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Contract Act, 1872 – ss. 186, 187, 188 and 237 – Agent’s act – Whether binding on the Principal – Exporter/consigner entering in contract of shipping consignment with shipper, who was an agent of carter – Complaint by consigner against the carter as well as shipper – Complaint dismissed by National Consumer Commission holding that there was no privity of contract between the consigner and the carter – Held: The Principal is bound by the acts or obligations of the agent, if the agent has by his words or conduct induced third persons to believe that such acts were within scope of his authority – The onus to prove that the act of agent was within scope of his authority, is on the person claiming against the Principal – On facts, it is proved that shipper was the agent of the carter – Carter is bound by the acts of its agent i.e. shipper – Matter remitted to Commission to decide on merits – Evidence – Onus to prove – Carriage Act, 1865 – s. 4;II Schedule, rr. 5,6,10 and 11. The appellant obtained an export order, it handed over the consignment to respondent No. 3 (Cargo clearing agent of respondent No. 1) for onward dispatch. For this, House Air Waybilll was prepared by respondent No. 3. Simultaneously respondent No. 1 prepared Master Air Waybill. Since the consignment did not reach the destination by the stipulated date, the importer cancelled the order. The appellant filed complaint before National Consumer Dispute Redressal Commission alleging deficiency in service on the part of the respondents, in particular by respondent No.1. The Commission dismissed the complaint on the preliminary ground that the appellant had no locus standi to file the complaint against respondent No. 1 as there was no privity of contract between the appellant and respondent No. 1. = Allowing the appeal and remitting the matter to National Consumer Dispute Redressal Commission, the Court HELD: 1. In the light of s. 4 of the Carriage Act 1865 and rr. 5, 6, 10 and 11 of the Second Schedule to the Act, the Commission was right in saying that the “air waybill” is prima facie evidence of the conclusion of the contract; of the receipt of the cargo and of the conditions of carriage. However, the Commission has failed to examine the question in regard to the capacity in which respondent No.3 was operating and had collected the cargo from the appellant for being shipped, i.e. the nature of relationship between respondent No.3 and respondent No.1. [Paras 9 and 10] [938-E-G; 939-A-C] 2. Section 186 of the Contract Act, 1872 lays down that the authority of an agent may be expressed or implied. As per Section 187 of the Contract Act, an authority is said to be express when it is given by words spoken or written, and an authority is said to be implied when it is to be inferred from the circumstances of the case; and things spoken or written, or the ordinary course of dealing, which may be accounted circumstances of the case. Section 188 of the Contract Act prescribes that 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. Section 237 of the Contract Act provides that when an agent has, without authority, done acts or incurred obligations to third persons on behalf of his principal, the principal is bound by such acts or obligations, if he has by his words or conduct induced such third persons to believe that such acts and obligations were within the scope of the agent’s authority. There is no gainsaying that onus to show that the act done by an agent was within the scope of his authority or ostensible authority held or exercised by him is on the person claiming against the principal. This, can be shown by practice as well as by a written instrument. [Para 11] [939-D-G] 3. Respondent No.3 had an express authority to receive the cargo for and on behalf of respondent No.1. This is manifest from the Master Air Waybill issued and signed by respondent No.3 on the Air Waybill printed by respondent No.1. But for the said authority, respondent No.3 could not use the Air Waybill proforma printed by respondent No.1. Though it is true that in the said Air Waybill the name of the Shipper has been mentioned as that of respondent No.3 but the said Air Waybill has also been signed by respondent No.3 as the agent of the carter – respondent No.1. The other relevant particulars like, the name of the consignee, the number of the House Air Waybill, etc. tally with the House Air Waybill issued by respondent No.3 to the appellant clearly showing the name of the consignor as that of the appellant. From the said documents, it would, appear that respondent No.3 was, in fact, acting in dual capacity – one as a Shipper on behalf of the appellant and the other as an agent of respondent No.1. That being so, respondent No.1 was bound by the acts of their agent, viz. respondent No.3, with all its results. While holding that there was no privity of contract between the appellant and respondent No.1, this vital aspect of the matter escaped the attention of the Commission thus, vitiating its order. [Para 13] [940-C-G] CIVIL APPELLATE JURISDICTION : Civil Appeal No. 8699 of 2002. From the Judgment & Order dated 15.4.2002 of the National Consumer Disputes Redressal Commission, New Delhi in Original Petition No. 156 of 1995. Arvind Kumar Gupta for the Appellant. Sanjay Gupta, Nina Gupta, Ishita Sehgal, Akshat Goel, Bina Gupta for the Respondent.

