High Court · 2008

IN THE HIGH COURT OF JUDICATURE OF MADRASDATED: 01.07.2008CORAM:THE HONOURABLE MR. JUSTICE G.RAJASURIAA.S.No.806 of 1995Air India rep. By its Assistant ManagerCargo Claims and Investigation at New Terminal Buildings,Bombay Air PortBombay 400 089.... Appellant/Third defendantVs. 1.Development Services (India) Pvt. Ltd., NO.12, Sunkurama Street, Madras 1, rep. By its Director Mr.E.D.Devadasan2.Oriental Insurance Co. Ltd., Office at NO.130, Angappa Naicken St., Madras 1... Respondents 1 &2/Plaintiffs 1,23.M/s Spencer & Co. Ltd.,Travel Division, C/o Connemara Hotel,Madras 2.4.M/s K.L.M.Royal Dutch Airwaysrep. By its Manager,Office at Spencer & Co., Ltd.,Mount Road, Madras 2... Respondents 3 &4/ Defendants 1 & 2Appeal against the judgment and decree of the II Additional CityCivil Court Judge, Madras made in O.S.No.1704 of 1989 dated13.04.1994.For appellant :: Mr.O.R.Santhanakrishna For Respondents:: Mr.Devadasan & Sagar (R1) Mr.Nageswaran (R2) Mr.Krishnasrinivasan for M/s Ramasubramanian Associates (R4) https://hcservices.ecourts.gov.in/hcservices/ JUDGMENT The suit in O.S.No.1704 of 1989 was initially filed by theplaintiff Development Services (India) Private Limited as against (1)M/s Spencer and Company Limited and (2) Oriental Insurance CompanyLimited. Subsequently, the said Oriental Insurance Company Limited,as per the order of the trial Court was transposed as Plaintiff No.2.Thereafter, M/s K.L.M.Royal Dutch Air Lines was impleaded as one ofthe defendants. While so, the said M/s K.L.M.Royal Dutch Air Linesinitiated third party proceedings under Order VIII A CPC as againstAir India.2. The appeal is focussed as against the Cross judgment anddecree dated 13.04.1994 passed by the learned II Additional CityCivil Judge, Madras, in O.S.No.1704 of 1989. For convenience sake,the parties are referred to here under according to their litigativestatus before the trial Court.3. The quintessence of the case of the plaintiffs as stoodexposited from the amended plaint could be portrayed thus:The first plaintiff entrusted goods worth Rs.34,061/- to witlaces with M/s K.L.M.Royal Dutch Air Lines, D2 for being transportedto Belgium from Madras. M/s Spencer and Company Limited shown as D1in the Judgement is the agent of M/s K.L.M.Royal Dutch Air Lines, D2.M/s K.L.M.Royal Dutch Air Lines, D2 entrusted the goods to D3, AirIndia for being transported. But, Air India would come forward withthe plea that the goods got lost in the transit. Hence, the firstplaintiff got insurance coverage amount from the second plaintiff,who stepped into the shoes of the first plaintiff, by virtue of thePower of Attorney executed by the first plaintiff in favour of thesecond plaintiff. As such the suit was prosecuted claiming damagesfrom the defendants.4. Per contra, M/s Spencer and Company Limited, D1 filed thewritten statement, the gist and kernel of it would run thus:-The suit is barred by limitation. D1 is only the authorisedsales agent of M/s K.L.M.Royal Dutch Air Lines, D2. The firstplaintiff booked a consignment of laces to Belgium through M/sVinsens Clearing Agent of M/s K.L.M.Royal Dutch Air Lines. Theconsignment was carried by Air India D.3 from Madras to Singaporeenroute Belgium. However the consignment got lost when it was in thecustody of D3 Air India, who issued the certificate dated 30.10.1989that the consignment booked got lost in the transit. The suit asagainst D1 is not tenable as he happened to be only an agent of thedisclosed Principal viz., D.2, M/s K.L.M.Royal Dutch Air Lines. https://hcservices.ecourts.gov.in/hcservices/

5. The second defendant M/s K.L.M.Royal Dutch Air Lines, filedthe written statement, the pith and marrow of it would run thus:-The suit is barred by limitation. The goods entrusted to D2through Agent was inturn entrusted to Air India, D.3 for beingtransported to Singapore. But, when the goods were in the custody ofAir India, D.3, it got lost. To that effect, D.3, also issued acertificate dated 30.10.1989. D.2 came to know about the loss ofconsignment only on 19.09.1998, upon receipt of the letter addressedto D2 by the first plaintiff. Second Plaintiff also paidcompensation relating to loss of goods and as such no cause of actionsurvives. Accordingly, D.2 M/s K.L.M.Royal Dutch Air Lines prayedfor dismissal of the suit.6. Third defendant, Air India filed the written statement, thewarp and woof of it would run thus:-The suit is barred by limitation. Rule 30 of