AIR FRANCE vs PATEL EXPORTS INDIA

THE challenge in this appeal is directed against the order dated December 31, 1993 passed by the State Commission, Tamil Nadu allowing a complaint-O.P. No. 335 of 1993 which was filed by the respondent herein against the appellant-Air France � alleging deficiency in service on the part of the latter and seeking to recover a sum of Rs. 6,51,895.10 from the respondent by way of compensation for the loss stated to have been suffered by the complainant on account of alleged negligence and deficiency in service on the part of the opposite party.

THE complainant had consigned 2820 pieces of men''s shirts packed in 79 cartons valued at U.S. $ 14805 from Madras to Zurich through the opposite party-Air France under Airway Bill dated 24.3.92 issued by the opposite party. According to the complainant, the consignee was Swiss Credit Bank, Zurich, Switzerland and the purchaser had to pay the amount of the bill to the said Bank, negotiate the documents by getting them endorsed in its favour and then only taken delivery of the consignment. As no information was received by the complainant about the delivery of the consignment, the complainant sent a letter to the opposite party on 23.6.92 asking for details of delivery and the opposite party replied to it by its letter dated 25.6.92 stating that the cargo had been delivered on 1.4.92. Thereupon the complainant by letter dated 19.9.92 drew the attention of the opposite party to the stipulation that the purchaser had to negotiate the documents only through the Swiss Credit Bank which was the consignee and stated that since payment had not been made by the purchaser and the original documents had not been got endorsed by the purchaser from the consignee Bank by the purchaser after making payment, it was ununderstandable how delivery could have been made. On receipt of the said letter from the complainant, the opposite party is said to have changed its stand and informed the complainant that the goods had not been cleared and they were lying with their handling agents. In view of the said representation made by the opposite party, the complainant by letter dated 7.11.92 called upon the opposite party to intimate the approximate freight charges that should be paid for rebooking the consignment as well as the demurrage charges incurred at the destination airport so that those particulars could be forwarded to the Export Credit Guarantee Corporation of India Ltd. Thereafter, with a view to mitigate the loss, the complainant arranged with another customer M/s. Rey Trade for purchase of the goods and requested the opposite party to hand over the consignment to them but delivery of the consignment was not given by the opposite party to M/s. Rey Trade. In the meantime the Swiss Credit Bank returned the documents to the complainant''s Banker � State Bank of India on the ground that the purchaser had not paid the amount of the bill and taken the documents. Thereupon the State Bank of India claimed from the complainant the invoice value together with Bank changes, interest etc., since the bill had been discounted with the Bank by the complainant. According to the complainant, subsequently it was found out by them on enquiry that the original purchaser M / s. Rovi Fashion AG had taken delivery of the consignment from the opposite party without negotiating the documents through the Bank and the said purchaser had since become bankrupt. Since such delivery to the purchaser without production by him of the original documents after obtaining them duly endorsed from the Swiss Credit Bank after payment of the full Mount of the bill was manifestly contrary to the terms of entrustment of the goods carried by the opposite party, there was clearly negligence and deficiency on the part of the opposite party, as a consequence of which heavy loss had been sustained by the complainant. Hence the prayer made in the complaint for recovery of compensation form the opposite party.

BESIDES raising a preliminary objection about the maintainability of the complaint under the Consumer Protection Act, the opposite party resisted the claim by contending that the complainant by letter dated 30.11.92 had directed the opposite party to amend the name of the consignee as M/s. Rey Trade and accordingly the amendment was carried out and the consignment had been safely delivered to the newly amended consignee namely, M/s. Rey Trade. On this basis it was pleaded that there had been no negligence or deficiency in service on the part of the opposite party and hence the claim put forward in the complaint for recovery of compensation was wholly baseless and unsustainable.

THE State Commission overruled the preliminary objection raised by the opposite party regarding the maintainability of the complaint. Though a feeble contention was raised before us that the said finding recorded by the State Commission is not correct or sound, we find no substance at all in the said plea put forward by the appellant and it is hereby rejected. There is no dispute that a consignment of men''s shirts packed in 79 cartons addressed to M/s. Rovi Fashion, Zurich, Switzerland had been endorsed for carriage by M/s. Air France under the Airway Bill Exh. A-4 dated 24.3.92. A reference to the said Airway Bill shows that the consignee was Swiss Credit Bank, Zurich. The original Airway Bill and all connected documents were sent by the complainant''s bank namely, State Bank of India to the consignee Swiss Credit Bank and the arrangement was that the purchaser M/s. Rovi Fashion had to pay the bill amount to the Swiss Credit Bank, get the documents endorsed in his favour and then only take delivery of the goods from the opposite party carrier or its agents.

WHEN the complainant did not receive any information concerning the delivery of the consignment and remittance of the money it wrote the letter Exh. A-5 dated 23.6.92 to the opposite party asking for details about the consignment. To this the opposite party sent the reply Exh. A 6 informing the complainant that the goods had been taken delivery on 1.4.92. Since the complainant learnt that the documents had not been negotiated by the purchaser M/s. Rovi Fashion from Swiss Credit Bank, which was the consignee under the Airway Bill, it again wrote to the apposite party under Exh. A 8, dated 19.9.92 pointing in out that the original Airway Bill together with all related documents had been forwarded to the said Bank with instructions to deliver the documents to drawee M/s. Rovi Fashion, Zurich only against full payment of the value of the shipment. Since the purchaser had not made payment of the amount of the bill to the Swiss Credit Bank and as a consequence the documents had been returned by the said Bank to the State Bank of India at Madras, the opposite party was requested by the complainant to ascertain whether the shipment was still with them, and if so, to await further instructions from the complainant for rebooking the same for which the return air freight will be paid by the complainant.

