Toy N Toy International vs Alitalia Airlines And Ors.

COMPLAINT was filed by the complainant, a partnership firm alleging that it is engaged in the manufacture and export of readymade garments. Alitalia Airlines -opposite party has regular airline service to New Delhi. On 24.12.1997, complainant through Nitco Air Express delivered to the opposite party a cargo of 346 cartons of 100% Power Loom Shirts and Bermudas having a gross weight of 6250 kgs for being carried to Sao Paulo, Brazil and freight was paid. Banco Portugues Do Atlantico, New York branch was the consignee. Airway Bill No. 055 -43195692 dated 24.12.1997 was issued. Cargo was for M/s. Affari Italia. The complainant through Canara Bank, New Delhi forwarded the documents to the Banco Portugues Do Atlantico for collecting the payment of cargo from M/s. Affari Italia. It was stated that the complainant having not succeeded in contacting Ms. Affari Italia, by writing letter dated 29.1.1998 sought from the opposite party the proof of delivery of the cargo. By a fax dated 4.2.1998, the opposite party informed the complainant that the cargo had been delivered on 5.1.1998. Since M/s. Affari Italia did not make payment of the cargo, the Banco Portugues Do Atlantico returned the entire set of documents to the Canara Bank, complainant''s banker. By the letter dated 13.2.1998, Canara Bank sought instruction from the complainant for re -import of the cargo. It was pleaded that on inquiry from the opposite party the complainant was told that the cargo had been delivered to the agent of M/s. Affari Italia on 13.2.1998. On subsequent inquiries, the complainant was informed that the release of cargo was based on a Delivery order dated 19.12.1997 allegedly issued by Banco Portugues Do Atlantico. In response to the letter dated 28.5.1998, Banco Portugues Do Atlantico vide letter dated 3.6.1998 intimated the complainant that the said Delivery order was purportedly signed by Marcus R. White, who was not an employee of the Bank nor did the bank authorize any one to take delivery of the cargo in question. It was pleaded that opposite party -Airlines without verification of the Delivery order had unauthorisedly released the cargo. Attributing negligence/ deficiency in service on the part of opposite party, direction was sought to be made to the opposite party to pay the value of the cargo being US $ 1,13,600, to refund of the freight charges of Rs. 10,55,010, to pay Rs. 6,91,356 towards duty draw -back along with interest, to pay US $ 1,00,000 towards business loss and the cost.

OPPOSITE party contested the complaint by filing written version. It was admitted that cargo of 346 cartons having gross weight of 6250 kgs was delivered to it for being carried to Sao Paulo, Brazil vide airway bill No. 055 -43195692 dated 24.12.1997; Banco Portugues Do Atlantico, New York was the consignee while M/s. Affari Italia was the Notify party. In the airway bill, no value was declared either for the purpose of Customs'' or Carriage''. Cargo was safely delivered at Sao Paulo, Brazil and delivery thereof was made to the consignee/ Notify party by the Custom warehouse and opposite party had no role to play in the same. Complaint was alleged to be bad for non -joinder of necessary parties. It was further alleged that delivery of cargo was made on production of a Delivery order issued by Banco Portugues Do Atlantico and if that Delivery order was fraudulent as alleged, then it is a criminal matter and does not amount to negligence / deficiency in service on the part of the opposite party. It was stated that there appears to be dispute between the complainant and M/s. Affari Italia who had not made the payment of the cargo. It was denied that the value of cargo was US $ 1,13,600 as alleged. Liability to pay the amount claimed was emphatically denied.

