Sudershan Kumar Misra, J.— The appellant, M/s. Surya Pharmaceuticals Limited, had sued for recovery of Rs. 4,96,188/- along with pendente lite and future interest from the respondent, Air India Limited, for the loss of 7 drums out of the total consignment of 40 drums of Amoxicillyn Compacted BP 98. This consignment was air lifted by the respondent, Air India, for transportation from Delhi to Hong Kong. After trial, the appellant's suit was partly decreed by the Additional District Judge for Rs. 1,70,625/- along with costs and interest at the rate of 7% per annum. By this appeal, the appellant has assailed that part of that judgment whereby, some of its claims were rejected. It prays that the impugned judgment and decree in the aforesaid Suit, bearing No. 104 of 2004, be modified, and that the entire suit amount along with interest as claimed, be decreed.
2. On 12th July, 2002, the appellant/plaintiff booked 40 drums containing bulk drugs with the respondent/defendant vide, Air waybill 09878399624 for transportation from Delhi to Hong Kong. Freight charges were also paid. Admittedly, all the 40 drums were loaded on to the aircraft of the respondent/defendant at Delhi. However, out of the 40 drums, only 33 drums were delivered by the respondent to the consignee at Hong Kong. The appellant's claims are with regard to the remaining seven drums. In the suit, the appellant claimed to have suffered a total loss of Rs. 4,96,188/- on this account. Out of this amount, a sum of Rs. 10,883.25 and Rs. 612.00 was claimed by the appellant towards proportionate freight charges paid by it for the missing drums; Rs. 84,670.83 towards loss of export benefits; and Rs. 45,108/- towards other expenses for tracing the missing drums. The appellant/plaintiff also claimed interest at the rate of 13.75% per annum. The value of the consignment for the purposes of customs, as declared by the appellant/plaintiff was US $ 35,500. In addition, a separate invoice to that effect, also accompanied the air waybill.
3. At the trial, the defendant/respondent did not controvert several important facts. Firstly, the fact that the plaintiff's consignment of 40 drums was duly loaded on the aircraft of the respondent/defendant was admitted. Secondly, the fact that the consignment handed over to the consignee at Hong Kong by the respondent/defendant was short by seven drums is also undisputed. Thirdly, the fact that the appellant/plaintiff had stated the value of this consignment to be US $ 35,500/-, albeit for the purpose of customs, was also not disputed. The respondent/defendant also did not dispute the claim that the true value of the contents of the consignment came to US $ 35,500/-. The only dispute raised by the respondent with regard to the value of the consignment was limited to the fact that the appellant/plaintiff had not specifically declared any value for this consignment for the purposes of carriage in the space provided on the air waybill itself.
4. In the suit, the respondent/defendant took a very simple defence. Its case is that there is a clause limiting its liability, in case of loss, to US $ 20 per kilogram, printed on the reverse of that air waybill, Ex. PW-1/3, and that this constituted a special contract whereby, its liability was limited to US $ 20 per kilogram of the goods lost. Alternatively, since special value for carriage was not declared by the consignor, i.e, the appellant herein, in the space provided therefor in Ex. PW-1/3; therefore, even under Rule 22(2) of the Second Schedule to the Carriage by Air Act 1972, its liability was limited to the amount stated in that rule.
5. By the impugned judgment, the trial Court has concluded that the respondent/defendant was negligent in handling the cargo. It has found that the respondent did not dispute the fact that all the 40 drums were duly loaded in the appellant's aircraft. In fact, the defendant respondent's own witness testified to this fact. In addition, no explanation was given by the respondent as to the fate of the missing drums. The trial Court also found that no evidence was led, and nothing was brought on record by the respondent to demonstrate that it was not negligent. It was in these circumstances that the Trial Court has concluded that it was the duty of the respondent/defendant to prove that it was careful in handling the cargo, and that the loss, if any, was beyond its control, otherwise, the presumption must be that the defendant was negligent in handling the cargo. For this conclusion, the trial Court also relied on the decision in the case of Air India v. S.V International, 1986 (1) Karnataka Law Journal 34.
