Madras High Court
Singapore Airlines Cargo Pvt Ltd vs M/S. Hcl Info Systems Ltd on 19 June, 2017
Author: R. Subbiah
Bench: R. Subbiah, M.S. Ramesh
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on : 19.04.2017
Pronounced on : 19-06-2017
CORAM:
THE HONOURABLE MR. JUSTICE R. SUBBIAH
and
THE HONOURABLE MR. JUSTICE M.S. RAMESH
Appeal Suit No. 1040 of 2012
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Singapore Airlines Cargo Pvt Ltd.,
Westminster First Floor
108, Dr. Radhakrishnan Salai
Chennai 600 004 .. Appellant
Versus
1. M/s. HCL Info Systems Ltd.,
registered Office
806-808, Siddharth
96, Nehru Place
New Delhi 110 019
represented by Power Agent/Subrogee
M/s. National Insurance Company Ltd.,
Divisional Office
No.110, Jawaharlal Nehru Street, II Floor
Pondicherry 605 001
2. M/s. National Insurance Company Limited
Divisional Office
No.110, Jawaharlal Nehru Street, II Floor
Pondicherry 605 001
3. M/s. Jetsea Logistics (S) Pte Ltd.,
represented by their Local Agents
M/s. Uniworld Logistics Pvt Ltd.,
#64, North Beach Road
Off. Krishnan Koil Street
Chennai 600 001 .. Respondents
Appeal filed under Section 96 of Civil Procedure Code against the Judgment and Decree dated 19.12.2011 made in O.S. No. 11112 of 2010 on the file of Additional District and Sessions Judge (Fast Track Court-V), Chennai.
For Appellant : Mr. O.R. Shanthanakrishnan
For Respondents : Mr. G. Guruswaminathan
for M/s. Nageswaran & Narichania for RR1 & 2
JUDGMENT
R. SUBBIAH, J The present appeal has been filed by the first defendant, as against the Judgment and Decree dated 19.12.2011 passed in O.S. No. 11112 of 2010 on the file of Additional District and Sessions Judge (Fast Track Court-V), Chennai by which the court below decreed the suit filed by the plaintiffs/respondents 1 and 2 herein inter alia directing the first defendant/appellant herein and also the second defendant/third respondent herein to pay jointly and severally to the second plaintiff the sum of Rs.13,39,213/- along with 18% simple interest from the date of plaint till the date of payment.
2. The appellant in this appeal is the first defendant in the suit. The respondents 1 and 2 herein are the plaintiffs, who have instituted the suit . The third respondent in this appeal is the second defendant in the suit. For easy reference, the parties are referred to in this appeal as per their ranking in the suit as 'plaintiffs' and 'defendants'.
3. The first plaintiff is a Public Limited Company incorporated under the Indian Companies Act. During the course of their business, the first plaintiff imported a cargo which consists of Computer Parts, Memory Modules Samsung Material Code IC000647 etc., from M/s. Excelpoint Systems (Pic) Limited, Singapore as per their invoice bearing Nos. EPSRIV07011435 and EPSRIV07011436, both dated 10.09.2007. According to the first plaintiff, the said cargo was securely packed in 8 cartons and entrusted with the second defendant, who is the consolidator and the second defendant also issued House Airway Bill (HAWB) bearing No. SIN0529248 dated 12.09.2007. The second defendant in turn handed over the cargo to the first defendant - Air Carrier who issued Master Airway Bill (MAWB) No.618-5459 9123 dated 12.09.2007 thereby undertaking to carry and deliver the cargo at Chennai Airport in the same condition. According to the plaintiffs, the defendants failed to deliver the cargo as entrusted to them, with the result, there was a short landing of 3 cartons of cargo out of 8 cartons. According to the plaintiffs, the CIF value of the undelivered cargo is Rs.13,39,213/- which includes proportionate freight and insurance charges. In this context, the first plaintiff, as owner of the cargo, issued notices indicating the loss of cargo on its arrival to both the defendants on 21.09.2007. The appellant/first defendant, by reply dated 03.12.2007, acknowledged such non-delivery of the cargo under HAWB SIN0529248. It is the contention of the plaintiffs that the short landing or non-delivery of 3 packages of cargo and the consequential pecuniary loss sustained by them is a result of lack of care, wilful misconduct and negligence attributable on the part of the defendants in handling the cargo. According to the plaintiffs, the first defendant, as Air Carrier and the third defendant, being the Consolidator, are therefore jointly and severally liable to compensate the plaintiffs for the loss caused to them and they are not entitled to restrict their liability as they have not chosen to disclose as to how the suit cargo was handled by them when they had exclusive custody of the same. In the absence of disclosure by the defendants as to the manner in which they have handled the cargo, their wilful misconduct and negligence have to be presumed. Thus, according to the plaintiffs, the defendants have failed to discharge their duties as contained under the Carriage by Air Act and thereby rendered themselves liable, jointly and severally, to compensate the plaintiffs.
4. It is the further case of the plaintiffs that the suit cargo was insured by the first plaintiff with the second plaintiff under Policy No.501502/21/07 /4200000002. On the basis of the claim made by the first plaintiff, the second plaintiff settled the claim of Rs.13,39,213/- made by the first plaintiff, being the proportionate insured value of the non-delivered cargo. On such indemnification, the first plaintiff executed a letter of subrogation and Special Power of Attorney in favour of the second plaintiff on 27.01.2009 thereby subrogating all their rights in favour of the second plaintiff. According to the plaintiffs, by virtue of such letter of Subrogation and as per Section 79 of the Maritime Insurance Act, the second plaintiff is entitled to file and maintain the present suit in their own name. On the strength of the Letter of Subrogation and Special Power of Attorney executed by the first plaintiff, the second plaintiff handed over the claim papers to their advocates, who lodged a claim on the first defendant by sending a notice dated 30.05.2009 for which a reply dated 19.06.2009 was sent by the first defendant denying their liability. Therefore, the plaintiffs have filed the present suit.
