A Brief Study on Carriage Laws and Multi-Modal Transportation of Goods

INTRODUCTION

With the changing economic scenario, factors such as globalization of markets, international economic integration, and removal of barriers to business and trade and increased competition have enhanced the need of transportation. It is one of the most important infrastructure requirements, which is essential for the expansion of opportunities and plays an important role in making or breaking the competitive positioning.

In the commercial life of any country, the need for carrying goods from one place to another cannot be overemphasized. Also, goods are to be moved from one country to another. For these purposes, a contract of carriage is to be entered into. The persons, organizations or associations which carry goods are known as carriers. Goods may be carried by land (including inland waterways), sea or air.

Multimodal transportation is the movement of cargo from the point of origin to the final destination, outside India, by using two or more modes of transport. Therefore the combination of all four modes of transportation i.e. (a) Air (b) Road (c) Rail (d) Sea is defined as `multimodal transport system'.

LAWS GOVERNING CARRIAGE OF GOODS AND MULTI MODAL TRANPORTATION

Accordingly, the law relating to carrying of goods in India is contained in the following enactments:

1. In case of carriage of goods by land:

(i) Carriage by Road Act, 2007 (Earlier enactment - The Carriers Act, 1865).

(ii) The Railways Act, 1989.

2. In the case of carriage of goods by air:

The Carriage by Air Act, 1972

3. In case of carriage of goods by sea:

(i) The (Indian) Bills of Landing Act, 1856.

(ii) The Carriage of Goods by Sea Act, 1925.

(iii) The Merchant Shipping Act, 1958.

(iv) The Marine Insurance Act, 1963.

4. Law governing multimodal transportation of goods

The Multimodal Transportation of Goods Act, 1993 governs multi modal transportation of goods.

Wherever there is no specific provision for a particular matter in these statutes, then the Indian Courts resort to English Common Law.

CARRIAGE LAWS

In the commercial life of any country, the need for carrying goods from one place to another cannot be overemphasised. Also, goods are to be moved from one country to another. For these purposes, a contract of carriage is to be entered into. The persons, organisations or associations which carry goods are known as carriers. Goods may be carried by land (including inland waterways), sea or air.

Accordingly, the law relating to carrying of goods is contained in the following enactments:

1. In case of carriage of goods by land:

(i) Carriage by Road Act, 2007 (Earlier enactment - The Carriers Act, 1865).

(ii) The Railways Act, 1989.

2. In the case of carriage of goods by air:

The Carriage by Air Act, 1972.

3. In case of carriage of goods by sea:

(i) The (Indian) Bills of Landing Act, 1856.

(ii) The Carriage of Goods by Sea Act, 1925.

(iii) The Merchant Shipping Act, 1958.

(iv) The Marine Insurance Act, 1963.

Wherever there is no specific provision for a particular matter in these statutes, then the Indian Courts resort to English Common Law.

CARRIAGE OF GOODS BY LAND

The Carriage by Road Act 2007 and the Railways Act, 1890 apply to carriage of goods by land. The Carriage by Road Act applies only to common carriers as distinguished from private carriers.

As per Notification No. S.O 2001(E) Dated 13th August 2010, the Central government appoints the 1st of March 2011 as the date when the Carriage by Road Act 2007 shall come into force.

The Carriage by Road Act, 2007 defines the term “common carrier” and provides for his rights, duties and liabilities. As regards matters not covered by this Act, the rules of English Common Law will apply.

A common carrier may be any individual, firm or company, which transports goods as regular business for money, over land or inland waterways. A private carrier, carries his own goods and may occasionally carry goods for selected persons. He is not covered by the Carriage by Road Act but by the Indian Contract Act.

The Carriage by Road Act 2007

The Carriage by Road Act, 2007 was passed to repeal the original Carriers Act, 1865 as it had become obsolete.

The Carriage by Road Act, 2007 received the President’s assent on 29th September 2007 and was notified on 1.10.2007. The Act will come into force on 1st March 2011. The Ministry of Road Transport and Highways, has framed draft Rules under this Act namely “Carriage by Road Rules 2010” and they are put on the Ministry’s website for comments.

It is an Act to provide for the regulation of common carriers, limiting their liability and declaration of value of goods delivered to them to determine their liability for loss, or damage to, such goods occasioned by the negligence or criminal acts of themselves, their servants or agents and for matters connected therewith or incidental thereto.

The Act extends to the whole of India except the State of Jammu and Kashmir. The Act contains only 22 sections and envisages a central registration unit for all common carriers and imposes deterring penalty on common carrier for violation of provisions of the Act.

