York Knitwears Ltd. and Anr. vs Lufthansa German Airlines and ... on 4 May, 2007

8/13/2019 York Knitwears Ltd. and Anr. vs Lufthansa German Airlines and ... on 4 May, 2007

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Consumer Disputes Redressal Commission

Consumer Disputes Redressal Commission

York Knitwears Ltd. And Anr. vs Lufthansa German Airlines And ... on 4 May, 2007

Equivalent citations: III (2007) CPJ 256 NC

Bench: K G Member, P Shenoy

ORDER

P.D. Shenoy, Member

1. Complainant No. 1 M/s. York Knitwears Limited (hereinafter referred to as the Company), Ludhiana, is a

Public Limited Company and complainant No. 2 is the Managing Director thereof. Complainant Company is

one of the premier institutions at Ludhiana and is engaged in the manufacturing and exporting of knitwear for

the past 10 years and claims to have a reputation and goodwill in India and also abroad for exporting knitwear

to the tune of Rs. 2.00 crores to Rs. 13 crores during the decade 1985-86 to 1993-94, except during 1992-1993

due to disturbed political situation in Russia. The Company had received orders for various kinds of knitwear

from buyers in Moscow. Ordered goods were divided into various consignments and shipped and the

following four consignments formed part thereof:

-------------------------------------------------------------------------------- Invoice Weight in Booked Invoice Date ofDate of consign- Number Kgs. through value USD Airway Bill mentreaching Moscow

-------------------------------------------------------------------------------- 1014 1776 Cargolux 21,000 1.12.1993

27.1.1994 1015 1848 -do- 26,520 3.12.1993 5.1.1994 & 27.1.1994

101 2031 -do- 23,880 8.12.1993 27.1.1994 1019 5820 Lufthansa 65,000 15.12.1993 5/10.1.1994

-------------------------------------------------------------------------------- Total 11475 1,36,400

--------------------------------------------------------------------------------

2. These consignments were booked through M/s. Sunrise Freight Forwarders (P) Ltd., New Delhi (OP No.

5)(hereinafter referred to as M/s. Sunrise) and the Company expected that the goods would be delivered atMascow before Christmas. The opposite parties assured delivery of goods at Moscow within 4/5 days which

is the normal time taken for such delivery by the Airlines. The Company had sent these goods by Air as the

same were to be in stock of the buyers for sale during the peak seasons of Christmas and New Year. The

complainant Company was shocked to receive a telephonic call from its buyers from Moscow on 26.12.1993

that none of the goods covered by the aforementioned four consignments sent to them had reached Moscow

and the buyers were astonished by the irresponsibility shown by the Company. Immediately the Company

wrote a letter to the General Manager, Lufthansa Air Cargo Division, Delhi on 27.12.1993 regretting that they

had booked their goods with the opposite parties who had not lived up to their reputation as responsible

carriers and requested that the goods be sent to Moscow before 31.12.1993. It was further mentioned in the

letter that after 1.1.1994 the Russian Custom Duty structure was also changing to the detriment of the traders.

The Company also wrote to M/s. Sunrise showing displeasure at the way the transportation of the goods had

been handled. M/s. Sunrise in turn wrote to the Cargo Manager, Lufthansa German Airlines, New Delhi in

respect to one consignmentbooked by them and also to the Manager, Cargolux Airlines International with

regard to the other three consignments booked by them. The agents also wrote a letter to the Cargo Manager

(Exports) Lufthansa German Airlines, Frankfurt, Germany. Though the three consignments were booked with

Cargolux and one with Lufthansa and all the four were ultimately despatched from Delhi through Lufthansa

Airlines (hereinafter referred to as Lufthansa).

3. On 11.1.1994, the Company directly faxed their letter to Lufthansa Air Cargo Division, Frankfurt to know

the fate of their consignment and further brought to the notice of the opposite parties that the consignment

contained woollen seasonal goods which were perishable and consumable in nature and were likely to get

damaged and they would also go out of season/fashion due to the delay. They further brought to the notice of


Indian Kanoon - http://indiankanoon.org/doc/1729948/ 1


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the opposite parties that in case the goods were not delivered the Company's credibility would be damaged

and there would be heavy financial loss and heavy claims from its buyers. Another letter on similar lines was

sent on 12.1.1994. Only on 20.1.1994 that Lufthansa gave the first meaningful response to the several frantic

inquiries made by the Company confirming that the goods had been airlifted from Delhi but the same were

still stuck in Frankfurt as no flight was being operated due to congestion in warehouses in Moscow. The four

consignments finally reached Moscow on 27.1.1994 after several days of booking, i.e.

(i) (invoice No. 1014) 57 days, (ii) (invoice No. 1015) - 55 days, (iii) (invoice No. 1016) 51 days and (iv)(invoice No. 1019) 43 days.

4. The consignees refused to accept the goods as the bumper season of Christmas/New/ear was over. The

goods are now dead stock for the Company. The Company then wrote a registered letter which is dated

7.3.1994, in which par t claim for one consignment booked with Lufthansa was made. A registered copy of

this letter was sent to Deutsche Lufthansa AG Germany, opposite party No. 2 and M/s. Sunrise.

5. On 23.3.1994 further lettei> were addressed to Cargolux Airlines International and also Lufthansa with

copies to M/s. Sunrise. M/s. Sunrise wrote to Lufthansa requesting that the claim of the company be

considered in all earnestness. After a long wait, the Lufthansa sent a letter dated 23.3.1994 stating that the

matter was being investigated and have also requested the company to address all future correspondence in thematter to the Office of Lufthansa and no correspondence with M/s. Cargolux as the latter has not been

involved in this transportation. The company informed the opposite parties that the buyers have refused to

accept the delayed goods and also will not buy the goods from the company in future until and unless they

were fully compensated. Through a registered letter the opposite parties were asked for a positive

consideration of the claims lodged by the Company. The Company again wrote letters on 18.4.1994,

29.4.1994, highlighting the deficiency in service on the part of the opposite parties. Ultimately a letter was

received by the complainant from the opposite parties mentioning that as the storage and transportation

capacities were inadequate at Moscow the goods were kept at Frankfurt for over 40 days approximately. In

spite of this gross deficiency due to inordinate delay, keeping the Company in dark about the happenings at

Frankfurt, the opposite party repudiated their liability towards any claims made by the Company. Further

correspondence by the Company did not elicit any positive response from the opposite party. The complainantsubmitted that the only stand taken by the opposite parties is that due to congestion in Moscow, the opposite

parties could not send the goods from Frankfurt to Moscow. This stand is wholly untenable as it was the duty

of the opposite parties to have not confirmed the booking of the goods at Delhi as they were already aware of

such a situation The stand taken by the opposite parties is nothing but an after-thought and is factually

incorrect. In support of this contention the complainant has pointed out that in another case the goods were

sent by the Company through another airlines i.e. Aeroflot from Delhi to Moscow and the same were

delivered at Moscow on the next day. The details of the same are given below:

---------------------------------------------------------------------------- Inv. No. of AW Bill No Date Date of Landing