Schedule II of theCarriage by Air Act, 1972 (herein after referred to as the Act)would contemplate two years period of limitation, for claimingdamages. Air India, D.3 was impleaded as 3rd defendant long after theexpiry of two years from the arisal of the cause of action ascontemplated under the said provision and accordingly D.3, prayed fordismissal of the suit.7. The trial Court framed the relevant issues and additionalissues. During the trial, on behalf of the plaintiffs, P.W.1 wasexamined and Exs.A1 to A11 were marked. On the defendants' side,no oral evidence was adduced. However, by consent Exs.B1 to B8 weremarked.8. The trial Court ultimately decreed the suit directing thesecond defendant M/s K.L.M.Royal Dutch Air Lines to pay a sum ofRs.20,416.35 with interest at 18% p.a. from the date of plaint i.e.,15.02.1989 till the date of realisation; D.2 was also ordered to paythe cost of Rs.4,944/- to the first plaintiff and the third defendantAir India was directed to reimburse D2 M/s K.L.M.Royal Dutch AirLines with the amount, which D.2 M/s K.L.M.Royal Dutch Air Lineswould be paying to first plaintiff. The suit as against D1 wasdismissed.9. Being aggrieved by and dissatisfied with the judgment anddecree of the trial Court, D.3 Air India filed this appeal on variousgrounds. The gist and kernel of them would run thus:-The judgment and decree of the trial court is against law,weight of evidence and probabilities of the case. As against D.3 AirIndia, the decree should not have been passed. The trial Courtfailed to hold that the claim as against D.3 Air India was barred by https://hcservices.ecourts.gov.in/hcservices/ limitation in view of the said Rule 30. The goods referred to inthis case was consigned by D.2 M/s K.L.M.Royal Dutch Air Lines on22.06.1988, whereas D.3 Air India was impleaded as a party only on28.06.1993 and infaact such a suit if at all to be filed, it shouldhave been filed within a period of two years from the arisal of thecause of action. But that was not done so. Hence the suit is barredby limitation. The reasoning given by the trial Court for holdingthat the suit was not barred by limitation as against D3 Air India isuntenable. As per Section 21 of the Limitation Act, relating to thenewly added party, the suit was deemed to have been instituted fromthe date he was so made a party. The suit was deemed to have beeninstituted as against D3 Air India only on 28.06.1993 long after theexpiry of two years' period, as indicated supra. Accordingly, D.3,prayed for the dismissal of the original suit after setting aside theJudgment and decree of the trial Court. 10. Heard the learned counsel for the appellants and the learnedcounsel for the respondents.11. The parties restricted their arguments only relating tolimitation point. Hence the following points for consideration arise:-(1) whether the original suit and Order VIII-A proceedings as against D3 Air India are barredby limitation in view of Rule 30 of the IISchedule to the Carriage By Air Act, 1972? and(2) whether there is any infirmity in theJudgment and the decree of the trial Court?12. Point No.I The learned counsel for the appellant placingreliance on the said Rule 30 and also Order I Rule 10(5) CPC, wouldadvance his argument to the effect that D3 Air India, appellantherein was impleaded in the suit only with effect from 28.06.1993, soto say long after the expiry of two years from the arisal of thecause of action for filing the suit. Whereas the learned counsel forD2 M/s K.L.M.Royal Dutch Air Lines, would submit that at theinstance of D.2 only D3 was impleaded purely for the purpose ofsafeguarding the interest of D.2 in the event of the trial Courtpassing a Judgment directing D.2 to pay damages to the plaintiffs asD.2 entrusted the goods to D.3 for being transported on its behalffrom Madras to Singapore and at that time alone when the goods werein the custody of D3 Air India admittedly, it got lost.13. At this juncture, it is worthwhile to reproduce hereunderRule 30 of the Act: "Rule 30: (1) The right to damages shall beextinguished if an action is not brought withintwo years, reckoned from the date of arrival at https://hcservices.ecourts.gov.in/hcservices/ the destination, or from the date on which theaircraft ought to have arrived, or from the dateon which the carriage stopped.