6. After concluding that the defendant was negligent in handling the cargo, the trial Court went into the question of damages. Here, it concluded that the air waybill, Ex. PW-1/3, contained a term limiting the carrier's liability to US $ 20 per kilogram and that the appellant/plaintiff had deliberately withheld this fact from the Court, therefore an adverse inference to that extent is to be drawn against the plaintiff. Based on this, it held that the plaintiff, ‘cannot claim more than that because knowing fully well the terms and conditions of the contract he had entered into a contract with the defendant’. This conclusion has also led the Trial Court to hold that, ‘even if the provisions of the Carriage by Air Act are ignored, still the liability of the defendant is limited’.
7. In addition, the Trial Court has concluded that Rule 22(2) of the Second Schedule of the Carriage by Air Act, 1972 limiting liability of the carrier to 250 Francs per kilogram is also attracted in this case. Therefore, for that reason also, the defendant/respondent's liability is limited to US $ 20 per kilogram of the goods lost. It has reached this conclusion on the basis of its belief that the protection of Rule 22 is not available to the carrier only if the requirements of Rule 25 are satisfied. Rule 25 is as follows:
“25. The limits of liability specified in Rule 22 shall not apply if it is proved that the damage resulted from an act or omission of the carrier, his servants or agents, done with intent to cause damage or recklessly and with knowledge that damage would probably result; provided that, in the case of such act or omission of a servant or agent, it is also proved that he was acting within the scope of his employment.”
8. In this case, the Trial Court concluded that since there was no evidence of ‘deliberate or wilful misappropriation on the part of the defendant, circumstantial or otherwise’; therefore, the provisions of rule 25 of the Second Schedule of the Carriage by Air Act, 1972 cannot be invoked by the appellant to deprive the respondent/carrier the benefit of the limitation on its liability granted by Rule 22(2) thereof.
9. As regards the other amounts claimed towards proportionate freight and other charges, the same were rejected on the ground that no evidence has been led, nor have any details been given about these expenses claimed to have been incurred by the plaintiff/appellant. Consequently, the appellant's suit was decreed for an amount equivalent to US $ 20 per kilogram weight of the aforesaid seven drums.
10. In appeal before us, the judgment of the trial Court has been assailed firstly on its conclusion regarding the terms and conditions of the contract of carriage between the parties, which were, admittedly, reduced to writing in the form of the air waybill Ex. PW-1/3. The second area of challenge is with regard to the scope and application of the provisions of Schedule second of the Carriage by Air Act, 1972 to the contract between the parties.
11. The Carriage by Air Act, 1972 was enacted by the Parliament to give effect to the Warsaw Convention, as amended by The Hague Protocol, laying down rules relating, inter alia, to International Carriage by Air. By Section 4(1) of the said Act, the rules contained in the Second Schedule, inter alia, relating to the rights and liabilities of all carriers and consignors, have been given statutory force. It constitutes special legislation regulating contracts of carriage by air. It specifies some of the essential terms and conditions which shall govern all contracts of carriage by air, and in effect, restricts the parties' freedom to contract in those areas of their relationship.
12. In the suit, in terms of Section 102 of the Indian Evidence Act, a duty was cast upon the appellant/plaintiff to prove the terms and conditions of the contract upon which the goods in suit were entrusted to the respondent. To discharge its onus, the appellant/plaintiff proved Ex. PW-1/3. This was the shipper's or consignor's copy of the air waybill. It was made out in terms of Rule 6 of Second Schedule of the Carriage by Air Act, 1972. This was duly exhibited by the Trial Court. Rules 6(1) and 6(2) provide as follows:
“6. (1) The air waybill shall be made out by the consignor in the three original parts and be handed over with the cargo.
(2) The first part shall be marked ‘for the carrier’, and shall be signed by the consignor. The second part shall be marked ‘for the consignee’; it shall be signed by the consignor and by the carrier and shall accompany the cargo. The third part shall be signed by the carrier and handed by him to the consignor after the cargo has been accepted.”
