National Consumer Disputes Redressal
Air India Ltd vs India Everbright Shipping & Tradingco on 20 April, 2001
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELLH DATED, THE 20th April, 2001 FIRST APPEAL NO. 451 OF 1994 (From the order dated 29.4.94 in OP No.372/93 of the State Commission Tamil Nadu) 1. The Manager, Air India Ltd. . .. Appellants/Opposite Parties 2. The Manager, Cargo Flight Handling, Air India Ltd. Vs. M/s. India Everbright shipping & Trading Co. .. Respondent/Complainant BEFORE:- HONBLE MR. JUSTICE D.P. WADHWA, PRESIDENT HONBLE MR. JUSTICE C.L. CHAUDHRY, MEMBER HONBLE MR. JUSTICE J.K. MEHRA, MEMBER. MRS. RAJYALAKSHMI RAO, MEMBER MR. B.K. TAIMNI, MEMBER (i) Section 14(1)(d) of the Consumer Protection Act - compensation to be limited by the provisions of Carriage by Air Act, 1972. (ii) Wilful - Blacks Law Dictionary - act may be described as one done intentionally, knowingly and purposely, without justifiable excuse as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. For the Appellants/Opposite Parties : Mr. H.D. Nanavati and Ms. F.H. Nanavati, Advocates For the Respondent/Complainant : Mr. Anand Padmanabhan, Advocate. O R D E R
PER JUSTICE D.P. WADHWA (PRESIDENT) This appeal is directed against the judgement dated 29th April, 1994 of the State Disputes Redressal Commission, Tamil Nadu allowing complaint of the complainant and giving him the following reliefs for delayed delivery of its consignment booked as international carriage by the opposite parties, the Air Carrier:
13. In the result, we order as follows:
(1) The Opposite parties 1 & 2 shall pay to the complainant the sum of Rs.1,25,053/- (Rs.1,01,000/- + Rs.24,053/- ) with interest thereon at 18% p.a. from 20.10.92, when the consignment was handed over to them for transportation under Ex.A4 (Airway Bill) till payment.
(2) The opposite parties 1 & 2 shall also pay damages to the complainant for the loss of business in the sum of Rs.2,00,000/-.
(3) The opposite parties 1 & 2 shall also pay costs of Rs.3,000/- to the complainant. (4) The complaint fails and is dismissed as against the opposite parties 3 & 4, (both forwarding agents) but without costs.
Aggrieved by the impugned order, the Air Carrier have come up in appeal before this Commission.
Complainant forwarded through the Air Carrier under an Airway bill dated 20th October, 1992 total 31 cartons of certain material for the manufacture of undergarments and brassiers to Gaborne, Botswana. As the Air Carrier do not fly to Botswana, the cartons were therefore carried by the Air Carrier to Nairobi by its flight on 25th October, 1992 from Madras to Bombay and thereafter by its flight on 28th October, 1992 from Bombay to Nairobi. Consignment reached Nairobi within nine days from the date of the Airway bill. At Nairobi the cartons were handed over by the Air Carrier to Kenya Airfreight Handling Ltd., being the handling agents of Air Botswana, for onward carriage from Nairobi to Gaborne, Botswana. Air Botswana delivered 15 out of the 31 cartons to the consignee at Gaborne on 11th November, 1992 and remaining 16 cartons were delivered only on 11th January, 1993. Complainant alleged that as each carton contained separate and different items, all together were required for the manufacture of undergarments and brassiers, the receipt of part of the consignment on 11th November, 1992 did not serve any purpose until the remaining 16 cartons were also delivered which was on 11th January, 1993. Complainant then alleged that by this time Christmas and New Year season was over and the very object of the order for the goods placed by the consignee was lost with the result the consignee cancelled the order putting the complainant to great loss both materially and mentally. The State Commission held the allegations of the complainant proved and awarded him compensation of the amount of the value of the goods, the freight charges, interest, damages for loss of business and cost. The award of compensation was made under clause (d) of sub section (1) of Section 14 of the Consumer Protection Act, 1986 (for short CPA). It reads as under:
14. finding of the District forum - (1) If, after the proceeding conducted under Section 13, the District Forum is satisfied that the goods complained against suffer from any of the defects specified in the complaint or that any of the allegations contained in the complaint about the services are proved, it shall issue an order to the opposite party directing him to (do) one or more of the following things, namely:-
(a)
(b) ..
