THE CARRIAGE BY ROAD ACT, 2007

The goods are carried by the mode of road, rail, sea and by air or combination
of any two or more of these modes.

The carriage of goods by road is

governed by The Carriage by Road Act, 2007; the carriage of goods by rail is
governed by the Railways Act, 1989; the carriage of goods by sea is governed
by The Indian Carriage of Goods by Sea Act, 1925; the carriage of goods by
air is governed by The Carriage by Air Act, 1972. The carriage of goods
involving two different modes is governed by The Multimodal Transportation of
Goods Act, 1993.
The Carriage by Road Act, 2007 has been passed in the year 2007 replacing
the old Carriage Act, 1865. The Act was implemented w.e.f. 15.08.2010. The
main objective of enacting the Act by repealing the old Carriage Act, 1865 is to
regulate and limit the liability of common carriers; to provide for registration of
common carriers and to regulate carriage of hazardous and dangerous goods:
I.

IMPORTANT DEFINITIONS OF THE ACT :

A) Common carrier Section 2 (a) of the Act, defines the word
common carrier. The definition is reproduced below :
Quote :
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
motorised 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
utilising the services of a person, either directly or indirectly, to carry or
accompany such documents, goods or articles, but does not include the
Government

Unquote :
The above definition classifies the common carriers into two categories
namely;
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Carriage of Goods by use of motorised transport on road and

Carriage of Goods / transportation of documents, goods or articles

utilizing the services of persons.

The transporters who are engaged in the movement of white oil, black
oil, bitumen (bulk & packed), LPG (bulk & packed), Lubes (bulk &
packed) falls within the definition of Common Carrier.
B) Consignee - Section 2 (b) defines the word Consignee which is
reproduced below :
Quote :
"consignee" means the person named as consignee in the goods forwarding
note;

Unquote:
C) Consignment - Section 2 (c) defines the word Consignment which
is reproduced below :
Quote :
"consignment" means documents, goods or articles entrusted by the
consignor to the common carrier for carriage, the description or details of
which are given in the goods forwarding note;

Unquote :
D) Consignor - Section 2 (d) defines the word Consignor which is
reproduced below :
Quote :

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"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;

Unquote :
E) Goods - Section 2 (e) defines the word Goods which is
reproduced below :
Quote :
"goods" includes(i) containers, pallets or similar articles of transport used to consolidate goods;
and
(ii) animals or livestock;

Unquote :

F) Registering Authority - Section 2 (f) defines the word Registering

Authority which is reproduced below :
Quote :
Registering Authority means a State Transport Authority or a Regional
Transport constituted under section 68 of the Motor Vehicles Act, 1988

Unquote :
II.

REGISTRATION AS COMMON CARRIER :

The Act mandates that a person cannot engage in the business of
Common Carrier without Certificate of Registration granted by the
Registering Authority. The Carriage by Road Rules, 2011 (hereinafter
referred to as rules) provide for the procedure & requirement for
registration as a common carrier.

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Rule 3 provides for the requirement for registration as a common

carrier.

The common carrier has to make an application in the

prescribed format as per the Form No. 1 of the said rules.

Rule 4 lays down the conditions to be complied with by the common
carrier while making an application for grant of registration certificate.
The common carrier shall comply with the following:
1. Common carrier to produce Registration Certificate of two
commercial vehicles registered in his name or in the name of
organization or in the name of partner or Proprietor or Director or a
Contract letter or Work Order for carrying out function as a common
carrier.
2. Common carrier shall have a net worth of Rs. 5 lakhs. This should
be supported by the Certificate from the Chartered Accountant or
Audited balance sheet or Income Tax Return.
3. Common Carrier shall have a net worth of Rs. 20 lakhs in case
he/she intends to provide a Certificates at a higher risk.
Explanation: The liability of a common carrier for loss of, or damage
to consignment is restricted /limited having regard to the value,
freight and nature of goods, documents or articles of the
consignment. However, common carrier can fix higher risk rate for
enlarging its liability for loss of or damage to consignment provided
the consignor undertakes to pay such higher risk rate determined by
the common carrier for movement of such consignment.