(2) The method of calculating the period oflimitation shall be determined by the law of theCourt seized of the case".and also Order I Rule 10(5) of CPC hereunder:-"(5)Subject to the provisions of the IndianLimitation Act, 1877 (15 of 1877) Section 22, theproceedings as against any person added asdefendant shall be deemed to have begun only onthe service of the summons".(emphasis supplied)14. By way of highlighting the real purport of said Rule 30 ofthe Act, the learned counsel for the appellant would rely on theJudgment of the Division Bench of this Court in the case of M/s AirIndia, Bombay Air Port and another vs. M/s Asia Tanning Co. & Anotherreported in 2003-1-L.W.622, an excerpt from it would run thus:-"6. The word 'damages' is not defined in theRules. Rule 17 deals with the damages sustained inthe event o death or injury to a passenger; Rule 18deals with the damage sustained in the event of thedestruction or loss of, or damage to, anyregistered baggage or any cargo; Rule 19 deals withthe liability for damages occasioned by delay inthe carriage by air of passengers, baggage orcargo.7. Section 4 of the Act deals with theapplication of amended Convention (WarsawConvention 1929 as amended by the Hague Protocol,1955) to India. Sub-section (1) thereof readsthus:"The Rules contained in the Second Schedulebeing the provisions of the amended Conventionrelating to the rights and liabilities of carriers,passengers, consignors, consignees and otherpersons, shall subject to the provisions of thisAct, have the force of law in India in relation toany carriage by air to which those rules apply,irrespective of the nationality of the aircraftperforming the carriage".The Rule of Limitation prescribed in Rule 30of the Second Schedule is thus a Special Rule ofLimitation in respect of carriage by air and willprevail over the general law of limitation. The https://hcservices.ecourts.gov.in/hcservices/ Rules prescribe the forum and the period beforewhich the action is to be brought. Thoseprovisions dealing with the forum and the period oflimitation are meant to be the law governingactions against air carriers. Questions ofprocedure are governed by the law of the Court inwhich the action is brought, as provided in Rule 29(2) of the Second Schedule to the Act.8. The Rules contained in Chapter III of theSecond Schedule are in relation to the claims fordamages against the carriers in relation to, interalia, the carriage of goods by air. Such carriageof goods is normally made only after an Airway billis issued for which provision is made in Rule 5 inPart III of Chapter II to the Second Schedule.Chapter II is titled as 'Documents of Carriage'.Part I of Chapter II is the passenger ticket; PartII of Chapter II is the Baggage check; and Part IIIof Chapter II is the Airway bill".Apparently the aforesaid facts would clearly indicate that D.3 AirIndia was impleaded long after two years and hence as against D3, thetrial Court should not have passed the Judgment. He would also try topress into service Section 4 (1) of the Act, which is reproducedhereunder:-"4. Application of amended Convention to India:- (1) The rules contained in the Second Schedule,being the provisions of the amended Conventionrelating to the rights and liabilities of carriers,passengers, consignors, consignees and otherpersons, shall, subject to the provisions of thisAct, have the force of law in India in relation toany carriage by air to which those rules apply,irrespective of the nationality of the aircraftperforming the carriage". (emphasis supplied)Infact, in the decision cited by him referred to above, the saidprovision is found referred to at Paragraph No.7. 15. The learned counsel for the appellant D3 would try totorpedo the argument of the learned counsel for D.2 by advancing hisarguments that the limitation as contemplated under Rule 30 of thesaid Act is not only applicable relating to a suit filed by theactual consignor of goods with the consignee Air Carrier, but it willalso apply between two Air Carriers so to say if one air Carrierinturn entrust the goods of the consignor to another air carrier fortransporting it on its behalf and if the former is constrained to paydamages to the consignor for the loss of goods, while the lattercarrier transporting it, then the former Air Carrier also is bound https://hcservices.ecourts.gov.in/hcservices/ by the limitation period contemplated therein.16. In order to understand the real purport of Rule 30 of theact, the principles governing interpretation of statutes shouldnecessarily be adhered to. The principle Bonum partem