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Couriering losses

Rosy Kumar

Are important documents worth more than the paper they are written on? And, what damages should courier companies pay when they lose documents or goods that are worth thousans or millions?

There have been divergent judicial views on this. In 1996, the Supreme Court ruled in Bharathi Knitting Company vs DHL Worldwide Express 1996 CTJ 557 (SC) (CP), in favour of DHL. Bharathi had consigned goods to a German company and the documents were delivered to DHL. The documents did not reach their destination and by the time duplicate copies were received, the summer season in Germany was over.

The result was that the German company said it would pay only DM 35,000 against the invoice value of DM 56,469.63. Bharathi filed a case before the state commission claiming the actual loss of DM 21,469.63, equivalent to Rs 429,000 and demanded that it receive this sum from the courier company. The state commission ordered that the courier company should pay the sum.

On appeal, the National Commission held a magnifying glass to the fine print and said that - as per the consignment note - the courier company's liability was only $100. Therefore, the complainant was entitled to receive only Rs 3,315. Bharathi Knitting then filed an appeal before the Supreme Court.

In its judgment dated May 9, 1996, the Supreme Court held that "the National Commission was right in limiting the liability undertaken in the contract entered into by the parties". The liability of a courier was thus Rs 100 in the case of domestic deliveries and $100 for documents to be delivered abroad.

This was the status quo until recently when the issue was once again reopened before the National Commission. In this case, filed by Tata Chemicals, negligence was alleged on the part of Skypak Couriers in not delivering a consignment containing computer hardware valued at Rs 3.6 million to Mumbai. The complainant claimed damages amounting to Rs 3.6 million with interest at 18 per cent per annum from October 10, 1990, the date of entrustment of the consignment, till payment.

The National Commission referred the case to the arbitration of Justice V D Tulzapurkar, a retired judge of the Supreme Court. After holding that Skypak was deficient in its services, the arbitrator delivered the opinion that unless and until the party sending the consignment is made aware of the liability clause printed in the consignment note, the same cannot be brought in to settle the claim on that basis.

The arbitrator, in his award, held that the courier company "will have to make good the full value of the consignment to the complainant".

Skypak Couriers then appealed to the Supreme Court. The case was finally referred back to the National Commission, which in its order dated December 14, 2001, dismissed the objections raised by Skypak and directed it to pay the compensation of Rs 3.4 million plus interest at 18 per cent per annum from October 10, 1990, till realisation.

There have been judicial flip-flops on this subject in the early '90s. During that period there were several cases that were decided in favour of the claimants. However, things changed in 1993, when the National Commission was approached with an appeal against the order of the Tamil Nadu State Commission.

In that case, filed on March 25, 1991, Kwality Tubes & Capillaries Pvt Ltd, Jaipur, entrusted documents to Airpak Courier (India) Pvt Ltd to be delivered to its office at Chennai. The consignment did not arrive at its destination. Kwality Tubes filed a consumer complaint before the Tamil Nadu Commission, which awarded compensation of Rs 100,000.

Airpak then filed an appeal before the National Commission, which set aside the state commission's order and held that the courier's liability for loss was limited to Rs 100 only.

The latest judgment in the Tata Chemicals case comes as a relief for those troubled by such delays and the National Commission has categorically held that in the absence of a proper notice given to the consignor, the courier cannot escape from its liability to make good the loss.

(The author is an advocate and the editor of Consumer Protection and Trade Practices Journal)

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