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 REPORTABLE

 IN THE SUPREME COURT OF INDIA

 CIVIL APPELLATE JURISDICTION

 CIVIL APPEAL NO.8699 0F 2002

M/S DILAWARI EXPORTERS -- APPELLANT

 VERSUS

M/S ALITALIA CARGO & ORS. -- RESPONDENTS

 JUDGMENT

D.K. JAIN, J.:

1.Challenge in this appeal under Section 23 of the Consumer

Protection Act, 1986 (for short "the Act") is to the order dated

15th April, 2002 passed by the National Consumer Disputes

Redressal Commission (for short "the Commission") in Original

Petition No. 156 of 1995. By the impugned order, the

Commission has dismissed appellant's complaint alleging

deficiency in service on the part of M/s Alitalia Cargo,

respondent No.1 in this appeal, on the ground that there was no
privity of contract between the appellant and respondent No.1.

Respondent Nos. 2 and 3 in this appeal are M/s Omni Marg

Travels (Pvt.) Ltd., General Sales Agents and M/s Fourways

Movers (P) Ltd., Cargo Clearing Agents of respondent No.1

respectively.

2.The salient facts giving rise to the present appeal are as

follows:

 The appellant is engaged in the business of export of

readymade garments and handicrafts. They obtained an order

from one M/s D.D. Sales, a concern based in New York, USA for

supply of 2050 pairs of Cotton Gents Dhotis, 150 sets of Cotton

Ladies Ghagra-Choli, 150 pieces of Dupatas, etc. As per the

agreement between the appellant and the said concern of New

York, USA, these articles had to reach New York, USA before

10th of October, 1994. Accordingly, the appellant handed over

the consignment of the said articles to respondent No.3 - M/s

Fourways Movers (P) Ltd. on 4th October, 1994 for onward

dispatch to New York, for which a House Air Waybill No. FMPL

0841 was prepared by respondent No.3. For the sake of ready

reference, the said Bill is reproduced hereunder:

 2
"Shippers Name and Address: Not Negotiable HAWB NO.
M/s. DILWARI EXPORTERS FMPL 0841
1-8 JANGPURA-B, MATHURA ROAD,
NEW DELHI-14 INDIA
 HOUSE AIR WAYBILL
 FOURWAYS MOVERS PVT. LTD.
 39/6-7A, COMMUNITY CENTRE
 EAST OF KAILASH, NEW DELHI- 110065

Consignee's Name and Address
M/S D.D. Sales, 110-53
62ND DRIVE, FOREST HILLS N.Y.
11375, U.S.A.

Issuing Carter's Agent (Name and City) Accounting Information
FOURWAYS MOVERS P. LTD. "FREIGHT : PREPAID"
NEW DELHI
Agent's IATA CODE
14-3-3775

Airport of Departure (Addr. Of first MASTER AWB NO.
Carter)
NEW DELHI / AZ 055 - 2342 9276
By First Carter Routing & Destination
NYC AZ
Airport of Destination Currency Declared Value Declared Value for
 for Customs Customs

NEW YORK INR NVD US$29441.70
 Amount of Insurance
 Rs.1012706-00
The landing information
NOTIFY: SAME AS ABOVE. PLS. INFORM CONSIGNEE IMMEDIATELY ON ARRIVAL OF
SHIPMENT AT DESTINATION. TEL. NO. (718) - 896-0575. ORIGINAL VISA (3 SETS)
COPY OF INVOICE (3 SET) PACKING LIST (3 SET), ALL INDIA HANDICRAFT BOARD
CERTIFICATE AND DECLARATION TO ACCOMPANY WITH THE SHIPMENT.

Carter Commodity Chargeable Rate/ Total Nature and
Weight Item No. Weight Charge Quantity of Goods
 (Incl.
 POWERLOOM
 COTTON GENTS
 DHOTIES & INDIA
 ITEM GARMENTS
 HAND/ EMD/
 PRINTED/ ZARI/
 APPLIQUE/ BEAD/
 MIRROR WORK
 (P/L COTTON
 LADIES CHOLI
 GHAGRA SET &
 DUPTATTAS)

 AS PER INV. NO.
 DE/EXP/358/94-95

 Dt. 28-9-94 RBI : DD
 : 008597

 3
48 1360-OK 1360-OK 85.00 115600-00 IEC:NC:05880 0952

Prepaid Weight Collect Other Charges
 Charge
215600-00 AWB: 60-00 HAWB: 150-00 SB: 175-00

 CTG: 500-00 APT: 545-00
 INS: 2886-00
Total other charges Due Agent
1230-00

Total other Charges Due Carter
2886-00
 FOURWAYS MOVERS PVT. LTD., NEW DELHI

Total prepaid
119716-00 4/10/94 NEW DELHI INDIA v.k.

