NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Mrs. Anita Bhatia & Ors. … Complainants
Kenyan Airways … Opposite Party
HON’BLE MR. JUSTICE D.P. WADHWA,
HON’BLE MR. JUSTICE J.K. MEHRA, MEMBER.
MRS. RAJYALAKSHMI RAO, MEMBER.
MR. B.K. TAIMNI, MEMBER.
Carriage by air Act, 1972 - IIA (IATA Intercarrier Agreement on Passenger Liability) AND MIA (Measures to Implement the IATA Intercarrier Agreement) - Kenyan Airways Agreement under IIA and MIA - principles applicable to award of damages - Fatal Accident Act - M.S. Grewal 7 Anr. vs. Deep Chand Sood & Ors. - JT 2001 (7) SC 159.
For the complainant : Ms. Monika Arora, Advocate
For the opposite Party : Mr. H.D. Nanavati and Mr. Subrot Birla, Adovcates
O R D E R
DATED THE 2nd August, 2002
JUSTICE D.P. WADHWA, J.(PRESIDENT)
This complaint pertains to the Carriage by Air Act, 1972 (for short the CA Act) which incorporates Warsaw Convention in Schedule –I and in Schedule II it is the Warsaw Convention again as modified by the Hague Protocol. We have to deal with the liability of Kenyan Airways, an international air carrier, on account of the death of Sanjeev Bhatia, a passenger, in the air crash which occurred on 30.1.2000. Sanjeev Bhatia had taken the flight No. KQ-431 of the Airways from Bombay to Nairobi when it crashed into the sea of Ivory Coast near Abidjan resulting in the death of Sanjeev Bhatia and other passengers.
This complaint is by the legal heirs of Sanjeev Bhatia being the wife and two children, one minor, claiming Rs.2,22,91,066.80 as compensation. In fact the total claim made is Rs.2,53,87.024 out of which an amount of Rs.30,95,968/- had been received earlier by the complainants as compensation by way of settlement. Complainants have challenged the settlement which was arrived on 20.4.2000 in the sum of US $ 70,800 and payments received, when this complaint was filed on 2.5.2001. Earlier a notice dated 19.9.2000 challenging the settlement and seeking more compensation was issued by the complainants through their lawyers. This was immediately replied to by the Kenyan Airways through their Solicitors by their letter dated 22.9.2000 denying the allegation of the complainants. This was again replied to by lawyers of the complainants by letter dated 20.11.2000 and thereafter this complaint came to be filed.
It is the contention of the complainants that figure of compensation was wrongly arrived at by the Kenyan Airways and the complainants were coerced to sign the settlement. Complainants say that they were threatened that in case they did not sign the settlement they would not be paid even a single penny as compensation and they would be left to litigate in Courts for the next decade to get the compensation. It is also mentioned that Kenyan Airways took advantage of the position of the complainants who were in grief and sorrow in getting the agreement signed which they allege was result of undue influence exercised by the Airways being in dominating position.
Then the complainants contend they were ignorant of the IATA Intercarrier Agreement on Passenger Liability (IIA, for short) and subsequent agreement to implement the same called Measures to Implement the IATA Intercarrier Agreement (MIA, for short). On the other hand complainants say that they were told that under the CA Act and the Warsaw Convention the maximum compensation payable to them would be US $ 20,000 and unless they agree to the amount offered by the Kenyan Airways they will have to face the prospect of long drawn civil dispute. The situation created by Kenyan Airways was that ‘take it or leave it’. Complainants say they were left with no choice. The agreement was signed without their free consent and in violation of the provisions of Sections 14 and other Sections of the Contract Act. Complainants further say that discharge voucher got signed from them would not estop them from claiming higher amount under IIA and MIA as far as Kenyan Airways was concerned as Article 22(1) of the Warsaw Convention as modified by the Hague Protocol did not apply. Since a great deal depends upon these two documents we set out the same herein in extenso:
The Intercarrier agreement is an “umbrella accord”; the precise legal rights and responsibilities of the signatory carriers with respect to passengers will be spelled out in the applicable Conditions of Carriage and tariff fillings.
