OLD VILLAGE INDUSTRIES LTD. vs AIR INDIA

THIS Original Petition under Section 21 of the Consumer Protection Act, 1986 by M/s. Old Village industries Ltd. was originally directed against Air India but subsequently the prayer of Air India for impleadment of KLM Royal Dutch Airlines (for short called K.L.M.) as additional opposite party was allowed by this Commission in the order dated 11.1.95.

THE facts which are not in dispute may be first noticed. THE complainant through its agent M/s. A.T. Travels, New Delhi entrusted to Air India 100 packages of ready-made garments for carriage from New Delhi to MANZINI/ MOPUTO, Swaziland. Photo copies of two Air- way Bills bearing No. 098-5671 8056 for 40 packages and 098-5671 8060 for 60 packages are on record and contain all the particulars of the bookings. 40 packages contained readymade garments of cotton mill made (Denim) Ladies Jacket QTY. 1000 pieces. 60 packages contained readymade garments of Cotton P/L ladies Jacket Style No. 98-910 Qty. 1500 pieces. A total sum of Rs. 1,19,615/- (Rs. 47,640.50 plus Rs. 71,913.75) was paid by the Complainant to Air India as freight charges. THE consignee named in the Air Waybills was M/s. A & M Imports Exports Pvt. Ltd., Swazi Plaza, Mbabane, Swaziland and the party to be notified on arrival of the shipment at destination was M/s Tivershield Ltd., 1st Floor, Linton House, 24, Wells Street, London, WIP, 3FG, U.K. THE Airway Bills contain an endorsement to please inform consignee on arrival of cargo. The complainant alleged in the complaint that it did not hear about the delivery of the said consignments at the destination for a considerable period and after making enquiries from Air India it was learnt that the consignments were mishandled by Air India and instead of carrying the same to the place of destination, wrongly carried them to Nairobi, but no flight details were furnished. The complainant by its detailed letter dated 20th June, 1990 wrote to Air India that since they had failed to deliver the consignments at the place of destination, they were liable to pay the claim resulting from non- delivery/mishandling of the shipments in the sum of Rs. 26,10,865/-. The letter dated 20.6.90 was acknowledged by Air India in its letter dated 12.7.90 assuring that "we are concerned that your shipments have been mishandled" and that investigation were being carried out and they would revert once the investigations were through. As there was no further report of investigation, the complainant sent a legal notice dated 9,11.90 through Counsel. The complainant was informed by Air India letter dated 5.11.90 that the shipments covered under Airway Bill No. 098-56718060 dated 21.3.90 were collected by the named consignee on 29.8.90. The complainant pursued its claim with Air India through another legal notice dated 27.12.90 and by complainants'' letters dated 7.6.91, 3.9.91,10.12.91, 22.4.92 and 15.6.92. The Air India in its letter dated 6/10.8.92 wrote that the complainant''s claim was not tenable. The complainant again issued another legal notice dated 18.9.92 through Counsel. The complainant further averred that Air India has been negligent in handling of the shipment resulting in the loss of the consignments and consequential financial loss to the complainant. Air India as the carrier of the consignments has failed, according to the complainant, to discharge its contractual obligations resulting into non-delivery of the shipments to the consignee/ notified party and the complainant would not have suffered financial loss had Air India acted in accordance with the contract and law and not with mala fide intentions, ulterior motive, gross carelessness and negligence. The Complainant claims to be a consumer as defined by Section 2(1)(d) of the Consumer Protection Act, 1986 (hereinafter called the Act) inasmuch as it hired the services of Air India for a valuable consideration and the service rendered by Air India is deficient as it failed to carry and deliver the consignments. The complainant has claimed several reliefs including the price of the consigned goods as per the Airway Bill (Rs. 7,62,500/-), freight charges (Rs. 1,19,615/-), loss on account of duty draw back, (Rs. 68,625/-), loss of profit on REP (Rs. 20,000/-), post shipment benefits (Rs. 50,000/-), possible claim from buyers loss on potential business and adverse effect on current production (Rs. 3,50,000/-), simple interest at the rate of 18% on the said amounts (Rs. 8,24,158/-), Reserve Bank of India 100% amount to be recovered from the complainant due to involvement of foreign exchange (Rs . 7,62,500/-), 100% penalty to be imposed under FERA Act (Rs. 7,62,500/-), legal expenses (Rs. 50,000/-) and compensation for loss (Rs. 2,00,000/-) in all Rs. 39,69,898/- against Air India beside pendente lite interest.

