Delhi High Court

Indian Airlines vs Angelique International Limited ... on 1 December, 2014

Author: A. K. Pathak

$~R-101
*     IN THE HIGH COURT OF DELHI AT NEW DELHI
+     RFA 569/2005
                                        Reserved on 21st November, 2014
                                        Delivered on 1st December, 2014

      INDIAN AIRLINES                                       ..... Appellant
                    Through             : Mr. Amit K. Pateria, Adv.

                           Versus

      ANGELIQUE INTERNATIONAL
      LIMITED & ANR.....                                 ..... Respondents
                    Through : None

CORAM:
HON'BLE MR. JUSTICE A.K. PATHAK

A.K.PATHAK, J.

1. During the course of hearing, learned counsel for the appellant has

canvassed that wrong delivery of goods will fall within the ambit and scope of

Clause 18 of the Carriage by Air Act, 1972 ("the Act", for short), thus, suit for

recovery of `6,46,800/- filed by the respondent no. 1 against appellant was

barred by time, having been filed after two years of loss of goods, in view of

Rule 29 of the first Schedule and Rule 30 of the second Schedule to the Act.

2. By placing reliance on M/s. Vij Sales Corporation vs. Lufthansa

Airlines, 1981 2 ILR (Del) 749, which was later on followed in Old Village

Ind. Vs. British Airways 1991 RLR 443, trial court, in the context of Rule 18

read with Rule 29 of first Schedule to the Act, has held that the said provisions

would come into play only when the consignment is either lost, destroyed

partly or wholly damaged in transit and not the wrong delivery of consignment.

In case goods are not covered by the Rule 18, then the special limitation given

in Rule 29 of first schedule to the Act would not govern the case and the

relevant provisions of the Limitation Act, 1963, that is, Articles 10 or 11 would

be applicable. Trial court has held that the case in hand was with regard to the

wrong delivery of goods and did not fall within the ambit and scope of loss of

baggage, thus, action of appellant did not fall within the Rule 18, therefore,

Rule 29 was not attracted and Article 11 of the Limitation Act, 1963, was

applicable, which envisages period of three years for bringing a suit against the

carrier for compensation for non-delivery, which period is to commence from

the date when goods ought to have been delivered. Thus, the suit having been

filed within three years, was within limitation.

3. Short point, which needs to be considered in this appeal is "Whether

wrong delivery of the goods by appellant would amount to loss of goods,

within the meaning of Rule 18 of the first schedule of the Act, thereby

attracting the provisions of Rule 29 of the first Schedule of the Act".

4. Briefly stated, facts of the case are that respondent no. 1 was engaged in

the business of manufacture, sale, export and import of all kinds of apparels.

Respondent no. 1 received an export order from the respondent no. 2 for supply

of knitted fabrics. Accordingly, respondent no. 1 booked the consignments

with the appellant for transporting it to respondent no. 2 in Nepal, vide airways

bills numbers and AWB 058-3369-8512 dated 2nd February, 1996 and AWB

058-3477-0551 dated 5th February, 1996. Original documents like bill of

exchange, invoice, packing list, airway bill, certificate of origin, beneficiary's

statement, insurance policy (cover note) etc. were negotiated by respondent no.

1 through its banker, that is, Central Bank of India, Parliament Street, New

Delhi which in turn forwarded these documents to the banker of respondent no.

2, namely, Rashtriya Banijya Bank, Baneshwor, Kathmandu, Nepal vide

covering letter dated 9th February, 1996. The said documents were to be

handed over by the Rashtriya Banijya Bank to respondent no. 2 against

payments and then to remit the funds to the banker of respondent no. 1, as per

the trade practice. The consignments were to be delivered to respondent no. 2

by the appellant on production of original documents. However, appellant

delivered the consignments to respondent no. 2 without insisting for production

of aforesaid documents. Later on, the Rashtriya Banijya Bank returned the said

documents to the banker of respondent no.1 with the remark "the party do not

appear to retire the same". Documents were returned after a gap of about five

months. Respondent no. 1 requested respondent no. 2 to make payment in

respect of aforesaid consignment but to no effect. Instead respondent no. 2

represented that it had not received the consignments from appellant.

