Indian Airlines Limited vs Skyline Nepc Limited & Anr.
2018 Latest Caselaw 713 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         CS(COMM) No. 402/2016

%                                                     31st January, 2018

INDIAN AIRLINES LIMITED                                     ..... Plaintiff
                   Through:              Ms. Suruchi Suri, Advocate.

                          versus

SKYLINE NEPC LIMITED & ANR.                 ..... Defendants
                  Through: Mr. Danish Aftab Chowdhury
                            and   Mr.     Suvir      Sharma,
                            Advocates for D-2.

CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?


VALMIKI J. MEHTA, J (ORAL)

1.

Plaintiff/Indian Airlines Ltd. has filed the present suit for

recovery of Rs.1,24,51,412.50 against two defendants. The first

defendant is Skyline NEPC Ltd. and the second defendant is NEPC

India Ltd. Plaint is a joinder of two causes of action with one cause of

action against the defendant no.1 towards charges claimed by the

plaintiff for providing to the defendant no.1 maintenance, repairs etc

with respect to aircrafts of the defendant no.1. The second cause of

action against the defendant no.2 is on account of plaintiff providing

ground handling services to the aircrafts of the defendant no.2 in the

North Eastern Region. At this stage itself it may be noted that

defendant no.1 company has been admittedly wound up and in fact

even during the pendency of the winding up proceedings no

application was filed for seeking permission of the company court at

Mumbai to sue the defendant no.1. Therefore, since defendant no.1 no

longer exists, no decree can hence be passed against defendant no.1

and in favour of the plaintiff with respect to the dues claimed by the

plaintiff from the defendant no.1 for providing services by the plaintiff

to defendant no.1 of maintenance, repair of aircrafts etc. That leaves

us only with the cause of action in the suit plaint of the claim against

the defendant no.2 for the ground handling services provided by the

plaintiff to defendant no.2 for the period from 1.8.1995 to 31.12.1995.

2. Defendant no.2 has filed its written statement and it does

not dispute that ground handling services were provided. The

defendant no.2 however claims an adjustment of its dues against the

plaintiff and which dues are on account of plaintiff being liable to pay

the defendant no.2 various charges under the heads of providing

airline tickets, baggages etc under the Interline Agreement dated

13.5.1995 entered into by the plaintiff with the defendant no.2. As per

the written statement defendant no.2 pleads entitlement to an amount

of Rs.54,24,625.96/- as principal and to which after adding of interest

defendant no.2 claims an amount of Rs.69,24,625.96/- against the

plaintiff.

3. After pleadings were complete the following issues were

framed:-

(i) Whether the suit is barred by limitation? OPD

(ii) Whether the suit is bad for mis-joinder and non-joinder of necessary parties? OPD

(iii) Whether this Court has jurisdiction to try and entertain the present suit? OPD

(iv) Whether the plaintiff is guilty of suppression of material facts as set out in Co. P. No. 195/2003 and if so, to what effect? OPD

(v) Whether the plaintiff is entitled to the relief claimed in the suit?

OPP

(vi) Relief."

4. Counsels for the parties agree that this Court need not

decide issue nos. 1 to 4 and which issues no. 1 to 4 are not pressed by

the parties. That only leaves us with issue no.5 as to whether plaintiff

is entitled to the suit amount against the defendant no.2 with respect to

ground handling services provided by the plaintiff to the defendant

no.2.

5. As already stated above, it is not disputed that plaintiff

did provide ground handling services to the defendant no.2 with

respect to aircrafts of the defendant no.2 in the North Eastern Region,

however, the issue which will arise is as to what is the rate and the

total amount which the plaintiff will be entitled to from the defendant

no.2 on account of providing of the ground handling services by the

plaintiff to the defendant no.2.

6. On the aspect of amount of ground handling charges

which the plaintiff has claimed as its entitlement, it is seen that

admittedly parties never entered into an agreement as to what will be

the agreed rate of ground handling charges. What are the ground

handling charges has however been admitted by the defendant no.2 in

terms of its letter dated 12.5.1997. This document is marked as

PW2/12, but in any case none of the counsels before me dispute that

this was a letter which was sent by the defendant no.2 to the plaintiff

and was received by the plaintiff. This letter dated 12.5.1997 reads as

under:-

"No.Sales/NE Sec/1153. 12th May, 1997 Mr. P.J.Crasta, Dy. Managing Director, Indian Airlines Ltd.

Airlines House, Parliament Street, New Delhi-110001. FAX: 3719484 Sub: Handling of Flight in North Region. Dear Sir, We acknowledge „receipt‟ of your letter No.HFD-8/NEPC/1600 dated 1st May, 1997 on the above subject requesting us to make payment of Rs.55 lakhs towards handling charges. You have stated that the average handling charges per flight works out to Rs.9565/- which are acceptable to us as in the Invoice of Rs.77,64,720/-, Finance has charged @ Rs.36320/- for a transit flight and 30% extra is charged on a transit turn-round flight. We accept your handling charge of Rs.9565/- per flight and request for a meeting with the concerned official to rework out the amount payable by us on the basis of Rs.9565/- per flight handling to enable us to come to a final amount payable by us with further discount of 20% on the total bill. We are grateful to you for resolving the issue to our satisfaction and we assure you once this amount is reworked as stated by you we will settle the invoice without any further delay. Thanking you, Yours faithfully, For NEPC Airlines, sd/-

V. JAYANARAYANAN President."

7. A reading of the aforesaid letter shows that defendant

no.2 accepted the ground handling charges at Rs.9565/- per flight.

