PASCO ENTERPRISES vs Air France

RESPONDENT No. 1/Air France Carrier carries on the business of carriage by air passengers, luggage and goods, for consideration. RESPONDENT-3 is the agent of respondent-1. Complainant is engaged in the business of sale purchase and export of carpets. Through this complaint the complainant has sought compensation of value of the goods amounting to Rs. 7,19,114.50 booked through the O.P. and Rs. 3,45,412 for additional expenses and damages for respondent''s failure to deliver the same to the consignee.

THE allegations of complainant giving rise to this complaint are as under: (i) Complainant booked 20 bales containing 71 pieces of Kashmir Handmade Handknotted Rayon carpets with respon-dent-1 through its agent respondent-3 at their Delhi office on 30.12.1992. THE respondent-3 issued Airway Bill No. 057-1125 4176 dated 30.12.1992 on behalf of respondent-1 i.e., carriers and also received Rs. 56,100 as air freight charges from the complainant for such cargo. THE cargo which contained 20 bales was booked in the name of Commerce Bank, 2000 Hamburg, Germany and the purchaserofthegoodswas M/s. Asadi Orienteppiche Brook Torkai-16, Hamburg, Germany.

(ii) In April 1993 on inquiry from the carriers about the fate of the shipment, complainants were surprised to learn that their shipment was still lying in the store of the carriers at Hamburg (Germany) Airport and was informed to take necessary steps for the lifting of the shipment. THE complainant requested the carriers to keep their shipment in their store at Hamburg Airport till the matter is looked into. It was agreed by the carriers on the condition that the complainant shall pay storage charges.

(iii) In response to the said agreement complainant deposited the "advance of Rs. 85,000 towards storage charges and for this carriers issued a receipt No. 0131 dated 2.4.1993.

(iv) Immediately after depositing Rs. 85,000 as advance towards storage charges, one of the partners of the complainant firm started taking necessary steps in arranging visa for his journey to Hamburg (Germany) so that reasons for not lifting of goods were ascertained. It was on 28.5.1993 that one of the partners of the complainant-firm namely Mr. Liaqat Ali went to Hamburg (Germany) for looking into the reasons.

(v) THE carriers kept the complainant''s partner waiting for lifting of goods for one week and ultimately informed that the goods have already been auctioned.

(vi) THE complainant tried to get the explanation from the carriers about their deficiency in service but carriers realising their negligence avoided to give any explanation and even did not give any date of auction.

(vii) THE complainant on arrival immediately on 15.7.1993 wrote to the carriers for compensating the complainant about the loss which occurred due to the negligence and deficiency in service of the carriers.

(viii) Vide letter dated 16th April, 1994 the claimant asked for full cost of the shipment, insurance paid on shipment, freight (air) paid, amount spent by partner of the firm in going to Hamburg (Germany) and advance storage charges totalling Rs. 10,84,526.

However, the claim was repudiated. Hence this complaint.

On behalf of O.P.Nos. 1 and 2 the complaint was resisted on the following grounds: (i) The crux of the complaint boils down to a receipt for Rs. 85,000 "advance towards storage charges". The contention of the complainant as per paragraphs 4-5 of the complaint that this advance of Rs. 85,000 was towards storage charges to keep the goods indefinitely "till the matter is looked into" is incorrect as this amount was received at the complainant''s request to assist that the goods remain with Customs Authority in Germany and only upto 15th April, 1993. German Customs sold the goods at the end of May 1993 though the complainant had indicated that they would be collecting the same before that.

(ii) Receipt itself does not imply any contract. There are no terms or settlement by which goods were to be stored indefinitely and they were sold by German customs over which the O.P. No. 1 has no control whatsoever, as auction is carried out in accordance with the rules and laws of Germany.

(iii) The entire problem arose because of dispute between the complainant and his consignee who has not been arraigned as a party. When the consignee did not pay and did not collect goods, they remained undelivered. The complainant was informed that the goods remained undelivered and though he paid some storage charges there was no contract for the goods to be kept indefinitely.

ON the legal aspects the contentions of the Counsel for O.P. Nos. 1 and 2 are as under: (a) Complainant is not a consumer under Section 2(1)(d)(ii) qua the O.P. Nos. 1 and 2 as it has not hired or availed any service of the O.Ps. for consideration. As per amended Consumer Protection Act the services that relate to commercial purpose do not come within the ambit of Consumer Protection Act, 1986.