The

consignor and common carrier can enter into an agreement for

compensation at a higher risk on the condition provided the
consignor undertakes to pay higher transportation charges to the
common carrier.
4. Common carrier should not have been blacklisted or deregistered
earlier.
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The grant of registration certificate is subject to the satisfaction of

registering Authority that the common carrier has fulfilled the above
conditions.
The registering authority has to communicate its refusal to entertain the
application for registration within a period of 60 days. In case, no such
communication has been issued, then the Registering authority has to
issue Certificate of Registration within a period of 30 days from the
expiry of 60 days notice period.
The Act permits the Common carrier to shift its registered office or to
register the branch office subsequent to the grant of registration
certificate.
III.

VALIDITY OF REGISTRATION CERTIFICATE

The registration certificate granted under the Act as per the format
prescribed under Form 2 of the rules is valid for a period of 10 years.

IV.

SUSPENTION

OR

CANCELLATION

OF

CERTIFICATE

OF

REGISTERATION.
The registering authority on the satisfaction of the grounds has a power
to suspend or cancel the registration certificated granted to the
common carrier. The certificate of registration can be cancelled or
revoked on following grounds
1) Common carrier has failed to maintain registers as prescribed under
the Act.
2) Common carrier shifted the registered office without obtaining the
permissions
3) Common carrier failed to submit the reports prescribed under the
Act within 120 days after the Thirty First March of every year.
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4) Common carrier failed to display Certificate of registration at

registered office or branch office.
5) Common carrier has allowed to load the motor vehicle beyond the
gross vehicle weight mentioned in the Registration Certificate
whose Registration No. is mentioned in the GFN.

V.

REMEDIES

AVAILABLE

TO

COMMON

REFUSAL/SUSPENSION/CANCELLATION

CARRIER
OF

AGAINST

REGISTRATION

CERTIFICATE.
The Registering Authority is under obligation to issue Show Cause
Notice to the common carrier before refusing his application for grant of
Registration Certificate or suspension or cancellation of certificate and
offer opportunity of hearing.
The common carrier has a right to file an appeal within period of 60
days from the date of order refusing the application for grant grant of
registration certificate or suspending/revoking the certificate of
registration to the State Transport Appellant Tribunal.
VI.

GOODS FORWARDING NOTE (GFN):

The Act mandates that every consignor while entrusting the goods for
transportation to the common carrier shall execute GFN in the format
prescribed under Form 7 of the rules, which is reproduced below:
Quote :
FORM 7
GOODS FORWARDING NOTE
(See rule 10(1))
Sr.
No.
1.

Subject

Details

2.

Goods Forwarding Note No. and Goods Receipt No. Date, if any. (GFN should be
machine numbered)
Details of Consignor & Consignee

3.

Particulars of the Goods

4.

Value of Goods

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5.

Weight / Volume and No. of Packages / units

6.

Origin

7.

Destination

8.

Expected date of delivery under normal conditions

9.

Whether the cargo/consignment to be booked under section 10 or under section 11

of the Act
10. Desirable period of delay, if any, beyond the likely date of delivery (requirement of
section 10(2) if the cargo is to be booked under section 10 of the Act.
11. Cargo to be booked as (a) dangerous & hazardous goods (D & H) category or as (b)
Normal Goods
12. Details of the insurance policy / cover (for carrying dangerous / hazardous goods.

I . have taken necessary precautions for carrying dangerous and hazardous goods.
.
Signature of the consignor
Date : .
Note : - For dangerous & hazardous goods, the form should have upper left hand corners printed in red as
Dangerous and Hazardous goods.

Unquote :
Consignor is responsible for the correctness of the particulars furnished in the
GFN and is responsible to indemnify the common carrier against any damage
suffered due to the reasons of incorrectness or incompleteness of the
particulars on the GFN.
Consignor is under obligation to issue Goods Forwarding Note in duplicate to
the transporter. GFN should contain on upper left hand corner in Red colour
Expand goods if the consignment is pertaining to hazardous goods.
The common carrier has to return an Acknowledged copy of GFN to
consignor.
Consignor has to make a mention of valid Insurance Policy for carrying
dangerous & hazardous goods on the GFN.

VII.

Goods Receipt :
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The Common Carrier upon receipt of the GFN has to issue a Goods
Receipt, in the format prescribed under Form, of the rules which is
reproduced below:
Quote :
FORM 8
GOODS RECEIPT
(See rule 10(4))
Sr. No.
1.

Subject

Details

Goods Forwarding Note No. and Date

2.

Goods Receipt No. & Date ( GR should be machine numbered)

3.

4.

Details of Consignor
Name and Address:
Details of Consignee
Name and Address:
Particulars of the Goods & their value

5.

Wieight/Volume and No. of Packages / units

6.

