CENTURY LEATHERS vs KOREAN AIR

THE complainant Century Leathers, sent through the opposite party M/s. Korean Air, cow hide grain leather under 7 different air way bills. It was agreed that the goods shall be air-shipped to Korea by 30.6.93. According to the complainant even after 20 days after the air-shipment they found that their Bank in India through which they had negotiated the documents had not received the sale price. On enquiry, it was found that the consignee Bank at Seoul had received payments from the complainant''s purchaser in respect of the consignment under only one air way bill which was Rs. 2,62,093.75 and no amount was received in respect of the consignment under the other six air way bills. THE purchaser had not taken delivery of the goods under the six air way bills because of the late arrival of the cargo at Korea. THE opposite party had not sought for fresh instructions from the complainants for redirecting the goods. This lapse on the part of the opposite party amounts to grave deficiency in service. THE complainant by their letter dated 23.7.93 wrote to the opposite party enquiring about the whereabouts of the shipment. THE opposite party by their reply dated 29.7.93 informed the complainant that the consignments were delivered to the complainants-consignee on various dates. On receipt of this communication the complainant was totally confused. THE complainant''s representative Mr. Appa Rao left for Seoul and reached there on 5.8.93 to locate the cargo there and with difficulty he found the undelivered cargos in six consignments in 3 different customs warehouses. In the mean while the complainant tried to find fresh purchasers. One Kum Chon Corporation (KCC), a Company in Seoul, was interested in purchasing the cargo. But since entry with the warehouses was restricted only to the consignee or the exporters and not for prospective purchasers, Kum Chon Corporation were not able to assess the condition of the goods nor could they examine the cargo by direct inspection. THE demurrages kept mounting up. KCC agreed to settle the demurrages and take delivery of the goods. But they offered only 75 cents per sq. ft. which works out to 25 to 30% less than the price of the cargo. THE complainant had no option but to accept this offer. THE complainant then procured RBI''s approval for reduced price on the basis of revised pro forma, invoice and packing list and these were faxed to me prospective purchasers, mentioning the terms of the payments as CAD (Cash Against Documents). But the air way bills could not be amended as they were still with the Bankers. Subsequently in December, 1993 the complainant came to know that the goods were cleared by KCC without making any payments to the Bank. When the complainant contacted them and pressed for payment they sent the complainant the said purchase price pertaining to air way bill No. 1803123-2143. Subsequently in March, 1993 KCC sent US $ 5,000 and US Pound Sterling''s 3631. THE opposite parties were once again guilty of deficiency in service and negligence in handing over the goods to the new purchasers without receiving the properly endorsed air way bills. Even though the goods were in the customs ware house the opposite parties still retained control over them. THE complainant had not received the entire payments till the date of filing of the complaint. Because of these reasons the complainant had to totally suspend his export activities for nearly a year. THEy had also suffered many other losses. On these grounds the complainants have claimed compensation on different grounds.