so to say thewords are prima facie to be taken in their lawful and rightful sense,should be resorted to for understanding the real purport of Rule 30.An excerpt from Chapter V of Maxwell on the Interpretation ofStatutes (Vol.XII) would run thus:-"BEFORE adopting any proposed constructionof a passage susceptible of more than one meaning,it is important to consider the effects orconsequences which would result from it, for theyoften point out the real meaning of the words.There are certain objects which the legislature ispresumed not to intend, and a construction whichwould lead to any of them is therefore to beavoided. It is not frequently necessary,therefore, to limit the effect of the wordscontained in an enactment (especially generalwords), and sometimes to depart, not only fromtheir primary and literal meaning, but also fromthe rules of grammatical construction in caseswhere it seems highly improbable that the words intheir wide primary or grammatical meaning actuallyexpress the real intention of the legislature. Itis regarded as more reasonable to hold that thelegislature expressed its intention in a slovenlymanner, than that a meaning should be given tothem which could not have been intended".17. A reading of various provisions of the Act including therules as found set out under Schedule II of it would make it quiteobvious that dispute between two AIR carriers in matters of thisnature, is not covered by the limitation of two years as found setout therein. The rule preceding Rule 30 also should be read. Rule29 is extracted hereunder for ready reference:-"29. (1) An action for damages must bebrought, at the option of the plaintiff, in theterritory of one of the High Contracting Parties,either before the Court having jurisdiction wherethe carrier is ordinarily resident, or has hisprincipal place of business, or has anestablishment by which the contract has been madeor before the Court having jurisdiction at theplace of destination.(2) Questions of procedure shall be governedby the law of the Court seized of the case". https://hcservices.ecourts.gov.in/hcservices/

18. A reading of Rule 29 would clearly indicate what was in themind of the Legislature in formulating Rules 29, 30 etc. Theconsignor of goods should be provided with facility to seek theirredressal within the time frame and those provisions are intended todiscipline both the consignor and the air carrier in this regard. Nodoubt in an hypothetical case where one air carrier entrusts its owngoods to another air carrier for transport, the former becomes theoriginal consignor and the latter becomes the original consignee andin such a case the position would be different. But here the factualposition is entirely different. The original consignor is only thefirst plaintiff and by no stretch of imagination, D.2 M/sK.L.M.Royal Dutch Air Lines could be described as original consignor.Infact, in international air transport, one and same air carriercannot be in a position to transport the air cargo from one place toanother and as such there is contractual understanding between theair carriers concerned. As such the goods entrusted by one consignorto one air carrier would be transported by one other air carrier andif any dispute arises between such two air carriers, in suchcircumstances, the limitation found as envisaged under Rule 30 ofthe Act cannot be pressed into service. 19. The facts involved in the case dealt with by the DivisionBench of this Court are entirely different from the facts involved inthis case. In the cited precedent, the facts were to the effect thatfinished leather was entrusted to Air India for being transportedand delivered to the consignee at Boston and that occurred shortdelivery for which the Air India was sued beyond two years and inthose circumstances, this Court held that the limitation period of 2years should be applied as against the consignor and as such thecited decision is not covering the factual aspects involved in thiscase. D.2 could have in this case without invoking Order VIII Rule-Aso to say the third Party proceedings and contested the original suitand in the event of D.2 M/s K.L.M.Royal Dutch Air Lines having beenordered to pay damages to the plaintiffs and after making suchpayment, D.2 M/s K.L.M.Royal Dutch Air Lines could have instituted aseparate suit namely contribution suit for reimbursement form D3 byadhering to the provisions of the Limitation Act. The Core questionarises, whether