Delhi High Court
Ethopian Airlines vs Federal Chemical Works Ltd. on 7 October, 2004
Equivalent citations: AIR2005DELHI158, 114(2004)DLT549, AIR 2005 DELHI 158, (2004) 78 DRJ 347 (2004) 114 DLT 549, (2004) 114 DLT 549
Author: Anil Kumar
Bench: Anil Kumar
JUDGMENT Vijender Jain, J.
1. This appeal has been preferred by the appellant aggrieved by the decision of the learned single Judge holding that the suit of respondent is not barred by time. Initially a suit was filed by M/s.Federal Chemical Works Ltd., respondent herein, against M/s.Nutsco (Nigeria) Ltd. and the second defendant was M/s.Ethopian Airlines, which is appellant herein. We were told that the defendant no.1, M/s.Nutsco (Nigeria) Ltd. has settled the matter with the plaintiff, i.e. M/s.Federal Chemical Works Ltd., however, as the suit was filed against both the defendants and the liability under the suit still remains that of the appellant, the appellant's challenge to the impugned order is to be adjudicated.
2. Mr.Wadhwani, learned counsel appearing for the appellant, has contended that learned single Judge framed the following preliminary issue :-
"Whether the suit is instituted within time."
3. Mr.Wadhwani, learned counsel for the appellant, contends that the learned single Judge's finding that the suit was within time, was totally contrary to the provisions of The Carriage by Air Act, 1972 hereinafter referred to as 'Act'). Learned counsel for the appellant has contended that Rule-30 of the Act provides :-
"30(1). The right to damages shall be extinguished if an action is not brought within two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped.
(2) The method of calculating the period of limitation shall be determined by the law of the Court seized of the case."
4. Mr. Wadhwani had contended that from the plain reading of Rule-30, under The Second Schedule, Chapter III, of the Act postulates the period of limitation to initiate an action for any loss or damage. According to him, it includes loss of mis-delivery and the period of limitation would be two years. As the goods were delivered on 9.2.1993 after being received on or before and the suit was filed on 14.11.1995 and, therefore, the suit of the respondent herein was not within two years and was not within time. Secondly, it was contended by Mr.Wadhwani before us that the Act was enacted to give effect to the Warsaw conventions and for the unification of Rules relating to international carriage by air codified at Warsaw and as amended by the Hague Protocol on 28.9.1955. According to Mr.Wadhwani, Rules 17, 18 and 19 of the Act as appearing in The Second Schedule of the Rules, under Chapter III, determines liability of the carrier. As these Rules have been relied upon by the learned counsel appearing for both the parties, same are reproduced below :-
"17. The carrier is liable for damage sustained in the event of the death or wounding of a passenger or any other bodily injury by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking.
18.(1) The carrier is liable for damage sustained in the event of the destruction or loss of, or of damage to, any registered baggage or any cargo, if the occurrence which caused the damage so sustained took place during the carriage by air.
(2) The carriage by air within the meaning of the preceding sub-rule comprises the period during which the baggage or cargo is in charge of the carrier, whether in an aerodrome or on board an aircraft, or, in the case of a landing outside an aerodrome, in any place whatsoever.
(3) The period of the carriage by air does not extend to any carriage by land, by sea or by river performed outside an aerodrome. If, however, such a carriage takes place in the performance of a contract for carriage by air, for the purpose of loading, delivery or transhipment, any damage is presumed, subject to proof to the contrary, to have been the result of an event which took place during the carriage by air.
