo. The petitioner in the proceeding was The River Steam Navigation Co., Ltd. and the respondent was Shyam Sundar Tea Co., Ltd. The judgment bears the citation 1962 AIR 1276 and 1962 SCR (2) 802. The legal issue concerned the status of a steamship company that carried goods by steamer on a main river and by boat on a tributary, where loss of the goods occurred while in transit on the tributary. The question was whether the company could be regarded as a common carrier for the feeder service and consequently be liable under the Carriers Act, 1865 (3 of 1865), section 2.

The headnote of the judgment explained that the determination of whether a carrier is a common carrier depends upon its public profession of carrying, which may be manifested either by a public notice or by the carrier’s conduct. The Court held that it is irrelevant if the carrier limits its business to particular kinds of goods, specific routes or defined points of shipment. Earlier authorities such as Lane v. Cotton, Ingate v. Christis and Johnson v. Midland Railway Company were cited as precedents. In the present matter, the steamship companies, which had publicly professed to be common carriers on the main river, regularly agreed, when asked, to arrange the conveyance of goods by boat from stations on a tributary to the main‑river steamship station. They accepted the goods in the same manner as they did for the main‑river service. When loss of the goods occurred on the tributary, the High Court, although overturning the trial court’s finding of negligence, upheld a decree against the companies on the ground that they were common carriers. The Supreme Court affirmed that decision, observing that the tributary service was clearly a feeder service to the main route and that the public profession made in respect of the main route extended to the feeder operation. The Court further noted that the profitability of the feeder service, its regularity, or the existence of a fixed rate for all goods were not material considerations; the law does not require a common carrier to maintain a uniform tariff, and the absence of such a fixed rate in the feeder service was immaterial to the question of liability.

The judgment was issued under the civil appellate jurisdiction in Civil Appeal No. 401 of 1957. The appeal arose from the decree dated 15 June 1954 rendered by the Assam High Court in First Appeal No. 23 of 1950, which itself affirmed the decree of the Subordinate Judge of Upper Assam Districts in a suit brought by the respondent, Shyam Sundar Tea Co., Ltd., against the appellant companies. Counsel for the appellants was D. N. Mukherjee, while the respondent was represented by B. Sen, P. K. Chatterjee and P. K. Bose. The judgment of the Supreme Court was delivered on 5 May 1961 by Justice K. C. Das Gupta, who reiterated that the High Court’s decision was correct and ordered that it be affirmed.

The plaintiff, Shyamsundar Tea Co., Ltd., instituted suit against the defendants, who were joint owners of a steamer service operating between Dibrugarh and Calcutta along the Brahmaputra River. The tributary Desang, joining the Brahmaputra at Desangmukh Ghat, was the location where the plaintiff alleged the defendants received the goods. In the plaint the plaintiff contended that the defendants, acting as common carriers, accepted the goods at Dillibari Ghat on the Desang, situated about seventy miles upstream from Desangmukh Ghat, and agreed to transport them by boat to Desangmukh Ghat and subsequently by steamer to various stations, for a freight charge. The plaintiff further asserted that on 10 September 1946 it delivered one hundred and twenty chests of tea to the defendants at Dillibari Ghat for conveyance to Kidderpore in Calcutta. The vessel carrying those chests sank, resulting in total loss of the tea and no salvage. The plaintiff attributed the loss to negligence on the part of the defendants’ agents and servants and, alternatively, claimed that as common carriers the defendants were strictly liable for the loss irrespective of negligence. Accordingly, the plaintiff sought compensation of Rs. 1,6,224‑12‑0. The defendants advanced four principal defences. First, they denied that any delivery had been made to them at Dillibari Ghat and asserted that they had not undertaken any carriage from that point. Second, they contended that the sinking was not caused by any negligence of their servants. Third, they maintained that they were not a common carrier for the segment from Dillibari Ghat to Desang. Fourth, they pleaded that the Forwarding Note executed by the plaintiff completely released them from liability. The trial court, after examining the evidence, concluded that the plaintiff had indeed delivered the tea to the defendants at Dillibari Ghat for carriage to Kidderpore and that the sinking resulted from negligence of the defendants’ servants. Without definitively resolving whether the defendants qualified as common carriers for this contract, the trial court awarded the plaintiff the amount claimed. On appeal, the Assam High Court affirmed the decree, albeit for somewhat different reasons. The High Court accepted the trial court’s finding that the goods were delivered to the defendants at Dillibari Ghat for carriage. However, the High Court did not agree with the trial court’s determination of negligence. In its view, the plaintiff had failed to prove negligence on the part of the defendants’ servants, yet the High Court held that the defendants had undertaken the carriage in the capacity of common carriers, rendering the negligence issue immaterial, and that the terms of the Forwarding Note did not absolve the defendants of liability.

