Trans Mediterranean Airways vs M/S. Universal Exports & Anr

Trans Mediterranean Airways .............. Appellant

versus

M/s Universal Exports & Anr. ...........Respondents

J U D G M E N T

H.L. DATTU, J.

1) This appeal is filed under Section 23 of the Consumer Protection Act,

1986 [hereinafter referred to as "the C P Act"] against the order in

Original Petition No. 161 of 1994 of the National Consumer Disputes

Redressal Commission, New Delhi ["the National Commission" for

short] dated 15th January, 2004, whereby the National Commission

has directed the appellant to pay a sum equivalent to US $71,615.75

with 5% interest from the date of the complaint, till its realization, and

imposed costs of `1 lakh for deficiency of service.

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2) The appellant before us is an International Cargo carrier, with its

principal place of business at Beirut, Lebanon. Respondent No.1 is a

garment exporter and respondent No.2 is an accredited International

Air Transport Association agent. By this appeal, we are called upon

to examine and reconcile the area of operation of the C P Act on the

one hand, and the Carriage by Air Act, 1972 [hereinafter referred to as

"the CA Act"] along with the Warsaw Convention of 1929

[hereinafter referred to as "the Warsaw Convention"] on the other.

The appellant, respondent No. 1 and respondent No. 2, hereinafter, for

the sake of brevity, referred to as "appellant carrier", "the consignor"

and "agent" respectively.

3) The core issues that arise for our consideration and decision in this

appeal are:

1. Whether the National Commission under the CP Act

has the jurisdiction to entertain and decide a complaint

filed by the consignor claiming compensation for

deficiency of service by the carrier, in view of the

provisions of the CA Act and the Warsaw Convention.

Or whether domestic laws can be added to or substituted

for the provisions of the conventions.

2. Whether the appellant can be directed to compensate

the consignor for deficiency of service in the facts and

circumstances of the case.

Brief Facts

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4) The facts leading to this appeal are as follows:

The agent made out three airway bills for shipping of garments

to Spain on behalf of the consignor through the appellant-carrier. In

the consignee column, the consignment was addressed as :

"BB SAE MADRID, SPAIN

NOTIFY: M/S LIWE ESPANOLA S.A.,

MAYOR S/N, 30006 PUENTE TOCINOR

APARTADO, 741, MORCIA, SPAIN,

L.C. No. C. 1036-92-00276"

In the box titled `Handling Information', the following

information was recorded:

"MARKS: SPAIN N/C NOS: 1027-1185

TOTAL ONE HUNDRED FIFTY NINE CARTONS

ONLY/PLS INF CNEE IMM ON ARR/DOCUMENTS

ATTACHED"

The airway bills from Bombay to Amsterdam were dated

25-08-1992 and the consignment through the appellant-carrier reached

Amsterdam on 30-08-1992. From Amsterdam, the consignments

were sent to Madrid by road on the following day, and they reached

Madrid on 03-09-1992 and were cleared by the Customs Authorities.

The appellant-carrier delivered the consignment to M/s Liwe

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Espanola, as according to them, that was the only recognizable

address available from the documents furnished by the consignor.

5) After nine months from the date of shipment, the agent made enquiry

regarding two of the three airway bills. Since there was no response,

the agent made further enquiry again after four months. In response to

the query, the appellant-carrier informed the consigner that on finding

the full name and complete postal address of the consignee as M/s

Liwe Espanola, the appellant-carrier has delivered the goods to it. It

was at this stage, the consignor claimed that the consignee of the said

consignment was Barclays Bank, Madrid, which had only one branch

in Madrid and since the appellant carrier had wrongly delivered the

consignment to the address mentioned in the Block column instead of

routing it through Barclays Bank and, therefore, there is deficiency of

service. Accordingly, the consignor instituted a complaint under

Section 12 of the CP Act before the National Commission, inter alia,

claiming compensation for the alleged deficiency of service by the

appellant-carrier and the agent for not delivering the said consignment

to the consignee. The National Commission, after considering the

entire evidence on record, has come to the conclusion that the services

rendered by the appellant-carrier was deficient and thereby, it was

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liable to pay compensation equivalent to US $71,615.75 with 5%

interest from the date of the Complaint till its realization, and imposed

costs of `1 lakh. It is the correctness or otherwise of this order, which

is called in question in this appeal.

6) Since this is the first appeal under Section 23 of the CP Act, we are

required to consider both the questions of facts as well as questions of

law.

Impugned Order of the National Commission

7) The appellant-carrier before the National Commission, by way of

preliminary objection, had raised jurisdiction of the National

Commission in entertaining the complaint filed by the complainant. It

was the contention of the appellant-carrier that in view of Rule 29 and

Rule 33 of the Second Schedule to the CA Act, the National

Commission in Delhi has no jurisdiction to entertain and decide the

complaint. It was contended that only the Courts at the four places

mentioned in the said provision have jurisdiction to adjudicate the

complaint and, therefore, no other courts, Tribunal or Commission has

jurisdiction to decide the complaint filed by the complainant. It was

also contended that in view of the Warsaw Convention, the National

5

Commission had no jurisdiction to decide the dispute. The National

Commission, after a detailed analysis of the provisions of the CP Act

and carrier laws, has negatived the contention by holding that the CP

Act has vested jurisdiction to the Consumer Courts to adjudicate upon

a claim for compensation in cases of deficiency of service. It was also

held that due to the pecuniary jurisdiction of the National

Commission, even a matter that arose in Mumbai of value of more

than `20 lakhs, could be filed for adjudication before the National

Commission (prior to the 2002 amendment).

8) On merits, it was the case of the consignor before the National

Commission that the services offered by the appellant-carrier and the

agent were deficient and the consignment meant for the consignee was

not delivered to the notified person. It was also the case of the

consignor that in view of the conditions of contract on the reverse of

the airway bill, it was required for the appellant-carrier to have

delivered the consignment to the consignee only, and in case of any

doubt regarding the address of delivery, the appellant-carrier was

required to enquire with the consignor and not deliver the

consignment to any other person than the notified party. Therefore, it

6

was contended that there is a deficiency of service by the appellant-

carrier.

9) The appellant-carrier has taken the defense that the address given by

the agent of the consignor was incorrect and incomplete, and the only

address that was properly given was that of the notified party, to

which address they have delivered the said consignment. Further, it

was contended that at no point of time, the appellant-carrier was made

known that the "BBE SAE, MADRID SPAIN" stood for Barclays

Bank, Madrid. Further, it was contended that the consignor had to file

a suit within 120 days by relying on Rule 12 and the complaint was

barred by limitation. It was further contended that if there was any

damage that was suffered by the consignor, it was due to the

negligence of the agent. It was also contended that the consignor has

received payment from the notified party. The appellant-carrier also

made reference to the CA Act, Warsaw Convention and several other

authorities in support of its claim.

10) The National Commission, in the impugned order, has concluded that

the agent was not only the agent of the consignor, but also of the agent

of the appellant-carrier, and hence any mistake committed by the

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agent would make the principal (appellant-carrier) liable for such

damages. Further, it is held by the National Commission that the

appellant-carrier was duty bound to have contacted the consignor in

case it was not able to locate the address of the consignee or in the

event, the consignee refused to accept the consignment. It is held that

it is not open to the appellant-carrier to have delivered the

consignment to the notified party without informing the consignor. On

the point of limitation, the National Commission has observed that by

virtue of Rule 30 of the Second Schedule, a suit could be brought

within two years, and hence Rule 12 is not applicable in the facts of

the case. In the light of the above findings, the National Commission

has held that the services provided by the appellant-carrier were

deficient and ordered payment of the compensation to the consignor.

