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Wednesday, March 9, 2011

Something on Carriage by Road Rules 2010

Production of goods is industrial action; the logistics  - the movement of goods from one place to another catering to the demand is the integral part of economic development.  It helps the Suppliers, creates volumes for Transport industry and source of revenue for Insurers.  

In all probability, goods were bought and sold and movement largely depended on the traders.  Then came the outsourcing of movement to transporters – precursor to modern day carriers. Centuries ago, when the profession of carrying of goods or passengers was growing and when the carriers had an opportunity contract out liability even for negligence or misconduct – the Carriers Act 1865 came in to being.  The Indian Act followed the English Carriers Act 1830 which was passed with the primary object of protecting the common carriers from the great risk which they ran under the common law in carrying parcels containing articles of great value in a small campus.  It had limited sections and stood the scrutiny of time for very many years.

After decades,  in Sept 2007, Indian Parliament enacted “The Carriage by Road Act 2007”  -  which inter-alia prescribed : mandatory registration of common carrier, liability of carrier to have regard to value, freight and nature of goods, consignors having to execute Goods forwarding note, single registration for a common carrier, common carrier liable for overloading inviting penalty under Sec 194 of MV Act, force majeure clause exonerating the carrier from liabilities etc.,

The Act elaborated the definition of ‘common carrier’ to include those in the business of collecting, storing, forwarding or distributing goods to be carried by goods carriage under a goods receipt from the earlier constrained definition which was
“ a person, other than the Govt. engaged in the business of transporting for hire property from place to place, by land or inland navigation, for all persons indiscriminately”

Thus under the New Act, the term Carrier encompasses, a goods booking company, contractor, agent, broker, and courier agency engaged in door to door transportation of documents, goods or articles.   With the passage of  ‘The Carriage by Road Act 2007” the time tested ‘Carriers Act 1865’ stood repealed.  The Act can be effectively put into use only with the Administrative rules and ‘Carriage by Road Rules 2010’ were drafted and circulated by the Ministry of Road Transport and Highways and notified on 15th June 2010.   The Notification clearly stated that notice is being given that the said draft rules shall be taken into consideration after the expiry of 45 days from the date on which copies of notification as published in Gazette of India are made available to Public.  

Apart from the Traders and common public, this has significance for Insurers as well.  Though Insurers are not a direct party to the contract of carriage, the modifications do affect the Insures and GIC also filed their suggestions in consultation with participating Insurers.    Sadly, more than 3 years after the Presidential assent of the Statue, the rules are yet to be legitimized.  There have been strong objection by various lobbies and the authority for registering the carriers is yet to be in place.  The transport sector continues to be unorganized and the regulations are yet to fall in place.  There were newspaper reports that the Implementation of the Act stood deferred upto 28/2/2011 as announced by the Minister of State for Road Transport and Highways in the Lok Sabha. 

With the deadline closing on there are some reports in Press that this has indeed been notified in March though no copies of notification are readily available.  The draft rules had earlier fixed the liability of common carrier for loss of or damage to consignment to ten times of the freight paid or payable.   Though this looks innocuous, think of the cargo that you are sending and its value as compared to the freight that you have been paying – one will realize the trap or the hopeless position that you are facing.  

The newspaper reports have it that it is 12 times the freight as penalty besides suspension of licence for a week !!  There is also another report that the Goods Transport agents will have to pay full value if the loss is due to negligence of was caused by theft by the carrier themselves.  

The waters are still murkier and it is not clear whether the draft rules have been notified as they are and whether the Registration mechanism is now well set in place.   Goods worth crores of money are in transit, in the hands of transport industry and it is only natural justice that they are made to pay for losses caused by their own acts of negligence or intent. 

The draft notification earlier had it that the delivery of the consignment  by the common carrier shall be treated as prima facie evidence of delivery of goods unless notice of general nature of loss of or damage to the goods is given in writing by the consignee at the time of handing over of the goods to them.   It further provides that where loss or damage is not apparent, notice be given within six days from the date of actual handing over of consignment to the consignee.   

When will the murkier water get clear is the Q uppermost….

Regards – S. Sampathkumar.


  1. Good one Sampath. Carriers would any way get out of the net after causing the damage. Insurers will end up paying the claim and not being able to recover anything ! - Murphy

  2. the definition of common carrier and the carriage photo is so good - Nair

  3. Good information.
    Name and address of the Authority with whom Transporter is to register and to whom the complaint of violation of provisions of the Act may also be included in this page.
    V K Sinha