In this case the Court observed that the plaintiff had failed to prove any negligence on the part of the defendants’ servants. Nevertheless, the High Court had concluded that the defendants had undertaken the carriage from Dillibari Ghat in the capacity of common carriers, and therefore the issue of negligence was deemed irrelevant. The High Court also held that the terms and conditions set out in the Forwarding Note did not relieve the defendants of liability, and consequently it affirmed the decree originally granted by the Trial Court. It was noted that, although one of the learned judges, Ram Labhaya J., appeared initially hesitant to reach a conclusion on the two points—whether the goods had been delivered to the defendants at Dillibari and whether the defendants were common carriers for that carriage—he ultimately agreed with the Chief Justice and the other judge, and the joint conclusions were affirmed as previously described. The High Court issued a certificate under Article 133(1)(c) of the Constitution, on the basis of which the present appeal was filed.

The counsel for the appellants attempted to persuade the Court to reassess the findings of the lower courts that the plaintiff had indeed delivered the tea chests to the defendants at Dillibari Ghat. The counsel argued that it was Macneill and Company that operated the boat service from Dillibari to Desangmukh and that the defendants had no involvement in that business. The Court observed that the plaint did not contain any allegation that Macneill and Company performed an independent boat service to Desangmukh, and therefore there was no basis for overturning the well‑established practice of not interfering with concurrent factual findings of the Trial Court and the first appellate court. After reviewing the evidence, the Court affirmed the lower‑court finding that the plaintiff had delivered the tea chests in question to the defendants at Dillibari Ghat for carriage onward. The Court also found no reason to disturb the High Court’s finding that the plaintiff had not established any negligence on the part of the defendants’ agents.

The principal issue before the Court was whether the appellants were common carriers of goods between Dillibari Ghat and Calcutta. The appellants acknowledged that they acted as common carriers on the steamer routes between Desangmukh Station and all other destinations served by those routes. However, they contended that this status did not automatically extend to make them common carriers for carriage from Dillibari Ghat—or any place not situated on their steamer route—to destinations on the steamer route. The respondent, on the other hand, maintained that once it is established that the defendants are common carriers within the meaning of the definition, they must be treated as such for the carriage in question unless they can clearly demonstrate that, for that particular shipment, they did not act as common carriers.

According to the Carriers Act, a person who undertakes to transport goods must be deemed a common carrier in law unless, for the specific shipment in question, they can demonstrably show that they did not act as a common carrier. The Carriers Act of 1865 (Act III of 1865) defines a “common carrier” as “a person, other than the Government, engaged in the business of transporting for hire property from place to place, by land or inland navigation, for all persons indiscriminately.” This definition was adopted from English common law, which historically treated the profession of common carriers as a form of public service. In an early judgment, Lord Holt described the common carrier as a “public trust” (see Lane v. Cotton, 12 Mad. 474). Under English law, once such a public trust is undertaken, a carrier ceases to be merely a private carrier and becomes a public carrier, which the English law calls a “common carrier.” Explaining the difference, Alderson B observed in Ingate and Another v. Christis (1850) 3 Car & K. 61 that “everybody who undertakes to carry for anyone who asks him, is a common carrier. The criterion is whether he carries for particular persons only, or whether he carries for everyone. If a man holds himself out to do it for everyone who asks him, he is a common carrier; but if he does not do it for everyone, but carries for you and me only, that is a matter of special contract.” The question in any case whether a carrier is a common carrier or a private carrier therefore depends on what the carrier publicly professes. Such a profession may be manifested by a public notice or by an actual practice of carrying goods indiscriminately. The public duty to carry goods indiscriminately may be confined to certain kinds of goods, specific routes, or even to two or more designated points.

