ANIL v. AIR INDIA LIMITED — 1985 DIGILAW 271 (DEL)

D. R. KHANNA ( 1 ) THIS suit for the recovery of Rs. 1,47,820. 21 p. has been brought by Mrs. Anil Kapur, who claims that she is doing business of export of readymade garments, handicrafts etc. In the month of April, 1975, she received a number of orders for the export of garments from M/s. Roopali, a concern of New York (impleaded as defendent No. 4), through their agent Miss Gool Vakharia, defendant No. 5. The goods thereof valuing Rs. 1,30,604. 47 p. were despatched under 9 invoices on 25-7-1975 through the Air India, impleaded as defendant No. 1, for carriage to New York. An air waybill was issued on the booking of that consignment on behalf of the Air India by their agent S. S. Robinson, Janpath, New Delhi. The documents thereof were negotiated through Allahabad Bank to be got cleared on payment, basis. The Allahabad Bank, New Delhi in turn negotiated those documents through the Irwing Trust Co. , a bank of New York (impleaded as defendant No. 3 ). It has also been stated that defendant No. 4 who had initially agreed to open a letter of credit with regard to the value of the goods, did not, in fact, do so. ( 2 ) THE air waybill and the other documents, however, were never got cleared and released by defendant No. 4 from defendant No. 3 in New York, and were returned later through the Allahabad Bank to the plaintiff. What, however, transpired was that the Air India carried those goods to Paris and from there entrusted them to the Trans World Airlines, initially impleaded as defendant No. 2, for carriage to New York. The plaintiff later was informed by defendant No. 1 by their letter dated 29-8-1975 that the consignment was picked up by defendnt No. 4 on 8-8-1975 in New York, and no payment had been received. The plaintiff, therefore, protested and correspondence ensued. Ultimately both the Airlines disowned their liability, and hence this suit. ( 3 ) DEFENDANT No. 2, Trans World Airlines, contended in written statement that there was no cause of action against them as the privity of contract was between the plaintiff and the Air India only. This prevailed with H. L. Anand, J. , and, therefore, the suit qua this defendant was disrnsised. ( 3 ) DEFENDANT No. 2, Trans World Airlines, contended in written statement that there was no cause of action against them as the privity of contract was between the plaintiff and the Air India only. This prevailed with H. L. Anand, J. , and, therefore, the suit qua this defendant was disrnsised. ( 4 ) NO written statement has been filed from the side of defendant No. 4, While defendant No. 5 simply pleadad that it did not act as agent of defendant No. 4, but only inspected the goods on their behalf to ensure that they were in terms of the orders placed. For this, she pleaded that she was paid commission towards the reimbursement of the expenses incurred. The liability for the suit amount was, therefore, contested. ( 5 ) DEFENDANT No. 3 on their part too denied that there was any privity of contract between them and the plaintiff. Rather it was stated that it was the Allahabad Bank which had forwarded the papers to them, and since none came to them in New York to get those papers cleared and released, they could not obtain any payment on their score. At the same time, it was contended that a duality was enacted by the plaintiff herself inasmuch as that she showed both this defendant as well as defendant No. 4 as the consignee and the invoices and other documents attached with the air waybill mentioned that the goods were meant for defendant No. 4. As such in case the Trans World Airlines delivered the goods to the defendant No. 4 without payment, this defendant did not come into the picture. The liability has, therefore, been disowned. ( 6 ) THE main defence has been set up by the defendant No. 1. It has not been disputed that the consignment was in fact booked by the plaintiff for carriage to New York at Delhi, and that from Paris the Air India handed over the consignment to the Trans World Airlines for carriage to New York. It has also not been disputed that the Trans World Airlines delivered the consignment to defendant No. 4 on 8-8-1975, and this was done without obtaining any payment from defendant No. 4. It has also not been disputed that the Trans World Airlines delivered the consignment to defendant No. 4 on 8-8-1975, and this was done without obtaining any payment from defendant No. 4. Similarly non- clearance of the documents which had been sent by the plaintiff through Allahabad Bank and defendant No. 3 has not been controverted, but it has been contended that the consignee of the documents issued by the plaintiff was defendant No. 4, and, therefore, no impropriety was committed by the Trans World Airlines in delivering the consignment to defendant No. 4. Even in the air waybill it has been pointed out that it was mentioned that the goods were despatched for defendant No. 4. The liability has, therefore, been disowned. ( 7 ) CONSEQUENTLY the following issues were framed : "1. Whether this Court has territorial jurisdiction to entertain this suit as regards defendants 2 and 3? 