11) Shri. Vinoo Bhagat, learned counsel, appears for the appellant-carrier,

Shri. Jaideep Gupta, learned senior counsel, appears for the consignor

(Respondent No.1) and Shri. Siddhartha Dave, learned counsel,

appears for the agent (Respondent No.2). On the question of

jurisdiction of the National Commission, we were assisted by

Shri. Shyam Divan, learned senior counsel, as the amicus curie. For

the sake of convenience, we will deal with the submissions made by

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the learned counsel on the issue of jurisdiction first and then, on the

factual matrix.

Issue of Jurisdiction of the National Commission

12) Shri. Vinoo Bhagat, learned counsel, submits that the Warsaw

Convention exclusively governs any claims arising under it, and

domestic law cannot be applied for deciding such claims. The learned

counsel relies on Rule 29 of the Second Schedule to the CA Act, to

contend that it was only at the places mentioned in this Rule, the claim

for compensation could have been filed. He further submits that the

appellant-carrier could be sued at a court in Mumbai (where the

contract was made), or at Beirut (where it has its principal place of

business), or at Madrid (place of destination), and no where else. He

further submits that the Court in Delhi has no jurisdiction to entertain

any claim against the appellant-carrier and that the provisions of the

CP Act could not alter the jurisdiction vested on Courts by the

Warsaw Convention. By pointing out to Rule 33 of the Second

Schedule, the learned counsel submits that this provision fortifies his

contention of the exclusive operation of Rule 29 and states that not

only are the places where the appellant-carrier can be sued are

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mentioned, but also the places where arbitration can take place, are

expressly stated. The learned counsel also states that there is no cause

of action under the CP Act, to invoke the jurisdiction of the National

Commission. He further contends that the National Commission is not

a Court and that a suit is maintainable only in a Court having

jurisdiction. He states that it is not permissible to read the word

"Court" to include quasi-judicial authorities and Tribunals. He places

reliance on some decisions of this Court, the House of Lords,

Supreme Court of the United States and the National Commission.

13) Shri. Jaideep Gupta, learned senior counsel, appearing for the

consignor supports the finding of the National Commission. He

submits that even assuming that Rule 29 of the Second Schedule to

the CA Act was applicable, the jurisdiction of the National

Commission is not ousted in any manner whatsoever. He further

submits that the word "Court" is not used in the strict sense of the

term, thereby it cannot be said that a quasi-judicial Tribunal is

excluded. He submits that the Warsaw Convention was reproduced in

two languages (being English and French), and that the term "Court"

seems to be used in a sense to indicate a body that resolves disputes

and cannot be restricted to the meaning accorded by our judicial

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system. Shri. Gupta further submits that the Warsaw Convention does

not contemplate the situation of alternate Tribunals replacing Courts

of Law. He relies on Rule 29(2) of the Second Schedule to the CA

Act and submits that the procedural law of the country, in which the

suit is filed, is what is applicable, and in India, the CP Act was the

legislation that lays down the remedy and procedure for the deficiency

of service. He would further state that the CP Act was brought into

force to expedite the justice delivery system for matters relating to

deficiency of service, and the CP Act not only prescribes territorial

jurisdiction, but also the pecuniary jurisdiction of the various Forums.

The learned senior counsel would contend that since the State Forum

did not have the pecuniary jurisdiction, the National Commission

could and, in fact, has entertained the complaint. He would further

submit that since deficiency of service was computed in more than

twenty lakh rupees at the relevant time (it is presently one crore

rupees after the 2002 amendment) or more, the National Commission

would have jurisdiction by virtue of Section 29 of the CP Act. He

also cited some judgments in support of his submissions and

differentiated those cited by Shri. Vinoo Bhagat.

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14) Shri. Siddhartha Dave, learned counsel appearing for the agent

submits that the provisions of the CP Act can co-exist with those of

other Statutes and the option is given to the parties as to which

remedy they would like to pursue and would support this argument by

referring to decisions of this Court.

15) Due to the importance of the question of law involved, Shri.

Shyam Divan, learned senior counsel, was requested to assist the

Court. The learned amicus has submitted a note on the question of

jurisdiction raised by the appellant-carrier. The learned amicus has

stated that it is clear from Section 3 of the CP Act that Consumer

Courts are additional Forums to ensure that consumers get speedy

disposal of their cases/complaints with regard to deficiency of service.

He lays emphasis on the phrase "An action for damages must be

brought" at the beginning of Rule 29 and states that this Rule gives an

option to the plaintiff to sue in the Courts on any one of the places

mentioned. He further states that Rule 33 provides an alternate

remedy to parties to resort to proceedings of arbitration in case of

disputes between the parties. He concludes that there is no express bar

in the CA Act to oust the jurisdiction of the Forums under the CP Act.

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16) To appreciate the rival contentions, it is necessary to notice the

scheme of the CA Act. The Statement of Objects and Reasons of the

CA Act reads:

"India is a signatory to the Warsaw Convention of 1929,

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' means

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 transshipment, 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

sovereignty, suzerainty, 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 passenger, or a shipper or cargo,

there is a presumption of liability of the carrier. The

carrier, however, is not liable if he proves that he or his

agent had taken all necessary measures to avoid the

damage or 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 of liability if the damage is caused

by the willful misconduct of the carrier, or by such

default, on his part as, in accordance with the law of the

Court ceased of the case, is equivalent to willful

misconduct. The Convention also contains detailed

provisions regarding documents of carriage.

2. The Warsaw Convention has been given effect to in

India by the enactment of the Indian Carriage By Air

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Act, 1934 (20 of 1934) in regard to international

carriage and the provisions of that Act have been

extended to domestic carriage, subject to certain

exception, adaptations and modifications, by means of a

notification issued in 1964.

3. A diplomatic conference under the auspices of

International Civil Aviation Organization was held at

Hague in September, 1955 which adopted a protocol to

amend the provisions of the Warsaw Convention. The

Hague protocol was opened for signature on 28th

September, 1955 and more than the required number of

States have ratified the protocol which came into force

between the ratifying States on 1st August, 1963.

4. Some of the amendments effected by the Hague

protocol to the Warsaw Convention are - (a)

simplification of documents of carriage; (b) an increase

in the amount specified as the maximum sum for which

the carrier may be liable to a passenger, that is to say,

the limits of the liability of the carrier in respect of a

passenger has been doubled, and unless a higher figure

is agreed to by a special contract, the liability is raised

from 1,25,000 gold francs per passenger to 2,50,000

gold francs; (c) making the carrier liable where the

damage was caused by an error in piloting or in the

handling of the air craft or in navigation.

5. Acceptance of the Hague Protocol would put our

national carrier on the same footing as many of its

international competitors, since the passengers will be

able to avail the limit of liability guaranteed by the

Hague Protocol the limit being double than that

stipulated under the Warsaw Convention.

6. Fifty seven countries have already ratified the Hague

Protocol and passengers traveling between those

countries would be ensured of the higher limit of

compensation.

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7. It is, therefore, proposed to enact a law, in place of the

existing Indian Carriage By Air Act, 1934, to apply the

existing provisions based on the Warsaw Convention to

countries which would choose to be governed by that

Convention and also to apply the provisions of the

Warsaw Convention as amended by the Hague Protocol

to countries which may accept the provisions thereof.