The principle was applied in Johnson v. Midland Railway Co. (1849) 4 Ex. 367, where the issue was whether the railway company was bound as a common carrier to transport coal from Melton Mowbray to Oakham. Parke B, with Alderson B, Rolfe B and Platt B, explained that “a person may profess to carry a particular description of goods only, for instance, cattle or dry goods, in which case he could not be compelled to carry any other kind of goods; or he may limit his obligation to carrying from one place to another, as from Manchester to London, and then he would not be bound to carry to or from intermediate places.” The learned Baron then observed that if the defendants were carriers at common law, they were not liable because there was no evidence that they had publicly undertaken to carry coal from Melton Mowbray to Oakham. He concluded that “the circumstances of their having undertaken to be carriers does not bind them to carry from or to each place on the line, or every description of goods.” This authority supports the appellants’ contention that merely being engaged in the transport of goods between certain points on their steamer service does not automatically mean that any other carriage they perform elsewhere is also as a common carrier. Consequently, it was necessary to examine the nature of the public profession claimed by the appellants with respect to the carriage of goods from Dillibari Ghat. The appellants’ counsel correctly pointed out that there was no public notice, unlike the notice that exists for places on the steamer service route, concerning the carriage from Dillibari Ghat.

The learned judge observed that the defendants could not be held liable as common carriers because the evidence did not show that they had ever publicly professed to carry coal from Melton Mowbray to Oakham. The judgment quoted the earlier decision in Johnson v. Midland Railway Company, which explained that a person may limit his carriage business to a particular description of goods or to a specific route, and that such limitations prevent a claim that the person is bound to carry every commodity or to serve every point along a line. Applying that principle, the judge concluded that the mere fact that the defendants had undertaken to act as carriers did not oblige them to transport goods from or to every place on a line, nor to carry every description of goods. This authority was cited to support the appellants’ argument that merely operating steamer services between certain places does not automatically imply that any other carriage they perform elsewhere is undertaken in the capacity of a common carrier. Consequently, the court deemed it necessary to examine the exact nature of the public profession claimed by the appellants with respect to the carriage of goods from Dillibari Ghat, rather than to assume that all such carriage fell within a common‑carrier framework.

The court noted that, as the appellants’ counsel correctly pointed out, there was no public notice concerning carriage from Dillibari Ghat, unlike the notices that existed for places on the regular steamer service route. Nevertheless, the court considered the regular conduct of the appellant companies in handling shipments from Dillibari Ghat and the surrounding circumstances. It was observed that tea gardens, which supplied the bulk of cargo for the companies’ dispatch steamers, found it convenient and economical to bring their produce to the nearest point on a river and then contract for carriage from those points to destinations on the steamer service routes. Evidence showed that the tea gardens regularly requested the appellants to arrange such carriage, and the companies invariably complied. The joint agent at Dibrugarh testified that the company “always tries to give facilities to the interior tea gardens and to all customers whenever they require any help,” and he made no mention of ever refusing a request for carriage from Dillibari Ghat. The court further noted that the companies depended on business from interior tea gardens, many of which were not situated directly on the main stream of the Brahmaputra, and that accepting goods for carriage from off‑stream locations was a natural extension of their effort to secure sufficient cargo for their steamers. Additionally, the defendant’s ghat supervisor at Desangmukh testified that “the Steamer Company bears expenses of the clearance of the rivers to make them navigable,” indicating that the company proactively invested in making tributary routes usable. This pattern of conduct was consistent with the view that the companies were eager to obtain any cargo available from the Desang River and other tributaries for onward transport to stations on the main steamer route.