No. Cartons Lifting ---------------------------------------------------------------------------- 1017 143 555 1832 3793

13.12.93 26.12.93 27.12.93 1018 136 555 1832 3804 13.12.93 26.12.93 27.12.93 1020 267 555 1832 8096

15.12.93 29.12.93 30.12.93 ----------------------------------------------------------------------------

6. The above example shows that the other consignments through Aeroflot in fact reached the next day of the

booking whereas the four consignments were still stuck at Frankfurt. The Lufthansa Airlines landed the

consignments after a delay of 1 1/2 of months. The details of which are given below:

---------------------------------------------------------------------------- Inv. No. of AW Bill Date of Flt No. and

Cartons No. Cartons No. and Lifting and Date Lifting Date Flt No. Delhi Frankfurt to

To Frankfurt Moscow




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---------------------------------------------------------------------------- 1014 100 172, 1387, LH 7423 LH 7412 100

8826 16.12.93 27.1.94

1.12.93

1015 104 172, 1387, LH 7343 LH 7334 95 852 16.12.93 5.1.94

3.12.93.

1016 114 172, 1387, LH 734 LH 7416 863 16.12.93 27.1.94

8.12.93

1019 267 220, 3237, LH 7219 LH 7343 31 9141 21.12.93 5.1.94

15.12.93

LH 7418 236

10.1.94

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - T o t a l 5 8 5 5 7 6

----------------------------------------------------------------------------

7. The complainant further submitted that the agent had advised the Company that they may send their goods

through Lufthansa. The Company was planning to send all the goods through Aeroflot. An assurance was

given by the agent that they will deliver the consignments within four days with the tacit consent of Lufthansa

Airlines and this has resulted in gross inefficiency in service on the part of the opposite party. Accordingly,

the complainants made the following claims which were actually suffered by them:

----------------------------------------------------------

1. The goods having become INR 42,78, 868.00 dead stock under invoice

Nos. 1014, 1015, 1016, 1019

(Total US D 136400

2. Interest n value of con- Amount will signment under invoice

depend on period

Nos. 1014, 1015, 1016,

1019, (Total US D

136400) 17% p.a. from

the date of booking of

consignment till actual




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payment

3. Air Freight charged on INR 10,11,036.00 per kg. vol. wt. basis of

our consignments under

inv. Nos. 1014, 1015,

1016, 1019 (Total Vol.

weight 11476 kgs. @

Rs. 88.10 p. kg.

4. Custom Duty levied at INR 14,18,445.00 Moscow on the four

consignment 33.15% on

knitwears on the value of

consignments i.e. on

US D 1364.00 33.15

(US D 45216.60)

5. That the foreign buyers INR 32,51,359.00 have lodged claims for

the following amounts and

have asked for 8% per

month interest thereon

from the date of lapse (after

4/5 days of booking to date

of actual payment

Invoice No. Claim Amount US D

1014 10034.00

1015 22215.60

1016 22888.88

1019 48507.00

---------




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103645.48

---------

(As per annexure 'FF')

(5 page)

6. (Losses suffered due to Actual amount storage rent of undisposed upto the date of goods which had to be

removal of goods retained in Moscow till the

date of actual removal of

goods from warehouse

Other damages

The company claims for

(a) Loss of good will INR 20,00,000.00 (b) Loss of further orders INR 20,00,000.00 refused to the company

Total Value claimed INR 1,39,59,708.00

Warehouse charges and

interest 17% per annum

till the date of actual

payment

----------------------------------------------------------

8. Apart from the above damages, as a deterrent, Lufthansa be directed to credit Rs. 10 lakh to the National

Consumer Welfare Fund to be utilised for the welfare of the public.

Case of the opposite party Nos. 1 and 2:

9. The opposite parties Lufthansa German Airlines and Duesche Lufthansa contended that the complainant

had no cause of action or right as a consignor to file the present complaint. As the consignments were carried

and have been delivered to the named consignees who had received the same without any protest or demur, in

accordance with the provisions contained in the Carriage by Air Act, 1972, the right conferred on the

consignor ceased, and that of the consignee began. The opposite parties 1 and 2 have fulfilled their contractual

obligations having carried the shipment to Moscow, against all odds. There was no undertaking to deliver the

consignment within 2-3 days. Complainant had not given any specially endorsed instruction to the effect that

the consignment was required to be delivered in Moscow before Christmas. The complainants have filed the

complaint to recover the money twice over, whereas the complainants have made a specific demand in their

letter dated 7.3.1994 claiming a sum of Rs. 3,45,202 towards interest @ 17% per annum on the alleged value

of the consignment annexed to the complaint. In the complaint the complainants have claimed the alleged full

value of the goods amounting to Rs. 42,78,868. The complainants have no locus standi to file this complaint.

On the reverse of the Airway Bill, Clause 12 states as follows:




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The person entitled to delivery must make a complaint to the carrier in writing in the case within 21 days of

the date the goods are placed at his disposal.

10. This means only the consignee is entitled to make the complaint. The Lufthansa, in order to avoid

inconvenience to shippers had immediately informed all the cargo booking agents including M/s. Sunrise that

all cargo bound to Moscow would be delayed because of restrictions imposed by the authorities therefor

which they had no control.

11. Liability of the carrier for destruction or loss or of damage to cargo is limited under the provisions

contained in the Carriage by Air Act, 1972. There is no allegation of loss or damage to the goods. Hence, the

claim is not sustainable. The authorities at Moscow had given strict instructions that no consignments were to

be brought as all the warehouses were filled to their capacity. The shipments carried by the opposite parties 1

and 2 were thus stranded at Frankfurt, Germany. The opposite parties 1 and 2 had informed all the cargo

agents of major customers in India of the difficult situation prevailing in Moscow but the complainant did not

give any alternate disposal instructions or change in the destination while the goods were still in Frankfurt to

their knowledge. The fact or otherwise that the complainant despatched certain goods through another airlines

as alleged and that they were delivered on the next date were not only irrelevant but also uncalled and highly

misleading. In conclusion the opposite parties 1 and 2, decline the liability towards the claim of the

complainant.

Case of the opposite parties 5-6 (M/s. Sunrise Freight Forwarders (P) Ltd.:

12. M/s. Sunrise, is a duly approved Cargo agent in India with International Air Transport Association

(AITA). Clauses 17(a) and (b) of the Cargo Agency Agreement between AITA and M/s. Sunrise is quoted

below:

The Lufthansa agrees to indemnify and hold harmless the agent, its officers and employees from liability for

any injury, loss or damage arising in the course of transportation or other ancillary services provided by the

member pursuant to a sale made by the agent hereunder or arising from the failure of the member to provide

such transportation or services, except to the extent that such injury, loss or damage is caused or contributed toby the agent, its officers or employees.

Clause 17(b) of the Cargo Agency Agreement reads as under:

The agent agrees to indemnify and hold harmless the member, its officers and employees from liability for

any loss, injury, or damage arising from any negligent act or omission of the agent, its officers or employees,

in performing or in breach of this agreement, except to the extent that such injury, loss or damage is caused or

contributed to by the member, its officers or employees.

