D.K Jain, J.— The challenge in this appeal under Section 23 of the Consumer Protection Act, 1986 (for short “the Act”) is to the order dated 15-4-2002 passed by the National Consumer Disputes Redressal Commission (for short “the Commission”) in Original Petition No. 156 of 1995. By the impugned order, the Commission has dismissed the appellant's complaint alleging deficiency in service on the part of M/s Alitalia Cargo, Respondent 1 in this appeal, on the ground that there was no privity of contract between the appellant and Respondent 1. Respondents 2 and 3 in this appeal are M/s Omni Marg Travels (Pvt.) Ltd., general sales agents and M/s Fourways Movers (P) Ltd., cargo clearing agents of Respondent 1 respectively.
2. The salient facts giving rise to the present appeal are as follows: the appellant is engaged in the business of export of readymade garments and handicrafts. They obtained an order from one M/s D.D Sales, a concern based in New York, USA for supply of 2050 pairs of cotton gents dhotis, 150 sets of cotton ladies ghagra-choli, 150 pieces of dupattas, etc. As per the agreement between the appellant and the said concern of New York, USA, these articles had to reach New York, USA before 10-10-1994. Accordingly, the appellant handed over the consignment of the said articles to Respondent 3 M/s Fourways Movers (P) Ltd. on 4-10-1994 for onward dispatch to New York, for which House Air Waybill No. FMPL 0841 was prepared by Respondent 3. For the sake of ready reference, the said bill is reproduced hereunder:
Shipper's Name and Address:
Not Negotiable
HAWB No.
m/s dilwari exporters 1-8, jangpura-b, mathura road, new delhi 14, india.
FMPL
0841
house air waybill fourways movers (p) ltd. 39/6-7A, community centre, east of kailash, new delhi 110065.
Consignee's Name and Address M/s D.D Sales, 110-53 62nd drive, forest hills, ny 11375, usa.
Issuing Carter's Agent (Name and City) fourways movers (p) ltd. new delhi
Accounting Information “freight : prepaid”
Agent's iata code 14-3-3775
Airport of Departure (Address of First Carter) new delhi/az
MASTER AWB No. 055-2342 9276
By First Carter
Routing and Destination
nyc
az
Airport of Destination
Currency
Declared Value for Customs
Declared Value for Customs
new york
inr
nvd
US $29,441.70
Amount of Insurance Rs 10,12,706-00
The Landing Information
notify: same as above. please inform consignee immediately on arrival of shipment at destination. tel. no. (718) - 896-0575. original visa (3 sets) copy of invoice (3 sets) packing list (3 sets), all india handicraft board certificate and declaration to accompany with the shipment.
Carter Weight
Commodity Item No.
Chargeable Weight
Rate/Charge
Total
Nature and Quantity of Goods (Incl. powerloom cotton gents dhoties and india item garments hand/emd/printed/zari/applique/bead/mirror work p/1 cotton ladies choli-ghagra set and dupattas) as per inv. no. DE/EXP/358/94-95 Dt. 28-9-1994 RBI: DD: 008597
48
1360-OK
1360-OK
85.00
115600-00
IEC:NC:05880 0952
Prepaid
Weight Charge
Collect
Other Charges
2,15,600-00
AWB: 60-00 HAWB: 150-00 SB: 175-00 CTG: 500-00 APT: 545-00 INS: 2886-00
Total Other Charges Due Agent 1230-00
Total Other Charges Due Carter 2886-00
fourways movers (p) ltd., new delhi
Total prepaid
1,19,716-00
4-10-1994
new delhi
india v.k
Signature of Issuing Carter or its Agent
055-2342 9276
original 3 (for shipper)
3. Simultaneously, a master air waybill on a numbered (055-2342 9276) pro forma printed by “Alitalia”, Respondent 1, was prepared. The said air waybill, containing relevant particulars, is also reproduced hereinbelow:
DEK 2342 9276
Shipper's Name and Address:
055-2342 9276
m/s fourways movers (p) ltd. 39/6, 7-A, community centre, east of kailash, new delhi/india.
Not Negotiable Air Waybill Issued by
Alitalia
Alitalia S.p.A
Consignee's Name and Address
M/s D.D Sales, 11053 62nd, drive forest hills, ny 11375, usa.
Issuing Carter's Agent (Name and City)
Accounting Information
fourways movers (p) ltd. new delhi
“freight: prepaid”
Agent's iata code
Account No.
14-3-3775
73279
Airport of Departure (Address of First Carter) and Requested Routing
new delhi/az
By First Carter
Routing and Destination
nyc
az
Airport of Destination
Currency
Declared Value for Customs
Declared Value for Customs
new york
inr
nvd
US $43,698.60
Amount of Insurance
Rs 15,03,101-00
The Landing Information
notify: same as above. please inform consignee immediately on arrival of shipment at destination. tel. no. (718) - 896-0575. one env. contg. docs attd. original visa (3 sets) copy of invoice (3 sets), packing list, all india handicraft board certificate and declaration to accompany with the shipment.
Carter Weight
Commodity Item No.
