ENCEE AROMATICS LTD. vs AIR INDIA

IN this complaint, the complainant has sought the following reliefs :- "The complainant most respectfully prays that the Hon''ble Authority be pleased to pass judgment and decree or award as the case may be against the respondents 1 and 2 jointly and severally directing them to pay the sum of Rs. 9,77,611/- to the complainant with current interest at 21% per annum on Rs. 7,05,856/- from today, till the date of payment and award costs also."

Opposite Party No. 1 is M/s. Air INdia and opposite party No. 2 is M/s. National INsurance Co. Ltd.

THE complainant M/s Encee Aromatics Limited, Vellipalayam Road, Mettupalayam 641 301, Coimbatore District, Tamilnadu, sold and despatched 30 kgs. of Jasmine Absolute worth Rs. 6,63,000/- (United States Dollars 39000) under Invoice No. EXP/184/90, dated 8,10.90 to M/s. Florasynth Inc., New York, USA, as per Ex.Cl. THE above cargo was sent by Air, that is, through opposite party No.l from Bangalore via Bombay to New York under Insurance Cover with the 2nd opposite party for a sum of Rs. 7,50,750/-, U.S. Dollars 42900. THE said cargo was received by the purchaser at New York. As far as this consignment is concerned, there is no dispute, it was despatched as averred by the complainant and was received at New York by M/s Florasynth Inc. New York. It is the case of the complainant that the said cargo on receipt by M/s Florasynth Inc., examined and rejected the same.

M/s. Florasynth Inc., New York, despatched a cargo ''FRT to Pay Basis'' from New York to the complainant under Air Waybill No. 098-4509 1852 dated 5.12.1990 as per Ex.R1.

IT is the further case of the complainant that he received a Fax message dated 4.1.1991, from M/s. Florasynth Inc., New York on 10.1.1991 that the purchaser had returned the cargo to the complainant by Air India under Air Waybill, Ex.R1, on the ground that the cargo did not conform or tally with the sample. The specific averment of the complainant, in this regard, at para (5) of the complaint reads as under :- "The complainant submits that the purchaser M/s. Florasynth informed the complainant by Fax message dated 4.1.1991, received by the complainant on 10.1.1991 to the effect that the purchaser had returned the cargo to the complainant by Air India under A.W.B. 09845091852, dated 5.12.90 from the 1st respondent on the ground that the cargo did not conform or tally with the sample."

The complainant, thereafter on 24.1.1991 made a proposal for an insurance cover with the opposite party No. 2 for Rs. 7,25,400/- U.S. Dollars 39000-under transit policy in regard to the said cargo returned by the purchaser to the complainant under Ex.R1 as per Ex. R7. Nextly, it is the case of the complainant that he received a Fax message from the common agent Dr. Seymour Lemberg on 27.1.1991, as per Ex.C7 that the returned cargo was lying in Bombay Airport in a damaged condition. The complainant, thereafter, on 29.1.1991 requested M/s. Air Freight Limited, as per Ex.R9 for making arrangements to make open inspection while clearing the cargo from customs authorities and also informed and requested opposite party No. 2, as per Ex.R12 on 8.2.1991 to assess the damage to the cargo which was lying at Bombay Airport.

THE complainant further averred that M/s. Florasynth Inc., New York, had delivered the said cargo to opposite party No. 1 in leak-proof packages. THE total value of which was Rs. 7,05,856/-. The complainant averred that opposite party No. 1 never informed either the consignor or the consignee, the complainant about any leakage in the packages, but on enquiry, opposite party No. 1 informed the complainant by its letter dated 7.2.1991 from Bangalore office that the cargo had been abandoned at Bombay Airport. The complainant, when he did not receive the cargo, made claims with opposite party Nos.l and 2 for the value of the consignment, and on the refusal by both, filed the complaint claiming the relief as referred above. The opposite parties filed their statement of objections. It is not disputed by opposite party No. 1 that M/s. Florasynth, Inc., New York, despatched a cargo under Air Waybill as per Ex.R1. Opp.party No. 1 further stated that the said cargo was damaged in transit from New York to Bombay. On arrival at Bombay, it was found to be totally leaking and it could not be further sent to Bangalore in such a damaged condition, and so the said cargo was removed at the Import Warehouse at Bombay.