Under Section 4 of the Indian Carriage By Air Act, 1934,

the rules contained in Warsaw Convention have already

been applied to non-international carriages subject to

certain exceptions, adaptations and modifications. It is

now proposed to take power to apply the rules contained

in the Warsaw Convention as amended by the Hague

Protocol also to non-international carriages subject to

exceptions, adoptions and modifications.

8. The Bill seeks to give effect to the above objectives."

17) The preamble to The Carriage by AIR Act, 1972 reads as follows:

"An Act to give effect to the Convention for the

unification of certain rules of international carriage by

air signed at Warsaw on the 12th day of October, 1929

and to the said Convention as amended by the Hague

Protocol on the 28th day of September, 1955 and to make

provision for applying the rules contained in the said

Convention in its original form and in the amended form

(subject to the exceptions, adaptations and

modifications) to non-international carriage by air and

for matters connected therewith."

18) The CA Act was enacted to give effect to the convention for

unification of rules relating to international carriage by air signed at

15

Warsaw as amended at Hague in 1995 and the Montreal Convention

of 1999.

19) Section 2 of the CA Act is the definition clause. Section 2(ii) of the

CA Act defines convention to mean convention for unification of

certain rules relating to international carriage by air signed at Warsaw

on 12.10.1929. Section 3 provides for the application of the Warsaw

Convention to India. It says that the rules contained in the First

Schedule being the provisions of the convention relating to the rights

and liabilities of carriers, passengers, consignors, consignees and

other persons, shall have the force of law in India in relation to any

carriage by air to which those rules apply irrespective of the

nationality of the aircraft performing the carriage, subject to the

provisions of the Act. Section 4 provides for application of amended

convention to India and also provides for Second Schedule in

consonance with the amended convention. This Schedule applies to

the claim made in the present case as it is a dispute that occurred in

1994 before the Montreal Convention in 1999. Section 4A provides

for the application of the Montreal Convention to India and provides

for the Third Schedule. Section 5 sets out the liability in case of death

of a passenger as being those governed by the First and Second

16

Schedules. Sections 6 and 6A provide for conversion of francs and

conversion of special drawing rights. Section 7 provides that every

high contracting party to the convention shall, for the purpose of any

suit brought in a Court in India in accordance with the provisions of

Rule 28 of the First Schedule or of the Second Schedule, as the case

may be, enforce a claim in respect of the carriage undertaken by him.

Section 8 enables the application of the Act to carriages which are not

international.

20) The First Schedule to the Act, vide Rule 1, provides that the rules

under this Schedule shall apply to all international carriage of persons,

luggage or goods performed by aircraft for reward. Sub-Rule 2

defines "the High Contracting Party" to the convention. Sub-Rule 3

defines international carriage. Rule 18 provides for liability of the

carrier for damages. Rule 19 provides for liability of the carrier for

damages occasioned by delay and Rule 28 provides for territorial

jurisdiction for suing for damages. The Second Schedule of the CA

Act provides for rules for the purpose of the Act. Chapter I of the

Second Schedule gives the definitions and the scope of the Schedule.

Chapter II deals with the documents of carriage, viz. passenger ticket

(Part I), baggage check (Part II), airway bill (Part III). Chapter III

17

enumerates the provisions regarding the liability of the carrier with

regard to the acts which the carrier will be held liable for, the

jurisdiction of the Court at which the carrier can be sued, the limit of

the liability, limitation for bringing a suit, etc. Chapter IV and

Chapter V deal with provisions relating to combined carriage and

general provisions respectively. Part III of Chapter II of the Second

Schedule is relevant for the purpose, of the case. Therefore, omitting

what is not necessary, relevant rules are extracted as :

"5. (1) Every carrier of cargo has the right to require

the consignor to make out and hand over to him a

document called as "air waybill"; every consignor has

the right to require the carrier to accept this

document.

(2) The absence, irregularity or loss of this document

does not affect the existence or the validity of the

contract of carnage which shall, subject to the

provisions of rule 9, be nonetheless governed by these

rules.

6. (1) The air waybill shall 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.

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(3) The carrier shall sign prior to the loading of the

cargo on board the aircraft.

(4) The signature of the carrier may be stamped; that

of the consignor may be printed or stamped.

(5) If, at the request of the consignor, the carrier

makes out the air waybill, he shall be deemed, subject

to proof to the contrary, to have done so on behalf of

the consignor.

10. (1) The consignor is responsible for the

correctness of the particulars and statements relating

to the cargo which he inserts in the air waybill.

(2) The consignor shall indemnify the carrier against

all damage suffered by him, or by any other person to

whom the carrier is liable, by reason of the

irregularity, incorrectness or incompletness of the

particulars and statements furnished by the

consignor."

12. (1) Subject to his liability to carry out all his

obligations under the contract of carriage, the

consignor has the right to dispose of the cargo by

withdrawing it at the aerodrome of departure or

destination, or by stopping it in the course of the

journey on any landing, or by calling for it to be

delivered at the place of destination or in the course of

the journey to a person other than the consignee

named in the air waybill, or by requiring it to be

returned to the aerodrome of departure. He must not

exercise this right of disposition in such a way as to

prejudice the carrier or other consignors and he must

repay any expenses occasioned by the exercise of this

right.

(2) If it is impossible to carry out the orders of the

consignor the carrier must so inform him forthwith.

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(3) If the carrier obeys the orders of the consignor

for the disposition of the cargo without requiring the

production of the part of the air waybill delivered to

the latter, he will be liable, without prejudice to his

right of recovery from the consignor, for any damage

which may be caused thereby to any person who is

lawfully in possession of that part of the air waybill.

(4) The right conferred on the consignor ceases at

the moment when that of the consignee begins in

accordance with rule 13. Nevertheless, if the

consignee declines to accept the waybill or the cargo,

or if he cannot be communicated with, the consignor

resumes his right of disposition.

13. ...

14. The consignor and the consignee can

respectively enforce all the rights given to them by

rules 12 and 13, each in his own name, whether he is

acting in his sown interest or in the interest of

another, provided that he carries out the obligations

imposed by the contract.

15. (1) Rules 12, 13 and 14 do not affect either the

relations of the consignor or the consignee with each

other or the mutual relations of third parties whose

rights are derived either from the consignor or from

the consignee.

(2) The provisions of rules 12, 13 and 14 can only

be varied by express provision in the air waybill.

(3) Nothing in these rules prevents the issue of a

negotiable air waybill.

16. (1) The consignor must furnish such

information and attach to the air waybill such

documents as are necessary to meet the formalities of

customs, octroi or police before the cargo can be

delivered to the consignee. The consignor is liable to

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the carrier for any damage occasioned by the

absence, insufficiency or irregularity of any such

information or documents, unless the damage is due to

the fault of the carrier or his servants or agents.

(2) The carrier is under no obligation to enquire

into the correctness or sufficiency of such information

or documents."

21) We also need to notice Rule 17, 18, 20, 29, 30 and 33 of Chapter III

and V of the Second Schedule. These are :

"17. The carrier is liable for damage sustained in

the event of the death or wounding of a passenger

or any other bodily injury suffered 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 transshipment, any damage is

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presumed, subject to proof to the contrary, to have

been the result of an event which took place during

the carriage by air.

20. The carrier is not liable if he proves that he and

his servants or agents have taken all necessary

measures to avoid the damage or that it was

impossible for him or them to take such measures.

29. (1) An action for damages must be brought, at

the option of the plaintiff, in the territory of one of

the High Contracting Parties, either before the

Court having jurisdiction where the carrier is

ordinarily resident, or has his principal place of

business, or has an establishment by which the

contract has been made or before the Court having

jurisdiction at the place of destination.