(c) .
(d) to pay such amount as may be awarded by it as compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the opposite party;
(e) to (i) .
Mr. H.D. Nanavati, learned counsel for the Air Carrier submitted that the State Commission went wrong in ignoring the provisions of the Carriage by Air Act, 1972 (for short CA Act), which Act limited the liability of an Air Carrier on the assumption that there was negligence on the part of the Air Carrier in not delivering the goods on time and the complainant suffered any loss or injury on that account. Mr. Nanavati said though he raised various issues in the grounds of appeal he would confine his argument to the applicability of the CA Act, assuming negligence on the part of the Air Carrier in not delivering the consignment on time. He said liability of the Air Carrier could not exceed a sum of US $ 20 per kg. of the weight of the goods consigned under the CA Act. The weight of the consignment in the present case was only 209 kgs.
Arguments for both the parties centered round the provisions of the CA Act. CA Act gives statutory recognition to the Warsaw Convention, 1929, as amended by the Hague Protocol, 1955 which contains provisions for international carriage of persons, luggage or goods by aircraft. Convention balances the imposition of a presumption of liability on the carrier of limiting his liability. There is however, no limitation of liability if the damage is caused by the wilful misconduct of the carrier or by such default on his part as in accordance with the law of the court seized of the case, is equivalent to wilful misconduct. First Schedule of the CA Act contains rules of Warsaw Convention and Second Schedule of the Hague Protocol. It is submitted by Mr. Nanavati that in the present case the First Schedule was applicable inasmuch as both India and Botswana are parties to the Convention and as the Hague Protocol has not been ratified by Botswana the Second Schedule would be inapplicable. This was contested by Mr. Anand Padmanabhan, learned counsel for the Complainant who said the Second Schedule would be applicable. We do not think we should enter into this controversy as Mr. Nanavati said we can proceed on the assumption as well that it is the Second Schedule which applies. The dispute is if Rule 22 applies or if it is Rule 25. Both these Rules have same numbers in Warsaw Convention and the Hague Protocol. Relevant portion of Rules 22 and 25 are as under:
Warsaw Convention (The First Schedule)
22.(1) ..
(2) In the carriage of registered luggage and of goods, the liability of the carrier is limited to a sum of 250 francs per kilogramme, unless the consignor has made, at the time when the package was handed over to the carrier, a special declaration of the value at delivery and has paid a supplementary sum, if the case so requires. In that case the carrier will be liable to pay a sum not exceeding the declared sum, unless he proves that that sum is greater than the actual value to the consignor at delivery (3) .
(4) the sums mentioned in this rule shall be deemed to refer to the French franc consisting of sixty-five and a half milligrammes gold of millesimal fineness nine hundred.
As amended by the Hague Protocol (The Second Schedule) :
22(1) .
(2)(a) In the carriage of registered baggage and of cargo, the liability of the carrier is limited to a sum of 250 francs per kilogramme, unless the passenger or consignor has made, at the time when the package was handed over to the carrier, a special declaration of interest in delivery at destination and has paid a supplementary sum if the case so requires. In that case the carrier will be liable to pay a sum not exceeding the declared sum, unless he proves that that sum is greater than the passengers or consignors actual interest in delivery at the destination.
(b) In the case of loss, damage or delay of part of registered baggage or cargo, or of any object contained therein, the weight to be taken into consideration in determining the amount to which the carriers liability is limited shall be only the total weight of the package or packages concerned. Nevertheless, when the loss, damage or delay of a part of the registered baggage or cargo, or of an object contained therein, affects the value of other packages covered by the same baggage check or the same air waybill, the total weight of such package or packages shall also be taken into consideration in determining the limit of liability (3) ..
