Delhi District Court
M/S Softech Computers Delhi Ltd vs Singapore Airlines on 25 January, 2008
IN THE COURT OF SH. RAKESH KUMAR
ADDITIONAL DISTRICT JUDGE: DELHI
(FAST TRACK COURT)
Suit No.409/06/98
M/s New India Assurance Co. Ltd.,
Branch Office 312302,
Channana Complex, 3rd Floor,
Gurudwara Road, New Delhi - 110005.
&
M/s Softech Computers Delhi Ltd.,
S - 6, Bajaj Tower (2nd Floor),
G - Block, Jail Road,
Hari Nagar, New Delhi - 110058. .....Plaintiffs.
Versus
1. Singapore Airlines
International Airports Division,
IGI Airport, New Delhi - 110037.
(Through its General Manager)
2. Air India Ltd.,
Cargo Terminal - II,
IGI Airport, New Delhi - 110037.
(Through its General Manager)
3. Airport Authority of India,
International Airports Division,
Cargo Terminal,
IGI Airport, New Delhi - 110037. .....Defendants.
Date of filing of suit : 09.10.1998
Date of decision of suit : 25.01.2008
SUIT FOR RECOVERY OF Rs.8,65,420/-
JUDGMENT
1. This is a suit for recovery of Rs.8,65,420/- alongwith interest @ 18% per annum from the date of this suit till actual payment, filed by the aforesaid plaintiffs against the above named defendants. Plaintiffs are also demanding cost of the suit.
2. The insurer (plaintiff no.1) issued an Insurance Policy no.
21 312302 00119 in favour of the insured (plaintiff no.2) for the period from 14.07.1997 to 13.07.1998 for a sum of Rs.50,00,000/-. The insured (plaintiff no.2) placed an order on ERI Pvt. Ltd., Singapore vide purchase order dated 25.07.1997 for computer components namely 60 pieces of Quantum Big Foot Y Lone 2.11 GB IDE HDD and 96 pieces of Quantum 1.08 GB HDO. The supplier from Singapore raised invoice dated 04.08.1997 for an amount of US $ 19,836 equivalent to Rs.7,14,000/- and the insured (plaintiff no.2) thereafter obtained from the insurer (plaintiff no.1) an insurance certificate no.26 312302 00354 under the above Insurance Policy no. 21 312302 00119 for the import of shipment of the above consignment consisting of 156 pieces of computer hard disc securely packed in two cartons and dispatched by air from Singapore to New Delhi through Singapore Airlines, for the value of Rs.7,14,000/-. The consignment consisting of two cartons weighing 127 kgs. was air lifted by Singapore Airlines from Singapore to Delhi through M/s Concord Express (S) Pvt. Ltd., vide MAWB No.61881954294 dated 04.08.1997 and HAWB No. CS 265517 dated 04.08.1997. The consignment reached Delhi airport on 05.08.1997 and was handed over to the Airport Authority of India in sound condition as per the statement of Singapore Airlines. Accordingly, the delivery note dated 06.08.1997 was issued by Air India, the handling agent of Singapore Airlines. The bill of entry was filed by the clearing agent of plaintiff no.2 on 11.08.1997 and the custom duty was paid. When the insured (plaintiff no.2) contacted the Airport Authority of India (defendant no.3) for the delivery of the consignment, the same could not be located and the defendant no.3 was not able to give any satisfactory explanation. The tracing out operation was conducted by the defendant no.3, Clearing agent and the representative of plaintiff no.2 after obtaining permission from the Custom Authority, but nothing could be traced. The defendant no.3 lodged a FIR on 26.08.1997 at the Police Station, IGI Airport, New Delhi, regarding the missing consignment, but the police authorities have not been able to make any progress in the matter. The plaintiff no.2 thereafter lodged a claim on Singapore Airlines (defendant no.1) vide letter dated 23.09.1997, to which the Singapore Airlines sent a reply dated 30.09.1997 disputing their liability since according to them they had delivered the consignment to Airport Authority of India in a perfect condition. The plaintiff no.1 then lodged a claim on Airport Authority of India, vide their letter dated 01.09.1997 to which they sent a reply dated 09/13.10.1997 confirming that the consignment could not be traced, thereby acknowledging non-delivery of the same. Thereafter, the insured (plaintiff no.2) gave intimation on 28.08.1997 to the insurer (plaintiff no.1) about the loss of the consignment after which the insurer (plaintiff no.1) appointed M/s Fast Recovery Consultants as investigators in the case, who submitted their report dated 17.10.1997 confirming the loss in the same circumstances as alleged by the insured (plaintiff no.2), and suggested that in all likelihood the loss had resulted on account of theft by insiders within the Airport Authority of India. The insured also appointed M/s J.B. Boda Surveyors Pvt. Ltd. as surveyors who carried out enquiries and submitted their report dated 16.12.1997 concurring with the findings of the investigators regarding the genuineness of the claim. They recommended the settlement of the claim of the consignment as claimed by the insured (plaintiff no.2). The insurer (plaintiff no.1) has processed the claim at its end and as per the terms and conditions of the insurance policy recommended payment of a sum of Rs.7,14,000/- as compensation to the insured in respect of the total loss and for the purpose for protecting the right of recovery has obtained Letter of Subrogation and Power of Attorney, both dated 22.01.1998 from the insured (plaintiff no.2). The discharge voucher in duplicate was also obtained from the insured (plaintiff no.2) duly signed for a sum of Rs.7,14,000/- thereby implying their consent for the settlement of the claim for the said amount. Since the defendant no.3 