M/S. Rajasthan Art Emporium v. Kuwait Airways & Anr.

JUDGMENT

PRASHANT KUMAR MISHRA, J. These two appeals are cross appeals preferred again st the order passed by the National Consumer Disputes Redressal Commission 1 dated 1 (for short ‘the NCDRC’)

01.10.2012 in Original Petition No. 229 of 1997 whereby the complaint filed by the appellant/complainant was disposed of while directing respondent no. 1 to pay the appellant/complainant US$ 500750/- or Rs. 20 lakhs is less along with 9% per annum compensation with effect from 31.07.1996 till its realization.

¶2The case of the appellant/complainant is that it is an exporter of all kinds of handicrafts goods to several countries including USA. The appellant/ complainant had received an order from M/s. Williams Sonoma Inc. USA for supply of handicraft goods. Accordingly, the appellant/compla inant had to send three shipments of 1538 packages weighing 26,859.5 kg. to the consignee on an urgent basis, which was specifically informed to the respondents. On 22.07.1996, the goods were tendered to respondent no. 1 through respondent no. 2 after getting an assurance that the shipments will reach destination at Memphis within 7 days and delivery schedule w as handed over to the appellant/complainant. As per the schedule, the entir e consignment was supposed to reach at Memphis by 31.07.1996.

¶3The consignments did not reach the destination at Memphis (USA) as per the delivery schedule. On enquiry, respondent no. 1 expressed its inability to deliver the consignments as per the delivery schedule provided to the appellant and a revised delivery schedule was given on 05.08.1996, which mentioned the date of delivery on 06.08.1996. However, the consignment did not reach at the destination even as per the revised delivery schedule.

¶4On non-receiving the goods, the consignee expressed its anguish by sending a letter dated 23.08.1996 and informed the complainant that the goods are not received in toto, and respondent no. 1 was unable to tell where the remaining cartons are.

¶5It is also on record that 69 cartons were lying with Lufthansa. The respondent no. 1, by its letter dated 30.08.1996 addressed to respondent no. 2, accepted the short delivery. On 07.09.1996, the appellant/complainant made a modest claim against the respondents for refund of full fr eight. In response to the said claim, respondent no. 2 confirmed having short delivered 104 cartons out of 288 cartons but did not state whether the other ca rtons had arrived at the destination. The appellant served the legal not ice dated

04.08.1997 on the respondents, which evoked no response. 287M/S. RAJASTHAN ART EMPORIUM v. KUWAIT AIRWAYS

PRASHANT KUMAR MISHRA, J.

¶6Ultimately, the appellant/complainant lodged a complaint before the NCDRC with the prayer that respondent no. 1 be directed to refund a sum of Rs. 24,48,345/- being the fair charges for the consignments; pay a sum of Rs. 20 lakhs as compensation for loss of business and reputation; pay US$ 7042.00 being the value of the goods short delivered; pay interest @ 18% as well as cost of litigation, which was disposed of as abovesaid. Hence these appeals.

¶7Learned counsel for the appellant would submit that admitt edly, the shipments booked by the appellant on 24.07.1996, which were to be delivered by 31.07.1996, were delivered to the handling agent of the Consignee only in the month of September, 1996 from 0 3.09.1996 to

12.09.1996 with delay of more than 40 days.

¶8Learned counsel submitted that the goods were tend ered to respondent no. 1 on a specific representation that the same will be delivered within seven days, therefore, time is the essence of the contract between the parties. It is next argued that in the case in hand, it is clear from the material on record that respondent no. 1 has been highly negligent in rendering its services to the appellant.

¶9Learned counsel further submits that once the NCDRC arrives at the conclusion that there is delay in delivery of consignment due to negligence of respondent no. 1, fair, just and reasonable compensation must be awarded in accordance with conditions of the contract and statutory provisions of the Carriage by Air Act, 1972.

¶10Per contra , learned counsel for respondent no. 1 submitted that there was no deficiency in service rendered by respondent no. 1. All reasonable care in performing its duties under the contract of carriage were discharged diligently. He would submit that no specific instructions were given by the appellant with regard to the time by which the consignments had to reach its destination, therefore, time was not the essence of contract entered into between the parties.

¶11Learned counsel next submits that respondent no. 1 should not be held liable for delay in service, as in spite of being aware of t he fact, the appellant sent the consignment through Kuwait Airways, which has various stops over at Kuwait, Chicago and Memphis, which would consume a lot of time period to deliver the consignment.

¶12Learned counsel lastly submits that the compensation awarded by the NCDRC is excessive, unjust and unfair and is based on the conjectures and surmises.

13.We have heard learned counsel for the appellant as well as the respondents at length and perused the material placed on record meticulously.