The said Airway bills were issued by M/s. Sunrise as an agent on behalf of the carrier/airlines. The goods

against the said Airway bills were received on 16.12.1993, 8.12.1993, 1.12.1993 and 3 12.1993 respectively

and the same were cleared by M/s. Sunrise on the same date and handed over to the Airlines concerned. The

Lufthansa Airlines lifted the goods on 21.12.1993, 16.12.1993, 16.12.1993 and 16.12.1993 respectively. As

per the IATA Rules the responsibility of M/s. Sunrise came to an end when the goods were handed over to the

Airlines and thereafter, M/s. Sunrise cannot be held responsible for any injury, loss or damages arising out of

any alleged delay or any other cause on the part of the Carrier.

It is denied that M/s. Sunrise assured the delivery of the goods at Moscow within 4-5 days. It is further denied

that there was any default or negligence on the part of M/s. Sunrise in the transportation and handling of the

goods. At the request of the complainant M/s. Sunrise followed up the matter from time-to-time with the

Airlines/Carrier as a gesture of goodwill and without prejudice to the fact that they were in no way responsible

for the alleged delay in the transportation of the goods.




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It is denied that M/s. Sunrise had assured the complainant that they may send the goods through the opposite

parties or that the complainant was planning to send all the goods through Aeroflot Russian Airlines and that

M/s. Sunrise advised them to divert 4 consignments through Cargolux Airlines International and Lufthansa

German Airlines and assured that they would be expeditiously delivered and rather earlier than that by

Aeroflot i.e. within a period of 4/5 days.

Submissions of the learned Counsel for the complainant:

13. Mr. Deepak Sibal, learned Counsel for the complainant submitted that M/s. York Knitwears is a big export

company. He also gave the details of the export figures. He stated that 1,47,000 kgs cargo was to be

transported by Lufthansa Airlines which had an invoice of US Dollar 1,36,400. These goods were lifted from

Delhi and reached Moscow with a delay of 43-57 days which is a clear cut case of deficiency in serviceby the

respondents. This delay is despite the fact that they had written to M/s. Sunrise on 28/29.11.1993 an extract of

which reads as under:

Please try to airlift the consignment in the first available Aeroflot Cargo and send us the original documents at

the earliest.

An extract of the letter dated 1.12.1993 which reads as under:

Please airlift the consignment in the Cargolux on 7th of December positively and send us the documents at the

earliest.

The relevant portion of the letter dated 2.12.2003 is as under:

Please try to airlift the goods by the first available Cargo and send us the original documents at the earliest.

14. In an another letter dated 9.12.2003 the York Knitwears wrote to M/s. Sunrise which reads as under:

The goods will reach Delhi on Monday (13.12.1993) morning. Please airlift this goods in Cargolux by15.12.1993 positively.

15. The underlining note in the above letters is that goods should be carried by the first available flight. This

shows the urgency as they were seasonal goods and Christmas was the main festival in those areas and it

being the winter season need for the woollen garments was the highest. On 26.12.1993 the complainant

received a phone call from Moscow from their buyers that the goods had not reached.

16. On 27.12.1993 York Knitwears addressed a letter to the General Manager Lufthansa Air Cargo Division,

Delhi stating as under:

We sincerely request you to send the message to your Frankfurt office and ask them to despatch the above

shipments to Moscow before 31st December 1993. You must be aware that Russian duty structure is changing

after 1st January, 2004 and if our shipments do not reach before that then we have to pay additional duty for

none of our fault. We again request you to expedite the things as early as possible.

17. On6.1.1994 M/s. Sunrise wrote a letter to the Cargo Manager, Lufthansa stating as follows:

We have been informed by the shipper that this shipment is still lying at Frankfurt. The shipper has claimed

that in spite of additional exorbitant freight charges, this indefinite delay has hampered all their business

activities. The shipper has also confirmed that any claim lodged by their consignee or demurrages due to this

delay will be in your account.




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You are requested to kindly let us have the delivery details of above consignment.

18. On 7.1.1994 the M/s. Sunrise wrote a letter to the Manager, Cargolux, New Delhi stating as under:

Unfortunately these all shipments are still lying at Frankfurt. Our shipper threatens that this indefinite delay

has hampered all their business and has caused great loss to their buyers if shipper received any claim or loss

will be debited to you. You are also requested to kindly let us have the delivery detail of the above

consignment.

19. This was followed up by another letter by fax dated 11.1.1994 by the company which reads as under:

Lufthansa is known for its efficiency, reliability, excellent service and punctuality to its clients. We had been

regularly sending export consignments to Moscow through your Airlines.

Even whenever our Managing Director or any of our marketing executive visits Far East Europe or other

places where Lufthansa services were available, we had been giving priority to Lufthansa as we were very

much satisfied with the services of your Airlines keeping in view the above we sent the above consignments

to Moscow through your Air Cargo with the expectation that these will be airlifted and delivered to our buyer

in Moscow in time. For this purpose we have paid higher freight to you as your Delhi office assured usprompt delivery.

20. On 12.1.1994 the company had sent another fax to Lufthansa which reads as under:

Thanks for your certificate No. GF/exp/56 dated 11.1.1994 received through FAX today. Please confirm the

fate of the following consignments and issue us similar certificate for the same as we are very much worried

about these consignments:

-------------------------------------------------------- Airway Date Cartons Flight No. Date Bill No. Delhi to

Frankfurt

--------------------------------------------------------- 172-1387- 1.12.93 100 LH 7423 16.12.93 8826

172-1387 8.12.93 114 LH 7423 16.12.93 8863

172-1387 3.12.93 104 LH 7423 16.12.93 8852

----------------------------------------------------------

21. On 20.1.1994 the Lufthansa wrote to the Company, which reads as under:

We acknowledge receipt of your letter dated 14th January, 1994 regarding various shipments from Delhi to

Moscow.

CN 220-32329141 dated 15.12 1993 Delhi-Moscow forwarded ex LH 7419/21 Dec, Delhi to Frankfurt onto

LH 7418/10 Jan 94 Frankfurt to Moscow.

CN 172-13888826 dated 1.12.1993 Delhi-Moscow forwarded ex LH7343/16 Dec. Delhi to Frankfurt.

CN 172 - 13878863 dated 15.12.93 Delhi-Moscow forwarded ex LH7343 16 Dec. Delhi to Frankfurt.




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The above shipments are still stuck in Frankfurt due no flight is being operated due to congestion in

warehouse in Moscow as duly explained in our letter dated 28.12.93.

22. The learned Counsel for the complainant submitted that the alleged letter dated 28.12.1993 was never

received by them. On 7.3.1994 the Managing Director, York Knitwears wrote a letter to Lufthansa, Delhi

regarding claim for delayed delivery of the consignment toMoscow (Russia) under Airway bill No. 220 3237

9141 dated 15.12.1993. The extracts of the letter are as under:

We had been assured that the time period for reaching at destination shall be less than two weeks from the

date of handing over the goods. The various details of the consignment which was booked and handed over to

you ready for carriage through our handling agents M/s. Sunrise Freight Forwarders Pvt. Ltd., New Delhi are

given in Annexure I. This consignment was not delivered at Moscow within the assured period of two weeks.