OPPOSITE party No. 1 further averred a Telex message on 17.12.1990 was sent as per Ex.R3 to Freight India, New York and at Bangalore Office stating that the cargo was abandoned, as it was damaged in transit.

OPPOSITE party No. 1 further averred that under Air Waybill Ex.R1, in which the said cargo was despatched from New York by M/s. Florasynth Inc., M/s. Florasynth Inc., had declared the value of the cargo for Carriage as Max Free. The value of the cargo was declared only for the purposes of customs and so the complainant was entitled only 20 U.S. Dollars per kg. of goods lost. Opposite party No. 1 further averred that opposite party No. 1 took all care in handling the cargo but the cargo got damaged in transit.

Opposite party No. 1 further averred that having regard to the facts and in the circumstances of the case, the complainant cannot be classified as a ''consumer'' under the provisions of the Act, as because the cargo was sent by M/s. Florasynth Inc., New York under Air Waybill Ex.Rl on ''FRT to Pay Basis''. Therefore, there was jural relationship between Air India and M/ s. Florasynth Inc., and not between the complainant and Air India. So, the complaint was untenable under law.

OPPOSITE party No. 1, on the basis of these averments, sought the complaint to be dismissed. Opposite party No. 2 also averred that the complainant cannot be classified as a ''consumer'' and the complaint was untenable under the provisions of Law.

OPPOSITE party No. 2 further averred that the cargo was despatched from New York under Air Waybill, Ex.Rl on 5.12.1990. Admittedly, the complainant received the information regarding this despatch of the cargo on 10.1.1991 asperEx.C4. But the complainant approached opposite party No. 2 for insurance cover only on 24.1.1991 as per Ex.R7. The complainant was even aware by 24.1.1991 that the consignment had already arrived at Bombay and had been abandoned. But the complainant did not disclose this material fact to opposite party No. 2 while making a proposal for insurance cover. OPPOSITE party No. 2 further averred that the complainant knowing fully well that subject matter of the insurance had already ceased to exist by 24.1.1991 but suppressed this material fact to opposite party No. 2 while seeking insurance cover on 24.1.1991. OPPOSITE party No. 2, on the basis of these averments, sought the complaint to be dismissed. During enquiry, complainant filed the affidavit of its Vice-Chairman and got Exs.C1 to C23, marked in evidence. Opposite party No. 1 filed the affidavit of its Officer in Cargo Division, Air India, Bangalore and got Exs. R1 to R6, marked in evidence.

OPPOSITE party No. 2, filed the affidavit of its Asstt. General Manager, Madras, and got Exs.R7 to R46, marked in evidence. "All the documents, Exhibits C-series and R-series were marked in evidence with the consent of the learned Counsel for the parties."

HAVING regard to the pleadings of the parties and the submissions made by the learned Counsel for the parties, the only point that arises for our consideration is whether : (a) there was any deficiency in services rendered by the opposite parties; and in consequence of which (b) the complainant did suffer any loss or injury; and if so, (c) to what compensation, the complainant is entitled to?

Before" considering the evidence, it is necessary to notice, a preliminary objection raised by the opposite parties. The objection raised was that the complainant cannot be classified as a ''consumer'', nor the allegations contained in the complaint can be classified as a ''complaint'' as per the provisions under Sections 2(1)(d) and 2(1)(c) of the Consumer Protection Act, 1986.

Another preliminary objection raised was that there was no journal relationship between Air India and the complainant - the consignee and so the Commission had no jurisdiction to entertain the complaint under the provisions of the Consumer Protection Act, 1986.

