1. By this First Appeal, under Section 19 of the Consumer Protection Act, 1986 (for short “the Act”), Air France, Opposite Party No.1 in the Complaint under the Act, calls in question the legality and correctness of the order dated 29.05.2008, passed by the U.P. State Consumer Disputes Redressal Commission at Lucknow (for short “the State Commission”) in Complaint Case No. 74/SC/2003. By the impugned order, while allowing the Complaint, preferred by Respondents No.1 to 3 herein, the State Commission has directed the Appellant herein to pay to each of the three Complainants a sum of ₹6,30,000/-, totalling ₹18,90,000/-, with simple interest @ 10% p.a. within a period of one month from the date of the order, with a default stipulation of enhanced interest @ 15% p.a., on the said amount, if the same was not paid within the stipulated period.
2. On 05.11.2002, the Complainants, who were holding senior management positions in the Sahara Group of Companies, including Sahara Airlines, had booked their ‘H’ Class confirmed air tickets with the Appellant, through its Agent, Opposite Party No.2, based at Kanpur, Uttar Pradesh for journey to Paris to attend a business meeting. As per their travel itinerary, their departure from Delhi to Paris was on 06.11.2002 and return on 09.11.2002. Due to change in the schedule of the meeting, at Paris, for which the Complainants had gone to Paris, but for attending a meeting with the Officials of Government of India on 11.11.2002, on 08.11.2002 they requested for change of date of return journey from 09.11.2002 to 10.11.2002. The Complainants were issued three ‘K’ Class confirmed tickets from Appellant’s Sales Office at Delhi for which change they were required to pay differential amount of ₹10,270/- per person. However, on 10.11.2002 they were not allowed to board Flight No. AF-148 at Charles De’ Gaulle Airport at Paris due to over boarding. It was the say of the Complainants that they were subjected to humiliation and embarrassment by the staff of the Appellant. Their tickets were also not endorsed to travel by Air India Flight No. AI-146, departing on the same day at 1750 hours, for which the Appellant had provided them confirmed booking in the Economy Class. The Complainants had to stay at Paris at their own expenses. According to the Complainants, since valuable 24 hours were lost; they being Commercially Important Persons, (CIP), their every minute was precious for the Company; and in their absence, the schedule of meetings got disturbed, resulting in a monetary loss of ₹50,00,000/- to the Company as consequential business loss. Accordingly, on 28.12.2002, the Complainants got issued a legal notice to the Appellant for compensating them for the aforesaid loss, harassment and humiliation. In the said background, alleging deficiency in service on the part of the Appellant on the afore-noted counts, the aforesaid Complaint came to be filed before the Uttar Pradesh State Commission by the Complainants, praying for a direction to the Appellant to return to them the excess amount charged on tickets with 24% compound interest and a compensation of ₹50,00,000/- for the losses suffered by the Company and mental agony undergone by them.
3. Upon notice, both the Opposite Parties, viz. the Appellant and their Agent, filed their respective Written Versions, refuting the allegations levelled against them in the Complaint.
4. It was pleaded on behalf of the Appellant that for the denied boarding, which is an accepted practice, internationally and nationally as also by the DGCA, the Complainants were given 300 Euros each (equivalent to approximately ₹53,600/-) besides free accommodation at Hotel Ibis Gare with meals; two telephone vouchers and nine telephone cards were also issued to them; after accepting the compensation and availing of the facilities/courtesies extended to them by the Appellant, the Complainants had filed the Complaint in order to take undue advantage of the situation, without disclosing the correct facts, and hence they were estopped by their conduct from seeking recovery of damages/compensation; no cause of action arose at Lucknow as the Appellant did not have a Branch Office at Lucknow and therefore, as per Section 17(2) of the Act, the State Commission at Lucknow, did not have the territorial jurisdiction to entertain the Complaint merely because the Complainants purchased tickets from some agent from Kanpur, who in fact had booked return tickets from a travel agent in New Delhi; the claim made in the Complaint to the tune of ₹50,00,000/- was highly inflated, speculative and grossly disproportionate to the alleged damage suffered by the Complainants on account of the alleged deficiency of service; the Complainants were not consumers, inasmuch as, if at all there was any loss, it would have been to the Company, namely, Sahara India Parivar, which was not a party to the Complaint. The allegations were made only to support illusory and unjustified claim for compensation for consequential losses; the liability of the Appellant was limited to proven damages, and, in no event, it would be liable for indirect damages as well as any form of non-compensatory damages; the Appellant was ready to reimburse the differential amount of ₹30,805/-, incurred by the Complainants while seeking upgradation of their tickets; as a goodwill gesture an offer for full and final settlement had been made to the Complainants in the deliberations which took place after the issue of legal notice to the Appellant; since the Complainants had actually travelled in K-Class, even a claim for the differential amount paid was not justified; the said willingness/offer for settlement could not be construed as their admission of the liability regarding payment of damages; that even by issuing the confirmed tickets, absolute right to board the flight was not guaranteed; as the Complainants had postponed their journey from 09.11.2002 to 10.11.2002, for which date, no seats were available in H-Class, their tickets were upgraded to K-Class upon payment of additional charges and hence there being no deficiency on their part the Complaint was liable to be dismissed.
