M/s Bhagwandas B. Ramchandani vs British Airways

Limitation Act, 1963 – s. 29 – Whether the Air Act, 1972, particularly Rule 30 of the Second Schedule expressly excludes the applicability of the Limitation Act, 1963? Held: Where a period of Limitation is prescribed in a special law, by virtue of Section 29 of the Limitation Act, such period will apply as if it was provided in the Schedule of the Limitation Act - Sub-Rule (2) of rule 30 must therefore be interpreted harmoniously keeping in mind not only the content of Sub-Rule (1) but also the purpose and object of the Convention which is to bring about the unification of Rules relating to International Carriage by Air - Rule 30 of the Carriage by Air Act 1972, expressly excludes the applicability of the Limitation Act,1963. Dismissing the appeal, the Court

HELD :

Does Limitation Act, 1963 apply to the period specified in Rule 30 of the Second Schedule of the Carriage by Air Act, 1972?

1. It is to be noticed that matters concerning the international carriage of persons, baggage, or cargo performed by aircraft for reward are the subject matter of International Conventions. These are incorporated into our laws through the Schedules to the Air Act, 1972. Section 3 of the Air Act, 1972 incorporates the Warsaw Convention, 1929 into the First Schedule and specifically provides that it shall have the status of law in India. Section 4 incorporates the Hague Protocol dated 28.09.1955 and provisions it in the Second Schedule and gives it the status of law in India. Similarly, Section 4A brought into force in 2009 for giving effect to the Montréal Convention, 1999 incorporates it in the Third Schedule to the Act and gives it the status of law in India. [Para 10][552-F-G; 553-A-B]

2. The procedural law governing the institution and adjudication of civil suits in India includes the Civil Procedure Code,1908 as well as the Limitation Act, 1963. The Limitation Act is a branch of adjectival law, and applies to all proceedings which it governs from the date of its enactment. There is however a well-established principle, which states that when the right itself is extinguished, the provisions relating to limitation have no application. A direct example where the right itself is extinguished, can be evidenced in Section 11 as well as Section

27 of the Limitation Act, 1963. Section 11 deals with suits filed in India with respect to contracts entered in foreign countries. Following the Principle of lex fori, the Section provides that rules of limitation provided in a foreign jurisdiction are not applicable. However, the exception to this Rule is provided in Section 11 (2)(a), when the Contract i.e., the right itself expires. Similarly, Section 27 also recognizes the principle of extinguishment of Right to Property being an exception to the applicability of the Limitation Act, 1963. [Para 12][554-B-E]

3. In view of the well-established position of law relating to Lex Fori in International Law, with the equally well-established exception arising out of the extinguishment of the right or the liability itself, we will now examine the position in India as per Rule 30 in the Second Schedule of the Air Act, 1972 relating to liability of the carrier. [Para 14][558-A-C]

4. While Rule 29 speaks about judicial remedy for initiating an action for damages, Rule 30 uses the expression right to damages. It is in the context of right as against a remedy that the purpose, object and meaning of Rule 30 is to be understood. Further, Rule 30 also uses the expression “extinguishment” as against “bar”, which is generally used in the context of a remedy. Therefore, the extinguishment is of right, that is, the right to damages is the subject matter of Sub-Rule (1) of Rule 30. The expressions, ‘right’ and ‘extinguished’ employed by the Convention as adopted and incorporated by the Parliament in Rule 30 of the Second Schedule clearly establishes the intention of the law-giver that the right to damages would not subsist after the expiry of the period mentioned therein. [Para 15.1][558-AC; 558-D-E]

5. Once the right to damages is extinguished upon the expiry of two years reckoned from the three alternative dates mentioned in the Rule itself, nothing would remain for enforcement. Section 3 of the Limitation Act only bars the remedy, but when the right itself is extinguished, provisions of the Limitation Act have no application. For this reason, in The East and West Steamship Co., this Court held that once the right of liability is extinguished under the clause, there is no scope of acknowledging the liability thereafter. [Para 15.2][559-C-D]