5. Resisting the case of the plaintiffs, the first defendant/appellant filed written statement contending inter alia that the suit is not maintainable since the person who verified the plaint as Power Agent of the first plaintiff and the Principal Officer of the second plaintiff company has no locus standi to file or verify the plaint in the absence of any Board Resolution or a Power of Attorney. Therefore, on this ground, the suit is not maintainable and it has to be dismissed. It is further contended that the first defendant does not admit the Letter of Subrogation or Special Power of Attorney executed by the first plaintiff in favour of the second plaintiff. Unless and until the Letter of Subrogation or Special Power of Attorney authorises the second plaintiff to sub delegate, it is not open to the Principal Officer of the second plaintiff to sign and verify the present suit.
6. With regard to the merits of the case, it is stated that the consignment containing computer spares, peripherals etc., was shipped under Master Airway Bill 618-5459 9123 with several House Airway Bills. The cargo was a 'Built up Pallet' (BUP) built by Consol Agent M/s. Jetsea Logistics (S) Ptd. Ltd., of the shipper M/s. Excelpoint Systems (Ptd) Ltd., According to the first defendant, the entire pallet was built up in the consol agent's warehouse at Singapore and handed over to the first defendant as a BUP and forwarded to the desgination shown in the Master Airway Bill intact. The BUP was forwarded directly from Singapore to Madras on SQ-528/12.09.2007. On arrival of the BUP at Chennai on 12.09.2007, it was found by the handling agent of the first defendant Air India that 3 pieces out of 8 pieces under House Airway Bill SIN 0529248 was short shipped and not found in the pallet. As the consignment was a BUP built up by the Consol Agent of the shipper in Singapore at their warehouse, the first defendant cannot be held responsible for such short shipment and no liability could be fastened on them. In fact, the first defendant had sent a letter dated 27.09.2007 addressed to the consignee's Consol agent Uniworld Logistics explaining the situation. According to the first defendant, it is the responsibility of the shipper first plaintiff and their consol agent to load the cargo meant for the consignee at Chennai. Therefore, if at all there is any liability for the alleged loss or short shipment, it is the Consol Agent of the Shipper at Singapore, who is responsible for the alleged loss and the first defendant cannot be made liable or responsible for such loss. Therefore, according to the first defendant, the suit is liable to be dismissed for non joinder of the Consol Agent of the Shipper at Singapore and for misjoinder of the first defendant. It is further stated that for the notice dated 30.05.2009 sent by the plaintiffs, a reply dated 19.06.2009 was sent by the first defendant denying their liability. The first defendant also denied the allegation that they have undertaken to deliver the cargo at Chennai Airport in good condition as entrusted to them. The first defendant also denied that they have failed to deliver the cargo at Chennai Airport or short landed 3 out of 8 packages. Therefore, according to the first defendant, the alleged pecuniary loss sustianed by the plaintiffs cannot be attributed against them. The first defendant also made reference to the handling agent report to show that 3 pieces out of 8 pieces under House Airway Bill was short shipped and not found in the pallet. Therefore, according to the first defendant, it is a case of short shipment and not short landing, as claimed by the plaintiffs and prayed for dismissal of the suit.
7. On the above pleadings, the trial Court framed as many as five issues for determination. During the course of trial, on behalf of the Plaintiffs, the Deputy Manager of the National Insurance Company Limited, second plaintiff in the suit, was examined as PW1 and Exs. A-1 to A-18 were marked. On the side of the defendants, the Cargo Sales Supervisor of the first defendant/appellant company was examined as DW1 and Exs. B1 to B4 were marked. The trial court, after analysing the oral and documentary evidence, decreed the suit as prayed for. Aggrieved over the same, the present Appeal Suit has been filed by appellant.
8. The learned counsel appearing for the first defendant/appellant, before making his submissions on the merits of the case, advanced arguments with regard to maintainability of the suit, as framed. In this regard, the counsel for the appellant submitted that the plaint was verified by one Mrs. Thilagam, Senior Divisional Manager of the Second Plaintiff Insurance Company. The Senior Divisional Manager of the second plaintiff company has no locus standi to verify the plaint in the absence of a Board Resolution or any other authorisation. In the present case, no Board resolution or any other documentary evidence was produced to show that a resolution was passed by the Board authorising the Senior Divisional Manager of the second Plaintiff company to verify and institute the suit, as required under Order 29 Rule 1 of CPC. In this regard, the learned counsel for the first defendant/ appellant invited the attention of this Court to Order 29 Rule 1 of CPC wherein it is stated that in suits by or against corporation, any pleading may be signed and verified on behalf of the corporation by the Secretary or by any Director or other principal officer of the corporation who is able to depose to the facts of the case. According to the learned counsel for the first defendant/appellant, the plaintiffs did not produce any evidence to show that the Divisional Manager of the second plaintiff company, who verified the plaint, was authorised by the second plaintiff company by passing any Board resolution. Therefore, the plaint filed as such would not fall within the purview of Order 29 Rule 1 of CPC. Further, one Mr. Murali Krishna, Deputy Manager of the National Insurance Company Limited, second plaintiff, who was examined as PW1, has deposed in his evidence that on the strength of the authorisation letter given by one Mr. K. Venkatesan, Divisional Manager of the Insurance Company in his letter dated 26.07.2011, which is marked as Ex.A-1, he is competent to adduce evidence. However, no documentary evidence was produced to show that the Divisional Manager is empowered to issue such an authorisation letter in favour of PW1 to adduce evidence in the suit. Therefore, in the absence of any documentary evidence to show that the suit was filed by a person who was duly authorised by the second plaintiff company, the trial Court ought to have dismissed the suit. In support of such contention, the learned counsel for the appellant placed reliance on the decision in (Janaki Vashdeo Bhojwani and another vs. IndusInd Bank Limited., and others) reported in AIR 2005 Supreme Court 439 wherein it was held that the power of attorney holder rendered some acts in pursuance to power of attorney and he may depose for the principal in respect of such acts, but he cannot depose for the Principal for the acts done by the Principal and not by him. Similarly, he cannot depose for the Principal in respect of the matter which only the Principal can have a personal knowledge and in respect of which the Principal is entitled to be cross-examined.