THE objections of the opposite parties were to fail. Though of course, consignor of the Cargo is M/s. Florasynth Inc., New York and the complainant is only a consignee, and it was M/s. Florasynth Inc., who had hired the services of opposite party No. 1, the provisions of Section 2(1)(d) provide that ''consumer'' includes any beneficiary of such services other than the person who hires the services for consideration. So, in the present case, though services of opposite party No. 1 were hired by M/s. Florasynth Inc., but the complainant is a beneficiary of such services hired by M/s. Florasynth Inc., New York. So, the objection of opposite party No. 1 that the complainant had no right to file the complaint has to fail.

THE another objection raised was that the deficiency on the part of the carrier amounts to a breach of contract under the General Law and so the complaint of the complainant was untenable has also no substance. The National Commission, considering this aspect of the matter in Synco Textiles Pvt. Ltd. v. Economic Transport Organisation and Others, reported in Vol. I (1991) CPJ page 40 (NC), it held as under :- "That the mere fact that the default or deficiency on the part of the carrier may also amount to a breach of contract under the general law will not in any way affect the jurisdiction of the Forums set up under the special law namely, the C.P. Act (hereinafter called the Act). Once it is found that there is a hiring of service for consideration and that loss has been caused to the complainant on account of neglect and deficiency in rendering the service, the aggrieved consumer is entitled to seek his remedy under the C.P. Act by approaching the appropriate Redressal Forum. Every transaction of hiring of service may amount to a contract in the eye of law and any deficiency in rendering the service may technically a breach of contract but merely for that reason that consumer cannot be denied the benefit of the protection conferred by the Act. While, ordinarily, claims arising out of breach of contract will have to be agitated before the regular Civil Courts, grievances relating to loss or injury caused on account of negligence and deficiency in the performance of services which are hired for consideration have been classified for special protection under the Act, and in such cases the aggrieved consumer is entitled to invoke the jurisdiction of Redressal Forums constituted under the Act, seeking relief as specified in the Act."

It is clear from this decision, that the grievances relating to loss or injury on account of negligence and deficiency in the performance of the services which are hired for consideration have been classified for special protection under the C.P.Act, even though the transaction of hiring of services may amount to be a contract in the eye of law. For the above reasons, we hold that the complainant is a ''consumer'' within the definition of Sec. 2(1)(d) of the C.P. Act and the complaint under the provisions of the Act is tenable.

BEFORE we consider the liability of opposite party No. 1, it is necessary to consider the liability of opposite party No. 2-Insurance Company.

THE complainant made a proposal to opposite party No. 2 for the first time with regard to cargo that was sent under Ex.R1, Air Waybill on 24.1.1991 under Ex.C6. It is not disputed that by that date, the complainant was aware of the fact that cargo was despatched by M/s. Florasynth Inc., New York, under Air Waybill, Ex. R1 on 5.12.1990. He has admitted this fact, as referred above, at para (5) of his complaint that he received the said message on 10.1.1991. The recitals contained in Ex.C-6 do show that the complainant did not disclose this fact to opposite party No. 2. The material part in Ex.C6, in this regard, reads as under :- "Due to various reasons our above buyer has rejected the above material and returned the same to India. We request you to kindly cover transit insurance for the above material from New York to our Factory at Vellipalayam Road, Mettupalayam. Further particulars in this regard will be sent to you as soon as we receive the same from the above buyer."

It is clear from the recital in this letter, that the fact that the cargo was despatched by Air India on 5.12.1990 itself from New York was not disclosed.

IT is the case of the complainant that he received message from the common agent at New York Dr. Seymour Lemberg on 28.1.1991, stating that the cargo was lying at the Airport in Bombay in a damaged condition. The complainant on receipt of this message by his letter on 29.1.1991, as per Ex. R9 requested M/s Freight, Bangalore, for making arrangements to make open inspection, while clearing the cargo from customs authorities. The complainant wrote a letter as per Ex. R10 on 31.1.1991 to opposite party No. 2 sending Air Waybill Ex.R1. Even in that letter, the complainant did not disclose the fact that the cargo was already lying in Bombay Airport in a damaged condition and it has been abandoned or destroyed. The complainant was aware of these facts even by 28.1.1991. But he did not disclose this material fact to opposite party No. 2.

