AIRPORTS AUTHORITY OF INDIA vs Orbit Peripheral Pvt. Ltd.

THE respondent/complainant purchased 128 MB DIMMS (PC 133) TA valued at US $ 8875 and 256 MB DIMMS (PC 133) TA valued at US $ 5100, from Celetron Lanka Pvt. Ltd., Sri Lanka. The import value of the aforesaid goods in Indian Rupees came to Rs. 6,86,172/ -. The consignment containing the aforesaid goods was sent to India through Air Lanka, and the documents were sent to the bank of the complainant. On receiving intimation in this regard, the complainant paid a sum of Rs. 6,87,167/ - to the bank, got the goods cleared from the Customs Department and requested for location of the cargo. However, the aforesaid goods which had been stored in the warehouse of the appellant Airports Authority of India (AAI) were not traceable and consequently could not be located. On a claim having been lodged with the appellant, the complainant was informed that they had admitted the claim only for Rs. 16,792/ -. Being aggrieved, the complainant approached the concerned State Commission by way of a complaint, seeking the following payments: -

THE complaint was resisted by AAI on the several grounds. A primarily objection was taken that there was no privity of contract between the parties and the complaint was bad for non -joinder of Custom authorities and the carrier. It was also stated in the reply that the opposite party was only a custodian of the goods under Section 45 of the Customs Act, which were handed over to it, and the complainant was not a consumer of the opposite party. It was also pleaded by the opposite party that the goods having been imported for commercial purpose, the complainant was not a consumer as defined in the Consumer Protection Act, 1986. It was also pointed out in the reply that no value of the goods was declared in the airway bill, which were said to weigh 18 kilogram. The opposite party claimed that in view of Rule 22(2)(a) of the second Schedule of the Carriage by Air Act, 1972, its liability was restricted to Rs. 16,792/ -.

VIDE its order dated 04.3.2010, the concerned State Commission directed the AAI to pay Rs. 6,86,172/ -, along with interest on that amount @ 9% per annum with effect from 27.7.2002. Being aggrieved from the aforesaid order, the opposite party AAI is before us by way of this appeal. As regards the plea that goods having been imported for a commercial purpose, the complainant was not a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act; we take note of the fact that the consignment in question came to be booked on 10.07.2002. The loss of the consignment was detected soon thereafter and even a claim with the appellant was lodged on 02.09.2002. The amendment in Section 2(1)(d) of the Consumer Protection Act, which excluded from its ambit hiring or availing of the services for a commercial purpose unless availed by a person exclusively for the purpose of earning his livelihood by means of self employment, came to be made only with effect from 15.03.2003. The unamended clause did not exclude even the services hired for a commercial purpose, from the ambit of the Consumer Protection Act. Therefore, it cannot be said that having imported the goods in question for a commercial purpose, the complainant was not a consumer in terms of Section 2(1)(d) of the Consumer Protection Act.

THE main plea taken by the appellant is that since Article 22(2) of the Carriage by Air Act, limits the liability of a carrier to 250 francs per kilogram unless the consignor has made, at the time of delivering the package to the carrier, special declaration of interest in delivery at destination and has paid a supplementary sum, if so required, its liability cannot exceed the aforesaid limit prescribed by the Statute. We however, find no merit in the aforesaid plea. The limit prescribed in the aforesaid Rule applies only to the liability of the carrier and AAI admittedly is not a carrier, which had carried the aforesaid goods from Sri Lanka to India.