In spite of our best efforts and repeated requests to you, we were not given any proper feed back, as to when

this consignment shall be delivered at Moscow. We are enclosing the copies of the fax message dated

11.1.1994 sent to Lufthansa German Airlines in this connection. As the consignment did not reach Moscow

prior to Christmas, buyer refused to accept the goods as the season was over and there was no scope of selling

the goods until the next season with the result that two of our Senior Executives Mr. Balraj Kumar and Mr.

Mukesh Kumar had to travel to Moscow to arrange for a memorandum of understanding with the buyer so as

to persuade them to take delivery of the goods. The goods are lying with the buyers at Moscow on our riskand costs and we have suffered a very serious loss due to the non-delivery of the consignment within time.

The time taken for delivery of this consignment is almost the same time that would have been taken in case

the consignment had been sent as Cargo through sea ship.

In this letter the complainants claim Rs. 22,12,736.

The details are as under:

-------------------------------------------------------- Bank interest on the value of the INR 3,45,202 consignment

for one year

Difference between Air Freight INR 4,21,068 and Sea Freight charges

Cost of to and fro air ticket INR 1,07,680 between Delhi and Moscow

for two executives

Lodging, Boarding, Travelling INR 4,49,856 and other incidental charges

Losses suffered due to storage rent INR 4,00,000

Bank interest on amounts blocked INR 4,90,930 in purchase of raw material

--------------------------------------------------------

23. Mr. Sibal submitted that the National Airport at Moscow was only closed for half an hour on 14th

December, 1993 from 1900 hours to 1930 hours. He also submitted that the goods reached in this case after a

delay of 43 to 57 days. On the other hand, the goods sent by them by Aeroflot which left on 26.12.1993 and

29.12.1993 landed at Moscow on 27.12.1993 and 30.12.1993 respectively i.e. on the next day. The goods

were stuck at Delhi and Frankfurt but not had reached Moscow in time which shows a gross deficiency of

service and the casual approach which has resulted in huge loss to the Company resulting in its closure. There

were three buyers at Moscow they are Astrovaz D, JV Kavita and Neo Trade. Learned Counsel for the




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complainant stated that they have submitted an affidavit revising their claim as they could realise some money

from the sale of goods. In the affidavit filed by them on 23.10.1997 they gave the following details:

24. The goods having invoice value of US D 1,36,400 had been sent by the complainant Company at

Moscow. These goods were sent through the opposite parties. Goods under invoice No. 1015 were sent to J.V.

Kavita and the invoice value of the same was US D 26,520. These goods having been delayed had not been

accepted by the purchaser M/s. J.V. Kavita Moscow who as a measure of goodwill and on the basis of

complainant's long relationship, had taken delivery of the goods on behalf of complainant Company andstored them in their warehouse. These goods for all intents and purposes continued to be complainant

Company's goods and were lying with them at the risk and responsibility of the complainant Company. This

was also in terms of the purchase order. The purchaser has now vide letter dated 2.1.1997 informed the

complainant Company that these goods were lying in their warehouse at the complainant Company's

responsibility and they had stored the goods for a number of years as a goodwill gesture and because of that

goods had deteriorated. Since suitable customer was not forthcoming and since the goods had deteriorated,

they did not want their own fresh stocks of woollens along side to be adversely affected. According to them,

warehouse charges had also not been paid by the complainant Company which had accumulated to US D

18,600 till August, 1996. They were, therefore, constrained to sell all this material at throwaway prices. Asum

of USD ll,900were realized. Final claim position was stated by M/s. J.V. Kavita in their letter which is given

as under:

(Amount in USD)

--------------------------------------------------------

1. Balance of USD 14 620.00 26,520 - 11,900

2. Warehouse charges 18 ,600.00 (from 2/94 to 8/96) 312

month @ US D 600 p.m.

3. Custom duty paid on behalf 8,791.00 of complainant Company

@ 33.15%

4. 0.5% of invoice value as 530.40 penalty for delayed delivery

----------------

42,541.40

--------------------------------------------------------

A copy of the letter is annexed as 'A' along with the affidavit.

25. In so far as the goods bearing invoice Nos. 1014 and 1016 were concerned, these goods had been sent to

M/s. Astrovaz D, Moscow, value of these goods was US D 44,880. Vide letter dated 4.1.1997, this purchaser

Company informed the complainant Company that since the scarves and others goods lying in their

warehouse have become sticky, moist-affected and infected, they had sold these goods in December 1996 to

make their warehouse safe and available to store fresh woollen goods for the Christmas season of 1996-97.

26. The final claim position was stated by this purchaser Company in their letter which is given as under:




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(Amount in US D)

--------------------------------------------------------

1. Custom duty paid on behalf 14,877.72 of complainant Company

2. 0.5% penalty per day of delav of 11,893.20 53 days (15.12.93 to 7.2.94)

3. Storage charges US D 600 p.m. 21,000.00 from 2/94 to 12/96

Less : Sale proceeds 47,770.72

20,500.00

Balance due to the purchaser 27,270.72 Company

--------------------------------------------------------

The letter of the purchaser company is attached as Annexure 'B'.

27. So far as 'invoice No. 1019 is concerned, the goods are still lying with M/s. Neo Trade, Moscow at the risk

and responsibility of the complainant Company. The warehouse rent claimed by M/s. Neo Trade, Moscow is

US D 23,100 and the penalty charged by them is US D 8000 and custom duty paid on behalf of the

complainant Company is US D 21,547.50.

28. That the present position of all the claims is given below:

--------------------------------------------------------------------------- Inv. Name of Inv. Sale Amount Wlhouse

C / D u t y P e n a l t y N o . t h e p a r t y V a l u e V a l u e l o s s r e n t

--------------------------------------------------------------------------- 1015 JV Kavita 26,520 11,900 14,620 18,6008791.00 530.40 Moscow

1014 Astrovaz-D, 44,880 20,500 24,380 21,000 14,877.72 11,893.20 &1016 Moscow

1019 Neo Trade 65,000 65,000 23,100 21,547.50 8,000.00 Moscow

--------------------------------------------------------------------------- 1,36,400 32,400 1,04,000 62,700 45,216.22

20,423.60 ---------------------------------------------------------------------------

Total Loss (Col 5 to 8) USD 2,32,339.82 (Rs. 36 per dollar) - 83,64,234.00 INR Other lasses

1. Total Infructuous Freight (1.04.000 10,11,036 1,36,400 7,70,878.00 INR

2. Loss of Goodwill 20,00,000.00 INR

3. Loss of orders 20,00,000.00 INR -----------------

1,31,35,112.00.INR

------------------




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29. Accordingly their claim in the original complaint had to be substituted by what is stated in the above

affidavit. Lufthansa had not disputed their delay at various Airports at Delhi, Frankfurt and Moscow in their

written statement. They only said that the consignor received the goods without protest and hence they are not

liable for damages. Except for Kavita, York Knitwears to be owners as they never paid him, hence there was

no question of consignee protesting.