Origin of Consignment

7.

Destination of Consignment

8.

Whether the cargo/consignment has been booked under Section 10 or under Section 11 of the
Act.

9.

Distance to destination

10.

Likely date of delivery

11.

Mutually agreed period of delay beyond the likely date of delivery (requirement of section 10 (2)

12.

Freight collected/paid/due (for calculating liability under Section 10 (1)

13.

Additional payment collected / due over and above freight charges for higher risk undertaken by
the common carrier as mutually agreed upon with the consignor if cargo booked under Section
11.
Details of the insurance Policy / cover (in case of dangerous / hazardous goods)

14.

I. .. have taken necessary precautions for carrying dangerous and hazardous goods.

Date :.

Note: For dangerous and hazardous goods the form

Hazardous goods.

.
Signature of the registered common carrier/his authorized agent:

should have upper left

Unquote :

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hand corners printed in Red as Dangerous and

VIII.

LIABILITY OF THE COMMON CARRIER :

The general rule laid down in the Act is that the liability of the Common
Carrier is limited.

The liability of a common carrier for loss of, or

damage to consignment is restricted /limited having regard to the value,

freight and nature of goods, documents or articles of the consignment.
According to Rule 12, the liability of common carrier for total loss shall
be limited to ten times the freight paid or payable.
As per Rule 12 (9) the liability of Common Carrier, actual freight
collected or due or 90% of total charges excluding the taxes shown on
the Goods Receipt whichever is higher.
Rule 12 further lays down that the liability of the Common Carrier
calculated shall not exceed the value of the goods as declared in the
GFN.
However, there is an exception carved out to this general rule under
Section 11 of Act which is reproduced below :
Quote :
11. Rates of charge to be fixed by common carrier for carriage of consignment
at a higher risk rate. - Every common carrier may require payment for the
higher risk undertaken by him in carrying a particular consignment at such rate
of charge as he may fix and correspondingly, his liability would be in
accordance with the terms as may be agreed upon with the consignor:
Provided that to entitle such carrier to claim payment at a rate higher than his
ordinary rate of charge, he should have exhibited a printed or written notice, in
English and the vernacular language of the State, of the higher rate of charge in
the place or premises where he carries on the business of common carrier.

Unquote :

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Common carrier can fix higher risk rate for enlarging its liability for loss
or damage to consignment provided the consignor undertakes to pay
such higher risk rate determined by the common carrier for movement
of such consignment. The consignor and common carrier can enter
into an agreement for compensation for loss or damage to the
consignment at higher risk on the condition that the consignor shall
pay higher transportation charges to the common carrier for its
responsibility to pay the higher compensation.
IX.

STATUTORY

PROVISIONS

APPLICATIONS

OF

COMMON

CARRIER :
The Common Carrier is responsible and liable to the consignor for the
loss or damage to any consignment in accordance with the GFN, even
such loss or damage has arisen on account of any criminal act of the
common carrier or any of his servants/agents. The Common Carrier
shall not take the defence that he took all reasonable care to avoid
such damage or loss to the consignment or he has acted as a man of
ordinary prudence.
The only exception in the above rule is that the Common Carrier shall
not be responsible for any loss/damage to the consignment if such loss
or damage is arisen out of:
(a) Act of God ;
(b) Act of war or public enemy ;
(c) Riots and civil commotion ;
(d) Arrest, restraint or seizure under legal process ;
(e) Order or restriction or prohibition imposed by the Central
Government or a State Government or by an officer or authority
subordinate to the Central Government or a State Government
authorised by it in this behalf.
X.

LITIGATION UNDER THE ACT :

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Before initiating any suit or other legal proceedings against the

common carrier for any loss of, or damage to consignment
Consignor/consignee shall serve a notice on the common carrier within
a period of 180 days from the date of booking of the consignment. It
means that upon expiry of 180 days, the remedy is barred.
In any such suit / legal proceedings, the consignee / consignor need
not to prove that such loss/ damage or non delivery was owing to
negligence of criminal act of the common carrier or any of his
servants / agents.
The only defence available to the common carrier in such suit / legal
proceedings for such loss/ damage to the consignment is Force Majure
as explained above.
The delivery of the consignment to the consignee by the common
carrier shall be treated as a primafacie evidence of the delivery of
goods as described in GFN. The consignee has to give notice to the
common carrier within six days from the date of actual handing over of
the consignment in case there is loss or damage to the consignment.
XI.