¶14Initially, the NCDRC passed a final order on 21.05.2003 holding that there has been a short delivery of 104 pieces equal t o 1822 Kgs. Therefore, in view of Rule 22 of Carriage by Air Act, multiplying this weight by US $ 20 per Kg., the amount payable work out to US $ 36440 which becomes payable by the respondent to the complainant for t he loss of goods. This amount was directed to be paid by the respondent along with interest @ 9% from 01.10.1996. In so far as the issue concerning delay in delivering the consignment, the NCDRC found that in the absence of any communication emanating from the respondent No.1-Ku wait Airways promising to deliver the goods by any particular date, the plea raise d by the complainant regarding delay in delivering the goods is not sustainable.

¶15Challenging the above order dated 21.05.2003 of the NCDRC, the complainant preferred Civil Appeal bearing C.A.No. 8211 of 2003 which was allowed by this Court on 15.03.2011. This Court observed that the issue concerning delay in delivery of goods has been decided by NCDRC without appreciating the material and evidence available on record. Res ultantly, the matter was remitted back to NCDRC for fresh considerati on of the complainant case vis-à-vis delay in delivering the consignment.

¶16After the remand, the present impugned order has been passed holding that there was delay in delivering the consignment on time for which the complainant is entitled to compensation of 25037.5 Kg. multiplied by US $ 20 Kg. each which comes to US $ 500750 which exceed the sum of Rs. 20 lakhs claimed by the complainant therefore the complainan t was only entitled to have compensation of Rs. 20 lakhs along with interest @ 9% w.e.f. 31.07.1996 till its realization as also the litigation charges and compensation for harassment and mental agony in the sum of Rs. 5 lakhs.

¶17Basing on the material available on record, the NCDRC has held that the fax message sent by respondent No.2-agent through whom the consignment was booked to be shipped by the respondent No.1 goes to 289M/S. RAJASTHAN ART EMPORIUM v. KUWAIT AIRWAYS

PRASHANT KUMAR MISHRA, J. show that the goods shall be delivered at Chicago Memphis on 29.07.1996,

31.07.1996 and 31.07.1996. However, when the consignment did not reach the destination, appellant - M/s Rajasthan Art Emporiu m informed the respondents whereafter, the respondent no. 2 provided a revised schedule, however, the shipments did not reach the destination even as per the revised schedule, according to which the goods were to reach the destination on

06.08.1996.

¶18The evidence on record shows that the parts of the shipments were received at Memphis on 30.08.1996 as admitted by the respondent No.1 in its letter dated 24.09.1996. Referring to the documents showing business relation between complainant and his buyer, the NCDRC would observe that the buyer was the largest customer of the complainant. Thus, the complainant has suffered huge loss due to transaction and the goods were received in the first week of September, 1996.

¶19We have perused and examined the material available on record and we are satisfied that the NCDRC has not committed any ille gality or perversity in recording the finding that there was de lay in delivery of consignment. As a matter of fact, it is an admitted position that the consignment which was booked on 24.07.1996, was delivered after one and a half month i.e. from 03.09.1996 to 12.09.1996.

¶20In its reply before the NCDRC, the agent-respon dent No.2 (Dagga Air Agents) admitted that at the time of booking, the complainant was informed about the tentative date of arrival of goods at Memphis by 31.07.1996 and thereafter a revised schedule was also give n to the complainant. Once the agent has issued a time schedule for del ivery of consignment, it cannot be said that there is no material indicating that there was no agreement for delivery of the consignment in time. respondent no.1 – Kuwait Airways has never taken the stand in any of the communication arising from its office that the respondent No.2 is not its agents or that there was no agreement or promise by its agent that the consignment wi ll be delivered in 07 days. The NCDRC has rightly noted that the appellant has paid air freight which is ten times more than the sea freight only to ensure that the consignment reaches its destination within a week because sea cargo would have taken 25 to 30 days for delivery and the appellant has paid such huge freight charges for ensuring early delivery, hence, the delay in delivery of consignment has necessarily inflicted damage to the appellant which is liable to be satisfied by the respondent No.1 as provided under Section 19 and 13(3) of the Carriage by Air Act 1972.

¶21The provisions contained in Section 19 and 13 (3) of the Carriage by Air Act 1972 read as follows: “19. The carrier is liable for damage occasioned by delay in the carriage by air of passengers, luggage or goods.” “13 (3). If the carrier admits the loss of the goods, or if the goods have not arrived at the expiration of seven days after the date on whi ch they ought to have arrived, the consignee is entitled to put into force against the carrier the rights which flow from the contract of carriage.” By virtue of the above provisions, the consignee is entitled to s eek damages for delay in delivering the consignment. It is not the case of the respondent No.1 that the respondent No.2 had acted beyond the terms of agency. Neither it is averred that the respondent no.2 was not the agent of respondent No.1.

