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Sita Fashion Crop. Through Partner v/s General Manager, Burlington Air Express (I) Pvt. Ltd. & Others

    FIRST APPEAL NO. 273 OF 2004

    Decided On, 23 September 2011

    At, National Consumer Disputes Redressal Commission NCDRC

    By, MEMBER

    For the Appellant : Rajshekhar Rao, Amrit Singh, Advocates. For Respondents :1& 2 : Nemo, R3 : Ms.Swati Sinha and Ms. Sahar Bakht, Advocates.

Judgment Text


Challenge in this appeal is to the order dated 1st July, 2004 passed by the Rajasthan State Consumer Disputes Redressal Commission, Jaipur (in short, 'the State Commission') in complaint no. 42 of 1999. By the impugned order, the State Commission has dismissed the complaint filed by the complainant – Sita Fashion Crop. against Burlington Air Express (I) Pvt. Ltd. and Kuwait Airways alleging deficiency in service and unfair trade practice on the latter’s part in not effecting the delivery of a consignment, which was entrusted to the above-named parties for carriage and safe delivery to a foreign buyer in Barcelona and thus causing loss and injury to the complainant for which the complainant sought award including the value of the consignment equal to $34,100, a sum of Rs.1,65,928/- as the amount paid by the complainant to its bank towards interest liability, a sum of Rs. 5 lakh as compensation for mental agony and a sum of Rs.25,000/- as cost of proceedings. Aggrieved by the dismissal of this complaint, the complainant has filed the present appeal.

2 (i). The facts and circumstances, which lead to the filing of the complaint, have been amply noted by the State Commission in the impugned order and need no repetition at our end. However, in order to decide the present appeal, we may notice that the complainant – appellant, a partnership firm, had entrusted a consignment of readymade garments to Burlington Air Express for its carriage and delivery to a foreign buyer. The Burlington Air Express handed over the consignment to M/s Kuwait Airways, Mumbai for air carriage of the said consignment and issued Airway Bill dated 13-05-1997 in which complainant was described as the 'consigner' and 'BANCA POPULAR ESPONAL BARCELONA SPAIN' a foreign bank as 'consignee'. The requisite documents like invoice of the consignment, etc., were sent to the consignee bank through Punjab National Bank, Jaipur, the banker of the complainant. Complainant alleged that it neither received the payment of the consignment through its bank nor got any intimation about the carriage and delivery of the consignment to the foreign buyer in Barcelona, Spain.

(ii) Subsequently, the complainant was informed by M/s Continental Carriers, Air Cargo and Custom House Agents at New Delhi vide the latter’s Air Cargo Arrival Notice-Cum-Invoice about the arrival of 78 cartons of readymade Indian garments having been returned by the foreign buyer and advised to take the delivery of the shipment to avoid liability for payment of demurrage at Delhi Airport. Complainant refused to take the delivery of the said shipment and returned the documents to the Continental Carriers.

(iii) Complainant, thereafter, filed the complaint as above, which was resisted by Opposite Parties (OPs). OPs No. 1 & 2 Burlington Air Express filed a joint reply, raising preliminary objection in regard to the jurisdiction of the State Commission to entertain the complaint; the complaint being barred by limitation and there being no privity of contract between them. They denied any deficiency in service on their part and pleaded that their contract for service was only to the extent of receiving the goods in question from the complainant at Jaipur and delivering the same to M/s Kuwait Airways at Mumbai for shipment carriage of the consignment by air to Barcelona in Spain and its delivery to the consignee there, were the responsibility of the Airlines. Kuwait Airways also resisted the claim on the ground of limitation, jurisdiction as also lack of privity of contract between them and the complainant and, in any case, pleaded that the consignment was duly delivered to the consignee/authorized person of the consignee in terms of the authorization issued by the consignee bank to Space Cargo Services, Barcelona and therefore, they had discharged their obligation as Air Carrier and hence no deficiency in service could be attributed to them nor could be held liable for any compensation.

