Delhi High Court
Sailesh Textile Industries vs British Airways And Anr on 31 March, 2003
Equivalent citations: 2003IVAD(DELHI)276, 2003(69)DRJ683
Author: C.K. Mahajan
Bench: C.K. Mahajan
JUDGMENT C.K. Mahajan, J.
1. By way of this suit, the plaintiff seeks to recover a sum of Rs.2,51,663.75 along with interest @ 18% per annum from the date of filing of the suit till realisation against settlement of their claims towards value of the cost of goods, freight, insurance, etc.
2. Briefly the facts are, plaintiff entered into a contract with one M/s. Yassin Hussein Adham of Jeddah (Saudi Arabia) for export of 7,000 pieces of "Hand Embroidered Terrywool Rumals: All white" of a total value of Rs.3,57,000/-. The plaintiff exported the above material in three consignments through defendant No.1. The third consignment of goods consisting of 2,997 pieces of the said Rumals was exported vide Airway Bill No.125-63405226 dated 7th October 1976. A sum of Rs.14,693.75 was pre-paid towards freight charges. The said goods were insured by defendant No.2 for which a premium of Rs.1,025/- was also paid by the plaintiff. Plaintiff handed over the relevant documents to defendant No.3 who discounted the same.
3. The goods were delivered to defendant No.1 on 7.10.1976 for carriage to Jeddah on pre-paid freight. Documents were negotiated through Bank Melli Iran, Jeddah. The goods left India only on 29.11.1976 by British Airways Flight No.BA 317. The said goods did not reach their designation. On enquiries, defendant No.1 was unable to give the whereabouts of the said consignment. Letters dated 10.1.1977 and 17.2.1977 were also sent to defendant No.1 but no reply was received. Plaintiff informed defendant No.2 of the loss of goods and by their letter dated 1.3.1977, requested defendants No.1 and 2 to make good the loss caused to the plaintiff. No reply was received. A legal notice of demand dated 18.4.1977 was also served on defendant No.1, in reply to which defendant No.1 stated that the consignment booked was delivered to the local customs on 29.11.1976 and the relevant documents were delivered to the consignee through Bank Melli Iran, Jeddah. Plaintiff again made enquiries but the consignment could not be traced. Defendant No.1 vide its letter dated 3.1.1979 addressed to defendant No.2 with a copy to the plaintiff admitted that the importer at Jeddah had not received the goods and the defendant No.1 had not been able to get documentary evidence of having delivered the goods to the Customs and the goods were not traceable. Defendant No.1 gave its no objection to defendant No.2 for settling the claims of plaintiff. Plaintiff lodged its claim with defendants No.1 and 2 but the defendants failed to settle the claim of the plaintiff.
4. The suit is opposed by the defendants. In its written statement, defendant No.1 has taken a preliminary objection that the suit is barred by time, is also not maintainable for want of statutory notice of claim. On merits, the defendant No.1 contended that the suit was not properly instituted by an authorised and a competent person as the partnership firm was not registered. The suit was thus not maintainable. The consignment was forwarded to the defendant No.1 by the clearing and forwarding agent of the plaintiff on 23.10.1976. The plaintiff and the agent were informed that on account of an embargo, the goods were not likely to be lifted in the near future. After the embargo was lifted, the clearing agent was advised that the shipping bill be revalidated. The goods were airlifted on 29.11.1976 and reached Jeddah on the same date. The goods were delivered to the local customs authorities on the same and the documents including the delivery order were issued to the named consignee bank Mille Iran, Jeddah on 6.12.1976. The plaintiff was informed about the delivery of the consignment. M/s. S.M. Attar & Co. who were the general sales agents of defendant No.1 at Jeddah Southia Arabia issued a delivery order No.3864 addressed to the Director of Customs, Jeddah to deliver the goods to the consignee bank Melli Iran Jeddah/Hussain Adham. The defendant No.1 reiterated that the claim of the plaintiff was misconceived and that they were not entitled to any compensation as the goods stood delivered to the customs authorities.
