GITA GODHA PRIVATE LIMITED. ,NEW DELHI v. PAN AMERICAN WORLD AIRWAYS, DELHI AIRPORT, DELHI
1982-10-07
H.L.ANAND
body1982
DigiLaw.ai
( 1 ) THIS suit by an exporter of garments against an international airline for damages, based on the failure of the airline to change the name of the ultimate consignee in any airway bill covering shipment of garments, and delay in making the change in the other, raises some interesting questions of construction of certain provisions of the Convention of certain provisions of certain rules relating to international carriage by Air, signed at Warsaw, as amended, incorporated in the Carriage by Air Act, 1972 and of conditions of the contract of carriage. ( 2 ) GITA Godha Pvt. Ltd. , for short, the Consignor, exports readymade garments to the United States. Pan American World Airways, defendant, for short, the Carrier, inter alia, carries on the business of air-lifting cargo from India to other countries, including the United States. In June, 1978, the consignor despatched two consignments, one covered by Airway Bill No. 026-21236132 dated June 8, 1978, for a declared value of Rs. 1,49,300. 00, and the other covered by Airway Bill No, 026-21236460 dated June 28, 1978 for a declared value of Rs. 1,92,700. 00 to New York, through the carrier. It is claimed by the consignor that both the consignments consisted of "fashion goods". Both the Airway Bills list Chase Manhattan Bank, for short, the nominal consignee, as the consignee. Airway Bills contain identical instructions that M/s. Gourmet Clothing Company Ltd. of New York, for short, the ultimate consignee, be notified. There is a further endorsement that on arrival of the goods agent Karl Schroff and Associates, for short the agent, be informed. The two consignments covered by the Airway Bills of June 8, 1978 and June 28, 1978 arrived at destination on June 18, 1978 and July 7, 1978 respectively. Neither of the Airway Bills indicated the declared value for carriage as distinguished from the declared value for customs, which was declared in each of the cases, as mentioned above. It further appears that during the same period two other consignments were despatched by the consignor through the carrier for the same destination with identical nominal and ultimate consignees and with identical instructions regarding notification on arrival. Pursuant to the request of the consignor to their shipping and clearing agent, the said shipping agent by their letter of Sep. 19, 1978, Ex.
Pursuant to the request of the consignor to their shipping and clearing agent, the said shipping agent by their letter of Sep. 19, 1978, Ex. P-1, informed the carrier with reference to all the four consignments, mentioned above, that "the consignee (apparently referring to the ultimate consignee and not the nominal consignee) is unable to take delivery and shipper has arranged with other consignee for the delivery" and requested the carrier "to please send an urgent message at destination to transfer the said shipment to M/s. Sona Distributor Inc. , 85, Canal Street, New York". The carrier was also requested to "deliver the said, consignment directly to the second consignee immediately and collect the charges" from them. This communication was addressed to the New Delhi Office of the carrier. By its communication of Sep. 26, 1978, Ex P-2, the New Delhi Office of the Carrier informed the consignor with regard to the substitution of the ultimate consignee that "in order to deliver the above shipments to M/s. Sona Distributor Inc. , 85, Canal Street, New York we require the original Airway Bills (original shipper s copy) and no objection certificate from your bankers". By its letter of Oct. 9, 1978, Ex P-3, the consignor forwarded to the New Delhi Office of the Carrier the original Airway Bill No. 026-21236460 and 026-21236132 and requested the Carrier "to make the change in the name of the consignee from Chase Manhattan notify Gourmet Clothing Company Ltd, to M/s. Sona Distributor Inc". The carrier was also requested to instruct their New York Office to deliver the shipment to M/s. Sona Distributor. It appears that necessary change was made in the two Airway Bills and there is no further controversy with regard to these two Airway Bills and consignments covered by them. By its letter of Oct. 13, 1978, Ex P-4, the New Delhi Office of the Carrier informed the consignor with reference to Airway Bills of June 8, 1978 and June 28, 1978 that the New York Office of the carrier had informed that they were unable to "amend the consignee as delivery documents have already been picked up by the broker of the original consignee . It was further stated that the original ultimate consignee had not advised the New York Office of their refusal to accept the shipment. Copies of Airway Bills were returned to the consignor.