3. The State Commission, on consideration of the respective pleas, evidence and material produced on record (which was mostly documentary) and the supporting affidavits filed on behalf of the parties dismissed the complaint as totally misconceived. In regard to the preliminary objections and pleas raised on behalf of OP no. 3, Kuwait Airways on the jurisdiction, limitation and privity of contract, the State Commission, going by the averments and allegations made by the complainant in its complaint, held that it had the requisite jurisdiction to entertain and try the complaint for the kind of relief sought by the complainant. On the question of limitation, the State Commission dismissed that ground by observing as under:--

'1. Limitation: -

Sec. 24 A (1) of the Act read with Rule 30 of the Second Schedule to Carriage by Air Act, 1972 prescribes a period of two years, from the date on which cause of action has arisen to the complainant, to file a complaint…. by him under the provisions of the Act. In the instance case M/s Kuwait Airways issued the Airway Bill on 13-05-1997 and the shipment was allegedly delivered to Consignee’s agent at Barcelona, the place of destination of the shipment, on 28/30-05-1997. But the complaint was, undisputedly, filed by the complainant before this Commission on 10-08-1999, i.e. much after the expiry of the period of limitation. No explanation for filing the complaint with delay was offered by the complainant. The present complaint is, therefore, barred by limitation and is required to be dismissed on that ground (vide Govind S. Poddar V/s Cathay Pacific Airways Ltd. (2003 (II) CPJ 4(N.) and P.K. Ram Chandaran V/s State of Kerala & Anr. AIR 1998 S.C. 2276).'

The State Commission also over-ruled the objection of privity of contract raised by OP no.3.

4. Despite having held that the complaint was barred by limitation and was required to be dismissed on that ground alone, the State Commission took into account the position that the complaint remained pending before the State Commission for about five years. With a view, therefore, to avoiding remand of the case in the event of the findings of the State Commission on the question of limitation not being upheld by the Appellate Commission, the State Commission proceeded to decide the complaint on merits also.

5. On consideration of the undisputed factual position or that which can be said to have been established through the evidence and material placed on record and on consideration of the correspondence exchanged between M/s Kuwait Airways and M/s Burlington Air Express, Bombay and Fashion Clothes, Barcelona, Spain, etc., after the filing of the complaint, the State Commission gave a categorical finding that the complainant had failed to establish any deficiency in service either on the part of Burlington Air Express or Kuwait Airways and accordingly dismissed the complaint.

6. We have heard Mr.Rajshekhar Rao, learned counsel representing the appellant – complainant and Ms. Swati Sinha and Ms.Sahar Bakht, learned counsel representing respondent no.3 - Kuwait Airways and have given our thoughtful consideration to their respective submissions.. There was no representation on behalf of respondents no. 1 & 2.

7. As regards the finding of the State Commission that the complaint was filed after the prescribed period of limitation, suffice it to note that the complainant could not be non-suited only on that ground. Parties exchanged correspondence even after the date of delivery. There were other developments, viz., the consignment was returned to India and original documents also returned later. It cannot be said that cause of action in filing the complaint arose on 30.05.1997 when the delivery of the consignment was effected. In our view, the complaint filed by the complainant was within the statutory period. The finding of the State Commission in this regard is, therefore, legally unsustainable.

8. It is pertinent to note that during the course of hearing on the appeal, a prayer was made on behalf of the appellant for a direction to Respondent No. 3 – Kuwait Airways to produce two documents, namely, Airway Bill bearing No. 22935002063 and the release order issued by BANCO POPULAR ESPONAL, BARCELONA, SPAIN on the strength of which Respondent No. 3 – Kuwait Airways claimed to have delivered the consignment to Space Services Cargo, the agent of the consignee bank. Besides, a request was made to call for the original documents received by Punjab National Bank, Bapu Nagar, Jaipur from BANCO POPULAR ESPONAL, BARCELONA, SPAIN. That prayer was granted. An official of the Punjab National Bank, Bapu Nagar, Jaipur appeared before this Commission and simply produced copies of Telex Messages, which were received by his Branch along with communication dated 04-08-1997 sent to it by Manager, FEO, Bombay Branch but expressed his inability to produce the original documents because the original documents would have been weeded out. In the meantime, learned counsel for both the parties were directed to produce documents, which were relied upon before the State Commission, if not already filed. Counsel for Respondent No. 3 – Kuwait Airways made a statement that Respondent No. 3 was unable to produce the original Airway Bill and the original Release Order issued by the said foreign Bank on the strength on which delivery of the consignment was claimed to have been effected to Space Cargo Services.