5. The defendant No.2 in its written statement have also opposed the claim of the plaintiff. It is stated that the goods were delivered to the local custom authorities at Jeddah on 29.1.1976 and therefore the carriage of the policy came to an end on the expiry of 30 days from the date of landing of the goods. It is also stated that as the goods were not damaged during transit, no liability can be fastened on defendant No.2.
6. On the pleadings of the parties, the following issues were framed :-
1. Did the consignment in question reach destination at Jeddah on 29.11.1976 and delivered to local custom authorities as alleged by the defendant No.1? OPD
2. If issue No.1 is decided in favor of the defendants, had the liability of the defendants not ceased? OPP
3. Is the suit within limitation? OPP
4. Is the plaintiff firm registered with the registrar of firms and person who has signed the plaint shown as one of the partners in the Register of Firms? If not what is its effect? OPP
5. Is the suit bad for want of statutory notice to defendant No.1? OPD
6. Has this court no territorial jurisdiction to entertain and decide the present suit? OPD
7. To how much amount if any are the plaintiff entitled and from whom of the defendants Nos.1 & 2? OPP
8. Are the plaintiffs entitled to interest? If so at what rate and for what period?
9. Relief.
7. Vide order dated 27.7.1982, the name of defendant No.3 was deleted from the array of parties as no relief was claimed against it.
8. Vide order dated 24.7.1985, I.A. 1112/83 filed by defendant No.1 under Order 26 Rules 4 and 5 for examination of two witnesses by open commission was allowed. But the defendant No.1 chose not to get the commission executed. The defendant No.2 also filed a similar application being I.A. 98/89 which was however dismissed by this Court on 14.3.1989.
9. I have heard learned counsel for the parties and perused the documents on record.
ISSUES NO. 3 :
10. Is the suit within limitation? OPP
11. The consignment in question was air lifted by respondent No.1 on 29.11.1976. It reached Jeddah on the same date. The goods were not delivered to the consignee and were thus lost. The suit was filed on 12.10.1979, i.e., beyond the period of two years. Clauses 18, 29 and 30 of 2nd Schedule of the Carriage by Air Act lay down the limitation of two years for claiming damages where after the right shall stand extinguished. Clauses 18, 29 and 30 are reproduced hereunder :-
"18. The carrier is liable for damage sustained in the event of destruction or loss of, or of damage to, any registered baggage or any cargo, if the occurrence which caused the damage so sustained took place during the carriage by air.
18(2). The carriage by air within the meaning of the preceding sub-rule comprises the period during which the baggage or cargo is in charge of the carrier, whether in an aerodrome or on board an aircraft, or in the case of a landing outside an aerodrome, in any place whatsoever.
18(3). The period of the carriage by air does not extend to any carriage by land, by sea or by river performed outside an aerodrome. If, however, such a carriage takes place in the performance of a contract for carriage by air for the purpose of loading delivery or transshipment, any damage is presumed, subject to proof to the contrary, to have been the result of an event which took place during the carriage by air.
29. The right of damages shall be extinguished if an action is not brought within two years reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped.
30(1). The right to damages shall be extinguished if an action is not brought within two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped.
(2) The method of calculating the period of limitation shall be determined by the law of the Court seized of the case."
12. Learned counsel for the plaintiff contends that the suit is within limitation and is governed by the Limitation Act, 1963. Articles 10 and 11 of the Limitation Act provided for a limitation of three years against a carrier for claiming compensation for loss or injury to the goods and for non-delivery or delay in delivering the goods. Counsel for the plaintiff placed reliance on a judgment of the Supreme in East and West Steamship Co., Georgetown, Madras Vs. S.K. Ramalingam Chettiar and sought to contend that a distinction was made by the Supreme Court between "loss to the goods" or "loss of goods" on one hand and "loss or damage to the owner of the goods, be he the shipper or the consignee" on the other hand. The shipper would be absolved of its liability if the loss was to the owner/consignee. However, if the loss was in respect of the goods only, then the shipper was liable. As per Clause 18 of the 2nd Schedule to the Carriage by Air Act, the liability was sustained by the carrier in the event of loss of and damage to the cargo and had nothing to do with the loss to the owner. In the circumstances the Carriage by Air Act would not apply and the law of the land, namely, the Limitation Act would apply which provides for a limitation of three years. In this regard, he took support from a decision of this Court reported in 2nd (1981) II Delhi 749.