(2) Questions of procedure shall be governed by the

law of the Court seized of the case.

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.

33. Any clause contained in the contract and all

special agreements entered into before the damage

occurred by which the parties purport to infringe

the rules laid down by this Schedule, whether by

deciding the law to be applied, or by altering the

rules as to jurisdiction, shall be null and void.

Nevertheless for the carriage of cargo arbitration

clauses are allowed, subject to these rules, if the

arbitration is to take place within one of the

jurisdictions referred to in sub-rule (1) of rule 29."

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22) The CP Act aims to protect the interests of the consumers and provide

for speedy resolutions of their disputes with regard to defective goods

or deficiency of service. The Statement of Objects and Reasons of the

CP Act are as under:

"The Consumer Protection Bill, 1986 seeks to provide

for better protection of the interests of consumers and for

the purpose, to make provision for the establishment of

Consumer councils and other authorities for the

settlement of consumer disputes and for matter

connected therewith.

2. It seeks, inter alia, to promote and protect the rights of

consumers such as -

(a) the right to be protected against marketing of

goods which are hazardous to life and property;

(b) the right to be informed about the quality,

quantity, potency, purity, standard and price of

goods to protect the consumer against unfair trade

practices;

(c) the right to be assured, wherever possible, access

to an authority of goods at competitive prices;

(d) the right to be heard and to be assured that

consumers interest will receive due consideration at

appropriate forums;

(e) the right to seek redressal against unfair trade

practices or unscrupulous exploitations of

consumers; and

(f) right to consumer education.

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3. These objects are sought to be promoted and protected

by the Consumer Protection Council to be established at

the Central and State level.

4. To provide speedy and simple redressal to consumer

disputes, a quasi-judicial machinery is sought to be set

up at the district, State and Central levels. These quasi-

judicial bodies will observe the principles of natural

justice and have been empowered to give relief of a

specific nature and to award, wherever appropriate,

compensation to consumers. Penalties for non-

compliance of the orders given by the quasi-judicial

bodies have also been provided.

5. The Bills seeks to achieve the above objects."

23) The relevant provisions of the CP Act that are required to be noticed

for resolving the issues before us are Sections 3 and 21. They are as

under:

"3. Act not in derogation of any other laws. - The

provisions of this Act shall be in addition to and not in

derogation of the provisions of any other law for the time

being in force.

......

21. Jurisdiction of the National Commission. - Subject to

the other provisions of this Act, the National Commission

shall have jurisdiction -

(a) to entertain -

(i) complaints where the value of the goods or

services and compensation, if any, claimed

exceeds rupees one crore; and

24

(ii) appeals against the orders of any State

Commission; and

(b) to call for the records and pass appropriate

orders in any consumer dispute which is

pending before or has been decided by any

State Commission where it appears to the

National Commission that such State

Commission has exercised a jurisdiction not

vested in it by law, or has failed to exercise a

jurisdiction so vested, or has acted in the

exercise of its jurisdiction illegally or with

material irregularity."

It is to be noted that at the relevant time, the pecuniary

jurisdiction was twenty lakh rupees for the National Commission.

Jurisdiction of the National Commission

24) It was rightly argued by learned counsel Sri Vinoo Bhagat that the

primary question that arises for our consideration in this appeal is

whether the CA Act and the three international conventions in it

constitute all the law governing liabilities of international air carriers

arising out of international carriage of passengers and goods by air or

whether domestic law can be added or substituted for the provisions

of the conventions. In a nutshell, the submission of the learned

counsel for the appellant-carrier is that conventions, viz. Warsaw

Convention, as amended at Hague in 1955 and the Montreal

Convention of 1999 exclusively govern carrier liabilities and,

25

therefore, a remedy under domestic law cannot be invoked.

The frame work for the CP Act was provided by a Resolution

dated 09.04.1985 of the General Assembly of the United Nations

Organization, which is commonly known as Consumer Protection

Resolution No.39/248. India is a signatory to the said Resolution.

The Act was enacted in view of the aforementioned Resolution of the

General Assembly of the United Nations. The preamble to the Act

suggests that it is to provide better protection for the consumers and

their interests. By this Act, the Legislature has constituted quasi-

judicial Tribunals/Commissions as an alternative system of

adjudicating consumer disputes.

Section 3 of the CP Act gives an additional remedy for

deficiency of service and that remedy is not in derogation of any other

remedy under any other law.

25) In Proprietor, Jabalpur Tractors vs. Sedmal Jainrain and Anr. 1995

Supp. (4) SCC 107, it is held:

"The Consumer Protection Act is not in derogation of any law."

26) In Fair Air Engineers Pvt. Ltd. and Anr. Vs. N.K. Modi (1996) 6 SCC

385, it is held:

26

"15. Accordingly, it must be held that the provisions

of the Act are to be construed widely to give effect

to the object and purpose of the Act. It is seen that

Section 3 envisages that the provisions of the Act are in

addition to and are not in derogation of any other law in

force. It is true, as rightly contended by Shri Suri, that

the words "in derogation of the provisions of any other

law for the time being in force" would be given proper

meaning and effect and if the complaint is not stayed

and the parties are not relegated to the arbitration, the

Act purports to operate in derogation of the provisions

of the Arbitration Act. Prima facie, the contention

appears to be plausible but on construction and

conspectus of the provisions of the Act we think that

the contention is not well founded. Parliament is

aware of the provisions of the Arbitration Act

and the Contract Act, 1872 and the consequential

remedy available under Section 9 of the Code of Civil

Procedure, i.e., to avail of right of civil action in a

competent court of civil jurisdiction. Nonetheless, the Act

provides the additional remedy."

27) In State of Karnataka vs. Vishwa Bharathi House Building Co-

operative Society and Others (2003) 2 SCC 412, a three Judge Bench

of this Court observed:

"16. ...in asmuch as the provisions of the said Act are in

addition to the provisions of any other law for the time

being in force and not in derogation thereof as is

evident from Section 3 thereof."

28) In the case of Secy., Thirumurugan Coop. Agricultural Credit Society

v. Ma. Lalitha, (2004) 1 SCC 305, this Court took the view:

27

"12. As per Section 3 of the Act, as already stated

above, the provisions of the Act shall be in addition to

and not in derogation of any other provisions of any

other law for the time being in force. Having due regard

to the scheme of the Act and purpose sought to be

achieved to protect the interest of the consumers better,

the provisions are to be interpreted broadly, positively

and purposefully in the context of the present case to

give meaning to additional/extended jurisdiction,

particularly when Section 3 seeks to provide remedy

under the Act in addition to other remedies provided

under other Acts unless there is a clear bar."

29) This Court, in the case of Kishore Lal v. Chairman, Employees' State

Insurance Corpn. (2007) 4 SCC 579, took the view:

"7. The definition of "consumer" in the CP Act is

apparently wide enough and encompasses within its fold

not only the goods but also the services, bought or hired,

for consideration. Such consideration may be paid

or promised or partly paid or partly promised under

any system of deferredpayment and includes any

beneficiary of such person other than the person who

hires the service for consideration. The Act being a

beneficial legislation, aims to protect the interests of a

consumer as understood in the business parlance. The

important characteristics of goods and services under

the Act are that they are supplied at a price to cover the

costs and generate profit or income for the seller of

goods or provider of services. The comprehensive

definition aims at covering every man who pays money

as the price or cost of goods and services. However, by

virtue of the definition, the person who obtains goods for

resale or for any commercial purpose is excluded, but

28

the services hired for consideration even for commercial

purposes are not excluded. The term "service"

unambiguously indicates in the definition that the

definition is not restrictive and includes within its ambit

such services as well which are specified therein.