5. As far as the Written Version on behalf of Opposite Party No.2, the booking/travel Agent, at Kanpur, was concerned, while admitting that three tickets had been sold to the Complainants for their journey from Paris to Delhi on 10.11.2002, it was pleaded that it was the Appellant who had denied boarding to them, and hence, the Complaint was not maintainable against him.
6. In the first instance, when there was no representation on behalf of the Appellant, vide its order dated 29.11.2007, the State Commission had partly allowed the Complaint, on merits, for recovery of a sum of ₹37,36,400/- as damages, subject to adjustment of the money spent by the Appellant on providing overnight accommodation, meals and telephone facility to the Complainants. On Appellant’s questioning the legality of the said order by way of a miscellaneous application, on the ground of violation of principles of natural justice, as opportunity of hearing was not afforded to them, the said order was recalled by the State Commission and the case was listed for fresh adjudication on merits.
7. On evaluation of the evidence adduced by the contesting parties, the State Commission, as noted above, vide the order, impugned in this Appeal, has allowed the Complaint and issued the aforesaid directions to the Appellant. While reaching the conclusion that there was deficiency in service on the part of the Appellant, the State Commission has not found any merit in the contentions urged on behalf of the Appellant that: (i) UP State Commission did not have territorial jurisdiction to entertain the Complaint; (ii) since the Complainants had filed the Complaint in their individual capacity, with the plea of alleged consequential losses to Sahara Company, they were not the consumers; (iii) there was concealment of facts on the part of the Complainants by not disclosing payment of 300 Euros to each of the Complainants; (iv) since the Complainants had accepted the aforesaid compensation and availed of the facilities, provided by the Appellant, they were estopped from filing the Complaint and seeking compensation/ damages; (v) practice of overbooking prevalent the world over, was binding upon the travelers; and (vi) the damages were inflated. For the sake of ready reference, the relevant findings of the State Commission on the afore-stated issues are extracted below:-
(i) Territorial jurisdiction
“ The opposite party no. 2 to the complaint, Sri Aveek Ghosh arranged the three tickets for the complainants through his office and by extending the facility of sale of the tickets in question to the complainants through Sri Ghosh, Air France would be deemed to have acquiesced to submit to the jurisdiction of this Commission. The opposite party no. 2 carries on his trade of a travel agent and the ‘Air France’ does allow sale of tickets through him, therefore, this State Commission is fully competent to adjudicate upon the issue raised before it by filing the complaint in hand.”
(ii) Whether Complainants are “ Consumers”
“We are, therefore, not inclined to accept the contention of the opposite party no. 1 that the three complainants are not consumers. Since they have filed their complaints in their individual capacity with the allegations that the ‘denied boarding’ resulted in personal discomfort, inconvenience and mental agony they were entitled to claim damages as per International Montreal Convention.”
(iii) Concealment regarding payment of compensation at Paris.
“This clearly reveals that they admitted about the payment of incidental expenses and the stay arrangements and even if they did not disclose the details of such payments or stay arrangements they cannot be held guilty of any concealment. It was more than enough on their part to reveal that the minimum facility expected of the ‘Air France’ in such a situation was extended to them. In view of this disclosure the contention of concealment obviously appears to be misconceived and hence rejected.”
“By no stretch of reasoning, mere stay arrangement and payment of 300 Euros to each complainant, can be said to be adequate compensation. Had such a facility been extended for a ‘denied boarding’ of journey for a few kms., it could, no doubt, have contributed to some extent but for a journey from Paris to New Delhi the facility was absolutely insignificant particularly when the complainants were denied of an opportunity to participate in the important meeting. Their consequential absence in the meeting at Delhi would have certainly caused them a serious mental setback irrespective of the fact as to whether such meeting was rescheduled and subsequently attended to. The damages under the Consumer Protection Act are awarded for deficiency in service on account of the loss or injury which has been suffered by a consumer or consumers. Injury may be physical or mental and likewise the loss may be direct or indirect. In the case in hand the complainants have preferred their claim for compensation which according to them occasioned on account of mental and physical inconvenience. Resultantly the contention of the learned Counsel for the ‘Air France’ is rejected.
(v) Practice of overbooking
“The crucial question is as to whether such a practice is without prejudice to the interest of the travelers/consumers? The answer must come in negative as if a free hand practice of overbooking is approved, it may cause havoc against the interest of the ticket holders as the airlines may invoke the malpractice of overbooking indiscriminately and beyond reasonable dimensions. Instead of taking recourse to this sort of policy, the airlines must impose stringent conditions for the eventuality of cancellation of tickets. To be specific it may be mentioned that the airlines may lay down a condition that in the case of long journey like the one in hand if a passenger does not report for boarding upto a certain time before departure, his ticket would be cancelled or refund would be permissible to a minimal extent. Refunding of money equivalent to the entire price of the ticket or with minor deductions to a passenger under contemplation of earning profit by overbooking of the tickets to large number of passengers would create an instability, indiscipline and unfair trade practice. Well accepted terms and conditions of booking a ticket may be of multi facet dimensions but by no stretch of reasoning excessive overbooking at the cost, convenience and comfort of the passengers to whom the boarding is denied should and would be acceptable.”