OPPOSITE party No. 2 issued Marine Cargo Transit Policy as per Ex.C9 regarding this cargo to the complainant on 5.2.1991. That shows that transit insurance was from New York, Bombay, Coimbatore by Air Thence to Mettupalayam by Road. It was contended by the complainant that opposite party No. 2 confirmed the issue of transit insurance cover for the cargo by its letter on 25.1.1991 as per Ex.R8, and so, it cannot be said that the complainant did suppress any material fact to opposite party No. 2 while seeking the insurance cover for the cargo. As detailed above, it is clear that even though complainant became aware of the fact that the cargo was despatched from New York by Air India Freight on 5.12.1990 by 10.1.1991, but he did not make a proposal for transit insurance cover till 24.1.1991. The complainant admittedly became aware of the fact that the cargo was lying in Bombay Airport in a damaged condition and it was abandoned by 28.1.1991, but he did not disclose even this fact to opposite party No. 2, when he wrote a letter as per Ex. R-10 on 31.1.1991 sending Air Waybill, Ex. R1 to opposite party No. 2. These were very serious and material facts when the complainant was claiming transit insurance cover from New York to Mettupalayam on 24.1.1991, which the complainant did not disclose to opposite party No. 2.

OPPOSITE party No. 2 on receipt of the claim instituted investigation and enquiry, Enquiry Report Ex.R-38, the material part of it reads as under : - "Further more vide Fax message dated 4.1.1991, message was given by the M/s. Floresynth informing that the consignment have been sent by Air India 112 vide Airway Bill No. 098-4509-1852 via Air India Flight No. 112 Newyork-Bombay, connect FLT 596 Bangalore and the remarks on the Fax message shows that M/s. Encee Aromatics Ltd., had received the message on 4.1.1991. From the relevant papers in the claim-file it can be said that M/s. Encee Aromatics Ltd., had sufficient time to know and were aware that the returned/refused parcels were reimported vide Airway Bill No. 098-4509-1852 dated 5.12.90 via Air India FLT No. 112 by Bombay connecting FLT 596 to Bangalore and M/s. Encee Aromatics Ltd., had sufficient time to approach the Insurers to obtain the policy as soon as they came to know about the returning of the parcels by the above flight of Air India. However, in the file we do not find the copy of the letter dated 7.2.1991 issued by the Asst. Manager, Cargo Claims, Air India, it is clear that they had sent a telex intimation to cargo Section of Air India, Bangalore, on 17.12.90 and as such we feel that M/s. Encee Aromatics Ltd., might have come to know about the abandonment of the consignment at Bombay before they approached the underwriter for obtaining the policy for the re-import of the consignment."

THIS is a document marked in evidence with the consent of the learned Counsel for the parties. It is evident, that the complainant by the time, he made proposal seeking transit insurance policy on 24.1.1991 with opposite party No. 2 was aware of the fact that the cargo had already left New York on 5.12.1990 and was abandoned or destroyed on 12.12.1990 at Bombay Airport. These material facts were not disclosed by the complainant to opposite party No. 2. Having regard to these facts and in the circumstances of the case, we hold and record that there was no deficiency of service on the part of opposite party No. 2, while it repudiated the claim made by the complainant.

It is to be considered now whether there was any deficiency of service committed by opposite party No. 1 M/s. Air India.

IT is not disputed that M/s. Florasynth Inc., New York gave a consignment to opposite party No.1 at New York as per bill of lading Ex. R6(a). Opposite party No. 1 issued Air Waybill Ex.R1 on 5.12.1990 for the said cargo. The said cargo was booked at New York to Mettupalayam via Bangalore. IT is also admitted that the said cargo was not delivered to the consignee as it was abandoned at Bombay as per Ex.C-10, a letter of opposite party No. 1 to the complainant on 13.2.1991. Opposite party No. 1 has stated that the cargo was received at Bombay Airport in a damaged condition and leaking, and so, it was abandoned. Opposite party No. 1 has not placed on record the relevant materials to show as to how the said cargo was handled by opposite party No.l, when it has admitted that the cargo was received at Bombay Airport.