However, a service hired or availed, which does not cost

anything or can be said free of charge, or under a

contract of personal service, is not included within the

meaning of "service" for the purposes of the CP Act."

30) In Skypak Couriers Ltd. v. Tata Chemicals Ltd., (2000) 5 SCC

294, this Court observed:

"2. With the industrial revolution and development in the

international trade and commerce, there has been a

substantial increase of business and trade, which

resulted in a variety of consumer goods appearing in the

market to cater to the needs of the consumers. The

modern methods of advertisement in media, influence the

mind of the consumers and notwithstanding the

manufacturing defect or imperfection in the quality, a

consumer is tempted to purchase the goods. There has

been possibility of deficiency in the services rendered.

For the welfare of such consumer and to protect the

consumers from the exploitation to provide protection of

the interest of the consumers, Parliament enacted the

Consumer Protection Act, and the Act itself makes

provision for the establishment of Commissions for

settlement of the consumer disputes and matters

connected therewith. The Commissions, under the Act,

are quasi-judicial bodies and they are supposed to

provide speedy and simple redressal to consumer

disputes and for that purpose, they have been empowered

to give relief of a specified nature and in an appropriate

way, to award compensation..."

29

31). This Court in the case of Patel Roadways Limited v. Birla

Yamaha Ltd., (2000) 4 SCC 91, has considered this question and has

laid down that the Disputes Redressal Agency provided for in the Act

will have the jurisdiction to entertain complaints in which the claim

for loss or damage of goods entrusted to a carrier for transportation is

in dispute.

32). In our view, the protection provided under the CP Act to

consumers is in addition to the remedies available under any other

Statute. It does not extinguish the remedies under another Statute but

provides an additional or alternative remedy. In the instant case, at

the relevant point of time, the value of the subject matter was more

than `20 lakhs, by which the National Commission is conferred

jurisdiction for any cause of action that arises under the Act. Further,

we are not inclined to agree with the argument of Shri. Bhagat that

exercising of jurisdiction was in contravention of International Law,

as the Warsaw Convention and the Hague Protocol have been

incorporated into the domestic law by the passage of the CA Act.

Therefore, we do not find any legal infirmity in the National

Commission exercising its jurisdiction, as the same can be considered

a Court within the territory of a High Contracting Party for the

30

purpose of Rule 29 of the Second Schedule to the CA Act and the

Warsaw Convention. Before we conclude on this issue, we may

usefully notice a three Judge Bench decision of this Court in the case

of Ethiopian Airlines vs. Ganesh Narain Saboo (Civil Appeal

No.7037 of 2004) which view is binding on us. It is held:

"67. Similarly, the Carriage by Air Act, 1972

explicitly provides that its rules apply to carriage

performed by the State or by legally constituted public

bodies under Chapter 1, Section 2, Sub-section 1.

Thus, it is clear that according to the Indian Law,

Ethiopian Airlines can be subjected to suit under the

Carriage Act, 1972. It may be pertinent to mention

that the Carriage by Air Act, 1972 (69 of 1972) is an

Act to give effect to the Convention for the unification

of certain rules relating to international carriage by

air signed at Warsaw on the 12th day of October, 1929

and to the said Convention as amended by the Hague

Protocol on the 28th day of September, 1955 and to

make provision for applying the rules contained in the

said Convention in its original form and in the

amended form (subject to exceptions, adaptations and

modification) to non-international carriage by air and

for matters connected therewith."

33). However, Shri. Vinoo Bhagat, learned counsel appearing for

the appellant-carrier has placed reliance on the decisions of foreign

courts to contend conventions exclusively govern carriers' liabilities.

We do not wish to refer to all those decisions, since in our view, this

31

issue is no more res integra in view of the decisions of this Court in

Ethiopian Airlines, wherein this Court has observed:

"72. On careful analysis of the American, English and

Indian cases, it is abundantly clear that the appellant

Ethiopian Airlines must be held accountable for the

contractual and commercial activities and obligations

that it undertakes in India.

73. It may be pertinent to mention that the Parliament

has recognized this fact while passing the Consumer

Protection Act, 1986 and the Carriage by Air Act, 1972.

Section 86 was itself, a modification and restriction of

the principle of foreign sovereign immunity and thus, by

limiting Section 86's applicability, the Parliament

though these incorrect acts, further narrowed a party's

ability to successfully plead foreign sovereign immunity.

In the modern era, where there is close interconnection

between different countries as far as trade, commerce

and business are concerned, the principle of sovereign

immunity can no longer be absolute in the way that it

much earlier was. Countries who participated in trade,

commerce and business with different countries ought to

be subjected to normal rules of the market. State owned

entities would be able to operate with impunity, the rule

of law would be degraded and international trade,

commerce and business will come to a grinding halt.

Therefore, we have no hesitation in coming to the

conclusion that the appellant cannot claim sovereign

immunity."

National Commission is a `Court'?

34) Shri. Bhagat has cited several decisions of this Court in which

this Court has taken the view that Consumer Forums are not Courts

32

but are quasi-judicial bodies or authorities or agencies, in furtherance

of his contention that only a Court in Mumbai has the jurisdiction to

try a suit against the appellant-carrier and that the National

Commission is not a Court. [See Laxmi Engineering Works v. P.S.G.

Industrial Institute, (1995) 3 SCC 583; Charan Singh v. Healing

Touch Hospital, (2000) 7 SCC 668; State of Karnataka v.

Vishwabharathi House Building Coop. Society, (2003) 2 SCC 412].

This position has been fortified recently by a decision of a

Constitution Bench of this Court in the case of Union of India v. R.

Gandhi, President, Madras Bar Association, (2010) 11 SCC 1, where

this Court has observed:

"38. The term "courts" refers to places where justice is

administered or refers to Judges who exercise judicial

functions. Courts are established by the State for

administration of justice that is for exercise of the

judicial power of the State to maintain and uphold the

rights, to punish wrongs and to adjudicate upon disputes.

Tribunals on the other hand are special alternative

institutional mechanisms, usually brought into existence

by or under a statute to decide disputes arising with

reference to that particular statute, or to determine

controversies arising out of any administrative law.

Courts refer to civil courts, criminal courts and the High

Courts. Tribunals can be either private tribunals

(Arbitral Tribunals), or tribunals constituted under the

Constitution (Speaker or the Chairman acting under

Para 6(1) of the Tenth Schedule) or tribunals authorised

by the Constitution (Administrative Tribunals under

33 Article 323-A and tribunals for other matters under

Article 323-B) or statutory tribunals which are created

under a statute (Motor Accidents Claims Tribunal, Debt

Recovery Tribunals and Consumer Fora). Some

Tribunals are manned exclusively by Judicial Officers

(Rent Tribunals, Motor Accidents Claims Tribunal,

Labour Courts and Industrial Tribunals). Other statutory

tribunals have judicial and technical members

(Administrative Tribunals, TDSAT, Competition

Appellate Tribunal, Consumer Fora, Cyber Appellate

Tribunal, etc.)

......

45. Though both courts and tribunals exercise judicial

power and discharge similar functions, there are certain

well-recognised differences between courts and

tribunals. They are:

(i) Courts are established by the State and are

entrusted with the State's inherent judicial power for

administration of justice in general. Tribunals are

established under a statute to adjudicate upon

disputes arising under the said statute, or disputes of a

specified nature. Therefore, all courts are tribunals.

But all tribunals are not courts.