9. The learned counsel for the first defendant/appellant also placed reliance on the decision rendered by the Honourable Supreme Court in the case of (Man Kaur (Dead) by L.R.s vs. Hartar Singh Sangha) reported in (2010) 10 Supreme Court Cases 512 wherein it has been held that a power of attorney holder, who has no personal knowledge, cannot depose or give evidence in the place of the Principal. An attorney holder, who has signed the plaint and instituted the suit, but has no personal knowlege of the transaction, can only give formal evidence about the validity of the power of attorney and the filing of the suit.
10. The learned counsel for the appellant, by placing reliance on the above decisions, would contend that the trial Court, without considering the above legal aspects, placed reliance on the decision of the Honourable Supreme Court in the case of Union Bank of India vs. Naresh Kumar reported in AIR 1997 SC Page No3, relied on behalf of the plaintiffs/respondents 1 and 2 herein, decreed the suit. In the said decision relied on by the trial Court, it has been held that cases where suits are instituted or defended on behalf of a public corporation like bank, public interest should not be permitted to be defeated on mere technicalities. It has been further held that procedural defects which do not go to the root of the matter should not be permitted to defeat a just cause. Further, there is sufficient power in the Courts under the Code of Civil Procedure to ensure that injustice is not done to any party who has a just case. Therefore, it has been held that as far as possible, substantive right should not be allowed to be defeated on account of a procedural illegality which is curable. In this context, the learned counsel for the first defendant/appellant relied on an unreported Judgment of this Court wherein a learned Judge of this Court, while passing the Judgment dated 29.10.2010 in Civil Suit No. 689 of 1999, placed reliance on the very same decision rendered by the Honourable Supreme Court in AIR 1997 SC Page No3 mentioned supra and distinguished the said Judgment on the basis of the decision rendered by the Himachala Pradesh High Court in (Apple Valley Resort vs. H.P. State Elec. Board) reported in 2004 (118) Company Cases 328 and held that the suit as filed by the plaintiff therein is not maintainable. The learned counsel for the appellant has also taken us to the relevant portion of the Judgment passed by this Court in Para No.20, which reads as follows:-
20. The abovesaid decision reported in 1999 (6) SCC 666 = 1997 (90) Company Cases 329 = AIR 1997 SC 3 (United Bank of India vs. Naresh Kumar (cited supra) has been referred to by the High Court of Himachal Pradesh in the decision reported in 2004 (118) Company Cases 328 (Apple Valley Resort vs. H.P. State Elec. Board) in which it was observed by the High Court of Himachal Pradesh that Order 29, Rule 1 of CPC only authorises the persons mentioned therein to sign and verify the pleadings on behalf of a Corporation/Company and it does not authorise such persons to institute an action on behalf of a Corporation/Company, the question of authority to institute an action on behalf of a company is not a technical matter, it has far-reaching effects and it often affects policy and finances of the Company, therefore, unless a power to institute an action is specifically conferred on a particular Director, he would have no authority to bring an action on behalf of the Company; the power to institute an acton on behalf of the company can be conferred on a Director or any other Officer of the company only by the Board of Directors by way of a Resolution in that regard; in the absence of a specific provision of the Board of Directors authorising the Liaison Officer to institute the petition (suit) for and on behalf of the Company or power conferred on the Director by the Memorandum and Articles of Association, the petition (suit) cannot be said to have been laid by a duly authorised and competent person for and on behalf of the Company; the High Court of Himachal Pradesh further held that the suit was bad and liable to be dismissed on that ground alone.