The carriers signatory to the Agreement undertake to waive such limitations and liability as are set out in the Warsaw Convention (1929), the Hague Protocol (1955) the Montreal Agreement of 1966, and/or limits they may have previously agreed to implement or were required by Governments to implement.
Such waiver by a carrier may be made conditional on the law of the domicile of the passenger governing the calculation of the recoverable compensatory damages under the Intercarrier Agreement. But this is an option. Should a carrier wish to waive the limits of liability but not insist on the law of the domicile of the passenger governing the calculation of the recoverable compensatory damages, or not be so required by governmental authority, it may rely on the law of the court to which the case submitted.
The Warsaw Convention system defences will remain available, in whole or in part to the carriers signatory to the Agreement, unless a carrier decides to waive them or so required by a governmental authority”.
“INTERCARRIER AGREEMENT ON
WHEREAS: The Warsaw Convention system is of great benefit to international air transportation; and
NOTING THAT: The Convention’s limits of liability, which have not been amended since 1955, are now grossly inadequate in most countries and that international Airways have previously acted together to increase them to the benefit of passengers.
The Undersigned carriers agree
1. To take action to waive the limitation of liability on recoverable compensation, damages. In Article 22 paragraph 1 of the Warsaw Convention – as to claims of death, wounding or other bodily injury of a passenger within the meaning of Article 17 of the Convention, so that recoverable compensatory damages may be determined and awarded by reference to the law of the domicile of the passenger.
2. To reserve all available defences pursuant to the provisions of the Convention nevertheless, any carrier may waive any defence, including the waiver of any defence upto a specified monetary amounts of recoverable compensatory damages, as circumstances may warrant.
3. To reserve their rights of recourse against any other person, including rights of contribution or indemnity, with respect to any sums paid by the carrier.
4. To encourage other Airways involved in the international carriage of passengers to apply the terms of this Agreement to such carriage.
5. To implement the provisions of this Agreement no latter than 1 November 1996 or upon receipt of requisite government approvals, whichever is later.
6. That nothing in this Agreement shall affect the rights of the passenger or the claimant otherwise available under the Convention.
7. That this Agreement may be signed in any number of counterparts, all of which shall constitute one Agreement. Any carrier may become a party to this Agreement by signing a counterpart hereof and depositing it with the Director General of the International Air Transport Association (IATA).
8. That any carrier party hereto may withdraw from this Agreement by giving twelve (12) months written notice of withdrawal to the Director General of IATA and to the other carriers parties to the Agreement.
Signed this 31s day of October 1995”
“AGREEMENT ON MEASURES TO IMPLEMENT THE IATA INTERCARRIER AGREEMENT.
“I. Pursuant to the IATA Intercarrier Agreement of 31 October, 1995, the undersigned carriers agree to implement said Agreement by incorporating in their conditions of carriage and tariffs, where necessary, the following:
1. [CARRIER] shall not invoke the limitation of liability in Article 22(1) of the Convention as to any claim for recoverable compensatory damages arising under Article 17 of the Convention.
2. [CARRIER] shall not avail itself of any defence under Article 20(1) of the Convention with respect to that portion of such claim which does not exceed 100,000 SDRs [unless option II(2) is used].
3. Except as otherwise provided in paragraphs 1 and 2 hereof, [CARRIER] reserves all defences available under the Convention to any such claim. With respect to third parties, the carrier also reserves all rights of recourse against any other person, including without limitation, rights of contribution and indemnity.
II. At the option of the carrier, its conditions of carriage and tariffs also may include the following provision:
1. [CARRIER] agrees that subject to applicable law, recoverable compensatory damages for such claims may be determined by reference to the law of the domicile or permanent residence of the passenger.