 Signature of Issuing Carter or its Agent
 055 - 2342 9276

 ORIGINAL 3 (FOR SHIPPER)"

Simultaneously, a Master Air Waybill on a numbered (055 -

2342 9276) proforma printed by "ALITALIA" - respondent No.1

was prepared. The said Air Waybill, containing relevant

particulars, is also reproduced hereinbelow:

"DEK 2342 9276 055- 2342 9276
Shippers Name and Address:
M/s. FOURWAYS MOVERS P. LTD. Not Negotiable
39/6, 7-A COMMUNITY CENTRE, Air Way Bill
EAST OF KAILASH, ALITALIA
NEW DELHI/INDIA Issued by
 Alitalia S.p.A.

Consignee's Name and Address

M/S D.D. Sales, 11053
62ND DRIVE, FOREST HILLS N.Y.
11375, U.S.A.

Issuing Carter's Agent (Name and City) Accounting Information

FOURWAYS MOVERS P. LTD. "FREIGHT : PREPAID"
NEW DELHI

 4
Agent's IATA CODE Account No.
14-3-3775 73279
Airport of Departure (Addr. Of first Carter) and requested Routing

NEW DELHI / AZ
By First Carter Routing & Destination
NYC AZ
Airport of Destination Currency Declared Value Declared Value for
 for Customs Customs

NEW YORK INR NVD US$ 43698.60
 Amount of Insurance
 Rs.1503101-00
The landing information
NOTIFY: SAME AS ABOVE. PLS. INFORM CONSIGNEE IMMEDIATELY ON ARRIVAL OF
SHIPMENT AT DESTINATION. TEL. NO. (718) - 896-0575. ONE ENV. CONTG. DOCS
ATTD. ORIGINAL VISA (3 SETS) COPY OF INVOICE (3 SET), PACKING LIST, M ALL
INDIA HANDICRAFT BOARD CERTIFICATE AND DECLARATION TO ACCOMPANY WITH
THE SHIPMENT

Carter Commodity Chargeable Rate/ Total Nature and Quantity of
Weight Item No. Weight Charge Goods (Incl.
 POWERLOOM
 COTTON GENTS
 DHOTIES & INDIA
 ITEM GARMENTS
48 1993-OKQ 1993-OK 85.00 169405- GRI:AG:493861
 00 493995, 493896

 HAWB NO: 0841, 0842
Prepaid Weight Collect Other Charges
 Charge
169405-00 AWB: 60-00 HAWB: 300-00 SB: 250-00

 CTG: 500-00 APT: 800-00 INS:4284-00
 INS: 2886-00
Total other charges Due Agent
2010-00
Total other Charges Due Carter
4284-00
 FOURWAYS MOVERS

 4/10/94 NEW DELHI INDIA v.k.

 Signature of Issuing Carter or its Agent
 055 - 2342 9276

 ORIGINAL 3 (FOR SHIPPER)"

On 6th October, 1994, a carting order was prepared by

"ALITALIA AIRLINES" handing over the consignment to AAI,

 5
Cargo Terminal (NITC), IGI Airport, New Delhi-110037 for

shipment by Flight AZ-1905. The carting order bore the

endorsement "Cargo accepted subject to space". The parties are

ad idem that the said House Air Waybill as also the Master Air

Waybill were issued under the seal and signatures of M/s

Fourways Movers (P) Ltd - respondent No.3. It is pertinent to

note at this juncture itself that House Air Waybill No.0841 had

the Master Air Waybill No.055 - 2342 9276, the running Bill

number printed on ALITALIA's printed bill book. Similarly,

the House Air Waybill No.0841 was recorded on the Master Air

Waybill.

3.Since the consignment did not reach New York by the

stipulated date, M/s D.D. Sales, the importer, cancelled the

order on or around 16th October, 1994 and claimed damages

from the appellant. The consignment reached the destination

only on 20th October, 1994.

4.Alleging deficiency in service on the part of the respondents,

in particular by respondent No.1, the appellant filed a

complaint before the Commission claiming Rs.22.46 lakhs

towards the value of the consignment along with interest at the

 6
rate of 18% per annum thereon and Rs.15 lakhs as special

damages.