13. There is no merit in the submission of the plaintiff. The Apex Court construed the word "loss or damage" as to include "loss or damage to the owner including loss or damage to the goods". The Supreme Court thus gave its ratio/finding that whether there is loss of goods, that is, the same are jettisoned, burnt or stolen or the goods are misplaced or mixed with other goods, the effect is that in both cases the same are lost to the owner who thus suffers a monetary loss. Thus all types of monetary losses are covered by the expression "loss". Clause 18 of the 2nd Schedule of the Carriage By Air Act provides that the carrier is liable for damage sustained if there is loss to the registered luggage or the cargo. Therefore the case of the plaintiff falls under Clause 18 (1) of the Carriage by Air Act and according to clauses 29 and 30 a suit filed beyond the period of two years was barred by limitation. It is the plaintiff's own case that the consignment was lost by defendant No.1. Rule 30 of the 2nd Schedule to the Carriage by Air Act stipulates that action against the carrier for loss or damage to the goods must be brought within two years to be reckoned from the date of arrival at the destination or from the date of on which the aircraft ought to have arrived or from the date when the carriage stopped. The right to damages extinguished if action was not brought within a period of two years.
14. Applying the principles laid down in , the Supreme Court in American Export Isbrandtsen Lines Inc. & Anr. Vs. Joe Lopez & Anr. , held as under :-
"If by the time ship leaves the port, the goods shipped or any part thereof had not been delivered, it will be a case of non-delivery of the goods on the date when the goods should have been delivered. The time when the ship leaves the port should be taken as the time when the delivery should have been made. Any delivery which has not been made by that date comes within the mischief of Clause (3) of Paragraph 6 of Article 3. The last date for filing the suit for "loss or damage" is one year from the date the ship left the port. The cause of action for filing the suit for `loss or damage' is one (year)."
15. The aforementioned cases related to the provisions of the Sea Customs Act. But the principles laid down by the Supreme Court would also be applicable to the present case. The provisions of the Carriage by Air Act and the schedules thereto are clear and unambiguous and provide for a period of limitation within which a suit is to be filed to claim damages for loss of goods, whether it be loss to the goods or whether loss to the owner.
16. Reliance was also placed on a judgment of this Court in M/s. Federal Chemical Works Ltd. Vs. M/s. NUTSCO (Nigeria) Ltd. . The decision is distinguishable on facts. That was a case of unauthorised delivery. The said judgment therefore is of no help to the plaintiff.
17. In view of the above discussion, this issue is decided in favor of the defendants and against the plaintiff. The suit having been filed beyond the period of prescribed period of two years is barred by limitation.
ISSUE NO.4
18. Is the plaintiff firm registered with the Registrar of firms and person who has signed the plaint shown as one of the partners in the Register of Firms? If not what is its effect? OPP
19. It is pleaded in the plaint that the petitioner is a registered partnership firm duly registered under the Indian Partnership Act with their head office located in Bombay. The plaint was signed by Mr. Vipin Kumar Khanna, a partner of the plaintiff. Photocopies of the partnership deed and the extract from the Register of Firms Bombay was filed by the plaintiff along with the list of documents in 1986. The plaintiff did not file the original documents nor did the plaintiff lead any evidence to prove that the firm was a duly registered partnership firm. Certified copies of the partnership deed or the certified copy of the extract from the Register of Firms was also not filed. Registration, thus, ought to be proved by calling the record of the Registrar of Firms, Bombay which was not done in the present case. The form of registration cannot be proved by oral evidence of the parties. Either the original documents ought to have been produced or the copies of the register certified by the Registrar of Firms ought to have been proved and the copies thus constituted secondary evidence of the original contents.
