2007 (2) CPR 347 (NC)
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
K.S. Gupta, Presiding Member and
Dr. P.D. Shenoy, Member
M/s. York Knitwears Ltd.
& Anr.—Complainants
versus
M/s. Lufthansa German Airlines & Ors.—Opp. Parties
Original Petition No. 160 of 1994
Decided on 4-5-2007

Headnote:(i)Consumer Protection Act, 1986—Section 21(a)(i) and 2(1)(g) r/w 2(1)(o)—Woollen Knitwear manufactured by complainant exported to buyers in Moscow by Air through Cargolux and Lufthansa for Christmas and New Year—Air way bill dated 1-12-1993,

       3-12-1993, 8-12-1993 and 15-12-1993—Lifted on 26-12-1993 and 29-12-1993 and reaching 27-12-1993 and 30-12-1993—Whether there was abnormal delay in delivery of Cargo and deficiency in service? (Yes).

       Held: This is a clear indication of abnormal delay in delivery of cargo by Lufthansa. The Ld Sr. Counsel for the Lufthansa submitted that generally it takes about two weeks for the cargo lifted at Delhi to reach Moscow, but in this case due to extraordinary circumstances i.e. due to the fact that godowns in Moscow were full and it was not possible to deliver the cargo at Moscow without furnishing adequate proof for the same. He has neither contradicted the statement made about the prompt delivery of cargo by Aeroflot nor has adduced any evidence to disprove this contention of the complainants.

       In our view there has been a clear cut case of deficiency in service by Lufthansa.

        (Paras 65 and 66)

       (ii) Consumer Protection Act, 1986—Section 21(a)(i)—Woollen Knitwear sent by complainant to buyers in Moscow—Sent by Air through Cargolux and Lufthansa—Sunrise Freight Forwarders (P) Ltd. mentioned as agent of Lufthansa in all airway bills—Whether Sunrise Freight Forwarder (P) Ltd. is agent of Lufthansa? (Yes).

       Held: We were shown a document by M/s Sun Rise, i.e the Cargo Agency Agreement No. 3716 between the IATA and Sunrise FF (P) Ltd which mentions that all the agents undertake for the sale of air cargo administration and handling of consignments performed under this agreement shall be in strict compliance with the rates, rules and conditions applicable. Agent undertakes to maintain all places where air cargo ready for carriage, the premises and staff required by Section A of the Cargo Agency Rules. The argument also mentions about the indemnities and waiver.

       Accordingly, the Lufthansa is bound by all the actions of the agent under this agreement and whenever the agent has been intimated by the consignor to carry the goods within the stipulated time, the carrier is bound by this intimation.

       Further in all the airway Bills, there is a clear mention of M/s Sunrise as the Agent.

       Hence we cannot accept this argument that they are not the agents of Lufthansa. (Paras 70, 71, 72 and 73)

       (iii) Consumer Protection Act,1986—Sections 21(a)(i), 2(i)(g) and 14(1)(d)—Woollen Knitwears sent by Air to foreign buyer—Goods meant for seasonal sale as Christmas and New Year—Carrier/Agent, intimated to tranship the Cargo early—Delayed delivery of goods at Moscow—Is Lufthansa liable for the delayed delivery to complainant? (Yes) (See Paras 75 to 78)—Whether Lufthansa has informed M/s. Sunrise about the delay in lifting the Cargo? (No).

       Held: Several letters written by the complainant to the agent of Lufthansa clearly indicates that the goods had to be carried by the first available flight or urgently as soon as possible, so the responsibility of Sunrise cannot be disputed. They are responsible for ensuring that the goods are dispatched by the earliest flight, secondly it being the agent of the Airlines they would have. definitely communicated to Lufthansa the necessity to carry the goods by the earliest flight to Moscow. The reverse of the airway bill indicates that anybody who has any complaint about the delay in despatch of goods they are supposed to file a complaint with Lufthansa within 21 days. We can deduce from this condition that Lufthansa should have ensured that the goods are reached within 21 days of booking which they have not done. There has been abnormal delay and it is clear from the records which is not controverted that the goods dispatched by the same company by Aeroflot from Delhi to Moscow reached Moscow within one day. Hence, Lufthansa is liable for the delayed delivery of goods at Moscow. (Para 78)

       Held also: There is neither any proof of Lufthansa sending these communications to Sunrise or the complainant nor there is any proof of receipt of the communications by Sunrise FF (P) Ltd., and M/s York Knitwear. (Para 81)

        (iv) Consumer Protection Act, 1986—Section 21(a)(i)—Liability of agent for delayed delivery of goods by Carrier Principal —Contract Act, 1872—Sections 222 and 230—Agent to be indemnified—No personal enforcement of contract by agent—Agent having taken pains of custom clearance and carrier delaying delivery—Whether agent can be held liable? (No)—Case law cited.