On being noticed, Air India has filed its written version. Air India has raised two preliminary objections namely that the present complaint is barred by limitation under Section 244 of the Act and that the complainant''s right to claim damages has been extinguished under the provisions of Rule 30 of second schedule to the Carriage by Air Act, 1972. On facts it is not denied that the Complainant handed over to Air India two consignments of 40 and 60 packages respectively, of ready-made garments for carriage from New Delhi to Swaziland as per the said Airway Bills. The stand is that as the Air India does not operate flights to Swaziland it transported the consignment to Nairobi being the point closest to Swaziland on 30th March, 1990 and handed over both the consignments to Kenya Airfreight Handling Limited who are the Handling Agents of several Airlines including Air India at Kenya. The said Kenya Airfreight Handling Ltd. issued a clean Cargo Transport Manifest dated 30th March, 1990 to Air India and forwarded part of the consignment of 40 packages, in all 20 packages to Swaziland, i.e. the place of final destination, on Air Swaziland Flight No. ZC, 303 on 4th April, 1990. It is pleaded that due to the space constraints, the remaining packages viz. the balance of 20 packages of one consignment and 60 packages of second consignment, could not be forwarded on the said flight or on subsequent flights to Swaziland. The said handling agent handed over the remaining packages of the consignments to KLM for being carried to final destination via Johannesburg. Though KLM accepted the said consignments for carriage to Swaziland they carried them upto Johannesburg only on 13th April, 1990 and failed to carry the same to Swaziland on the ground of space constraints. It is pleaded that KLM stated that the consignee was not responding to the notification letter sent from KLM''s Johannesburg office and KLM requested Air India to contact the shippers and obtain alternate disposal instructions. Further, Air Swaziland, also sent a telex dated 6th June, 1990 to Air India, as regards the 20 packages (which telex they copied to the KLM) referring to the consignment of 60 packages and stating that they were unable to locate the consignee in Swaziland. It is pleaded that obviously Air Swaziland was trying to communicate to KLM that in any event there would be no point in the goods being sent to Swaziland as the consignee was not contactable. In fact Air Swaziland had earlier on 14.5.90 sent a telex message to the Air India referring to the consignment of 40packages and stated that Air Swaziland was unable to locate the consignee and they requested the Air India to check airport of destination. It is pleaded that Air India by its telex dated 6th June, 1990 addressed to Mr. Dherendra, Advocate of the complainant, reported to the complainant that the consignment of 60 packages had been forwarded on KLM''s Flight No. 591 on 13th April, 1990 from Nairobi to Johannesburg, that KLM had been'' unable to forward the consignment to Manzini due to space constraints and inspite of reminders, the consignee was not contacting KLM at Johannesburg and that KLM was requesting for the shippers disposal intructions. This telex also stated that in regard to other consignments i.e. of 40 packages, the complainant should request the consignee to contact Air Swaziland at Manzini, Swaziland, directly.

