Supreme Court Upholds NCDRC Order, Directs Kuwait Airways to Compensate Exporter for Delayed Delivery

Supreme Court Upholds NCDRC Order, Directs Kuwait Airways to Compensate Exporter for Delayed Delivery

In a recent ruling, the Supreme Court upheld an order by the National Consumer Disputes Redressal Commission (NCDRC) mandating Kuwait Airways to compensate an exporter of handicraft goods for the delayed delivery of a consignment.

M/s. Rajasthan Art Emporium (appellant) had contracted with M/s. Williams Sonoma Inc. USA for the supply of handicraft goods. Three shipments were dispatched to the consignee via Kuwait Airways, with the assurance of reaching their destination in the USA within seven days. However, the consignments failed to arrive in Memphis, USA, as per the agreed-upon delivery schedule.

Subsequent inquiries and communication uncovered discrepancies in the delivery, including a shortfall in delivered cartons and uncertainty regarding the whereabouts of the remaining packages. As a consequence of these issues, the appellant sought reimbursement for freight charges, compensation for loss of business and reputation, restitution for the value of the undelivered goods, along with an interest rate of 18% and litigation costs.

After carefully reviewing the evidence and pleadings, the NCDRC ruled in favour of the appellant.

However, the appellant's counsel contended that should the delay in the consignment's delivery be attributable to negligence, fair, just, and reasonable compensation must be awarded. This compensation should adhere to the terms of the contract and the statutory provisions enshrined in the Carriage by Air Act, 1972.

In stark contrast, Kuwait Airways' counsel maintained that there were no shortcomings in the service provided by Kuwait Airways. They contended that all reasonable care in fulfilling their obligations under the contract of carriage was meticulously exercised.

It was argued that the appellant failed to provide specific instructions regarding the time frame within which the consignments had to reach their destination.

Consequently, time was not deemed an essential element of the contract entered into by both parties. The counsel further asserted that the compensation awarded by the NCDRC was excessive, unjust, and unfair.

After carefully examining and scrutinising the available evidence, the two-judge bench, comprising Justices A.S. Bopanna and Prashant Kumar Mishra, concurred that the NCDRC's finding of a delay in the consignment's delivery was neither illegal nor perverse. The undisputed fact remained that the consignment, booked on July 24, 1996, was delivered a month and a half later.

The Bench upheld the NCDRC's observation that the appellant's decision to opt for air freight, which was 10 times more expensive than sea freight, was made with the explicit purpose of ensuring the consignment's delivery within a week. The NCDRC rightly acknowledged the appellant's significant expenditure on freight charges to secure prompt delivery. Consequently, the Bench concurred with the NCDRC's conclusion that the delayed delivery of the consignment had indeed caused harm to the appellant. This damage was deemed compensable by Kuwait Airways, under the provisions outlined in Section 19 and 13(3) of the Carriage by Air Act 1972.

The Bench further determined that Kuwait Airways was bound by the promise made by its agent, respondent No.2, regarding the timely delivery of the goods. In the absence of any contention from Kuwait Airways that respondent No.2 was not its agent or lacked the authority to provide a delivery schedule, the Bench concluded that the onus of proof had not been discharged, thereby holding Kuwait Airways accountable for the promised delivery.

Moreover, the Bench acknowledged that the appellant's primary grievance in this appeal stemmed from the NCDRC's decision not to grant the full compensation amount. The appellant sought to calculate the compensation by applying Rule 22(2) of Schedule-III of the Carriage by Air Act, 1972, which involved multiplying the total weight of the consignment (2507.5 Kg.) by US $20 per Kg. This calculation, according to the appellant, would exceed ₹20 lakh, and they sought the entire amount equivalent to US $50,070 without any limitation to ₹20 lakh.

The Bench, however, upheld and endorsed the NCDRC's order on this matter. This endorsement stemmed from the fact that in the complaint filed under Section 21(a)(i) of the Consumer Protection Act, 1986, the appellant explicitly sought damages amounting to ₹20 lakh only, claiming it as compensation for loss of business and reputation. The Bench reiterated the principle that a party is not entitled to relief that has not been explicitly prayed for.

Given the abovementioned reasons, the Court was not inclined to interfere with the order passed by the NCDRC. As a result, both the appeals were dismissed.