11. By placing reliance on the above decisions, the learned counsel for the first defendant/appellant prayed this Court to set aside the Decree and Judgment passed by the trial Court by holding that the suit filed by the plaintiffs/respondents 1 and 2, as framed, is not maintainable
12. With regard to the merits of the case, it is submitted by the learned counsel for the first defendant/appellant that the first plaintiff imported a cargo of Computer Parts from M/s. Excel Point Systems (Pte) Ltd., Singapore to Chennai. The cargo was packed in 8 cartons which were entrusted to the second defendant/third respondent herein, who is the consolidator. The second defendant also issued House Air Way Bill bearing No.SINO529248 dated 12.09.2007. According to the first defendant, the entire pallet was built up in the ware house of the consol agent of the first plaintiff at Singapore and handed over to the carrier as a BUP and this is also mentioned in the Master Airway Bill issued by the consol agent as 92 pcs 1600 kgs loaded onto PMC-563558Q and the pallet number PMC-563558Q has been mentioned in the cargo arrival manifest as a 'BUP'. It is contended by the learned counsel for the first defendant/appellant that the first defendant/appellant, as carrier, will accept the complete pallet, built up by the agent as a 'BUP' and forward the same to the destination shown in the Master Airway Bill intact. However, in this case, the BUP from the consol agent was directly forwarded from Singapore to Madras on 12.09.2017. On arrival of the BUP at Chennai on 12.09.2017, it was found by the Carrier's handling Agent Air India that 3 pieces out of 8 pieces under House Airway Bill SIN 0529248 was short shipped and not found in the pallet. As the consignment was a 'BUP', built up by the Consol Agent of the shipper at Singapore at their ware house, if at all, the Consol agent alone can be mulcted with the liability for the loss sustained by the plaintiffs/respondents 1 and 2 and not the first defendant/appellant. Thus, the learned counsel for the first defendant/appellant would contend that it is not a case of short landing of cargo but short shipment of the cargo for which the appellant cannot be made liable. The learned counsel for the appellant placed reliance on Ex.B3, report of the handling agent on the Cargo Manual and submitted that in Ex.B3, absolutely there is no entry made by the handling agent with regard to any damage caused to the consignment, which would indicate that 3 pieces out of 8 pieces was short shipped and not found in the pallet. Therefore, it is not a case of short landing and consequently, there is no wilful negligence attributable on the part of the appellant in handling the cargo. As soon as the aircraft arrives, the carrier/appellant filed import manifest, Ex.B3. After arrival, the checking of the cargo was done by Customs Department wherein the handling Agent Air India has signed Ex.B3 indicating that 3 pieces weighing 05 kgs were short shipped. Therefore, the consol agent of the shipper at Singapore alone could be responsible for the alleged loss caused to the plaintiffs and not the appellant/first defendant. Even assuming there is any loss, the liability of the career is limited to USD 20 per kilo for the weight loss of 33.3 kilograms in terms of Indian Ru;ees which would work out to Rs.43,539/- at the exchange rate of Rs.65.43 per US dollar. The learned counsel for the appellant also invited the attention of this Court to Rule 22 (2) (a) of the Second Schedule to the Carriage by Air Act, 1972 and submitted that in case of loss, damage of cargo, the weight to be taken into consideration for determining the carrier's monetary liability is limited only to the total weight of the packages concerned, 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 the instant case, no such special declaration has been made by the first plaintiff at the time of handing over the cargo to the carrier. Hence, the liability of the appellant is limited to US Dollars 20 per kilogram X weight loss of 33.3 kilogrmas in terms of Indian Rupees = Rs.43,579/- and not more than that. Thus, the learned counsel for the appellant/first defendant prayed for dismissal of the suit filed by te plaintiffs by setting aside the judgment and decree passed by the trial Court.
13. Countering the submissions made by the learned counsel for the appellant, the learned counsel for the plaintiffs/respondents 1 and 2 submitted that it is incorrect to state that the suit, as framed, is not maintainable. In fact, the first plaintiff was indemnified by the second plaintiff under the policy of insurance and has also subrogated their rights in favour of the second plaintiff, which is a public sector company represented by its Principal Officer. The letter of subrogation was also marked as Ex.P16. According to the counsel for the plaintiffs/respondents 1 and 2, the plaint was properly instituted and it was verified by the Principal Officer of the second plaintiff company. Furthermore, during the course of cross-examination of PW1, on behalf of the first defendant, not even a suggestion was put to PW1 as regards the competency of the person who verified the plaint on behalf of the second plaintiff company, as a power agent of the first plaintiff company. In fact, it was admitted by the first defendant in the written statement itself that the Senior Divisional Manager of the second plaintiff company was the Principal Officer of the second plaintiff company. Similarly, no such suggestion was putforth to PW1 on behalf of the first defendant/appellant at the time of his evidence to the effect that the Divisional Manager, who has given the authorisation letter to adduce evidence, is not a competent person to issue such a letter of authorisation. Therefore, according to the counsel for the respondents 1 and 2, the suit was properly filed and it is maintainable under law.
14. The learned counsel for the respondents 1 and 2 would further contend that the decisions relied on by the learned counsel for the appellant cannot be made applicable to the facts of this case. The decisions cited by the counsel for the appellant arise out of Marine Insurance Act or about the concept of subrogation and therefore, the decisions relied on by the counsel for the appellant cannot be made applicable to the facts of this case. In fact, the trial court, by placing reliance on the decision of the Honourable Supreme Court in AIR 1997 SC Page No.3, mentioned supra, has negatived the claim made by the first defendant and held that the suit is maintainable and it was properly filed.
15. With regard to the merits of the case, it is submitted by the counsel for the plaintiffs/respondents 1 and 2 that Ex.A5, marked on the side of the plaintiffs/respondents 1 and 2 herein, is the House Airway Bill issued by the consolidator/third respondent herein, which would prove that cargo weighing about 75 kilograms was entrusted with the second defendant and it also contains the invoice numbers. Further, Ex.A11 is the letter addressed by the first defendant/ appellant to the first plaintiff stating that inspite of world wide tracers, the lost cargo could not be located and it is declared as lost. The contents of Ex.A11 would only prove that the cargo was not short shipped and it was entrusted to the appellant. In other words, the defence of the appellant that the lost cargo was not at all entrusted to them is nothing but a falsehood. In this regard, the counsel for the respondents 1 and 2 invited the attention of this Court to Ex.B3, Manifest and submitted that the entries made in the corner by the cargo agent to the effect that SL/3 would indicate that 3 cartons were short landed. According to the learned counsel for the respondents 1 and 2, the words 'D-2' indicated therein would also mean that two cartons were damaged. It is further written in Ex.B3 as 03p S/L as against MAWB ending 9123. It is also written as on arrival 3 Pcs of 8 Pcs under HAWB was reported as short landed. Further, DW1 in his cross-examination admitted that their company carried the cargo as entrusted by the second defendant/consolidator. DW1 further admitted that whatever cargo was mentioned in House Airway Bill will be incorporated in Ex.B1- Air Way Bill dated 12.09.2007. Thus, the counsel for the respondents 1 and 2 would submit that the above documentary evidence would clearly establish that the suit cargo was entrusted to the first defendant and consequently it has to be held that the defence of short shipment made by the first defendant has not been proved in a manner known to law. Therefore, it is a case of short landing of the cargo and the plaintiffs are entitled to get the amount as claimed towards loss suffered by them.