20. The evidence was concluded on 1989. The original documents were filed along with an application being I.A. 6892/2002 just before the conclusion of the arguments with a prayer that they may be taken on record and be exhibited. It is too late in the day to accept the submissions of the plaintiff. The original documents were in the power and possession of the plaintiff and there is no cogent explanation given as to why these documents were not filed along with the suit and before the settlement of issues. The plaintiff also did not summon any witnesses from the office of the Registrar of Firms nor did it summon the register of firms to prove that the plaintiff was a registered partnership firm. By a separate order passed today, the application being I.A. No.6892/2002 has been dismissed.
21. PW-1 in his statement deposed that plaintiff is a registered partnership firm. The photocopy of the certificate issued by the Registrar of Firms has been marked "A" and the photocopy of the partnership deed of the plaintiff has been marked "D".
22. The registration or other facts connected with the registration of partnership cannot be proved by oral evidence. Statement of PW-1 that the plaintiff is a registered partnership firm is thus of no consequence and does not prove the document. The document can only be proved if the original was filed or a certified copy of the original was filed by adducing evidence of the Registrar of Firms. The plaintiff having failed to proved that it was a registered partnership firm, Section 69 of the Partnership Act would come into play and places a bar on an unregistered partnership firm from filing a suit against a third party.
23. In Kelson Constructions Vs. Versha Spinning Mills Ltd. & Anr. 1994 (1) Arb. L.R. 385, this Court dismissed the petition on the ground of technical non-compliance with the mandatory requirement of law as the partnership on the date of institution was not registered. In Lalit Kumar & Ors. Vs. Municipal Corporation of Delhi & Anr. also, this Court dismissed the petition on the ground of non-registration of the partnership firm.
24. In the present case, the plaintiff was unable to prove that the plaintiff was a registered partnership firm as on the date of filing of the present suit or that the partners were or had been shown in the Register of Firms as partners in the firm.
25. Therefore, this issue is decided in favor of the defendant No.1 and against the plaintiff.
26. After having recorded my conclusions in the aforesaid two issues, I now record my findings in the remaining issues.
ISSUES No.1 & 21. Did the consignment in question reach destination at Jeddah on 29.11.1976 and delivered to local custom authorities as alleged by defendant No.1? OPD
2. If issue No.1 is decided in favor of the defendants, had the liability of the defendants not ceased? OPP
27. The onus of proving issue No.1 was on the defendants. It is admitted case of the parties that the cargo/consignment was booked with defendant No.1 and the goods reached the destination on 29.11.1976. The dispute is with regard to the delivery of the goods to the local customs authorities.
28. PW-1 in his statement has deposed that their bankers informed the plaintiff that the consignment had not reached its designation. He has also deposed that the plaintiff was informed that the goods in dispute had been shipped in the month of November, 1976. But the goods did not reach Jeddah. Plaintiff also made enquiries from the Customs Department at Jeddah but were unable to locate the goods. The defendant No.1 vide its letter dated 3.1.1979 (Exh. P-2) informed defendant No.2 that the importers at Jeddah had not received the goods. The defendant No.1 also intimated that they had not been able to get documentary evidence of having delivered the goods to customs and the goods are not traceable. The defendant No.1 gave no objection for settling the claim of the plaintiff. Copies of the letters Exh. P-6 to P-9 also show that the goods in question have not reached their destination at Jeddah.
