ORDER
S.N. Kapoor, J. (Presiding Member)
1.Tamil Nadu State Consumer Disputes Redressal Commission by its order dated 17.10.1997 dismissed the complaint against the British Airways World Cargo for loss due to non-delivery of the insured cargo to the appellant. Feeling aggrieved by the order, the appellant consignee and the insurer both have filed the present appeal.
2. The complaint was jointly filed by Southern Petrochemical Industries, the consignee beneficiary a consumer and the New India Assurance Co. Ltd., the insurer of the consignment on 24th May, 1996.
3. On 26.5.1994, M/s. Siemens, Germany entrusted a consignment of 298 pcs. of ICs for SCE/OPU system to British Airways for safe carriage from Frankfurt Germany to Madras, India. The appellant No. 1, Southern Petrochemical Industries was the consignee in respect of the consignment of 298 pcs. of ICs. British Airways, the respondent accepted the consignment in good and sound condition and issued an Airway Bill bearing No. AWB 0936 3911 dated 26.5.1994 and HWAB No. FRA-310 103. The flight, which was supposed to carry the above said consignment namely, BA 147 arrived at Madras on 29.5.1995. As per the landing remarks issued by the International Airport Authority of India, the cartons in which the above said 298 ICs were sent were delivered in a tampered/damaged condition and the contents of 298 pcs. of ICs were missing at the time of landing and were not available for delivery. Non-delivery of ICs was due to gross negligence and misconduct, misfeasance and malfeasance of the respondent and/or its employees, etc. It was clear and wilful dereliction of the respondent’s duty as an air carrier amounting to total deficiency in service. An independent survey was also conducted by Mr. P. Sridharan. He also certified vide his report dated 1.7.1994 about non-delivery of the imported ICs to the complainant/appellant No. 1. On 8.7.1994, claim preferred by the appellant No. 1 was repudiated by the respondent on the untenable ground that the respondent is not liable to pay the complainants the value of nondelivery of consignment amounting to Rs. 4,51,000 with interest @ 24% from 25.5.1994 along with compensation for the loss caused due to non-delivery of consignment estimated at Rs. 4,50,000. Insofar as the insurance claim preferred by the appellant No. 1 against the New India Assurance Co. Ltd. was concerned, it was settled on 16.8.1994. The beneficiary consumer executed a letter of subrogation for the British Airways did not satisfy the claim of the complainant. As the two complainants, the beneficiary consumer and their insurer filed a joint complaint on 24.5.1996.
4. The respondent-British Airways contested the matter, inter alia, on the ground that the beneficiary being stranger to the contract could not file the complaint for they had not hired the services of the respondent nor they promised to pay anything and still further, the respondent was not required to deliver the consignments to the complainant, in question. The respondent was not the consignee of the consignor. As such, the goods were not required to be delivered to him. It is further contended that the appellants were not consumers. Inasmuch as the first appellant heavily been paid the value of the consignment by the 2nd appellant, the first complainant/appellant could not make a claim. The claim of damage was not tenable and could not be sustained. Insofar as 2nd appellant Insurance Company is concerned, being a subrogee is not a consumer and consequently cannot maintain the complaint as well as appeal. It is submitted that the contract being governed by the Carriage by Air Act, 1972, the method to assess the loss is given in such matters in Rule 22(2) of Second Schedule of the Act. On the basis of Rule 22(2) of Second Schedule of the Carriage by Air Act, 1972, it is submitted that for 1.1 kg at the most compensation could be awarded for as US$ was 250 francs per kg. and weight being 1.1 kg. Consequently, it could not be more than the said amount since 250 francs = 20 US$ weight being 1.1 kg. The complainant could claim only the said amount at the most. The appellant/ complainant refused the amount offered accordingly.
5. The State Commission took the view that none of the complainants were consumers for the purpose of filing of complaint. The appellant not even consignee for T.P. Bank of India, Guindy Branch has been shown as the consignee. As such, the services were neither provided nor were agreed to be provided to the complainant-Southern Petrochemicals Industries. Consequently, the complainant No. 2, the Insurance Co. could not have paid any amount to the respondent No. 1.