Chargeable Weight
Rate/Charge
Total
Nature and Quantity of Goods (Incl. powerloom cotton gents dhoties & india item garments)
48
1993-OKQ
1993-OK
85.00
169405-00
GRI:AG: 493861 493995, 493896
HAWB No.: 0841, 0842
Prepaid
Weight Charge
Collect
Other Charges
1,69,405-00
AWB: 60-00 HAWB: 300-00 SB: 250-00
CTG: 500-00 APT: 800-00 INS: 4284-00
INS: 2886-00
Total Other Charges Due Agent
2010-00
Total Other Charges Due Carter
4284-00
fourways movers
4-10-1994
new delhi
india v.k
Signature of Issuing Carter or Its Agent
055-2342 9276
original 3 (for shipper)
4. On 6-10-1994, a carting order was prepared by “alitalia airlines” handing over the consignment to AAI, Cargo Terminal (NITC), IGI Airport, New Delhi 110037 for shipment by Flight AZ-1905. The carting order bore the endorsement “cargo accepted subject to space”. The parties are ad idem that the said house air waybill as also the master air waybill were issued under the seal and signatures of M/s Fourways Movers (P) Ltd., Respondent 3. It is pertinent to note at this juncture itself that House Air Waybill No. 0841 had Master Air Waybill No. 055-2342 9276, the running bill number printed on Alitalia's printed bill book. Similarly, House Air Waybill No. 0841 was recorded on the master air waybill. Since the consignment did not reach New York by the stipulated date, M/s D.D Sales, the importer, cancelled the order on or around 16-10-1994 and claimed damages from the appellant. The consignment reached the destination only on 20-10-1994.
5. Alleging deficiency in service on the part of the respondents, in particular by Respondent 1, the appellant filed a complaint before the Commission claiming Rs 22.46 lakhs towards the value of the consignment along with interest at the rate of 18% per annum thereon and Rs 15 lakhs as special damages.
6. The complaint was contested by Respondent 1, repudiating the claim made by the appellant. In the counter-affidavit filed by Respondent 1, while denying any negligence on their part resulting in deficiency in service, by way of a preliminary objection, it was pleaded that there was no privity of contract between them and the appellant, and therefore, the complaint was liable to be dismissed on that short ground.
7. The stand of Respondent 1 before the Commission was that Air Waybill No. 055-2342 9276 dated 4-10-1994, which was issued by Respondent 3 “on behalf of Respondent 1” did not mention the flight number and the date in the column provided for the same, since airlifting of cargo was always subject to load/space. It was reiterated that House Air Waybill No. 0842 dated 4-10-1994 was neither issued by Respondent 1 nor on its behalf.
8. Both the parties led evidence before the Commission by way of affidavits. Upon consideration of the evidence on record, the Commission dismissed the complaint on the aforestated ground, namely, the appellant had no locus standi to file the plaint against Respondent 1. While holding so, the Commission observed thus:
“It is not disputed by the parties that Air Waybill (sic) alone is a contract between the parties. Firstly, we see that Part III of Chapter II of Schedule II of the Act does not even remotely refer to any other document except Air Waybill (sic). We find that on the Air Waybill (sic) which happens to be prima facie evidence of conclusion of contract of the receipt of cargo and the conditions of carriage, the name of the shipper is shown as Fourways Movers (P) Ltd., OP No. 3, and not that of the complainant nor is there any evidence/indication of any such capacity of Respondent 3 on the Air Waybill (sic). Therefore, it will not be possible to reach in the Air Waybill (sic) what is not set out or indicated therein. It is for this reason that we tend to agree with Respondent 1 and accept its plea that the complainant has no locus standi to file the present complaint against Respondent 1, the airline. Things would have been different if at the time of booking the cargo Respondent 3 had issued a communication to Respondent 1 that it was acting as an agent of the complainant.”
The Commission, thus, declined to go into the merits of the complaint though it did observe that there was a lot that could be said on merits of the appellant's case.
9. Being aggrieved, the appellant claimant is before us in this appeal.
10. Mr Arvind Kumar Gupta, learned counsel appearing on behalf of the appellant, submitted that the Commission committed a serious error of law and on facts in dismissing the complaint on the sole ground that the appellant had failed to prove any privity of contract between them and the carrier i.e Respondent 1. According to the learned counsel, it is clear from the house air waybill as also Master Air Waybill No. 055-2342 9276, that both the bills were prepared contemporaneously by Respondent 3 as Respondent 1 carter's agent when the consignment was handed over to them, and since the house air waybill records the appellant as the shipper and Respondent 3 as the issuing carter's agent, the mention of Respondent 3 as the shipper as well as the issuing carter's agent in the master air waybill is of no consequence.
11. It was strenuously urged by the learned counsel for the appellant that from the said air waybills, it is clear that Respondent 3 was acting as an agent of Respondent 1 and therefore, the said respondent, as principal, was bound by all the acts of omission and commission of his agent. It was asserted that the Commission failed to apply its mind on this aspect of the matter and therefore, erred in holding that there was no privity of contract between the appellant and Respondent 1.