(4) The limits prescribed in this rule shall not prevent the Court from awarding, in accordance with its own law, in addition, the whole or part of the Court costs and of the other expenses of the litigation incurred by the plaintiff. The foregoing provisions shall not apply if the amount of the damages awarded excluding Court costs and other expenses of the litigation, does not exceed the sum which the carrier has offered in writing to the plaintiff within a period of six months from the date of the occurrence causing the damage, or before the commencement of the action, if that is later.
(5) The sums mentioned in francs in this rule shall be deemed to refer to a currency unit consisting of sixty-five and a half milligrammes of gold of millesimal fineness nine hundred. These sums may be converted into national currencies in round figures.
Conversion of the sums into national currencies other than gold shall, in case of judicial proceedings, be made according to the gold value of such currencies at the date of the judgment.
Rule 25 ( Warsaw Convention):
25.(1): The carrier shall not be entitled to avail himself of the provisions of this Schedule which exclude or limit his liability, if the damage is caused by his wilful misconduct or by such default on his part as is in the opinion of the court equivalent to wilful misconduct.
(2). Similarly the carrier shall not be entitled to avail himself of the said provisions, if the damage is caused as aforesaid by any agent of the carrier acting within the scope of his employment.
Rule 25 (Hague Protocol ) :
25. The limits of liability specified in rule 22 shall not apply if it is proved that the damage resulted from an act or omission of the carrier, his servants or agents, done with intent to cause damage or recklessly and with knowledge that damage would probably result;
provided that, in the case of such act or omission of a servant or agent, it is also proved that he was acting within the scope of his employment.
As we have noticed above, the order has been passed by the State Commission under Section 14(1)
(d) of CPA. Question arises if the State Commission could award damages more than what is prescribed under the CA Act. Section 3 of the CPA provides that the provisions of the Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force. Section 3 only provides for an alternative mode by enforcing the right or obtaining redress for the contravention of any provisions of law and no more. It does not change the substantive law which law limits the award of damages when there is violation of any obligation or right. If damages are to be awarded it has to be within the four corners of law on the subject. Section 14 (1) (d) of the CPA has to be read with CA Act. When there is a law defining the rights and its applications in any particular respect that has to be followed. Viewed from this angle when CA Act limits the liability of an air carrier to an extent that cannot be exceeded by the Forum under the CPA. This is how Section 14 is to be read and understood. Looked from that angle we do not think it can be disputed that CA Act is applicable to the facts of the present case. Consignment has been delayed. There is presumption of negligence by the Air Carrier. Liability under the Warsaw Convention as amended by the Hague Protocol is artificial automatic liability created without proof of any damages suffered. It is for consideration if it is Rule 22 or Rule 25 which is to be applied to the facts of the present case.