6. We have heard the learned Counsel for the respondent and have gone through the written submissions, as well.
7. Insofar as the first question relating to Appellant No. 1 being consumer, is concerned, undisputedly, he was not consignee, for the consignment was booked by Word Freight GMBH in the name of consignor, Express Freight Pvt. Ltd. Name of none of the complainants/ appellants was found anywhere in the Airway Bill. In terms of Exb. ‘A-5’, the consignee was Express Freight Pvt. Ltd. and the appellant was supposed to establish how the first complainant could make a claim against the first opposite party. On the other hand, it was claimed that M/s. Siemens, Germany was the consignor for the Invoice was issued by M/s. Siemens, Germany to the first complainant. Whatever is being claimed by the complainant/appellant may be true but unfortunately it had not been so proved, particularly, in terms of the endorsements and entries in the Airway Bill.
8. The State Commission referred House Airway Bill, Exb. ‘A-6’, Exb. ‘A-5’ Master Airway Bill. House Airway Bill and Master Airway Bill cover consolidated consignment showing the consolidator as per carrier, and not as per the terms of the House Airway Bill, which covers each individual shipment of consolidation, which was issued by the consolidator with instructions to the Freight Bulk Agent (See: The Air Cargo Tariff Rules-April 1955 Issue 40). In Exb. ‘A-6’, T.P. Bank of India, Guindy Branch had been shown as consignee. Thus, there could not be any dispute that the said bank was consignee of the opposite party.
9. The tampered consignment would have been delivered only after the bank made endorsement in favour of the appellant No. 1. As the carrier had undertaken to deliver it to the consignee the said Bank, but since the consignment was to be delivered ultimately to the complainant and the documents were released for taking possession of the articles, we have no inhibition in holding that the appellant being the beneficiary of the consignment is a consumer.
10. However, since the appellant could not deliver the goods to any person other than the T.P. Bank of India, Guindy Branch, in terms the Airway Bill from the point of liability, the matter needs further scrutiny, about legal position.
11. Section 12 on the basis of which was interpreted against the appellant reads as under:
12. Manner in which complaint shall be made.-A complaint, in relation to any goods sold or delivered or agreed to be sold or delivered or any service provided or agreed to be provided may be filed with a District Forum, by-
(a) the consumer to whom such goods are sold or delivered or agreed to be sold or delivered or such service provided or agreed to be provided;
(b) any recognised consumer association whether the consumer to whom the goods sold or delivered or agreed to be sold or delivered or service provided or agreed to be provided is a member of such association or not;
(c) one or more consumers, where there are numerous consumers having the same interest, with the permission of the District Forum, on behalf of, or for the benefit of, all consumers so interested; or
(d) the Central or the State Government.
(Emphasis supplied)
12. The above said section has to be interpreted in a holistic and harmonious way. The main clause of Section 12 itself for the present purpose may be read to the effect that a complainant in relation to any service provided or agreed be provided, may be filed by the consumer to whom such service provided or agreed to be provided.
13. It is not disputed before us that as per respondent the said consignment was part of a consolidated consignment, which was handed over to them by World Freight GMBH, who are apparently Cargo Consolidation Agents and they were consignors/shippers in the Airway Bill issued by the respondent. The respondent accepted the consolidated consignment from the said World Freight GMBH. The said Airway Bill is a Master Airway Bill issued to the said World Freight GMBH as the shippers in relation to the consolidated consignment wherein one Express Freight Pvt. Ltd. had been named as the consignees. The respondent was therefore required to hand over the consolidated consignment only to consignee as mentioned in Airway Bill, namely Express Freight Pvt. Ltd. Since the HAWB No. FRA-310103, House Airway Bill No. 310103 related only to the individual consignment, in question, was not a document issued by the respondent, the respondent could not be held liable. We might have accepted this submission, but for the fact that a certificate was issued at the time of delivery at the airport itself and on landing of the consignment itself it was found as per the certificate of Sr. Cargo Manager dated 7.7.1994:
2… the consignment in question was received by IAAI in damaged condition from the Airlines….
14. It would indicate that while it was on the British Airlines plane, or in transit, the consignment was damaged and its contents were taken out by the employees of the British Airways. If this was the condition before delivery to M/s. Express Freight Pvt. Ltd., Chennai, and the respondent could not absolve themselves by just camouflaging and side tracking the real issue despite submissions made in this regard.
15. The shipment was sent by Siemens, Germany through M/s. World Freight GMBH from Frankfurt. World Freight GMBH were just authorised to appoint a sub-agent like British Airways. A sub-agent could be a liable under Section 192 of the Indian Contract Act if any fraud or wilful wrong was committed by the sub-agent. Since all the contents were taken out as per certificate issued by Indian Airport Authority as well as found by the surveyor, it is evident that the loss of contents was caused by wilful wrong on the part of the employees of the sub-agent, British Airways, the sub-agent could not run away by just taking pleas that they were not liable.