ONE of the pleas raised in the written version is that the complaint is bad for non -joinder of parties. In terms of the order dated 15.1.2009 holding that the Consignee and Notify party, buyer are necessary parties, notices were ordered to be issued to Bano Portuguese Do Atlantico and M/s. Affari Italia returnable on 5.3.2009. Despite notices being sent by registered post to both of them, no one was present on behalf of the either of them on 5. 3.2009. Objection in regard to complaint being bad for non -joinder of parties, thus, does not survive now. Complainant attributes deficiency in service on the part of the Airlines alleging that the cargo in question was released without payment being received by Banco Portuguese Do Atlantico, consignee whom the documents were sent for collection money through Canara Bank, by the complainant. On the other hand, the opposite party alleges that cargo was released against the Delivery order dated 19.12.1997 issued by Banco Portuguese Do Atlantico. In airway bill No. 055 -43195692 dated 24.12.1997, Banco Portuguese Do Atlantico is shown as Consignee while M/s. Affari Italia as Notify party. Said Delivery order on the letter -head of the said Bank, omitting immaterial portion, is reproduced below: "Dear Sirs, We herewith authorize you to take over the following goods 346 cartons 100% COTTON POWERLOOM SHIRTS and BERMUDAS sent through Nitco Air Express, New Delhi/Alitalia with AWB No. 055 -4319 5692 from New Delhi/India to Sao Paulo/ Brazil in December, 1997 to AFFARI ITALIA IMPORTACAO E EXPORTACAO LTDA. Rua Professor Gabriel Ortiz No. 181 05612 -70 Sao Paulo (SP)/Brazil." Letter dated 3rd June, 1998 sent by the Bank to the complainant (copy at page 28) omitting immaterial portion, reads as follows: - "Sub: Delivery Order dated December 19th, 1997 related to Alitalia AWB No. 055 -43195692. Dear Mr. D. Khera Confirming our SWIFT message dated May 5, 1998 (copy enclosed), this is to certify that the above -referenced document was issued fraudulently and that it contains a fraudulent signature. The purported signer of the Delivery Order'', Marcus R. White, Manager'' is not an employee of this Bank We did not authorize either the consignment of the AWB to our Bank nor the release of the goods to Affari Italia Importacao Ltda. Consequently, we accept no liability for the payment of the goods released under the above mentioned AWB. sd/ - (Marcus R. White) Manager"

BY the order dated 11.11.2008, the parties were allowed to file additional affidavit(s) as regards procedure followed internationally by the Airlines on handling the cargo sent from one country to another. In the additional affidavit dated 19.11.2008 filed pursuant to this order, it is averred by P.K. Sharma, one of the partners of complainant firm that it is incumbent upon the carrier to give notice to the consignee or Notify party as soon as the cargo arrives at the destination as envisaged by Rule 13(2) of the Second Schedule to the Carriage by Air Act, 1972. In "To Order" shipments the cargo is released by making endorsement on the back side of the original airway bill and Delivery order is never issued by the Bank. It is further averred that on 11.11.2008 during the course of argument, opposite party''s Counsel had submitted that the delivery of the cargo in question was made by the opposite party -Airlines and not the customs. In the additional affidavit of Elliot Fernandes filed on behalf of the Airlines on 30.12.2008, it is stated that the responsibility of the carrier comes to an end the moment cargo reaches the place of destination and is deposited at the custom''s warehouse and consignee/Notify party are informed of the arrival either by way of letter or telephone or fax, as the case may be. Consignee/Notify party in Brazil have to arrange for a licensed customs broker to clear the goods and pay the Custom Duty and other taxes. It might be that cargo in question had been released on the basis of a forged letter. It is further averred that the opposite party -Airlines did not have any knowledge about the terms and conditions of contract between the consignee and consignor in the present case. Vide another order dated 5.3.2009, the complainant was ordered to place on affidavit the correspondence which it had with the said Bank and the buyer. Pursuant to this order along with additional affidavit dated 23.4.2009, the complainant has filed the certificate issued by Ayam and Company, Chartered Accountant; copy of the letter dated 11/15 September, 2003 from Reserve Bank of India to the complainant together with Circular for writing off the unrealised amount from M/s. Affari Italia and two letters from Haron Trading LtdA. to the complainant. In the additional affidavit it is stated that Haron Trading LtdA. - buying agent had instructed the complainant to send the cargo to M/s. Affari Italia; correspondence was done either through e -mail or on telephone and after great efforts whatever legible the complainant could found, are enclosed herewith. Transaction had taken place more than 10 years back. It was contended by Mr. O.P. Dua for the complainant that as the documents were sent for collection of payment to Banco Portuguese Do Atlantico, the delivery of the cargo could not have been made except on that Bank having endorsed the original airway bill in favour of the Notify party i.e. M/s. Affari Italia. In such a case, the Bank does not issue a Delivery order. It was submitted that the Delivery order in question was of the date on which even the cargo was not booked. This should have alerted the opposite party about the authenticity of the Delivery order. Airlines should not have released the cargo without ascertaining the genuineness of the Delivery order from the said Bank. It was further submitted that from the complainant which is supported by the affidavit of P.K. Sharma, partner, and the certificate issued by Ayam and Company, C.A. it is proved beyond any shadow of doubt that the complainant had not received the value of the cargo in question and opposite party -Airlines being grossly deficient in service cannot escape the liability of paying the claimed amount. Reliance was placed on the decision in Pearl Syntex Pvt. Ltd. v. KLM Cargo and Ors., IV (2006) CPJ 276 (NC). On the contrary, it was argued by Mr. Lalit Bhasin for the opposite party - Airlines that as the Delivery order dated 19.12.1997 is stated to be forged by the complainant, the complainant need to be relegated to the civil Court as the question of forgery of Delivery order cannot be gone into under summary jurisdiction by this Commission. It was further argued that as is evident from the two letters of Haron Trading Ltd. A filed along with the additional affidavit dated 23.4.2009, the order was placed and delivery of the cargo was taken by Haron Trading LtdA. who is not a party to these proceedings. Further, airway bill dated 24.12.1997 would show that no value was declared for the purposes of carriage and customs by the complainant and the liability, if any, of the opposite party, carrier shall be limited to the amount stipulated in Rule 22(2)(a) of the Second Schedule of the Carriage by Air Act, 1972. It was denied that there was any deficiency in service on the part of opposite party as alleged. In support of the submission of the complainant being relegated to civil Court, reliance was placed on the decision in New India Assurance Co. Ltd. v. Hira Lal Ramesh Chand and Ors., III (2008) CPJ 6 (SC)=V (2008) SLT 757=2008 (9) SCALE 105. Said Rule 22(2)(a) runs thus: "ln the carriage of registered baggage and of cargo, the liability of the carrier is limited to a sum of 250 francs per kilogramme, unless the passenger or consignor had 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."