AS already noticed, the original defence taken by the opposite party in the letter Exh. A-6 was that the consignment had been delivered on 1.4.92, presumably to M/s. Rovi Fashion, but, subsequently, the opposite party changed its stand and informed the complainant as per the letter Annexure ''B'' dated 1.10.92 that the consignment was lying undelivered at Custom Warehouse in Zurich since the consignee had not obtained Bank release inspite of several reminders. Thereupon the complainant wrote the letter Exh. A12 dated 7.11.92 to the opposite party asking for information regarding the approximate freight charges to be paid for rebooking of the goods to Madras and also the demurrage charges payable at Zurich for getting release of the goods for redespatch to Madras. To the aforesaid query made by the complainant, no response was received from the opposite party. On 30.11.92, the opposite party was informed by the complainant that it had arranged with another buyer M/s. Rey Trade to take delivery of goods on payment of the amount of the bill and all other charges and requesting the opposite party to deliver the consignment to M/s. Rey Trade, Switzerland. Subsequently, the complainant was informed by M/s. Rey Trade as per letter Exh. A 16 dated 23.9.93 that they had not taken delivery of the consignment since the goods had been delivered by the opposite party to the original purchaser M/s. Rovi Fashion, Switzerland without production of original Airway Bill and without payment of the price to the Swiss Credit Bank. Since the stand taken by M/s. Air France in their letter dated 24.8.93 was that the consignment had been delivered directly in January, 1993 to M/s. Rey Trade, whose name had been substituted as the consignee by amending the Airway Bill pursuant to the instructions received from the complainant, and this contention had been reiterated by the opposite party before the State Commission, the State Commission called upon the opposite party to produce any document for proving the factum of delivery of the consignment to M/s. Rey Trade. But despite adequate opportunity having been given to the opposite party to produce evidence for substantiating the aforesaid plea, the opposite party totally failed to adduced any materials whatever in proof of the said case put forward by it.

BEFORE this Commission also the appellant has not been able to substantiate its case that the consignment had been delivered to M/s. Rey Trade in January, 1993 by the production of any supporting documentary evidence. In this context it is worthy of note that it was only by letter dated 24.8.93 that the opposite party informed the complainant for the first time that the consignment had been delivered by it in January, 1993 to M/s. Rey Trade, the amended consignee. On receipt of this letter the complainant sent a Fax message to M/s. Rey Trade enquiring about the correctness of the carrier''s version. In reply thereto M/s. Rey Trade sent the Fax message dated 23.9.93 (page 93 of the Appeal Paper Book) wherein it was categorically stated that they had never taken delivery of consignment and on the other hand the merchandise had been delivered to M/s. Rovi Fashion in March end or early April, 1992. No arguments were advanced before us challenging the truth and veracity of the contents of the said Fax message.

ON a careful scrutiny of all the materials available on record, we are of opinion that the original version given by the opposite party in its letter to the complainant dated 25.6.92 (Exh. A-6) namely that the consignment had been delivered by it to M/s. Rovi Fashion on 1st April, 1992 has to be accepted as representing the true factual position. Since the original Airway Bill and connected documents were returned by the Swiss Credit Bank to the complainant''s Bank � State Bank of India � stating that the goods had not been cleared by the purchaser after making payment and getting the bill endorsed in their favour, it is manifest that the delivery of the goods to M/s. Rovi Fashion had been effected by the opposite party without production of the endorsed original Airway Bill as was specifically required under the terms of the contract of carriage entered into between the parties. The consignee of the goods was the Swiss Credit Bank to whom the original Airway Bill had been forwarded by the complainant''s Banker. In the circumstances, we have no hesitation to hold that the State Commission was perfectly right in holding that there had been gross deficiency on the part of the opposite party and its handling agent M/s. Swiss Air in delivering the consignment to M/s. Rovi Fashion without proper endorsement of the Ariway Bill in its favour. Since the complainant could not realise the price of the goods and had thereby suffered serious loss on account of the aforesaid negligence and deficiency in service on the part of the opposite party, it was rightly held by the State Commission that compensation had to be awarded to the complainant. The State Commission has awarded to the complainant compensation representing the full value of the consignment namely Rs. 4,57,474.50 and directed the opposite party to pay the said amount with interest thereon @ 19.75% per annum from 24.3.92 (date of Airway Bill � earlier date of payment). While we agree that the complainant is entitled to recover from the opposite party as compensation for the loss the full value of the consignment viz. Rs. 4,54,474.50, we are of opinion that interest on said amount should be awarded only @ 18% per annum and not at the rate of 19.75% per annum fixed by the State Commission. We accordingly modify the order of the State Commission by reducing the rate of interest payable by the opposite party on the sum of Rs. 4,57,474.50 from 19.75% to 18% per annum, such interest being payable for the period from 24.3.92 uptill the date of actual payment of the amount to the complainant.

SUBJECT to the modification relating to the rate of interest, the order of the State Commission is confirmed in all other respects and this appeal is dismissed. The appellant will pay a sum of Rs. 3,000/- by way of costs to the respondent.