It was further stated that the original ultimate consignee had not advised the New York Office of their refusal to accept the shipment. Copies of Airway Bills were returned to the consignor. This communication elicited the counsel s notice of Nov. 3, 1978, Ex P-5, by which the carrier was called upon to explain why the instructions with regard to substitution of the name of the consignee had not been carried out. By its reply of November 8, 1978, Ex P-6, the Carrier informed the counsel that consistent with the practice obtaining in New York documents were released to the broker of the consignee and that while the consignor s instructions to amend the Airway Bill dated June 28, 1978 had been carried out, the substitution could not be made in the other Airway Bill of June 8, 1978, as the original ultimate consignee s broker was still in possession of documents and the shipment had since been placed in the U. S. Government warehouse. The Counsel was further informed that unless the broker of the original consignee, designated, by the consignor, returned the documents collected from New York Office "the desired amendment of Airway Bill cannot be accomplished. "by its letter of November 21, 1978, Ex D-3, the nominal consignee informed the carrier that the ultimate consignee had refused merchandise covered by Airway Bill of June 8, 1978 on which the carrier, by its letter of Nov. 30, 1978, Ex D-9, requested the agent for the return of documents as the shipment had been refused. The documents were, however, not returned by the agent as the agent claimed to have financial interest in the shipment covered by the said Airway Bill and had apparently already informed the carrier by his letter of Aug. 29, 1979, Ex D-4. It further appears, and these are matters with regard to which there has been controversy between the parties, that the goods had been shipped under the cover of letter of credit which had expired on June 10, 1978, that the ultimate consignee had refused to take delivery prior to Sept. 23, 1978 on the ground that the letter of credit had expired, and that the agent, who had picked up the documents on June 19, 1978, had paid custom duty on the consignment covered by Airway Bill of June 8, 1978 amounting to U. S. $ 6,000.
23, 1978 on the ground that the letter of credit had expired, and that the agent, who had picked up the documents on June 19, 1978, had paid custom duty on the consignment covered by Airway Bill of June 8, 1978 amounting to U. S. $ 6,000. 00 and this was the reason why the agent claimed "financial interest" in the consignment and was, therefore, withholding documents of delivery. It further appears, and with regard to this also there is controversy between the parties, that the substituted ultimate consignee declined, to take delivery of the consignment, covered by the Airway Bill of June 28, 1978 by his letter of Nov. 11, 1979, Ex Public Witness. 3/2, during the pendency of the suit, on the ground that "both the consignments covered by the Airway Bill of June 8, 1978 and June 28, 1978 constituted one main consignment so far as the style, colour and the story is concerned. " It was further pointed out by it that "unless both these consignments are released, to us within a week of this letter, we will not be interested in taking delivery of these consignments, as we have already closed our purchase for this season. " As a result, delivery of neither of these two consignments was taken from the carrier and the consignments having then transferred to the U. S. Government Warehouse, have been incurring demurrage and the freight charges, admittedly payable to the carrier still remained, unpaid. ( 3 ) IN the background of these facts and circumstances, the consignor claims damages from the carrier amounting to the aggregate of the declared value of the two consignments on the ground that by its failure to carry out the instructions with regard to the substitution of the name of the ultimate consignee in one of the Airway Bills, the carrier failed to deliver one of the consignments, on account of which the other consignment was also rendered of no value and that for these reasons, the carrier became liable to the consignor for damages.
The carrier denies liability on the ground that, to the extent it was possible, the carrier carried out the instructions of the consignor and substituted the name of the ultimate consignee but that the substitution of the name of the ultimate consignee in respect of the consignment covered by Airway Bill of June 8, 1978 was not possible because the original consignee s agent having picked up the papers had deposited the custom duty and declined to return the documents to enable the carrier to make the substitution. The carrier further pleads that the consignor had been guilty of contributory negligence and took no steps to mitigate the damages, if any, which was caused by the acts or omissions of the consignor himself. The carrier further contends that the suit was not maintainable in view of the conditions of contract stipulated on the reverse of the Airway Bill. ( 4 ) ON the pleadings of the parties, following issues were framed on April 21, 1980 : 1. Is the suit as laid barred by limitation under the provisions of the Carriage by Air Act ? 2. Was the consignee a necessary party to the suit and, if so, does the non-impleading of the consignee affects the maintainability of the suit ? 3. Does the plaint not disclose any cause of action ? 4. Is the written statement properly signed and verified ? 5. Did the plaintiff entrust the goods covered by Airway Bills No. 026-2123-6132 dated 8-6-78 and 026-2123-6460 dated 28-6-78 to the defendant company ? 6. Was the defendant company not justified in refusing to amend the name of the original consignee named in the Airway Bills ? 7. Has the refusal of the defendant company to amend the name of the original consignee named in the Airway Bills caused damages to the plaintiff ? 8. Did the plaintiff give instructions to the defendant for amending the name of the consignee at the appropriate stage ? 9. Is the plaintiff entitled to reliefs prayed for ? ( 5 ) SUBSEQUENTLY, at the instance of the carrier, following further issues were framed on October 5, 1981: 10. Whether the suit is not maintainable in view of the conditions of contract stipulated on the reverse of the original Airway Bill ? If so, to what effect ? 11.