13. Looking to the provisions of Rule 6 reproduced above, it is obvious that the respondent/defendant, who is the consignor, should have been in possession of the first out of the three original parts of the said air waybill. The air waybill, which was proved by the appellant at the trial and exhibited as Ex. PW-1/3, is a photocopy of the shipper's copy. Presumably, this was handed over to the appellant at the time when the goods were consigned by it to the respondent. The reverse of this document is blank. It is the respondent's case that the relevant terms on which it relies, were printed on the reverse. According to the respondent, inter alia, the clause limiting its liability to US $ 20 per kilogram was printed there. However, no objection was taken by the respondent to the proof and exhibition of this document by the appellant at the trial. Surprisingly, not only has the respondent failed to object to the exhibition of a photocopy of the original document, which, according to it, does not contain the complete terms; it also failed to seek production of the original document from the appellant. Further, it was always open to the respondent to produce, or cause to be produced, any of the other two originals which would have been prepared at the time when the consignment was booked to bring out the relevant terms of the contract which, according to it, limit its liability to US $ 20 per kilogram. The respondent defendant however failed to prove the same in support of its claim that there existed a clause therein limiting its liability to US $ 20 per kilogram. In addition, the respondent itself has also relied upon Ex. PW-1/3 to show that the column, ‘Declared Value for Carriage’ carries the notation, ‘NVD’, which means, ‘no value declared’, and that the value US $ 35,500/- has been indicated by the appellant/plaintiff only under the adjacent column titled, ‘Declared Value for Customs’. Once the defendant/respondent allowed Ex. PW-1/3 to be duly exhibited without raising any objection at the trial, it cannot thereafter claim the benefit of some other clauses, which it says were also in the same document although the document proved, and duly exhibited at the trial, does not have them.
14. Merely because there is a statement by the plaintiff in cross-examination that some other conditions were printed on the reverse of Ex. PW-1/3, none of which are there in the document exhibited, coupled with mere oral, self serving, testimony of the defendant in its own examination-in-chief that its liability was limited to US $ 20 per kilogram for the goods lost cannot, to our mind, lead to the inference that there was indeed any such term which governed the contract. Apart from the fact that the latter is merely a self-serving oral statement, a reference may be had in this regard to Section 103 from the Evidence Act which states as follows:
“103. Burden of proof as to particular fact.—The burden of proof as to any particular fact lies on that person who wishes the Court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.”
15. A plain reading of the above provisions shows clearly that in case the respondent desired the Court to believe that in the contract in question, there exists a clause limiting its liability to US $ 20 per kilogram, then it was for the respondent/defendant to prove this fact. The method of proving of facts is covered by Chapters IV, V and VI of the indian evidence act. In this context, reference may also be had to the Latin maxim, Ei incumbit prabatio qui dicit, non qui negat—the onus of proof lies on him who affirms and not upon him who denies the existence of any fact.
16. In this connection, chapter VI of the indian evidence act titled ‘Of the exclusion of oral or documentary evidence’, and in particular Section 91 thereunder is also relevant. The relevant portion of the said section states as follows:
“91. Evidence of terms of contract, grants and other dispositions of property reduced to form of document.—When the terms of a contract ‘….have been reduced to the form of a document, and in all cases in which any matter is required by law to be reduced to the form of a document, no evidence shall be given in proof of the terms of such contract, grant or other disposition of property, or of such matter, except the document itself, or secondary evidence of its contents in cases in which secondary evidence is admissible”….”