In the complaint filed under the CPA, the complainant says loss had occurred to him due to the negligence and lethargic manner of handling of Cargo by the Opposite parties. In another place he says all this happened due to negligence and cheating attitude of the opposite parties and deficiency in service in wrong handling of the Cargo contrary to the terms of bill of lading. He nowhere alleges if that damage was caused by wilful misconduct of the carrier (Rule 25 of the First Schedule of Warsaw Convention) or that the damage resulted from an act or omission of the carrier done with the intent to cause damage or recklessly and with knowledge that damage would probably result (Rule 25 of the Second Schedule of the Hague Protocol.). As to what is wilful has been described in a simple language in the Blacks Law Dictionary. It says a wilful act may be described as one done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. The wilful act differs essentially from a negligent act. The one is positive and the other is negative. Wilful misconduct would be such conduct committed with an intentional or reckless disregard for the safety of others or with an intentional disregard of a duty necessary to the safety of anothers property. Supreme Court in the case of Rakapalli Raja Ram Gopala Rao v. Naragani Govinda Sehararao, (1989) 4 SCC 255, has observed that an act is said to be wilful if it is intentional, conscious and deliberate. With regard to the word recklessly the Blacks Dictionary says, A person acts reckessly with respect to a material element of an offense when he consciously disregrds a substantial and unjustifiable risk that the material element exists or will result from his conduct. This risk must be of such a nature and degree that, considering the nature and purpose of the actors conduct and the circumstances known to him, its disregard involves a gross deviation from the standard of conduct that a law-abiding person would observe in the actors situation. In Shawinigan Ltd. v. Vokins & Co. Ltd. - (1961) 3 All E.R. 396, this is how Megaw, J. described recklessly:
In my view, recklessly means grossly careless. Recklessness is gross carelessness -the doing of something which in fact involves a risk, whether the doer realises it or not; and the risk being such having regard to all the circumstances, that the taking of that risk would be described as reckless. The likelihood or otherwise that damage will follow is one element to be considered, not whether the doer of the act actually realised the likelihood. The extent of the damage which is likely to follow is another element, not the extent which the doer of the act, in his wisdom or folly, happens to foresee. If the risk is slight and the damage which will follow if things go wrong is small, it may not be reckless, however unjustified the doing of the act may be. If the risk is great, and the probable damage great, recklessness may readily be a fair description, however much the doer may regard the action as justified and reasonable. Each case has to be viewed on its own particular facts and not by reference to any formula. The only test, in my view, is an objective one. Would a reasonable man, knowing all the facts and circumstances which the doer of the act knew or ought to have known, describe the act as reckless in the ordinary meaning of that word in ordinary speech? As I have said, my understanding of the ordinary meaning of that word is a high degree of carelessness. I do not say negligence, because negligence connotes a legal duty.
In the absence of even allegation in the complaint that there was any wilful misconduct or the damage resulted from an act or omission of the Air Carrier (opposite parties) done with intent to cause damage or recklessly and with the knowledge the damage would probably result, it is difficult for us to hold that rule 25 (of either the First Schedule or the Second Schedule) would apply. We may also refer to a few judgments cited at the Bar. In the case Air Lanka Vs. S. Prasannan -
1(1998) CPJ 117, Kerala State Consumer Disputes Redressal Commission (Justice P.K. Shamsuddin, President) had occasion to consider the question of liability of carrier for loss of contents in the luggage in the context of International Carriage as defined in the First Schedule to the CA Act. In this case the complainant took a flight from Colombo to Thiruvanthapuram by Air Lanka flight. On arrival he found that his luggage was tampered resulting in the loss of three wrist watches and certain amount of foreign currency and cosmetics.
The total weight of the luggage was 5 kgs. When the complainant reported the loss to the Airlines, it offered to pay US $ 100 in full and final settlement of the claim. This offer, the complainant declined. He filed complaint before the District Forum, Thiruvanthapuram. On notice being issued, Airlines pleaded that the complainant had not declared any specific goods or their value before checking in the goods. At that time when the complainant checked in, he had entrusted 5 Kgs of goods without declaring the value of the same. As per the regulation applicable in the case Airlines said it was liable to pay for the loss of luggage only US $ 100 @ US $ 20 per Kg.
Complainant submitted that First Schedule to the CA Act did not apply inasmuch as airline had not issued any luggage ticket as required Chapter II Part II Rule 4(1) of the First Schedule to the CA Act. He succeeded before the District forum. On appeal filed by the Airline, State Commission referred to Rule 22(2) of the Second Schedule of the CA Act and held it was applicable and that the complainant was entitled to only under that Rule 250 Francs per Kg. unless the value was declared. Earlier also Kerala State commission had taken the similar view in somewhat similar circumstances and held complainant to be entitled to US $ 560 for the goods lost of the weight of 28 Kgs. It however, granted rupee equivalent of US $ as on the date of loss and not the date of the order.