Dealing with the plea of overbooking as an accepted norm around the globe, the State Commission observed as follows:-
“Moreover if the ‘Air France’ pleads under the shelter of international practice for its right of overbooking, it should also follow the international practice envisaged under ‘Montreal Convention’ which has been ratified by dozens of countries including India and France. The practice of overbooking does not authorize an airline to go to any extent of overbooking and resultant ‘denied boarding’ to a large number of persons without any rhyme or reason. There should be a plausible explanation for overbooking to a certain extent and justification must also be offered for scrutiny. There are large number of factors which may protect the monetary interest of an airline to follow the practice of overbooking and unless such factors are really offered for scrutiny and they stand the test of genuineness, huge overbooking cannot be said to be justified. In the case in hand the Opposite Party No. 1 has not disclosed as to how many passengers were issued ‘overbooking tickets’ and what was the number of ‘No-Show’ passengers and how many of the ‘overbooking ticket holders’ were accommodated? A few relevant factors like International Festivals, Holidays, International Seminars, Winter or Summer vacations, Closing of schools and colleges, International Games, Regional disturbances, State of wars in some parts of the world etc. are relevant for necessitating overbooking but the Opposite Party No. 1 has not at all revealed any such factor for judicial scrutiny. Therefore, mere right of overbooking without a sense of duty or liability cannot be endorsed to be a justifying weapon.”
(vi) Inflated compensation
“In the case in hand the ‘Montreal Convention’ as referred to above do not leave any room for doubt that in a case of ‘denied boarding’ 16600 SDRs i.e. equivalent to ₹12,60,000/- would be the higher limit of compensation. Now the crucial question arises as to whether the entire sum of ₹12,60,000/- as determined by the ‘Montreal Convention’ would be appropriate quantification of damages? Mr. Pasrich contended that this is the higher limit of compensation and since the three complainants have not substantiated that they suffered specifically mentioned losses the award of whole amount of compensation may not be warranted. We have mentioned above that the three complainants hold high positions in a renowned organization and certainly one of them being the Dy. Managing Worker must have been badly disturbed with the disruption of his busy schedule besides the fact that all of them were prevented from participating in an important meeting scheduled at Delhi on 11th November i.e. a day after the date of ‘denied boarding’. Keeping all these aspects of the matter and also the contention of the learned Counsel for the ‘Air France’ that the ‘Montreal Convention’ referred to above merely prescribed the upper limit and also fully bearing in mind that there cannot be any hard and fast rule for awarding damages so as to bring it within the definition of ‘recompense’, we award 50% amount of what has been determined by the ‘Montreal Convention’. Accordingly, we hold that each one of the complainant will be entitled to claim ₹6,30,000/- as compensation. In all the complaint deserves to be decreed for a sum of ₹18,90,000/- along with simple interest @ 10% per annum from the date of filing the complaint until the payment is made. While quantifying these damages we have not taken into consideration the facilities provided at Paris on the day of ‘denied boarding’ nor we have considered it of quantifying relevance to advert to the offer of the ‘Air France’ regarding refund of the difference of the price of ‘H’ and ‘K’ class journey tickets.”
8. Hence the present Appeal.
9. We heard Mr. A.R. Takkar, Learned Counsel appearing for the Appellant and Mr. Satvik Verma, Learned Counsel for the Complainants at considerable length.
10. Elaborating on the afore-stated grounds, on which the claim by the Complainants was resisted in the Written Version, filed on behalf of the Appellant, Mr. Takkar emphasized that an Airlines and the passenger are bound by the terms and conditions mentioned on the ticket and the Appellant having discharged its obligations as stipulated under such terms and conditions, it could not be accused of any deficiency either on account of denial of boarding on 10.11.2002, or for not compensating the Complainants for denied boarding on account of overbooking, more so when the date of return journey was got changed by the Complainants themselves for which confirmed tickets were issued for 10.11.2002. In support of the proposition that denied booking is a world-wide practice and is not construed as deficiency in service, Learned Counsel relied on the decisions rendered by this Commission and Hon’ble Supreme Court in:
Indian Airlines Vs. Dr. Savita Malhotra - R P No. 700/2005.
Rajjinder Pal Jaura (NRI) vs. The Secretary, Union of India & Anr. 1(2003) CPJ 24, NCDRC.
M/s Air France Vs. M/s Unik Traders & Anr. NCDRC 2005(3) CCC 65.
