1. The appellant, M/s Surya Pharmaceuticals Limited, had sued for recovery of Rs.4,96,188/- along with pendente lite and future interest from the respondent, Air India Limited, for the loss of 7 drums out of the total consignment of 40 drums of Amoxicillyn Compacted BP 98. This consignment was air lifted by the respondent, Air India, for transportation from Delhi to Hong Kong. After trial, the appellants suit was partly decreed by the Additional District Judge for Rs.1,70,625/- along with costs and interest at the rate of 7% per annum. By this appeal, the appellant has assailed that part of that judgment whereby, some of its claims were rejected. It prays that the impugned judgment and decree in the aforesaid Suit, bearing No.104 of 2004, be modified, and that the entire suit amount along with interest as claimed, be decreed.

2. On 12th July 2002, the appellant/plaintiff booked 40 drums containing bulk drugs with the respondent/defendant vide Air waybill 098-78399624 for transportation from Delhi to Hong Kong. Freight charges were also paid. Admittedly, all the 40 drums were loaded on to the aircraft of the respondent/defendant at Delhi. However, out of the 40 drums, only 33 drums were delivered by the respondent to the consignee at Hong Kong. The appellants claims are with regard to the remaining seven drums. In the suit, the

appellant claimed to have suffered a total loss of Rs.4,96,188/- on this account. Out of this amount, a sum of Rs.10,883.25 and Rs.612.00 was claimed by the appellant towards proportionate freight charges paid by it for the missing drums; Rs.84,670.83 towards loss of export benefits; and Rs.45,108/- towards other expenses for tracing the missing drums. The appellant/plaintiff also claimed interest at the rate of 13.75% per annum. The value of the consignment for the purposes of customs, as declared by the appellant/plaintiff was US $ 35,500. In addition, a separate invoice to that effect, also accompanied the air waybill.

3. At the trial, the defendant/respondent did not controvert several important facts. Firstly, the fact that the plaintiffs consignment of 40 drums was duly loaded on the aircraft of the respondent/defendant was admitted. Secondly, the fact that the consignment handed over to the consignee at Hong Kong by the respondent/defendant was short by seven drums is also undisputed. Thirdly, the fact that the appellant/plaintiff had stated the value of this consignment to be US $ 35,500/-, albeit for the purpose of customs, was also not disputed. The respondent/defendant also did not dispute the claim that the true value of the contents of the consignment came to US $ 35,500/-. The only dispute raised by the respondent with regard to the value of the consignment was limited to the fact that the appellant/plaintiff had not specifically declared any value for this consignment for the purposes of carriage in the space provided on the air waybill itself.

4. In the suit, the respondent/defendant took a very simple defence. Its case is that there is a clause limiting its liability, in case of loss, to US$ 20 per kilogram, printed on the reverse of that air waybill, Ex. PW-1/3, and that this constituted a special contract whereby, its liability was limited to US$ 20 per kilogram of the goods lost. Alternatively, since special value for carriage was not declared by the consignor, i.e., the appellant herein, in the space provided therefor in Ex. PW-1/3; therefore, even under Rule 22 (2) of the Second Schedule to The Carriage by Air Act 1972, its liability was limited to the amount stated in that rule.

5. By the impugned judgment, the trial court has concluded that the respondent/defendant was negligent in handling the cargo. It has found that the respondent did not dispute the fact that all the 40 drums were duly loaded in the appellants aircraft. In fact, the defendant respondents own witness testified to this fact. In addition, no explanation was given by the respondent as to the fate of the missing

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