has admitted non delivery of the subject shipment and accordingly they have lodged the FIR with the concerned police station it is clear that the insured (plaintiff no.2) has not received the delivery of the subject shipment which was insured against and as a consequence thereof has suffered a loss of the value of the consignment. Since the plaintiff no.1 has paid the insured (plaintiff no.2) the insured amount of the consignment i.e. Rs.7,14,000/- after obtaining the Letter of Subrogation and Power of Attorney, it has a right to file the present suit for the recovery of the said amount. The carrier in the present case is Singapore Airlines and the primary responsibility rests with them until the consignment is delivered to the consignee. The Air India being the handling agent of Singapore Airlines and the delivery order dated 06.08.1997 was issued by them, are also liable to settle the claim. The Airport Authority of India who is in charge of all the consignments after their arrival at the Delhi airport till the delivery are also responsible to meet the claim of the plaintiffs. The plaintiffs have sent a Legal Notice through their counsel, Sharma & Associates, Advocates, to all the three defendants, calling upon them to pay a sum of Rs.7,14,000/- as the value of the consignment, plus Rs.10,201/- as freight and forwarding charges paid by the insured (plaintiff no.2) alongwith 18% interest per annum from the date of 06.08.1997 on which date the plaintiff no.2 was to take the delivery of the consignment. The defendant no.1 & 2 sent their replies through their counsels. The cause of action has arisen on 06.08.1997 when the plaintiff no.2 did not get the delivery of the consignment from the defendant no.3, and the cause of action is continuing as the defendants could not deliver the consignment to the plaintiff no.2 and the defendant no.3 has confirmed the same to be missing. The value for the purposes of court fee and jurisdiction is Rs.8,65,420/- on which appropriate court fee of Rs.10,835.20ps. has been affixed on the plaint. This court has pecuniary and territorial jurisdiction to entertain and try the suit.
3. All the three defendants were duly served with the summons of the suit.
4. Defendant no.1 contested the suit by filing its Written Statement in which it has claimed that plaintiff has not disclosed any cause of action against the defendant no.1. The plaintiff admits that the suit consignment had arrived at Delhi on 05.08.1997. It had arrived SQ 7336 vide IGM No.8650/97. Under Section 45 of Customs Act, every carrier brining cargo in India is required to entrust the same on arrival to the custodian appointed by the Commissioner of Customs, New Delhi, Airport Authority of India in such custodian at Delhi. As such, the cargo was entrusted by the defendant no.1 to the Custodian (AAI) vide segregation report no. 16526 dated 05.08.1997. Upon such entrustment, the liability of the defendant no.1 came to an end. Air India (defendant no.2) is the handling agent of the defendant no.1 at IGI Airport, New Delhi. It had duly issued delivery order in favour of the plaintiff to take delivery of the consignment from the defendant no.3. This fact is also admitted by the plaintiff. It is the defendant no.3 who has failed to deliver the cargo to the plaintiff. Therefore, the liability of the loss of the cargo, if any, is that of the defendant no.3 who was entrusted with the custody of the consignment for delivering the same to the plaintiff. Further the maximum liability of a carrier for loss of the consignment (cargo) is limited by Carriage by Air Act to US $ 20 per kg. Since the carriage of the suit consignment is governed by Schedule II of the said Act, Rule 22 would be applicable. The condition limiting liability of the carrier is also printed on the airway bill which was made out by the shipper. The weight of the consignment was 127 kg., the maximum compensation to which the plaintiff can be entitled to is US $ 254 converted into INR as on 05.08.1997. The suit is also bad for want of statutory notice under Rule 27 (4) of Schedule II of the Carriage by Air Act. Further, plaintiffs do not have locus standi to file the present suit. The suit could only have been filed against the defendant no.1 either by the consignee of the consignment or by the shipper named in the airway bill.
The plaintiff are neither the consignee nor the shipper named in the airway bill. The suit as framed and instituted by and on behalf of plaintiff no.1 & 2 against the defendant no.1 is unauthorized, wrongful and not maintainable. The plaintiff has no right or cause of action to maintain the suit against defendant no.1 since the alleged cause of action is based upon the alleged loss by defendant no.3 of the consignment whilst the same was admittedly in its charge.
On merits side it was claimed that plaintiff no.2 was the consignee named in the House airway bill issued by the shipper, hence it was entitled to take delivery of the cargo. The claim preferred against defendant no.1 is misconceived. It has not liability of payment of any compensation to the plaintiff. Defendant no.1 had duly, correctly and truthfully performed and discharged its obligations under Contract of Carriage. Receipt of Legal Notice from the plaintiff is not denied.
5. Defendant no.2 did not file its Written Statement despite of giving opportunity and vide the order dated 10.08.1999, the right of defendant no.2 of filing of its Written Statement was closed.