17. In this case, admittedly, the terms of the contract between the parties had been reduced to the form of a document. That document was proved by the plaintiff at trial and duly exhibited by the Trial Court as Ex. PW-1/3. Consequently, no evidence could be given in proof of the terms of that contract except the document itself. It follows, therefore, that the general statement elicited from the plaintiff's witness in cross-examination by the defendant to the effect that there were some other terms, as also the oral testimony of the defendant's witness regarding the contents of Ex. PW-1/3 to the effect that it also had a term limiting the defendant's liability to US $ 20 per kilogram, was barred under the indian evidence act. Therefore, it could not have been relied upon by the Trial Court as proof of any relevant fact. We, therefore, have no doubt that the onus of proving that there existed a term in the written contract between the parties limiting its liability to US $ 20 per kilogram has not been properly discharged by the defendant. We might add that it was also open to the defendant to seek the production of the original air waybill issued to the appellant at the time of booking of the consignment in terms of Section 66 of the Evidence Act and thereafter, on failure of the appellant to produce the same, it was open to the appellant to apply under Section 65 of the Evidence Act to lead secondary evidence of the terms of the contract entered into between the parties. This too has not been done. For all these reasons, we feel that the respondent/carrier has failed to prove that there was any bilateral contract limiting its liability to US $ 20 per kilogram of the goods lost.
18. It was also the respondent's case that its liability was specifically limited in terms of the Carriage by Air Act, 1972. For this, the respondent relied on Rule 22(2)(a) of Chapter III titled, ‘Liability of the Carrier’, which is as follows:
“22. (1) xxx xxx xxx xxx
(2)(a) In the carriage of registered baggage and of cargo, the liability of the carrier is limited to a sum of 250 francs per kilogramme, unless the passenger or consignor has made, at the time when the package was handed over to the carrier, a special declaration of interest in delivery at destination 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 that sum is greater than the passenger's or consignor's actual interest in delivery at destination.
19. The respondent/defendant, being a carrier of the goods, has relied on this Rule to avoid any liability in excess of US $ 20 per kilogram in this case. The learned Trial Court's decision on this aspect appears to be a curious mixture of two submissions made by the respondent. On the one hand, it seems to have been impressed by the limit of liability prescribed by the above Rule, but at the same time, it has ignored the stipulation that the liability in that case will be limited to 250 Francs per kilogram. On the other hand, it has decided that there existed a specific clause in Ex. PW-1/3 limiting the respondent's liability to US $ 20 per kilogram and inexplicably it has concluded that because the appellant/plaintiff, who was the consignor in this case, had not made any special declaration of interest in delivery at destination, nor paid a supplementary sum for that purpose at the time of booking the consignment, therefore, in terms of Rule 22(2)(a) also, the respondent's liability is limited to US $ 20 per kilogram. Simultaneously it has also concluded that the respondent/carrier's liability is also limited to US $ 20 per kilogram of the goods lost under an independent contract de hors the Carriage by Air Act, 1972. To our mind, this reasoning is completely erroneous and cannot be sustained. The governing Statute is the Carriage by Air Act, 1972 and any exclusion from liability that is claimed by the carrier must fall within the four corners of the Act. If it does, its liability would be limited to 250 Francs per kilogram. Of course, the limit of liability may be raised upwards after due compliance with other provisions of that Act. There was, however, nothing to warrant the conclusion that the respondent's liability could be limited to US $ 20 per kilogram under that Statute instead of the prescribed 250 Francs per kilogram.
20. Furthermore, while concluding that Rule 22(2) limiting the carrier's liability was attracted in this case, the learned Trial Court has overlooked the provisions of Rules 8(c) and 9, which are reproduced below:
“8. The air waybill shall contain:
(a) xxx xxx xxx
xxx xxx xxx
(c) a notice to the consignor to the effect that, if the carriage involves an ultimate destination or stop in a country other than the country of departure, the amended Convention may be applicable and that the amended Convention governs and in most cases limits the liability of carriers in respect of loss of, or damage to, cargo.
9. If, with the consent of the carrier, cargo is loaded on board the aircraft without an air waybill having been made out, or if the air waybill does not include the notice required by Rule 8(c), the carrier shall not be entitled to avail himself of the provisions of Sub-rule (2) of Rule 22.”