2. [CARRIER] shall not avail itself of any defence under Article 20(1) of the Convention with respect to that portion of such claims which does not exceed 100,000 SDRs, except that such waiver is limited to the amounts shown below for the routes indicated, as may be authorised by governments concerned with the transportation involved.
[Amounts and routes to be inserted]
3. Neither the waiver of limits nor the
waiver of defences shall
be applicable in respect of claims made by public social
insurance or similar bodies however asserted. Such claims
shall be subject to the limit in Article 22(1) and to the
defences under Article 20(1) of the Convention. The
carrier will compensate the passenger or his dependents
for recoverable compensatory damages in excess of
payments received from any public social insurance or
Furthermore, at the option of a carrier, additional provisions may be included in its conditions of carriage and tariffs, provided they are not inconsistent with this Agreement and are in accordance with applicable law.
I. Should any provision of this Agreement or a provision incorporated in a condition of carriage or tariff pursuant to this Agreement be determined to be invalid, illegal or unenforceable by a court of competent jurisdiction, all other provisions shall nevertheless remain valid, binding and effective.
V 1. This Agreement may be signed in any number of
counterparts, all of which shall constitute one Agreement. Any carrier may become Party to this Agreement by signing a counterpart hereof and depositing it with the Director General of the International Air Transport Association. (IATA).
2. Any carrier Party hereto may withdraw from this
Agreement by giving twelve (12) months’ written notice of withdrawal to the Director General of IATA and to the other carriers Parties to the Agreement.
3. The Director General of IATA shall declare this
Agreement effective on November 1st, 1996 or such
later date as all requisite Government approvals have
been obtained for this Agreement and the IATA
Intercarrier Agreement of 31st october, 1996
Singned on this __________ day of _______ 1996.
IATA is a non-Government body of international Airways. It makes schedules of the scheduled Airways and also decides about air tariffs. To provide for uniformity of action by international Airways in case of loss of goods, death or causing injury to the passengers outside the Warsaw Convention as modified by Hague Protocol..
The issue arises for consideration as to how far the IATA Intercarrier Agreement on Passenger Liability (IIA) and Measures to Implement the IATA Intercarrier Agreement (MIA) would be applicable vis a vis the provisions of the CA Act. First we go to the relevant provisions of the Air Act. Admittedly it is schedule-II of the CA Act which is applicable and it incorporates Warsaw Convention as modified by the Hague Protocol. Article 17, Chapter III, which contains liability of the air carrier, provides that carrier is liable for damage sustained in the event of the death or wounding of a passenger or any other bodily injury suffered by a passenger if the accident which caused the damaged so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking. Article 20 provides the exceptions which says that carrier is not liable if he proves that it had taken all necessary measures to avoid the damage or that it was impossible to such measures. Sub-Article (1) of Article 22 limits the liability of the carrier for each passenger and limit is US $ 20000. To this there is exception contained in Article 25 which says the limit of liability would not apply if the damage is resulted from an act or omission of the carrier, his servants, or agents, done with interest to cause damage or recklessly . We quote these provision extensively:
“17. The carrier is liable for damage sustained in the event of the death or wounding of a passenger or any other bodily injury suffered by a passenger if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking.
20. The carrier is not liable if he proves that he and his servants or agents have taken all necessary measures to avoid the damage or that it was impossible for him or them to take such measures.
22(1) In the ca+rriage of persons the liability of the carrier for each passenger is limited to the sum of 2,50,000 francs. Where in accordance with the law of the Court seized of the case, damages may be awarded in the form of periodical payments the equivalent capital value of the said payments shall not exceed 2,50,000 francs. Nevertheless by special contract , the carrier and the passenger may agree to a higher limit of liability.
25. The limits of liability specified in Article 22 shall not apply if it is proved that the damage resulted from an act or omission of the carrier, his servants or agents, done with interest to cause damage or recklessly and with knowledge that damage would probably result, provided that in the case of such act or omission of a servant or agent it is also proved that he was acting within the scope of his employment”.