6. In its Written Statement, defendant no.3 has claimed that suit of the plaintiff is liable to be dismissed as the same is against public policy as well as Section 6 of the Transfer of Property Act, 1862 because a mere right to sue cannot be transferred and as such no subrogation letter, if executed between the plaintiffs is binding on defendant no.3. The plaint discloses no privity of contract between the plaintiffs and defendant no.3. Defendant no.3 stands indemnified for any loss/damage to the Cargo handled on behalf of defendant no.1 & 2 the Carrier Airlines as per agreement between defendant no.1 & 2 and the defendant no.3 (Clause 8 - 1 (C) of the said Agreement. The defendant no.3 has nothing to do with the contract between plaintiff no.2 and supplier. It was admitted that an Import Air Consignment bearing Airway Bill no. 618 8195 4294 and HAWB No. CS 265517, came on Singapore Airlines Flt. No. SQ 7336 and was received on 05.08.1997, by the defendant no.3 on ''said to contain and said to weigh basis'' as per the manifest, from defendant no.1. It was also admitted that the plaintiff approached the defendant no.3, after obtaining a Customs ''Out of charge'' through Bill of Entry under green channel, on 13.08.1997, for payments of AAI Charges and issuance of gate pass. After the issue of gate pass and at the time for delivery, the Cargo in question was found to be missing. Immediately, an in house tracer action was taken up and a report (FIR) was lodged with the Local Police Station. It was also admitted that in response to the letter dated 01.09.1997 from plaintiff no.2 requesting for a Non Delivery Certificate (NOC), the same was issued on 09/13.10.1997 by the defendant no.3 and sent to plaintiff no.2, without prejudice to the defendant no.3's rights and contentions. It was conceded that defendant no.3 has issued the non delivery certificate to plaintiff no.1 and lodged an FIR with the concerned police station. As per the handling Agreement Clause 8 - 1 (C) entered into with the Carrier Airline, the defendant no.3 stands indemnified for any damage/loss to Cargo handled on behalf of the Carrier. The defendant no.3 was neither negligent in handling the Cargo nor is liable to damages as alleged. The defendant no.3 took due and proper care of the Cargo in its custody as any ordinary prudent person would, of his own goods of such bulk and quantity. Defendant no.3 received the suit Cargo on ''said to contain'' and ''said to weigh'' basis and it was kept in the bonded area of the Cargo Terminal.
7. In its replications to the Written Statements of defendant no.1 & 3, the plaintiffs have denied the objections and claim taken by these defendants and reiterated and reasserted the averments of the plaint. It is specifically denied in the replication to the Written Statement of no.1 that the plaintiff has not disclosed any cause of action against the defendant no.1. It is submitted that the plaintiff has filed the suit alleging to the deficient services and negligence in handling of consignment of the plaintiff due to which the plaintiff suffered the loss. Though it is admitted that the suit consignment had arrived at Delhi on 05.07.1997 vide SQ-7336 vide IGM no.8650/99, however, the same was not delivered to the consignee. In the absence of delivery of the consignment, the defendant no.1 can not claim that it is got absolved by entrusting the same to some other person or authority than the consignee. It is also denied that the liability of loss of consignment is of defendant no.3 only. It is for defendant no.1 to ensure the safe delivery of consignment to the consignee or his agent/representative. It is submitted that defendant no.3 showed its inability to deliver the consignment to plaintiff no.2 as it is alleged the same has not been received. Thus all the defendants are jointly and severally liable. It is also denied that the claim can be restricted to the sum equivalent to US $ 254 in terms of Rule 22. The value of the consignment was made known to the defendants and even the insurance coverage was to the extent of value of goods. The plaintiffs have right to recover the same amount from the defendants. It is denied that defendant no.1 was to be served any statutory notice in the instance case. However, the defendant was notified the loss to the extent of value of consignment and also claim for the recovery of the same was made them on account of loss suffered by consignee due to non delivery of the consignment and hence the present suit is maintainable against the defendants under the circumstances. As the consignment has not been delivered to the consignee, the plaintiff no.2 herein and the plaintiff no.1 having already paid the claim of loss to the plaintiff no.2, the plaintiff no.1, on the basis of letter of subrogation and Power of Attorney can legally and lawfully maintain the present suit against the defendants. The cause of action has been duly pleaded against all the defendants and they are jointly and severally liable.
8. In the replication to Written Statement of defendant no.3, it is claimed that it is not necessary to disclose the privity of contract for suit for the recovery of amount based on the wrongful acts of the defendants. the loss to the plaintiff has been occasioned due to wrongful acts of the defendants. They are, therefore, liable for loss to the plaintiff. In so far as the objection of the defendant no.3 that it stands indemnify, on the basis of certain clause of the ''said agreement'', it is submitted that firstly there is no agreement mentioned for the para under reply nor any copy of the same delivered to plaintiff, secondly, the plea of indemnity can be looked only at the trial of the matter. It is denied that defendant no.3 was not negligent or not liable to the plaintiff for the loss occasioned due to non delivery of the consignment to the consignee. The claim of engagement of professional 460 ex-service man as a security agency by the defendant no.3 is of no consequences to the negligent act resulting in loss of consignment. The defendant cannot take the shelter of the system it might have adopted regulating the movement of person and/or engagement of the security guard or installation of closed circuit television etc.
9. After completion of pleadings, following issues were framed vide order dated 08.03.2001:-
(i).Whether the plaintiff is entitled to recover the suit amount from all the defendants and if not from which of the defendants? OPP.
(ii).To what rate of interest the plaintiff is entitled to claim? OPP.
Thereafter, consequent to the amendment made by defendant no.1 in its Written Statement and filing of amended Written Statement, the necessity of framing of following additional issues arose and accordingly they were framed on 09.12.2002:-
(i).Whether the suit as framed and instituted against defendant no.1 is not sustainable? OPD.