19. The carrier is liable for damage occasioned by delay in the carriage by air of passengers, baggage or cargo."
5. On the basis of the aforesaid Rules, it was contended that the phrase 'loss of' as used in Rule-18 read with Rule 18(2) and words "however founded" used in Rule 24 of the The Second Schedule of the Act would include loss of the consignment by mis-delivery thereof by the carrier. It was contended by the learned counsel for the appellant that if mis-delivery is not included in the loss as contemplated under Rule-18 read with Rule18(2), it will mean that there is no remedy available to the respondent on account of mis-delivery under the Act. It was further contended that no remedy will be available to the respondent under common law, if the same is not available under the absolute liability clause contained under The Second Schedule. In support of his contentions, learned counsel for the appellant has relied upon a decision of Supreme Court in East and West Steamship Co. V/s.S K Ramalingam Chettiar in which it is held by the Supreme Court :-
"The argument that loss due to failure to deliver the goods is not covered by this clause is merely to be mentioned to deserve rejection. The very use of the words "the date on which the goods should have been delivered"clearly contemplates a case where the goods have not been delivered. The clause gives the owner of the goods one year's time to bring the suit--the year to be calculated from the date of the delivery of the goods where the goods have been delivered and from the date when the goods should have been delivered where all or some of the goods have not been delivered. The fact that the first clause of the 6th paragraph speaks of removal of the goods may be an argument for thinking as the Bombay High Court thought that that clause has no application when goods are not delivered. It may be mentioned that some authorities (see Carver's Carriage of Goods by Sea, 10th Edn., o.191) have suggested that the first clause of this paragraph appears to have little meaning. That is a matter which need not engage our attention. It is sufficient to mention that the fact that the rule of evidence provided in the first clause of the paragraph may have no application to cases to non-delivery is wholly irrelevant in deciding whether the third clause applies to cases of non-delivery. As we have already said the date when the goods should have been delivered necessarily contemplates a case where loss has arisen because goods have not been delivered."
6. Reliance was also placed on a single bench judgment of this Court in M/s.Shailash Textile Industries Vs.British Airways & anr. Suit no.1253/1979 decided on 31.3.2003. Mr.Wadhwani has also placed reliance on judgment of House of Lords reported as Sidhu & ors. Vs.British Airways (1997) 3 All England Reports 197 and a judgment of Court of Appeal in Seagate Technology International Vs.Changi International Airport Services Pte.Ltd. 1997-3SLR 1; 1997 SLR Lexis 160 in support of his contentions. Lastly, it was contended by Mr.Wadhwani that assuming that Rules 17, 18 and 19 do not apply in the instant case still Rule 30 would be applicable as far as limitation is concerned. It was also contended that if right to sue extinguishes pursuant to Rule 30, no extension of that right can be granted in favor of the respondent.
7. On the other hand, Mr.Gupta, learned counsel appearing for the respondent, has contended that this is an admitted fact that the goods were mis-delivered in the present case as Canara Bank was the consignee but the goods were not delivered to the Canara Bank but were delivered to M/s.Nutsco (Nigeria) Ltd. and, therefore, when there was an express breach of term of contract between the parties, the respondent cannot be left remediless and he will have the remedy for breach of contract under the statute or under common law. It was further contended that narrow interpretation of Rule 30 as has been contended by the appellant, cannot be given to said Rule as Rule 30(2) provides the mechanism for calculating the period of limitation by the law of the court seized of the case. According to the learned counsel for the respondent, once the legislature in its own wisdom has left the method of calculating the period of limitation pursuant to municipal laws i.e. lex fori, to contend that in all cases question of limitation will be controlled by sub-rule (1) of Rule 30, will amount to negate sub-rule(2) of Rule 30 of the Rules. Mr.Gupta has also placed reliance of a single bench decision of this court in M/s.Viz Sales Corporation Vs.Lufthansa, German Airlines 2nd (1981) II Delhi 749.
8. We have given our careful consideration to the arguments advanced by the learned counsel for both the parties. At the outset we discuss the case of Sidhu & ors. Vs.British Airways (supra). That judgment was rendered by House of Lords in relation to a suit filed by one Sidhu, who was a passenger of a scheduled international flight operated by British Airlines, which left London on 1.8.1990 for Malaysia via Kuwait. On 2.8.1990 aircraft landed in Kuwait for refueling and several hours after Iraqi forces had begun to invade Kuwait at the commencement of the Gulf War. An action was brought by said Sidhu, who was a passenger in the said flight, under the common law, principle of negligence and torts and the House of Lords held:-
"........The convention does not purport to deal with all matters relating to contracts of international carriage by air. But in those areas with which it deals--and the liability of the carrier is one of them-- the code is intended to be uniform and to be exclusive also of any resort to the rules of domestic law."