16. With regard to the submissions made by the counsel for the first defendant/appellant herein that it is for the plaintiffs/respondents 1 and 2 herein to prove that there was wilful negligence and carelessness on the part of the first defendant in handling the cargo, the learned counsel for the plaintiffs/respondents 1 and 2 would submit that loss or damage has been caused to the cargo only due to the act of the first defendant Carrier. Once the first defendant, as a carrier, receives the cargo, it is their obligation duty to safely deliver the same and burden is on the carrier to show that they have followed proper procedure and inspite of their best efforts, they could not prevent loss or damage. In the absence of such evidence, it can be held that carrier is guilty of misconduct. In the present case, the first defendant has not produced any documentary evidence to prove that they have followed the proper procedure and taken best efforts in delivering the cargo. Therefore, the learned counsel for the plaintiffs/respondents 1 and 2 would contend that the first defendant/appellant is guilty of misconduct and negligence is attributable on their part.
17. With regard to the submissions made by the counsel for the appellant/first defendant that if at all there is any liability on the part of the appellant/first defendant, the said liability could be restricted only to an extent of USD 20 per kilogram. It was replied by the learned counsel for the plaintiffs/respondents 1 and 2 that as per Rule 25 of Chapter III of the second Schedule of The Carriage by Air Act, 1972, if damage is resulted from an act or omission or wilful misconduct on the part of the carrier, the limits of liability as specified in Rule 22 shall not apply and Rule 22 (5) of Chapter III of Second Schedule will only apply. Rule 22 (5) of Schedule II of Chapter III of The Carriage by Air Act, 1972, reads as follows:-
22 (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 milligramme 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.
18. In this regard, the counsel for the respondents 1 and 2/Plaintiffs contended that if calculation is made as per Rule 22 (5) Second Schedule of Chapter III of the The Carriage by Air Act, on the basis of Rs.65.80 milligram of gold of millesimal fineness nine hundred, then the maximum liability on the part of the first defendant/appellant herein for 33.30 kilograms of suit cargo works out to Rs.15,82,402.56 which is restricted to suit claim. The trial court, by properly considering all these issues has come to a correct conclusion to decree the suit as prayed for, and therefore, the learned counsel for the plaintiffs/respondents 1 and 2 prayed for dismissal of the appeal.
19. By way of reply to the submissions made by the learned counsel for the plaintiffs/respondents 1 and 2 with regard to the maximum extent of liability as per Rule 22 (5) of The Carriage by Air Act, the learned counsel for the first defendant/appellant invited our attention to the preamble and statement of objects and reasons of the Act which reads as follows:-
Preamble Whereas it is expedient not only to enable common carriers to limit their liability for loss of, or damage to property delivered to them to be carried but also to declare their liability for loss of or damage to such property occasioned by the negligence or criminal acts of themselves, their servants or agents, it is enacted as follows:-
Statement of Objects and reasons:- India is a signatory to the Warsaw Convention of 1926, which is an International Agreement governing the liability of the air carrier in respect of international carriage of passengers, baggage and cargo by air. Under that convention 'international carriage' mean any carriage in which according to the contract made by the parties, the place of departure and the place of destination, whether or not there be a break in the carriage or transhipment, are situated either within the territories of two High Contracting Parties or within the territories of a single High Contracting Party, if there is an agreed stopping place within a territory subject to the sovereignity, suzerainity, mandate or authority of another Power, even though that power is not a party to the Convention. The Convention provides that when an accident occurring during international carriage by air causes damage to a passneger, or a shipper or cargo, there is a presumption of liability of the carrier. The carrier, however, is not liable if he proves that it was impossible for him or them to take such measures. The Convention balances the imposition of a presumption of liability on the carrier by limiting his liability for each passenger to 1,25,000 gold francs. There is no limitation or liability if the damage is caused by the wilful conduct of the carrier, or by such default on his part as, in accordnace with the law of the Court seized of the case, is equivalent to wilful misconduct. The convention also contains detailed provisions regarding documents of carriage.
20. The learned counsel for the first defendant/appellant contends that a reading of the preamble and Statement of Objects and reasons mentioned above would indicate that The Warsaw Convention in its original form and as amended by the Hague Protocol limits the liability of the carrier by Reference to 'Francs'. This reference to the franc is demanded to be a currency unit consisting of 64 < mgs of gold mullesimal finners 900. On April 1st, 1978, the use of gold as the common denominator in the International Monetary system was ended. This change in International usage was reflected in national legislation and government practice and it is no longer possible to speak of an official gold value of any currency. The implications of this fundamental change for International Treaty practice have of course been recognised, hence, the use of Special Drawing Rights (SDR) of the International Monetary Fund is as per the Monetral Convention, 1999. Further, after Montreal Convention, the liability of cargo remains unchanged as Montreal Protocol 4 and is limited to 17 Special Drawing Rights (SDR) per kg (in the absence of supplemental / valuation charge). Further, liability limits under Montreal Convention (MC) will prevail unless origin and destination are not MC States. For such cases, Warsaw (1929) or Hague will apply. Therefore, by no stretch of imagination, can respondent 1 and 2 contend that the liability of the carrier has to be computed in terms of currency unit consisting of 65.5 mgs of gold of millesemal francs 900 and applying the same to determine the liability of the appellant as per Rule 22 (5) of Second Schedule of Chapter III of the The Carriage by Air Act, 1972.
21. We have given our anxious consideration to the submissions made by the counsel for both sides. In the light of the above rival submission, the following points falls for our consideration.