Section 19 of Sale of Goods Act is relevant in this case:

Astrovaz-D in their letter dated 1.11.1993 has stated that time of delivery is hereby extended up to 15th

December, 1993 as against 1st week of November, 1993 as a very special case. The goods if delivered

thereafter shall be accepted under protest, only as a measure of goodwill and the claims arising out of such

delay shall be borne by you. The claims shall be lodged, if necessary, in accordance with the position as

obtaining on actual date of delivery and the goods received later shall continue to be your property and will lie

with us at your own risk and responsibility till the claims lodged by us are settled by you.

30. The Neo Trade in their letter dated 27.12.1993 has stated as follows:

Contract No. 12 dated 7.12.1993 for 20,000 Scarves.

It was provided in our contract that the goods were to be delivered by 15.12.1993 to 20.12.1993 and the date

of bill was to be regarded as the date of delivery. This was in the expectation that goods would be received for

sale during the Christmas season. But the same has not been received by us till date of this letter. Hence,

please note that, if and when, the goods are actually received by us, the same shall be accepted under protest

only and that too on account of the relations shared by us. This shall be subject to the claims which may be

lodged by as a consequence of the damage suffered for the delayed delivery. Also the said goods shall lie with

us as your property in custody with us till our claims are settled by you.

31. As per Kavita is concerned "the damages resulting from any delay of delivery of goods beyond Christmas

shall be borne entirely on your account and shall bear the entire loss."

Appendix of the contract speaks of 1800 pullover to be despatched within 15 days of receipt of payment.

4300 pullovers to be despatched within 21 days of receipt of second payment.

32. Mr. Sibal further submitted that the alleged letter of Lufthansa German Airlines is addressed to 'Agent'

which reads as under:

Due to warehouse congestion in Moscow and heavy backlog situation in Frankfurt a total embargo is declared

on all the shipments to Moscow. We, therefore, request you to please do not book any shipment to Moscow

until further notice.

33. It is not addressed to York Knitwears and the (Sunrise) the agent in this case has denied to have received

this communication. Similarly the agent had denied the receipt of the letter dated 30.12.1993 and 31.12.1993

by them in this case. This letter speaks of heavy backlog at Frankfurt. If this letter had actually been written to

York Knitwears they could have transported the goods in advance from Frankfurt to Moscow by truck. The

first letter which was received by York Knitwears is dated 14.1.1994.

Submissions of the learned Counsel for respondents 4 & 5 i.e. M/s. Sunrise Freight Forwarders (P) Ltd.

34. Mr. Rajeev Talwar, learned Counsel has submitted that as an IATA Agent they had the following

obligations and duties:




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1. to receive goods in airworthy condition;

2. to prepare and issue airway bills in accordance with IATA rules and any specific airlines rules applicable at

the time;

3. to also ensure that airway bill is prepared correctly in accordance with the shipper's documents requirement;

4. to weigh and measure the package and declare accurately the chargeable weight on the airway bills;

5. to label all package correctly;

6. to hand over goods ready for carriage to the concerned airline without any negligence or unwarranted delay;

7. to collect the freight charges from the shipper and remit the same to concerned airlines within 30 days of

end of relevant fortnight i.e. in accordance with IATA regulations. If any event of failure to collect, to pay all

freight charges on behalf of shipper to the airline;

8. on behalf and request of shipper, to follow up information on status of air lifting/delivery of consignment.

35. Mr. Talwar said that their Company had fulfilled all these 8 conditions. There is no complaint against their

Company except that the Company was planning to send all the goods through Aeroflot Russian Airlines but

M/s . Sunr ise advised them to d iver t these four consignments th rough Cargolux Air l ines

International/Lufthansa German Airlines and assured that they would be expeditiously delivered and rather

earlier than Aeroflot i.e. within a period of 4/5 days. Mr. Talwar vehemently denied this. He drew our

attention to the letter dated 27.12.1993 wherein the York Knitwears Ltd., had stated that "we sincerely request

you to send the message to your Frankfurt office and ask them to despatch the above shipments to Moscow

before 31st December, 1993. You must be aware the Russian Duty structure is changing after 1st January,

1994 and if our shipments do not reach before that then we have to pay additional duty for none of our fault.

We again request you to expedite the thing as early as possible".

36. The correspondence dated 11.1.1994 from the Company addressed to Lufthansa Air Cargo Division which

states that 'even whenever our Managing Director or any of our marketing executive visits Far East Europe or

other places where Lufthansa service were available, we had been giving priority to Lufthansa as we were

very much satisfied with the services of your Airlines' is a clear indication that they had trusted Lufthansa

Airlines. He has given the following details of the Airline bills which indicated that goods were received and

cleared by them on the same day, the same are as under:

Goods received on Goods cleared on

16.12.1993 16.12.1993

08.12.1993 08.12.1993

01.12.1993 01.12.1993

03.12.1993 03.12.1993

37. Mr. Talwar submitted that Airway Bills do not mention the date of delivery. The complainants in their

correspondence with them only indicated that they should send cargo by the first available flight or at the

earliest except the correspondence dated 28/29.11.1993 they had mentioned that airlift the consignment in the

first available Aeroflot Cargo, whereas in the letter dated 1.12.1993 the Company states that airlift the

consignment in the Cargolux and the letter dated 2.12.1993 states that please airlift the goods by the first




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available cargo. The letter dated 9.12.1993 states to airlift the goods in Cargolux. The letter dated 13.12.1993

states that airlift the consignment in Cargolux or Lufthansa. He submitted that there is no fault of their

Company at all. They are a mere commission agent getting the commission of 005%.

38. Mr. Talwar submitted that the Freight charges for the said consignments were duly paid by Sunrise Freight

Forwarders (P) Ltd., to the airlines and bills were raised by Sunrise Freight Forwarders (P) Ltd., on the

complainant for payment of the freight as well as other handling charges of Sunrise Freight Forwarders (P)

Ltd. The complainant has till date not made the payment in full and is still holding the amount of Rs. 3,55,129against the above shipments. Apart from the above said amount the complainant is also holding a further

amount of Rs. 9,85,999 which is also due for payment against other shipments.

39. The complainant despite repeated reminders from Sunrise Freight Forwarders (P) Ltd., has failed and

neglected to make the payment.

40. The so called instructions issued by the Lufthansa to their agent dated 28.12.2003 stated that 'due to

warehouse congestion in Moscow and heavy backlog situation in Frankfurt, a total embargo is declared on all

the shipments to Moscow. We, therefore, request you to please do not book any shipment to Moscow until

further notice'. In an alleged letter dated 30.12.1993 the Lufthansa German Airlines has stated that 'due to

warehousing congestion in CIS countries and heavy backlog situation in Frankfurt, a total embargo is declaredon all the shipments to CIS countries. We, therefore, request you to please do not book any shipment to CIS

countries until further notice.' The said letters were never received by M/s. Sunrise nor they have received any

phone call in this regard. IATA instructions are very clear in this regard.