       Held: In this connection, it is worthwhile to go through judgment of the Apex Court in 1998 (3) SCC 247, Marine Container Services South Pvt. Ltd. v. Go Go Garments, where it has held that “we are not a little surprised to read that the Contract Act does not apply to complaints filed under the Consumer Protection Act. The Contract Act applies to all the litigants before the Commission under the Consumer Protection Act. Whether in proceedings before the Commission or otherwise, an agent is entitled to invoke the provisions of Section 230 of the Contract Act and if the facts found support him, his defence based thereon cannot be brushed away.” Accordingly, in view of the aforesaid judgment of the Supreme Court and also the provisions of the Indian Contract Act, the Agent namely Sunrise is not liable for the delayed delivery of the good at the destination by the Lufthansa. The responsibility of Sunrise ceases when it had got the custom clearance for the booked goods and arranged the delivery of the goods to Lufthansa. In fact, Sunrise had taken pains to remind the Lufthansa to ensure prompt delivery of the goods. Hence, the agent cannot be held liable for delayed delivery. (Para 87)

       (v) Consumer Protection Act, 1986— Section 21(a)(i)—Complaint about gross delay in delivery of Air consignment—Seasonal goods—Purpose and sale affected by delay—Damage under Carriage by Air Act, 1952—Sections 18 and 19—Whether complainant is eligible for any relief, if so, how much?

       Held: Under the Carriage by Air Act 1972 the liability of the carrier has been defined. The relevant portions are quoted below:

       Section 18 The carrier is liable for damage sustained in the event of the destruction or loss of, or of damage to, any registered luggage or a goods, if the occurrence which caused the damage so sustained took place during the carriage by air.

       Section 19—The carrier is liable for damage occasioned by delay in the carriage by air of passengers, luggage or goods.

       In the carriage of registered luggage and of goods, the liability of carrier is limited to a sum of 250 francs per kilogram, unless the consignor made, at the time when the package was handed over to the carrier; a special declaration of the value at delivery 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 sum is greater than the actual value to the consignor at delivery.

        (Emphasis supplied)

       There has been abnormal delay which has caused loss in the sense that by the time the consignments reached, the season was over and hence the Lufthansa cannot evade liability for payment of damages under Section 19. As regards the liability of the carrier it is limited to 250 francs per kg. This is calculated at US $ 20 per kg and as the total kilograms carried is 11,475 this comes to US $ 2,29,500. However, as the value of the invoice is US $ 1,36,400 the liability is further limited to this amount. Accordingly, the complainant would have been eligible for Rs. 42,78,868. Learned Counsel for the Lufthansa has contended that York Knitwear has received full payment from M/s Kavita before the dispatch of the Cargo. This has not been contradicted by the learned Counsel for the complainant in his rejoinder. Appendix to the contract between York Knitwear and M/s Kavita shows that 1,800 pullovers to be despatched within 15 days of receipt of payment. 4,300 pullovers to be despatched within 21 days of receipt of second payment. Complainant has sent 1,848 kg of woollen materials to M/s Kavita. If this is deducted the net weight comes to 9,627 kg. The total value of the invoice is 1,36,400 US $, out of this, the value of the invoice pertaining to M/s Kavita is $ 26,520. So the net amount payable comes to 1,09,880 US $ and @ 31.37 per $ this is converted to Rs. 34,46,936.

       Learned Counsel appearing for the Lufthansa has submitted that as regards Astrovaz D is concerned the goods are to be delivered on advance payment. What is that advance payment received has not been explained to us by the complainant. The contract between York Knitwear and Astrovaz D shows that the goods are to be delivered within months of advance payment. Partial shipments and part shipments ahead of schedule is allowed and the date of bill of lading air way bill is considered as the delivery date. This has not been controverted by the learned Counsel for the complainant in his rejoinder. In absence of the quantification of the amount received in advance, we award a lump-sum compensation of Rs. 5,00,000 in respect of the consignment to Astrovaz D.

       There is no dispute that no advance payment has been received against the goods dispatched to Neo Trade 5,820 kgs of Knitwear were dispatched to Neo Trade @

       $ 20 per kg the value comes to US

       $ 69180.65353 @ 31.37 per $ the value comes to Rs. 21,70,197.10. Complainant alleges that no amount was received by it from the said consignee.

       Learned Counsel for the complainant has claimed Rs. 20,00,000 of each towards the loss of goodwill and loss of further orders refused to the complainant. No evidence has been placed before us to substantiate this claim, hence, this is purely speculative claim. Accordingly, we are not persuaded to award any relief towards this claim.

       The complainants have also filed an affidavit wherein they have claimed compensation towards custom duty paid on behalf of the complainant Company by the buyers. storage charges of goods till their disposal by their buyers, penalty for the delayed delivery etc. totaling to Rs. 83,64,234 apart from Rs.7,70,878 towards in fructuous freight paid. As there is a ceiling limit towards the reimbursement of claims under the Carriage by Air Act, which is fixed at

       $ 20 per kg, we do not deem it necessary to analyse this claim.

       Therefore the amount payable to complainant for the delay in dispatch of goods to Neo Trade comes to Rs. 21,70,197. Similarly, for the delay of dispatch of goods to Astrovaz D, the amount payable to the complainant comes to Rs. 5,00,000. Accordingly, this amount i.e. Rs. 26,70,197 is directed to be paid with interest @ 6% from the date of the complaint till the date of payment by Lufthansa to the complainant. They shall also pay Rs. 25,000 as costs. (Paras 89, 90, 91, 92, 93, 94, 95 and 96)

       Result: Complaint allowed in part accordingly.