IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.BHAVADASAN WEDNESDAY, THE 27TH JANUARY 2010 / 7TH MAGHA 1931 AS.No. 904 of 1998(A) ------------------------------ OS.281/1994 of ADDL.SUB COURT, KOCHI .................... APPELLANT(S): 2ND DEFENDANT ---------------------- M/S.INDIAN AIRLINES, REP.BY ITS CARGO MANAGER, AIRPORT CARGE COMPLEX, COCHIN 3. BY MR.A.M.SHAFFIQUE, SENIOR ADVOCATE RESPONDENT(S): /PLAINTIFF & DEFENDANTS 1, 3 AND 4. ------------------------ 1. KURIAN ABRAHAM, S/O.CHACKO KURIAN, PROPRIETOR, M/S. MOUNT SAHYA VELLAPPALLY LANE, KOTTAYAM 686 001. 2. HARRISONS MALAYALAM LIMITED, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN 682 003. 3. SWISS AIR TRANSPORT CO.L. LTD. SURICH, SWITZERLAND. 4. AVIATION TRAVELS PV.T LTD., AYSHA MANZIL, M.G.ROAD, RAVIPURAM, COCHIN 16. BY ADVS.MR.K.GOPALAKRISHNA KURUP SMT.PRIYA MANJOORAN SMT.PRIYA MAHESH. THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 12/01/2010, THE COURT ON 27/01/2010 DELIVERED THE FOLLOWING: tss P. BHAVADASAN, J. - - - - - - - - - - - - - - - - - - - - - - - - - - - A.S. No. 904 of 1998 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 27th day of January, 2010. JUDGMENT An interesting question regarding the interpretation of the word 'wilful misconduct' and the question of burden of proof arises for consideration in this appeal. 2. The defendant, who suffered a decree at the hands of Sub Court, Kochi, is the appellant. The parties and facts are hereinafter referred to as they were available before the court below. 3. The facts are not in dispute. The plaintiff had entrusted five cartons of curcuma powder of 10 kg. each to the first defendant to deliver to M/s. Proquimao Color S.A.C/o. Solsona-42, E-08227 Terassa, Barcelona, Spain. The first defendant was an agent and the second defendant was the carrier. At the delivery end, it was found that one of the cartons was missing. Short delivery of one carton was confirmed by the defendants. As a result of the deficiency in A.S.904/1998. 2 quantity, the consignee refused to accept delivery. Apart from the cost of the article, the plaintiff had to pay 805 U.S. Dollars towards demurrage charges. 108.51 U.S. Dollars were incurred for other expenses. The plaintiff suffered loss due to the non-acceptance of the goods by the consignee due to the shortage in quantity. The plaintiff suffered a damage of Rs.10,000/- on that count. On the basis of the above claim, the suit was laid for a sum of Rs.48,990/-. 4. It is not necessary to refer in detail the objection filed by the various defendants. The fact of short delivery of one carton of curcuma powder is admitted. The only contention of the second defendant is that they are liable to honour the claim under Rule 22(2) of Schedule I of the Carriage by Air Act, 1972 and their liability is limited. 5. On the basis of the evidence adduced in the case, the court below found that the contention taken by the second defendant regarding the limitation to liability was not available to them in the light of Rule 25 of Schedule I of the same Act. A.S.904/1998. 3 Accordingly, the court below negatived the contention of limited liability on the part of the second defendant and granted a decree for a sum of Rs.20,712/- (580 U.S. Dollars) with 6% interest from the date of suit. The plaintiff was given his costs also. It is the said judgment and decree that are assailed in this appeal. 6. The only question that arises for consideration is whether any interference is called for with the judgment and decree of the court below. 7. The fact that five cartons of curcuma powder of 10 kg each was entrusted for consignment is a fact not in dispute. The second defendant admits loss of one carton during transport, but they are unable to give reasons for the same. They took refuge under Rule 22 of Schedule I of the Act already referred to. According to them, their liability is limited to 250 Francs per kg. The plaintiff contended that, that rule is not available to them in the light of the fact that there is wilful misconduct on the part of the second defendant in dealing with the goods and the rule applicable A.S.904/1998. 4 is Rule 25 of Schedule I of the Act. That Rule extends to the liability in case it is found that the carrier was guilty of willful misconduct in dealing with the goods. 8. The question involved is almost a question of law, and therefore the relevant provisions need to be referred to. 9. India is a signatory to Warsaw Convention of 1929, which related to the international agreement governing the liability of air carrier in respect of international carriage of passengers, baggage and cargo by air. The convention provides for various contingencies like damage to passengers, ship or cargo etc. and it casts a presumption to liability of the carrier. However, as per the Convention, if the carrier has taken all necessary measures to avoid the damage or it was impossible for him to do so, then he may be exonerated from the liability. India has given effect to the Warsaw Convention by enacting the Indian Import Act 1934 (Act 20 of 1934) in regard to international carriage and the provisions of the A.S.904/1998. 