(ii) Courts are exclusively manned by Judges.

Tribunals can have a Judge as the sole member, or

can have a combination of a judicial member and a

technical member who is an "expert" in the field to

which the tribunal relates. Some highly specialised

fact-finding tribunals may have only technical

members, but they are rare and are exceptions.

(iii) While courts are governed by detailed statutory

procedural rules, in particular the Code of Civil

Procedure and the Evidence Act, requiring an

elaborate procedure in decision making, tribunals

generally regulate their own procedure applying the

provisions of the Code of Civil Procedure only where

34

it is required, and without being restricted by the strict

rules of the Evidence Act."

35) In the case of Bharat Bank Ltd. v. Employees, 1950 SCR 459,

this Court took the view that to be a court, the person or persons who

constitute it, must be entrusted with judicial functions, that is, of

deciding litigated questions according to law. This Court further

observed that before a person or persons can be said to constitute a

court, it must be held that they derive their powers from the State and

are exercising the judicial powers of the State. In State of Bombay v.

Narottamdas Jethabhai, 1951 SCR 51, this Court held that the word

"Court" denoted a place where justice was judicially administered,

having been vested the jurisdiction for this purpose by the State. In

the case of Brajnandan Sinha v. Jyoti Narain, (1955) 2 SCR 955, it

was held that in order to constitute a "Court" in the strict sense of the

term, an essential condition is that the Court should have, apart from

having some trappings of a judicial tribunal, power to give decision or

a definitive judgment which has finality and authoritativeness which

are the essential tests of a judicial pronouncement. This Court, in

Ram Narain v. The Simla Banking and Industrial Co. Ltd., AIR 1956

SC 614, held that a Tribunal which exercised jurisdiction for

35

executing a decree would be a "court" for the purpose of the Banking

Companies Act.

36) While examining the Contempt of Courts Act, 1971, a

Constitution Bench of this Court in Baradakanta Mishra v. Registrar

of Orissa High Court, (1974) 1 SCC 374, observed:

"68. What then is a court? It is

"an agency of the sovereign created by it directly or

indirectly under its authority, consisting of one or

more officers, established and maintained for the

purposes of hearing and determining issues of law and

fact regarding legal rights and alleged violations

thereof, and of applying the sanctions of the law,

authorised to exercise its powers in due course of law

at times and places previously determined by lawful

authority." Isbill v. Stovall, Rex. Civ. App. 92 SW 2d

1057, 1070."..."

37) In State of Tamil Nadu v. G.N. Venkataswamy, (1994) 5 SCC

314, this Court observed that the primary function of a Court was to

adjudicate disputes, while holding that a Collector constitutes a

Revenue Court within the meaning of Entry 11-A of the List III of the

Seventh Schedule of the Constitution. In Canara Bank v. Nuclear

Power Corpn. of India, (1995) Supp 3 SCC 81, this Court observed: 36

"26. In our view, the word `court' must be read in the

context in which it is used in a statute. It is permissible,

given the context, to read it as comprehending the courts

of civil judicature and courts or some tribunals

exercising curial, or judicial powers..."

This Court also quoted, with approval, the Halsbury's Laws of

England and observed thus:

"29. In Halsbury's Laws of England (4th Edn., Vol. 10,

paras 701 and 702), this is observed:

"701. Meaning of `court'. Originally the term `court'

meant, among other things, the Sovereign's palace. It

has acquired the meaning of the place where justice is

administered and, further, has come to mean the

persons who exercise judicial functions under

authority derived either directly or indirectly from the

Sovereign. All tribunals, however, are not courts, in

the sense in which the term is here employed. Courts

are tribunals which exercise jurisdiction over persons

by reason of the sanction of the law, and not merely by

reason of voluntary submission to their jurisdiction.

Thus, arbitrators, committees of clubs and the like,

although they may be tribunals exercising judicial

functions, are not `courts' in this sense of that term.

On the other hand, a tribunal may be a court in the

strict sense of the term even though the chief part of its

duties is not judicial. Parliament is a court. Its duties

are mainly deliberative and legislative; the judicial

duties are only part of its functions. A coroner's court

is a true court although its essential function is

investigation.

702. What is a court in law. The question is whether

the tribunal is a court, not whether it is a court of

justice, for there are courts which are not courts of

37

justice. In determining whether a tribunal is a judicial

body the facts that it has been appointed by a non-

judicial authority, that it has no power to administer

an oath, that the chairman has a casting vote, and that

third parties have power to intervene are immaterial,

especially if the statute setting it up prescribes a

penalty for making false statements; elements to be

considered are (1) the requirement for a public

hearing, subject to a power to exclude the public in a

proper case, and (2) a provision that a member of the

tribunal shall not take part in any decision in which he

is personally interested, or unless he has been present

throughout the proceedings.

A tribunal is not necessarily a court in the strict sense

of exercising judicial power merely because (1) it

gives a final decision; (2) it hears witnesses on oath;

(3) two or more contending parties appear before it

between whom it has to decide; (4) it gives decisions

which affect the rights of subjects; (5) there is an

appeal to a court; and (6) it is a body to which a

matter is referred by another body.

Many bodies are not courts even though they have to

decide questions, and in so doing have to act

judicially, in the sense that the proceedings must be

conducted with fairness and impartiality. Examples

are the benchers of the Inns of Court when

considering the conduct of one of their members, the

disciplinary committee of the General Medical

Council when considering questions affecting the

conduct of a medical man, a trade union when

exercising disciplinary jurisdiction over its

members...."

30. These passages, from the earlier edition of Halsbury,

were cited by this Court in Thakur Jugal Kishore Sinha

v. Sitamarhi Central Coop. Bank Ltd. The question there

was whether the provisions of the Contempt of Courts

Act applied to a Registrar exercising powers under

Section 48 of the Bihar and Orissa Cooperative Societies

38

Act. It was held that the jurisdiction of the ordinary civil

and revenue courts of the land was ousted in the case of

disputes that fell under Section 48. A Registrar

exercising powers under Section 48, therefore,

discharged the duties which would otherwise have fallen

on the ordinary civil and revenue courts. He had not

merely the trappings of a court but in many respects he

was given the same powers as were given to the ordinary

civil courts of the land by the Code of Civil Procedure,

including the power to summon and examine witnesses

on oath, the power to order inspection of documents, to

hear the parties after framing issues, to review his own

order and to exercise the inherent jurisdiction of courts

mentioned in Section 151. In adjudicating a dispute

under Section 48 of the Bihar Act, the Registrar was held

to be "to all intents and purposes a court discharging the

same functions and duties in the same manner as a court

of law is expected to do".

38) The aforesaid observation has been strongly relied upon by

Shri. Jaideep Gupta in reply to the contention of Shri. Bhagat that the

National Commission was not a Court, and therefore, lacked

jurisdiction to decide the complaint filed by the opposite party. In P.

Sarathy v. State Bank of India, 2000 (5) SCC 355, this Court took the

view that the term "Court" in Section 14 of the Limitation Act, 1963,

meant any authority or tribunal having the trappings of a court. It may

also be relevant to notice that a Constitution Bench of this Court in the

case of Kihoto Hollohon v. Zachillhu, (1992) Supp (2) SCC 651 held

that all Tribunals may not be Courts, but all Courts are Tribunals. 39

39) Now let us look at the definition of the term "Court" as

commonly understood. The Oxford Advanced Learner's Dictionary

[8th Edition] defines it as "the place where legal trials take place and

where crimes, etc. are judged." The Oxford Thesaurus of English [3rd

Ed] gives the following synonyms: "court of law, law court, bench,

bar, court of justice, judicature, tribunal, forum, chancery, assizes,

courtroom". The Chamber's Dictionary [10th Ed.] has described a

court as "a body of person assembled to decide causes". In Stroud's

Judicial Dictionary [5th Ed], the word "court" has been described as

"a place where justice is judicially ministered, and is derived", and is

further observed, "but such a matter involves a judicial act which

may be brought up on certiorari".