Clause 19 of IATA (Cargo agency agreement) which reads as under:

All notices to the agent from the member or from the agency administrator shall be sufficient if sent by

prepaid telegraphic means or mail addressed to the principal office of the agent. All notices from the agent to

the member shall be sufficient if sent by prepaid telegraphic means or mail addressed to the principal office of

the member. All notice from the agent to the agency administrator shall be sufficient if sent to IATA at the

address shown in this agreement, which address may be changed by notice given in writing from time-to-timeby the agency administrator to the agent.

41. There is no proof that the alleged correspondence addressed to the 'Agent' was received by them.

42. He has quoted the decision of the Hon'ble Supreme Court of India in Ravneet Singh Bagga v. KLM Royal

Dutch Airlines and Anr. III (1999) CPJ 28 (SC), which reads as under:

The deficiency in service cannot be alleged without attributing fault, imperfection, shortcoming or inadequacy

in the quality, nature and manner of performance which is required to be performed by a person in pursuance

of a contract or otherwise in relation to any service. The burden of proving the deficiency in service is upon

the person who alleges it. The complainant has, on facts, been found to have not established any wilful fault,

imperfection, shortcoming or inadequacy in the service of the respondent. The deficiency in service has to be

distinguished from the tortuous acts of the respondent. In the absence of deficiency in servce the aggrieved

person may have a remedy under the common law to file a suit for damages but cannot insist for grant of

relief under the Act for the alleged acts of commission and omission attributable to the respondent while

otherwise do not amount to deficiency in service. In case of bona fide disputes no wilful fault, imperfection,

shortcoming or inadequacy in the quality, nature and manner of performance in the service can be informed. If

on facts it is found that the person or authority rendering service had taken all precautions and considered all

relevant facts and circumstances in the course of the transaction and that their action or the final decision was

in good faith, it cannot be said that there had been any deficiency in service. If the action of the respondents is

found to be in good faith, there is no deficiency of service entitling the aggrieved person to claim relief under

the Act. The rendering of deficient service has to be considered and decided in each case according to the fact




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of that case for which no hard and fast rule can be laid down. Inefficiency, lack of due care, absence of bona

fide, rashness, haste or omission and the like may be the factors to ascertain the deficiency in rendering the

service.

43. Mr. Talwar submitted that he has written several letters to Lufthansa to expedite the shipments of the

cargobut they had not sent any response. Hence there is no deficiency in service on the part of the clearing

agent.

44. Mr. Rajiv Talwar has brought to our notice the judgment of SC in Marine Container Services South Pvt.

Ltd. v. Go Go Garments .

Submissions of Mr. Tikku, learned Sr. Counsel for the Lufthansa Airlines:

45. Mr. Tikku submitted that as far as contract with Kavita is concerned the complainant who is the consignor

has received the payment which is evident from the appendix one to the contract which mentions 6100 pieces

of pullover valued 62,220 US Dollar i.e. 1800 pullover to be despatched within 15 days of receipt of payment

and 4300 pullover to be despatched within 21 days of receipt of second payment.

46. The learned Sr. Counsel mentions that the letter dated 2.1.1997 from J V Kavita to York Knitwears wasplanted by the complainants to support their case in the proceedings before the National Commission. The

extract of the letter is reproduced below:

A sum of US D 11,900 were realised from the sale of goods against your invoice No. 1015 for US D 26,250.

In this respect we would like to inform you that we have already advanced the total invoice value of US D

26,520 on your request on some specific conditions vide our letter dated 15.4.1994.

The contract with Astrovaz D is as follows:

The goods are to be delivered within months of advance payment. Partial shipments and part shipments ahead

of schedule is allowed the date of Bill of Lading/Air Way Bill is considered as the delivery date.

It means that the Company had received some advance payment.

47. The complainants had issued the first notice on 7.3.1994 wherein they have claimed Rs. 22,14,736 which

is contradictory to the claim made before this Commission. Mr. Tikku submitted that normal time taken from

Delhi to Moscow is two weeks. In this case as the conditions were beyond their control there has been a

reasonable delay. The Sunrise in their reply has clearly stated that they have not assured that cargo will be

delivered within a period of 4-5 days.

48. Mr. Tikku submitted that Air Way Bill is the contract between the parties. In the Air Way Bill No.

172-1387-8826 of Cargolux dated 1.12.1993, there is a mention of NVD i.e. No value declared under the

approximate heading. There is no mention about the date of delivery. The consignee has not made any

complaint to Lufthansa. Carriage by Air Rules are very clear in this regard. Mr. Tikku explained in great

detail the dates of delivery of various consignments and that the consignee in each case has received the goods

without any protest. The complainant has filed the claim within 2 months, though part of the payment was

received by him in advance. There was no loss, damage or destruction of the goods transported by Lufthansa.

The case of the complainant is of delay only. The delay cannot equated with loss/damage/destruction. The

consignee has not filed any case against the consignor in the form of arbitration or civil litigation.

49. The letter of Kavita addressed to York Knitwears mentioning that as per the contract the total shipment

was to be done only between the period from 15th September to 30th November, 1993 but the final shipment

was received only on 15th January, 1993 and this has created lot of problems viz., lost credibility with the




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customers and had to pay excess duties for the storage charges etc. Further, some articles were not

corresponding to the samples shown, there were improper packing and they had suffered due to no fault of

theirs and goods can be handed over after settlement of duty paid by them etc. According to Mr. Tikku this

letter is a created document by the Company.

50. There was lack of storage facilities at Moscow which has been brought to the notice of the complainants

by Lufthansa on 3.5.1994 in clear-cut terms, as follows:

Therefore and however much we regret the inconvenience and difficulties you had, we are not in a position to

accept any liability for late forwarding to Moscow. Please understand that due to the above we, unfortunately,

cannot provide a positive reply.

51. Mr. Tikku submitted that the carrier is not responsible for the custom regulations and duties and also the

payment towards the storage charges. He concluded by stating that the right of the consignor ends where the

right of the consignee begins.

Rejoinder by the learned Counsel for the complainant:

52. Mr. Sibal submitted that what he has stated in page 14 of his complaint relating to invoice number,number of cartons, Airway bill number and date and date of lifting and flight number from Delhi to Frankfurt

and flight number and date of lifting fro'. Frankfurt to Moscow and number of cartons which indicates

abnormal delay in the lifting of 585 cartons weighing 11,476 kgs. has not been disputed by the Lufthansa or

by Sunrise Freight Forwarders (P) Ltd. The learned Counsel for the Lufthansa admitted that in normal

circumstances cargo should have been delivered in two weeks' time. But even two weeks is a long period, and

in this case the delay is much longer than that.