IT was contended by the learned counsel for appellant that the carrier being a bailee and the petitioner being a sub -bailee, the liability of the petitioner cannot exceed that of the carrier. In support of his contention he relied upon the decision of the High Court of Delhi in International Airport Authority of India Vs. Televista Electronics (Pvt.) Ltd., : ILR (2011) Supp.(4) Delhi 104. In the case before Delhi High Court, the respondent company had booked consignment which the International Airport Authority which later it could not trace, though it was in its possession and custody. A Civil Suit was filed by the respondent for recovery of the value of the consignment. The said Suit having been decreed, an appeal was filed by International Airport Authority, challenging the order of the Trial Court. Only four issues were raised by the appellant before the high Court. The first issue was whether the respondent was bound to implead the carrier KLM Airlines as the party to the suit; the second issue was whether the suit was liable to be dismissed on the ground that there was no privity of contract between the parties, the third issue was as to whether the appellant having taken care of the goods as a prudent person, was not liable, and the fourth issue was as regards the exchange rate of the francs which had been taken for compensating the respondent. Dismissing the appeal, the high Court inter -alia observed that sub -bailment can arise even when there is no contract and sub -bailee is bound by the obligation of the bailee qua the bailor. It was also observed that the appellant/defendant, being agent of the carrier, had stepped into its shoes and therefore, could not escape its liability if the goods had been lost, while being handled by the appellant/defendant due to want of proper care. In the above referred case, the High Court did not even consider the extent of the liability of the International Airport Authority in the context of the Rule 22 of Schedule second of the Carriage by Air Act, 1972. Moreover, in view of the provisions contained in Section 230 of the Indian Contract Act 1872, a contract cannot be enforced by or against the agent, unless it falls within the exceptions stipulated therein. The exceptions are (1) where the contract is made by an agent for the sale or purchase of goods for a merchant resident abroad, (2) where the agent does not disclose the name of his principal, (3) where the principal, though disclosed, cannot be sued. In the case before us, none of the aforesaid three exceptions is attracted and therefore, it would be difficult for the complainant to recover compensation from the respondent on the premise that it is an agent of the carrier, which carried the goods from Sri Lanka to India. Moreover, in a complaint under the provisions of the Consumer Protection Act, the consumer can succeed only if he is able to make out a deficiency on the part of the service provider in rendering services to him and, if such deficiency is proved, the quantum of the compensation to be awarded to the complainant, would depend upon the loss suffered by the consumer, unless the liability of the service provider is limited by virtue of a Statute such as the Carriage by Air Act, 1972 or by way of contract between the parties. As far as the Carriage by Air Act is concerned, it limits the liability only of a carrier and not of a warehouse keeper such as AAI and there is no Statute limiting the liability of the AAI in a case where the goods are lost, while kept in its custody. It is true that had the goods been lost by the carrier, the complainant would have been able to recover the compensation calculated at 250 francs per kilogram of the consignment since the consignor had not made any special declaration as regards the value of the goods, while handing over the said goods to the carrier, but the aforesaid limit, prescribed by the Carriage by Air Act, 1972, will not apply to the appellant before us, which admittedly is not a carrier.

IN fact, the goods imported by the complainant were not kept in the warehouse of the appellant by virtue of some agreement between the appellant and the carrier. The goods were so stored in view of the legal requirement prescribed in the Customs Act read with the Airport Authority of India Act, 1994. Section 45 of the Customs Act, to the extent it is relevant, provides that all imported goods unloaded in a custom area shall remain in the custody, as approved by the Customs Act, unless they are cleared for home consumption or are warehoused or are transhipped in accordance with the provisions of Chapter VIII. Sub -Section (2) of Section 45 requires the person having custody of any imported goods in a custom area to keep a record of such goods and not to permit the same to be removed from the custom area or otherwise dealt with, except under and in accordance with the permission in writing of the proper officer. This is also the stand taken by the appellant in its reply that it is an approved custodian of the goods in terms of Section 45 of the Customs Act.