40) The above dictionary meaning and decision of this Court in the

case of Canara Bank (Supra.) and also the observations of the

Constitution Bench decision of this Court in the case of R. Gandhi

(Supra.) reveal that word "Court" must be understood in the context

of a body that is constituted in order to settle disputes and decide

rights and liabilities of the parties before it. "Courts" are those bodies

that bring about resolutions to disputes between persons. As already

mentioned, this Court has held that the Tribunal and Commissions do

40

not fall under the definition of "Court". However, in some situations,

the word "Court" may be used in a wide, generic sense and not in a

narrow and pedantic sense, and must, in those cases, be interpreted

thus.

41) In State of Karnataka v. Vishwabharathi House Building Coop.

Society, (2003) 2 SCC 412, this Court took the view that there is a

legal fiction created in giving tribunals like the Consumer Forum the

powers of a Court. It was held:

"57. A bare perusal of Section 25 of the Act clearly

shows that thereby a legal fiction has been created

to the effect that an order made by District Forum/State

Commission or National Commission will be deemed to

be a decree or order made by a civil court in a suit.

Legal fiction so created has a specific purpose i.e. for the

purpose of execution of the order passed by the Forum

or Commission. Only in the event the Forum/State

Commission or the National Commission is unable to

execute its order, the same may be sent to the civil court

for its execution. The High Court, therefore was not

correct to hold that in each and every case the

order passed by the District Forum/State

Commission/National Commission are required to be

sent to the civil courts for execution thereof.

58. Furthermore, Section 27 of the Act also confers

an additional power upon the Forum and the

Commission to execute its order. The said provision is

akin to Order 39 Rule 2-A of the Code of Civil Procedure

or the provisions of the Contempt of Courts Act or

41 Section 51 read with Order 21 Rule 37 of the Code of

Civil Procedure. Section 25 should be read in

conjunction with Section 27. A parliamentary statute

indisputably can create a tribunal and might say that

non-compliance with its order would be punishable by

way of imprisonment or fine, which can be in addition to

any other mode of recovery."

42) The use of the word "Court" in Rule 29 of the Second Schedule

of the CA Act has been borrowed from the Warsaw Convention. We

are of the view that the word "Court" has not been used in the strict

sense in the Convention as has come to be in our procedural law. The

word "Court" has been employed to mean a body that adjudicates a

dispute arising under the provisions of the CP Act. The CP Act gives

the District Forums, State Forums and National Commission the

power to decide disputes of consumers. The jurisdiction, the power

and procedure of these Forums are all clearly enumerated by the CP

Act. Though, these Forums decide matters after following a summary

procedure, their main function is still to decide disputes, which is the

main function and purpose of a Court. We are of the view that for the

purpose of the CA Act and the Warsaw Convention, the Consumer

Forums can fall within the meaning of the expression "Court".

42

43) This view of ours is fortified by the decision of this Court in the

case of Patel Roadways Ltd. (supra) where this Court has held that a

complaint before the Consumer Forum is within the meaning of the

term "suit" as employed by Section 9 of the Carriers Act, 1865. In

other words, we are of the view that when it comes to legislations like

the CP Act, there can be no restricted meaning given to the word

"Court". Hence, we reject the argument of Shri. Bhagat that the

National Commission is not a "Court" within the meaning of Rule 29

of the Second Schedule of the CA Act.

Deficiency of Service

44) Shri. Vinoo Bhagat, learned counsel appearing for the

appellant-carrier, would contend that there was no deficiency of

service on the part of the appellants. He would point out that the

appellant-carrier had delivered the consignment to the address that

was given by the consignor in the box with the title "Consignee's

Name and Address". He would further state that the only party in the

consignee box with a name and an address was that of M/s. Liwe

Espanola S.A. He would assail the findings of the National

43

Commission that there was a deficiency of service on the part of the

appellant-carrier for not having delivered the consignment at the

correct address, and state that "BBSAE, MADRID, SPAIN" was not

identifiable address to which any delivery of goods could be made.

He would also state that there was no way of finding out that the

consignment was to be made to a Bank. Shri. Bhagat would lay

emphasis on the fact that it was the duty of the consignor to place the

correct address and particulars while making the airway bill, by

placing reliance on the Air Cargo Tariff Rules framed and notified by

IATA. He states that the entire responsibility for the correct address

of the consignee falls upon the consignor and there is no obligation on

the part of the carrier or shipper to ensure that the address is correct.

The carrier, Shri. Bhagat would submit, is only responsible to ensure

the contents of the consignment and not the addressee. He would

further submit that it would not be practical for the carrier to check the

authenticity of the address in the consignee box for each and every

consignment and that they would only check if there is an address or

not.

45) The learned counsel, Shri. Bhagat would also contend that the

consigner did not invoke the rights under the Warsaw Convention for

44

the non-arrival of goods in a timely manner and as a result, was

disentitled to later complaining about the lost consignment. He would

then refer to Clause 12 of the airway bill and state that if the notice

was not given by the consignor within a period of 120 days, then the

claim would get extinguished. He would further contend that neither

the consignee nor the consignor invoked their rights under Article

13(3) and Article 14 at any time. This fact sufficiently proves,

according to the learned counsel, that the claim made is not genuine.

46) Before the National Commission, appellant-carrier had filed the

affidavit of Mr. Daulat Kripalani, who was working as Manager of the

appellant-carrier in India. In the affidavit, it is stated that the

consignor must provide all the information of the consignee and

further, the consignor did not give the address of the consignee even

when it is asked for and it was also not informed to them that the

goods must be released after obtaining appropriate credit. It is the

responsibility of the consignor to give full particulars of the consignee

as provided in IATA Regulations. It is also stated that Barclays Bank

has several offices in Madrid and the Bank did not receive any letters

of credit (L/C) from Canara Bank, Bangalore. It is also stated that

L/C was not attached to the airway bill and, therefore, there was no

45

way of finding out that the consignment was addressed to the Bank. It

is also stated that if the name and address of the Bank was not given

in full, the custom authorities would not have released the goods. He

also states that there was delay in approaching the air carrier after

shipment of the goods, which would disentitle them from making any

claim.

47) The appellant has also filed the affidavit of Khaled El Tameer,

Asstt. Vice President, Insurance claims, who has also stated in the

same lines on that of Mr. Daulat Kripalani. In his cross-examination,

he has stated that it is the responsibility of the agent of the consignor

to furnish all required documents and they would accept the Airway

bill on the basis of the documents furnished by the agent.

48) The cargo agent/respondent No.2 has filed the affidavit of Mr.

Anil Vazirani, who is the partner of the firm. He has stated that the

airway bills are prepared as per the instructions of the consignor and

the abbreviations used in the airway bills are universally known and in

the dispute between the appellant-carrier and the consignor, it has no

role to play and they are also not liable for any damages for any

deficiency of service.

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49) Mr. Rajendra Hinduja - partner of the consignor, has filed his

affidavit. He has stated in his affidavit that the address of BBSAE has

been given to notify the party, who is the consignee. The same stands

for Barclays Bank, Madrid. It is also stated that since they did not

receive the value of the consignment, they had made several oral

enquires with the appellant-carrier and since they did not get positive

response, they made written correspondence in the year 1993.