2. Whether the plaint does not disclose any cause of action as regards defendants 2 and 3? 3. Whether the insurance company is a necessary party to the suit? If so,. its effect. 4. Whether defendant No. 1 could transfer the goods under the air waybill to defendant No. 2 and thus stands absolved of all liabilities? OPD-1 5. Whether delivery of the goods to person other than the consignee was as a result of negligence or wilful default on the part of defendants 1 and 2? If so, its effect. 6. If issue No. 5 is decided in the affirmative as regards defendant No. 2, whether defendant 2 is not liable for the loss? 7. Whether the plaintiff is entitled tointerest? If so, at what rate? 8. To what amount on account of damages and against whom is the plaintiff entitled? 9. Relief. " ( 8 ) ISSUES Nos. 1 and 2 : As already noted above so far as defendant No. 2 Trans World Airlines is concerned, the suit has already been dismissed qua this defendant. It was held that no privity of contract between the plaintiff and this defendant No. 2 existed. The consignment had been booked by the plaintiff with Air India. 1 and 2 : As already noted above so far as defendant No. 2 Trans World Airlines is concerned, the suit has already been dismissed qua this defendant. It was held that no privity of contract between the plaintiff and this defendant No. 2 existed. The consignment had been booked by the plaintiff with Air India. Similarly the air waybill and other documents were despatched by the plaintiff through the Allahabad Bank for getting them cleared and receiving payment from defendant No. 4 in New York; It was the Allahabad Bank which in turn sent those documents to the defendant No. 3 for clearance and realisation of the amount. Admittedly none appeared in New York to get those documents cleared and making payment in New York from defendant No. 3. This defendant, therefore, returned the documents to the Allahabad Bank as having been not cleared. It is, therefore, difficult to see how the plaintiff has any cause of action against this particular defendant. Both the issues are decided against the plaintiff. ( 9 ) ISSUE No. 3 : It has not been shown how the Insurance Company is a necessary party in the suit. The consignment was not lost nor suffered damage. It reached defendant No. 4 for whom it was meant. The controversy to be decided is whether the Air India or Trans World Airlines were justified to hand over the consignment to defendant No. 4 without the latter getting the documents cleared from defendant No. 3 and making payment thereof. This will be decided in the discussion which hereinafter follows. ( 10 ) ISSUES Nos. 4 to 6 : Ex. P. W. 2/15 is the air waybill which was issued by the Air India on the booking of the consignment by the plaintiff for carriage to New York. In the column pertaining to the name and address of the consignee, it was mentioned as under : "irving Trust Co. , One Wall Street, New York, U. S. A. A/c M/s Roopali Div. of Indo American Trading Corporation 1411 Broadway. New York, N. Y. 10018, U. S. A. ". There was also a note that the consignee should be informed on arrival and further in the column pertaining to accounting information the words "charges Collect" were added. This the plaintiff contends, had the implication that the value of the consignment was to be recovered before delivery. New York, N. Y. 10018, U. S. A. ". There was also a note that the consignee should be informed on arrival and further in the column pertaining to accounting information the words "charges Collect" were added. This the plaintiff contends, had the implication that the value of the consignment was to be recovered before delivery. Its value was declared at Rs. l,30,604. 47p. The bill of exchange attached with this air waybill was Ex. P. W. 1/2, and it was drawn on defendant No. 4 for payment of Rs. l,30,604. 