Similarly, in the case of Balaji Inc. Vs. Divisional Manager, National Insurance Co. Ltd. & Ors. -1 (1997) CPJ 206, (Justice D.R. Vithal Rao, President) arising from the Karnataka Staten Consumer Disputes Redressal Commission, where a consignment booked from India to Mauritious, reached there in damaged condition. The goods were entrusted to Indian Airlines which in turn entrusted the same to Singapore Airlines who carried the same to Mauritious. It was contended by the respondents that its liability was limited to pay damages equivalent to US $ 20 per kg. on the basis of weight loss adjudged under clause (g) of sub Section (2) of Section 45 of the Air Corporation Act and also as per the provisions embodied in Rule 22(2)
(a) and (b) of Schedule II at Chapter III of the CA Act. This contention of Indian Airlines was accepted by the State commission.
In the case Gargi Parsai Vs. K.L.M. Royal Dutch Airlines - 1(1996) CPJ 2, arising from the Delhi State Commission where the complainant made a claim for US $ 2400 (equivalent to Rs.72000) for loss of one suitcase and damage to the other. Airlines offered only US $ 360 @ US $ 20 per kilogram for 18 kilograms weight of the suitcase on the basis of its limited liability. Reference is made to the provisions of the CA Act. It was submitted that the case was governed by rule 22(2) of the Second Schedule to the CA Act which lays down the general rule applicable in all cases where special declaration is not made and extra payment is not made at the time of checking in.
Contentions by the Air Carrier were (1) the case is governed by Rule 22(2) which lays down the general rule applicable in all cases where special declaration is not made and extra payment is not made at the time of checking in; (2) admittedly the complainant made no declaration regarding the contents of the suitcase nor paid any extra amount in terms of Rule 22(2); (3) the burden of proving the exception is on the complainant and the same has not been discharged and therefore rule 25 is not attracted; (4) the rule of Limited Liability is statutory in character and is binding on the parties; (5) in any case, carriers liability being limited was an essential condition of the contract as it was one of the terms of printed on the jacket of the ticket. The State Commission then considered expression wilful misconduct as occurring in Rule 22 which does not find definition in the Act or the rules. It held that it was necessary for the complainant to allege and prove some intentional conscious and deliberate act of omission or commission. State Commission was of the view that the wilful misconduct referred to in Rule 25, in the nature of things, signifies wilful misconduct antecedent to the baggage being lost or damaged and not to any alleged misconduct after the baggage had been lost or damaged. It was only at Los Angeles that ultimately the suitcase of the complainant was traced and it was delivered to the complainant in that very state. It would be of no consequence that instead of saying that the correct baggage has been traced at Los Angles the person giving the message chose to write that the baggage had been retraced. This mode of description will not tantamount to proof of wilful misconduct within the meaning of Rule 25. State Commission was thus of the view the rule applicable was rule 22(2) of the first Schedule to the CA Act and the petitioner has failed to establish that her case is covered by rule 25.
In Bharati Knitting company Vs. DHL Worldwide Express Courier Division of Airfreight Ltd. - II (1996) CPJ 25 (SC), the complainant had agreement with German buyer for summer season 1990 and consigned certain goods with documents. The documents did not reach the destination. By the time the duplicate copies were obtained and sent, the season was over with the result that the consignee agreed to pay DM 35,000 instead of invoice value DM 56,469.63 . The complainant made a claim before the State Commission for the difference of the loss. The State Commission allowed the claim of the complainant. On appeal filed by the Carriers, it was held by National Commission that since loss was only to the extent of US $ 100 as per the receipt, the complainant was entitled for deficiency of service only to that extent and allowed the appeal. The complainant sought leave appeal to the Supreme Court which was granted. The question before the Supreme court was that when the parties had contracted and limited their liabilities, whether the State Commission or the National Commission under the Act could give relief for damages in excess of the limits prescribed under the contract? The court gave answer in the negative and said that National Commission was right in limiting liability being undertaken in the contract entered into by the parties and in awarding the amount for deficiency in service to the extent of liability undertaken by the Courier. We may also