British Airways Plc. vs Gems Art Factory

THE complainant carrying business under the name and style of M/s. Gems Art Factory at Jaipur, received a letter from one Mr. S.B. Vohra for supply of four handmade silk carpets worth US $ 8000. The buyer made payment through his credit card and a bank draft. The goods were to be delivered to the buyer in Detroit, USA. The complainant engaged opposite parties Nos.2 and 3 viz. Asia Transport Co. Pvt. Ltd. and Lyraid Pvt. Ltd, for the purpose of facilitating the transportation of the goods. The goods were then entrusted to the appellant -British Airways through opposite party No.2 -Asia Transport Co. vide Airway bill dated 13 -02 -1997. On 17 -3 -1997, the complainant received a letter dated 28 -2 -1997, written by the appellant -British Airways to the opposite party No.2 -Asia Transport Company, informing that the buyer had refused to take the delivery of the goods. The appellant also sought disposal instructions with respect to the aforesaid consignment. Thereupon the complainant instructed the appellant, on 20.3.1997, to rebook the goods for delivery to him, at his cost. However, the goods were not sent back to India. The buyer, on account of not receiving the goods in time, debited the amount, which he had paid to the complainant, to his account. Alleging deficiency on the part of the opposite parties including the appellant, a complaint was filed before the State Commission, seeking the following payments: 1. Cost of four precious silk carpets US $ 8000.00

Amount of incentive disallowed US $ 800.00

Freight charges US $ 350.00

Telephone and Trunk Call charges and travelling expenses US $ 500.00

Postage expenses US $ 150.00

Silk board expenses US $ 200.00

Lawyer ''s fee and incidental expenses US $ 500.00

Loss of goodwill US $ 2500.00

Mental agony and inconvenience US $ 2500.00

Uptodate interest @ 18% on the value of the consignment US $ 1000.00

THE complaint was resisted by the appellant as well as by the opposite party No.2. It was stated in the reply that the appellant/respondent No.1 had informed the complainant about refusal of the consignee to accept the delivery of the consignment. However, the said letter was responded by the complainant only on 20 -03 -1997 and the consignment was, in the meanwhile, seized by the US custom on 24 -03 -1997. It was further stated in the reply that in view of the provisions contained in Section 20(1), Schedule I of the Carriage by Air Act, 1972, the appellant/respondent No.1 was not liable since it had taken all necessary measures to avoid the damage. It was also stated in the reply that since the complainant had not made any special declaration as to the value of the goods, the liability of the appellant/respondent No.1 was statutorily limited to US $ 20 per kg. and, therefore, the claim was to be restricted to US $ 60, weight of the consignment being only 3 kg..

THE respondent -Asia Transport Company inter alia stated that the consignment in question was given by it to the appellant -British Airways on 14 -02 -1997 through its forwarding agent - Lyraid Pvt. Ltd. (opposite party No.3). The consignment reached the destination on 20 -02 -1997. The letter dated 28 -02 -1997 was received by them from British Airways, in the first week of March, 1997 stating therein that the consignee has refused to accept the goods. The information was forwarded by them to Lyraid Pvt. Ltd. on 05 -03 -1997, but the complainant did not convey any direction regarding further action to be taken in the matter. The State Commission vide its order dated 06 -01 -2005 directed the opposite parties to pay a sum of US $ 11,000 or its equivalent Indian rupees but not exceeding Rs.2,82,400/ - to the complainant along with interest @9% per annum from 01 -07 -1997, within a period of three months from the date of receipt of the order, failing which the interest was to be paid at the enhanced rate of 12% per annum. The opposite parties were also directed to pay a sum of Rs.1,00,000/ - to the complainant as compensation for mental agony, loss of business, goodwill and expenditure incurred by him on postage besides cost of litigation amounting to Rs.5,000/ -.

BEING aggrieved from the order passed by the State Commission, separate appeals have been filed by the British Airways as well as by the Asia Transport Company. No appeal has been preferred by the opposite party No.3 -Lyraid Pvt. Ltd..

THE first question which arises for consideration in this appeal is as to whether the complainant was a consumer of the appellant -British Airways or not. The contention of the learned counsel for the appellant was that the complainant did not directly availed services of the appellant -British Airways and opposite party No.2 -Asia Transport Company was not its agent. The contention of the learned counsel for the opposite party No.2 which is also the appellant in First Appeal No.134 of 2005 on the other hand is that the said firm was an agent of British Airways and had accepted the consignment for and on behalf of the aforesaid airlines. Though it is an admitted position that the complainant did not directly availed the services of British Airways for transportation of the consignment in question to Detroit, a perusal of the Airway bill in respect of the consignment in question clearly shows that the opposite party No.2 was acting as an agent of the carrier -British Airways. In the Airway bill the name of the Asia Transport Company appears as the agent of the carrier. Though the Airway bill has been issued by Asia Transport Company, it is quite obvious that the said entity was acting as an agent of the British Airways while issuing the Airway bill. The words ''British Airways '', word ''Cargo '' appear on the top right side of the Airway bill whereas the words ''Airway Bill issued by British Airways, London '' appear on top in the middle of the Airway bill. It is also not in dispute that the consignment in question was carried by British Airways to Detroit. Therefore, there can be no reasonable dispute that Asia Transport Company was the agent of the British Airways in India for the purpose of booking cargo which the airlines used to carry to other countries. Therefore, we find no merit in the contention that the complainant was not a consumer of the appellant -British Airways.