IT is further averred by Air India that the complainant did not respond to the said telex of 6th June, 1990. Thereafter, KLM sent another telex dated 22nd August, 1990 again stating that they were unable to forward the consignments to final destination due to limited capacity on flights from Johannesburg to Swaziland and KLM again asked for alternative disposal instructions from Air India. Accordingly, Air India by its letter dated 28th August, 1990 communicated this factual position to the complainant and requested the complainant to give alternative instructions. As no instructions were forthcoming from the complainant and no alternative instructions were given to KLM, KLM sent another telex on 28th August, 1990 requesting Air India to ask shipper and advise them the consignee''s telephone or fax number or their address so that KLM could arrange to forward the consignment by road. The submission is that Air India did everything within its power to ensure that the consignment reach its destination but Air India was helpless in the matter. It is then pleaded that the alleged loss occurred while the goods were in the possession and custody of successive carrier within the meaning of Warsaw Convention, KLM who actually took the delivery under a clear Transfer Manifest and agreed to carry the same to final destination. Air India prayed that KLM may be joined as a party to the complaint. An application was also moved by Air India to the same effect. The prayer of Air India for impleadment of KLM Royal Dutch Airlines as additional opposite party in the case was allowed by this Commission in its order dated 11th January, 1995. Air India was called upon to take out notice of the petition to the KLM. KLM has entered appearance and filed their written version.

KLM in its written version has taken a preliminary objection that Air India has no locus standi to seek impleadment of KLM as a party in the complaint filed by M/s. Old Village Industries against Air India. The plea set up is that the claim of the complainant against KLM is not maintainable in India in terms of Clause 29 of Schedule-II to the Carriage by Air Act, 1972 as the registered office, the principal office, principal place of business of KLM are in Amsterdam, Netherlands, that the contract to carry consignments was not made by KLM in India and that none of the conditions of Clause 29 of Schedule II are satisfied to enable the complainant to bring an action in India. It is further pleaded that the complaint filed is barred by time qua KLM both in terms of Clause 30 of the Schedule II to the Carriage by Air Act, 1972 and also in terms of Section 24A of the Consumer Protection Act, 1986. On facts the case set up is this. In normal course KLM received two consignments of 20 packages and 60 packages respectively from Kenya Air Freight Handling Limited on 30th March, 1990 at Nairobi for shipment to Manzani, Swaziland via Johannesburg. KLM carried the consignments to Johannesburg and was due to handover the consignments to Air Swaziland at Johannesburg. Air Swaziland could not carry the consignments to Manzani due to limited capacity. KLM sent notices to the consignee calling upon the consignee to take delivery of the consignment. The consignee did not respond. KLM sought alternate disposal instructions from Air India including sending of the consignments by road. These requests and reminders were sent to Air India vide letters filed by Air India alongwith their reply but KLM did not get any alternative disposal instructions. The consignments taken by KLM from Nairobi to Johannesburg were lying at the warehouse in Johannesburg. KLM concludes by pleading that it did all what was expected of KLM and non-delivery of the consignment at the destination i.e., Manzani, Swaziland was not on account of any negligence on the part of KLM and that it was due to the failure on the part of the consignee to respond to the notices of