9. Is the plaintiff entitled to reliefs prayed for ? ( 5 ) SUBSEQUENTLY, at the instance of the carrier, following further issues were framed on October 5, 1981: 10. Whether the suit is not maintainable in view of the conditions of contract stipulated on the reverse of the original Airway Bill ? If so, to what effect ? 11. Whether the plaintiff failed to mitigate the alleged loss and damages and is for that reason not entitled, to claim any relief ? ( 6 ) IN support of rival contentions, parties led both oral and documentary evidence. I have heard learned counsel for the parties at length, on the various questions in controversy between the parties. My conclusions on the various issues are as follows: ( 7 ) ISSUE Nos. 1, 2, 3, 4 and 5 The pleas on which these issues were based were not pressed with the result that the pleas that the suit is barred by limitation, that the ultimate consignee was a necessary party, that the plaint did not disclose any cause of action, that the written statement was not properly signed and verified and that the consignor did not entrust the goods, covered by the two Airway Bills, to the carrier fail and these issues are answered accordingly. ( 8 ) ISSUE No. 10. This issue is based on the plea of the carrier that the suit was not maintainable "by virtue of the conditions of contract of carriage". The plea is vague and indefinite in that it did not specify the clause of the contract of carriage by virtue of which the suit was not maintainable. At the fag-end of his arguments, counsel for the carrier, however, invoked Cl. 10 (a) of the Conditions of Contract and urged that the suit was not maintainable in that the consignor failed to present to the carrier notice incorporating the claim "within 120 days from the date of issue of the Airway Bill". On behalf of the consignor, it was not disputed that the notice said to incorporate the claim, Ex P-5, was presented to the carrier on or about Nov.
On behalf of the consignor, it was not disputed that the notice said to incorporate the claim, Ex P-5, was presented to the carrier on or about Nov. 4 1978, after the expiry of 120 days from the date of the issue of both the Airway Bills, but it was urged that inasmuch as the cause of action for the claim itself arose after the expiry of the said period of 120 days from the date of the Airway Bills, noticeincorporating the claim could not possibly have been presented within the said period and that Cl. 10 (a) of the Conditions of Contract would. therefore, not be attracted and the contractual requirement would be satisfied if the notice was presented within a reasonable period and prior to the institution of the suit, ( 9 ) THIS contention of the consignor appears to be well-founded. The cause of action with reference to the consignment covered by the Airway Bill of June 8, 1978 arose only on or after October 13, 1978 when the carrier informed the consignor tor the first time of its inability to substitute the name of the consignee. By that day, 120 days had already expired. As for the consignment covered by Airway Bill of June 28, 1978, some days were still left when the carrier sent its communication of October 13, 1978 but since the carrier eventually relented and substituted the name of the consignee in this Airway Bill, the cause of action for damages in respect of this consignment was linked with the cause of action in relation to the other Airway Bill since it is the case of the consignor that in the absence of non-delivery of the other consignment, this consignment also became useless from commercial point of view. That being so notice of the claim could not possibly have been presented within 120 days of the dates of issue of the two Airway Bills and the requirement would be satisfied if the notice had been presented to the carrier within reasonable time of its refusal or inability to make the necessary change even though it was beyond the period of 120 days. It was not urged on behalf of the carrier that the notice of Nov. 3, 1979 was otherwise not a valid notice as envisaged by Cl.
It was not urged on behalf of the carrier that the notice of Nov. 3, 1979 was otherwise not a valid notice as envisaged by Cl. 10 (a) of the Conditions of Contract or that it was not presented within reasonable time of the date on which the cause of action is said to have arisen. The condition was, therefore, either inapplicable or had been substantially complied with and it cannot therefore be said that the suit of the consignor was not maintainable. Issue is answered accordingly. ( 10 ) ISSUE No. 8. This issue is based on the plea of the carrier that the instructions by the consignor to substitute the name of the ultimate consignee were unreasonably delayed and the consignor, therefore, failed to have the necessary instructions at the appropriate stage. It is no doubt true that the consignment covered by Airway Bill of June 8, 1978 arrived at destination on June 18, 1978 and the other consignment arrived on July, 7, 1978. The instructions for the change in the name of the ultimate consignee were sent on Sept 19, 1978, after a lapse of 2-3 months. It is equally true that long before the instructions were issued for substitution of the name of the ultimate consignee, the agent of the original consignee, on the consignee and the agent being notified of the arrival of the cargo, had picked up the Airway Bills and the accompanying documents from the office of the carrier for Bank and custom clearance preparatory to the release of the goods and in the ordinary course of events, in the case of air shipment of cargo, the consignee would have taken delivery of the cargo after the bank clearance and in the absence of any instructions from the consignor to the contrary, the carrier would have been bound to deliver the goods to the ultimate consignee. In that context, there would be considerable justification for the contention of the carrier that the instructions for substitution were unusually delayed and that the proper time for such instructions was soon after the arrival of the goods at destination and in any event, before the ultimate consignee had taken any steps to claim the goods or to otherwise change its position in relation to the goods, as by financial involvement in the payment of custom duty, etc.