(I) Whether the suit has been properly filed and verified as required under Order 29 Rule 1 of CPC?
(ii) Whether the plaintiffs/respondents 1 and 2 have proved that there was a short landing of the cargo, if so, what is the liability of the first defendant?
22. Point No.(i): It is the submission of the counsel for the first defendant/ appellant that the plaint was verified by the Senior Divisional Manager of the second plaintiff company and as per Order 29 Rule 1 of CPC, in suits by or against a corporation, any pleading may be signed and verified on behalf of the corporation by the Secretary or by any Director or other principal officer of the corporation who is able to depose to the facts of the case. In this case, the plaintiffs 1 and 2/ respondents 1 and 2 herein have not filed any documentary evidence to show that the Divisional Manager of the second plaintiff company was authorised to sign and verify the plaint on the basis of any Board resolution. In the absence of any Board resolution, the trial court ought not to have entertained the suit, as framed. In this context, it is necessary to look into the provisions of Order 29 Rule 1 of CPC, which reads as follows:-
1. Subscription and verification of pleading:- In suits by or against a corporation, any pleading may be signed and verified on behalf of the corporation by the Secretary or by any Director or other principal officer of the corporation who is able to depose to the facts of the case
23. A perusal of Order 29 Rule 1 of CPC would indicate that the pleading in a suit by or against Corporation has to be signed and verified by the Secretary or any Director or other Principal Officer of the Corporation who is able to depose to the facts of the case. In this case, in the plaint filed by the plaintiffs/ respondents 1 and 2, in para No.5, it has been stated that the second plaintiff is a Public Limited Company incorporated under the Indian Companies Act and carrying on business of general insurance and it is represented by their Principal Officer/Divisional Manager B. Thilagam. Thus, it is evident that the plaint was filed by the plaintiffs through their Principal Officer/Divisional Manager and it is in accordance with Order 29 Rule 1 of CPC. Though it is the case of the first defendant/appellant that the suit was not properly filed or it was verified by an incompetent person without any authorisation to institute the suit and no Board resolution was passed, we find that in the cross-examination of PW1, on behalf of the first defendant, no questions were put to PW1 to that effect. The relevant portion of the cross-examination of PW1 by the first defendant/appellant reads as follows:-
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24. It is evident from the relevant portion of the cross-examination of PW1 that the first defendant has not chosen to put any question to PW1 to the effect that the Senior Divisional Manager of the second plaintiff company is not a competent officer to verify the plaint. The first defendant also did not put any question as regards the position held by the person, who verified the plaint, in the second plaintiff company. The first defendant/appellant has also not denied the case of the plaintiffs/respondents 1 and 2 herein that the Senior Divisional Manager of the second plaintiff company was the Principal Officer. Even in the cross-examination of PW1 by the first defendant, no question was putforth with regard to the competence of Senior Divisional Manager to verify the plaint. The defence was made only against non-filing of resolution authorising the Principal Officer of the second plaintiff to file the suit and not about the competence of the Principal Officer, who verified and instituted the suit. Further, the authorisation letter given by the Divisional Manager of the second plaintiff in his letter dated 26.07.2011, to PW1, was marked as Ex.A-1 on the strength of which PW1 deposed before the trial Court. However, in the cross-examination of PW1, no suggestion was made to the effect that the Divisional Manager of the second plaintiff firm was not the Principal Officer of the second plaintiff insurance company and he is not a competent person to authorise PW1 to depose evidence in this case. When competence of the Senior Divisional Manager of the second plaintiff who verified the plaint as well as the Divisional Manager who authorised PW1 to depose during trial is not challenged by the first defendant/ appellant by putting specific questions with regard to the competency of the Senior Divisional Manager of first plaintiff company as well as PW1, no significance could be attached to the plea raised by the first defendant/appellant regarding non-filing of the Board resolution. Furthermore, Order 29 Rule 1 of CPC is permissive in nature which empowers the Principal Officer of the first plaintiff company to institute the suit. On this ground also, non-filing of the Board resolution by the first plaintiff company is not fatal to the case of the plaintiffs.
25. In this context reference can be made to the decision rendered in 2006 AIHC 1871 (1872) MP (Bank of India vs. S.R. Mukherjee). In the said case, suit filed was filed by the Bank for recovery of money. The suit was signed and verified by the Regional Manager of the Bank as Principal Officer of the Branch. However, the authority of such officer was not challenged by the defendant by adducing cogent and reliable evidence. In such circumstances, it was held that even in the absence of proof and presentation of power of attorney, the suit could not be dismissed.
26. Further, in Oriental Bank of Commerce vs. S.R. Kishore & Co., AIR 1992 Delhi 174 (177), the Bank has filed a case through its Manager against a firm. There was a resolution passed by Board of Directors authorising Manager to institute the suit. Also, the power of attorney was executed by Director in favour of Manager. The Manager was a Principal Officer during the relevant period. Therefore, it was held that the suit was instituted by a competent person.
27. The learned counsel for the first defendant/appellant relied on the decision of the Honourable Supreme Court in (State Bank of Travancore vs. Kingston Computers India Private Limited) reported in (2011) 11 Supreme Court Cases 524. In that case, the trial Court dismissed the suit and upheld the preliminary objection as regards the maintainability of the suit as the suit was filed on behalf of the respondent company by an incompetent person. On appeal, the High Court reversed the decision of the Trial Court. The Judgment of reversal passed by the High Court was challenged before the Honourable Supreme Court. The Honourable Supreme Court, while setting aside the order of the High Court, held that the respondent did not produce any evidence to prove that the person who verified the plaint was appointed as a Director of the Company and a resolution was passed by the Board of Directors of the company authorising him to file a suit. The letter of authority issued by the Chief Executive Officer of the company was nothing but a scrap of paper because, no resolution was passed by the Board of Directors delegating its powers to the Chief Executive Officer to authorise another person to file a suit on behalf of the company. In the present case, the plaint was verified by the Principal Officer of the second plaintiff company. Therefore, the said decision cannot be made applicable to the facts of this case.