¶22Section 186 of the Contract Act, 1872 provides that authority of an agent may be expressed or implied. Similarly, Section 188 of the Contract Act, 1872 prescribes that an agent, having an authority to do an act, has authority to do every lawful thing which is necessary in order to do such act. In Dilawari Exporters v. Alitalia Cargo & Ors.2 this Court has observed in Paragraph 17 to 20 as follows: - “17. Section 186 of the Contract Act, 1872 (for short “the Contract Act”) lays down that the authority of an agent may be expressed or implied. As per Section 187 of the Contract Act, an authority is said to be express when it is given by words spoken or written, and an authority is said to be implied when it is to be inferred from the circumstances of the case; and things spoken or written, or the ordinary course of dealing, which may be accounted circumstances of the case.

¶18Section 188 of the Contract Act prescribes that: 2 (2010) 5 SCC 754 291M/S. RAJASTHAN ART EMPORIUM v. KUWAIT AIRWAYS

PRASHANT KUMAR MISHRA, J. “188. Extent of agent’s authority.—An agent, having an authority to do an act, has authority to do every lawful thing which is necessary in order to do such act.”

¶19Section 237 of the Contract Act provides that: “237. Liability of principal inducing belief that a gent’s unauthorised acts were authorised.—When an agent has, without authority, done acts or incurred obligations to third persons on behalf of his principal, the principal is bound by such acts or obligations if he has by his words or conduct induced such third persons to believe that such acts and obligations were within the scope of the agent’s authority.”

¶20There is no gainsaying that onus to show that the act done by an agent was within the scope of his authority or ostensible authority held or exercised by him is on the person claiming against the principal. This, of course, can be shown by practice as well as by a wri tten instrument. Thus, the question for consideration is whether on the evidence obtaining in the instant case, can it be said that Respondent 3 had an express or implied authority to act on behalf of Respondent 1 as their agent? If Respondent 3 had such an authority, then obviously Respondent 1 was bound by the commitment Respondent 3 had made to the appellant.”

¶23In the case at hand, in the absence of a plea by the respondent No.1, that the respondent no. 2 was not its agent or that he had no authority t o give schedule of delivery of consignment, the onus has not been discharged. Therefore, the respondent No.1 is bound by the promise held by its age nt - respondent No.2, that the goods shall be delivered within one week and when the time schedule expired and the goods were, in fact, delivered after one and a half month, there was negligent delay in delivery of consignment.

¶24The grievance of the appellant in this appeal is mainly on account of the NCDRC not allowing the entire claim for compensation by calculating the total weight of the subject consignment at 2507.5 Kg. multipl ied by US $ 20 per Kg. According to the appellant, in view of Rule 22 (2) of Schedule-III of the Carriage by Air Act, 1972 (as amended by the Hague Protocol) the amount thus calculated would exceed the sum of Rs. 20 lakhs. The appellant would thus claim the entire amount equivalent to US $ 50070 without limiting it to Rs. 20 lakhs. However, on this point also, we approve and sustain the order passed by the NCDRC for the reason that in its complaint under Section 21(a)(i) of the Consumer Protection Act, 1986, the complainant/appellant has sought damages for Rs. 20 lakhs only as compensation for loss of business and reputation. It is a trite law that a party is not entitled to seek relief which he has not prayed for. For this proposition we may profitably refer to this Court’s judgments in Merrrs. Trojan & Co. Vs. RM.N.N. Nagappa Chettiar 3, Krishna Priya Ganguly etc. etc. Vs. University of Lucknow & Ors 4., Om Prakash & Ors. Vs. Ram Kumar & Ors5., Bharat Amratlal Kothari Vs. Dosukhan Samadkhan Sindhi & Ors6., Manohar Lal (Dead) by Lrs. Vs. Ugrasen (Dead) by Lrs. & Ors.7

¶25In view of the forgoing reasons, we are not inclined to interfer e with the Order passed by the NCDRC and resultantly both the Civil Appeals deserve to be and are hereby dismissed. The parties shall bear their own costs. Pending application(s), if any, shall stand disposed of Headnotes prepared by: Appeals dismissed. Ankit Gyan 3 AIR 1953 SC 235 4 AIR 1984 SC 186, 5 AIR 1991 SC 409 6 AIR 2010 SC 475 7 2010 (11) SCC 557

CIVIL APPELLATE JURISDICTION : Civil Appeal No.9106 of 2012. From the Judgment and Order dated 1.10.2012 of the National Consumer Disputes Redressal Commission, New Delhi in Original Petition No.229 of 1997. With Civil Appeal No.9194 of 2012.

Vivek Sood, Sr. Adv., Dinesh Sabharwal, Braj K Mishra, Ms. Aparna Jha, Ms. Himani Bhatnagar, Abhishek Yadav, Ruchit Mohan, Dhrubjit Saikia, Ms. Rasneet Kaur, Ms. Madhurima Tatia, S. C. Birla, Subrat Birla, Advs. for the appearing parties.