or by making other financial commitments or incurring any other liability. In the peculiar facts and circumstances of this case, the delay in the transmission of instructions appears to be quite understandable. The letter of credit opened by the consignee is stated to have expired on June 10, 1978 soon after the despatch of one of the consignments and even before the despatch of the other. The consignee was apparently not interested, in at least one of the consignments covered by Airway Bill dated June 8, 1978 because it is clear both from Ex D-5, Bank of Maharashtra s letter to the consignor, and Ex D-3, the nominal consignee s letter of Nov. 21, 1978 to the carrier, that the consignee had not authorised the payment of invoice for cargo covered by this Airway Bill. Moreover, at no stage did the consignee claim the consignments covered by any of these Airway Bills even though the consignee s agent had, for some inexplicable reason, picked up the papers for customs clearance and it is claimed that he had paid custom duty in respect of one of the consignments covered by Airway Bill of June 8, 1978 and refused to return the documents because of his financial stake. I would accordingly hold that even though the instructions regarding change of the name of the ultimate consignee were unusually delayed, the delay was of no consequence even though meanwhile the agent of the ultimate consignee may have paid custom duty in relation to one of the consignments. I would presently consider the various implications of the financial involvement of the agent and its impact on the rights and obligations of the consignor and the carrier. Issue No. 8 is answered accordingly. ( 11 ) ISSUES Nos. 6 and 7. The questions that these issues pose are if the carrier was not justified in refusing to amend the name of the ultimate consignee in the two Airway Bills and as to its effect. The issues, as framed, appear to have been based on a misapprehension that the name of the consignee was not amended in any of the two bills. This assumption is not correct. By Ex P-1, the consignor s agent had sought amendment in the name of the ultimate consignee in all the four Airway Bills.
The issues, as framed, appear to have been based on a misapprehension that the name of the consignee was not amended in any of the two bills. This assumption is not correct. By Ex P-1, the consignor s agent had sought amendment in the name of the ultimate consignee in all the four Airway Bills. By Ex P-2, the carrier sought further material to carry out the instructions and in order to deliver the above shipment to M/s. Sena Distributors Inc. , the new consignee. By Ex P-3 the carrier forwarded the two Airway Bills, the necessary change in the other two having apparently been carried out. By Ex P-4, the carrier expressed their inability to amend the name of the consignee in the remaining two Airway Bills on the ground that the delivery documents had already been picked up by the consignee s broker It was also pointed out that ultimate consignee had not advised refusal to accept the shipment. The original Airway Billswere returned. Subsequently, however, by Ex P-6 the carrier informed the consignor s counsel that the instructions to amend the name of the consignee in one of the remaining Airway Bills had already been complied with, apparently because the original consignee s agent had meanwhile returned the Airway Bill on requisition by the carrier. The amendment, however, could not be carried in the fourth Airway Bill as the agent was still said to be in possession of the document and the Instructions could not be carried out. It follows, therefore, that even though by Ex P-4, the carrier had expressed its inability to carry out the amendment in the name of the consignee in the two Airway Bills on 13th Oct. , 1978 because the documents had been picked up by the agent, the carrier relented eventually when it found that the documents in respect of one of these Airway Bills had been returned by the agent. Although the carrier had expressed its inability to carry out the amendment initially in both the Airway Bills in the absence of the documents, the necessary instructions were carried out subsequently in respect of one on the document being returned, with the result that there was no refusal to amend the name of the consignee in case of one of the Airway Bills, even though the carrying out of the instructions was delayed.
In view of the detention of the documents in respect of this Airway Bill, the delay in carrying out the instructions of the consignor appears to have been justified. The carrier could not have amended the Airway Bill unless the document had been returned to the carrier. For the same reason, the carrier was justified in declining amendment of the other Airway Bill. ( 12 ) THERE was considerable controversy if the carrier was justified in parting with the Airway Bills to anyone other than the nominal consignee or to the ultimate consignee or his agent without the clearance from the nominal consignee. It was urged on behalf of the consignor that on the terms of the Airway Bills, the nominal consignee was a banking institution which had never appointed any agent to pick up the delivery documents, that the instructions in the Airway Bill merely required that the ultimate consignee may be notified of the arrival of the goods and this notification be made to the ultimate consignee through a named agent and that this instruction did not authorise the carrier to part with the delivery documents in favour either of the ultimate consignee or its named agent and that by disregarding his instruction and by acting in an unauthorised manner in parting with possession of the delivery documents, the carrier disabled itself by its fortuitous act from carrying out the instructions. On behalf of the carrier, it was urged that it was consistent with normal practice that the delivery documents are immediately picked up by the named agent of the ultimate consignee for custom clearance from the nominal consignee, the banking institution, so that the process of release of goods is expedited, speed being the essence of shipment of cargo by air. The contention of the consignor on this count appears to be the result of a misconception. Mere delivery of documents to the agent of the ultimate consignee has no impact on the release of the goods. The release is effected only after the custom and the nominal consignee s clearance has been obtained.