9. That decision took note of the fat that no system of law can attempt to compensate persons for all losses in whatever circumstances but the assumption is that where a breach of duty has caused loss, remedy for damage ought to be uniform under the code. However, reliance was placed by the counsel for the appellant on the observations of the judgment :-
".......It was not designed to provide remedies against the carrier to enable all losses to be compensated. It was designed instead to define those situations in which compensation was to be available. So it set out the limits of liability and the conditions under which claims to establish that liability, if disputed, were to be made. A balance was struck, in the interests of certainty and uniformity."
10. As a matter of fact, the action brought by said Sidhu was dismissed as it was conceded in that case that no such remedy was available to him under the established norms and the convention. Therefore, said authority is of no help to the arguments of the appellant. The second decision which was cited before us i.e Seagate Technology International Vs.Changi International Airport Services Pte.Ltd., as a matter of fact, goes against the appellant. The said judgment was rendered on the basis of the judgment of Sidhu & ors. Vs.British Airways (supra) and Abnett Vs.British Airways (1997) 3 All England Reports 197 on the point of whether the amended convention was exclusive in respect of the actions against carrier for matters falling within the scope of amended convention. However, we have already held that Sidhu & ors. Vs.British Airways was decided on a concession made by the appellant there. In Seagate Technology International Vs.Changi International Airport Services Pte.Ltd.'s case (supra) the court held as follows :-
"..........On the other hand the passenger or other party to the contract is restricted in the claims which he can bring in an action of damages by the conditions and limits set out in the Convention. The idea that an action of damages may be brought by a passenger against the carrier outside the Convention in the cases covered by art 17-- which is the issue in the present case -- seems to be entirely contrary to the system which these two articles were designed to create... The intention seems to be to provide a secure regime, within which the restriction on the carrier's freedom of contract is to operate. Benefits are given to the passenger in return, but only in clearly defined circumstances to which the limits of liability set out by the Convention are to apply......."
11. In this case employee of Singapore Airlines Cargo Handling Agent committed theft of some of the goods, action was brought based on negligence, bailment and action brought by the consignee against Cargo Handling Agent. An argument was advanced on the side of suiter that the negligence on the part of the employee of Singapore Airlines Cargo Handling Agent would amount to the negligence committed by the Airlines. The court held :-
"But the position is different when the claim for loss or damage is not brought against the carrier, but the carrier's agent. As is clear on the plain reading of arts 17, 18 and 19, these articles do not impose any liability on the carrier's agent. Unlike in the case of the carrier, there is no special regime in the Amended Convention or the Act which imposes a 'no-fault' type of liability on the carrier's agent for loss arising out of an international air carriage. The basis of the carrier's agent's liability must therefore, by default, be at common law in negligence, bailment, conversion or whatever the cause of action may be, if the proper law governing the claim is Singapore law. Hence, in our opinion, CIAS's liability for the loss of the pallet of hard disk drives derives from common law and not from the terms of the Amended Convention. It follows that Seagate's statement of claim is not defective because its pleas of negligence, bailment and conversion against CIAS are valid causes of action at law."
12. The argument was advanced by the affected party who has brought the action that word 'carrier' in Articles 17, 18 and 19 of the Amended Convention should be read broadly to include carrier's agents and servants. The court declined to entertain the plea and on that ground held that as far as general scheme and word 'carrier' as appearing in the Rules it would be an inconsistent meaning if the actions of agents are also covered by 'carrier'. Broadly speaking from the ratio of the aforesaid two judgments it cannot be said that in the event of breach of terms of the contract, a party is left remediless if the remedy is not covered under the rules. A very strong protection regime is provided on the basis of the conventions which have been incorporated in the Act but that does not exclude loss or damage suffered on account of breach of contract in cases like mis-delivery, the one before us.