THE next question which arises for consideration in this case is as to whether the State Commission at Jaipur had the jurisdiction to entertain the complaint. It is an admitted case that the consignment in question was handed over by the complainant to the opposite party No.2 -Asia Transport Company at Jaipur, through opposite party No.3 -Lyraid Pvt. Ltd.. Section 17(2) of the Consumer Protection Act, 1986 reads as under: ''''17(2) A complaint shall be instituted in a State Commission within the limits of whose jurisdiction, -

(a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain; or

(b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office or personally works for gain, provided that in such case either the permission of the State Commission is given or the opposite parties who do not reside or carry on business or have a branch office or personally work for gain, as the case may be, acquiesce in such institution; or

(c) the cause of action, wholly or in part, arises. ''''

AS far as the opposite party No.2 -Asia Transport Company and opposite party No.3 -Lyraid Pvt. Ltd. are concerned admittedly they have an office in Jaipur. Therefore, the State Commission at Jaipur had territorial jurisdiction to entertain the claim against them. As far as the appellant -British Airways is concerned, in case the jurisdiction is determined in accordance with the provisions of the Consumer Protection Act, 1986, the State Commission in terms of Clause (b) of Sub -Section (2) of Section 11, would have jurisdiction to entertain the complaint against it, if the cause of action wholly or in part arose in Jaipur. It is an admitted case of the parties that the consignment in question was delivered by the complainant to opposite party No.2 -Asia Transport Company through opposite party No.3 -Lyraid Pvt. Ltd. at Jaipur. Since the opposite party No.2 was an agent of the appellant/opposite party No.1 -British Airways, it can be safely said that the consignment in question was received by the appellant -British Airways from the complainant at Jaipur. Therefore, the cause of action for filing the complaint clearly arose in the jurisdiction of the State Commission at Jaipur. However, the contention of the learned counsel for British Airways was that the jurisdiction, as far as British Airways is concerned, is to be determined in accordance with the provisions of the Carriage by Air Act, and not in accordance with the provisions of the Consumer Protection Act, 1986. The learned counsel drew our attention to Clause 29 of Schedule II of the Carriage by Air Act, 1972 and contended that in view of the aforesaid provision the complaint at Jaipur was not maintainable, since the said appellant did not have either the principal place of business or an establishment at Jaipur.

SECTION (3) of the Consumer Protection Act, 1986 provides that the provisions of the said Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force. Though the Consumer Protection Act, 1986 is a later enactment to provide for better protection of the interests of the consumers and one of the primary aims of the Act is to provide for an expeditious settlement of consumer disputes and matters connected thereto, the said Act applies to consumers of all classes, whereas the provisions of Carriage by Air Act apply only to the air carriers. The provisions of Section 3 of the Consumer Protection Act, 1986 are in addition to but not in derogation of the provisions of other laws which at the relevant time were in force. The expression ''derogation '' is defined in Oxford Dictionary as (i) an occasion without a rule or law is allowed to be ignored and (ii) words or actions which show that sb or sth is considered to have no worth. Therefore, the provisions of the said Act cannot be read in such a manner as to defeat the express provision of another Act which was in force at the relevant time. The Carriage by Air Act, 1972 was enacted under Article 253 of the Constitution of India which enables the Parliament to make laws for implementing any treaty, agreement or convention with other country or countries or any decision made at any international conference, association or other body. The said Act was enacted in order to give effect to the convention for the unification of certain rules relating to International Carriage by Air Act, signed at Warsaw on 12 -10 -1929 and to the said convention as amended by the Hague protocol on 28 -09 -1955. The Act extends to whole of India. Since the Carriage by Air Act does not permit institution of a claim at the place where the cause of action arises, unless the Carrier has its principal place of business there or the contract is entered into by an establishment of the Carrier in that place, institution of a complaint at a place which does not fall within the fourcorners of Clause 29 in Schedule II of the Carriers Act would be in contradiction of the provisions of Carriage by Air Act. Therefore, territorial jurisdiction in a complaint against an international carrier such as British Airways has to be determined only in accordance with the provisions of the Carriage by Air Act, 1972. Clause 29 contained in Schedule II of Carriage by Air Act, 1972 reads as under; ''''29. (1) An action for damages must he 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. ''''

Admittedly, British Airways is neither an ordinary resident in India nor does it have principal place of its business in India. Admittedly, British Airways did not have an establishment in Jaipur, at the time the consignment in question was entrusted to its agent, M/s. Asia Transport Company. Therefore, it cannot be said that the contract with the complainant was made by an establishment of British Airways at Jaipur. Consequently, the State Commission at Jaipur did not have territorial jurisdiction to entertain the complaint.