The contention of the consignor on this count appears to be the result of a misconception. Mere delivery of documents to the agent of the ultimate consignee has no impact on the release of the goods. The release is effected only after the custom and the nominal consignee s clearance has been obtained. The instructions in the Airway Bill which specifically mentioned the ultimate consignee as also the agent fully justified not only an intimation to the consignee that the goods had arrived but also the liberty to pick up the delivery documents and have the same processed both at the custom and with the nominal consignee for eventual release. There was, therefore, nothing unusual in the way the carrier dealt with these documents, even though, it must be conceded that the subsequent dealings of the agent with the documents and the refusal of the consignee to take delivery did introduce an unusual feature leading to apparent legal difficulties and avoidable litigation between the carrier and the consignor. In the circumstances, I have no hesitation in holding that having regard to all the circumstances, the carrier was justified in declining to carry out the amendment in the Airway Bills until the return of the Airway Bills and in having failed to carry out the instructions in relation to one of the Airway Bills, which was detained by the agent. ( 13 ) WHAT then is the effect of the refusal?
( 13 ) WHAT then is the effect of the refusal? Ordinarily, if the cause of action for damages had its genesis in the mere refusal or inability of the carrier to amend the name of the ultimate consignee in one or both of the Airway Bills and the right to damages was, in turn, based on that cause of action, nothing further would survive for the consignor to lay a claim on the carrier but in spite of the phraseology of these issues, the mere justification for not making the amendment in the name of the ultimate consignee in one of the Airway Bills and in delaying the amendment in the other do not appear to be the end of the story because the real grievance of the consignor, as indeed, the basis of the claim, is not confined to the technical or mechanical act of amending the name of the consignee but the virtual failure of the carrier to deliver the consignments to the proposed new ultimate consignee and the damage caused on that account. True, the frame of the suit unfortunately does give the impression, albeit an erroneous one, as if the consignor was aggrieved merely because the amendment was not carried out or in case of one of the Airway Bills, it was delayed. The real grievance appears to be that the instruction to deliver the consignments to a new consignee was not carried out. It may be that either in technical parlance or the practice obtaining in that behalf, the instructions had to be carried out, partially, if not wholly, by amending the name of the consignee in the Airway Bills but the amendment is not the be-end and be-all of the instruction. The substance and the core of the instruction is that the original consignee was no more interested in the consignment, he had refused to take delivery, his banker had declined to authorise payment and, therefore, under the compulsion of these adverse circumstances, consignor was compelled to divert the consignments to a new buyer, to whom the consignments were to be delivered direct without the intervention of any banking institution with the resultant supply of goods to such consignee on credit.
It is important to remember in this context that where a banking institution is involved in a shipment, whether by air, or by sea or otherwise, it is the usual mechanics in trade to ensure payment before the delivery of the goods but if the goods are to be supplied on credit, the bank has no intermediary role to play. It, therefore, in the adverse circumstances, the consignor was compelled to deal with a fresh consignee, even at the risk of giving credit to it. I see no justification for the carrier to decline or in its failure for whatever reason, to deliver the consignments to the new consignee so long as the instructions of the consignor are genuine and unequivocal, and neither the original consignee nor the bank involved in the original Airway Bill had any financial stake in thetransaction. The availability or non-availability of the consignee s copies of the Airway Bill and of the other documents or the factum that the agent of the earlier consignee had paid custom duty or had otherwise changed his position, or claimed to have financial interest in the consignment, was wholly irrelevant. It is established On record that the original consignee was not interested in the consignments. It is equally established that the banking institution, mentioned as the nominal consignee, had no claim either. The agent of the consignee had no position of his own independently of his principal. If the consignee had authorised the agent to incur financial obligation on account of custom duty even though the consignee was not interested in the goods, it was a matter for determination between the consignee and his agent. If the agent had changed his own position because he was allowed to pick up the papers and had some kind of a claim on the consignor, that again is a matter between the consignor and the agent. Such rights and obligations did not have any impact on the clear obligation of the carrier to deliver the goods according to the instructions of the consignor unless either the consignee or the bank made any claim on the goods.