THE opposite parties in their written version denied that they agreed to shift the cargo by courier on 30.6.93. THEy contended that the air way bills prepared by the complainants did not contain any special instructions regarding the time within which the cargo should be taken to the place of destination. All the seven consignments have been handed over to them by M/s. Sky lift Cargo Private Ltd. the cargo agents of the complainants, only after 30.6.93 and, therefore, there is no basis for the allegations that specific instruction was given to the opposite party that goods should be shipped to Korea by 30.6.93. On the part of the opposite party there was no delay in airlifting the consignments. THE opposite party denied that the purchasers refused to deliver the goods because of late arrival as alleged. Even as per the air way bill the opposite party was obliged to notify the buyer alone and not the consignee Bank. THE opposite party had notified the buyer M/s. Shangyong Corporation and handed over the air way bills and with that their responsibility was over, and thereafter it was for the consignee Bank for clearing the goods. In these circumstances there was no need for the opposite party to inform about anything to the complainant or seek fresh instructions regarding clearance of the goods. THE carrier, on reaching the destination, upon notifying the purchaser, lodges the cargo with the customs bonded warehouse and they cease to have any control or responsibility over the same. Moreover the freight have not been prepaid. THE carrier have no further interest in the goods, and unless the air way bill itself was not cleared they have no duty to the consignor. It is true that the complainants themselves in their letter dated 27.3.1993 after coming to know that the consignee will not take delivery of six out of seven consignments, informed the opposite party that they were trying to locate an alternative buyer and requested the opposite party to keep the cargo in the customs bonded warehouse and also for seeking the permission for inspection of the cargo with the customs bonded warehouse by the prospective buyers if any. THE opposite parties in their letter dated 29.7.1993 informed the complainant about the position of the consignments but by inadvertence instead of stating that the air way bills have been cleared from them, stated that the consignments were cleared, and this was only an error which was also within the knowledge of the complainant. THE, complainants had entered into a direct transaction with the subsequent purchaser and it is because the subsequent purchaser had committed default, as an after-thought the complainant has filed this complaint with a view to fasten the liability on the opposite parties. THEre was no obligation on the part of the opposite parties to hand over the goods to any new purchasers. THErefore, the complaint is liable to be dismissed. The points that arise for consideration are : 1. Whether there was any delay on the part of the opposite party in the shipment of the cargo? 2. Whether there was deficiency on the part of the opposite party in failing to inform the complainant that the consignee had failed to take delivery of the goods or in failing to issue an irregularity certificate as pleaded by the complainant? 3. Whether the opposite party had given false information about the fate of the consignments at the destination ?

Whether the opposite party was guilty of negligence in handing over the goods to the new purchasers without first obtaining the properly endorsed air way bill from them? 4. Point No. 1 : The case of the complainant appears to be that the opposite party undertook to deliver the goods in Korea on 30.6.1993. This is denied by the opposite party. The air way bill is the contract between the shipper and the carrier. The Air Way Bills Ex. A-4, A-7, A-10, A 13, A-16, A-19 and A-22 do not contain any terms regarding the time of delivery of the consignment by the opposite party. This being the case, the consignment shall be delivered by the opposite party at Korea within a reasonable time of shipment. And further the complainant had first handed over the consignments to their cargo agent M/s. Skylift Cargo Private Ltd and they in turn the had handed over the consignment to the carrier. A perusal of the air way bills show that all the consignments have been handed over to the opposite party by M/s. Skylift Cargo Pvt. Ltd. only beyond 30.6.1993. This clearly establishes that there could not have been any undertaking by the opposite party that the consignment would be transhipped to Korea on or before 30.6.1993. In these circumstances, rightly the learned Counsel appearing for the complainant himself has, during the course of the arguments, conceded that there is no evidence to show that the opposite party agreed to deliver the goods on or before 30.6.1993. For these reasons, accusation that the opposite party failed to tranship the goods to Korea on or before 30.6.1993 falls to the ground.

POINT No. 2 : According to the complainant the consignee has taken delivery of the cargo of one consignment and it failed to take delivery of the cargo of the remaining six consignments, and regarding this the opposite party has not intimated the consignor. As per Rule 13(2) in the I Schedule to the Carriage by Air Act, 1972, "Unless it is otherwise agreed, it is the duty of the carrier to give notice to the consignee as soon as the goods arrive."

Even in the conditions of carriage of Korean Airlines, under Article 9(2), it is stated as follows : "2. Delivery to Consignee Except as otherwise specifically provided in the air way bill, delivery of the consignment will be made only to the consignee. However, if a person to be notified is specifically indicated in their way bill, delivery to the consignee shall be considered to have been effected when arrival notice has been made in advance in accordance with Paragraph 1 above, and the consignment has been delivered to such person indicated on the air way bill as the person to be notified."

