Airlines Bound By Time Schedule Promised By Its Travel Agent : Supreme Court

The Supreme Court held that an authority is bound by the promise held by its agent under the Indian Contract Act.

The Apex Court held so in the context of a consumer dispute, where Kuwait Airways, through its agent, Dagga Air Agents, had fixed a schedule of 7 days for delivery of certain goods. The Court held that the Airline was liable to pay the complainant damages for delay in delivering the consignment.

“Once the agent has issued a time schedule for delivery of consignment, it cannot be said that there is no material indicating that there was no agreement for delivery of the consignment in time” the bench of Justice AS Bopanna and Justice PS Narasimha held.

The Apex Court was dealing with an appeal against an order of the National Consumer Disputes Redressal Commission (NCDRC) in which it was held that there was a delay in delivering the consignment of the complainant and that they were entitled to compensation from the airline that failed to deliver the goods on time.

The Complainant is an exporter of handicrafts goods. In 1996, Kuwait Airways (Respondent No. 1 in the appeal), agreed to ship the goods through Dagga Air Agents (Respondent No. 2 in the appeal) within 7 days. However, the consignments did not reach the destination as per the delivery schedule

The consignment was delivered one and a half months later, when the agreed time was 7 days. The Court thus held that the consignee is entitled to seek damages for delay in delivering the consignment.

The Appellant paid air freight charges, ten times more than the sea freight charges only to ensure that the consignment reaches its destination within a week because sea cargo would have taken 25 to 30 days for delivery, the Court noted.

Under Section 186 of the Contract Act, 1872 the authority of an agent may be expressed or implied and under Section 188 of the Act, 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, the Apex Court highlighted.

“..in the absence of a plea by the respondent No.1, that the respondent no. 2 was not its agent or that he had no authority to give schedule of delivery of consignment, the onus has not been discharged. Therefore, the respondent No.1 is bound by the promise held by its agent - respondent No.2, that the goods shall be delivered within one week and when the time schedule expired and the goods were, in fact, delivered after one and a half month, there was negligent delay in delivery of consignment,” the Apex Court concluded.

The delay in delivery of the consignment has inflicted damage on the appellant which the Airways liable to compensate for under Section 19 and 13(3) of the Carriage by Air Act 1972, the Court held.

The NCDRC had directed a compensation of Rs. 20 Lakhs to be paid to the Complainant, even though it was acknowledged that the loss sustained by them was higher than that. It held by the NCDRC that the complainant was entitled to only Rs. 20 lakhs

Even though the NCDRC acknowledged that the loss sustained by the Complainant exceeded 20 lakhs, it held that the complainant had only sought for 20 lakhs and hence was not entitled to more. The complainant then approached the Apex Court claiming the entire amount without limiting it to Rs. 20 lakhs. The Apex Court however, refused to interfere with the order of the NCDRC. The Apex Court reiterated that a party is not entitled to seek relief that has not been prayed for. 

“... we approve and sustain the order passed by the NCDRC for the reason that in its complaint under Section 21(a)(i) of the Consumer Protection Act, 1986, the complainant/appellant has sought damages for Rs. 20 lakhs only as compensation for loss of business and reputation. It is a trite law that a party is not entitled to seek relief which he has not prayed for,” the Apex Court held.

Case Title: M/S. RAJASTHAN ART EMPORIUM V. KUWAIT AIRWAYS & ANR., CIVIL APPEAL NO. 9106 OF 2012

Citation: 2023 LiveLaw (SC) 975

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