CONSIDERIN G what is stated in para Nos. 3 and 5 of the additional affidavit dated 19.11.2008 which are not rebutted by the opposite party and there being no cogent evidence from the side of the carrier about the consignee and/or Notify party being informed of the arrival of the cargo destination, we are in total agreement with the submission advanced on behalf of the complainant that the present case being a to Order'' shipment the delivery of the cargo could have only been made on production of duly endorsed original airway bill by the Banco Portuguese Do Atlantico in favour of the Notify party -M/s. Affari Italia. Opposite party was grossly negligent/deficient in service in releasing the cargo on the basis of Delivery order dated 19.12.1997. Since the forgery of this Delivery order is writ large as it is of the date on which even the cargo was not booked, the complaint need not be relegated to the civil Court to establish the forgery. Decision in Hira Lal Ramesh Chand''s case (supra) was rendered on the facts of that case and it is of no help to the opposite party. Further, in our view, the opposite party cannot take advantage of the said two letters of Haron Trading LtdA. as it has throughout been the case of opposite party carrier that the delivery of the cargo was given on the strength of the said Delivery order to M/s. Affari Italia. Moreover, in the additional affidavit dated 23.4.2009, the complainant has clarified that Haron Trading LTDA. was only the buying agent. In the complaint, total value of the cargo has been claimed. Indisputably, in the airway bill for the purpose of carriage and customs no value was declared. In view of aforesaid Rule 22(2)(a) the liability of the opposite party in such a case is restricted at the rate of 250 francs equivalent to US $ 20 per kilogramme. In Pearl Syntex''s case (supra) which otherwise supports the complainants'' case a special declaration was made and supplementary charges were paid by the complainant. Since the gross weight of the cargo in question was 6250 kg, the complainant is entitled to 6250 x US $ 20=US $ 1,25,000 towards the value of the cargo.

AMOUNT of Rs. 10,55,010 has been claimed towards the freight charges paid by the complainant. The complainant is entitled to the refund of this amount.

COMPLAINAN T has claimed amount of Rs. 6,91,356 towards duty drawback. Aforesaid letter dated 11/15th September, 2003 filed by the complainant would show that Reserve Bank of India had advised Canara Bank, Con. Circus, New Delhi to deal with the case in terms of para C.18 of AP (DIR series) circular No. 12 dated 9.9.2000 in writing off the unrealised amount from M/s. Affari Italia. Presumably, the complainant may have been allowed writing off this amount by the said Bank. There is, thus, no question of the complainant being awarded any amount towards the duty draw back.

SINCE complainant has been deprived of the use of money all these years for no fault on its part, it is entitled to interest which we quantify at 12% p.a. on the awarded amount. Since interest at that rate is being allowed, we are not inclined to award compensation for business loss of an amount of US $ 1,00,000 separately as claimed by the complainant.

FOR the foregoing discussion, the complaint is partly allowed. Opposite party - Airlines is directed to pay in rupees a sum equivalent to US $ 1,25,000 at the exchange rate prevailing today as provided by Section 6 of the Carriage by Air Act, 1972 with interest @ 12% p.a. from 13.2.1998, the date on which delivery of cargo was given, till realization. Opposite party is further directed to refund amount of Rs. 10,55,010 with interest at the said rate and from the said date. Complainant will be entitled to cost of Rs. 20,000 from the opposite party. Complaint allowed.