COMING to the merits of the case, the first question which comes up for our consideration is as to whether the consignee had refused to accept the goods and if so on which date. It appears from the pleadings of the parties that the consignment had reached Detroit on 20 -02 -1997. The information in this regard was sent by British Airways to opposite party No.2 by way of a letter dated 28 -02 -1997, though according to the opposite party No.2, the aforesaid letter was received by it only in the first week of March, 1997. This is no one ''s case that the aforesaid letter was ante dated by British Airways. Therefore, it can be safely said that the alleged refusal came on or before 27 -02 -1997. Though the letter dated 28 -02 -1997 does not indicate in what manner the consignee had refused to accept the consignment, this is not the case of the complainant that in fact the consignee has not refused to accept the goods and the letter written by the appellant British Airways to Asia Transport Company in this regard was false. Even otherwise, had the consignee been ready and willing to take delivery of the consignment, there could be no reason for British Airways refusing delivery of the same to it. It would be pertinent to note here that this is nowhere the case of the complainant that the consignee has approached the British Airways for taking delivery of the consignment but at that time the said consignment was not available or was refused by the carrier.

THOUGH there is no documentary evidence of the appellant -British Airways having intimated the consignee of the arrival of the goods at Detroit, the very fact that the consignee refused to accept the consignment is a clear indication that it had received the requisite intimation in this regard from British Airways. Even otherwise, the complainant on account of his commercial transaction with the consignee would be anxious to confirm that the consignee had taken delivery of the goods sent to him and, therefore, would be in regular touch with him around the time the consignment was expected to arrive in Detroit. Reliance in this regard may be placed upon the decision of the Hon ''ble Supreme Court in Saddler Shoes Pvt. Ltd. Vs. Air India & Ors., 2001 (008) SCC 0390 SC wherein the Apex Court inter alia observed as under: ''''The consignor as a prudent businessman to whom substantial amounts were due in respect of the goods dispatched to Poland, would ordinarily have been in regular touch with his banker for ascertaining whether the bills had been honoured and the amount due thereon had been credited to his account. We are unable to believe and accept as true the case put forward by the complainant that they made no inquiries of the said nature and were content to sit back and wait until some day in July, 1991 when they casually came to know from a part (sic) in Sweden that the consignees were not interested in taking delivery of the goods. The probability is that, soon after the consignments reached Gdansk in Poland and the consignee failed to take delivery thereof, the complainants would have come to know from their banker in Madras that the bills had not been hououred and hence they would have contacted the part (sic) in Sweden in their efforts to find an alternative buyer. ''''

THE next question arising for our consideration is as to whether there was any deficiency on the part of the British Airways in sending intimation of refusal of the consignee to accept delivery of the goods and whether the British Airways was under a contractual and/or legal obligation to send the goods back to Delhi from Detroit, pursuant to the instructions given by the complainant on 20 -03 -1997. As noted earlier, according to the Asia Transport Company the letter dated 28 -02 -1997 sent to it by British Airways was received by them in the first week of March, 1997. However, the exact date of receiving the said letter has not been given by the said opposite party. Therefore, the letter may have been received by them even on first of March, 1997. Hence, there was no deficiency on the part of British Airways in intimating its agent Asia Transport Company that the buyer had refused to accept the delivery of the goods. However, in our view the said letter should have been addressed to the complainant or at least a copy of the letter sent to Asia Transport Company should have been endorsed to him. That admittedly was not done. Therefore, the Carrier was clearly negligent in not intimating the refusal of the goods to the consignor of the goods, M/s. Gems Art Factory, the proprietorship concern of the complainant, Karan Singh. According to the complainant, the letter dated 28 -02 -1997 was received by him on 17 -03 -1997 and on 20 -03 -1997 he instructed the Carrier to deliver the goods back to him at his cost. A perusal of the record would show that the letter dated 20 -03 -1997 was delivered in the office of British Airways in Delhi. Therefore, there was no delay on the part of the complainant in giving alternative instructions to the Carrier as regards disposal of the goods. The complainant, by way of the aforesaid letter dated 20 -03 -1997, had also agreed to pay the requisite charges in this regard to the Carrier. Clause 12 (1) of the Schedule II to Carriage by Air Act, reads as under: ''''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 goods by withdrawing them at the aerodrome of departure or destination, or by stopping them in the course of the journey on any landing or, by calling for them 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 consignment note, or by requiring them to be returned to the aerodrome of departure. He must not exercise the 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. ''''