9. We have carefully considered the entire evidence and material brought on record. On doing so, the undisputed factual position, which has emerged is that vide proforma invoice No. 51/96-97 dated 02-01-1997, a consignment containing 78 cartons of ladies readymade garments valued at US $ 23865 showing BANCO POPULAR ESPONAL, BARCELONA, SPAIN as the Consignee and, Fashion Clothes SL C/Bruch/2408010 Barcelona, Spain as the Buyer with the terms of delivery and payment 'by air L/C No. 1012477/DCREO-4' at 30 days site from B/L date along with packing list was handed over to Burlington Air Express, Jaipur (the forwarding agent for its carriage by air). The said consignment was duly received by the said forwarding agent which, in turn, forwarded to its counterpart in Bombay, which entrusted the consignment to Respondent No. 3 – Kuwait Airways, Bombay. This was drawn to the Forwarding Agent on behalf of 'shipper'. An Airway Bill No. 22935002063 was drawn with the particulars as appearing in the proforma invoice. The consignment was carried to its destination – Barcelona by the air carrier. Further the original invoice with copy of the airway bill and other relevant documents were forwarded to the foreign bank - BANCA POPULAR ESPONAL, BARCELONA, SPAIN through Punjab National Bank, Jaipur and were duly received by them by means of the above named foreign bank, who thereafter, issued a bank release order to release the consignment in favour of Space Cargo Services and forwarded the same release order and the copy of the invoice to the Space Cargo Services and on production of the said document, Respondent No. 3 – Kuwait Airways delivered the consignment to Space Cargo Services at Barcelona.

10. It is also established that the consignment reached the hands of the foreign buyer which was apparently not satisfied with the quality of the consignment and, therefore, returned the goods to the complainant. The goods reached India and its delivery was offered to the complainant which refused to accept the same for its own reasons.

11. Learned counsel for the appellant has assailed the impugned order passed by the State Commission primarily on the ground that it is based on incorrect and improper appreciation of the facts and circumstances of the case and the evidence and material brought on record. The basis if his submission is that even going by the admitted or factual position established on record that the consignment was carried to its destination and that the Kuwait Airlines through its subsidiary / agent Iberia Airlines had delivered the consignment to M/s Space Cargo on the strength of release order / authorization purportedly issued by Banca Popular Espanol authorizing Space Cargo Services to clear the aforesaid shipment, still the Banco Popular Esponal and Kuwait Airlines are guilty of gross deficiency in service on their part. It was vehemently argued that in the Airway bill, the Banca Popular Esponal was described as the consignee and the original document i.e. 3rd part of the Airbill ( consignor’s copy) alongwith invoices etc. were sent to the above named bank with the specific instructions and understanding that the said document could be retired by the foreign buyer by paying the value of the consignment and, thereafter, only on receipt of the payment of the consignment, the bank could release the original copy of the Airway bill entitling the foreign buyer of his agent to take delivery. It is pointed out that release / authorization order issued by the Banca Popular was only the Airway Bill ( Original 2 (For consignee) and not the Original 3 i.e. meant for consignor and, therefore, they acted contrary to the instructions as against the statutory provisions. In this connection our attention has been invited to Rule 6 of Part III of Schedule Two of the carriage by air which reads as under:

'(1) The airway bill should be made out by the consignor in the three original parts and be handed over with the cargo.

.(2) The first part shall be marked 'for the carrier', and shall be signed by the consignor. The second part shall be marked 'for the consignee'; it shall be signed by the consignor and by the carrier and shall accompany the cargo. The third part shall be signed by the carrier and handed by him to the consignor after the cargo has been accepted.

(3) The carrier shall sign prior to the loading of the cargo on board the aircraft.

(4) ………………………..

(5) ……………………….'

12. Going by the scheme contained in the above rule, it is manifest that the original airway bill would be prepared in three parts, first meant for the carrier, second meant for the consignee and third will be given to the consignor after the cargo has been accepted because the first part will already be in the possession of the air carrier. It is the only third part ordinarily referred as consignor’s copy, which would be the document of title and only on the production of which, the delivery of the consignment would be effected by the air carrier.13. Having regard to the above noted provisions, we find merit in the contention put forth by the counsel for the appellant. In support of his contention that the Airlines is guilty of deficiency in service by not following the above provision of law, learned counsel for the appellant has placed strong reliance on a decision of this Commission rendered in the case of Pearl Syntex Pvt. Ltd. Vs. KLM Cargo, State Bank of India, where taking note of the factual position that the Airline had effected delivery of consignment of gold of high valuation acting on a fax message without production of the original Airway Bill, ( part 3 meant for consignor) awarded compensation as high as 49,57,600/- ( because the coverage was upto to Rs.50 lakh only), although the value of the consignment of gold was much more.