in such a suit Air India could press into service thesaid Rule 30. I am of the considered opinion that certainly Rule 30is having no application to contribution suits or suits forreimbursement by one Air Carrier against another Air Carrier. By wayof avoiding multiplicity of proceedings, D.2 M/s K.L.M.Royal DutchAir Lines invoked Order VIII-A of CPC. In such a case, the questionof pressing into service Rule 30 of the Act as against D.2 M/sK.L.M.Royal Dutch Air Lines does not arise at all. The very purportof Order VIII-A itself would denote and connote that relating to theremedy between the defendant who invokes Order VIII-A and the thirdparty is concerned separate law of limitation is applicable dehors https://hcservices.ecourts.gov.in/hcservices/ the law of Limitation as applicable to the original suit.20. The learned counsel for the appellant D.3 placing relianceon Section 4(1) of the Act as extracted supra would draw theattention of this Court to the words "other persons" and develophis argument that those words would include air carriers. My mind isredolent with the principle Ejusdem generis. The term 'otherpersons' should be understood in concinnity and in consonance withthe words carriers, passengers, consignors, consignees and otherpersons and that too in the light of the object of the relevant rulesand provisions. The legislatures never intended to apply it tocontribution suits and reimbursement suits and in such a case, Rule30 cannot be pressed into service as against D3. Infact, plaintiffshave no cause of action directly as against D.3 and it was D.2 M/sK.L.M.Royal Dutch Air Lines in order to safeguard its interest andthat too in the event of suffering a decree wanted to get reimbursedfrom D2. Hence in such a case, D3 Air India is not justified inraising the limitation point as against D.2 by relying on Rule 30.21. The learned counsel for D.3 also cited the decision of theHon'ble Apex Court in the case of M/s Bihar Supply Syndicate vs.Asiatic Navigation and others reported in AIR 1993 SUPREME COURT 2054relating to Marine Insurance Act, which contemplates only one yearlimitation period. The decision of this Court in the case of TheShipping Corporation of India Ltd., vs. Union of India reported in2004(3) CTC 686 also relates to Indian Carriage of Goods bySea Act,1925 and there also the claim was dismissed on the ground oflimitation. In view of my discussion supra, those decisions are notapplicable to the factual circumstances involved in this case.22. The learned counsel for D2 also has come forward with analternative argument that infact the suit by the plaintiffs asagainst D.2 was barred by limitation in view of Rule 30 as betweenthe plaintiffs and D.2, Rule 30 would be applicable and thatoriginally D.2 was not impleaded as one of the defendants' but later,so to say, after a lapse of two years from the date of filing of thesuit, D.2 was impleaded.23. Indubitably and incontrovertibly the goods were entrusted bythe first plaintiff to D.1, the agent of D.2 on 20.06.1988. Thepolicy of insurance emerged dated 21.06.1988 was issued by P2 to P1.On 13.09.1988 the consignee confirmed that consignment did not reachhim. On 19.12.1988, notice was served to D.2 Airlines by firstplaintiff. Notice was sent by first plaintiff to second plaintiffon 14.12.1988, for recovering the insurance amount. Only on15.02.1989 the plaint was filed in Court. On 30.10.1989, Air IndiaD.3 issued certificate confirming the loss of goods in transit. D.2M/s K.L.M.Royal Dutch Air Lines was impleaded on 02.04.1991, as perthe order of the trial Court in I.A.No.22910 of 1989. As such the https://hcservices.ecourts.gov.in/hcservices/ learned counsel for the second defendant would develop his argumentthat two years period of limitation as contemplated under Rule 30 ofthe Act had long ago got expired as against D2. 