Chandi Prasad Bhatt vs. British Airways 1 (2003) CPJ 169 NCDRC.
Ravneet Singh Bagga vs. KLM Royal Dutch Airlines & Anr. –Appeal (Civil) 8701 of 2007 SC.
11. It was asserted that on facts at hand ‘Montreal convention’ was not applicable and the case had to be dealt with under the Carriage by Air Act, 1972. In support of the proposition that the provisions of the Carriage by Air Act, being a special Act, must prevail over the Consumer Protection Act, Learned Counsel placed reliance on the decisions of this Commission in Bharat S. Modi Vs. British Airways, - 2001 SCC Online NCDRC 23; Govind S. Poddar Vs. Cathay Pacific Airways Ltd. - 2002 SCC Online NCDRC 27; Indian Airlines Vs. D.P. Hazra - 2002 SCC Online NCDRC 12 and British Airways Vs. Gems Art Factory & Ors. - 2014 SCC Online NCDRC 826. It was argued that the Montreal Convention, on which the State Commission has relied to a limited extent, while awarding compensation, came into force on 01.07.2009 for the first time when Section 4A was specifically inserted by an amendment in the Carriage by Air Act and was made applicable only to the domestic travel, in terms of Schedule 3 to the said Act. In this behalf reliance was made to State of W.B Vs. Kesoram Industries Ltd. & Ors.- (2004) 10 SCC 201 and Jolly George Varghese & Anr. Vs. The Bank of Cochin - AIR 1980 SC 470. In support of the contention that conditions as printed on the ticket are binding contract between the Airlines and the passenger, the decision of the Hon’ble Supreme Court in M/s Interglobe Aviation Ltd. Vs. N. Satchidanand - (2011) 7 SCC 463 was also pressed into service. Reliance was also placed on the decision of the Hon’ble Supreme Court in Bharat Knitting Company Vs. DHL Worldwide Express Courier Division of Airfreight Ltd. - (1996) 4 SCC 704, to contend that the liability of the Airlines is limited. It was also stressed that the compensation awarded is without any basis and is highly excessive.
12. Per Contra, Mr. Verma, while supporting the decision of the State Commission, strenuously urged that in view of the decision of the Hon’ble Supreme Court in Trans Mediterranean Airways Vs. Universal Exports & Anr. - (2011) 10 SCC 316, the protection provided to the Consumers is in addition to the remedies under another statute, like the Carriage By Air Act, and hence the jurisdiction of a Consumer Fora under the Act could not be circumscribed. It was urged that in the light of this pronouncement, the decision of this Commission in British Airways (supra), pressed into service on behalf of the Appellant, is per incuriam and, therefore, cannot be relied upon. As regards the question of territorial jurisdiction, it was submitted that the tickets for travel to Paris having been purchased by the Complainants from an accredited travel agent at Kanpur, recognized by the Appellant, a part of cause of action arose within the territorial jurisdiction of the UP State Commission. Refuting the allegation of concealment of payment of 300 Euros to each of the Complainants, it was submitted that in the Complaint, it was clearly stated that besides making stay arrangements for their stay in a Hotel, incidental expenses were also paid to them and therefore, question of concealment of any material fact did not arise. It was argued that even if it was assumed for the sake of argument, without admitting, that the practice of over-booking is being followed by all the Airlines, the world over, yet in the present case, the international practice of usually inviting the volunteers, who may be willing to stay back to make room for those passengers, who could not postpone their departure, was not followed. Certain observations in the impugned order, relating to over-booking without any policy/ guidelines, were also highlighted. Referring to the affidavit, dated 17.04.2017, filed by the Appellant, placing on record European Council Regulation, establishing common Rules for a denied boarding compensation system in scheduled Air transport, stipulating that the said “Regulation shall apply without prejudice to subsequent application to the Courts, having jurisdiction with a view to further compensation,” it was asserted that the payment of 300 Euros to each of the Complainants under the said Regulation, was a bare minimum compensation and therefore, the State Commission was competent and justified in awarding additional compensation towards the mental agony and harassment suffered by the Complainants for the ad-hoc manner in which they were denied boarding. As regards the adequacy of compensation, relying on the decisions of the Supreme Court in K. Suresh Vs. New India Assurance Co. Ltd. & Anr.- (2012) 12 SCC 274, Manju Bhatia (Mrs.) & Anr. Vs. New Delhi Municipal Council & Anr. - (1997) 6 SCC 370 and Lucknow Development Authority Vs. M.K. Gupta - (1994) 1 SCC 243, Learned Counsel stressed that, while quantifying the amount of compensation, the State Commission has kept in mind the principles enunciated in the said decisions and therefore, its decision does not warrant any interference.
13. Having bestowed our anxious consideration to the facts at hand, we are of the opinion, that but for the quantum of compensation awarded by the State Commission in favour of the Complainants, its decision on all other points, highlighted on behalf of the contesting parties and summarized above, does not suffer from any illegality, factual or legal, warranting interference.