usefully refer to a decision of the English Court of Appeal in the case of Goldman Vs. Thai Airways International Ltd - {1983} 3 All ER 693. In this case the plaintiff was a passanger on a flight from London to Bangkok in an aircraft owned by Thai Airways. During the flight the aircraft encountered an air turbulence. The pilot in contravention of the requirements failed to illuminate the seat belt sign. Godman was not having his seat belt fastened at that time. The result was that he was thrown from his seat and sustained severe injuries. He brought an action for damages against Thai Airways under the Warsaw Convention as amended at the Hague. Rule 22(1) of the Convention limited the amount of damages recoverable to approximately L 11,800 but Rule 25 provided that the limitation on the amount recoverable did not apply if it was shown the damage resulted from an act or omission of the carrier done with the intent to cause damage or recklessly and with knowledge that damage would probably result. It was contended by the Thai Airways that if the damages were recoverable they are not to exceed the amount specified in Rule 22(1). The Judge who tried the suit held that the pilot should have switched on the seat belt sign before entering the area of air turbulence which had been forecast. He further found that the pilot deliberately disregarded the instructions on the use of seat belts set out in the flight operations manual and since they were instructions designed for the safety of the passengers his conduct amounted to recklessness. The Judge, therefore, awarded Goldman damages not limited to under Rule 22(1), but under Rule 25 awarded damages amounting to L 41,000. On appeal filed by Thai Airways the Court held that on the facts it had not been shown that the instructions in the flight operations manual would necessarily be interpreted as meaning that the pilot was obliged to switch on the seat belt sign before entering the area of air turbulence and further that on the evidence there was nothing to show that the pilot knew that the damage would probably result from his failure to do so. The court said that it followed that plaintiff had not shown that his claim was within the provisions of Rule 25 and therefore limited the damages as provided under Rule 22 (1). In the case of Morgan Stanley Mutual Fund Vs. Kartick Das and Ors. (1994) 4 SCC 225, the Court was considering the scope of Section 14 of the Act vis-a - vis power to grant ad-interim injuction. After setting out the provisions of Section 14, the Court observed as under:
A careful reading of the above discloses that there is no power under Act to grant any interim relief or even an ad-interim relief. Only a final relief could be granted. If the jurisdiction of the forum to grant relief is confined to the four clauses mentioned under Section 14, it passes our comprehension as to how an interim injunction could ever be granted disregarding even the balance of convenience. National Commission in the case of Rajasthan State Industrial Development & Investment Corporation Limited Vs. Premier Paints - II(1991) CPJ 599, took the view that reliefs which it can grant to any complainant are only those specified in Section 14 of the Act.
Having thus considered the provisions of the CA Act, CPA and various judgments on the subject, we are of the view that it is a case which fall under Rule 22 of the First Schedule or the Second Schedule of the CA Act. The respondent
-complainant would be entitled to relief of US $ 4180 @ US $ 20 per Kg. for its weight of 209 Kgs of the cargo.
At the time of admission of this appeal, the Commission passed the following order:
There will be an interim stay of enforcement of the order passed by the State Commission subject to the condition that the appellants shall pay to the complainant (respondent herein) a sum of Rs.1,31,670/- in part payment of the liability due under the impugned order of the State Commission within six weeks from today.
In default of compliance with the conditions specified above the stay will stand automatically vacated. The arrest warrants said to have been issued against the appellants herein shall not be executed until further orders are passed by this Commission. Notice returnable in three weeks.
It is stated by Mr. Nanavati that in terms of that order the amount mentioned therein has since been paid to the complainant. He does not press for refund of any such amount. He said he wanted principle of law to be settled. We, therefore, partly allow this appeal, set aside the order of the State Commission to the extent above mentioned, but at the same time would not direct the refund of the amount paid by the Air Carrier to the complainant in terms of the order of admission.
There shall be no order as to costs.
..J (D.P. WADHWA) PRESIDENT .J (C.L. CHAUDHRY) MEMBER .J (J.K. MEHRA) MEMBER ..
( RAJYALAKSHMI RAO ) MEMBER ..
( B.K. TAIMNI) MEMBER