ONE of the functions of the AAI prescribed in Section 12 of the Airport Authority of India Act, 1994, is to establish warehouses and cargo complexes at the airport for storage and processing of the goods. Section 42(2)(d) of the aforesaid Act empowers the Central Government to make rules, by Notification in the Official Gazette for carrying out the provisions of the Act including the storage or processing of goods in any warehouse established by the Authority under Clause (g) of Sub -Section (3) of Section 12 and the charging of fees of such storage and processing. Vide Notification dated 4th June, 1993, issued in exercise of regulation making powers conferred upon it by Section 37 of the International Airport Authority Act, 1971 made regulations with the previous approval of the Central Government and Regulation 3(b) of the aforesaid regulation provides that in regard to the goods imported, the goods will be received by the officers of the authority or accredited handling agency from the carrier in the presence of the customs officials. It further provides that the officers of the authority will deliver the consignment to the consignee or his agent after collecting applicable charges and obtaining a valid receipt from him and shall have a lien on cargo or goods till the same are paid. Regulation 4 of the aforesaid Regulations provides that the authority shall levy charges, which may include demurrage charges, handling charges, storage and processing charges and other charges for the purpose of giving effect to the provisions of the Regulations. It is thus evident that the AAI has been rendering services of storing imported goods, which are yet to be cleared by the customs, in its warehouses, in consideration of the charges including storages charges and demurrage charges, which it is entitled to recover from the consignee. The services offered by the AAI are availed by the consignor/consignee of the goods who pays the prescribed charges, while taking delivery of the goods from its warehouse. The respondent/appellant having availed, though it may not have hired, the services of the appellant for consideration, which it was to pay at the time of taking delivery of the goods from the warehouse, therefore would be its consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act. Even if we proceed on the premise that the services of the AAI were availed by the consignor, the respondent would still be its consumer, being the beneficiary of such services.

RELYING upon Regulation 8 of the International Airport Authority (Storage and Processing of Goods) Regulation, 1980, it was contended by the learned counsel for the appellant that since the appellant had deployed round the clock security for the purpose of surveillance and security of the cargo, including CCTV cameras, besides devised procedure for issuing passes to the bona -fide users of the cargo terminal, it cannot be held liable to make good the claim of the complainant if despite such measures having been taken, the goods came to be stolen from the warehouse. We however, find no merit in the contention. Regulation 8 on which reliance is placed by the learned counsel, read as under: "8. Care of Cargo - The Authority shall take such care of the cargo or goods which come in its custody as a man of ordinary prudence would under similar circumstances take in relation to his own goods and in the absence of any contract to the contrary, the Authority will not be responsible for loss or destruction or deterioration of cargo or goods if care has been taken as aforesaid".

It would thus be seen that the appellant authority has first to prove that it had taken such care of the cargo as a man of ordinary prudence under similar circumstances take in relation to his own goods and only thereafter it could claim that it was not responsible for the loss of the cargo from its warehouse. The appellant has not explained how the goods came to be stolen from its warehouse, despite the precautions and measures it claims to have taken. The appellant has not told us as to who was the official incharge of the goods of the complainant in the warehouse, and what was the explanation offered by him for the theft of the said goods. In fact, the reply filed by the appellant does not even disclose whether any enquiry having been made by the appellant to identify the person responsible for the theft of the goods. Even the CCTV footage of the warehouse where the goods of the complainant were stored for the relevant period has not been produced. In these circumstances, we cannot accept the bald averment of the appellant as regards the precautions and care alleged to have been taken by it in relation to the goods, which were kept in its warehouse. Consequently, the benefit of Regulation 8, in our view, will not be available to the appellant.

THE case before us in fact, is squarely covered by a previous decision of this Commission in International Airports Authority of India Vs. Solidaire India Ltd.,, I (1999) CPJ 25 (NC). In the above referred case, the complainant imported some electrical goods, which were kept in the custody of IAAI at Madras. At the time of delivery, the packages were found tampered and on opening them, certain goods were found missing. The claim lodged by the complainant, having not been paid, a complaint was filed before the concerned State Commission, seeking compensation. The State Commission having ruled in favour of the complainant, the matter was agitated by IAAI by way of an appeal before this Commission. Relying upon the provisions contained in Section 30 of the International Airports Authority of India Act and Section 151 and Section 152 of Indian Contract Act, the appeal was dismissed by this Commission holding that the opposite party being a bailee was bound to take as much as care of the goods as a man of ordinary prudence to take care of its own goods and the burden of proof lies on the bailee to show that such care was duly exercised by it. For the reasons stated hereinabove, we find no merit in the appeal and is hereby dismissed with no order as to costs.