Such rights and obligations did not have any impact on the clear obligation of the carrier to deliver the goods according to the instructions of the consignor unless either the consignee or the bank made any claim on the goods. Interestingly enough the carrier had received the original Airway Bills i. e. the consignor s copy of it, and the non-availability of the consignee s copy did not absolve the carrier from the obligation to deliver the goods to the new consignee unless the original consignee made any claim to the goods. The carrier was, therefore, not justified in refusing to carry out the instructions of the consignor in delivering the consignments to the new consignee and in the case of one of the consignments, in delaying its delivery merely because the papers had not been returned by the agent in one case and there was delay in the return of the papers in the other. ( 14 ) EVEN if it be assumed that the agent had some kind of a claim on the consignor or the goods, which may have caused some prejudice to the carrier in dealing with the new consignee, the conduct of the carrier could not be justified. In the first, instance, the carrier never informed the consignor that the agent had any financial involvement or that the papers were not being returned because he had paid custom duty. If such an information had been conveyed to the consignor since custom duty had to be paid, either by one consignee or the Other, or failing that by the consignor in his own interest, there would have been no difficulty in the consignment being delivered to the new consignee on the necessary reimbursement of the agent. Secondly, the carrier could have given the clearance of the goods to the new consignee on the condition of the new consignee reimbursing the agent. This course was also not followed. ( 15 ) RULES 12 to 15 of the Rules in the Second Schedule to the Act which, inter alia, regulate the rights and obligations of the carrier, the consignor and the consignee, leave no manner of doubt that the consignor has the control over the disposal of the consignment under Rule 12 (1) and this right ceases only when that of the consignee begins under Rule 13.
Sub-rule (4) of Rule 12 further provides that if the consignee declines to accept the cargo, as happened in this case, the consignor resumes his right of disposition even though the consignee s right had begun. The only other limitation on the right of the consignor under Rule 12 is that he must not exercise the right of disposition in such a way as to prejudice the carrier or other consignors and he must re-pay any expenses occasioned by the exercise of that right. In the absence of any right claimed by the consignee on or in relation to the consignment, the carrier could not be said to be prejudicing its interest if he carried out the instructions to divert the consignment to the new ultimate consignee merely because the consignee s agent claimed to have changed his position. Rule 15 provides that Rules 12 to 14 do not affect either the relations of the consignor or the consignee with each other or mutual relations of the third parties whose rights are derived either from one or from the other. Any possible claim of the agent either against the consignee or against the consignor would have been clearly within the mischief of Rule 15 and had no impact on the rights and obligations of the consignor, the carrier and the consignee under Rules 12 and 13.
Any possible claim of the agent either against the consignee or against the consignor would have been clearly within the mischief of Rule 15 and had no impact on the rights and obligations of the consignor, the carrier and the consignee under Rules 12 and 13. ( 16 ) FOR all these reasons, I have no hesitation in holding that even though there was some justification for the failure of the carrier to carry out the amendment in the Airway Bill and in the delay in the carrying out of the amendment in the other, the carrier had no justification whatsoever, in either delaying the delivery of the consignment to the new consignee and in its failure to deliver the other consignment to the new consignee, notwithstanding clear and unequivocal instructions to that effect by the consignor and the absence of any legal impediment to such a course being followed A faint suggestion was made on behalf of the carrier in answer to repeated enquiries by me of the counsel for the carrier, if the agent who had been allowed to pick up the papers and allegedly involved himself financially, would ever have a cause of action of whatever nature against the carrier, that if the carrier had dealt with the consignments according to the revised instructions of the consignor, the carrier would have either rendered itself liable to the agent or at least exposed itself to a possible action by the agent against the carrier. There is no substance in this contention. The consignee having lost interest in the consignments, any financial involvement of his agent was entirely a matter between the consignee and the agent. The agent could have had no possible cause of action either against the consignor or against the carrier. Assuming that the agent had any possible cause of action, and may have either filed an action against the carrier or at least threatened one, such an assumption would also not protect the carrier because then, the carrier was bound to deal with the consignments in accordance with the revised instructions of the consignor subject to production of a suitable indemnity bond by the consignor that the carrier would in such an event be fully reimbursed.
As already pointed out above, the carrier could in any case have insisted that the instructions would, be carried out subject to the payment being made to the agent of the custom duty, said to have been deposited by him. That the non-delivery of the consignments to the new consignee caused damage to the consignor was not disputed. The issues are answered accordingly. ( 17 ) ISSUE No. 11. Whether the consignor tailed to mitigate the damage arising out of the failure of the carrier to deliver the consignments, whether one or both, to the new consignee, and was tor that reason, not entitled to claim any relief, is thequestion that this issue poses for decision. The first enquiry would be if there was anything useful which in the totality of the circumstances, created by the need for substitution of the name of the consignee, could be effectively done by the consignor itself. This aspect may be examined for the present independently of the question if any of such measures or steps could have possibly relieved the situation by either obviating loss or damage or if not obviating, at least minimising the impact of all that had happened on the fortunes of the consignor, The consignor was definitely faced with a situation in which the original consignee lost interest in the consignment either because of delay or otherwise. The consignor was no doubt itself to blame because of this delay and to an extent suffered because by the time the consignments were despatched or soon thereafter, the letter of credit opened at the instance of the consignee had expired with the result that the consignee was under no obligation to take delivery of the goods. By this, the consignor was naturally landed in a situation in which there was no ready buyer of the consignments and the goods had to be delivered to a new buyer on credit. Another aspect of the situation was that if the goods were fashion garments, as made out by the consignor, the delay that had already occurred would be accentuated by the further delay that would be involved in the process of finding an alternative buyer and in getting the name of the consignee suitably substituted in the Airway Bills.