In this case the Court observed that the service provided on the tributaries functioned as a feeder service for the main steamer route, and therefore the public declaration to carry the goods of every person on the main route necessarily extended to the feeder routes as well. The appellant’s counsel urged the Court to consider three matters: first, that the rate for carriage from Dillibari was not a fixed rate; second, that there was no regular service because boats were supplied only on requisition; and third, that the carriage was undertaken without profit. The Court held that the third proposition, even if proved, was of no consequence because a carrier may deliberately operate a loss‑making feeder service in order to attract lucrative business on the main steamer route where it expects to recover the losses. The second proposition was also held to be irrelevant to the question of whether a public profession to carry indiscriminately existed. The Court explained that the existence of a regular service is not a prerequisite for a common carrier’s duty, nor does the absence of regular service disprove a public profession; conversely, a carrier may maintain a public profession while providing service only on demand. Regarding the first proposition, the Court stated that the law does not require a common carrier to maintain a single fixed rate for all goods. Citing Blackburn J. in G. W. Ry. Co. v. Sutton, the Court quoted, “There was nothing in the common law to hinder a carrier from carrying for favoured individuals at an unreasonably low rate, or even gratis. All that the law required was, that he should not charge any more than was reasonable.” The Court further cited Professor Otto Kahn‑Freund’s observation that “the requirement of equality of charges… was entirely the creation of statute while the common law regards inequality as nothing more than possible evidence of ‘unreasonableness.’” Consequently, the Court concluded that the lack of a fixed charge for carriage from Dillibari could not be used to infer that the appellants were not common carriers for that segment of the journey.

The appellant’s counsel then advanced a further argument that bordered on desperation. He pointed to a Forwarding Note executed by the plaintiff for the journey from Desangmukh to Calcutta, noting that it contained a special contract limiting the carrier’s liability, and asked whether the absence of a similar Forwarding Note for the Dillibari‑to‑Desangmukh leg meant that the appellants could not be deemed common carriers for that leg. The Court rejected this line of reasoning, observing that a common carrier may limit liability by special contract, but the lack of such a contract does not negate the carrier’s status as a common carrier. The Court therefore held that the absence of a special contract concerning the Dillibari segment was wholly irrelevant. After reviewing the entire evidence, the Court formed the opinion that the appellants, by their conduct, had professed—though not by any public notice—to carry goods indiscriminately for anyone requesting carriage from Dillibari to various destinations on the main steamer route. Accordingly, the Court concluded that the appellants were indeed common carriers with respect to the plaintiff’s goods originating at Dillibari.

The Court observed that the plaintiff had a forwarding note for the journey from Desangmukh to Calcutta, and that note contained a special contract which limited the carrier’s liability. The Court then considered the argument that, if the appellants were truly common carriers for the carriage from Dillibari, it would be unreasonable to assume that there was no similar forwarding note covering the leg from Dillibari to Desangmukh. The Court rejected this line of reasoning as fundamentally incorrect. It explained that a common carrier is permitted to limit liability by a special contract, but the mere absence of such a contract does not demonstrate that the carrier is not a common carrier. Consequently, the fact that the appellants failed to prepare a special contract for the carriage from Dillibari was held to be wholly irrelevant. After reviewing the whole record, the Court concluded that the appellants, by their conduct, had manifested an intention to transport goods for anyone who requested carriage from Dillibari to various destinations on their principal steamer route, even though they had not issued any public notice to that effect. In that respect, the appellants were held to be common carriers for the plaintiff’s goods originating at Dillibari. The Court then addressed a final contention concerning the interpretation of the forwarding note. The contention asserted that the note should be read as also covering the carriage from Dillibari. The Court found that the forwarding note was expressly limited to the contract of carriage from Desangmukh to Calcutta and that no reasonable construction could extend its terms to the journey commencing at Dillibari. Because all of the points raised in the appeal were rejected, the Court dismissed the appeal and ordered the appellant to pay costs.