(ii).Whether the plaintiff has no cause of action to maintain the suit against defendant no.1? OPD.
(iii).Whether on account of losses incurred by defendant no.3;
defendant no.1 is not liable to pay the amount? OPD - 1.
(iv).Relief.
10. In support of the case of the plaintiffs two witnesses namely PW-1, Sh.
Ashok Kumar Verma and PW-2 Sh. Ashok Taneja appeared in the witness box and after recording of their respective testimonies, the evidence of the plaintiffs was closed. Thereafter, on behalf of defendant no.1 and defendant no.3 Sh. Piyush Singhal and Arvind Dubey got recorded their respective statements as DW-1 and DW-2 and than the defendants evidence was also closed.
11. In his examination-in-chief tendered by way of affidavit Ex.P-1, PW-1 Sh. Ashok Kumar Verma has reiterated the contents of the plaint. He has also exhibited the following documents:-
Ex.PW1/A : Report of recovery Agent.
Ex.PW1/B : Report of Surveyor.
Ex.PW1/C : Power of Attorney given by plaintiff
no.2 in favour of plaintiff no.1.
Ex.PW1/D : Letter of subrogation given by plaintiff
no.2 in favour of plaintiff no.1.
Ex.PW1/E : Discharge Voucher.
Ex.P-2 : Copy of notice issued to defendants.
Ex.PW1/F to H : Postal Receipts.
Ex.PW1/I : AD Card in respect of defendant no.2.
Ex.PW1/J : Reply of notice by defendant no.2.
Ex.PW1/K : Letter of claim given by plaintiff no.1
company.
Mark ''A'' : Copy of policy issued by plaintiff no.1 to
plaintiff no.2.
Mark ''B'' : Insurance Certificate in respect of
consignment which was not delivered.
Mark ''C'' : Purchase order with respect to the
consignment in question.
Mark ''D'' : Invoice in respect of consignment in
question.
Mark ''E'' : Copy of delivery note issued by
defendant no.2.
During cross examination by defendant no.1, he conceded that he does not have the original of Power of Attorney filed alongwith plaint, though he can bring the certified copy of the same. He also admitted that as per Power of Attorney Ex.PW1/C the suit could be filed only against ''Air Port Authority''.
During cross examination by defendant no.3, he admitted that there is no agreement between plaintiff and defendant no.3.
During cross examination by defendant no.2, he claimed that the report of Surveyor is correct but he could not explain as to what was the liability of Air India in this transaction. As per his knowledge, no demand notice was issued to Air India.
12. In his testimony tendered by way of affidavit Ex.P-2, PW-2 Sh. Ashok Taneja too has reiterated the contents of the plaint and he has also confirmed that he is a constituted attorney of plaintiff no.2 company and is authorized and empowered to file suit on behalf of plaintiff no.2 and to sign and verify the pleadings. He is authorized vide resolution resolved in the meetings of the Board of Directors held on 22.01.1998 at the registered office of company wherein he was authorized to institute the proceedings against Air Port Authority of India and other concerned department in proper court of law claim against lost consignment vide MAWB No.618- 8195 4294, HAWB No. CS-265517 Dt. 05.08.1997 covers under open cover No.2131230200119 of the New India Assurance Co. Ltd. branch unit- 312302, Channa Complex, Gurdwara Road, Karol Bagh, New Delhi-5. He too was also cross examined by defendants.
13. DW-1 Sh. Piyush Singhal in his examination-in-chief tendered by way of affidavit Ex.DW1/A has stated that he is the Cargo Operations Supervisor of defendant no.1 and he is well conversant of the facts of the case. He confirmed that a consignment weighing 127 kgs. was booked by the plaintiff no.2 to be air lifted by the defendant no.1 (Singapore Airlines) from Singapore to Delhi vide Airway Bills MAWB No.61881954294 dated 04.08.1997 and HAWB No. CS-265517 Dt. 04.08.1997. The consignment reached Delhi International Airport on 05.08.1997 by the defendant no.1's flight SQ 7336 vide IGM no.8650/97. As per routine practice, every Carrier brining cargo in India is required to entrust the same on arrival to the custodian appointed by the Commissioner of Customs, New Delhi. The Airport Authority of India (AAI) being such a custodian at Delhi, upon arrival, the cargo was entrusted by the defendant no.1 to the Airport Authority of India vide segregation report no.16526 dated 05.08.1997 in sound condition. He proved the segregation report as Mark ''A''. He also confirmed that defendant no.2 was the handling agent of the defendant no.1 at Indira Gandhi International Airport, New Delhi and it had duly issued delivery order in favour of the plaintiff no.2 to take delivery of the consignment from defendant no.3 i.e. Airport Authority of India. Defendant no.1 for the first time received a communication dated 23.09.1997 in respect of the suit consignment from the plaintiff no.2 which was duly replied to vide reply dated 30.09.1997 averring that the claim was misconceived and denying the same. Copy of reply is Mark ''B''. The plaintiff thereafter addressed a Legal Notice to the defendant no.1 raising false and frivolous claims and claimed Rs.7,14,000/- which was also duly replied to by the defendant no.1. Copy of reply is Mark ''C''. During cross examination he stated that he was looking after Cargo business of Singapore Airlines at Delhi Airport, IGI, Terminal II. He claimed that at the time of booking of consignment, their cargo agent Air India deposited the Cargo to the Airport Authority of India who was the custodian of the warehouse. After the segregation report, they did not check the status of the consignment. He admitted that they had not offered any compensation to the plaintiff because they had handed over the consignment to the custodian in good order and condition.