6. In its plain and simple language, Sub-Rule (2) seems to adopt the applicability of the Limitation Act, 1963 as Courts in India exercise jurisdiction. ‘The method of calculating the period specified in Sub-rule (2) naturally relates to the period’ specified in Sub-rule (1). Sub-Rule (1) identifies and fixes two incidents. The period of limitation and the date of commencement of the said period (the three specified dates). Therefore, when the period of limitation, as well as the date of commencement of the said period, are already given, the method of calculation of the period of limitation contemplated under Sub-Rule (2) must relate to some other factor. However, without specifying the variable to which the method of calculating the period, is to apply, Sub-rule

(2) merely provides that it “shall be determined by the law applicable to the Court seized of the case.” This has caused uncertainty about the intent of the lawmakers, be it the Convention or Rule 30 of the Second Schedule of the Act. [Para 16.2][559-F-H; 560-A-B]

7. Further, the expression in Rule 30(2) calculating the period of limitation is synonymous to the expression computation of period of limitation provided in Part-III of the Limitation Act, 1963. Part-III which relates to the exclusion of certain time periods is to sub-serve a just cause based on public policy which recognizes human vulnerabilities. Broadly, these periods relate to (i) the date from which the period is to be reckoned (Section 12); (ii) the time taken for seeking to contest as a pauper, (Section 13); (iii) the bona fide period involved in the perusal of a remedying the wrong Court (Section 14); (iv) fraud (Section 17); (v) acknowledgment of debt (Section 18); (vi) admitted payments on account of debt (Section 19); (vii) continuous breach etc. These are the periods that can be excluded while computing the period of limitation under the Limitation Act, 1963. [Para 16.3][560-BD]

8. The rival submissions surface due to an apparent conflict between Sub- Rule (1) and Sub-Rule (2) of Rule 30 of the Second Schedule. While Sub- Rule (1) extinguishes the right itself upon the expiry of the period of two years, after which nothing would remain for enforcement, Sub-Rule (2) seems to suggest that the Court seized of the case can apply the law of limitation applicable to its proceedings and entertain the suit of the proceedings. [Para 18][561-B-C]

9. In view of the uncertainty in the language of sub-article

(2) of Article 29, as in the case of Sub-Rule (2) of Rule 30 for India, courts of law across jurisdictions were called upon to consider the rival submissions on the construct of the said provision. Learned counsels appearing for both the parties have placed before us the decisions of foreign courts that have ruled upon Article 29 and interpreted the said provision, more or less consistently taking a view that the domestic laws of limitation will have no bearing on the period of two years. [Para 29][569-CD]

10. The High Courts across the country have also taken a similar view that the Limitation Act, 1963 will be excluded from operation for a claim under the Air Act. The High Courts have reasoned that the Air Act is a special statute and would thus prevail over the Limitation Act, 1963, which is a general statute. The High Court of Delhi in Air India Ltd. v. Tej Shoe Exports P. Ltd. , Sailesh Textile Industries v. British Airways & Anr. , Indian Airlines v. Angelique International Ltd. & Anr., Ethopian Airlines v. Federal Chemical Works Ltd., the High Court of Madras in M/s M.R.F Ltd. v. Singapore Airlines and Air India, Bombay Airport v. Asia Tanning Co., and the High Court of Bombay, in the judgment impugned before us, have all taken this view. [Para 40][576-E-G]

11. In the ultimate analysis, keeping in view the legislative history of the Convention and in view of the consistent interpretation of Article 29 of the Convention adopted in different jurisdictions, for the purpose of uniformity and also to subserve the purpose and object of the Convention, we are of the view that Rule 30 (2) does not enable applicability of exclusion of periods for the purpose of reckoning the period of two years. [Para 43][577-G-H]

Whether the Air Act, 1972, particularly Rule 30 of the Second Schedule expressly excludes the applicability of the Limitation Act, 1963?