5.The complaint was contested by respondent No.1, repudiating

the claim made by the appellant. In the counter affidavit filed

by respondent No.1, while denying any negligence on their part

resulting in deficiency in service, by way of a preliminary

objection, it was pleaded that there was no privity of contract

between them and the appellant and, therefore, the complaint

was liable to be dismissed on that short ground. The stand of

respondent No.1 before the Commission was that the Air

Waybill No.055 2342 9276 dated 4th October 1994, which was

issued by respondent No.3 "on behalf of respondent No.1" did

not mention the flight number and the date in the column

provided for the same, since airlifting of cargo was always

subject to load/space. It was reiterated that House Air Waybill

No.0842 dated 4th October 1994 was neither issued by

respondent No.1 nor on its behalf. Both the parties led

evidence before the Commission by way of affidavits. Upon

consideration of the evidence on record, the Commission

dismissed the complaint on the afore-stated ground, namely,

 7
the appellant had no locus standi to file the plaint against

respondent No.1. While holding so, the Commission observed

thus:

 "It is not disputed by the parties that Air
 Waybill (sic) alone is a contract between the
 parties. Firstly we see that part III Chapter
 II of Schedule II of the Act does not even
 remotely refer to any other document except
 Air Waybill (sic). We find that on the Air
 Waybill (sic) which happens to be prima
 facie evidence of conclusion of contract of
 the receipt of Cargo and the conditions of
 Carriage, the name of the Shipper is shown
 as Fourway Movers Pvt. Ltd., O.P. No. 3,
 and not that of the Complainant nor is
 there any evidence/indication of any such
 capacity of the Respondent No.3 on the Air
 Waybill (sic). Therefore, it will not be
 possible to reach in the Air Waybill (sic)
 what is not set out or indicated therein. It
 is for this reason that we tend to agree with
 Respondent No.1 and accept its plea that
 the complainant has no locus-standi to file
 the present complaint against Respondent
 No.1, the Airline. Things would have been
 different if at the time of booking the cargo
 the Respondent No.3 had issued a
 communication to Respondent No.1 that it
 was acting as agent of the complainant."

 The Commission, thus, declined to go into the merits of

the complaint though it did observe that there was a lot that

could be said on merits of appellant's case.

 8
6.Being aggrieved, the appellant - claimant is before us in this

appeal.

7.Mr. Arvind Kumar Gupta, learned counsel appearing on

behalf of the appellant, submitted that the Commission

committed a serious error of law and on facts in dismissing the

complaint on the sole ground that the appellant had failed to

prove any privity of contract between them and the carrier i.e.

respondent No.1. According to the learned counsel, it is clear

from the House Air Waybill as also the Master Air Waybill No.

055 2342 9276, that both the bills were prepared

contemporaneously by respondent No.3 as respondent No.1 -

carter's agent when the consignment was handed over to them,

and since the House Air Waybill records the appellant as the

Shipper and respondent No.3 as the Issuing Carter's Agent, the

mention of respondent No.3 as the Shipper as well as the

Issuing Carter's Agent in the Master Air Waybill is of no

consequence. It was strenuously urged that from the said Air

Waybills, it is clear that respondent No.3 was acting as an

agent of respondent No.1 and, therefore, the said respondent, as

principal, was bound by all the acts of omission and commission

 9
of his agent. It was asserted that the Commission failed to

apply its mind on this aspect of the matter and, therefore, erred

in holding that there was no privity of contract between the

appellant and respondent No.1.

8.Mr. Sanjay Gupta, learned counsel appearing on behalf of

respondent No.1, on the other hand, supported the decision of

the Commission and submitted that since the Master Air

Waybill is the only contract of carriage between the Consignor

and the Carter and in the said Bill, respondent No.3 having

been named as the Shipper and M/s D.D. Sales of New York as

the consignee, respondent No.1 had no liability towards the

appellant, notwithstanding the fact that the appellant had been

named as the Shipper in House Air Waybill No. 0841. It was

submitted that since as per Part III of Chapter II of the Second

Schedule to the Carriage by Air Act, 1972 (for short "the

Carriage Act"), it is the consignor who is required to make out

the Air Waybill and handover the same to the carrier, it was

the responsibility of the consignor to see that all the particulars

and details of the cargo inserted in the Air Waybill are correct.

It was thus, argued that respondent No.1 not being a party to

 10
the contract of carriage vis-`-vis the appellant, the said

respondent cannot be held to be liable for any delay in delivery

of the consignment in question.