24. But the learned counsel for the Insurance Company, thesecond plaintiff would correctly and convincingly argue that eventhough the order of the trial Court is dated 02.04.1991 impleadingD.2 M/s K.L.M.Royal Dutch Air Lines, yet, the necessary applicationin I.A.No.22910 of 1989 for impleadment was filed even in the year1989 and the very number itself is indicative of the said fact. Assuch, it is clear that during the year 1989, two years period did notget lapsed.25. The learned counsel for D.2 placing reliance on Order I Rule10(5)CPC would develop his argument that from the date of receipt ofsuch suit summons alone, D.2 would be deemed to have been impleadedas a party as per the limitation Act. At this juncture, I would liketo highlight that the said provision has to be read harmoniously withregard to the case laws as such. It is trite proposition of law thatbefore impleading the party in a suit, in the IA for impleadment,notice should be sent to the proposed party. Obviously, it wouldtake time even years together at times. If the argument of thelearned counsel for D.2 M/s K.L.M.Royal Dutch Air Lines is accepted,then, pragmatically speaking in no case, parties could be addedadditionally within the period of limitation. It is well known thatthere is no statutory time limit for disposal of IA and also forpronouncement of orders and in such cases, the proposed parties wouldbe bent upon dragging on the proceedings. In almost all the cases,the attempt to implead necessary new parties will end in a fiasco.As such the time taken for impleading new parties should be excludedwhile computing the period of limitation. So, what could be legallyand logically, practically and pragmatically, reasonably andjustifiably held is that the date of filing of the application forimpleading new parties should be taken for reckoning limitation, asotherwise, it will lead to disastrous consequence in the litigativeprocess resulting in causing injustice to litigant public.Accordingly if viewed, D.2 M/s K.L.M.Royal Dutch Air Lines cannotpress into service the plea of limitation. As such the contention ofD.2 that the original suit filed by the plaintiffs as against D.2 wasbarred by limitation is not tenable. Infact, D.2 attempted to getthe original suit itself dismissed so that not only D.2 would bebenefited, consequently D.3 also would be benefited. But in myopinion, such a plea suggested is not legally tenable.26. The learned counsel for D.2 M/s K.L.M.Royal Dutch Air Lineswould justify his right to argue on his alternative plea asaforesaid, by placing reliance on Order XLI Rule 33 CPC even thoughno cross appeal was filed or separate appeal was filed by D.2 asagainst rejection of D.2's plea of limitation. In support of hiscontention, he cited the following decision:- https://hcservices.ecourts.gov.in/hcservices/ 1) Mahant Dhangir and Another vs. Shri Madan Mohan reported inAIR 1988 Supreme Court 5427. There is no quarrel over the proposition that the appellateCourt can invoke Order XLI Rule 33 CPC in appropriate cases. Here,considering Order XLI Rule 33 only, I permitted the learned counselto argue on the alternative plea that the suit was barred bylimitation as against D.2 M/s K.L.M.Royal Dutch Air Lines. But onmerits, I could see that such a plea of limitation as sought to beputforth by D.2 also was untenable.28. Before concluding this Judgment, I would like to cite herethe following Judgment:-The Oriental Insurance Co. Limited vs. Karur Vsya Bank Limited (reported in 2001 (2) CTC 400)29. Not to put too fine a point on it, the aforesaid Judgment isclearly indicative of the fact that Government, GovernmentOrganisations and Corporations, when once it finds that they are atfault, they should not rely on limitation point so as to deny thelegitimate claim of the public. Here, without mincing words, theappellant D.3 admitted that it got lost the goods while the same werein its custody. In such a case, D3 should have come forward to paythe claim in all fairness. No doubt, I do not lay down a generalprinciple that Government and Government Organisations should notraise limitation point at all in all cases. But in a case like this,where D.3 are found was at fault, in view of having lost the cargo,it should have, without any demur come forward to pay compensation,but it failed to do so. Accordingly, point No.1 is decided in favourof the plaintiffs. 30. Point NO.II In view of my discussions supra, I am of theconsidered view that there is no infirmity in the Judgment and decreepassed by the trial Court, consequently, the appeal is dismissedconfirming the same. However, there shall be no order as to costs. sd/-Asst.Registrar/true copy/Sub Asst.Registrar https://hcservices.ecourts.gov.in/hcservices/ rgToThe II Additional City Civil Court Judge, Madras Copy toThe Section Officer,V.R. Section, High court, Madras.+1 cc To Mr.O.R.Santhanakrishna , Advocate, SR.34035+1 cc To Mr.Nageswaran , Advocate, SR.33716+1 cc To M/s Ramasubramanian Associates , Advocate, SR.34488A.S.No.806 of 1995rsy [co]gkg/15.7