21. A reading of the above shows that for the respondent/carrier to claim any statutory limitations on its liability which are available to the respondent under Rule 22(2) of the Second Schedule to the Carriage by Air Act, 1972, the other conditions specified in the said Schedule and, in particular, the requirements of Rule 8(c) must be satisfied. Here, the goods were sent from Delhi to Hong Kong. Therefore, admittedly, the ultimate destination of the carriage was a country other than the country of departure. Consequently, the air waybill should have contained a notice to the consignor, i.e the plaintiff/appellant herein to the effect that the amended convention is applicable and that the amended convention governs and, in most cases, limits the liability of carriers in respect of loss or damage to the air cargo. However, no such notice as required by the aforesaid Rule 8(c) has been proved by the respondent/carrier. It follows, therefore that since the respondent/consignor has failed to fulfil the requirements of Rule 8(c), consequently, in terms of Rule 9, it is not entitled to avail itself of the provisions of Rule 22 Sub-Rule (2) to limit its liability to either US $ 20 per kilogram as claimed or even to 250 Francs per kilogram as prescribed thereunder.
22. In addition, the trial Court has rejected the contention of the appellant/plaintiff to the effect that the loss has been occasioned to the plaintiff due to the deliberate and wilful negligence of the defendant on the ground that ‘nothing has been brought on record that there was any deliberate or wilful act on the part of the defendant or its employees to appropriate the goods’, and that the evidence on record only shows that out of 40 drums loaded at Delhi for Hong Kong only 33 reached their destination and seven were found missing but evidence of any deliberate or wilful misappropriation on the part of the defendant was absent. This conclusion, which is contained in paragraphs 16 and 17 of the impugned judgment is at variance with the conclusion reached by the trial Court in paragraph 6 of the same judgment where it has concluded that the defendant was negligent in handling the cargo.
23. In this context the decision of the Supreme Court in Union of India v. Sugauli Sugar Works (P) Ltd., (1976) 3 SCC 32 : AIR 1976 SC 1414, is worth noting. There, a consignment booked with the Railways was placed in wagons that were taken on a barge on the river Ganges when the barge with all the wagons sank in the river. No explanation was given by the Railways with regard to the sinking of the barge. There, the Supreme Court held as follows:
“13. The liability of the railway was that of a bailee. The consignments were booked at railway risk. The onus of proving that the railway employees took the necessary amount of care and that they were not guilty of negligence rested on the Railway authorities. The High Court held that it was not a case of unavoidable accident and that the Barge sank because of gross negligence of railway employees and the railways did not take the amount of care which it was required to take as a bailee.”
24. Similarly, in another case titled Nath Bros. Exim International Ltd. v. Best Roadways Ltd.., (2000) 4 SCC 553, while examining Sections 151 and 152 of the Indian Contract Act regarding the duties of a bailee it was held that—
“14. These provisions, in effect, embody the English common law rule as to the liability of the bailee. Under the English common law rule, the measure of care required of the person to whom the goods were bailed, was the same as a man of ordinary prudence would take of his own goods. In other words, it was a mere matter of negligence on which the liability was founded. If a person was negligent and did not take as much care as he would have taken of his own goods, he would be liable in damages.”
25. The Court further held that:
“27………..the liability of a carrier to whom the goods are entrusted for carriage is that of an insurer and is absolute in terms, in the sense that the carrier has to deliver the goods safely, undamaged and without loss at the destination, indicated by the consignor. So long as the goods are in the custody of the carrier, it is the duty of the carrier to take due care as he would have taken of his own goods and he would be liable if any loss or damage was caused to the goods on account of his own negligence or criminal act or that of his agent and servants.”
26. A reference may also be made to the decision of the Supreme Court in N.R Srinivasa Iyer v. New India Assurance Company Ltd., (1983) 3 SCC 458, wherein the Supreme Court held that the burden is on the bailee and sub-bailee to prove the extent of care of the goods taken by them. When they failed to discharge the burden regarding carelessness and negligence on their part, the Court will be justified in accepting the bailor's version. In the case at hand, before the trial Court, the respondent made no efforts and led no evidence to demonstrate that there was no negligence on its part. It is also an admitted fact that the cargo was lost while it was in the custody and control of the carrier and its servants or agents. In addition, the provisions of Rule 20 which stipulate that, ‘the carrier is not liable if he proves that he and his servants or agents have taken all necessary measures to avoid the damage or that it was impossible for him or them to take such measures’, embodies the rule as to the liability of a bailee. The onus to demonstrate due care and lack of negligence has not been discharged by the respondent.