(b) As per Carriage by Air Act there is no duty cast upon the carrier to keep informing the consignor about the fact and position of his goods even though in this case irregularity report dated 12th February, 1993 was given to the complainant and they still did not arrange the goods to be collected. In this regard the Counsel for O.P. Nos. 1 and 2 relied upon the following decisions-

(i) Air India v. N. Uddavan and N. Uddavan v. Air India and Saddlers Shoes Pvt. Ltd., I 1995 CPJ 190 (NC) wherein it was held that there is no obligation on the carrier to give any intimation to the consignor. The relevant paragraphs i.e., 11 and 15 are reproduced below: "11. We are of the view that the case put forward by the complainant that the consignee had not been intimated about the arrival of the consignment in Gdansk cannot be accepted as correct. ON the other hand the evidence adduced in the case fully substantiates the case put forward by Air India which is reiterated in the statement filed by LOT Polish Airlines (third respondent) that the Polish Airlines had advised the consignee about the arrival of the goods on 29th May, 1991 and had followed it up with reminders sent on June 11, 1991 and July 19, 1991. There was, therefore, no failure on the part of either Air India or its agent LOT Police Airlines to carry out their obligation to give due intimation to the consignee about the arrival of the goods at the port of destination. The consignee, however, for reasons known to it, failed to take delivery of the goods. Hence, the first contention put forward by the complainant that Air India was guilty of deficiency in service on the ground of failure on its part to give intimation to the consignee about the arrival of the goods in Gdansk is devoid of factual foundation. We accordingly reject the said plea raised by the complainant."

"15. From the above passage it becomes clear that the liability of the carrier ceases after the expiry of reasonable period from the date of giving intimation of arrival of the goods to the consignee. The legal position is also clear that there is no obligation in law for the carrier to intimate the consignor about the failure of the consignee to take delivery of the goods. Hence we hold that the omission on the part of Air India to inform the consignor about the failure of the consignee to take delivery of the goods does not constitute ''deficiency in service''."

(c) However in the same judgment Rule 12 was interpreted to the effect that this rule does not confer any right on the consignor to call upon the carrier to undertake transportation of the goods from its original part of destination to another place situated in a different country. Whatever right is conferred on the consignor under Rule 12 is capable of being exercised only before the right of the consignee to take delivery of the goods from the port of destination, namely on its being given due intimation of the arrival of the goods (Para 19).

(d) There is no cause of action as there is no negligence or deficiency in service on the facts of the instant case since the Airlines simply accepts some charges as advance for storage and it never undertakes to ensure the goods would be kept under the custody indefinitely by the concerned Customs Authorities.

There is no force in the contention of the Counsel for the O.Ps. that advance of Rs. 85,000 received by the O.Ps. did not specify the period upto 15th April as even otherwise in the counter version the O.P. No. 1 has stated in para 2 categorically that on 25th March, 1993 the Customs Authorities had already impounded the goods and, therefore, there was no question of accepting advance payment on 2nd April. Even otherwise as per Rule 12 the O.Ps. were under obligation to ask the consignor for further instructions which were not asked for. Though to keep the consignor informed about the day-to-day progress is difficult yet carrier was expected to ask for the instructions before disposing of the goods. Complainant was telephonically informed for further instructions for taking the delivery of the goods. It was pursuant to this instruction the complainant went to France after arranging for its VISA etc., which took two months'' time. Deficiency on the part of the O.Ps. was that the total consignment was sold by way of auction without waiting for further instructions from the complainant and the cost of the consignment was shown in the receipt issued by O.Ps. dated 30.11.1992 as Rs. 6,58,702 besides Rs. 56,100 which were paid by the complainant to the O.P. towards freight charges and Rs. 85,000 as advance storage charges.