16. Though it would have been better in this regard if M/s. World Freight GMBH Frankfurt, Germany and M/s. Express Freight Pvt. Ltd. Chennai were made parties, yet on this account alone if the loss could be ascertained due to wilful wrong by the sub-agent, the sub-agent could not escape from its liability.
17. One of the obligations of British Airways was to carry consolidated shipment as well as part thereof in safe and sound conditions. Since the consignment was sent by M/s. Siemens, Germany for the purpose of accounting information to Bank of India, Guindy Branch, goods as per attached manifest and they could not have been cleared without considering the individual packages by the customs, and, as such, the British Airways was supposed to note its contents and values of the consignments and the fact that was insured. In these circumstances, it would be evident that obligation resembling those created by contract had been incurred by the respondent to carry the consolidated consignment as well as the individual consignment contained therein in safe and sound condition to deliver it to the consignee so long the shipment is in its custody. In such a case not only the intermediate consignee but also the ultimate consignee had suffered injury due to failure of the British Airways to perform its obligation of carrying the shipment in safe and sound condition to the Airport for delivery. The complainant No. 1 would be entitled to claim loss caused due to deficiency in service.
18. For the aforesaid reasons, it could not be said that the appellant No. 1 would not be a consumer being beneficiary of the consignment. It is accepted by the countries governed by Anglo-Saxon and common law that the contract could be written as well as implied. Accordingly, we hold that there was at least implied contract and in view of the second part of Section 73, the British Airways were liable or in the alternative since there will be wilful 192 of the Indian Contract Act.
19. There is no dispute that the complainant No. 1 is a beneficiary after the | documents were delivered to them. We need not say that the T.P. Bank of India, Guindy Branch in ordinary course of business was only supposed to ensure payment of the consignment being the named consignee. It is not the case that the documents could not be transferred. Once the documents have been transferred the interest in the consignment is to transfer and since the interest in the consignment stood transferred in favour of the appellant No. 1, in ordinary course, appellant No. 1 becomes entitled to take delivery of the consignment. This is ordinary way of conducting business in such kinds of transactions. The way it has been interpreted has taken out the spirit from the contents. It is against the holistic and harmonious construction of the document. It may further be mentioned that the beneficial provision under the Consumer Protection Act are for the benefit of the consumer and while interpreting such a provision a consumer friendly as well as equitable and solution-oriented interpretation is essential. The interpretation of the provision by the State Commission was certainly not in tune with interpretation of beneficial legislation. The State Commission applied the rule of strict interpretation applicable to criminal laws and not liberal interpretation of welfare legislation like Consumer Protection Act, which would serve the object of the Act.
20. Accordingly, we find it difficult to sustain the findings given by the learned State Commission on Issue No. 1 and Issue No. 2.
21. As regards the loss there is a subrogation made by Mr. Wadhwani in terms of Sub-rule (2) of Rule 22 of second Schedule “provides the limit to the sum of Rs. 250 francs per kilograms in absence of special declaration of interest in delivery of destination” and the respondent could not claim more than this amount. In ordinary course, submission of Mr. Wadhwani should be accepted.
22. The most important plea taken by the respondent is that the document which authorises the New India Assurance Company Ltd. is not a letter of subrogation rather it would indicate that it was a deed of assignment. The letter of subrogation-cum-special power of attorney addressed to the New India Assurance Co. Ltd. by the appellant No. 1 indicates as under:
We hereby assign, transfer and abandon to you all our noticeable rights, title and interest in and to them and (sic) goods and proceeds thereof (to the extent provided by law) and all rights and remedies against Railway Administration and/or Sea/Lorry Curiers and/or agents of Sea Curiers and/or Port authorities and/or Customs Authorities and/or person or persons whomsoever is liable in respect thereof.