28. On the other hand, the Honourable Supreme Court in the decision rendered in (Union Bank of India vs. Naresh Kumar) reported in AIR 1997 SC Page No3 which was also relied on by the trial Court, held that in cases where suits are instituted or defended on behalf of a public corporation like bank, public interest should not be permitted to be defeated on mere technicalities. It has been further held that procedural defects which do not go to the root of the matter should not be permitted to defeat a just cause. Further it was held that sufficient power is vested in the Courts under the Code of Civil Procedure to ensure that injustice is not done to any party who has a just case. Thus, it has been held that as far as possible, substantive right should not be allowed to be defeated on account of a procedural illegality which is curable. In the light of the above decision of the Honourable Supreme Court, we are of the view that the suit was properly verified and filed by a competent officer of the second plaintiff company and consequently, the suit as framed and filed is proper. Hence, we are of the view that when the suit was verified by the Principal Officer of the second plaintiff company and the competence of such Officer was not questioned by the first defendant during trial or disproved the same by producing cogent evidence, we are not in a position to accept the submission of the counsel for the appellant that the suit was improperly filed. Therefore, we hold that the suit was filed before the trial Court by a competent person and the suit is maintainable. In this regard, it is proper for us to refer to the decision rendered in (Sarwan Singh vs. State of Punjab) reported in (2003) 1 Supreme Court Cases 240 wherein it has been held that it is a rule of essential justice that whenever the opponent has declined to avail himself of the opportunity to put his case in cross-examination, it must follow that the evidence tendered on that issue ought to be accepted.
29. Point No. (ii) As regards the merits of the case, it is the case of the first defendant/appellant that the consignment containing computer spares, peripherals, accessories and materials were shipped under Master Airway Bill No. 618 5459 9123 which was a BUP and it was built up in the consol agent's warehouse at Singapore and it was handed over to the first defendant/appellant as a BUP. Such BUP from the console agent was forwarded directly from Singapore to Madras on 12.09.2007 by SQ 528. On arrival of the BUP at Chennai, it was found by the first defendant's handling agent M/s. Air India that 3 pieces out of 8 pieces under House Airway Bill SIN 0829248 was short shipped and not found in the pallet. According to the counsel for the first defendant, the consignment was a Built Up Pallet (BUP), built up by the Consol Agent of the shipper at Singapore at their warehouse and therefore, the first defendant cannot be held liable or responsible for the short shipment. Further, there was no entry to show that there was any damage caused to the consignment and therefore, there was no short landing of consignment rather it was a short shipped consignment, in which case, the first defendant cannot be made liable or responsible for the loss incurred by the plaintiffs.
30. On perusal of Ex.A5, House Airway Bill issued by the consolidator/third respondent herein, it is seen that the cargo weighing about 75 kilograms was entrusted with the second defendant and it also contain the invoice numbers. Further, Ex.A11, letter addressed by the appellant to the first plaintiff would show that inspite of world wide tracers, the lost cargo could not be located and it is declared as lost. The contents of Ex.A11 would only show that the cargo was not short shipped as contended by the first defendant/appellant and consequently the defence raised by the first defendant/appellant that the lost cargo was not at all entrusted to them cannot be accepted. The contents of Ex.A11 would only indicate that there was short landing of the cargo and not short shipment, as defended by the first defendant/appellant. Even though in Ex.A-11, it was indicated that it was issued without prejudice, from the contents of Ex.A-11, it could be safely inferred that there was short landing of the cargo and not short shipment. Further, in Ex.B3, Manifest the entries made by the cargo agent is to the effect that SL/3 which would indicate that 3 cartons were short landed. The words D-2 indicated therein would mean that two cartons were damaged i.e., damage to two. It is further written in Ex.B3 as 03p S/L as against MAWB ending 9123. It is also written as on arrival 3 Pcs of 8 Pcs under HAWB was reported as short landed. As pointed out by the counsel for the respondents 1 and 2, DW1 in his cross-examination admitted that their company carried the cargo as entrusted by the second defendant/consolidator and whatever cargo was mentioned in House Airway Bill will be incorporated in Ex.B1- Air Way Bill dated 12.09.2007. The above deposition of DW1 coupled with the documentary evidence mentioned supra would clearly establish that the suit cargo was entrusted to the first defendant and consequently the defence of short shipment made by the first defendant has not been proved in a manner known to law.