Ministry of Road Transport and Highways

An apex organisation under the Central Government, the Ministry of Road Transport and Highways (MORTH) is entrusted with the task of formulating and administering, in consultation with other Central Ministries/Departments, State Governments/UT Administrations, organisations and individuals, policies for Road Transport, National Highways and Transport Research with a view to increasing the mobility and efficiency of the road transport system in the country. The Ministry has two wings – Roads Wing and Transport Wing. The Road Transport Division of the Ministry is entrusted with the job of administration of the Carriage by Road Act 2007.

Meaning of Common Carrier

Under the Carriage by Road Act 2007, common carrier means “ a person engaged in the business of collecting, storing, forwarding or distributing goods to be carried by goods carriages under a goods receipt or transporting for hire of goods from place to place by motorized transport on road, for all persons undiscriminatingly and includes a goods booking company, contractor, agent, broker and courier agency engaged in the door-to-door transportation of documents, goods or articles utilizing the services of a person, either directly or indirectly, to carry or accompany such documents, goods or articles but does not include the Government”

A common carrier in common-law countries (corresponding to a public carrier in civil-law systems, usually called simply a carrier) is a person or company that transports goods or people for any person or company and that is responsible for any possible loss of the goods during transport. A common carrier offers its services to the general public under license or authority provided by a regulatory body. The regulatory body has usually been granted authority by the legislation which created it. The regulatory body may create, interpret, and enforce its regulations upon the common carrier (subject to judicial review) with independence and finality, as long as it acts within the bounds of the enabling legislation.

Classification of Carriers

Carriers can be classified as:

i. Common carriers;

ii. Private carriers;

iii. Independent carriers; or

iv. gratuitous carriers.

i. Common carrier - The Carriage by Road Act 2007 defines “common carrier”. A common carrier holds itself out to provide service to the general public without discrimination (to meet the needs of the regulator's quasi judicial role of impartiality toward the public's interest) for the "public convenience and necessity". A common carrier must further demonstrate to the regulator that it is "fit, willing, and able" to provide those services for which it is granted authority. Common carriers typically transport persons or goods according to defined and published routes, time schedules, and rate tables upon the approval of regulators.

ii. Private Carrier - A private carrier is distinguished from a common carrier whose primary business is the transport of goods, and which is in business to serve any customers that hire them, such as buses, railroads, trucking companies, airlines and taxis. Private carriers may refuse to sell their services at their own discretion, whereas common carriers must treat all customers equally. A private carrier is a company that transports only their own goods. Usually the carrier's primary business is not transportation but rather something else.

A private carrier does not make a general offer to carry goods for any one from one place to another for hire. However, he may enter into a contract with someone to carry goods on the terms agreed upon between them. In such a situation, it is a contract of bailment. Therefore, such transactions are not covered by the Carriage by Road Act 2007.

iii. Independent Carrier - is an individual owner-operator or trucker who may make deals with private carriers, common carriers, contract carriers, or others as he or she wishes.

iv. Gratuitous Carrier - When a person carries goods of another free of charge, he is a gratuitous carrier. Similarly a person may give lift in his transport to another person voluntarily without any compensation. Thus a gratuitous carrier may carry not only goods but persons also free of charge.

It is to be noted that the Carriage by Road Act 2007 does not apply to the Government. Also though the liabilities of a common carrier are determined by the Carriage by Road Act 2007, a private carrier’s liability is not determined by this Act. He is liable as a bailee as given in the Indian Contract Act, 1872.

Important Terms

Consignee – means the person named as consignee in the Goods Forwarding Note.

Consignor – means a person, named as consignor in the goods forwarding note, by whom or on whose behalf the documents, goods or articles covered by such forwarding note are entrusted to the common carrier for carriage thereof.

Goods Forwarding Note – Every consignor shall execute a goods forwarding note in the prescribed form and manner which shall include a declaration about the value of the consignment and of goods of dangerous or hazardous nature. The consignor shall be responsible for the correctness of the particulars furnished by him in the Goods Forwarding Note. He also has to indemnify the common carrier against any loss suffered by him due to incorrectness or incompleteness of the note.

Goods Receipt - A Goods Receipt is a receipt issued by the common carrier. A common carrier shall issue a Goods Receipt in the prescribed Form and Manner in the following cases:

a. In case where the goods are to be loaded by the consignor, on the completion of such loading; or

b. In any other case, on the acceptance of the goods by him.

The Goods Receipt shall be issued in triplicate and the original shall be given to the consignor.

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