23. In this matter there is no dispute that the appellant No. 2 had settled the claim after letter of subrogation and special power of attorney. The difference between subrogation and assignment came up for consideration before the Hon’ble Supreme Court in the case of Oberai Forwarding Agency v. New India Assurance Co. Ltd. and Anr. 1 (2000) CPJ 7 (SC) : (2000) 2 Supreme Court Cases 407 and the Supreme Court after referring to Insurance Law quoted a part thereof. The relevant part reads as under:
1131. Difference between subrogation and assignment-Both subrogation and assignment permit one party to enjoy the rights of another, but it is well established that subrogation is not a specie of assignment: Rights of subrogation vest by operation of law rather than as the product of express agreement. Whereas rights of assignment can be enjoyed by the insurer as soon as payment is made, as assignment requires an agreement that the rights of the assured be assigned to the insurer. The insurer cannot require the assured to assign to him his rights against third parties as a condition of payment unless there is a special clause in the policy obliging the assured to do so. This distinction is of some importance, since in certain circumstances an insurer might prefer to take an assignment of an assured’s rights rather than rely upon his rights of subrogation. If for example, there was any prospect of the insured being able to recover more than his actual loss from a third party, an insurer, who had taken an assignment of the assured’s rights, would be able to recover the extra money for himself whereas an insurer who was confined to rights of subrogation would have to allow the assured to retain the excess.
1132. Another distinction lies in the procedure of enforcing the rights acquired by virtue of the two doctrines. An insurer exercising rights of subrogation against third parties must do so in the name of the assured. An insurer who has taken a legal assignment of his assured’s rights under statute should proceed in his own name….
24. As aforesaid, clause of letter of subrogation and special power of attorney indicates, dated 16.8.1994 (at P. 74 filed by Counsel for the appellant), that the appellant No. 1 has assigned transfer and abandoned all the rights title interest in the insured goods and proceeds thereof in favour of the second appellant and the second appellant has acquired all rights to recover the compensation for the loss. In view of the assignments of all the rights of the appellant No. 1 in favour of the appellant No. 2, the appellant No. 1 retained no right to recover compensation for the loss of the consignment. Since he has assigned all the rights, the complainant No. 1 did not have any interest in the disputed matter and therefore could not say that the complaint was maintainable.
25. In the case of Shivani Road Lines v. Sundaram Textiles Ltd. reported as III (2001) CPJ 8 (SC) : AIR 2001 SC 2630 squarely covered the point in issue. Accordingly, we accept the submissions of Sh. M. Wadhwani that the present letter of subrogation and special power of attorney is assignment of all rights. Consequently, appellant No. 1, SPCL does not have any locus now to bring and maintain the present complaint against British Airways.
26. There is yet another argument advanced by the respondent that in terms of Rule 27(4) of the Schedule II, the complaint was not maintainable. Under Section 27(2) of the Schedule II to the Carriage by Air Act, 1972 for want of notice of damage or loss of the cargo within one week from the date the cargo was placed at the disposal of shipper or consignor or the person entitled to delivery. From para 10, it is evident that on 25.6.1994, joint inspection by the custom authorities, International Airport Authority, insured’s representative and clearing agent took place when the visibly tampered boxes were opened. It was noted that both the boxes were totally empty, except for some packing stuffed inside. After independent survey by Sridharan, he certified the loss. It would be appropriate to reproduce Section 27(2) and 27(4) for proper appreciation of the point in Issue.
27. Section 27(2) of the Carriage by Air Act, 1972 reads as under:
In the case of damage, the person entitled to delivery must complaint to the carrier forthwith after the discovery of the damage, and, at the latest, within seven days from the date of receipt in the case of baggage and fourteen days from the date of receipt in the case of cargo. In the case of delay the complaint must be at the latest within twenty-one days from the date on which the baggage or cargo have been placed at his disposal.
28. Sub-section (4) of Section 27 reads as under:
Failing complaint within the times aforesaid, no action shall lie against the carrier, save in the case of fraud on his part.
29. Since it is evident that it was found on 25.6.1994 that the cartons were empty, it was essential for the appellant No. 1 to complain about the loss within 7 days from 25.6.1994 i.e. by 2.7.1994. Since it is not claimed that any such notice under Section 27(2) was given, no action would lie against the carrier, same in the case of fraud. As such, in absence of pleading and proof of fraud on the part of the carrier, it could not be said that the complaint was maintainable.
30. With the above observations, the appeal as well as the complaint, both are dismissed. However, the appellants shall have the liberty to seek remedy before any appropriate forum, if so advised, and the appellant may also take advantage of the observations made in the case of Laxmi Engineering Works v. P.S.G. Industrial Institute II (1995) CPJ 1 (SC) : (1995) 3 SCC 583, about the time spent before Consumer Fora.