5 Act has been extended to domestic carriage as well with certain modifications. 10. As per Section 3 of the Act (Act 69 of 1972) the Rules contained in the First schedule relate to the rights and liabilities of carriers, passengers, consignors, consignees and other persons to have the force of law in India in relation to matters dealt with therein. The Act also provides liability in case of death of passenger etc. The First Schedule deals with various aspects like passenger ticket, luggage ticket, air consignment note, liability of carrier etc. In the case on hand, we are here concerned with Chapter 3 of Schedule I, which deals with liability of carriers. To be more precise, we are concerned with Rules 22 and 25 of Chapter 3, which read as follows: “22. (1) In the carriage of passengers the liability of the carrier for each passenger is limited to the sum of 1,25,000 francs. Where damages may be awarded in the form of periodical payment, the equivalent capital value of the said payments shall not exceed 1,25,000 A.S.904/1998. 6 francs. Nevertheless, by special contract the carrier and the passenger may agree to a higher limit of liability. (2) In the carriage of registered luggage and of goods, the liability of the carrier is limited to a sum of 250 francs per kilogramme, unless the cosignor has made, at the time when the package was handed over to the carrier, a special declaration of the value at delivery and has paid a supplementary sum if the case so requires. In that case the carrier will be liable to pay a sum not exceeding the declared sum, unless he proves that that sum is greater than the actual value to the consignor at delivery. (3) As regards objects of which the passenger takes charge himself the liability of the carrier is limited to 5,000 francs per passenger. (4) The sums mentioned in this rule shall be deemed to refer to the French franc consisting of sixty-five and a half miligrammes gold of millesimal fineness nine hundred. ................. ................. 25. (1) The carrier shall not be entitled to avail himself of the provisions of this Schedule which exclude A.S.904/1998. 7 or limit his liability, if the damage is caused by his wilful misconduct or by such default on his part as is in the opinion of the Court equivalent to wilful misconduct. (2) Simlarly the carrier shall not be entitled to avail himself of the said provisions, if the damage is caused as aforesaid by any agent of the carrier acting within the scope of his employment.” 11. It is an admitted fact that the value of the goods had not been shown. The court below took the view that since the second defendant had not adduced any evidence to show that they had taken all the precautions necessary for the safe delivery of cargo, they were liable to pay the amount as claimed by the plaintiff. The burden was on the second defendant to show that they had taken all possible measures to avoid damage and inspite of their best efforts the article was lost. The court below for the said purpose relied on the decision reported in Air India v. S.V. International (1985 ILR Karnataka 3983), wherein a similar issue was considered and it had been held that in order to take shelter A.S.904/1998. 8 under Rule 22(2), the carrier had to necessarily show that they have taken all possible steps to ensure that the cargo was delivered safely, failing which Rule 25 will be attracted. 12. Learned counsel appearing for the appellant assailed the finding of the lower court and pointed out that normally the liability of the carrier is limited as provided under Rule 22(2) and it was for the plaintiff to show that there has been wilful misconduct on the part of the defendants which entitled him to claim the benefit of Rule 25(2). It was pointed out that there was no presumption of misconduct and it is a matter for proof. The plaintiff, who was relying on wilful misconduct had to prove the same in the absence of any evidence in that regard, the court below could not have decreed the suit as it did. Therefore it is pointed out that the judgment and decree of the court below are to be interfered with. 13. Learned counsel appearing for the respondents on the other hand pointed out that it was for the appellant to show that A.S.904/1998. 9 they had taken all the necessary steps to ensure the safety of the cargo. The plaintiff had placed all the materials, which he had with him and then it was left to the defendants to show that they had taken all the necessary precautions. Learned counsel went on to point out that the term wilful misconduct in the context will have to be understood differently. Normally, according to the learned counsel the word 'wilful' meant intentionally, knowingly or deliberately. But in the context in which the word misconduct is used, it assumes a different connotation and it is for the defendant concerned to establish and prove that they had taken all necessary steps to ensure the safety of the cargo. That having not been done, they were liable to pay the amount claimed by the plaintiff. It was also pointed out that, that is all what the court has done now. 14. As pointed out by the learned counsel for the respondents, usually the word 'wilful' means deliberately, knowingly or intentionally. The term 'wilful misconduct' appears to take in an element of mens rea. The question that arises for A.S.904/1998. 