14. DW-2 Sh. Arvind Dubey is the DGM (Cargo) IGI Airport, Airport Authority of India (the defendant no.3), who has testified in his examination-in-chief tendered by way of affidavit Ex.DW2/A that the suit does not disclose any jural relation, contractual or statutory between the plaintiff and AAI which may constitute a cause of action under law against AAI for the relief claimed against them. There is no public duty imposed on AAI to pay to the plaintiff the amount of alleged damages, or any other amount. The suit is liable to be dismissed for non joinder of parties. The plaintiff has not impleaded the Union of India through its Customs Department, New Delhi, who are necessary parties to this suit. AAI is only a custodian of the goods on behalf of the Customs Department as per Section 45 of the Customs Act, 1962. The goods allegedly imported by the plaintiff stood insured in the event of loss or damage. The plaint is thus liable to be dismissed against AAI for the reasons that the plaintiff had an adequate remedy for the alleged loss, which he has availed of. The plaintiff thus has no cause of action against AAI. The suit is against public policy as well as Section 6 of the Transfer of Property Act, 1868, because a mere right to sue cannot be transferred and as such no subrogation letter can be executed. AAI is a body corporate, constituted by an Act of Parliament under the Airports Authority of India, Act, 1994 (55 of 1994) and as a part of its functions, operates the cargo terminals for storage and processing of cargo handled at I.G.I. Airport in terms of the IAA (storage and processing of goods) Regulations, 1993 notified through the Govt. of India Gazette Notification dated 26.06.1993. AAI is custodian of cargo as approved by customs in terms of Section 45 (1) of the Customs Act, 1962. AAI processed/ handled the cargo on ''said to contain'' and ''said to weigh'' basis in terms of regulation 8 of AAI (storage and processing of goods) Regulations, 1993. AAI as bailee qua the customs department had taken due and proper care of the cargo as a person of ordinary prudence would take of his own goods of similar bulk and nature. He confirmed that the plaintiff had approached the deponent authority after obtaining a Customs ''out of charge'' through Bill of Entry under green channel on 15.08.1997 for payments of the AAI charges and for issuance of a gate pass. After issuance of the gate pass and at the time of delivery, the cargo in question was found untraceable. Immediately, in house tracer action was taken and an FIR was lodged with the local police station. On request a non delivery certificate dated 09/13.10.1997 was issued by the deponent authority, without prejudice to its rights and contentions. He claimed that the above measures proves that AAI took due and proper care of the cargo in its custody and having done so they cannot be held liable, for the same, in the absence of a contract to the contrary. However, their liability, if any, is limited to the amount as specified in the rules framed under the Carriage by Air Act, 1972. The plaintiff has failed to show any negligence on part of AAI and is not entitled to any damages at all and/or as claimed.
During cross examination, he stated that he has no personal knowledge of the suit transaction but he has knowledge on the basis of record of defendant no.3. He admitted that as per the Airport Authority of India Act, 1994, it is the duty of the defendant no.3 to provide Air Traffic Service and Air Transport Service at all Airports in India. He admitted that within Delhi Airport it is defendant no.3 alone which empowered to manage, handle and transport consignments carried in various Airlines. He also conceded that Airlines such as defendant no.1 & 2 have no option but to hand over the consignments of its clients to defendant no.3 for custom clearance and transportation within the Airports until it is handed over to the consignee. He confirmed that there is an agreement between the defendant no.3 on the one hand and defendant no.1 & 2 on the other hand with regard to handling their consignments by defendant no.3 at Delhi Airports. He admitted that no such agreement has been filed by defendant no.3 on record. He expressed his ignorance that there is any clause in the agreement that in case of loss of any consignment of third party while in the custody of defendant no.3, defendant no.3 has to pay the claim to the third party concerned and then recovered the amount from the Airline i.e. defendant no.1 & 2 under an indemnity clause contained in the agreement. He however admitted that under the agreement defendant no.1 & 2 have to pay the prescribed charges for providing various services such as destuffing charges etc. The handling charges are paid directly by the importer to defendant no.3. The defendant no.3 is the custodian of the goods on behalf of the customs while the same are lying in the custody of the defendant. He also admitted that the goods which are the subject matter of the present suit were received by defendant no.3 and these were not delivered by defendant no.3 to the importer. He also admitted that all charges are paid by the importer to defendant no.3 before issuance of the gate pass. He admitted that the importer i.e. plaintiff no.2 was the owner of the goods while the same were lying in the custody of defendant no.3. He conceded that because of the non delivery of the goods by defendant no.3 to plaintiff no.2 suffered loss. He claimed that Airport Authority does take the sufficient safeguards and precautionary measures to protect the goods whole deploying the sufficient security personnel. He stated that the defendant no.3 carried out internal inquiry as to how the consignment in question could not be traced but no particular individual could be held responsible for the loss. He admitted that at the time when the gate pass and the delivery order were issued to plaintiff no.2, the defendant no.3 must have verified that the goods were lying with defendant no.3. He admitted that Ex.DW3/P1 was received by defendant no.3. He stated that the importer could claim either from Airports Authority or underwriter's of importer. In the instant case, the importer claimed from his underwrite, since he cannot claim from both the parties.
