Airlines will be bound by the timeline promised by its Agent

Rajasthan Art Emporium vs Kuwait Airways Civil Appeal no. 1906 of 2012 decided by the Hon’ble Supreme Court of India on 09.11.2023

The Appellant (hereinafter Complainant) is an exporter of handicrafts to many countries. The complainant had to fulfil an order to USA on urgent basis. The complainant approached the Respondent no. 1 (hereinafter airways) via respondent No. 2 (hereinafter agent), the agent gave assurance to the complainant that the goods will reach the destination as per the time frame provided. However, the goods did not reach the destination on time. The agent gave a new time frame for delivery of goods, however this time as well the goods did not reach the destination on time.

The complainant approached the National Consumer Dispute Redressal Commission (hereinafter NCDRC) for the loss incurred due to the delay in delivery in goods and lack of diligence on part of the Airways. The NCDRC ordered in favour of the complainant holding that the Airways were not diligent in their services subsequently granting compensation for the complainant however did not grant any compensation for delay in delivery. The NCDRC order was appealed wherein it was contended that the NCDRC did not appreciate evidence on record in respect of delay in delivery. Subsequently the matter was remanded back to the NCDRC wherein the NCDRC ordered compensation for delay in delivery as well.

The parties impugned the order of NCDRC in a cross appeal. The complainant contended that the agent represented to the complainant that the goods will be delivered on time. The Airways contended that the complainant was never informed that time was of the essence of the contract and cannot be held responsible for the delay in delivery.

The Hon’ble Supreme Court on perusal of records observed that the agent in its correspondence with the complainant gave a revised time frame for the delivery of goods. Further there was no document on record to show that the Airways has taken any stand that the Respondent No. 2 was not the agent of the Airways. Further the Airways neither contended that the agent acted beyond the terms of his agency. Therefore, the agent acted on behalf of the Airways.

The Hon’ble Supreme Court held that the Airways would be liable for the act of his agent. The Court held that in view of the Indian Contract Act, 1872 an agent has the authority to do any act required which is necessary.

The Court in Dilawari Exporters vs Alitalia Cargo & Ors (2010) 5 SCC 754 held that as per section 186 to 188 of the Indian Contract Act, 1872 an authority of an agent may be expressed or implied, express authority is by way of words and writing or implied by way of inference from circumstances. Further the agent has the authority to do an act which is necessary to discharge his authority. As per section 237 of the Indian Contract Act a principal will be liable for the act of the agent.

The Court held that in the present case the Airways have not taken any stand that the agent’s act was unauthorised. The Court held that the Airways will be bound by the time frame promised by the agent, as the agent has acted on behalf of the Airways. The Court upheld the compensation granted for delay in delivery of goods and refused to interfere in the order of the NCDRC.