Therefore, the complainant had a legal right to recall the consignment at any time before it was forfeited by the custom authorities in London. Of course, he was required to pay all the expenses which the Carrier would incur in sending the goods back to the place from where the delivery was taken by them, which in the present case was Jaipur. The contention of the learned counsel for the appellant -British Airways was that since the freight charges for sending the goods back to Delhi from Detroit were not deposited by the complainant with them, they were not bound to send the goods back to India. We, however, do not find any merit in the contention. Though the consignor of the goods is liable to pay the expenses incurred due to the exercise of his right to recall the goods, there is no obligation to deposit such expenses in advance, before the consignment is sent back to him. The appellant -British Airways, therefore, could have sent the goods back to India and claimed payment of the requisite expenses from the complainant before delivering the said goods to him. It had a lien on the goods till the requisite charges were not paid. In any case, even on receipt of letter dated 20 -03 -1997 from the complainant, British Airways did not require him to deposit the requisite charges as a pre -condition for sending the goods back to India from USA. It would be pertinent to note here that the goods came to be seized by the custom department on 24 -03 -1997. The Delhi office should have requested the office in Detroit, immediately on receipt of the complainant ''s letter dated 20 -03 -1997, to send the goods back to India. Instructions could be sent by FAX or even on telephone. Therefore, it was very much possible for British Airways to send the goods back from Detroit in USA to India between 20 -03 -1997 to 23 -03 -1997. Therefore, the appellant British Airways was clearly deficient in rendering services to the complainant since neither the notice of refusal by the consignee was sent to the complainant on 28 -02 -1997 nor did the Carrier comply with the alternative disposal instructions given to it by the complainant vide letter dated 20 -03 -1997 delivered in its Delhi office.

THE last question which comes up for consideration in this complaint is as to how much compensation the appellant British Airways would be liable to pay to the complainant. Clause 22(2) of the Schedule II to Carriage by Air Act reads as under: ''''(2) (a) In the carriage of registered baggage and of cargo, the liability of the carrier is limited to a sum of 250 francs per kilogram, unless the passengers or consignor has made, at the time when the package was handed over to the carrier, a special declaration of interest in delivery at destination and has paid a supplementary sum if the case so requires. In that case the carrier will be liable to pay a sum not exceeding the declared sum, unless he proves that that sum is greater than the passenger ''s or consignor ''s actual interest in delivery at destination.

A perusal of the Airway Bill of the consignment in question would show that no specific value of the consignment was declared by the complainant in the said Bill. Therefore, in view of the aforesaid rule, the appellant -British Airways would be obliged to make payment only at the rate of 250 francs per kg. which according to the learned counsel for the complainant comes to US$20 per kg.. A perusal of the Airway Bill would show that the weight of the consignment was only 3 kgs.. Therefore, the liability of the British Airways would be restricted to Indian rupees equivalent to US$60.

FOR the reasons stated hereinabove we hold that though there was deficiency in the services provided by the appellant -British Airways to the complainant, the liability of the Carrier would be restricted to Indian rupees equivalent to US$60. However, since we have also taken the view that the State Commission at Jaipur did not have territorial jurisdiction to entertain the complaint against the appellant -British Airways, the appeal filed by the said Carrier is liable to be allowed.

COMING to the appeal filed by Asia Transport Company, as noted earlier by us, the said firm was acting as an agent of the British Airways in booking the consignment and taking its delivery at Jaipur. No deficiency in the services provided by Asia Transport Company has been proved by the complainant. Admittedly, the consignment taken from the complainant at Jaipur was duly delivered to British Airways for being taken to Detroit by air. Admittedly, the letter dated 28 -02 -1997 which Asia Transport Company received from British Airways was also sent by them to the complainant. According to the said firm, immediately on receipt of the letter in the first week of March, 1997 they had verbally informed Mr. Jagdish, an employee of respondent No.3 whose services they had engaged in Jaipur. The Asia Transport Company was not independently engaged as an agent of the complainant and no fee or reward was paid to the said firm by the complainant. They were acting as agent of British Airways in receiving the goods from the complainant at Jaipur through respondent No.3 -Lyraid Pvt. Ltd.. Therefore, we hold that the complainant is not entitled to any payment from the appellant -Asia Transport Company.

FOR the reasons stated hereinabove both the appeals are hereby allowed and the impugned order dated 06 -01 -2005 to the extent it pertains to the appellants -British Airways and Asia Transport Company is hereby set aside. In the facts and circumstances of the case there shall be no order as to costs.