10 consideration is how the words 'wilful misconduct' is to be understood as occuring in Rule 25. Even though in Rule 1 of the First Schedule definitions are given, the term 'wilful misconduct' has not been defined. 15. Normally as would be evident from Rule 22(2), in case of cargo the liability of the carrier is limited as per that provision. But Rule 25(1) says that in case of wilful misconduct on the part of the carrier, they cannot take advantage of the above provision. The question that arises for decision is what is misconduct that is contemplated under Section 25(1). 16. One has to remember that all that the claimant could do was to prove that he had taken all the necessary steps to entrust the cargo in the proper form to the consignee. Once the carrier receives the same, the obligation is on him to safely deliver the same. Thereafter it follows that it is for the carrier to show that they have taken all the necessary care and precaution to ensure the safety of the article undertaken by them for delivery. Viewed from A.S.904/1998. 11 this angle, it follows that the burden is on the defendants to show that they had followed the proper procedure and inspite of their best efforts, they could not prevent loss or damage. 17. The word 'wilful' has been referred to in American Jurisprudence Vol.2d page 451 as follows: “The elements necessary to charactrize an injury as wantonly or wilfully inflicted are (1) knowledge of a situation requiring the exercise of ordinary care and diligence to avert injury to another, (2) ability to avoid the resulting harm by ordinary care and diligence in the us of the means at hand, and (3) the omission to use such care and diligence to avert the threatened danger, when to the ordinary mind it must be apparent that the result is likely to prove disastrous to another.” It is further stated that to constitute wilful misconduct, the law deems to be the equivalent of actual knowledge of the peril to be apprehended, coupled with a conscious failure to avert injury. A.S.904/1998. 12 18. In Corpus Juris Secundum Vol.94, 'wilful' and 'wilfully' are seen referred to as follows: “The words “willful”and “wilfully” are of familiar use in every branch of the law, being commonly employed in averring or describing an act, or in denoting the qualify of an act, or in describing the intent with which an act is done; and when so used the terms imply the ability to do the act described. “Willful” and “willfully” have various meanings are susceptible of different shades of meaning or degrees of intensity and are used in different senses in different connections, and generally their signification will depend on the context in which they appear, the nature of the subject to which they refer, and the evident purpose of the writer.” It is further stated in page 629 as follows: “The words “willful” and “willfully” are frequently used in the same sense to denote that what was done or omitted was without just cause or justifiable excuse, or that it was committed or omitted without lawful or legal justification, and with no legal or reasonable ground A.S.904/1998. 13 for believing the act to be lawful, and the terms are sometimes used to signify that what was done was without authority”. 19. In Words and Phrases Vol.46 Permanent Edition 'wilful misconduct is seen referred to as follows: “Failure to exercise ordinary care to prevent injury to a person who is actually known to be, or reasonably expected to be within the range of a dangerous at being done is usually 'wilful misconduct.” 20. In Stroud's Judicial Dictionary of Words and Phrases Vol.3 at page 2916 'wilful misconduct' is referred to as follows: “Wrong conduct, wilful in the sense of being intended, but induced by mere honest forgetfulness or genuine mistake, does not amount to 'wilful misconduct' - What is meant by 'wilful misconduct' is misconduct to which the will is a party, it is something opposed to accidental or negligent; the 'mis' part of it, not the conduct, must be wilful.” A.S.904/1998. 14 The Book also refers to 'wilful misconduct' with reference to Carriage by Air Act 1932. It is seen mentioned as follows: “In order to establish wilful misconduct a plaintiff had to satisfy the court that the person who did the act knew at the time that he was doing something wrong and yet did it notwithstanding, or alternatively, that he did it quite recklessly, not caring whether he did the right thing or the wrong thing, quite regardless of the effects of what he was doing on the safety of the aircraft and of the passengers for which and for whom he was responsible.” It can thus be seen that the words 'wilful misconduct' are susceptible to different shades of meaning depending upon the context in which they occur. 21. The principle of resorting to contextual interpretation has received acceptance at the hands of the Apex Court as can be seen from the decisions reported in Rai Vimal Krishna v. State of Bijar [(2003) 6 SCC 401], CIT, Trivandrum v. Anand Theatres [(2000) 5 SCC 393] and State of A.S.904/1998. 