47p. There was also mention of 18% interest payable. I need not refer to other documents and evidence on record as material facts thereof have not been disputed. As noted above, this air waybill along with the bill of exchange, invoice etc. were handed over by the plaintiff to the Allahabad Bank for getting cleared on receipt of payment from defendant No. 4 in New York. The Allahabad Bank forwarded them through defendant No. 3 for getting them so cleared. Defendant No. 4, however did not clear these documents, nor make any payment to the bankers. Instead the Trans World Airlines to whom consignment had been entrusted by the Air India for carriage from Paris to New York handed over the same to defendant No. 4 without obtaining any payment. The delivery took place on 8-8-1975. ( 11 ) THERE is little doubt from these facts and circumstances that the Trans World Airlines acted in a highly irresponsible manner in handing over the consignment to defendant No. 4 without caring to take note that it was the defendant No. 3 banker who was the consignee mentioned in the air waybill. Of course, it had been added therein that it was on account of defendant No. 4. However, there could not be any misgiving that the consignee was defendant No. 3 and until they had endorsed the air waybill in favour of defendant No. 4 on realisation of charges which meant the price thereof, the Trans World Airlines could not have handed over the consignment to defendant No. 4. in fact the release of consignment could only have taken place when the air waybill was presented. Without caring to obtain its delivery the Trans World Airlines passed on the consignment to defendant No. 4. in fact the release of consignment could only have taken place when the air waybill was presented. Without caring to obtain its delivery the Trans World Airlines passed on the consignment to defendant No. 4. ( 12 ) THE next question to be considered is how far the Air India can be made liable for this default committed by the Trans World Airlines. The contract which the plaintiff entered into for carriage of goods from Delhi to New York was with the Air India. It was, therefore, the liability of the Air India to carry the goods to New York. In case the Air India for any reasom did not choose to do so themselves, and considered it proper to avail the services of Trans World Airlines for carriage of consignment from Paris to New York the contract in this regard was inter se them only. The plaintiff did not come into the picture. The liability of the Air India, therefore, qua the plaintiff subsisted and they could not pass that on to a third party with whom the plaintiff had nothing to do. It is well settled that an agent cannot lawfully employ another to perform acts which he has expressly or impliedly undertaken to perform personally, unless by the ordinary custom of trade, a sub-agent may, or, from the nature of the agency, a sub-agent must, be employed. No such ordinary custom of trade has been proved on record. It is not even brought out that the Air India had no flight going to New York. Moreover, the agent is responsible to the Principal for the acts of the sub-agent and the sub-agent is on his part responsible for his acts to the agent, but not to the Principal except in cases of fraud or wilful wrong. The statutory provisions in this regard exist in Ss. 190 to 192 of the Contract Act of 1872. Itis not shown that there was any collusion or fraud between the plaintiff and the Trans World Airlines. The liability of the Air India, therefore, to account for the consignment to the plaintiff clearly remains. ( 13 ) UNDER S. 30 of the Carriage by Air Act, 1972 the liability of different carriers with regard to the goods consigned remains joint and several. The liability of the Air India, therefore, to account for the consignment to the plaintiff clearly remains. ( 13 ) UNDER S. 30 of the Carriage by Air Act, 1972 the liability of different carriers with regard to the goods consigned remains joint and several. The present suit is by the consignor and, therefore, the right of action against the first carrier which has been the Air India clearly exists. R. 13 of the Second Schedule to the Carriage by Air Act, 1972 entitles the consignee to require the carrier to hand-over to him the airway bill and to deliver the cargo to him on arrival of cargo at the place of destination and on payment of charges due and on complying with the conditions of carriage set out in the airway s bill. Unless otherwise agreed it is the duty of the carrier to give notice to the consignee as soon as the cargo arrives. In the present case as already noted above the consignee was the defendant No. 3 banker though it was to hold the goods on account of defendant No. 4 and the latter was to get the documents released on payment of the amount mentioned in the bill of exchange. No delivery was effected of the cargo to defendant No. 3 nor any notice given to it of the arrival of the cargo. ( 14 ) THE airways bill contained conditions of contract on its reverse side and mentioned that carriage if performed by several successive carriers is regarded as a single operation. Condition No. 9 stipulated that unless as otherwise specifically provided, delivery of the goods would be made only to the consignee named in the face of the airway bill, unless such consignee is one