Three airlines fined: Delhi exporter gets Rs.22 lakh for service deficiency
Royal Jordanian Airlines, Czechoslovak Airlines (now Czech Airlines) and Jet Airways have been directed by the apex consumer court to jointly pay compensation and interest of Rs.22 lakh ($40,000) to a Delhi-based exporter for deficiency in service while delivering a consignment of garments to a consignee in Bratislava, Slovakia.
"The respondents were guilty of deficiency in service in dispatching and delivering the goods in contravention of the terms and conditions as agreed to between the parties," said National Consumer Disputes Redressal Commission president Ashok Bhan and members Vineeta Rai and S.M. Kanitkar.
Upholding the plea of Hira Lall & Son (Exports) Pvt. Ltd., Karol Bagh, the top consumer court said: "We direct the respondents to jointly and severally pay the appellant nine percent interest on the awarded amount of Rs.10 lakh from the date of filing the complaint (April 7,1994) till Nov 29, 2008."
The order mentions Czechoslovak Airlines, which it was named when the complaint was filed. It assumed its present avatar in May 1995, two years after the erstwhile Czechoslovakia split into the Czech Republic and Slovakia.
The exporter said in its complaint that its contract with the airline had an important provision that the consignment, worth Rs.9.73 lakh, could only be delivered to the named consignee, which was a bank in Bratislava since the responsibility to ensure payment to the appellant for the consignment was with the bank.
However, the respondents failed to fulfill the provision.
"The airlines instead delivered the goods directly to consignee M/s Penta Trade without any authorization from the consignee or from the appellant and, therefore, the delivery of goods was in contravention of the terms of the contract and amounted to deficiency in service resulting in non-payment for the consignment to the appellant," the complaint said.
The Delhi State Commission ruled in favour of the exporter and awarded Rs.10 lakh compensation. But the exporter moved the national commission for seeking interest on the awarded amount.
"The contention of the counsel for the exporter is that it was clear breach of the term of the contract between the parties as wherever foreign buyers are involved, the shipper has to take extra caution and care in delivering the consignment as it becomes difficult for the exporter in this country to get the payment of the consignment from the foreign buyer..," the national commission noted.
There was no term of contract between the parties that the airlines shall reimburse the cost of the consignment in case of any breach of contract though in terms of Section 14 of the Consumer Protection Act, a consumer is entitled to an amount of compensation to the loss or injury suffered by him due to the negligence of the opposite party, Bhan said.
The national commission agreed with the state commission's decision that "taking over all view of the matter and taking the cost of the consignment as Rs.9.73 lakh... a lump sum amount of Rs.10 lakh, including the cost and compensation as to the mental agony, harassment and non-recovery of the payment for foreign buyer shall meet the ends of justice".
Bhan, however, gave the exporter an additional relief by noting that the state commission erred in not granting interest on the awarded amount.
"Admittedly, the appellant had paid 26 percent interest on the invoice value of the goods and, therefore, this should have been taken into account by the state commission. Further, as ruled by the Supreme Court in Alok Shanker Pandey v. Union of India & Ors. (2007), the award of interest is not a penalty or punishment but is awarded because of normal accretion on capital," the national commission said, awarding nine percent per annum interest on the awarded amount of Rs.10 lakh for 14 years.
"The respondents were guilty of deficiency in service in dispatching and delivering the goods in contravention of the terms and conditions as agreed to between the parties," said National Consumer Disputes Redressal Commission president Ashok Bhan and members Vineeta Rai and S.M. Kanitkar.
Upholding the plea of Hira Lall & Son (Exports) Pvt. Ltd., Karol Bagh, the top consumer court said: "We direct the respondents to jointly and severally pay the appellant nine percent interest on the awarded amount of Rs.10 lakh from the date of filing the complaint (April 7,1994) till Nov 29, 2008."
The order mentions Czechoslovak Airlines, which it was named when the complaint was filed. It assumed its present avatar in May 1995, two years after the erstwhile Czechoslovakia split into the Czech Republic and Slovakia.
The exporter said in its complaint that its contract with the airline had an important provision that the consignment, worth Rs.9.73 lakh, could only be delivered to the named consignee, which was a bank in Bratislava since the responsibility to ensure payment to the appellant for the consignment was with the bank.
However, the respondents failed to fulfill the provision.
"The airlines instead delivered the goods directly to consignee M/s Penta Trade without any authorization from the consignee or from the appellant and, therefore, the delivery of goods was in contravention of the terms of the contract and amounted to deficiency in service resulting in non-payment for the consignment to the appellant," the complaint said.
The Delhi State Commission ruled in favour of the exporter and awarded Rs.10 lakh compensation. But the exporter moved the national commission for seeking interest on the awarded amount.
"The contention of the counsel for the exporter is that it was clear breach of the term of the contract between the parties as wherever foreign buyers are involved, the shipper has to take extra caution and care in delivering the consignment as it becomes difficult for the exporter in this country to get the payment of the consignment from the foreign buyer..," the national commission noted.
There was no term of contract between the parties that the airlines shall reimburse the cost of the consignment in case of any breach of contract though in terms of Section 14 of the Consumer Protection Act, a consumer is entitled to an amount of compensation to the loss or injury suffered by him due to the negligence of the opposite party, Bhan said.
The national commission agreed with the state commission's decision that "taking over all view of the matter and taking the cost of the consignment as Rs.9.73 lakh... a lump sum amount of Rs.10 lakh, including the cost and compensation as to the mental agony, harassment and non-recovery of the payment for foreign buyer shall meet the ends of justice".
Bhan, however, gave the exporter an additional relief by noting that the state commission erred in not granting interest on the awarded amount.
"Admittedly, the appellant had paid 26 percent interest on the invoice value of the goods and, therefore, this should have been taken into account by the state commission. Further, as ruled by the Supreme Court in Alok Shanker Pandey v. Union of India & Ors. (2007), the award of interest is not a penalty or punishment but is awarded because of normal accretion on capital," the national commission said, awarding nine percent per annum interest on the awarded amount of Rs.10 lakh for 14 years.