15 Kerala v. Koliyat Estates [(1999) 8 SCC 419]. Wilful misconduct has also been understood as an intentional disregard of a duty known or which should have been known, necessary to ones safety. The word wilful misconduct in the present case as occurring in Rule 25 takes its colour from the context. An identical issue was considered in the decision reported in Air India v. S.V.International (1986(1) Kar.L.J. 34), which is referred to by the court below also. 22. There also a cargo was entrusted to a carrier. There was short delivery. The consignor claimed the value of the cargo. A contention similar in nature as in this case was raised in that case also. Rejecting the contention raised on behalf of the carrier, it was held as follows: “The least that was reasonably expected from defendant -1 was to carry the parcels by Air and deliver the same to the consignee in the very condition they were entrusted to defendant-1 for carriage to London. He has failed to do so All the facts that were in the A.S.904/1998. 16 possession of the plaintiff and could, in fact have been possessed by the plaintiff have been placed by him before the court. They have been satisfactorily proved also. Therefore, it logically takes me to only the conclusion, that is, that defendant-1 has committed misconduct. Now it is to be seen whether in the opinion of this Court, this misconduct is 'equivalent to wilful misconduct' within the meaning of Rule 25(1) of the Rules. It would be unreasonable to expect the plaintiff, under the facts and circumstances of the case, to prove to the hilt that defendant-1 wilfully committed the misconduct. Therefore, the question is whether this misconduct can be, in the opinion of this Court, held to be equivalent to wilful misconduct. It is in this context that the stand taken by defendant-1 are to be considered and weighed. Defendant-1 has nowhere set out how the loss of the parcels came to occur. That shows the defendant-1 was not in a position to place those facts before the Court. I wish to make it clear at this juncture that the question whether the element of intention of defendant-1 creeps in, in understanding the word 'wilful' used in the context under consideration may not arise. It was a contract entered into between A.S.904/1998. 17 the plaintiff and defendant-1. The main terms of the contract were that the plaintiff was to pay charges for the carriage and defendant-1 was to carry the parcels safely and deliver them to the consignee at London. The plaintiff has paid the charges, defendant-1 has failed to deliver the parcels to the consignee, but on the other hand, he has lost them. Whether defendant-1 intended to loose the parcels is out of question. The fact that he has lost is, by itself, misconduct and under the facts and circumstances particularly in the absence of any material placed by defendant-1 to the contrary, the Court has to reach the conclusion that the loss has been caused by defendant-1 for no reason. In my considered opinion the further conclusion that follows is that the misconduct on the part of defendant-1 is equivalent to wilful misconduct. When hat is so, defendant-1 is not entitled to the protection afforded to him by Rule 22(2) of the Rules.” 23. Almost a similar issue was considered in the decision reported in Horabin v. British Airways Corpn. (1952(2) All E R 1016) also. A.S.904/1998. 18 24. Coming to the case on hand, it can be seen that all that the consignor could do was to prove that he had given evidence of all matters which he could. In fact, there was no dispute regarding those aspects at all. Thereafter it was for the carrier to show that they had taken all the necessary precautions and steps to ensure the safety of the cargo and its delivery. As noticed in the decision referred to by the lower court, it may not be possible for the plaintiff to show that there was wilful misconduct on the part of the carrier for, those matters are within the exclusive knowledge of the carrier. They alone will be able to say the various steps taken by them for the safety and security of the cargo. They had to show that inspite of all care and caution taken by them, the loss had occurred. In the absence of that evidence the only conclusion possible is that the carrier is guilty of wilful misconduct. The defendant concerned was bound to lead evidence to show that they had taken all precautions in the matter and in the absence of that, it cannot be presumed that they had taken care of A.S.904/1998. 19 the cargo. Viewed from this angle, the court below was perfectly justified in following the decision of the Karnataka High Court and to hold that the second defendant has failed to discharge the burden cast on them. The result is that this appeal is without merits and it liable to be dismissed. I do so confirming the judgment and decree of the court below with costs to the contesting respondent. P. BHAVADASAN, JUDGE sb. A.S.904/1998. 20 P. BHAVADASAN, J. - - - - - - - - - - - - - - - - - - - - - - - - - - - A.S. No. 904 of 1998 - - - - - - - - - - - - - - - - - - - - - - - - - - - JUDGMENT 27.01.2010.