Another aspect of the situation was that if the goods were fashion garments, as made out by the consignor, the delay that had already occurred would be accentuated by the further delay that would be involved in the process of finding an alternative buyer and in getting the name of the consignee suitably substituted in the Airway Bills. The first thing that the consignor could have, therefore, done in this situation was either to persuade the consignee to take delivery on whatever terms were considered reasonable or to arrange an alternative buyer for the goods who could take delivery through the bank thereby ensuring prior payment or provide credit to the new buyer. The consignor was able to do the latter and that was the reason for the instruction for the substitution of the name of the consignee and the exclusion of the bank from the new arrangement implying that the new consignee was to get the consignments on credit. The goods arrived at destination in June and July of 1978. The conduct of the consignee gave enough indication by the middle of Sept. 1978 of the lack of interest of the consignee in the consignments and by the third week of Sept. 1978, the consignor initiated action for substitution. It is unfortunate that because of the conduct of the agent in retaining control of one of the Airway Bills and the accompanying documents, even though his principal, the original consignee, had admittedly lost interest in the consignment, rendered the instruction for substitution almost infructuous in relation to one of the Airway Bills. The consignor could not have done better in this situation. The consignor no doubt could have made enquiries as to why the agent was withholding the Airway Bill and the accompanying papers even though his principal had no interest in the consignments and to have swung into action so as to either persuade the agent to release the documents or if the agent had financially involved himself, to reimburse the agent, particularly where the financial involvement of the agent was confined to the payment of custom duty, which in any case had to be paid, whether the consignment was to be delivered to one consignee or the other. Unfortunately, however, there is no material on record to indicate that the agent was withholding the documents because he had deposited the custom duty.
Unfortunately, however, there is no material on record to indicate that the agent was withholding the documents because he had deposited the custom duty. There is no doubt an indication in Ex D-4, a letter from the agent that the agent had financial interest in the consignment, but the financial interest was not spelt out in this letter. Such information was, however, available with the carrier but, unfortunately, it was never conveyed to the consignor with the result that there was no possible occasion for the consignor to offer reimbursement to the agent so as to facilitate the task of the carrier in carrying out the instruction. There was no explanation available as to why the carrier, who had clear information as to the reason why the agent was withholding the documents, the information was never conveyed to the consignor. The consignor no doubt could have made the necessary enquiry on its own from the agent or otherwise and to have taken remedial steps but in the absence of any other indication such a failure could not be considered as a default in carrying out its ordinary duty as a consignor. I should have thought it was for the carrier to convey to the consignor the reason why the papers were being withheld, particularly, where the carrier had been informed that the consignee was no more interested in the consignment. It was also for the carrier to have offered to deliver the goods according to the fresh instructions of the consignor even though on the condition that the payment of custom duty by the agent be suitably reimbursed to the agent. The carrier could not have lost sight of the fact that the custom duty, in any event, was a statutory obligation and its reimbursement to the agent would not have created any difficulty whatsoever. It was urged on behalf of the carrier that the damage could have been reduced, if not eliminated altogether, if instead of allowing consignments to gather demurrage after the disputes had arisen, the consignor had promptly taken delivery itself and to have disposed of the consignments in the market.
It was urged on behalf of the carrier that the damage could have been reduced, if not eliminated altogether, if instead of allowing consignments to gather demurrage after the disputes had arisen, the consignor had promptly taken delivery itself and to have disposed of the consignments in the market. According to the consignor, because of the delay and the fact that the consignments consisted of fashion garments, which were marketable for a particular season, such a course would not have been practical and even if the consignor had rushed all the way to New York, he may not have been able to generate enough funds by the disposal of the consignments to pay for the custom duty, the demurrage or the carriage charges besides for the passage. It is further pointed out that in any event, such a delivery could not have been taken by the consignor in the case of one of the Airway Bills because the carrier refused to deliver the consignment and the other consignment was rendered useless because both the consignments constituted one set having regard to the colour, and sizes and the substituted consignee declined to take delivery without the other. There was considerable controversy between the parties if the goods in the two consignments consisted of "fashion garments" having market for a particular season and as to its implications. There is no substance in the contention that the consignor could have taken delivery of the consignment, in which the name of the consignee had not been substituted. The refusal to carry out the instructions was tantamount to refusal to give delivery to anyone other than the original consignee. If that be so, there was no question of the consignor asking for delivery or to make arrangement for the disposal of the consignment. The position of the other consignment, however, is slightly different. The name of the consignee had been substituted, even though substitution was delayed. Even in this case, the consignor could have done precious little if the two consignments really represented one set of garments having regard to the sizes and colours. The disposal of one consignment without the other would not have been of much consequence.