14. Having considered the legal position emerging from the above provisions of law, there is no escape from the conclusion that so far as Banca Popular Esponal is concerned, their deficiency in service is writ large because there is no denial of the factual position that they had issued release / authorization order for the delivery of the consignment to the Space Cargo without realization of the value of the consignment from the foreign buyer. This is so apparent because the original documents including consignor’s Airway Bill forwarded to the said foreign bank were returned by them unpaid to the Punjab National Bank. What were the circumstances under which the said Bank acted contrary to the instructions of the complainant and issued the release order have not been made clear before us as the bank was not made a party in the present proceedings.

15. Therefore, even after noting the above conduct of the foreign bank which amounts to deficiency in service, we cannot enfasten any liability on the bank as the said foreign bank has not been made party in the present proceedings. According to the complainant, the foreign bank was not arrayed as a party because it would have been very difficult for them to recover the amount from the said bank even if the bank had been arrayed as a party before this Commission We do not find the ground as wholly tenable.

16. Now coming to the role of respondent No.3-Kuwait Airways, we must record that the said Airline was also deficient in service because it has neither acted in conformity with the terms of the contract of carriage of the consignment nor in accordance with law. Going by the above provisions of law (supra), it was the bounden obligation of the air carrier to have insisted for the production of the airway bill i.e. the 3rd part meant for consignor, before effecting delivery of the consignment but instead of doing so, it delivered the consignment on the basis of the airway bill ( 2nd part) i.e. copy meant for consignee which was already with them. We must, therefore, hold that Kuwait Airlines is equally guilty of deficiency in service. The plea of the Airline that delivery was effected by another Airline i.e Iberia Airways to whom the consignment was handed over is of no avail because for all intents and purposes, it was the Kuwait Airlways which had undertaken to carry the consignment to its destination and deliver it to the right person on the production of the requisite documents. In any case we have not been informed about the arrangements which existed between the Kuwait Airways and Iberia Airline. As regard the role of respondent nos. 1 & 2, we may hasten to observe that they simply acted as forwarding agents for the air carrier and their role will be deemed to have come to an end once it is shown that it had handed over the consignment to the air carrier for its safe carriage and delivery as per the contract of carriage.

17. Thus, having considered the matter, we are of the view that State Commission has erred in holding that the complainant has failed to establish any deficiency in service on the part of the opposite parties. We hold that there was deficiency on the part of the Banco Popular Esponal Barcelona, Spain and also respondent n o.3 Kuwait Airways.

18. The next important question which arises for our consideration is as to what amount of compensation can legitimately be granted to the complainant on account of the said deficiency. For deciding this question we must take into account the peculiar facts of the case. The fact are that even after the alleged misdelive

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ry / wrongful delivery, there is no denial of the factual position that the foreign buyer had received the consignment and after doing so, did not accept the consignment nor paid for it and rather returned the consignment to the complainant which the complainant refused to accept. Learned counsel for the appellant argued that appellant had valid reasons for doing so because the consignment was of readymade ladies garments which were fabricated to meet the seasonal requirement of the product in the foreign country and once it was not accepted by the foreign buyer, the same was of no use to the appellant and was rendered valueless after the season was over. Even if we take into account this aspect, we must observe that appellant ought to have accepted the consignment at least in order to minimize the loss occasioned to him due to the above stated circumstances because consignment would have fetched at least some value to the complainant. Unfortunately, that was not done and, therefore, the fault also lies with the complainant and it cannot validly claim compensation equivalent to the invoice value of the consignment. In our view, the complainant can at best be refunded the freight charges amounting to Rs.90,583/- (paid by the appellant to the airlines at the time of handing over the consignment for carriage). Besides that, having regard to the inconvenience and loss which might have been suffered by the complainant due to improper delivery of the consignment, we are of the view that it would adequately meet the ends of justice if we award a further compensation of Rs.1,10,000/- i.e. total compensation of Rs.2,00,000/- in all to the complainant. 19. For the above state reasons, we allow the present appeal and set aside the order and findings of the State Commission and partly allow the complaint thereby directing the complainant-respondent no.3 Kuwait Airways to pay a sum of Rs.2,00,000/- ( Rupees two lakh only) plus cost of Rs.20,000/- (Rupees Twenty Thousand only) within a period of four weeks from the date of this order failing which the amount shall carry interest @ 12% p.a. w.e.f. date of the default.