Findings:

1. Whether there was an abnormal delay in delivery of cargo and deficiency in service?

53. The following table gives details of 11,476 kgs of woollen knitwear manufactured by York Knitwears

Company which were lifted by Cargolux and Lufthansa as per the invoice numbers, number of cartons, air

waybills, names of the carriers, value in USD and the dates of Airway bill and dates of reaching Moscow:

----------------------------------------------------------------------- Inv. No of AW Bill Date of Flt No. and Cartons

No. Cartons No. and Lifting and Date of Lifting Date Flt No. Delhi Frankfurt

To Frankfurt Moscow

----------------------------------------------------------------------- 1014 100 172, 1387, LH 7423 LH 7412 100 8826

1.12.93

1015 104 172, 1387, LH 7423 LH 7434 95 8852 16.12.93 5.1.94

3.12.93

1016 114 172, 1387, LH734 LH 7416 114 8863 16.12.93 27.1.94

8.12.93

1019 267 220, 3237, LH 7219 LH 7343 31 9141 21.12.93 5.1.94




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15.12.93

LH 7418 236

10.1.94

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - T o t a l 5 8 5 5 7 6

-----------------------------------------------------------------------

54. The Lufthansa has taken over Cargolux, hence it has accepted the responsibility of cargo booking through

Cargolux. The above details given in the statement is not at all in dispute. The dates on which the cargo

reached are also not disputed. It is clear that the cargo has reached with delay of 47-58 days.

55. The complainant has stated in his complaint that, though Lufthansa and Cargolux have delivered the cargo

with inordinate delay at Moscow, certain other cartons sent by another airlines i.e. Aeroflot from Delhi to

Moscow duly landed at Moscow on the very next day. The details of which are given below:

------------------------------------------------------------------------- Inv. No of Aw Bill No Date Date of Landing

No. Cartons Lifting ------------------------------------------------------------------------- 1017 143 555 832 379313.12.93 26.12.93 27.12.93 1018 136 555 1832 3804 13.12.93 26.12.9 27.12.93 1020 267 555 1832 8096

15.12.93 29.12.93 30.12.93 -------------------------------------------------------------------------

56. This is a clear indication of abnormal delay in delivery of cargo by Lufthansa. The learned Sr. Counsel for

the Lufthansa submitted that generally it takes about two weeks for the cargo lifted at Delhi to reach Moscow,

but in this case due to extraordinary circumstances i.e. due to the fact that godowns in Moscow were full and

it was not possible to deliver the cargo at Moscow without furnishing adequate proof for the same. He has

neither contradicted the statement made about the prompt delivery of cargo by Aerof lot nor has adduced any

evidence to disprove this contention of the complainants.

57. In our view there has been a clear-cut case of deficiency in service by Lufthansa.

2. Whether Sunrise Freight Forwarders (P) Ltd. is an agent of Lufthansa?

59. It is contended by the Sr. Counsel for the Lufthansa that M/s. Sunrise is not its agent hence, it is not liable

for the damages if any due to the acts of commission or omission by M/s. Sunrise who were given some Air

Way Bills to be handled by them while booking cargo on their behalf.

60. This argument does not hold water for the following reasons, firstly the learned Counsel for the Lufthansa

drew our attention to the disputed letters addressed by Lufthansa to its agents on 28.12.1993, 30.12.1993 and

31.12.1993 mentioning about the warehouse congestion at Moscow due to heavy backlog situation at

Frankfurt, etc. and in this case, he contended that they were also addressed to Sunrise. Hence we cannot buy

this argument that they were not the agents of Lufthansa. Further assuming that the letters were received by

the agent, these letters were subsequent to the airlifting of cargo in this case.

61. Further we were shown a document by M/s. Sunrise, i.e. the Cargo Agency Agreement No. 3716 between

the IATA and Sunrise FF (P) Ltd. which mentions that all the agents undertake for the sale of air cargo

administration and handling of consignments performed under this agreement shall be in strict compliance

with the rates, rules and conditions applicable. Agent undertakes to maintain all places where air cargo ready

for carriage, the premises and staff required by Section A of the Cargo Agency Rules. The argument also

mentions about the indemnities and waiver.




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62. Accordingly, the Lufthansa is bound by all the actions of the agent under this agreement and whenever the

agent has been intimated by the consignor to carry the goods within the stipulated time, the carrier is bound by

this intimation.

63. Further in all the Air Way Bills, there is a clear mention of M/s. Sunrise as the Agent.

64. Hence we cannot accept this argument that they are not the agents of Lufthansa.

3. Whetherthecarrier/agentreceivedany intimation to transship the cargo early?

65. The letters addressed by York Knitwears to Sunrise on several dates i.e. on 28/29.11.1993, 1.12.1993,

2.12.1993, 9.12.1993 and 13.12.1993 are indicative of the fact that M/s. York Knit-wears had instructed M/s.

Sunrise in the following words:

Please try to airlift the consignment in the first available Aeroflot Cargo and send us the original documents at

the earliest.

Please airlift the consignment in the Cargolux on 7th December positively and send us the documents at the

earliest.

Try to airlift the goods by the first available cargo and send us the original documents at the earliest.

Please airlift this goods in Cargolux by 15.12.1993 positively.

Kindly airlift the consignment in Cargolux, if available in this week otherwise in Lufthansa urgently.

66. Hence, the urgency of transshipment of the cargo has been reiterated over and over again by the

complainant. The learned Counsel for the Sunrise has stated that they had intimated the Lufthansa to carry the

cargo expeditiously.

67. In this case if we strictly go by what is written in the Air Way Bill there is no mention of the number of

days by which the goods had to be delivered at Moscow from the day of delivering the goods to the Airlines,

which means time was not the essence of the contract. If we go by the narrow sense of contract, the Airlines

can escape the responsibility, but they cannot do so for the following reasons:

68. Several letters written by the complainant to the agent of Lufthansa clearly indicates that the goods had to

be carried by the first available flight or urgently as soon as possible, so the responsibility of Sunrise cannot

be disputed. They are responsible for ensuring that the goods are despatched by the earliest flight; secondly it

being the agent of the Airlines they would have definitely communicated to Lufthansa the necessity to carry

the goods by the earliest flight to Moscow. The reverse of the Air Way Bill indicates that anybody who has

any complaint about the delay in despatch of goods they are supposed to file a complaint with Lufthansa

within 21 days. We can deduce from this condition that Lufthansa should have ensured that the goods are

reached within 21 days of booking which they, have not done. There has been abnormal delay and it is clear

from the records which is not controverted that the goods dispatched by the same Company by Aerof lot from

Delhi to Moscow reached Moscow within one day. Hence, Lufthansa is liable for the delayed delivery of

goods at Moscow.

4. Whether Lufthansa has informed M/s. Sunrise about the delay in lifting the cargo.

In an affidavit by Mr. Ashwani Nand, CMD of M/s. Sunrise FF (P) Ltd., has clearly stated that Lufthansa

Airlines never gave any notice or issued any circular to Sunrise Freight Forwarders (P) Ltd., that there was a

problem in shifting the goods in Moscow at any stage before or immediately after the shipment of the goods.




