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Airline liable for delivery delay even when there's no wilful default

Source : BUSINESS_STANDARD
Last Updated: Sun, Feb 10, 2013 21:00 hrs

Rajasthan Art Emporium had filed a consumer complaint before the National Commission against Kuwait Airways and Daga Air Agents alleging deficiency in service and negligence in delivery of goods despatched by them. The grievance was about short delivery and delay in delivery of goods.

The commission observed that the emporium export all kinds of handicrafts to several countries including the US. Its largest overseas customer was Williams Sonoma Inc of the US, which had placed an order for handicrafts to be delivered on urgent basis.

The emporium approached Kuwait Airways and its agents, both of whom gave an assurance that the goods would be delivered in seven days. Relying on this assurance, the emporium entrusted three shipments for transport. The consignments did not reach in the stipulated time. On enquiry, the airlines gave a revised schedule, extending the delivery period to two weeks, but the consignments did not reach. The importer expressed its displeasure. The Emporium took up the issue with the airlines and its agents, who were indifferent.

After considerable delay, of the 288 cartons, only 184 cartons were delivered. The emporium sent a legal notice, making a claim for this deficiency in service, but it was ignored. Hence a complaint was filed before the commission.

The commission observed that carriage by Air Act provided compensation for short delivery to be computed at $20 per kg of loss, regardless of the actual value of the lost goods. Going by the weight stated in the airway bill, the loss was to the extent to 1,822 kg, so the compensation would work out to $36,440. Accordingly, the commission directed the airlines to pay this amount along with interest at 9 per cent from October 1, 1996 till the date of payment.

As for the delay, the airline claimed that the goods were neither fragile nor perishable, and time was not the essence of the contract. Also, there was no record with the airway bill about the commitment to deliver the goods with a specified time period. The commission refused to accept this argument, as correspondence on record showed that the consignments had been sent to Kuwait instead of US, from where they had to be reshipped, resulting in delay in delivery.

As per Section 19 of the carriage by Air Act, a carrier is liable for damage due to delay in the carriage by air of passengers, luggage or goods. Section 13 (3) provides that when the carrier admits loss of the goods, or if the goods have not arrived at the expiration of seven days after the date on which they ought to have arrived, the consignee is entitled to put into force against the carrier the rights which flow from the contract of carriage.

The commission held that the law did not require wilful default to be proved. An air carrier can be held liable for negligence if goods are not delivered within seven days. Observing that air freight is almost ten times more that sea freight, the commission held that when goods were sent by air, it has to be presumed that time was the essence of the contract, and had to be automatically read into the contract.

The weight of the consignment delivered was 25,037.50 kg. (after reducing the value of the lost cargo). Compensation for delay was fixed at $20 per kg, which worked out to $500,740. Since the emporium had claimed Rs 20 lakh towards compensation, the commission directed that the emporium be entitled to either $500,740 or Rs 20 lakh, whichever was lower, along with nine per cent interest from July 31, 1996 till payment. This was in addition to the amount of $36,440 awarded for the shortfall in delivery due to loss of cargo. Besides this, Rs 5 lakh was also awarded as costs of litigation. A period of three months was granted to the airlines for compliance of the order. The agent was not held liable as there was no negligence or deficiency on its part.

So, foreign airlines should also learn to treat their customers with care. It is presumed that timely delivery is to be ensured when goods are despatched by air.


The write is a consumer activist




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