of the carriers participating in the carriage, in which event delivery would be made to the person indicated on the face of airway bill as the person to be notified. It also provided for sending of notice to the consignee on the arrival of the goods. ( 15 ) THERE is, therefore, no escape from the conclusion that the delivery of the goods in the present case was effected to defendant No. 4 unauthorisedly when the consignee was the defendant No. 3. It also provided for sending of notice to the consignee on the arrival of the goods. ( 15 ) THERE is, therefore, no escape from the conclusion that the delivery of the goods in the present case was effected to defendant No. 4 unauthorisedly when the consignee was the defendant No. 3. The defendant No. 4 could have taken delivery of the goods only after obtaining the documents including the airway bill from defendant No. 3 and on payment of the amount mentioned in bill of exchange. If the Trans World Airlines acted irresponsibly in delivering the goods to defendant No. 4, the latter s conduct in obtaining the delivery was a fraudulent act. In fact it is defendant No. 4 who should be responsible for the payment of the amount primarily, and in case the Air India is obliged to pay the amount, the remedy to recover the same from defendant No. 4 must remain alive. However, what is indeed unfortunate and somewhat intrigueing is that the plaintiff did not care to correspond at all with defendant No. 4 and seek the price of the goods. She had come to know that the delivery thereof had been taken by defendant No. 4. It was an unusual conduct and some doubt does arise that perhaps there was some collusion between the plaintiff and defendant No. 4. In case the order had been placed by defendant No. 4 with the plaintiff and the goods too have been received by defendant No. 4 any person in the position of the plaintiff would naturally have written. to defendant No. 4 as to why the payment was not made. The payment could surely have been sent through the bankers in case the foregin exchange regulations required that accordingly. Coupled with this circumstance is the non-opening of letter of credit by defendant No. 4 before the dispatch of the goods. There is a mention of this letter of credit in the plaint when the plaintiff admitted that though this letter of credit was agreed to be opened; was in fact not opened. Defendant No. 4 has chosen not to file any written statement in the suit though at initial stages appearance was made on their behalf by their counsel. Perhaps the plaintiff entered into correspondence with the defendant No. 4, but none such has been chosen to be placed on record. Defendant No. 4 has chosen not to file any written statement in the suit though at initial stages appearance was made on their behalf by their counsel. Perhaps the plaintiff entered into correspondence with the defendant No. 4, but none such has been chosen to be placed on record. In case there was a dispute between them as to the nature of the goods despatched, the same has not been brought out in this suit. All these thus are left in the realm of conjectures and possibilities. No clear evidence in this regard has been placed by any of the parties on record and I will not like to hazard a decisive finding on this. ( 16 ) THE plaintiff, therefore, is clearly entitled to the amount of Rs. 1,30,604. 47p. which was the value of the consignment as the same was negligently and without authority delivered by the Trans World Airlines, who had been entrusted the consignment by defendant No. 1, to defendant No. 4. Defendant No. 1, therefore, is liable for having booked the goods for transit and then passed on to the Trans World Airlines. ( 17 ) ISSUE No. 7 : In the bill of exchange, the rate of interest mentioned by the plaintiff which was chargeable fromdefendant No. 4 was 18% p. a. Qua defendant No. 4 this rate should prevail. However, against defendant No. 1 I am not inclined to allow this high rate keeping in view the conduct of the plaintiff in not corresponding with defendant No. 4 after the latter had wrongfully taken delivery of the consignment without making payment thereof. I allow interest at the rate of 6% per annum only against this defendant on the principal amount of Rs. l,30,604. 47p. ( 18 ) THE result, therefore, is that the suit of the plaintiff for Rs. 1,47,820. 21p. is decreed with costs against defendant No. 4. This amount shall carry interest at the rate of 18% per annum from the date of the institution of the suit till realisation qua this defendant The suit of the plaintiff is also decreed against defendant No. 1 for Rs. 1,36,500. 00 with proportionate cost. This amount will carry further interest at the rate of 6% per annum from the date of the institution of the suit till realisation.