14. At the outset, we hold that merely because the Complainants had travelled to Paris to attend some official meeting, they did not cease to be ‘Consumers’ as defined in Section 2(1)(d) of the Act, in so far as the deficiency in service on the part of the Appellant Airlines, undertaken by it to be rendered to the Complainants in relation to their travel to Paris and back. There is neither any pleading nor any evidence on record which may even remotely suggest that the said visit directly fructified into generation of profits to the Company, they are alleged to have represented.
15. The other hotly contested issues requiring consideration are:- (i) Whether the UP State Commission had the territorial jurisdiction to entertain the Complaint; (ii) applicability of the Consumer Protection Act, 1986 vis-à-vis the Carriage by Air Act and the International Conventions and (iii) the basis and the adequacy of compensation awarded by the State Commission to the Complainants.
16. In so far as the question of territorial jurisdiction of the UP State Commission to entertain the complaint is concerned, Section 17 of the Act defines the jurisdiction of a State Commission. Sub-Section 2 of Section 17 of the Act, inserted by Act 62 of 2002, with effect from March 15, 2003, relevant for our purpose, reads as follows:-
“[(2) A complaint shall be instituted in a State Commission within the limits of whose jurisdiction, -
the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain; or
any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides, or carries on business or has a branch office or personally works for gain, provided that in such case either the permission of the State Commission is given or the opposite parties who do not reside or carry on business or have a branch office or personally works for gain, as the case may be, acquiesce in such institution; or
the cause of action, wholly or in part, arises.]”
17. Thus, question for consideration is as to whether on the basis of assertions made in the complaint, the “cause of action”, wholly or in part, arose at Kanpur?
18. The expression “cause of action” is neither defined in the Act nor in the Code of Civil Procedure, 1908. However, in a catena of decisions of the Supreme Court, the said expression is described as a bundle of essential facts necessary for the plaintiff to prove and obtain a decree but does not comprise evidence necessary to prove such facts. Failure to prove such facts would give the defendant a right to judgment in his favour. “Cause of action” thus gives occasion for and forms the foundation of the suit. (See Kandimalla Raghavaiah & Co. Vs. National Insurance Co. Ltd. – (2009) 7 SCC 768).
19. In Oil & Natural Gas Commission Vs. Utpal Kumar Basu & Ors.,- 1994 (4) SCC 711, a three Judge bench of the Supreme Court, while interpreting the expression “cause of action, wholly or in part, arises” as appearing in Article 226(2) of the Constitution of India (pari materia to the expression used in Section 17(2)(c) of the Act) observed, thus:-
“It is well settled that the expression “cause of action” means that bundle of facts which the petitioner must prove, if traversed, to entitle him to a judgment in his favour by the Court. In Chand Kour Vs. Partab Singh [ILR (1889) 16 Cal 98, 102:15 IA 156] Lord Watson said:
“…the cause of action has no relation whatever to the defence which may be set up by the defendant, nor does it depend upon the character of the relief prayed for by the plaintiff. It refers entirely to the ground set forth in the plaint as the cause of action, or, in other words, to the media upon which the plaintiff asks the Court to arrive at a conclusion in his favour.”
Therefore, in determining the objection of lack of territorial jurisdiction the court must take all the facts pleaded in support of cause of action into consideration albeit without embarking upon an enquiry as to the correctness or otherwise of the said facts. In other words the question whether a High Court has territorial jurisdiction to entertain a writ petition must be answered on the basis of the averments made in the petition, the truth or otherwise whereof being immaterial. To put it differently, the question of territorial jurisdiction must be decided on the facts pleaded in the petition.” (Emphasized by us).
20. Again, in Navinchandra N. Majithia Vs. State of Maharashtra & Ors., - (2000) 7 SCC 640, in his concurring judgment, K.T. Thomas J. explained the import of the said expression, as under:-
“The collocation of the words “cause of action, wholly or in part, arises” seems to have been lifted from Section 20 of the Code of Civil Procedure, which section also deals with the jurisdictional aspects of the courts. As per that section the suit could be instituted in a court within the legal limits of whose jurisdiction the “cause of action wholly or in part arises”. Judicial pronouncements have accorded almost a uniform interpretation to the said compendious expression even prior to Fifteenth Amendment of the Constitution as to mean “the bundle of facts which would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the court”. (Emphasis supplied)
In Read V. Brown Lord Esher, 60LT 250 (CA)], adopted the definition for the phrase “cause of action” that it meant:
“every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the court. It does not comprise every piece of evidence which is necessary to prove each fact, but every fact which is necessary to be proved”.”