29. In cross-examination, the witness has deposed that the plaintiff had verified the fact from its buyers that the goods reached Jeddah on 6th December, 1976. The witness has also confirmed having engaged Saha & Rai and their informing the plaintiff that goods had been dispatched by defendant No.1 on 29.11.1976. The documents of the bank by Punjab National Bank were sent to Bank of Mille Iran was confirmed by the witness. The plaintiff's witness suggests in his cross-examination that copy of airway bill and copy of the insurance cover and the original invoice were returned to the plaintiff. Legal notice Exh. P-5 sent by plaintiff and its reply Exh.PW-1/DA by defendant No.1 was also admitted but the witness does not remember if in the reply they were informed of delivery of consignment to the consignee. Original documents, airway bill, invoice, bill of exchange, dishonoured memo are proved by the witnesses.
30. Defendant No.1's witness, D-1W1 has deposed that the consignment was air lifted from Delhi on 29th November 1976 vide Airway Bill dated 29.11.1976 (Exh.D1W1/A). A letter dated 6.12.1977 (Exh. D1W1/C) was received from one M/s. Sadiq Mohd. Attar & Co. confirming that the consignment arrived Jeddah on 29.11.1976 and Delivery Order No.0003864 was issued to the consignee through Bank Melli Iran on 6.12.1976. He has also deposed that on 22.6.1979, the said M/s. Sadiq Mohd. Attar & Co. sent a letter to the defendant No.1 enclosing therewith delivery order No.3864 (Exh. D-2/5) and a photocopy of the delivery receipt of the airway bill. The witness has admitted that the letter dated 3.1.1979 (Exh. D-2/2) was written by Mr. C.H.Morris, Manager Northern India. The witness has also proved telex messages dated 8.1.1977 (Exh.D1W1/PC), 9.6.1977 (Exh. D1W/PD) and 27.8.1978 (Exh. D1W1/PB) showing that the consignment was delivered to the consignee.
31. The witness has stated that once the shipment arrives at an international airport, it goes into the control of the customs authorities, or in the customs warehouse. If the consignment is addressed to a consignee, then the delivery order is prepared by the airlines or agent and sent to the consignee. Where the consignment is sent through a bank the delivery order prepared by the airline or the agent is sent to the bank. With the issuance of the delivery order, the control of the goods goes out of the hands of the airlines and that is the stage where the shipper loses his right over the goods qua the carrier.
32. The delivery order No.3864 (Exh. D-2/5) produced by defendant No.1 was in Arabic language and was sent to the Department of Arabic, University of Delhi for translation. The document is only a copy. It was issued by Sadiq Mohd. Attar & Co. and addressed to the Customs Authorities at Jeddah. The original delivery order would thus be in the possession of the customs authorities. The original document was not filed or proved on record despite defendant No.1 having obtained orders from the Court for examination of witnesses on interrogatories. However, on a perusal of the translated copy of the delivery order No.3864, it appears that the same was issued on 6.12.1976 by Saddiq & Mohd. Attar Co. requesting the Customs Authorities to deliver the consignment to Iran Melli Bank which reached Jeddah Airways on 29.11.1976.
33. The defendant No.1 has also produced a letter dated 6th December 1977 (Exh. D1W1/C) from M/s. Saddik & Mohamed Attar Company whereby the said firm confirmed that the consignment arrived Jeddah on 29.11.1976. It has also been confirmed that they issued the delivery order No.0003864 through Bank Melli Iran on 6.12.1976. Vide letter dated 4th February 1978 (Exh. D1W1/G) addressed to the plaintiff, the defendant No.1 again confirmed that the documents were handed over to the consignee on 6.12.1976. As per the Saudi Arabian Government regulations, the goods were deposited with the custom authorities at Jeddah and the goods were still in the custody of the customs awaiting clearance by the consignee. The defendant No.1 asked the plaintiff to contact the consignee and arrange for immediate clearance of the consignment. The witness has also proved letter dated 22nd June 1979 (Exh. D1W1/D2A) received by defendant No.1 from its Senior Customer Services Officer, Jeddah along with a copy of the Delivery Receipt showing that the consignment was delivered to the consignee.