A conjoint reading to IIA, MIA and Articles 17, 20 and 22 of Warsaw Convention would show that Airways were conscious of the fact that Warsaw Convention’s limit of liability has not been amended since 1955 after the Hague Protocol and the liability is grossly inadequate in most countries and that international Airways have previously acted together to increase them to the benefit of passengers. IIA and MIA apply in the case of claim for death, wounding, bodily injury of a passenger within the meaning of Article 17 and there would be no limitation of liability and compensation would be determined and awarded with reference to law of domicile of the passenger. Carrier shall not avail of any defense under Article 20(1) with respect to such compensation which does not exceed US $ 1,35,000.
At the time of his death, Sajeev Bhatia was about 44 years of age. He was in business and partner of Laborate Pharmaceeuticals (India). Kenyan Airways was approached by the Complainants through Ajay Bhatia, brother of the deceased, to know the modalities for making a claim on account of unfortunate death of Sanjeev Bhatia. Kenyan Airways informed Ajay Bhatia that it had engaged services of Mr. Hoshang Nanavati, Solicitor of Mulla & Mulla Craigie Blunt and Caroe, Mumbai to deal with all the claims arising in India and that he should be contacted. On 15.2.2000 complainants through Aditya Bhatia (son of the deceased) as partner of Laborate Pharmaceuticals (India) wrote a letter to Mr. Nanavati requesting him to send the modalities to make the claims for the death of Sanjeev Bhatia. On 26.2.2000 Anita Bhatia(wife of the deceased) sent the claim form for the loss of life of her husband, duly signed and completed in all respects. She requested for immediate settlement of the claim. A reminder by Fax was sent on 10.4.2000 where she wrote that she had not received any reply after she had submitted her claim. Mr. Nanavati immediately responded by Fax on the same day wherein he expressed his surprise over the contents of the Fax of Anita Bhatia. Mr. Nanavati said that immediately on receipt of letter dated 26.2.2000 he had telephoned Ajay Bhatia, brother of the deceased, and explained to him legal position, that the compensation was to be assessed basically by reference to the pecuniary loss sustained by the family as a result of the death. Mr. Ajay Bhatia was requested to send a copy of the return filed by the deceased or other appropriate evidence of his income “having regard to the fact that a very substantial income figure has been mentioned in the Claim Form without giving any details as to how that figure had been arrived at or giving any other evidence in regard thereto”. This had not so far been done. Thereafter, it would appear, documents were forwarded by Ajay Bhatia showing the income of the deceased Sanjeev Bhatia. On 20.4.2000 an agreement was arrived at and was duly signed by all the complainants and witnessed by S.K. Bhatia (brother in law of the deceased ) and Mr. Nanavati, Solicitor and Advocate. This agreement is on non-judicial stamp paper of Rs.120/-. Under this agreement US $ 70,800 was agreed to be payable as total compensation as a result of death of Sanjeev Bhatia in the air crash. Same day a discharge voucher duly signed by same very persons signing the agreement for having received the amount was given. On 4.5.2000 a letter was written by M/s. Mulla & Mulla & Craigie Blunt & Caroe to Anita Bhatia stating that an amount of US $ 70,400 had been remitted to them as compensation payable on account of death of her husband and that she had also requested that she be reimbursed the air fare of herself and her son from Panipt to Bombay and back which amounted to Rs.20,400/- (US $ 470), and thus a cheque for Rs.30,95,968.90 equivalent to US $ 71,270/- was being sent to her. It was acknowledged by letter dated 9.5.2000 of Anita Bhatia. As far as Kenayan Airways is concerned matter rested at that till, as noted above, notice was issued by the lawyers of the complainants. It would be seen it were rather the complainants who wanted settlement with all the promptitude.