OPPOSITE party No. 1 has pleaded that the cargo was abandoned; that is removed to another godown by the airport authorities. No material has been placed on record to show that which was the godown to which it was removed and stored. OPPOSITE party No. 1 also has not placed on record any material as to how subsequently the said cargo was either kept stored or destroyed. So, it is clear, from this material on record that opposite party No. 1 did act negligently in handling the cargo when it received it at Bombay Airport by not transmitting the same to the consignee and in not placing on record the relevant material to show as to how the said cargo was handled at Bombay Airport. Having regard to these facts and in the circumstances, we hold and record that opposite party No. 1 did commit deficiency in service, and in consequence of which, the complainant did suffer loss and injury. Now it is to be considered to what compensation the complainant is entitled to? The complainant has claimed compensation in a sum of Rs. 7,50,750/- the value of the cargo which he had sent to M/s. Florashynth Inc., New York, under Ex. C1 invoice.

IN the present case, we are not concerned with the cargo that was sent by the complainant to M/s Florasynth INc., at New York under Ex.C1. IN the present case, we are concerned with the cargo that was sent from New York via Bombay, Bangalore, Mettupalayam by Florasynth INc., to the complainant under Ex. R1. Ex. R6(a) is the bill of lading under which M/s. Florasynth INc., delivered the cargo to opposite party No. 1 at New York, and for which, opposite party No. 1 issued Airway Bill as per Ex.R1.

BILL of lading Ex. R6(a) showed that the weight of the cargo as 90 Lbs and the value of the cargo shown thereunder reads as under :- "Essential oils, aromatic chemicals, essential oils & aromatic chemicals mixture, value not to exceed 50 cents per pound." It is clear from this that the consignor M/s. Florasynth Inc., while delivering the cargo for transport to opposite party No. 1 declared the value of the cargo at 50 cents per Lb.

Opposite party No. 1 issued Air Waybill Ex.R1 regarding the said cargo. The weight of the cargo was shown as 90 Lb. The value of the cargo for carriage was shown as Max Free, declared value for customs was shown as 39175 US Dollars. Therefore, it is clear for the purposes of carriage, the value of the cargo delivered by the consignor to opposite party No. 1 for carriage was Max Free.

EX. R2 is the conditions of contract attached to Air Waybill EX. R1. Condition No. 4 reads as under : - "EXcept as otherwise provided in Carrier''s tariffs or conditions of carriage, in carriage to which the Warsaw Convention does not apply Carrier''s liability shall not exceed US$ 20.00 or the equivalent per kilogram of goods lost, damaged or delayed unless a higher value is declared by the shipper and a supplementary charge paid."

That shows that the carrier''s liability shall not exceed 20 U.S. Dollars per kg. Condition No. 5 reads as under;- "If the sum entered on the face of the Air Waybill as ''declared Value for Carriage" represents an amount in excess of the applicable limits of liability referred lo in the above Notice and in these Conditions and if the shipper has paid any supplementary charge that may be required by the Carrier''s tariffs, conditions of carriage of regulations, this shall constitute a special declaration of value in this case Carrier''s limit of liability shall be the sum so declared. Payment of claims shall be subject to proof of actual damages suffered."

That shows that if the declared value for carriage represents an amount in excess of the liability of the Carrier as provided under condition No. 4, the consignor has to pay supplementary charges that require by the Carrier''s tariff conditions of carriage. In the present case, no such excess or additional amount was declared nor any supplementary charges were paid by the consignor.