The name of the consignee had been substituted, even though substitution was delayed. Even in this case, the consignor could have done precious little if the two consignments really represented one set of garments having regard to the sizes and colours. The disposal of one consignment without the other would not have been of much consequence. Even otherwise in the absence of a ready buyer, the air dash of the consignor to New York may have had its hazards particularly having regard to the cost of passage, apart from the heavy payment of customs, demurrage, carriage charges, etc. In considering what steps the consignor could have taken in the unfortunate situation that developed, it is difficult to ignore the time element as also the distance from which the consignor was dealing with the consignments. On the other hand, the carrier had. the advantage of being right on the scene. It is, therefore, not possible to hold that there was any measure or step which, in the totality of circumstances, could have been taken by the consignor to relieve distress or to prevent or minimise damage to itself. ( 18 ) ISSUE No. 9 That leaves for consideration the question as to the relief to which the consignor is entitled in the circumstances of the case. In view of my findings on the various issues, the consignor would be entitled to damages represented by the value of the consignment covered by the Airway Bill in which the name of the consignee was neither substituted nor was it delivered to the new consignee. There was some controversy between the parties as to the true value of the consignment. The Managing Director of the consignor has sworn to the fact that the value mentioned in the Airway Bills represented the true value. True, he has not been able to either spell out the split up of the cost of raw material and other ingredients like labour, etc. nor has he been able to produce the books of account or other records of the company in relation thereto but I have no hesitation in accepting his testimony in view of the value contemporaneously given in the Airway Bill when no one had anticipated that there would, be any controversy with regard to it.
nor has he been able to produce the books of account or other records of the company in relation thereto but I have no hesitation in accepting his testimony in view of the value contemporaneously given in the Airway Bill when no one had anticipated that there would, be any controversy with regard to it. The consignor, however, would not be entitled to damages on account of the value of the consignment covered by the other Airway Bill, the name of the consignee in which was duly substituted, even though the substituted consignee is said to have declined to take delivery for his own reasons. The claim of damages is not based on the delay in the substitution of the name of the consignee. Delayed substitution would not, therefore, entitle the consignor to any damages. Damage on account of this consignment is claimed on the ground that the goods in the two consignments formed part of a single set having regard to the sizes, colour scheme etc. and the failure to substitute the name of the consignee in one rendered the consignment covered by the other Airway Bill useless. Such a claim is rather remote and that both the consignments formed a single set having regard to sizes, patterns, colours, etc. was a peculiar fact of which the carrier had no notice either at the time of shipment or subsequently when notice of the claim was given to the carrier. Moreover the material in support of the claim is insufficient. Reliance was placed on the letter of Nov. 11, 1979, Ex Public Witness 3/2, said to have been received from the substituted ultimate consignee. This letter was, however, received after the institution of the suit and though bearing the dateline Nov. 11, has been shown having been received in the month of October. It is, therefore, not possible to rely on this piece of evidence. The non-delivery is confined, to one consignment covered by an Airway Bill. Damages could not be justified with reference to a different consignment covered by a different Airway Bill. Such is the scheme of R. 22. Rule 22 (2) (b) of the II Schedule in terms provides that the weight to be taken into consideration in determining the amount to which the carrier s liability is limited "shall be only the total weight of the package or packages concerned.
Such is the scheme of R. 22. Rule 22 (2) (b) of the II Schedule in terms provides that the weight to be taken into consideration in determining the amount to which the carrier s liability is limited "shall be only the total weight of the package or packages concerned. " It further provides that "nevertheless, when the loss, damage or delay of apart of the registered baggage or cargo, or of an object contained therein, affects the value of the other packages covered by the same baggage check on the same Airway Bill, the total weight of such package or packages shall also be taken into consideration in determining the limit of liability. " This rule clearly excludes from consideration the content of packages covered by a different Air way Bill in computing the amount of damages. The claim of the consignor to damages on account of the value of consignment covered by the Airway Bill June 28, 1978 fails and is hereby dismissed. Claim for damages for Rupees 1,49,300. 00 on account of consignment covered by Airway Bill of June 8, 1978 succeeds and the suit of the consignor to that extent is decreed. The consignor would also be entitled to proportionate costs and interest on the amount from the date of the suit till the date of payment at 12 per cent p. a.