Now a claim was made that Kenyan Airways was liable to pay Rs.2,22,91,055.80 as under:
a) Compensation payable to the petitioners Rs. 2,01,70,420/-
on account of death of Shri Sanjeev Bhatia.
I. Interest at the rate of 24% per annum from the Rs 49,66,604.80
date of death till 1.4.2001
c) Mental harassment and injury caused to the Rs. 2,00,000/-
petitioners due to the threat given by the respondent.
d) Legal fees Rs. 50,000/-
Less amount received Rs. 30,95,968.80
Amount payable Rs.2,22,91,055.80
This amount is claimed as per the two agreements IIA & MIA. It is stated that under these agreements even the minimum amount payable as compensation would be US $ 1,35,000 while settlment arrived at was for US $ 70,800/-.. It was stated in the notice of the lawyer that these two documents (IIA & MIA) were not disclosed by Kenyan Airways with the intent to deprive the complainants of their lawful amount of compensation and to induce them to enter into the agreement dated 10.4.2000. This apart there has been allegations of undue influence etc. It was also mentioned in the notice that principles of Motor Vehicles Act, 1988 would apply in arriving at the correct amount of compensation
Though the provisions under CA Act limit the liability, in the present case to US $ 20,000 but then under sub Article (1) of Article 22 this limit would not apply when there is a special contract under which the carrier and the passenger may agree to a higher limit of liability. The special contract in the present case by which Kenyan Airways and Sanjeev Bhatia agreed to a higher limit of liability would be MIA terms of which were accepted by the former being members of IATA. An argument was sought to be raised, more perhaps in desperation than anything else, that it is the air ticket which contains the terms of the contract between the air carrier and the passengers we do not find any such special contract. Relevant clauses of the air ticket have been brought on record. But then how come that in spite of the fact that law limits the liability the US $ 20,000 in the present case, Kenyan Airways agreed to pay US $ 70,800/-. Certainly this was on account of the two agreements namely IATA Intercarrier Agreement on Passenger Liability (IIA) and Measures to Implement the IATA Intercarrier Agreement (MIA). Kenyan Airways cannot be permitted to take a stand contrary to the terms of IIA & MIA and particularly having agreed not to invoke the limit of liability of US $ 20,000
The fact that Kenyan Airways agreed to pay above US $ 20,000 as provided under Article 22(1) of the Second Schedule to the Air Act, would that show that it agreed not to avail of any defence under Article 20(1) of the Conventions with respect of that portion of such claims which did not exceed US $ 1,35,000 is a question which can be answered after we examine the MIA completed by the Kenyan Airways and filed with IATA. This has not been produced. Subject to that it would not mean that Kenyan Airways agreed that it would pay a minimum of US $ 1,35,000 on account of death of the passenger. These provisions do not provide requiring an air carrier to pay any minimum figure of compensation the figure of SDR 100,000 equivalent of approximately US $ 1,35,000. It would not be minimum liability figure, but a sum to which an air carrier is precluded from raising any defence under Article 20(1) of the Conventions. The defence that an carrier would take under Article 20 is that carrier is not liable if it proves that he, his servants or agents have taken all necessary precaution to avoid damage or that it was impossible for him or them to take such measures. Only this defence an air carrier would not take if the claim made is below US $ 1,35,000. If the claim is over and above US $ 1,35,000 then there is no bar on the air carrier to take any defence under Article 20 of the Air Act for the amount in excess of US $ 1,35,000. According to Kenyan Airways therefore, there is no provision under the aforesaid MIA agreement which could allow award of compensation of US $ 1,35,000 on account of death of passenger without anything more.
Under the MIA in pursuance to the IIA entered into on 31.10.1995 the international air carriers agreed to implement that agreement by incorporation that:
(i) a carrier shall not invoke the limitation of liability under Article 20(1) of the Convention and
(ii) to avail itself any defence under Article 20(1) of the Convention in respect of that portion of that claim which does not exceed SDR 100,000 approximately US $ 1,35,000 except that such waive is limited to the amounts as may be prescribed..