15. I have carefully heard the rival submissions of the counsels for the parties. I have also thoroughly perused the entire relevant material placed in the file.
My issues wise findings are as under:-
For the convenience sake, I will take additional issues no.1, 2 & 3 prior to main issues.
16. ADDITIONAL ISSUE No.1:-
Whether the suit as framed and instituted against defendant no.1 is not sustainable? OPD.
The onus to prove this issue has been placed upon defendant no.1, who has claimed that the suit could only have been filed against the defendant no.1 either by the consignee of the consignment or by the shipper named in the Airway Bill. In the present case, the plaintiffs are neither the consignee nor the shipper named in the airway bill and therefore, the suit is not maintainable as against defendant no.1. Further, PW-1 Sh. Ashok Kumar Verma has admitted in his cross examination that the suit merits dismissal as against the defendant no.1 as the plaintiff is not even otherwise authorized to institute any proceeding as against defendant no.1 which is evident from the Power of Attorney Ex.PW1/C. The liability if at all of defendant no.1, came to an end when the consignment was entrusted to the custodian i.e. defendant no.3 vide segregation report no.16526 dated 05.08.1997. Even otherwise the handling agent of defendant no.1 i.e. Air India (defendant no.2 herein) had duly issued delivery order in favour of plaintiff to take delivery of consignment from defendant no.3.
On the other hand, according to the plaintiffs, they have filed the present suit alleging deficiency of service and negligence on the part of defendants in handling the consignment for which the plaintiffs had suffered losses. Defendant no.1 admits that the consignments in deed arrived at Delhi on 05.08.1997 and the same was delivered to defendant no.2 vide delivery order no.016503 dated 06.08.1997 (Mark E). Plaintiff no.2 thereafter filed the necessary bill of entry and paid the requisite customs duty, and contacted defendant no.3 for delivery of the consignments, who had failed to deliver the consignments and was not in a position to explain the reason of non availability of the consignments with them. The defendants cannot deny their liabilities since plaintiff no.2 was covered under the Marine Insurance Policy no.2131230200119 issued by plaintiff no.1, plaintiff no.1 indemnified plaintiff no.2 for the loss sustained and paid them a sum of Rs.7,14,000/- as compensation by way of full and final payment of the claim. On receipt of the compensation amount of Rs.7,14,000/- plaintiff no.2 had executed Special Power of Attorney Ex.PW1/C and Letter of Subrogation Ex.PW1/D in favour of plaintiff no.1 for the recovery of the claim amount.
In my considered view, suit of the plaintiffs as filed is sustainable against the defendant no.1 as admittedly the defendant no.1 was engaged by plaintiff no.2 for delivery of the consignment which was not reached to its destination. The plaintiffs have made allegations of deficiency of services and negligence on the part of defendants. Defendant no.1 admits that the consignments indeed arrived at Delhi on 05.08.1997 and the same was delivered to defendant no.2 vide delivery order no.016503 dated 06.08.1997 (Mark E). Plaintiff no.2 thereafter filed the necessary bill of entry and paid the requisite customs duty, and contacted defendant no.3 for delivery of the consignments, who had failed to deliver the consignments and was not in a position to explain the reason of non availability of the consignments with them. The defendants cannot deny their liabilities. Plaintiff no.2 was covered under the Marine Insurance Policy no.2131230200119 issued by plaintiff no.1, plaintiff no.1 indemnified plaintiff no.2 for the loss sustained and paid them a sum of Rs.7,14,000/- as compensation by way of full and final payment of the claim. On receipt of the compensation amount of Rs.7,14,000/- plaintiff no.2 had executed Special Power of Attorney Ex.PW1/C and Letter of Subrogation Ex.PW1/D in favour of plaintiff no.1 for the recovery of the claim amount. Issue accordingly stands decided against defendant no.1 and in favour of plaintiff.
17. ADDITIONAL ISSUE No.2:-
Whether the plaintiff has no cause of action to maintain the suit against defendant no.1? OPD.
The onus to prove this issue too has been placed upon the defendant. As per contentions of Ld. counsel for defendant no.1, the plaintiff has not disclosed any cause of action against defendant no.1 and therefore the suit merits dismissal as against defendant no.1 on this ground alone. The alleged cause of action being based upon the loss by the defendant no.3 of the consignment while the same was admittedly in its charge does not give any right or cause of action to the plaintiff to maintain the suit as against defendant no.1.
On the other hand, according to Ld. counsel for plaintiffs, there is sufficient cause of action for filing of the suit against the defendant no.1 because it was defendant no.1 only with which the plaintiff no.2 entered into a contact for Airlifting of the Consignment but the goods never reached to its destination, as a result of which the plaintiffs suffered losses. There is an allegation of deficiency of service and negligence on the part of defendants in handling the consignment for which the plaintiffs had suffered loss. Defendant no.1 admits that the consignments indeed arrived at Delhi on 05.08.1997 and the same was delivered to defendant no.2 vide delivery order no.016503 dated 06.08.1997 (Mark E). Plaintiff no.2 thereafter filed the necessary bill of entry and paid the requisite customs duty, and contacted defendant no.3 for delivery of the consignments, who had failed to deliver the consignments and was not in a position to explain the reason of non availability of the consignments with them. The defendants cannot escape from their liabilities.