KLM and due to failure on the part of M/s. Old Village Industries and Air India to give alternate disposal instructions. The parties have not led any oral evidence in support of their respective versions but merely relied on the documents and correspondence on the record. Written versions are, of course, supported by affidavits. We have heard the Counsel for the parties and also gave them opportunity to file written note of arguments which they did. It is clearly established on the record from the admitted documents that two consignments of 40 and 60 packages of ready-made garments were entrusted on 21.3.90 by the complainant to Air India for carriage from New Delhi to Swaziland under the said two Airway Bills. The complainant knew or ought to have known that Air India does not operate flights to Swaziland and so the consignments could be carried by Air India only upto a particular destination where it operates and thereafter it was bound to be entrusted to some other carrier. Air India carried on 30.3.90 by Al-209 the said consignments to Nairobi upto which it operates closest to Swaziland. These consignments were then handed over to Kenya Airfreight Handling Ltd., Exhibit-B-8 the written version of Air India. 20 packages out of 40 packages of one consignment were carried to Swaziland on Air Swaziland flight ZC 303 on 4.4.90. The remaining 20 packages of one consignment and 60 packages of the other consignment were entrusted on 30.3.90 by Kenya Airfreight Handling Ltd. to KLM for carriage to Swaziland, via Johannesburg. KLM carried these consignments to Johannesburg on 13.4.90 but could not carry the consignments to Swaziland due to space constraints. KLM sent a telex (Exhibit C to the written version of Air India) about that fact as well as stating that the consignee was not responding to the notification sent from KLM''s office at Johannesburg. Air Swaziland also sent telex on 14.5.90 (Exhibit ''E'' to Air India''s version) with reference to 20 packages which Air Swaziland had carried stating they were unable to locate the consignee followed by another telex on 6.6.90, Exhibit-D. Air India by telex dated 6.6.90, Exhibit F confirmed to the complainant of the said factual position that the consignee was not responding and requested for shippers disposal instructions. On a reminder received from KLM in its telex dated 22.8.90, Exhibit G, Air India sent another letter dated 22.8.90, Exhibit H, to the complainant requesting for alternate instructions. The above noted facts are stated by the Air India in its written version and are corroborated by the copies of the telex messages exchanged which are on the record. The complainant himself in his letter dated 20th June, 1990 (Annexure-2 to the complaint) had stated that Delhi representative of the consignee could ascertain that only 20 packages out of 40 had been received in Swaziland by the end of May, 1990, that regarding balance 20 packages no indication was available, that regarding 60 packages it was learnt on 19.5.90 that this cargo was flown from Nairobi to Johannesburg by KLM flight K.L. 591/13.4.90 and had not moved from there to Swaziland and that the complainant had then asserted that Air India should have got in touch with KLM and organised to reach Cargo in Manzani and should have notified the party. It is manifest that Air India kept the complainant informed of the stages of carriage of the two consignments and the status of the shipments. The complainant was requested to contact the consignee to advise the disposal instructions as the shipments were then lying in Government warehouse accruing demmurrage charges. It is also pertinent to note that these assertions of fact together with documents are pleaded in para 3 of the written version of Air India and the complainant in its rejoinder in the corresponding paragraph does not specifically deny the factual position based on record, but denies other averments.