31. As regards the liability on the part of the first defendant/appellant, the rights and liability of an International Air Carrier is governed by Carriage by Air Act. Chapter III of II Schedule deals with liability of the carrier. It is contended by the first defendant/ appellant that the maximum liability on their part is only Rs.43,579/- and their liability could be restricted only to the extent of USD 20 per kilogram. On the contrary, the learned counsel for the plaintiffs/respondents 1 and 2 would contend that Rule 22 (5) of Chapter III deals with conversion of francs to units of gold and to Indian Currency which provides for maximum liability of the air carrier for short landing of 33.30 kilograms of the cargo in terms of value of goods. According to the plaintiffs/respondents 1 and 2, the weight of the short landed cargo is 33.30 kilograms. The loss has to be calculated by taking note of the fact that the transaction in this case took place in the year 2007 and therefore, the amendment brought into the Third Schedule of the Act during the year 2009 prescribing different mode of calculation will have no application to the case on hand. In this conext, the learned counsel for the plaintiffs/respondents 1 and 2 have filed a Memo of Calculation justifying the claim made by them in the suit. The Memo filed by the plaintiffs/respondents 1 and 2 is as follows:-
The maximum liability of the First Defendant for the lost cargo of 33.30 Kgs will have to be derived as follows:-
Maximum liability for 33.30 kgs = 8325 Francs (250 X 33.50) In terms of Gold (66.50 X 83.25) = 545287.50 Mgs of Gold In terms of Grams = 545.28 Gms of Gold Value of 1 Gm. Of Gold (916 Fineness) = Rs.2,954.00 As of today -
Therefore value of 1 Gm of gold 900 GM Fineness = Rs.2,902.00 Therefore for 545.28 Gms of Gold = 545.28 X 2902 = Rs.15,82,402.56 Maximum liability as per Act for 545.28 Gms = Rs.15,82,402.56
32. In this context, it is also useful to refer to Rule 22 and 25 of Chapter III of Schedule II of The Carriage by Air Act, 1972, which reads as follows:-
22. (1). In the carriage of persons the liability of the carrier for each passenger is limited to the sum of Rs.2,50,000 francs. Where, in accordance with the law of the Court seized of the case, damages may be awarded in the form of periodical payments the quivalent capital value of the said payment shall not exceed 2,50,000 francs. Nevertheless, by special contract, the carrier and the passneger may agree to a higher limit of liability.
(2) (a) In the carriage of registered baggage and of cargo, the liability of the carrier is limited to a sum of 250 franc 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 passenger's or consignor's actual interest in delivery at 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 carrier's 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 way-bill, the total weight of such package or packages shall also be taken into consideration in determining the limit of liability.
(3) As regards objects of which the passenger takes charge himself the liability of the carrier is limited to 5,000 francs per passenger.
(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 provision 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 milligramme 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.
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.
33. It is evident from the above provisions of the Act that the claim of the first defendant/appellant that their liability is limited to US Dollar 20 per kilogram is not sustainable when it is not disproved by the first defendant/appellant that because of their negligence or wilful misconduct, the loss or damage is caused to the consignment. In the absence of such proof to show that there was no misconduct on their part, the first defendant/appellant is not entitled to the protection given in Section 22 of the Act and consequently, they will fall within the scope and ambit of the provisions of Section 25 of the Act which deals with wilful misconduct. Though it is the submission of the counsel for the first defendant/appellant that it is for the plaintiffs to prove whether there is wilful negligence on the part of the first defendant/appellant, we find that the burden of proving absence of negligence and wilful misconduct is only on the part of the first defendant/appellant who has to prove the absence of misconduct by valid and satisfactory evidence, which the appellant has miserably failed to discharge in this case. Further, when once the carrier receives the cargo, it is their obligation to safely deliver the same and the burden is on the carrier to show that they followed proper procedure and inspite of their best efforts, they could not prevent loss or damage. Therefore, we are of the opinion that the burden of disproving the wilful misconduct is on the part of the first defendant/appellant which they miserably failed to discharge by letting in any oral or documentary evidence. In this context, it is useful to refer to the decision rendered by the Kerala High Court in the case of (M/s. Indian Airlines vs. Kurian Abraham and others) reported in AIR 2010 KERALA 85 relied on by the learned counsel for the plaintiffs/respondents 1 and 2 wherein it was held that when once carrier receives cargo, the obligation is on their part to safely deliver the same. The burden is on the carrier to show that they had followed proper procedure and inspite of their best efforts, they could not prevent loss or damage. In the instant case, the first defendant/appellant failed to show that they have taken all precaution and adopted proper procedure to safely deliver the goods. In such view of a matter, we do not find any reason to interfere with the Judgment and decree passed by the trial Court. Hence, the Appeal suit fails and it is liable to be dismissed.
34. With regard to the submissions made by the counsel for the appellant that the liability of the appellant is only limited as per Warsaw Convention 1929, we are of the opinion that when Rule 22 (5) of the Carriage by Goods Act clearly imposes the liability on the part of the Carrier and it is the Law of the Land, it has to be adopted to decree the suit filed by the plaintiffs. Further, Rule 23 (1) of The Carriage by Air Act, 1972 clearly stipulates that any provision tending to relieve the air carrier of liability or fix a lower liability than that which is laid down in these Rules shall be null and void. Therefore, the submission of the counsel for the appellant that a condition in the airway bill limits their liability to US D 20 per kilogram is null and void. Moreover, the appellant has not filed the original airway bill containing the terms and conditions. In such circumstances, we are not inclined to accept such submissions made by the learned counsel for the appellant as regards the applicability of Warsaw Convention 1929 and Hague convention to this case.
35. Even though the plaintiffs/ respondents 1 and 2 have filed CMP No. 6873 of 2017 during the pendency of this appeal for reception of additional evidence namely the authorisation letter, we are of the opinion that in the above facts and circumstances of the case, in the absence of any defence having been raised by the first defendant that the Divisional Manager of the second plaintiff company was not the Principal Officer, non-filing of the Board resolution is not fatal to the case of the plaintiffs and consequently, the arguments raised on behalf of the first defendant/ appellant has to be rejected. We therefore hold that the Plaint has been properly verified and instituted by a competent person and there is no necessity to pass orders in CMP No. 6873 of 2017 filed for reception of additional document at the appellate stage. Therefore, CMP No. 6873 of 2017 is closed.
36. In the result, the Appeal suit fails and it is accordingly dismissed. No costs. M.P. No. 1 of 2012 is closed.
(R.P.S.J.,) (M.S.R.J.,)
19-06-2017
rsh
Speaking / Non-speaking Order
To
The Additional District and Sessions Judge
(Fast Track Court-V), Chennai.
R. SUBBIAH, J
and
M.S. RAMESH, J
rsh
Pre-delivery Judgment in
AS No. 1040 of 2012
19-06-2017