21. In Alchemist Ltd. & Anr. Vs. State Bank of Sikkim and Ors. - (2007) 11 SCC 335, explaining the meaning of the expression “cause of action”, the Supreme Court opined thus:-
“37. From the aforesaid discussion and keeping in view the ratio laid down in a catena of decisions by this Court, it is clear that for the purpose of deciding whether facts averred by the appellant-petitioner would or would not constitute a part of cause of action, one has to consider whether such facts constitutes a material, essential, or integral part of the cause of action. It is no doubt true that even if a small fraction of the cause of action arises within the jurisdiction of the court, the court would have territorial jurisdiction to entertain the suit/petition. Nevertheless, it must be a “part of cause of action” nothing less than that.” (Emphasis supplied)
22. Tested on the touchstone of the afore-stated broad principles, we are inclined to agree with the State Commission that in the instant case, a part of cause of action did arise at Kanpur when the tickets were purchased and hence, it was vested with territorial jurisdiction to entertain and deal with the Complaint. Admittedly, the Air Tickets were purchased through an accredited agent of the Appellant Airlines based at Kanpur; who, on receipt of the consideration towards the cost of the tickets at the same place on 05.11.2002, had created PNR through Amadeus (host system of the Appellant Airlines); and the said Agent was also impleaded as a party in the Complaint. Support to this view is lent by a decision dated 07.02.2017, rendered by a Coordinate Bench of this Commission in Spicejet Ltd. Vs. Ranju Aery – IV (2017) CPJ 1 (NC). In this decision, it was held that since Air travel tickets were purchased by the Complainant on the internet from Chandigarh, the cause of action arose at Chandigarh and, therefore, U.T. State Commission had territorial jurisdiction to entertain the Complaint against the Airlines. The said decision has attained finality on dismissal of the Special Leave Petition, preferred by the Airlines against the said order on 04.08.2017. The stand of the Appellant is rejected accordingly.
23. In so far as the question of applicability of the Carriage by Air Act, 1972, as amended by the Carriage by Air (Amendment) Act, 2009, incorporating the relevant provisions in conformity with the ‘Montreal Convention’, adopted on 28.05.1999, for determination of statutory compensation payable under the said Act is concerned, it has to be considered in a larger perspective, keeping in view the rapid strides in the civil aviation industry, traceable from a hot-Air balloon flights in the 18th century to the present age of super-sonic jets. In the course of these developments, a number of international instruments governing the liability of Air Carriers for injury, death, loss or damage of baggage or cargo delays etc. have evolved. India has also subscribed and ratified the Warsaw convention 1929; the Hague Protocol 1955 and lastly the ‘Montreal Convention’ 1999, giving effect to the same by way of appropriate legislations, such as Indian Carriage by Air, 1934; the Carriage by Air Act, 1972 and Act 28 of 2009, including the III Schedule and other amended provisions to the existing Act. With regard to the liability to pay compensation it is the ‘Montreal Convention’ that has brought about drastic changes in the International Civil Aviation Sector. Although signatory to both the earlier conventions – i.e. Warsaw Convention and the Hague Protocol, India took nearly two decades to take a firm decision to subscribe to ‘Montreal Convention’ and bring forth necessary legislation to give effect to the same, by introducing the Carriage by Air (Amendment) Bill, 2007.
24. By virtue of the Montreal Convention, a ‘two-tier’ liability regime was introduced for the first time, providing compensation in terms of ‘SDR’ (Special Drawing Rights). As per the first tier, in the case of death or bodily injury, the liability of the Carrier was limited to ‘One Lakh SDR’, per passenger, making the Carrier subject to strict liability, regardless of fault. For proven damages above ‘One lakh SDR’, though there was no pre-specified limits of liability, the Carrier was declared as not liable to such extent, if it was proved that the damage was not caused by its negligence or other wrongful act or omission. Simultaneously, enhancement was also made on the compensation in respect of damage caused to baggage/cargo.
25. The earlier Convention, i.e. Warsaw System, provided ‘four choices’ of jurisdiction for filing a claim by the passenger or legal heirs, namely, (1) the place where the ticket was issued or the contract of carriage was made (2) principal place of business of Carrier, (3) the place of destination of the passenger, and (4) the place of domicile of the Carrier. The Montreal Convention 1999, added a ‘5th jurisdiction’, i.e. the ‘place of domicile of the passenger’, provided the Airline had presence there. This fact, highlighted in the Bill, enabled an Indian National to file his claim in India, even if the journey was undertaken outside India and the ticket was purchased outside India, provided the Carrier had presence in India. It provided for simplified and modernized documents of the carriage (passenger ticket and way bill): thus enabling utilization of electronic data processing in the Air Transport Industry. The Montreal Convention 1999 sought to establish much needed uniformity and predictability of the Rules relating to the international carriage of passengers, baggage and cargo, protecting the interest of passengers by introducing the modern ‘two-tier’ liability system and providing for the swift recovery of proven damages, without the necessity to have lengthy litigation, simultaneously enabling the Airline operators to achieve substantive operational savings, through the use of electronically generated simplified documents of carriage and efficient risk management. After the necessary inputs by the Committee to which the bill was referred, the bill was piloted by the Minister for Civil Aviation (vide Ext. P11 Speech dated 30.04.2008), projecting the salient features. The bill was passed by both houses and necessary amendment to the Statute was effected as per Carriage by Air (Amendment) Act, 2009 (Act 28 of 2009) and India became a signatory to the ‘Montreal Convention’ accordingly.