Learned counsel for the plaintiff could not point out to me any other

letter issued by the plaintiff to the defendant no.2 which was agreed to

by the defendant no. 2 showing any agreement with respect to ground

handling charges. I, therefore hold that the rate of ground handling

charges between the parties has to be taken as Rs.9565/- in terms of

the letter dated 12.5.1997 issued by the defendant no. 2 to the plaintiff

and which letter was in fact in response to the letter dated 1.5.1997

issued by the plaintiff to the defendant no.2.

8. Admittedly, the total number of flights with respect to

which ground handling charges are claimed by the plaintiff from the

defendant no. 2 are 577 in number and this is an admitted position

arising out of the letter dated 17.7.1997 written by the plaintiff to the

Under-Secretary to the Ministry of Civil Aviation. This letter dated

17.7.1997 is filed by the plaintiff itself and therefore can be used

against the plaintiff. Counsel for the defendant no.2 admits that

defendant no.2 is liable only with respect to 577 flights with respect to

which ground handling services were provided by plaintiff to

defendant no.2. When the figure of 577 is multiplied by Rs.9565/-

this amount comes to Rs.55,19,005/- and therefore the same is

rounded to Rs.55,00,000/-. I may note that even as per the suit the

plaintiff admits that plaintiff had asked from the defendant no.2 a total

amount of Rs.55,00,000/- after giving discount to the defendant no.2.

The case of the plaintiff of giving discount from a rate higher than

Rs.9565/- cannot be accepted by this Court for giving a rate higher

than Rs. 9565/- because in the first place there is no agreement for any

rate of ground handling charges and therefore the rate of ground

handling charges has to be taken at Rs.9565/- per flight as stated vide

letter of the plaintiff dated 1.5.1997 and accepted by defendant no.2 by

its letter dated 12.5.1997 to the plaintiff and which has been

reproduced above.

9. I, therefore, hold that the rate of ground handling charges

between the parties is to be taken as Rs.9565/- in terms of the letter

dated 12.5.1997 issued by the defendant no.2 to the plaintiff and

which letter was in fact in response to the letter dated 1.5.1997 issued

by the plaintiff to the defendant no.2.

10. Accordingly, I hold that the plaintiff is entitled to a sum

of Rs.55,00,000/- from the defendant no.2. I may note that no pre-suit

interest can be granted because there is no agreement between the

parties for claiming of interest and plaintiff has not proved any legal

notice being served upon defendant no. 2 claiming interest.

11. That takes us to what would be the amount that the

defendant no.2 will be entitled to adjust from the claim of the plaintiff

for a sum of Rs.55,00,000/-. In this regard the admission of the

plaintiff is seen from the plaintiff‟s letter dated 15.4.1998 filed by the

plaintiff itself and this letter admits the liability of the plaintiff towards

the defendant no.2 for a sum of Rs.49,35,000/-. This letter dated

15.4.1998 reads as under:-

"The Director M/s. NEPC Airlines, G.R. Complex, 407 & 408, Anna Salai, Nandanam, MADRAS-600 035 Dear Sir, Reference HFD-8/NEPC/834 Date 15.04.1998 Sub: Settlement of Mutual Dues between IAL and NEPC Please refer to your letter No. NEPCAL/98 dated 1st April, 1998 on the subject.

At the outset, we may clarify that the amount payable towards Interline dues is Rs.49.35 lakhs, not Rs. 75 lakhs as mentioned in your above letter. It was never intended to provide Handling services on complementary basis.

You are kindly aware that an amount of Rs.77.76 lakhs is payable by you towards Ground Handling of your flights. This amount has now been outstanding for a long time. Several letters have been exchanged and a number of meetings have taken place between the two airlines to explain the basis of billing and clarify various other points raised by you. Our efforts to reach to a mutual understanding have proved infructous. In the circumstances, you would appreciate, we are left with no choice but to withhold the interline/payment. It will be observed that there still remains a balance of Rs.28.41 lakhs even if we adjust your interline dues of Rs. 49.35 lakhs. We, therefore, seek your cooperation in early settlement of our dues. Thanking you, Yours faithfully, for Indian Airlines Ltd.

sd/-

(A.K. Saxena) General Manager(Finance) To:Shri R.S. Meena, under Secretary, Min. of Civil Aviation, N. Delhi."

12. In law, the defendant no. 2 is always entitled to adjust

amount lying with it of the plaintiff inasmuch as once plaintiff has a

claim against the defendant no. 2, and defendant no. 2 has in its pocket

moneys of the plaintiff, then the defendant no. 2 can surely adjust the

claim of the plaintiff against the amount due to the defendant no.2

from the plaintiff because of the defendant no. 2 already having with it

moneys of the plaintiff. This is the law in view of the judgment of the

Division Bench of this Court in the case of Walchandnagar

Industries Ltd. vs. Cement Corporation of India (2012) 2 ArbLR 219

(DB). Adjusting by a person moneys due to another person from the

amounts of another person lying with the first person in law is an

adjustment because a person takes out money from his one pocket and

puts it in another pocket wherein the claim of the other person's

amount is.

13. Accordingly, I hold that defendant no. 2 is entitled to

adjust a sum of Rs.49,35,000/- from the suit amount to be decreed of

Rs.55,00,000/-.

14. The net effect of the aforesaid discussion is that the suit

of the plaintiff will stand decreed for the difference of Rs.55,00,000/-

minus Rs.49,35,000/- i.e Rs.5,65,000/-. Plaintiff is also held entitled to

pendente lite and future interest at 9% per annum simple till the date

of payment. Parties are left to bear their own costs. Decree sheet be

prepared accordingly.

JANUARY 31, 2018                             VALMIKI J. MEHTA, J