TO say that the advance charges were accepted by the O.Ps. for a specific period and not till further instructions of the complainant is incorrect and unacceptable. Had this been the case O.P. Nos. 1 and 2 would not have accepted this amount in April 1995 whereas the consignments were impounded by the customs authority in March 1992. Explanation of the O.Ps. that this amount was accepted upto March 1993 the date when the goods were impounded by them i.e., upto 25th March, 1993 amounting to DEM 3830.88 and the balance would have been adjusted upto April 1993 and the goods were sold at the end of May is of no assistance or help to the O.Ps. and does not cut ice. Let us assume for the sake of arguments that the stand taken by the O.P. is correct. Still the fact remains that the goods reached Hamburg on 6th January, 1993 and the amount of Rs. 85,000 was paid by the complainant till 15th April, 1993. So the demurrage even if we calculate from 6th January, 1993 to 15th April, 1993 i.e., 100 days comes to be Rs. 34,000 @ 44 DM per day. This demurrage charges till 25th March, 1993 come to DM 3432 but upto 15th April, 1993 the complainants had paid DM 4400 equivalent to Rs. 85,000. Cargo was sold in the end of May 1993 and even if we calculate the demurrage charges for the period upto May 1993 these come to DM 1760 equivalent to Rs. 33,000. Value of the cargo was Rs. 7,19,114.50.

TO allow the cargo valued at Rs. 7,19,114.50 to be auctioned for non-payment of Rs. 34,000 was uncalled for as according to the provisions of Rule 12 of Air Carriage Rules they were under obligation to call for further instructions with regard to the consignment as they had done in the past also particularly when advance storage charges of Rs. 85,000 had already paid to the O.P. The minimum care and caution the O.P. was expected to exercise was to inform the consignor before impounding and sale of goods as there was no communication in this regard. The O.P. took the advance storage charges on 2nd April, 1993 whereas according to the O.P. on 25th March, 1993 goods were already impounded by the customs authority and, therefore, the O.P. were not supposed to take the storage charges of Rs. 85,000 upto 2nd April, 1993 and moreover the document in token of receipt of advance storage charges does not specify any date as to upto which date these charges were applicable.

LET us see the obligations Rule 12 cast upon the carrier. Rule 12 provides 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 cargo by withdrawing it at the aerodrome of departure or destination, or by stopping it in the course of the journey on any landing, or by calling for it 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 way bill, or by requiring it to be returned to the aerodrome of departure. He must not exercise his right to 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. (2) If it is impossible to carry out the orders of the consignor the carrier must inform him forthwith. (3) If the carrier obeys the orders of the consignor for the disposition of the cargo without requiring the production of the part of the air way-bill delivered to the latter, he will be liable, without prejudice to his right of recovery from the consignor for any damage which may be caused thereby to any person who is lawfully in possession of that part of the air way bill. (4) The right conferred on the consignor ceases at the moment when that of the consignee begins in accordance with Rule 13. Nevertheless, if the consignee declines to accept the way bill of the cargo, or if he cannot be communicated with, the consignor resumes his right of disposition."

The circumstance of accepting Rs. 85,000 towards advance storage charges upto 2nd April, 1993 itself shows that the goods were under the control of the O.P. and had these goods not been in their control they would have informed the complainant on 6th January, 1993 itself that the goods have reached Hamburg and as per Rule 12 the O.P. was required to either return the consignment or seek instructions.

Bare perusal of Rule 12 casts obligation upon O.P. in such eventuality as we are faced in the instant case either for return of the consignment to aerodrome departure but O.P. instead accepted huge amount of Rs. 85,000 as storage charges and over and above waited till 24th April without adhering to the requirement of Rule 12 either by receiving further instructions from the complainant or by requiring the consignment to be returned at the airport departure or they should have informed the complainant that they have no more any control left with the consignment which shall be on complainants risk. Heavens would not have fallen had the O.P. taken instructions from the complainant in April itself after receipt of Rs. 85,000 towards demurrage and storage charges but allowed the German Authorities to auction the consignment in May which was more than a month later.

SINCE in this case there was no communication between the parties from January 1993 uptil 24th April, 1993 the care and caution that could have been taken by the O.P. was to do either oftwo things as mentioned in Rule 12. Failure of the O.P. in not doing either amounts to deficiency in service which means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.

IN the result complainant is entitled for a compensation as to the loss or injury suffered by it in terms of Section 14(1) of the Consumer Protection Act. However, taking overall view of the matter and long duration of the goods having been stored and auctioned some time in May 1993, the information of about which was given in June 1993 and rules of German Customs Authority involved we deem that compensation of Rs. 5,00,000 (Rupees five lakhs) which shall include cost of litigation, would meet the ends of justice. Payment shall be made within one month. Complaint is disposed of in aforesaid terms. A copy of this order as per the statutory requirements be forwarded to the parties free of charge and thereafter the file be consigned to record room. Complaint disposed of.