THE contemporaneous documentary evidence contained in the above noted telexes of KLM and Air Swaziland and repeated by Air India establishes that 20 out of 40 packages of one consignment and 60 packages of other consignments could not be carried to Swaziland due to limited capacity and space constraints, that the consignee could not be located by Air Swaziland for delivery of 20 packages and that the complainant did not give alternate disposal instructions on the failure of the consignee to respond to the notices sent by KLM and Air Swaziland. No negligence either of KLM or Air India is established on record by the complainant. Air India cannot be faulted as the consignee could not be located by Air Swaziland and KLM and the complainant failed to give alternate disposal instructions of the consignments, partly lying at Swaziland and partly at Johannesburg despite being informed of the space constraints and limited capacity for carriage from Johannesburg to Swaziland.

THE Consumer FORA have jurisdiction to grant the relief of payment of compensation to the consumer for any loss or injury suffered by the consumer due to the negligence of the opposite party. It is not clear from the record whether or not the consignments have been preserved at Johannesburg or Swaziland, but they are certainly lost so far as the complainant is concerned. As the complainant failed to give alternate disposal instructions, there is no negligence of the opposite parties. Air India cannot be held in this case to be negligent in the performance of service or for the loss suffered by the complainant. Air India carried the consignments to Nairobi and thereafter entrusted it to KLM and Air Swaziland which carried 20 packages to the destination in April, 1990. KLM carried the remaining consignments to Johannesburg but Air Swaziland could not lift these consignments due to space constraints and these are factors beyond the control of Air India and KLM. THE sine qua non for the grant of compensation by Consumer FORA is only if the loss occurs to the consumer due to the negligence of the opposite party and negligence of either Air India or KLM is not established on record in this case. Apart from it both KLM and Air India have raised the plea of the bar of limitation. KLM pleads that the claim is hopelessly time barred in so far as KLM is concerned both in terms of Clause 30 of the Second Schedule, to the Carriage by Air Act, 1972 and also in terms of Section 24A of the Consumer Protection Act, 1986 as the carriage of goods was in April, 1990 and the KLM was impleaded as an additional party on 11th January, 1995 under the orders of this Commission. Air India has also taken the plea of the complaint being time barred both under Section 24A of the Act as well as under Rule 30 of Schedule-II to the Carriage by Air Act, 1972. Rule 30 of Schedule-II to the Carriage by Air Act reads as under : "30. (1) The right to damages shall be extinguished if an action is not brought within two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped. (2) The method of calculating the period of limitation shall be determined by the law of the Court seized of the case. Under the said rule, the right to damages stands extinguished if the action is not filed within two years from the date on which the aircraft ought to have arrived. 20 packages out of 40 packages of one consignment were carried by Air Swaziland in April, 1990. The remaining 20 packages of that consignment and the 60 packages of the other consignment were carried by KLM to Johannesburg on 13.4.90 but these could not be carried to Swaziland due to space constraints. The complainant in its letter dated 20th June, 1990 admits that on 19.5.90 it was learnt that 40 (should have been 20) packages were sent by Swaziland Airlines in three different lots during first week and third week of April, 1990, that Delhi representative of the consignee could ascertain that only 20 packages had been received and that the 60 packages cargo was flown from Nairobi to Johannesburg by KLM flight KL.591/ 13.4.90 and had not moved from thereto Swaziland. The complaint was filed on 19.7.93 against Air India alone and KLM was added as an additional opposite party on 11.1.95. Admittedly a part of the consignment of goods reached its destination in April, 1990 and the remaining part of the consignments were carried to Johannesburg on 13th April, 1990 and these facts were made known to the complainant on 19.5.1990. The right to damages stands extinguished if the action is not filed within 2 years from the date on which the aircraft ought to have arrived. A part of consignment of goods failed to arrive and thus the relevant date would be the date on which the rest of the consignment reached its destination and that was in April, 1990 and in any case the cause of action came to the knowledge of the complainant on 19.5.1990.

The question whether the Carriage by Air Act, 1972 and the Limitation prescribed therein would be applicable to the proceedings before the Consumer FORA came up for consideration before this Commission in M/s. Sawhney Export House Pvt. Ltd. v. Pakistan International Airlines-I (1993) CPJ 96 (NC), it was ruled that there is a special law prescribing the period of limitation different from that in the Limitation Act, and so special law would prevail by virtue of the provisions contained in Section 29 of the Limitation Act, 1963. As the action is not brought within 2 years from the relevant date on which a part of consignment reached destination and the balance of the consignment did not reach, the right of action is extinguished. In other words, it is completely destroyed and not merely rendered enforceable by action.

COUNSEL for the complainant argued that the complaint is not barred by time either under Section 24A of the Act or under Rule 30 of the Second Schedule to the Carriage by Air Act, 1972 as there is an admission of liability on the part of the Air India in the letters dated 5th September, 1991,30th September, 1991 and 24th December, 1991. The complainant had lodged the claim in the letter dated 20th June, 1990 and in furtherance of the discussions with the Cargo Sales Manager of Air India it had furnished details of the claim in the letter dated 7th of June, 1991 followed by the reminder dated 3rd September, 1991. Letter dated 3rd September, 1991 of the complainant was acknowledged by Air India in the letter dated 5th September, 1991 in which the only mention is "that your claim is under active consideration". In the subsequent letter dated 30th September again Air India wrote that the claim is "under active consideration" The third letter dated 24th December, 1991 is marked ''without prejudice''. Copies of the claim as well as the letters of Air India are part of the complaint and we have referred to those documents. In none of these letters there is any admission of the liability so as to extend the period of limitation. In order that an acknowledgement may give a fresh starting point for computing limitation certain laid down conditions have to be satisfied. One of the conditions is that the acknowledgement must be a clear and unambiguous acknowledgement admitting a subsisting liability. The statement on which a plea of acknowledgement is based must relate to a present subsisting liability. The mere statement that the claim is under active consideration, cannot be construed, even if we do it liberally, that the amount claimed is due and remains unpaid. It cannot be considered that it is an admission that the debt was then existing. For the above reasons the complaint fails both on the question of limitation as well as on the ground that no negligence is established on the record on the part of Air India in handling the two consignments and it is hereby dismissed. The parties shall, however, bear their own costs. Complaint dismissed.