12. While dealing with Issue No.1, we have held that the right to damages itself is extinguished after the expiry of the period of two years and therefore the provisions of the Limitation Act have no application as there is no right subsisting for enforcement. In this context we have referred to Section 3 of the Limitation Act which merely bars the remedy and not the right itself, but when the statute extinguishes the right itself the position is very different. We will however consider the present argument of appellant as an alternative plea and proceed forthwith to deal with the same. [Para 45][578-E-F]

13. Where a period of Limitation is prescribed in a special law, by virtue of Section 29 of the Limitation Act, such period will apply as if it was provided in the Schedule of the Limitation Act. Consequently, the provisions of Sections 4 to 24 will apply for the purpose of computation of period of limitation. This provision is subject to a bright exception that the Limitation Act will not apply if it is “expressly excluded” by the Special Act. [Para 46][578-F-H]

14. The Air Act, 1972 is an Act to give effect to various International Conventions for the unification of certain Articles relating to international carriage by air. The International Conventions incorporated in the Act are the (i) Warsaw Convention, 1929; (ii) The Warsaw Convention, 1929 as amended by the Hague Protocol on 28.09.1955 and (iii) the Montréal Convention, 1999. Section 3 of the Act incorporates the Warsaw Convention into the Act as the First Schedule and specifically provides it the status of law in India. Section 4 incorporates the Hague Protocol and provisions it in The Second Schedule. Section 4A for giving effect to Montréal convention, provides The Third Schedule to the Act and specifically provides the status of law to these provisions. [Paras 50 & 51][581-B, E-F]

15. The Warsaw Convention as amended by the Hague Protocol is a complete code within itself for all questions relating to carriage by air by international carriages. Rule 1(1) provides that the Hague Protocol shall apply to “all international carriage of persons, baggage or cargo performed by aircraft for reward”. Rule 2 provides that the Convention will apply to carriage performed by the State or by legally constituted public bodies. Chapter II of the Convention (Rules 3 to 16) is entitled “Documents of Carriage”. Rule 3 relates to the documents that a carriage of passengers must deliver. Rule 4 prescribes a mechanism for baggage check. Rule 5 to 11 relates to the air waybill in cases of cargo carriages. Rule 12 relates to the right of the consignor to dispose of the goods in a manner that is not prejudicial to the carrier. Rule 13 pertains to the rights of the consignee upon the arrival of the goods. Rule 13(3) provides that where there is a loss of goods, the consignee shall be entitled to enforce the rights which ‘flow from the contract of carriage’. Rule 14 provides for the consequences of non- compliance of Rule 12 and 13. [Para 52][581-F-H; 582-A-B]

16. The Chapter with which we are presently concerned with is Chapter III which is titled ‘Liability of the Carrier’. Rule

17 provides for the liability of a carrier for damages in the event of death or wounding or other injuries caused to a passenger while onboard the aircraft. Rule 18 envisages the liability of a carrier in the event of destruction, loss, damage etc. of cargo. Similarly, Rule 19 concerns the liability of a carrier upon delay in the carriage of passengers, baggage or cargo. Rule 20 provides for an equitable exemption to the carrier if he proves that he had taken all necessary measures to negate the delay or damage. Rule 21 is yet another equitable provision that protects the carrier in cases of contributory negligence. Rule 22 specifies the minimum liability of the carrier. Rule 23 nullifies all limits which are lower than those provided in Rule 22. [Para 53][582-B-D]

17. The Convention certainly incorporated two variables in the context of reckoning the period specified in Rule 30 (1) of limitation. The first event relates to the time, which is a fixed period of two years. The second event relates to the commencement of cause of action which has been specified as any of the three events being (i) arrival at the destination; or (ii) date on which the aircraft ought to have arrived; or (iii) the date on which the carriage stopped. Now, the only event that remains is the date on which the action for damages is initiated as this would depend upon the law of the Court seized of the case. Rule 30(2) specifically provides that “the method of calculating the period will be determined by the law of the Court seized of the case.” This should necessarily follow for the reason that the period of two years for enforcing the right would be extinguished if an action is not brought within the said period. [Para 57][583D-F]