26. We have made reference to the evolution of law with regard to the liability of the Air Carriers at the international and domestic levels because a big issue relating to the applicability or otherwise, of the Montreal Convention on the facts of the present case was sought to be made out by the Learned Counsel for the parties, although we are of the view that the question of award of compensation to the Complainants on account of the alleged harassment for the delay in their departure from Paris to Delhi due to admitted overbooking by the Appellant deserves to be examined under the provisions of the Act (CPA, 1986) dehors the Air Act or the above-noted conventions/protocol. However, before entering this arena, we deem it necessary to clarify that we are examining the question of award of compensation to the Complainants in addition to what is payable or paid to them under the afore-noted Conventions.
27. It needs little emphasis that the Act (CPA, 1986) was envisaged as a special social legislation to protect consumer rights unlike other legislations that create dispute resolution mechanisms between level players, this legislation establishes a level-playing field between unequal players i.e. Consumers and large Corporations. The following observations of the Hon’ble Supreme Court in Lucknow Development Authority v. M. K. Gupta - (1994) 1 SCC 243, clearly and finally delineate the objective behind the enactment of the Consumer Act:-
“ The importance of the Act lies in promoting welfare of the society by enabling the consumer to participate directly in the market economy. It attempts to remove the helplessness of a consumer which he faces against powerful business, described as, ‘a network of rackets’ or a society in which, ‘producers have secured power’ to ‘rob the rest’ and the might of public bodies which are degenerating into storehouses of inaction where papers do not move from one desk to another as a matter of duty and responsibility but for extraneous consideration leaving the common man helpless, bewildered and shocked. The malady is becoming so rampant, widespread and deep that the society instead of bothering, and fighting against it, is accepting it as part of life. The enactment in these unbelievable yet harsh realities appears to be a silver lining, which may in course of time succeed in checking the rot. A scrutiny of various definitions such as ‘consumer’, ‘service’, ‘trader’, ‘unfair trade practice’ indicates that legislature as attempted to widen the reach of the Act.
It has been approved by this Court in Regional Director, Employees’ State Insurance Corpn. v. High Land Coffee Works of P.F.X. Saldanha and Sons, (1991) 3 SCC 617; CIT v. Taj Mahal Hotel, Secunderabad - (1971) 3 SCC 550and State of Bombay v. Hospital Mazdoor Sabha, AIR 1960 SC 610.The provisions of the Act thus have to be construed in favour of the consumer to achieve the purpose of enactment as it is a social benefit oriented legislation. The primary duty of the Court while construing the provisions of such an Act is to adopt a constructive approach subject to that it should not do violence to the language of the provisions and is not contrary to the attempted objective of the enactment.” (Emphasis supplied)
28. A similar approach has been recommended by the Hon’ble Supreme Court in its recent decision in National Insurance Co. Ltd. v. Hindustan Safety Glass Works Ltd. - (2017) 5 SCC 776, wherein, it has been observed as follows:
“…… in a dispute concerning a consumer, it is necessary for the Courts to take a pragmatic view of the rights of the consumer principally since it is the consumer who is placed at a disadvantage vis-a-vis the supplier of services or goods. It is to overcome this disadvantage that a beneficent legislation in the form of the Consumer Protection Act, 1986 was enacted by Parliament.”
29. The area of operation of the Act (CPA, 1986) on the one hand and the Carriage by Air Act, 1972 has been examined and reconciled by the Hon’ble Supreme Court in Trans Mediterranean Airways (Supra). Answering the issue whether a Consumer Fora has the jurisdiction to entertain and decide a complaint filed by the consignor claiming compensation for deficiency of service by the carrier, in view of the provisions of the Carrier by Air Act and the ‘Warsaw Convention’ or whether domestic laws can be added or substituted for the protection of the consumers, relying on the observation in the three-Judge decision in Ethiopian Airlines Vs. Ganesh Narain Saboo - (2011) 8 SCC 539, the Hon’ble Supreme Court had opined that the protection provided under the Act (CPA, 1986) to the consumers is in addition to the remedies available under any other statute. It does not extinguish the remedies under another statute but provides an additional or alternative remedy. Consequently, the Supreme Court affirmed the decision rendered by this Commission, holding the carrier in that case, deficient in rendering service to the Complainant. In the light of the stated authoritative pronouncement, we have no hesitation in rejecting the contention of the Appellant that the compensation to Complainants has to be determined under the Air Act and not under the Act (CPA).