Accordingly, respondent no. 1 filed the suit for recovery of `6,46,800/-, that is,

principal amount of `4,20,000/- and interest of `2,26,800/- @ 18% per annum

from the date of invoices, that is, 19th January, 1996 till realization against the

appellant.

5. In the written statement, appellant alleged that suit was bad for non-

joinder of necessary parties, since bank/cargo agents and insurance company

were not impleaded. Suit was barred by limitation. Goods were booked on 2nd

February, 1996 and 5th February, 1996 respectively. Terms of booking were

printed on the back of airway bills, which clearly gave right to respondent no. 1

to proceed with action within two years. Suit was filed on 16th January, 1999,

that is, after two years, thus, was barred by limitation. Appellant alleged that it

had received three shipments for transportation to Nepal. One shipment was

received on 2nd February, 1996; whereas two shipments were received on 5th

February, 1996. Shipments reached Nepal on 4th February, 1996, 7th February,

1996 and 8th February, 1996. Thereafter, shipments were delivered on 5th

February, 1996 and 13th February, 1996 to the consignees, named in the airway

bills. Airway bills did not carry any other document and as per terms and

conditions of the contract printed on the reverse side of airway bills, appellant

was to comply with specific conditions of informing the consignee of the cargo

arrival and delivering the same to the consignee or his duly authorized person.

Both these conditions, as contained in the airway bills, were duly complied

with; thus, appellant was not liable to pay any amount towards the loss of any

baggage.

6. In the replication, respondent no. 1 denied the averments made in the

written statement and reiterated what was stated in the plaint. Respondent no.

2 did not appear despite service and was proceeded against ex-parte.

7. Following issues were framed by the trial court:

i) Whether the suit is bad for non-joinder of parties as alleged in preliminary objection 1 of WS?

OPD

ii) Whether the suit is barred by time as alleged in preliminary objection no. 2 of the WS? OPD

iii) To what amount, if any is the plaintiff entitled against the defendant as principal amount?

               OPP

               iv)    Whether the plaintiff is entitled to any

interest? If so, at what rate and for which period and to what amount? OPP

v) Relief.

8. Respondent no. 1 examined Ms. Surabhi Tekriwal as PW1. As against

this, appellant examined its Traffic Officer Shri J.K. Gambhir as DW1. Upon

scrutiny of evidence adduced by the parties, trial Court has returned issue-wise

findings. As already stated in the preceding paras hereinabove that only point

pressed during the course of hearing is with regard to the limitation. Thus,

findings on this issue alone have been considered and delved upon.

9. Section 2(2) of the Act defines "Convention" as "the Convention for the

unification of certain rules relating to international carriage by air signed at

Warsaw on the 12th day of October, 1929." Section 2(1) defines "amended

Convention" as "the Convention as amended by the Hague Protocol on the 28 th

day of September, 1995."

10. Section 3(1) of the Act reads as under:-

"3. Application of Convention to India (1) The rules contained in the First Schedule, being the provisions of the Convention relating to the rights and liabilities of carriers, passengers, consignors, consignees and other persons, shall subject to the provisions of this Act, have the force of law in India in relation to any carriage by air to which those rules apply, irrespective of the nationality of the aircraft performing the carriage."

11. Similarly, Section 4(1) of the Act reads as under:-

"4. Application of amended Convention to India (1) The rules contained in the Second Schedule, being the provisions of the amended Convention relating to the rights and liabilities of carriers, passengers, consignors, consignees and other persons shall, subject to the provisions of this Act, have the force of law in India in relation to any carriage by air to which those rules apply, irrespective of the nationality of the aircraft performing the carriage."