18. This Court also note that giving effect to the meaning of the words the ‘law of the court seized of the case’ would lead to an anomalous situation where the law of every country would be incorporated into the Convention, thereby defeating the purpose of an International Convention which is to bring about uniformity across the globe in the laws applicable to carriage by air. Having considered the matter in detail, this Court is of the opinion that Rule 30 of the Carriage by Air Act 1972, expressly excludes the applicability of the Limitation Act, 1963. Issue No.2 is answered accordingly. [Para 58 & 60][583-F-G; 584-C] Sailesh Textile Industries v. British Airways & Anr. 2003 SCC Online Del 318; Indian Airlines v. Angelique International Ltd.& Anr. 2014 SCC Online Del 6825; Ethopian Airlines v. Federal Chemical Works Ltd 2004 SCC Online Del 862 Air India, Bombay Airport v. Asia Tanning Co. 2002 SCC Online Mad 802 – approved. Punjab National Bank and others v. Surendra Prasad Sinha 1993 Supp (1) SCC 499 : [1992] 2 SCR 528; Hukumdev Narain Yadav v. Lalit Narain Mishra (1974)

2 SCC 133 : [1974] 3 SCR 31; Shanmugam v.

Commissioner for Registration [1962] 2 All E.R. 609 – relied on.

M.R.F. Ltd. v. M/s Singapore Airlines Ltd. 2014 SCC Online Mad 247; M/s Air India Bombay Airport and Another v. M/s Asia Tanning Co. and Anr. 2002 SCC Online Mad 802; The Shipping Corporation of India Ltd., Bombay and Anr. v. Union of India 2004 SCC Online Mad 489; The East and West Steamship

Company, Georgetown, Madras v. S.K. Ramalingam Chettiar AIR 1960 SC 1058 : [1960] 3 SCR 820; Air India Ltd. v. Tej Shoe Exporters P. Ltd. and Anr. 2013 SCC Online Del 3749; Gulf Air Company v. Nahar Spinning Mills Ltd. and Others 1999 SCC Online P&H 915; Khadi Gram Udyog Trust v. Ram Chandraji

Virajman Mandir (1978) 1 SCC 44 : [1978] 2 SCR 249; Needle Industries (India) Ltd. and Anr. v. Needle Industries Newey (India) Holding Ltd. and Ors (1981)

3 SCC 333 : [1981] 3 SCR 698; National Aviation Company of India Ltd. v. Jatnadevi Tejraj Jain 2011 SCC Online Guj 7601; State of Kerelaand Ors. v. V.R. Kalliyanikutty and Anr. (1999) 3 SCC 657 : [1999]

2 SCR 372; Prem Singh and Ors. v. Birbal and Ors. (2006) 5 SCC 353: [2006] 1 Suppl. SCR 692– referred to.

United Kingdom in Laroche v. Spirit of Adventure (UK) Ltd. (2009) EWCA Civ 12; Fishman v. Delta Airlines

938 F. Supp. 228 (1996); Sidhu v. British Airways [1997] 1 All ER 193; Philips v. Air New Zealand (2002) EWHC 800; Fishman v. Delta Airlines 82 A.D. 2d 696; Kahn v. Trans World Airlines (1981) 443 NYS 2d 79; Bhatia v. Malaysian Airline System Berhad (2018) FCA 1471; Rukmaboye v. Lulloobhoy Motichand (1935) 5 HIA 234; RM. AR. AR. RM. AR. Ramanathan Chkttiar and others v. K.M.CL.M. Somasundaram Chettiar and Ors. (1964) 77 LW 399; R v. Secretary of State for the Home Department exparte Adan, (1999) 4 All ER 774. p. 785 (CA); R. (on the application of Mullen) v. Secretary of State for the Home Department (2004) 1 All ER 65; Fothergill v. Monarch Airlines (1980) 2 All ER 696; Morris v. KLM Royal Dutch Airlines [2001] 3 WLR 351; Zicherman v. Korean Air Lines Co. Ltd. 516 US 217, (1996), EI AI Israel Airlines Ltd. V. T.Y. Tseng

525 U.S. 155 (1999); Narayanan v. British Airways 2014 U.S. App. LEXIS 5173 : 747 F.3d 1125; Lorans v. Air France (1977) 31 RFDA 268 Joseph v. Syrian Arab Airlines 88 F.R.D. 530 (S.D.N.Y. 1980); Flanagan v. McDonnell Douglas Corp 428 F. Supp. 770 (C.D. Calf. 1977) – referred to.