Kenyan Airways has rejected the stand now taken by the complainants and has referred the circumstances under which the agreement came to be concluded and the discharge vouchers signed. They say after having accepted the amount with their free consent complainants could not go back and claim higher amounts. They say that the claim was settled on ‘proof-of-loss’ basis without reference to any limit as contained in the Warsaw Convention.
Complainants came to know of the existence of IIA and MIA subsequent to their signing the agreement and the discharge voucher. The agreement and the voucher do not at all refer to these two documents. It is difficult to accept the proposition as advanced by Kenyan Airways that complainants supposedly should have known the existence of these two documents as these two documents could easily be discovered. If that was so there was then no need for Kenyan Airways to send these two documents to the complainants with their reply. Existence of these documents could not have been known to a common man. Principle of ignorance of law does not apply as these documents do not constitute any law. Kenyan airways do not say if the contents of IIA and MIA were ever brought to the notice of the complainants. Knowledge of these two documents was vital to a fair agreement.
As to how the amount of US $ 70,800 has been arrived at we were not told by Kenyan Airways . It is stated by Kenyan Airways that the amount was arrived at on the basis of ‘proof-of-loss’ basis without reference to any limit. Kenyan Airways do not tell us as to what formula was applied to arrive at this figure. We are inclined to believe the version of the complainants that they did not sign the agreement and gave discharge voucher with their informed consent. They were certainly acting under the mistaken belief and unless they agreed to accept the figure of US $ 70,800 they would have to face the prospect of tortuous civil litigation in a Civil Court even to get US $ 20,000. Existence of these two documents were not disclosed which in our opinion it was the duty of the Kenyan Airways to do so who were in full knowledge of the same and were bound by the same.
As noted above, the compensation had to be arrived at as per law of the country. For this we have the provisions of Fatal Accidents Act, 1855, Motor Vehicles Act, 1985 various decisions of the Courts and the recent decision of the Supreme Court in the case of M.S. Grewal & Anr. Vs. Deep Chand Sood & Ors. (2001) 7 JT 159.
To restate it is the stand of the Kenyan Airways that claim had been settled wholly in accordance with Warsaw Convention read with the said IIA and MIA, both of which have been signed by Kenyan airways. It was stated that Kenyan Airways had given instructions to its Solicitor/Advocate to settle all claims arising out of air accident in question on ‘proof -of -loss basis’ without reference to such limit of liability of US $ 20,000 under the Warsaw Convention as incorporated in the Act. It was then stated in the claim form submitted by the complainants, Sanjeev Bhatia, the deceased, was shown having annual income of Rs.16,81,035/-. With the reply to the notice of the complainants, Mulla & Mulla & Craige Blunt & Caroe, Advocates and Solicitors also sent copies of IIA and MIA. No doubt a settlement has been arrived at. But if it is in accordance with law of land, is the question before us. Has the amount of compensation arrived at keeping in view the relevant factors and have those factors been applied in the given situation? If the figure so arrived at is less than the amount of compensation stated to have been settled, the other question is if it was with the free consent of the complainants pales into insignificance as the complainants would never have consented to a lower figure. It will therefore be for the Kenyan Airways to spell out the details as to how the amount of US $ 70,000 as compensation was computed.
Before concluding we would say that after going through the records of the case as to how settlement has been arrived at, we agree with the Kenyan Airways that allegations made against their Advocate/ Solicitor was not proper and made in bad taste. We are, however, of the view that making allegation against Solicitor and Advocate, complainants were ill advised.
We would, therefore, direct Kenyan Airways to file an affidavit the details as to how the figure of US $ 70,000 was arrived at keeping in view the age, income and other relevant parameters for fixing the compensation in the case of death by accident of a person. Let this affidavit be filed within four weeks of the receipt of this order.
To be listed on 26th September, 2002 for directions and further proceedings.
(JUSTICE D.P. WADHWA)