12. At this stage, it would also be relevant to refer to relevant provision of

first Schedule of the Act, which reads as under:-

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

(2) The carriage by air within the meaning of sub-rule (1) comprises the period during which the luggage or goods are in charge of the carrier, whether in an aerodrome or on board an aircraft, or in the case of a landing outside an aerodrome, in any place whatsoever.

(3) The period of the carriage by air does not extend to any carriage by land, by sea or by river performed outside an aerodrome. If however, such a carriage takes place in the performance of a contract for carriage by air for the purpose of loading, delivery or transshipment, any damage is presumed, subject to proof to the contrary, to have been the result of an event which took place during the carriage by air.

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

13. Rule 29 of the first schedule of the Act prescribes the period of

limitation for bringing an action for damages, which reads as under:-

"29. The right of damages shall be extinguished if an action is not brought within two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped."

14. A perusal of preamble to the Act indicates that it is a special law, having

been enacted to give effect to the Warsaw Convention of 1929 for unification

of rules relating to International Carriage, to which India is signatory and

further to give effect to the Hague Protocol, 1955. The period of limitation as

prescribed under Rule 30 in second Schedule of the Act is pari materia in Rule

29 in first Schedule of the Act. In Air India Ltd. vs. Tej Shoe Exporters P. Ltd.

and Anr., MANU/DE/3321/2013, a Division Bench of this Court, in the context

of above referred provisions, more particularly, Rule 18 of first schedule of the

Act held that loss due to failure to deliver the goods would fall within the ambit

and scope of the said rule. In the said case also, the consignment was delivered

to the consignee without obtaining the necessary bank release, inasmuch as the

said mistake was admitted by the carrier. The Division Bench held as under:-

"In the present case, the Carriage by Air Act provides for relief through Rule 18 (in both the First and Second Schedule). That is the only provision which prescribes or visualizes the kind of situations which Parliament had in contemplation while dealing with compensation. The expression is "damage sustained in the event of the destruction or loss of, or of damage to" the goods. In East and West Steamship (supra) the Supreme Court had to deal with a provision under the Carriage by Sea Act, limiting liability in respect of "loss or damage" to the goods. The court decisively rejected that "loss or damage" contemplated was in respect of loss or damage to the goods and did not cover loss or damage of the goods: "the loss or damage in this paragraph is a wide expression used by the

Legislature to include any loss or damage caused to shipper or consignee in respect of which he makes a grievance and in respect, of which he claims compensation from the shipping company. The argument that loss due to failure to deliver the goods is not covered by this clause is merely to be mentioned to deserve rejection. The very use of the words "the date on which the goods should have been delivered" clearly contemplates a case where the goods have not been delivered."

15. Section 29 of the Limitation Act, 1963, reads as under:-

29. Savings.--(1) Nothing in this Act shall affect Section 25 of the Indian Contract Act, 1872 (2) Where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed by the Schedule, the provisions of Section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in Sections 4 to 24 (inclusive) shall apply only in so far as, and to the extent to which, they are not expressly excluded by such special or local law.

(3) Save as otherwise provided in any law for the time being in force with respect to marriage and divorce, nothing in this Act shall apply to any suit or other proceeding under any such law.

(4) Sections 25 and 26 and the definition of

"easement" in Section 2 shall not apply to cases

arising in the territories to which the Indian

Easements Act, may for the time being extend.

16. A perusal of Section 29 (2) makes it clear that if any special or local law

prescribes a period of limitation in any suit, appeal or application different than

the period prescribed by the Schedule to the Limitation Act, such period of

limitation, as prescribed under the special or local law would be applicable.

The Division Bench in Air India (supra) held thus: "likewise, the period of

limitation prescribed under Articles 29 (of the first schedule) and 30 (of the

second schedule) are contrary stipulations, which amount to "period of

limitation different from the period under the Limitation Act (Section 29(2)),"

which would exclude application of the Limitation Act itself. Those

stipulations under the 1972 Act are under a special statue and are absolute in

terms; they would prevail over the general provisions of the Limitation Act."

In Air India (supra), the view taken in Vij Sales (supra) by the learned Single