50) All the witnesses, who had filed their affidavit by way of

examination-in-chief, have been cross examined by the contesting

parties.

51) The learned counsel Sri Vinoo Bhagat would contend that in

the airway bill, the consignor had indicated the name of the consignee

as M/s. LIWE ESPANOLA in the consignee box and, therefore, the

consignor could not have expected the carrier to have delivered the

consignment to BBSAE, Madrid, Spain. The airway bill is one of the

documents produced along with the Memorandum of civil appeal. A

perusal of the same would show that the agent of the consignor in the

consignee's box specifically mentions the name of the consignee as

BBSAE, Madrid and immediately thereafter, the name of M/s LIWE

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ESPANOLA is mentioned. It has come in the evidence of the

consignor and his agent that BBSAE, Madrid is Barclays Bank,

Madrid and `SAE' is a Spanish abbreviation for incorporation like

`limited'. Therefore, the consignee is only Barclays Bank, Madrid. It

is the stand of the appellant-carrier that BBSAE, Madrid is not the

consignee and further, it was the responsibility of the consignor and

his agent to have furnished the correct and accurate particulars of the

consignee and since the name of M/s. LIWE ESPANOLA also finds a

place in the consignee box, the consignment is delivered to the

notified party and, therefore, it cannot be said that there was

deficiency of service. We cannot agree. The consignor, through his

agent, has stated that in the airway bill that is handed over to the

appellant-carrier, in the consignee box, the name of BBSAE, Madrid

is specifically mentioned. If, for any reason, the appellant-carrier was

of the view that the name of the consignee is not forthcoming or if the

particulars furnished were insufficient for effecting the delivery of the

consignment, it was expected from the appellant-carrier to have made

enquiries. In our view, at this belated stage, the appellant-carrier

cannot shift the burden by contending that it was expected from the

consignor and his agent to have furnished the correct and proper

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particulars of the consignee in the airway bill. The appellant is an air

line carrier of high repute and they effect transportation of goods to

various parts of the world including Spain and, therefore, it can safely

be presumed that the carriers were fully aware of the consignee's

name, which was indicated in the consignee's box and they should

have notified the notified party immediately after the arrival of the

consignment. Since, that has not been done, the National Commission

was justified in holding that there is deficiency of service on the part

of the carrier in not effecting the delivery of goods to the consignee.

52) Learned counsel for the appellant-carrier has contended that by

virtue of Articles 6, 10 and 16 of the Rules, the consignor is required

to make the airway bill and they are only responsible for correctness

of the airway bill and consequences of errors in it and the carrier is not

required to check correctness of consignors documents. We have

already noticed the relevant rules. Repetition of it may not be

necessary. Rule 6 of the Rules envisages that the airway bill requires

to be made by the consignor and handed over the same to the carrier

with the cargo. Rule 10 stipulates that the consignor is responsible for

the correctness of the particulars and statements relating to the cargo

which he inserts in the airway bill. Sub-clause (2) of Article 10 49

provides that the consignor shall indemnify the carrier against all

damages suffered by him or to any other person to whom the carrier is

liable, by reason of the irregularity, incorrectness or incompleteness of

the particulars and statements furnished by the consignor. Rule 16

provides that the consignor should furnish all the information and

attach it to the airway bill to meet the requirements of law enforcing

agencies. In the present case, as we have already noticed that the

consignor had furnished all the relevant information in the airway bill

which would satisfy the requirements of both Rule 6 and 16 of the

rules and, therefore, the consignor cannot be accused of not furnishing

the correct particulars and information in the airway bill which is

handed over to the appellant-carrier with the cargo. In our view, the

appellant-carrier cannot absolve its responsibilities by contending that

it would be practically impossible to verify the correctness of all the

airway bills which are furnished with the cargo. The appellant's

contention that the name and address of the consignee was inadequate

is difficult to accept. There is evidence on record to show that

documents supporting the letter of credit was sent by the consignors

using the self same name and address and there was no difficulty in

the same being delivered to the consignee bank.

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53) The learned counsel also submits that the consignor, having not

invoked Article 14 of the Rules within a reasonable time, is disentitled

to make any complaints before any forum, much less National

Commission. We are not impressed with the arguments canvassed.

Rule 14 confers the right on the consignor to make complaint to the

carrier if the consignment has not reached its destination qua the

consignee. In the evidence of the consignor, it is elicited that

necessary oral enquiries were made with the carrier within a

reasonable time, when the consignor did not receive the value of the

goods from the consignee and since it did not receive any reasonable

explanation, it had no other alternative but to correspond with the

appellant-carrier by written correspondence. Though, the witnesses of

the consignor are cross examined by the appellant-carrier, nothing

worthwhile is elicited. Therefore, in the absence of any contrary

evidence, the statement made by the consignor and its witness require

to be accepted.

54) It is also contended that Clause 12 of the Conditions of Contract

printed on the reverse of airway bill requires that the person entitled to

delivery must make a complaint to the carrier in writing in the case of

non delivery of the goods within 120 days from the date of the issue

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of the airway bill. If not done within the time stipulated, claim, if any,

against the carrier extinguishes. Per contra, Shri Jaideep Gupta,

learned senior counsel, submits that under CP Act, the cause of action

does not depend on any notice in writing being served on the carrier

unlike in certain other Statutes. While considering this issue, the

National Commission, in the impugned Judgment, has concluded:

"In our view, this submission cannot be

accepted. Firstly, Clause (12) only provides that

the persons entitled to delivery must make a

complaint to the carrier in writing, in case of non-

delivery of the goods within 120 days from the

date of issue of airway bill. There is no question of

delivery of goods to the shipper/Complainant.

Further, it cannot control the period of limitation

provided under `the Act'. Rule 29(2), upon which

heavy reliance was placed by the Respondent, also

nowhere provides that it should be filed within 120

days. On the contrary, Rule 29(2) specifically

provides that questions of procedure shall be

governed by the law of the Court seized of the

case.

In addition, Rule 30 of the second Schedule

leaves no doubt that the right to damages shall be

extinguished only if the action is not brought

within two years as provided therein. It reads thus:

"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

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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."

The Complainant entrusted the goods to the

carrier on 25th August, 1992 and the goods

reached Madrid on 3rd September, 1992.

Admittedly, the complaint is filed within a period

of 2 years.

Further, Rule 33 which is quoted above,

upon which heavy reliance was placed by the

learned Counsel Mr. Bhagat for Opposite Party

No.1, in contending that this Commission would

have no jurisdiction to decide the matter,

specifically provides that any clause contained in

the contract entered into before the damage

occurred by which the parties purport to infringe

the rules laid down by the schedule, whether by

deciding the law to be applied, or by altering the

rules as to the jurisdiction, shall be null and void'.

Hence, Clause 12 of the airway bill would

not be of any ground for holding that petition filed

by the Complainant is barred by period limitation

(sic.)."

55) We are in total agreement with the conclusion reached by the

National Commission. Therefore, we do not see any merit in the

contention canvassed by the learned counsel for the appellant-carrier.

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56) We conclude that the National Commission has jurisdiction to

decide the dispute between the parties and it is a Court and that there

was deficiency in service by the appellant-carrier.

57) In view of the above discussion, we do not see any merit in this

appeal. Accordingly, it is dismissed. Parties are directed to bear their

own costs.

...........................J.

[G.S. SINGHVI ]

...........................J.

[H.L. DATTU ]

New Delhi,

September 15, 2011.

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