TRANSPORTATION OF DANGEROUS AND HAZARDOUS GOODS

At present, the movement of dangerous and hazardous goods is
governed by following Acts.
1. The Environment Protection Act 1986 and the Hazardous Waste
(Management and Handling) Amendment Rules, 2000;
2. The Motor Vehicle Act 1988 (MV ACT) and The Central Motor
Vehicles Rules,1989; (MV Rules)
3. The Public Liability Insurance Act 1999.
The Motor Vehicle Act 1988 (MV ACT) and The Central Motor
Vehicles Rules,1989; (MV Rules)

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i.

As per Proviso to Section 146 of the MV Act Common carrier

has to ensure that there shall also be a policy of insurance under
the Public Liability Insurance Act, 1991 (6 of 1991).

ii.

Rule 132 of the MV Rules defines the responsibility of the

transporters or owner of goods carriage. As per the said rule It
shall be the responsibility of the owner of the goods carriage
transporting any dangerous or hazardous goods to ensure the
following; namely:

a) He has a valid registration to carry the said goods and the

vehicle is safe for the transport of the said goods,
b) The vehicle is equipped with necessary first aid, safety
equipment, toolbox and antidotes as may be necessary to
contain any accident.
c) The information given by the consignor is full and accurate in all
respects and corresponds to the classification of such goods
specified in rule 137.
d) The driver is given all relevant information in writing and has
sufficient understanding of the nature of such goods and is
capable of taking appropriate action in case of emergency.
e) The route and timetable for each trip to the destination and back
is laid down by the consignor and owner and the driver shall be
bound to take unless directed or pennitted otherwise by the
Police Authorities.
f) In addition, section 129 of the Central Motor Vehicles Rules, lays
down the conditions which need to be complied with by the
owner of the goods carriage transporting any dangerous or
hazardous goods.

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The Public Liability Insurance Act 1999

Section 4 of The Public Liability Insurance Act 1991casts a duty on the
owner of the hazardous substance to take out, one of more insurance
policies before starting or handling hazardous substances for providing
relief in case of death or injury to a person or damage to any property
or the consignment arising out of accident, the consignment of
dangerous or hazardous good. Such insurance policy taken out or
renewed by an owner shall not be for an amount less than the amount
of paid-up capital of the undertaking handling any hazardous
substance and more than the amount exceeding fifty crore rupees.
The Carriage by Road Act deals with the movement of product by road
only. Therefore, the Act mandates that the common carrier is bound to
follow the procedure to safeguard the consignment as specified under
Rule 130 to 137 of the Central Motor Vehicles Rules, 1989 while
carrying goods of dangerous or hazardous nature.
XII.

OFFENCE UNDER THE ACT

The act requires strict compliance of following provisions
1. To obtain the registration certificate before commencing the
business of common carrier.
2. To fulfil the requirements of the Motar Vehicle Rules 130 to 137
while transporting the dangerous and hazardous goods
3. To ensure that consignment is covered by one or more
insurance policy for providing relief in case of death or injury to a
person or damage to any property or the consignment arising
out of accident.
4. Not to transport the goods banned by the Central Government
Any contravention of the above provisions is an offence and is
punishable with fine only. The first offence is punishable with fine which
may extend upto Rs. 5000 and subsequent offence is punishable with
fine which may extend upto 10000/Page 13 of 15

The offence is compoundable either before the filling of the complaint

or after instituting the prosecution.
XIII.

APPLICATION OF COMMON CARRIER/CONSIGNOR :

Oil Marketing Companies (OMCs) have divergent view/opinion
regarding applicability of the provisions of Carriages of Road Act, 2007
to its transportation contract.
It is argued that the provisions of the Act are not applicable to the
transportation agreement/contracts for following reasons:

Tank trucks (TTs) are offered to the OMCs exclusively.

During the contract period, the transporters are not permitted to

offer their trucks to any other person.

The TTs has to report the supply location after delivery of the
product to the consignee.

The transporters are paid transport charges per Round Trip

Distance basis.

The TTs are designed to suit the particular requirement of OMCs

and cannot be used to carry any other product other than
petroleum.

The other argument for its applicability to the transportation business of

OMCs is that

prior to the contract with OMCs, the transporters are free to offer
their TTs to other users.

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The Act provides that before starting the business of

transportation, the transporter has to register as a common
carrier.

The argument for non-applicability hold good in case TTs are

owned by OMCs and are used exclusively for the movement of
their individual products.

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