12. Mr Sanjay Gupta, learned counsel appearing on behalf of Respondent 1, on the other hand, supported the decision of the Commission and submitted that since the master air waybill is the only contract of carriage between the consignor and the carter and in the said bill, Respondent 3 having been named as the shipper and M/s D.D Sales of New York as the consignee, Respondent 1 had no liability towards the appellant, notwithstanding the fact that the appellant had been named as the shipper in House Air Waybill No. 0841. It was submitted that since as per Part III of Chapter II of the Second Schedule to the Carriage by Air Act, 1972 (for short “the Carriage Act”), it is the consignor who is required to make out the air waybill and hand over the same to the carrier, it was the responsibility of the consignor to see that all the particulars and details of the cargo inserted in the air waybill are correct. It was thus, argued that Respondent 1 not being a party to the contract of carriage vis-à-vis the appellant, the said respondent cannot be held to be liable for any delay in delivery of the consignment in question.
13. There is no quarrel with the proposition that as per Section 4 of the Carriage Act, the rules contained in the Second Schedule govern the rights and liabilities of carriers, consignors, consignees, etc. The rules contained in the Second Schedule apply to all international carriage of persons, baggage or cargo performed by aircraft for reward. Chapter II of the said Schedule enumerates the documents of carriage. Rule 5 of Part III of the said Chapter stipulates that:
“5. (1) Every carrier of cargo has the right to require the consignor to make out and hand over to him a document called as ‘air waybill’; every consignor has the right to require the carrier to accept this document.”
14. Rule 6 provides that the air waybill shall be made out by the consignor in three original parts and be handed over with the cargo in the manner prescribed therein. Rule 10 makes the consignor responsible for the correctness of the particulars and statements relating to the cargo which he inserts in the air waybill. As per Rule 11:
“11. (1) The air waybill is prima facie evidence of the conclusion of the contract, of the receipt of the cargo and of the conditions of carriage.”
15. In the light of these provisions, we agree with the Commission that the “air waybill” is prima facie evidence of the conclusion of the contract; of the receipt of the cargo and of the conditions of carriage.
16. However, the question which, in our view, the Commission has failed to examine is in regard to the capacity in which Respondent 3 was operating and had collected the cargo from the appellant for being shipped to New York. In other words, what was the nature of relationship between Respondent 3 and Respondent 1?
17. Section 186 of the Contract Act, 1872 (for short “the Contract Act”) lays down that the authority of an agent may be expressed or implied. As per Section 187 of the Contract Act, an authority is said to be express when it is given by words spoken or written, and an authority is said to be implied when it is to be inferred from the circumstances of the case; and things spoken or written, or the ordinary course of dealing, which may be accounted circumstances of the case.
18. Section 188 of the Contract Act prescribes that:
“188. Extent of agent's authority.—An agent, having an authority to do an act, has authority to do every lawful thing which is necessary in order to do such act.”
19. Section 237 of the Contract Act provides that:
“237. Liability of principal inducing belief that agent's unauthorised acts were authorised.—When an agent has, without authority, done acts or incurred obligations to third persons on behalf of his principal, the principal is bound by such acts or obligations if he has by his words or conduct induced such third persons to believe that such acts and obligations were within the scope of the agent's authority.”
20. There is no gainsaying that onus to show that the act done by an agent was within the scope of his authority or ostensible authority held or exercised by him is on the person claiming against the principal. This, of course, can be shown by practice as well as by a written instrument. Thus, the question for consideration is whether on the evidence obtaining in the instant case, can it be said that Respondent 3 had an express or implied authority to act on behalf of Respondent 1 as their agent? If Respondent 3 had such an authority, then obviously Respondent 1 was bound by the commitment Respondent 3 had made to the appellant.
21. Having examined the question in the light of the two aforeextracted “air waybills”, which, according to both the contesting parties, are determinative of the terms and conditions of contract between them, we are of the opinion that Respondent 3 had an express authority to receive the cargo for and on behalf of Respondent 1. This is manifest from Master Air Waybill No. 055-2342 9276 issued and signed by Respondent 3 on the air waybill printed by Respondent 1. But for the said authority, Respondent 3 could not use the air waybill pro forma printed by Respondent 1. Though it is true that in the said air waybill the name of the shipper has been mentioned as that of Respondent 3 but the said air waybill has also been signed by Respondent 3 as the agent of the carter, Respondent 1.
22. The other relevant particulars like, the name of the consignee, the number of the house air waybill (0841), etc. tally with the house air waybill issued by Respondent 3 to the appellant clearly showing the name of the consignor as that of the appellant. From the said documents it would appear that Respondent 3 was in fact, acting in dual capacity, one as a shipper on behalf of the appellant and the other as an agent of Respondent 1. That being so, Respondent 1 was bound by the acts of their agent viz. Respondent 3 with all its results. We are of the opinion that while holding that there was no privity of contract between the appellant and Respondent 1 this vital aspect of the matter escaped the attention of the Commission thus, vitiating its order.
23. In view of the aforegoing discussion, we have no option but to allow the appeal and set aside the impugned order. We order accordingly and remit the matter back to the Commission for fresh adjudication of the claim preferred by the appellant on merits. However, in the facts and circumstances of the case, there will be no order as to costs.