27. Although we have concluded that the respondent has failed to prove any special contract limiting its liability to US $ 20 per kilogram, as claimed by it; this plea must be rejected for another reason also. The Carriage by Air Act, 1972 is a Statute passed by the Indian Parliament specifically laying down the circumstances under which the liability of the carrier can be limited. It cannot be by-passed in any bilateral contract limiting that liability without conforming to the conditions prescribed therefor under that Statute. To our mind, any separate contract in the same field, i.e limiting the liability of a carrier, which does not conform to the provisions of this Act would be void being a contract opposed to public policy. In that context, once it is provided that in case notice as required under Rule 8(c) of the Second Schedule of the aforesaid Act is not included in the air waybill, the carrier is not entitled to the benefit of limited liability as described under Rule 22(2); then any bilateral contract between the parties limiting the liability of the respondent/carrier without complying with the said rule or any other provisions of that Statute, would be void and unenforceable. This is because the absolute freedom of two contracting parties to agree to terms regarding damages or compensation in the event of any loss has been curtailed by the Carriage by Air Act, 1972. It follows therefore that the conclusions of the learned trial Court that since it has found that the parties had agreed to limit the liability of the carrier to US $ 20 per kilogram under a separate contract, the same would be enforceable independent of the Carriage by Air Act, is not sustainable. Such a contract, even if it is proved, must be held to be void. No Court would give effect to such a contract. By holding that, ‘even if the provisions of the Carriage by Air Act are ignored, still the liability of the defendant is limited’, the trial Court has failed to appreciate the binding and overriding nature of this legislation which clearly controls and regulates the parties' freedom to contract in that area.
28. Finally, we find that there was no rebuttal by the respondent of the claims made by the plaintiff/appellant with regard to the actual market value of the seven drums that were lost, which was stated by the plaintiff to be Rs. 3,02,859.38. The proportionate freight charges on the above quantity Rs. 10,883.25 and further freight charges on the transportation of this quantity from Banur to Delhi of Rs. 612.50 as well as the plaintiff's claim to the loss of export benefits of Rs. 84,673.83 and other expenses for nontraceability of Rs. 45,108/- have also not been denied. Furthermore, the Trial Court has rejected plaintiff's claim towards proportionate freight charges on the ground that those charges were paid by the plaintiff towards the consideration of the contract. We do not see how that can make any difference to the responsibility of the respondent/carrier to make good the loss suffered by the plaintiff/appellant. Apart from the value of the goods lost, the expenses incurred by the plaintiff in transporting those goods as well as the expenses incurred in tracing them, would undoubtedly be reckoned towards the overall losses occasioned to the plaintiff as a result of the loss of its goods. For the same reason, the export benefits which he would have earned by exporting the shipment were also denied to the plaintiff because the goods were lost and can be attributed to the respondent. We might also add that the respondent/defendant who happened to be the carrier of the goods has also not filed any appeal against the finding of negligence arrived at by the Court below. Nor has that finding been seriously assailed even before us. Furthermore, the respondent/defendant has not raised any objection, even at this appellate stage, to the proof and exhibition of Ex. PW-1/3 which was tendered by the appellant/plaintiff as the air waybill as proof of the terms of the contract between the parties.
29. Under the circumstances, the appeal is allowed. The impugned judgment and decree dated 23rd August, 2004 is modified and the suit of the appellant/plaintiff is decreed with costs and interest @ of 7% per annum from the date of notice of demand till the decretal amount is paid. In case any amount has already been realized by the appellant/plaintiff from the respondent in terms of the impugned decree, the same would be deducted.
Appeal allowed.
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