9.There is no quarrel with the proposition that as per Section 4

of the Carriage Act, Rules contained in the Second Schedule

govern the rights and liabilities of carriers, consignors,

consignees, etc. Rules contained in the Second Schedule apply

to all international carriage of persons, baggage or cargo

performed by aircraft for reward. Chapter II of the said

Schedule enumerates the documents of carriage. Rule 5 of Part

III of the said Chapter stipulates that every carrier of cargo has

the right to require the consignor to make out and hand over to

him a document called as "air waybill"; every consignor has the

right to require the carrier to accept this document. Rule 6

provides that the air waybill shall be made out by the consignor

in three original parts and be handed over with the cargo in the

manner prescribed therein. Rule 10 makes the consignor

responsible for the correctness of the particulars and

statements relating to the cargo which he inserts in the air

waybill. As per Rule 11, the air waybill is prima facie evidence

 11
of the conclusion of the contract, of the receipt of the cargo and

of the conditions of carriage. In the light of these provisions, we

agree with the Commission that the "air waybill" is prima facie

evidence of the conclusion of the contract; of the receipt of the

cargo and of the conditions of carriage.

10.However, the question which, in our view, the Commission

has failed to examine is in regard to the capacity in which

respondent No.3 was operating and had collected the cargo from

the appellant for being shipped to New York. In other words,

what was the nature of relationship between respondent No.3

and respondent No.1?

11.Section 186 of the Indian Contract Act, 1872 (for short "the

Contract Act") lays down that the authority of an agent may be

expressed or implied. As per Section 187 of the Contract Act,

an authority is said to be express when it is given by words

spoken or written, and an authority is said to be implied when

it is to be inferred from the circumstances of the case; and

things spoken or written, or the ordinary course of dealing,

which may be accounted circumstances of the case. Section 188

of the Contract Act prescribes that an agent having an

 12
authority to do an act has authority to do every lawful thing

which is necessary in order to do such act. Section 237 of the

Contract Act provides that when an agent has, without

authority, done acts or incurred obligations to third persons on

behalf of his principal, the principal is bound by such acts or

obligations, if he has by his words or conduct induced such third

persons to believe that such acts and obligations were within

the scope of the agent's authority. There is no gainsaying that

onus to show that the act done by an agent was within the

scope of his authority or ostensible authority held or exercised

by him is on the person claiming against the principal. This, of

course, can be shown by practice as well as by a written

instrument.

12.Thus, the question for consideration is whether on the

evidence obtaining in the instant case, can it be said that

respondent No.3 had an express or implied authority to act on

behalf of respondent No.1 as their agent? If respondent No.3

had such an authority, then obviously respondent No.1 was

bound by the commitment respondent No.3 had made to the

appellant.

 13
13.Having examined the question in the light of the two afore-

extracted "air waybills", which, according to both the contesting

parties, are determinative of terms and conditions of contract

between them, we are of the opinion that respondent No.3 had

an express authority to receive the cargo for and on behalf of

respondent No.1. This is manifest from the Master Air Waybill

No.055 - 2342 9276 issued and signed by respondent No.3 on

the Air Waybill printed by respondent No.1. But for the said

authority, respondent No.3 could not use the Air Waybill

proforma printed by respondent No.1. Though it is true that in

the said Air Waybill the name of the Shipper has been

mentioned as that of respondent No.3 but the said Air Waybill

has also been signed by respondent No.3 as the agent of the

carter - respondent No.1. The other relevant particulars like,

the name of the consignee, the number of the House Air Waybill

(0841), etc. tally with the House Air Waybill issued by

respondent No.3 to the appellant clearly showing the name of

the consignor as that of the appellant. From the said

documents, it would, appear that respondent No.3 was, in fact,

acting in dual capacity - one as a Shipper on behalf of the

appellant and the other as an agent of respondent No.1. That

 14
being so, respondent No.1 was bound by the acts of their agent,

viz. respondent No.3, with all its results. We are of the opinion

that while holding that there was no privity of contract between

the appellant and respondent No.1 this vital aspect of the

matter escaped the attention of the Commission thus, vitiating

its order.

14.In view of the afore-going discussion, we have no option but

to allow the appeal and set aside the impugned order. We order

accordingly and remit the matter back to the Commission for

fresh adjudication of the claim preferred by the appellant on

merits. However, in the facts and circumstances of the case,

there will be no order as to costs.

 ..................................
 J.
 (D.K. JAIN)

 ..................................J.
 (T.S. THAKUR)
NEW DELHI;
APRIL 16, 2010. 15
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