34. From the above, it is clear that the consignment in question was dispatched by defendant No.1 on 29.11.1976 which reached Jeddah on 29.11.1976. The agents of defendant No.1 issued a delivery order on 6.12.1976 requesting the local customs authorities at Jeddah to deliver the goods to the consignee's bank. The necessary documents were also given to the consignee along with the delivery order. But it appears that the consignee did not take any steps for clearance of the goods from the local customs authorities at Jeddah.
35. The document Exh. D-2/5 though not proved and either party not having led their best evidence, the evidence on record and the documents relied upon by the parties, particularly, the Exh. D1W1/PB, D1W1/PC and D1W1/PD, and Exh. D1W1/PA, Exh. D1W1/C, Exh. D1W1/1 and Exh. D1W1/D2A suggest that the goods were delivered to the local customs authorities at Jeddah. Plaintiff has produced only one witness whose statement is based on hearsay and the statement does not inspire confidence.
36. In these circumstances, both the issues are decided in favor of the defendants.
ISSUE NO.5 :
"Is the suit bad for want of statutory notice to defendant No.1? OPD"
37. Learned counsel for the plaintiff contends that no notice was required to be given under Rule 27 (2) of the Schedule II of the Carriage By Air Act and thus the suit is not bad for want of statutory notice.
38. Rule 27 (2) of 2nd Schedule of the Carriage By Air Act stipulates that in the event of delay in delivery of the consignment, notice must be given to the carrier within 21 days from the date on which the consignment was placed at its disposal. It is further stipulated that if notice is not given to the carrier, no action would lie against it. Rule 24 of 2nd Schedule of the Act provides that an action for damages founded in cases covered under Rules 18 and 19 can be brought subject to the conditions and limits set out in these rules. Rules 24 and 27 of 2nd Schedule of the Carriage By Air Act read as under:-
"24. In the cases covered by rules 18 and 19 any action for damages, however, founded, can only be brought subject to the conditions and limits set out in these rules."
27(1) Receipt by the person entitled to delivery of baggage or cargo without complaint is prima facie evidence that the same has been delivered in good condition and in accordance with the document of carriage.
(2) In the case of damage, the person entitled to delivery must complain to the carrier forthwith after the discovery of the damage, and, at the latest, within seven days from the date of receipt in the case of baggage and fourteen days from the date of receipt in the case of cargo. In the case of delay the complaint must be made at the latest within twenty-one days from the date on which the baggage or cargo have been placed at his disposal.
(3) Every complaint must be made in writing upon the document of carriage or by separate notice in writing dispatched within the times aforesaid.
(4) Failing complaint within the times aforesaid, no action shall lie against the carrier, save in the case of fraud on his part."
39. Admittedly, the consignment was handed over to the defendant No.1 on 7.10.1976 after getting it cleared from Customs. The goods left India on 29.11.1976 and arrived in Jeddah on the same day. It is clear that the complaint was to be filed with the defendant No.1 within 21 days from the date on which the package/cargo was placed at the disposal of the carrier. However, the complaint was not filed within the stipulated time and therefore no action lies against defendant No.1 except in case of a fraud on the part of defendant No.1. Fraud is not pleaded. The complaint was made in this regard on 10.1.1977 which is beyond the stipulated period of 21 days.
40. In light of the aforesaid discussion, the issue is decided in favor of the defendants and against the plaintiff.
ISSUE NO.6 "6. Has this court no territorial jurisdiction to entertain and decide the present suit? OPD"
41. Learned counsel for defendant No.1 does not press this issue. Therefore, this issue is decided in favor of the plaintiff and against the defendants.ISSUE NO.7 & 8
42. The defendants have proved that the goods in question reached Jeddah and were delivered to the local customs authorities but the consignee, i.e., M/s. Yassin Hussein Adham of Jeddah did not take any steps to take delivery of the said goods from the local customs authorities. Therefore, the defendants cannot made liable to pay the value of the goods, freight, insurance, etc. Accordingly, these issues are also decided in favor of the defendants and against the plaintiff.
43. In these circumstances, the suit of the plaintiff is dismissed.