THE complainant has admitted that the cargo that was despatched from New York was a rejected material. Complainant wrote a letter to opposite party No. 2, as per Ex.R24 on 8.8.1991 specifying the reasons for rejecting the material by M/s Florasynth Inc., New York at para (2) in the said letter, which reads thus :- "The reasons given are :- (i) Odour Unacceptable. (ii) Benzyl Acetate is over 30%. (iii) All containers have suspended material, probably waxes. (iv) This material unlike the previous lot J86 which was delivered last year. (v) The fact that it was labelled J86 caused concern that it was old material."

Ex. R6(b) is the Quality Control Report regarding the said material which reads as under :- "Odor oxide. Prunella like Physical appearance turbiel heavy precipitation present. Colour dark." This would go to show that the same value can not be ascribed to this cargo as that of Jasmine Absolute.

THE complainant has not placed on record any other material to show the value of the cargo that was sent from New York under Ex.R1.

THE learned Counsel for the complainant relied upon the decisions in M/s. Agarwalla Air Transport v. Md. Nasratulla reported in AIR 1959. Calcutta Page 755, M/s. Gita Godha Pvt. Ltd., New Delhi v. M/s. Pan American World Airways, Delhi Airport, reported in AIR, 1983, Delhi page 356 and Air India v. S.V. International reported in ILR 1985 Karnataka, page 3983, and submitted that the complainant was entitled to the full value of the cargo as sent to Florasynth Inc., New York, under Ex. C1. In all these cases, the carrier was claiming his liability as limited to a sum of 250 Francs per K.G. under Rule 22(2) of the First Schedule of the Carriage by Air Act, 1972, even though the value of the goods consigned was declared for carriage and was proved by the claimant. THE Court awarded the full value declared and proved of the consignment and held that the wilful misconduct of the Carrier was established under Rule 25 of the Schedule, and so, carrier was not entitled to the protection afforded to him by Rule 22(2) of the Schedule. In our opinion, in the present case, the complainant is not entitled to the value of the cargo sent by him to New York under Ex.C1. The complainant is entitled to the value of the cargo that was consigned in New York under Ex.R1 as per Bill of lading under Ex. R6(a).

The consignor himself under Ex.R(6)a, Bill of lading has declared the weight of the cargo as 90 Lb and the value of which not exceeding 50 cents per pound.

IN the Air Waybill, Ex. R1, the value declared for carriage is virtually nil; declared value for carriage is stated as Max Free. Having regard to the fact that the material was not genuine one, it was mixed with so many extraneous materials as per Quality Control Report as per Ex. R6(b) and the letter of the complainant himself as pef Ex. R-24. Having regard to the fact that it was not genuine, the purchaser rejected the said material and sent it back to the complainant. So, in our opinion, having regard to these facts, the complainant is not entitled to the value as claimed by him as per Ex. C1. The complainant has not placed any other material to show the exact or approximate value of the cargo.

OPPOSITE party No. 1, the carrier has admitted to pay 20 U.S. Dollars per kg as per condition No. 4 of Air Waybill to the complainant. The cargo that was sent by M/s Florasynth Inc., was 30 kg in weight. So, as per 20 U.S. Dollars per Kg, the complainant would be entitled to 600 US Dollars in all. The equivalent value in the Rupee currency of which would be US $ 600x31, equivalent to Rs. 18,600/-. We award this amount of Rs. 18,600/- to the complainant towards the value of the cargo. The complainant has admittedly lost the cargo and was deprived of it since 5.12.1990, and so, in our opinion, the complainant is necessarily to be compensated for the same. We award interest on this amount of Rs. 18,600/- at 18% p.a. from 5.12.1990 till date of payment to the complainant. In the result, therefore, this complaint is allowed in part. Opposite party No. 1 is directed to pay the complainant a sum of Rs. 18,600/- with interest at 18% p.a. from 5.12.1990 till the date of payment. The opposite party No. 1 shall also pay a sum of Rs. 2,500/- towards costs to the complainant. Opposite party No. 1 shall pay the sums so awarded to the complainant within a period of 8 weeks from the date of this order. The complaint as against opposite party No. 2 fails and it is dismissed. Complaint allowed in part.