In my considered view the plaintiff has sufficient cause of action for filing of the suit against defendant no.1 for the reason that it was defendant no.1 only who was approached by the plaintiffs for the shipment of consignment and even despite of performance of the obligation by the plaintiffs the goods did not reach to its destination, as a result of which losses were suffered by the plaintiffs. Thus the plaint has disclosed a cause of action against defendant no.1 for filing of the present suit. Issue stands decided accordingly.
18. ADDITIONAL ISSUE No.3:-
Whether on account of losses incurred by defendant no.3; defendant no.1 is not liable to pay the amount? OPD -1.
The onus to prove this issue has been placed upon the defendant no.1. According to the plaintiffs, this is an admitted fact that the plaintiff no.2 approached the defendant no.1 for airlifting of consignment and paid the necessary charges to defendant no.1. Admittedly the consignment was Airlifted by defendant no.1 from Singapore to Delhi through M/s Concord Express (S) Pvt. Ltd. vide MAWB No.61881954294 dated 04.08.1997 and HAWB No. CS 265517 dated 04.08.1997. Now the defendant no.1 can not escape for his liability as the consignment entrusted to defendant no.1 did not reach to its destination as a result of which the plaintiff suffered losses. On the other hand as per defendant no.1, the suit consignment weighing 127 kg. had admittedly arrived at Delhi on 05.08.1997. It had arrived SQ 7336 vide IGM no.8650/97. Upon arrival, the cargo was entrusted by the defendant no.1 to the custodian (AAI) i.e. defendant no.3 vide segregation report no.16526 dated 05.08.1997, as per the guidelines laid down by Section 45 of Customs Act, which mandates that every carrier brining cargo in India is required to entrust the same on arrival to the custodian appointed by the Commissioner of Customs, New Delhi, Airport Authority of India being such custodian at Delhi. The same has been admitted by the witness of defendant no.3 i.e. DW-2 Sh. Arvind Dubey during his cross examination. Upon such entrustment, the liability of defendant no.1 came to an end. The defendant no.2 had duly issued delivery order in favour of plaintiff to take delivery of the consignment from defendant no.3. This fact is also admitted by the plaintiff. However, it was the defendant no.3 who had failed to deliver the cargo to the plaintiff. The failure on their part has been admitted by PW-1 and by the witness of defendant no.3 during their cross examination. Therefore, the liability of the loss of the cargo, if any, is that of defendant no.3 who was entrusted with the custody of consignment for delivering the same to the plaintiff and no liability can be fixed upon defendant no.1. After giving due thoughts to the aforesaid submissions of the counsels for the parties, I have come to the conclusion that since the defendant no.1 has duly performed its part of duty by entrusting the consignment to the custodian i.e. defendant no.3 vide segregation report no.16526 dated 05.08.1997 Mark ''A'', so no liability can be fixed upon defendant no.1. Its liability came to an end as soon as the consignment was entrusted to defendant no.3 and delivery order in favour of plaintiff was issued by defendant no.2.
In his cross examination PW-1 has conceded that as per Power of Attorney Ex.PW1/C, the suit could be filed only against Airport Authority. PW-2 also has clearly testified that he was authorized vide resolution resolved in the meetings of board of directors of plaintiff no.2 held on 22.01.1998 to institute the proceedings against Airport Authority of India. The segregation report has been proved by DW-1 which is Mark ''A''. Thus the defendant no.1 can not be held liable for the losses suffered by the plaintiffs. Issue stands decided accordingly.
19. MAIN ISSUE No.1:-
Whether the plaintiff is entitled to recover the suit amount from all the defendants and if not from which of the defendants? OPP. The onus to prove this issue has been placed upon the plaintiffs and in order to discharge the same the plaintiffs have proved the documents Ex.PW1/A to Ex.PW1/K, Ex.P-2 and documents Mark ''A'' to ''E''. PW-2 has also supported the case of the plaintiff. Even DW-1 has confirmed that a consignment weighing 127 kg. was booked by the plaintiff no.2 to be airlifted by defendant no.1 from Singapore to Delhi. The consignment reached Delhi at International Airport on 05.08.1997 by flight SQ 7336 vide IGM no.8650/97. The said carrier was entrusted to defendant no.3 vide segregation report no.16526 dated 05.08.1997 in sound condition and the delivery order was issued in favour of plaintiff no.2 but the consignment did not reach to its destination and was misplaced from the custody of defendant no.3.