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Circulars dated 28.12.1993, 30.12.1993 and 31.12.1993 purported to have been issued by Lufthansa Airlines

were in fact never received by the Sunrise FF (P) Ltd., whobecame aware of the circulars only after the

present complaint was filed and the same were produced by the Lufthansa Airlines in support of their defence.

69. There is neither any proof of Lufthansa sending these communications to Sunrise or the complainant nor

there is any proof of receipt of these communications by Sunrise FF (P) Ltd., and M/s. York Knitwears.

5. Whether Sunrise was deficient in its service?

In this connection, it is useful to go through Sections 222 and 230 of the Indian Contract Act, 1872.

70. Section 222 of the Indian Contract Act, 1872 reads as follows:

Agent to be indemnified against consequences of lawful acts - The employer of an agent is bound to

indemnify him against the consequences of all lawful acts done by such agent in exercise of the authority

conferred upon him.

Similarly Section 230 of the Indian Contract Act, 1872 reads as follows:

Agent cannot personally enforce, nor be bound by contracts on behalf of principal - In the absence of any

contract to that effect an agent cannot personally enforce contracts entered into by him on behalf of his

principal, nor is he personally bound by them.

Presumption of contract to contrary - Such a contract shall be presumed to exist in the following cases:

(i) where the contract is made by an agent for the sale or purchase of goods for a merchant resident abroad;

(ii) where the agent does not disclose the name of his principal;

(iii) where the principal, though disclosed, cannot be sued.

In this case, these presumptions mentioned in the above Section 230 are not applicable.

71. In this connection, it is worthwhile to go through judgment of the Apex Court in Marine Container

Services South Pvt Ltd. v. Go Go Garments (supra), wherein it has held that "we are not a little surprised to

read that the Contract Act does not apply to complaints filed under the Consumer Protection Act. The

Contract Act applies to all the litigants before the Commission under the Consumer Protection Act. Whether

in proceedings before the Commission or otherwise, an agent is entitled to invoke the provisions of Section

230 of the Contract Act and if the facts found support him, his defence based thereon cannot be brushed

away", Accordingly, in vie w of the aforesaid judgment of the Supreme Court and also the provisions of the

Indian Contract Act, the Agent namely Sunrise is not liable for the delayed delivery of the goods at the

destination by the Lufthansa. The responsibility of Sunrise ceases when it had got the custom clearance for the

booked goods and arranged the delivery of the goods to Lufthansa. In fact, Sunrise had taken pains to remind

the Lufthansa to ensure prompt delivery of the goods. Hence, the agent cannot be held liable for delayed

delivery.

6. Whether York Knitwears is eligible for any relief, if so, how much?

72. Under the Carriage by Air Act, 1972 the liability of the carrier has been defined. The relevant portions are

quoted below:




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Section 18. The carrier is liable for damage sustained in the event of the destruction or loss of, or of damage

to, any registered luggage or any goods, if the occurrence which caused the damage so sustained took place

during the carriage by air.

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

or goods.

In the carriage of registered luggage and of goods, the liability of the carrier is limited to a sum of 250 Francsper kilogram, unless the consignor had made, at the time when the package was handed over to the carrier, a

special declaration of the value at delivery and has paid a supplementary sum if the case so requires. In that

case the carrier will be liable to pay a sum not exceeding the declared sum, unless he proves that sum is

greater than the actual value to the consignor at delivery.

(Emphasis supplied)

73. There has been abnormal delay which has caused loss in the sense that by the time the consignments

reached, the season was over and hence the Lufthansa cannot evade liability for payment of damages under

Section 19. As regards the liability of the carrier it is limited to 250 Francs per kg. This is calculated at US $

20 per kg and as the total kilograms carried is 11,475 this comes to US $ 2,29,500. However, as the value ofthe invoice is US $ 1,36,400 the liability is further limited to this amount. Accordingly, the complainant

would have been eligible for Rs. 42,78,868. Learned Counsel for the Lufthansa has contended that York

Knitwears has received full payment from M/S. Kavita before the despatch of the cargo. This has not been

contradicted by the learned Counsel for the complainant in his rejoinder. Appendix to the contract between

York Knitwears and M/s. Kavita shows that 1800 pullovers to be despatched within 15 days of receipt of

payment. 4300 pullovers to be despatched within 21 days of receipt of second payment. Complainant has sent

1848 kgs. Of woollen materials to M/s. Kavita. If this is deducted the net weight comes to 9627 kgs. The total

value of the in voice is 1,36,400 US $, out of this, the value of the invoice pertaining to M/S. Kavita is $

26,520. So the net amount payable comes to 1,09,880 US $ and @ 31.37 per $ this is converted to Rs.

34,46,936.

74. Learned Counsel appearing for the Lufthansa has submitted that as regards Astrovaz D is concerned the

goods are to be delivered on advance payment. What is that advance payment received has not been explained

to us by the complainant. The contract between York Knitwear and Astrovaz D shows that the goods are to be

delivered within months of advance payment. Partial shipments and part shipments ahead of schedule is

allowed and the date of Bill of lading/Airway Bill is considered as the delivery date. This has not been

controverted by the learned Counsel for the complainant in his rejoinder. In absence of the quantification of

the amount received in advance, we award a lump sum compensation of Rs. 5 lakh in respect of the

consignment to Astrovaz D.

75. There is no dispute that no advancer payment has been received against the goods dispatched to Neo

Trade, 5820 kgs of Knitwear were dispatched to Neo Trade $ 20 per kg the value comes to US $ 69180.65353

31,37 per $ the value comes to Rs, 21,70,197.10. Complainant alleges that no amount was received by it from

the said consignee.

76. Learned Counsel for the complainant has claimed 20 lakh of rupees each towards the loss of goodwill and

loss of further orders refused to the complainant. No evidence has been placed before us to substantiate this

claim, hence, this is purely speculative claim. Accordingly, we are not persuaded to award any relief towards

this claim.

77. The complainants have also filed an affidavit wherein they have claimed compensation towards custom

duty paid on behalf of the complainant-Company by the buyers, storage charges of goods till their disposal by

their buyers, penalty for the delayed delivery, etc. totalling to Rs. 83,64,234 apart from Rs. 7,70,878 towards




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infructuous freight paid. As there is a ceiling limit towards the reimbursement of claims under the Carriage by

Air Act, which is fixed at $ 20 per kg, we do not deem it necessary to analyse this claim.

78. Therefore the amount payable to complainant for the delay in dispatch of goods to Neo Trade comes to

Rs. 21,70,197. Similarly, for the delay of dispatch of goods to Astrovaz D, the amount pay able to the

complainant comes to Rs. 5 lakh. Accordingly, this amount i.e. Rs. 26,70,197 is directed to be paid with

interest @ 6% from the date of the complaint till the date of paymentby Lufthansa to the complainant. They

shall also pay Rs. 25,000 as costs.


York Knitwears Ltd. and Anr. vs Lufthansa German Airlines and ... on 4 May, 2007

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Transcript of York Knitwears Ltd. and Anr. vs Lufthansa German Airlines and ... on 4 May, 2007