2007 (1) CPR 363
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION,
NEW DELHI
M.B. Shah, President and Rajyalakshmi Rao, Member
Pearl Syntex Pvt. Ltd.—Complainant
versus
KLM Cargo & Ors.—Opposite Parties
Original Petition No. 217 of 1997 (along with OP No. 47 of 1998
Decided on 29-9-2006

IMPORTANT POINT
The act and omission on the part of the employees of Air Carrier KLM was reckless as the jewellery consignment was given without production of original documents. They are primarily liable to complainant.

Headnote:(i) Consumer Protection Act, 1986—Sections 2(1)(g) and (o) and 21—Complaint about deficiency in service of Air Carrier—Complainant had exported jewellery to notified party FM Mir Jewellers in UK through Bank (National Westminister Bank, UK by Air Carrier (M/s. KLM Royal Dutch Airlines)—Carrier delivering goods without production of original Bank released documents—No Fax message complainant claiming principal amount and compensation—Presumption of negligence of Carrier in case of wrong delivery—(Para 5)—Admission of liability by Carrier to complainant (Para 6)—Contention of complainant that Carrier cannot plead limitation of its liability under Rules 22(2) of the Schedule II of the Carriage by Air Act, 1978 and is liable to pay under rule 25 the loss or damage suffered by complainant—Case law referred.

       Held: In this view of the matter, in our view, the carrier (KLM) cannot contend that its liability is limited, as provided under Schedule II of Rule 22 the Carriage By Air Act, 1972. (Para 15)

       Held further: In the alternative, presuming that even if there is no special declaration of interest as contemplated under Rule 22(2)(a), then, we have to find out whether there is compliance of all the ingredients of Rule 25. For the said purpose, Rule 25 (Para 16)

       Held also: There is compliance of all the ingredients of Rule 25. In our view, in the present case, the facts speak for themselves and the maxim res ipsa loquitur would be applicable. (Para 18)

       From the facts as stated above, it can be held that the act of delivery of the gold jewellery without the bank release note was an act of gross carelessness and may indicate that it was intentional misconduct. Because, a prudent employee of the KLM knowing the fact that the small packet, containing gold jewellery, valued more than Rs. 20,00,000, as described in the invoice, in ordinary course of business, would not deliver such goods in the manner in which it is done, and, that too, in breach of all requirements. The extent of damage which was likely to follow was also known to the doer. In such cases, it can be said that carrier/employees are guilty of wilful default as it has disregarded the normal procedure of taking care in handling such a consignment. (Para 22)

       Held finally: Finally, we hold that when employees of a carrier are dealing with goods worth crores of rupees, they are expected to be cautious in delivering the goods to a layman and ought not to have delivered without ascertaining his identity, without verification of proper documents and without the knowledge of the consignee or the consignor. In such a case, a man of prudence would certainly arrive at the conclusion that the act or omission on the part of the employees was reckless and knowledge can easily be inferred that it would cause damage to the consignor/consignee.

       In view of the above discussion, we hold the KLM responsible for the ‘deficiency in service’. (Paras 30, 31)

       (ii) Consumer Protection Act, 1986—Sections 2(1)(g) and (o) 14 proviso and 21—Complaint about deficiency in service of cognizance bank—National West Minister Bank UK—Whether Bank liable for alleged fraud by Carrier? (No)—Whether bank is liable for loss of original documents received from Indian Bank? (Yes) under Section 14(1)(d) proviso.

       Held: In our view, there is nothing on record to establish that officers of the Bank have taken any part in the alleged fraud. For the fraud, some persons were prosecuted before the Crown Court at Northampton, There is an elaborate judgment and nowhere it points out that the bank employees were involved in the said fraud.

       Further, it is the contention of the Bank, in Original Petition No. 217/1997, that they received original documents on 23rd October, 1996, while the goods were released on 22nd October, 1996 and hence they are not responsible. (Paras 34, 35)

       But held: In our view, such a statement before the Court, is an admission of its deficiency in service. This deficiency on the part of the Bank cannot be condoned. Because, for want of original documents, the Insurance Company repudiated the claim and the Complainants are without reimbursement for years for the loss suffered by them. In such circumstances, deficiency on the part of the Bank is established by its own admission that the documents are lost, which, according to us, is an unusual thing. No doubt, the loss of original documents has not played any part in release of the goods, because, the goods were released prior to the receipt of the original documents. (Para 37)

       Consequently held: In these set of circumstances, for the deficiency in service by the Bank in not protecting the valuable documents, we think that it would be just and reasonable to direct the bank to pay compensation/punitive damages as provided under Section 14 of the Consumer Protection Act, 1986. Hence, the Bank is directed to deposit the sum in Rupees equivalent to 5,000 Pounds, with the National Consumer Disputes Redressal Commission. The said amount shall be deposited by the Registrar of the National Commission in the ‘Consumer Legal Aid Account’ to be administered by this Commission. (Para 38)

       (iii) Consumer Protection Act, 1986—Sections 14(1)(d)—Reimbursement in foreign currency—Whether he allowed? (No)—Compensation for deficiency—Yardstick is reasonable rate of interest i.e. 12% p.a.

       Held: Learned Counsel for the Complainants submitted that the Complainants are entitled to receive the amount in Pound or Dollars as per the invoices. In our view, this submission cannot be accepted because in 1996 when the goods were sold the Complainants were not entitled to keep currency in Pounds/Dollars in their possession. They are required to convert the same into Rupees at the earliest. Hence, we find no substance in the contention and hold that for reimbursement value in Rupees is required to be taken as on the date of dispatch of the consignments in all the three cases. (Para 39)

       But held: Award of reasonable rate of interest would cover the compensation payable to the Complainant, as it was a commercial transaction and the prices of gold has escalated. Hence, we direct that the amount shall be paid with interest at the rate of 12% p.a. (Para 42)

       Result: All the three original petitions allowed accordingly.