The Marine Insurance Policy no.2131230200119 issued by plaintiff no.1 in favour of plaintiff no.2 for a period from 14.07.1997 to 13.07.1998 for a sum of Rs.50,00,000/- and Insurance certificate no.2631230200354 obtained by plaintiff no.2 in pursuance of the aforesaid Marine Insurance Policy for the shipment of above consignment are proved as Mark A and B. The purchase order and the invoice in respect of consignment are also proved as Mark C & D. Mark E is the copy of delivery note issued by defendant no.2. The consignment did not reach to its destination and plaintiff no.2 made claim against defendant no.1 and defendant no.3 vide their letter dated 23.09.1997 and 01.09.1997 respectively. Defendant no.3 informed plaintiff no.2 about non availability of the consignment vide letter dated 09/13.10.1997. The plaintiff no.2 intimate about the said loss to plaintiff no.1 vide letter dated 28.01.1997. Plaintiff no.1 appointed M/s Fast Recovery Consultant for investigation of loss, who had submitted their report dated 17.10.1997 Ex.PW1/A with opinion that the consignment could have been stolen from the flight check point with the help of some insider. Plaintiff no.1 thereafter appointed M/s J.B. Boda surveyor's Pvt. Ltd. surveyor to access the loss, who vide their report dated 16.12.1997 Ex.PW1/B confirmed the arrival of the consignments at IGI Airport, Delhi. Plaintiff no.1 processed the claim and paid a sum of Rs.7,14,000/- as compensation to plaintiff no.2 by way of full and final satisfaction of the claim. On receipt of compensation plaintiff no.2 executed Special Power of Attorney and letter of sabrogation Ex.PW1/C & Ex.PW1/D. The plaintiffs have also proved the Legal Notice dated 28.04.1997 which is Ex.P-2. The postal receipts are also Ex.PW1/F to H. There is no denial on the part of the defendants that the consignment did not reach to its destination and the plaintiffs suffered losses on account of the same. Thus in my considered opinion, the plaintiff is entitled to recover the suit amount. Now the question arise as to from whom the plaintiff is entitled to recover the said amount?
While deciding additional issue no.3, I have already reached to the conclusion that the defendant no.1 is not liable to pay the amount. As regards to defendant no.2, during the entire testimony of PW-1 & PW-2, no allegations have been made against defendant no.2. PW-1 has even conceded in his cross examination that as per his knowledge no demand notice was issued to Air India, the defendant no.2. He also could not tell as to what was the liability of Air India, the defendant no.2 in this transaction. The perusal of the contents of the plaint also shows there is no specific allegations and claim against defendant no.2 except that it was the handling agent of the Singapore Airlines and the delivery order dated 06.08.1997 was issued by them after the entrustment of the consignment to defendant no.3. Admittedly the consignment was entrusted to defendant no.3, and thereafter the same was misplaced and it was not delivered to the consignee/importer, so no liability can be attached even against defendant no.2. The claim was made by plaintiff no.2 only against defendant no.1 vide letter dated 23.09.1997 Ex.PW1/K and against defendant no.3 vide letter dated 01.09.1997. Thus in my opinion, the defendant no.2 is also not liable to pay any amount.
Now come to the question of liability of defendant no.3. DW-2 Sh. Arvind Dubey in his cross examination conceded that as per the Airport Authority of India Act, 1994, it is the duty of the defendant no.3 to provide Air Traffic Service and Air Transport Service at all Airports in India. He admitted that within Delhi Airport it is defendant no.3 alone which was empowered to manage, handle and transport consignments carried in various Airlines. He also conceded that Airlines such as defendant no.1 & 2 have no option but to hand over the consignments of its clients to defendant no.3 for custom clearance and transportation within the Airports until it is handed over to the consignee. He confirmed that there is an agreement between the defendant no.3 on the one hand and defendant no.1 & 2 on the other hand with regard to handling their consignments by defendant no.3 at Delhi Airports. He admitted that no such agreement has been filed by defendant no.3 on record. He also admitted that the goods which are the subject matter of the present suit were received by defendant no.3 and these were not delivered by defendant no.3 to the importer. He also admitted that all charges are paid by the importer to defendant no.3 before issuance of the gate pass. He admitted that the importer i.e. plaintiff no.2 was the owner of the goods while the same were lying in the custody of defendant no.3. He conceded that because of the non delivery of the goods by defendant no.3, the plaintiff no.2 suffered losses. Thus the plaintiffs are entitled to claim the suit amount i.e. Rs.8,65,420/- from defendant no.3 only. Issue stands decided accordingly.
20. MAIN ISSUE No.2:-
To what rate of interest the plaintiff is entitled to claim? OPP. The onus to prove this issue has been placed upon the plaintiffs. While deciding the foregoing issues, I have come to the conclusion that the plaintiffs are entitled for the recovery of amount of Rs.8,65,420/- from the defendant no.3 only. Now question arises as to at what rate the plaintiff is entitled to claim interest on the aforesaid amount. In the plaint the plaintiffs have claimed the interest @ 18% per annum but it has led no evidence to substantiate their claim of interest @ 18% per annum. Thus in my view the plaintiffs are not entitled to claim interest @ 18% per annum but since the transaction in question was of commercial nature and the plaintiffs had to suffer on account of the negligence on the part of defendant no.3, so they are entitled for some interest. In my considered opinion the interest of justice shall be fully met if the plaintiffs are awarded interest @ 8% per annum from the date of filing of the suit till the date of its realization.
21. RELIEF:-
In view of my findings on the foregoing issues I hereby pass a decree in favour of plaintiffs and against the defendant no.3 for the recovery of Rs.8,65,420/- alongwith interest @ 8% per annum from the date of filing of the suit till its realization. Cost of the suit is also awarded.
22. Decree Sheet be prepared accordingly.
23. File be consigned to Record Room after completion of necessary formalities.
(Announced in the open (RAKESH KUMAR)
court today on 25.01.2007) ADDL. DISTRICT JUDGE
DELHI
CS. No. 409/06
25.01.2008
Present: As before.
Vide a judgment dictated separately, suit of the plaintiff is decreed against defendant no.3.
Decree Sheet be prepared.
File be consigned to Record Room after completion of necessary formalities.
(RAKESH KUMAR) ADJ/DELHI/25.01.2008