In the present case, according to the opposite party carrier as per the contract between them and the consignor, they have to notify the arrival of the goods to one M/s. Ssang Yong Corporation who are the buyers. This is evidenced from the air way bills themselves which show that M/s. Ssang Yong Corporation as the persons to be notified. The notified person would get the air way bills and the delivery order and the cargo will be taken possession of by the Customs for their formalities. Thus, the responsibility of the carrier will be over by delivery of the air waybills and the delivery order to the notified person. Thereafter it is the responsibility of the consignee to take delivery of the goods from the Customs. In this case, it is not in dispute that the opposite party has delivered the air way bills and the delivery order to the notified person. Therefore, if thereafter the consignee has not taken delivery of the goods, the opposite party carrier would not be responsible for that. The air freight had also been paid. In such circumstances, there is no rule or terms of contract that the opposite party carrier would be in any way liable to the consignor because of the failure on the part of the consignee to take delivery of the goods. Hence, there is no point in the accusation by the complainant that the opposite party failed to inform the complainant of the consignee''s failure to take delivery of the goods excepting the goods in respect of one air way bill. The complainant has not shown anything that warrants issue of an irregularity certificate by the opposite party about the failure of the consignor to take delivery of the goods. Ex. A-23 is the letter dated 23.7.1993 written by the complainant to the opposite party. There, it is stated that the complainant has understood that the consignee has taken delivery of the cargo under only one air way bill and they did not take delivery of the cargo of the remaining air way bills. No whisper has been made about any default on the part of the opposite party that they have not informed the complainant about the consignee not taking delivery of the cargo, and it has been further stated in that letter that men of the complainant would be visiting Seoul to make alternative arrangements, and the opposite party had been requested to make arrangements for the safe keeping of the cargo. In their further letter Ex. B-10 dated 23.9.1993, the complainants have written to the opposite party that since the cargo had not been cleared they were changing the consignee, and they have also given the name of the new consignee and the new notified party, and they have further requested the opposite party to issue new air way bills to the complainant to forward them to the Bank. Al these show that the complainant knew even at the earliest point of time after the cargo arrived at the destination that the consignees were not clearing the goods excepting one consignment for some reasons, which the complainant alone knew. In these circumstances, there is no merit or substance in the allegation against the opposite party now that they failed to give information to the complainant that the consignee had not taken delivery of the goods or they failed to give an irregularity certificate regarding this as alleged by the complainant. 6. Point No. 3 : It is alleged by the complainant that by their letter Ex. A-24 dated 29.7.1993, the opposite party had misinformed the complainant that the consignee had taken delivery of all the consignments. As regards this, the contention of the opposite party is that they intended to convey that all the air way bills have been picked up at the destination, and it was by mistake it has been stated that the entire cargo had been delivered to the consignee. Ex. A-24 letter has been sent by the Madras office of the opposite party after they had made enquiries with their office at Seoul. It is quite possible that the Madras office had committed a mistake in not properly getting the message from the Seoul office. Here it may be noted that even earlier, i.e., on 23.7.1993, the complainant had written as aforesaid Ex. A-23 letter to the opposite party wherein they had categorically stated that they had understood that the consignee has taken delivery of only one. cargos and not the remaining six cargo. The opposite party would not stand to gain by giving a wrong information as alleged. Therefore it cannot be held that the opposite party was guilty of deficiency in service in giving any wrong information to the complainant.

POINT No. 4 : It is contended by the complainant that the opposite party is guilty in delivering the remaining goods to the proposed purchaser without obtaining necessary endorsement in the air way bills to the effect that they had paid the bill amount. But it is not stated as to whom the bills should have been paid. According to the opposite party, if the new purchaser had taken delivery of the goods which were kept in bonded Customs ware house, they had nothing to do with it because they had already handed over the air way bills to the notified person and had parted with the goods. It is not the case of the complainant that they had instructed the opposite party to hand over the goods to the new proposed purchaser when they get an endorsement of payments in the air way bills. The complainants on their own initiative have substituted a new buying party in the place of the old buyer and the opposite party had absolutely no role to play in it. The foreign Bank viz. Cho Hung Bank the consignee under the original airway bill, had also nothing to do with the transaction between the complainant and the proposed new purchaser. Admittedly/before and even after filing of this complaint, the complainant has received payments from the new buyer. In these circumstances, there is absolutely no point in saying that the opposite party has delivered the goods to the new purchaser without verifying whether he had paid the sale price to the Bank or any body else. It is relevant to note that the new buyer has not been made a party. It appears that the new buyer has failed to discharge his burden of making full payment and to make good the loss, the complaint has been filed against the opposite party because they alone are within the jurisdiction of this Commission. Thus considering, we find no merit in the complaint. Accordingly, we dismiss the complaint. However, there will be no order as to costs. Complaint dismissed.