Hindalco Industries Limited vs PRINCIPAL SECRETARY, DEPARTMENT OF TOURISM

THIS complaint has been instituted by Hindalco Industries Limited in which Principal Secretary, U.P. Tourism, Sports and Civil Aviation Department, Govt. of Uttar Pradesh, Managing Director, U.P. Airways/S.G.S. Airlines, U.P. Airways/S.G.S. Airlines (through Manager, Marketing) and U.P. Airways/S.G.S. Airlines through General Manager (Commercial) are the four opposite parties. The claim is for refund of Rs. 8,29,445/- with interest amounting to Rs. 2,21,828/- (from 7.5.196 to 15.6.1997), Rs. 3 lacs compensation, totalling to Rs. 13,51,273/- and such other reliefs which is claimed through the complaint.

BEFORE proceeding further it may be pointed out that the complaint initially maintained that opposite party Nos., 2, 3 and 4 were concerned with U.P. Airways limited, as noted above. The aforesaid company was subsequently named as S.G.S. Airlines Limited. Hence amendment was allowed to be incorporated on 22.4.2002. During the course of argument it was suggested that again the name of the company is reverted to U.P. Airways Limited. The allegations in the complaint lie in a narrow compass. It is said that the aforesaid U.P. Airways/S.G.S. Airlines (hereinafter referred to as "Airlines") decided to introduce a flight on the air route Delhi-Allahabad-Muirpur-Lucknow-Delhi from 29.2.1996. The details of the flights were intimated to the complainant by the airlines. 350 tickets in advance was sold to the complainant. 150 advance tickets were for March, 1996 whereas 2000 advance tickets were for April 1996 and the validity of the tickets was till June 1996 as per extension granted by the Airlines. A sum of Rs. 5,78,250/- and a further sum of Rs. 7,71,000/- were paid taking the airfare between Muirpur and Delhi at Rs. 3,850/-. The complainant, however, utilised upto May, 1996 a total of 131 tickets for route Delhi-Muirpur and 8 tickets for Muirpur-Lucknow. Since Muirpur-Lucknow flights for which 8 tickets as mentioned above were utilised was for a lesser flight journey, Rs. 16,040/- were claimed to be refunded to the complainant as per alleged admission of the airways in their letter dated 8.4.1996.

The complainant, however, alleges that the flights were irregular and did not operate regularly and it was on 7th May, 1996 that the airlines completely stopped their aforesaid flight. Assurances were given that the flights will be resumed soon but nothing happened. The result was that as on 7th May, 1996 the complainant was left with 172 valid unused tickets on the Muirpur-Delhi or Delhi-Muirpur sector which were to be used on or before 30th of June, 1996 as per the extension granted admittedly by the Airlines. Because of the arbitrary discontinuation of the flight, a letter went from the complainant dated 23.5.1996 telling the Airlines that due to the aforesaid unethical decision on the part of the Airlines the complainant was forced to keep 172 unused tickets with him valued at Rs. 6,63,060/-. Another sum of Rs. 1,50,345/- being the price of 39 tickets which remained unused on cancellation of the tickets during the period of flight was operative and further four tickets on Muirpur-Lucknow and Lucknow-Delhi each, totalling 8, worth Rs. 16,040/- thus totalling to Rs. 8,29,445/- was to be received as refund by the complainant from the Airlines.

COMPLAINANT further states that opposite party No. 2 wrote a letter on 4.7.1996 telling the complainant that it was not possible to re-validate the tickets, sum of the difference may be adjusted but flatly refused to honour the request made in the complainant''s letter dated 23.5.1996 and refused to refund the amount claimed for the non-used tickets. The rest of the allegations in the complaint from para 7 to 16 are references to various letters and documents exchanged between the parties, copies whereof have been filed, references to which shall be made in the subsequent paras to follow. The Airline''s case as placed through the written statement and the evidence produced by them is primarily confined to two factual allegations; first, the complainant was a party to a contract under which it was to go on purchasing three months tickets in advance on a monthly basis and that many of the companies/firms, which were also expected to purchase tickets in advance as the complainant, backed out and did not purchase the stipulated three months advance tickets, no question of refund arose; second, that the complainant knew very well that the flights were arranged only to cater to the needs of the complainant and allied companies and since all of them did not purchase the three months advance tickets, they faltered in their part of the contract and no amount is refundable.

ON the legal points, objections have been raised about the maintainability of the complaint on the ground that jurisdiction if any lie only with the Court or forum in Delhi/New Delhi and certainly not in Uttar Pradesh much less in the Commission and further that the complainant cannot be termed a "consumer" within the meaning of definition of Consumer Protection Act, 1986 (COPRA). Mr. V.K. Upadhyay, learned Counsel for the complainant has been heard extensively. He has drawn the attention to the various provisions of law and rulings which shall be taken one by one by dealing with the points seriatim. Mr. V.P. Sharma, learned Counsel for the opposite party Nos. 2, 3 and 4 has also been heard at length. He too has placed reliance on the provisions of law and rulings which shall be referred to at the time of dealing with the problems sought to be raised by him. Only one comment needs to be made on the factual issues. The complainant''s claim relates to two types of deficiency. One relates to the alleged non-use of some tickets when the flights were being continued. The other relates to the tickets which remained unused because of discontinuation of the flights. This point shall be having bearing on the success of the complaint and corresponding compensation.

MR. V.P. Sharma, learned Counsel for the opposite parties relied upon Rule 3(2) of the Rules framed under the Carriage by Air Act, 1972 which is quoted below: "Rule 3(2) : The passenger ticket shall constitute prima facie evidence of the conclusion and conditions of the contract of carriage. The absence, irregularity or loss of the passenger ticket does not affect the existence or the validity of the contract of carriage which shall, nonetheless, be subject to these rules, nevertheless if with the consent of the carrier, the passenger embarks without a passenge ticket having been delivered, or if the ticket does not include the notice required by Sub-rule (1)(c) of this rule, the carrier shall not be entitled to avail himself of the provisions of Rule 22".