30. Now adverting to the question of deficiency in service on the part of the Appellant, in our view, in the light of specific averment in the Complaint to the effect that the procedure like searching for the volunteers, the Airlines are required to follow in situations created by them on account of the over bookings, was not followed. In the absence of any cogent evidence by the Airlines to rebut the averment and prove that all necessary measures to avoid the unnecessary delay in Complainants’ departure, or that it was impossible for it to take such measures, as stipulated in Article 20 of the ‘Warsaw Convention’ and Article 19 of the ‘Montreal Convention’ no fault can be found with the finding returned by the State Commission on the point, particularly when nothing has been brought on record to show that the practice of overbooking the flights has the sanction of Director General of Civil Aviation (DGCA). The practice of overbooking may be a commercially viable international practice being adopted by all the Airlines, probably, to ensure that seats in the flights do not go vacant in the event of no-shows by booked passengers(s) but the same cannot be at the altar of the passengers. Not permitting a passenger, holding confirmed ticket to board a flight, amounts to deficiency of service on the part of an Airline.
31. Having reached the afore-stated conclusion, the question surviving for consideration is whether the amount of total compensation i.e. ₹18,90,000/- being 50% of the amount payable under the ‘Montreal Convention’, along with interest @ 10% p.a. from the date of the filing of the Complaint till realization, awarded by the State Commission to three Complainants, is excessive, as pleaded on behalf of the Appellant?
32. It is trite that although the word ‘Compensation’ is not defined in the Act, but it is of very wide connotation. It not only constitutes actual loss or expected loss, it may extend to mental or even emotional sufferings. In Lucknow Development Authority (Supra) explaining the width and scope of the powers invested in the Consumer Fora under the Act, the Hon’ble Supreme Court has observed that the Commission has been vested with jurisdiction to award value of goods or services and determine compensation for any loss or damage suffered by a consumer, which in law is otherwise included in the wide meaning of compensation. The Consumer Fora is entitled to award not only the value of the goods or services but also to compensate a Consumer for the injustice suffered by him due to deficiency in service in sale of goods or rendering of service, as the case may be.
33. On the question of determination of compensation for the loss or injury suffered by a Consumer on account of deficiency in service, the following observations by a three Judge Bench of the Hon’ble Supreme Court in Charan Singh v. Healing Touch Hospital & Ors., - (2000) 7 SCC 668 are also apposite:
“While quantifying damages, Consumer Forums are required to make an attempt to serve the ends of justice so that compensation is awarded, in an established case, which not only serves the purpose of recompensing the individual, but which also at the same time, aims to bring about a qualitative change in the attitude of the service provider. Indeed, calculation of damages depends on the facts and circumstances of each case. No hard and fast rule can be laid down for universal application. While awarding compensation, a Consumer Forum has to take into account all relevant factors and assess compensation on the basis of accepted legal principles, on moderation. It is for the Consumer Forum to grant compensation to the extent it finds it reasonable, fair and proper in the facts and circumstances of a given case according to the established judicial standards where the claimant is able to establish his charge.”
34. It is trite that in considering the quantification of compensation, a precise calculation is difficult, as no clear or straitjacketed principles can be designed for the said purpose. Hence, the exercise would invariably involve discretion and consideration of a plethora of variables, depending on the facts and the circumstances of the case. Some broad factors that may be considered while scrutinizing claims for compensation/damages include:
(a) background of the parties, both the injured and the negligent or defaulting party;
(b) the degree of negligence or these verity of the defaulting act that caused the injury to the complainants;
(c) the degree of proximity or causation of defaulting acts resulting in the injury; and
(d) consideration of alternative modes of redressal of the Complainant’s grievance like restitution, general and specific damages, other means of non monetary compensation, etc.
Needless to add that the above parameters are only illustrative and not exhaustive.
35. As afore-stated, in the present case, the Fora below has adopted the ‘Montreal Convention’ as the basis for quantification of the compensation for the loss, humiliation and harassment claimed to have been suffered by the Complainants. Since we have dealt with the claim of Complainants primarily under the provisions of the Act (CPA, 1986) dehors the provisions contained in the Air Act and Conventions/Protocols, we are of the opinion, that in the absence of any cogent material, showing the extent of the loss of income to the company they were working with, for having missed an important official meeting in India on account of late arrival, the compensation awarded appears to be a little on higher side. Taking an over-all view of the matter, in our opinion, ends of justice would be sub served if a lump sum compensation of ₹4,00,000/- is awarded to each one of the three Complainants for the personal inconvenience and harassment suffered by them on account of delay in their departure from Paris.
36. In the final result, the Appeal is partly allowed to the extent indicated above. Vide order dated 29.08.2008, the Appellant was directed to deposit in this Commission 50% of the amount awarded by the Fora below, as a condition precedent for stay of the impugned order. It is directed that out of the amount so deposited, a sum of ₹4,00,000/- shall be released by the office to each of the Complainants by means of demand drafts, drawn in their favour. The shortfall in the amounts payable to them in terms of this order, if any, shall be made good by the Appellant within four weeks of receipt of a copy of this order. At the same time, if some surplus amount, including the accrued interest on the amount deposited, is left in the account, the same shall be refunded to the Appellant. The statutory deposit made at the time of filing of the Appeal, shall be transferred to the Consumer Welfare Fund.