13. The concept of loss or damage suffered by any account by the shipper or consignee, is not the same as the loss and damage referable to the goods. We are relying upon the judgment of M/s.Viz Sales Corporation Vs.Lufthansa, German Airlines's case (supra) and approve the reasoning of the learned single Judge. In paragraph-18 of the East and West Steamship Co. V/s.S K Ramalingam Chettiar's case (supra) the Supreme Court took note that paragraph 8 spoke of loss or damage to or in connection with the goods but the legislature in 6th paragraph of the Article left the words 'loss or damage' unqualified. Had, therefore, words 'to or in connection with the goods' been incorporated in paragraph-6 as well as after the words 'loss or damage', the Supreme Court would not have treated the same as unqualified, which was so in their absence. In M/s.Viz Sales Corporation Vs.Lufthansa, German Airlines's case (supra) it was held :-
"Thus the words 'loss or damage' in para 6 to Article 3 of the schedule to Carriage of Goods by Sea Act have reference to the shipper and the consignee and not to the goods. In the former case non-delivery, mis-delivery, loss or destruction are all covered. In any of these events the shipper or consignee suffers loss or damage. However in a case where the loss or damage has reference to the goods or consignment, they have to be construed as loss, destruction and damage to the goods themselves. In other words it should be shown that the goods are either lost, destroyed, partly or wholly, or damaged in transit. Where none of these is shown to have happened, and the goods are not delivered or mis-delivered, the case cannot be treated as of loss, destruction or damage 'to or in connection with the goods'.
Now in the present case rule 18 to the schedules to the Carriage by Air Act 1972 is not all embracing when it speaks of 'destruction or loss of, or of damage to'. They have been made referable to 'any registered luggage or any cargo'. In order words destruction, loss or damage must be to the goods and not to the air carrier or the consignee. This circumstance alone distinguishes the provisions under the Carriage by Air Act 1972 from those contained in the Carriage of Goods by Sea Act 1925. As already observed above, the distinction was taken note of in para 18 of the Supreme Court in the case of East and West Steamship Co.(supra)."
14. Now, the last question which has to be answered by us is with regard to the interpretation of Rule 30 either independent of Rules 17, 18 and 19 or in conjunction with Rules 17, 18 and 19. Once the legislature in its own wisdom has left the field regarding limitation to be determined by lex fori, that is the law of the courts then relying on Rule 30(1) and to import that the law of limitation would be two years, would be making the sub-rule (2) of Rule 30 redundant. There are two periods regarding law of limitation. As per English law of limitation under 1980 Act for a simple contract six years period is provided while special time limit for claiming contribution in respect of any damage from any other person, a two years' period from the date on which that right accrued had been provided. We would like to observe that it appears that in international conventions and covenants, the limitation provided basically has been imported considering the limitations provided in the laws of limitation as provided in the later category of English Limitation Act. As law of limitation differs from country to country and, therefore, the inclusion of sub-rule (2) of Rule 30 cannot be stated to be in conflict with the main objectives of the Act. If the period of limitation is left to the Hague Protocol solely it may lead to various anomalous situation, which can be countered and for which Rule 30(2) was enacted. Any proposition to whittle down the relevancy of Rule 30(2) will not in consonance with the objective of The Carriage by Air Act, 1979 ( No.69 of 1972) and will not be acceptable. Therefore, on conjoint reading of pleadings and provisions of the Act and limitation as provided under common law, the inevitable consequence is that suit of respondent is not barred by limitation. Therefore, we find no merit in this appeal and the same is dismissed with cost.
15. File of Trial Court records be sent back to the Trial Court for further proceedings in the matter.