THE aforesaid provisions has no application to the facts of the present case because there is no challenge to the validity of the contract but the opposite party has raised only the issue of territorial jurisdiction. Mr. V.P. Sharma then vehemently argued that the Commission lacks territorial jurisdiction. He referred to the condition No. 7 written on the tickets which reads as under: "In case of any kind of dispute only Courts/Forums/Tribunals, etc. in Delhi/New Delhi, will have the exclusive jurisdiction, since the registered office of the company is at New Delhi."

According to Mr. Sharma appearing for the contesting opposite parties, the aforesaid condition is an agreement between the parties and relies upon the Hon''ble Supreme Court''s various decisions. This point has been highlighted by him in the written arguments.

MR. Upadhyay on the other hand strongly rebuts the said argument and says that the aforesaid entry of a condition on the air tickets cannot oust the jurisdiction of the Consumer Fora/Commission. It may be pointed out that the very basis of reliance on the aforesaid condition in the ticket is the continuity of the flight but where this continuity of the entire air service is the basis of the claim of the complainant, the condition in the ticket is as much useless as the ticket itself. The use and validity of the ticket is dependent upon the opposite party''s steps to extend the service of air flights to the complainant. Admittedly the very flight stands discontinued. The tickets have been turned waste papers for the purpose of authorised flights. Therefore, the very foundation of the argument of MR. Sharma is knocked out and the discontinuation of the flight as a whole which is the cause of action for filing of the complaint for which reason the aforesaid argument is rejected. The second argument advanced by Mr. V.P. Sharma is that the complainant is not a consumer. Enlarging the ambit of the said argument, it was further contended that the very fact that bulk tickets were purchased indicate that the complainant was desirous of using those tickets for commercial purpose and, therefore, would not be included within the definition of the expression "Consumer" as provided under Section 2(b) of COPRA.

IN reply it was said that it was the complainant, and the complainant alone, who had to travel and unless the advance tickets were sold to someone other than the complainant or its officials, commercialism cannot be said to have sneaked in he purchase of those tickets. In this connection the allegations in the complaint that the tickets were purchased for the complainant''s use have not been denied. In fact the letters which have been written from time-to-time refer to the allegation of the complainant that flights were irregular even when they were continuing and the complainant suffered loss because of sudden cancellation of flights. Those allegations stand admitted in the letter of the opposite parties. Therefore, the complainant is very much a consumer and the complaint was and is maintainable.

MR. Sharma then said that the sale and purchase of the tickets was a part of the contract as per mutual agreement, details of which were said to be included in Annexure B of the written statement. The said enclosure refers to letter of the complainant dated 23.5.1996, a paragraph whereof has been quoted, which is re-produced below: "You will please recall that in a meeting chaired by District Magistrate, Sonbhadra, where senior officials of various projects of this area participated, you had agreed to operate U.P. Airways flight via Muirpur on regular basis (three days a week) provided advance tickets as per commitment are purchased at least for three months. Accordingly, we had purchased tickets by making advance payment to your representative".

THE aforesaid extract does not in any way indicate any goodwill gesture. In fact the aforesaid extract of the complainant is right. THEy had purchased the tickets in bulk in advance. In view of the contents of the extract, the flights were to be contained and continuity of service was to be maintained so that availing of service through advance tickets was utilizable in time. The last argument raised on behalf of the opposite parties is that 350 tickets purchased were for the months of March and April. It is contended that those tickets were not usable in subsequent months. The argument is fallacious. The very letter of the opposite party indicates without doubt that the period of tickets was extendable and the actual discontinuation in the air service by the Airlines became effective from 7th May, 1996. Therefore, this argument also has no force.

It was rightly contended by Mr. Upadhyay that purchasing of the advance tickets called upon the opposite parties to continue the service for which they received consideration. The payment of the money by the complainant and sale of the advance tickets by the opposite parties are admitted facts. Opposite parties, therefore, were duty-bound to extend the service and since they voluntarily discontinued the flights, they have to refund the amount.

THE only question which now survives is what relief the complainant is entitled to. THE evidence produced by the complainant and the facts stated in the replies of the opposite party Nos. 2 to 4 could legitimately entitle the complainant to Rs. 6,63,060/-. Insofar as the allegation of purchase of 39 tickets worth Rs. 1,50,345/- and the balance eight tickets amounting to Rs. 16,040/- the evidence lacks to prove the user or non-user of those tickets. Only statement of allegation is to be found in the status report of the tickets which the complainant has annexed as Annexure 4 at page 17 of the paper book. THE refund due to alleged cancellations of regular flights, if any, must have been claimed same day or within a couple of days normally. Keeping pending such claims raises doubt about the bona fides of the allegations. It will be worthwhile to repeat that there is no evidence from complainant''s side otherwise than the aforesaid status report suggesting the intermittent flight amounts are refundable to the complainant. THE contents of one of the letters of opposite parties refers to the complainant''s aforesaid allegation. This according to Mr. Upadhyaya should be treated as an admission, which on the given facts, it certainly is not. THErefore, the amount of Rs. 1,50,345/- and Rs. 16,040/- are not to be refunded and the benefit of doubt must go to the opposite parties. In other words the complainant is entitled to Rs. 6,63,060/- only. Coming now to the question of payability of interest, Mr. V.P. Sharma has argued that no interest should be paid because corresponding action on the part of the complainant was lacking for which the flights had to be discontinued. Mr. Upadhyaya on the other hand stated that no part of the contract was left unfulfilled by the complainant. He went on purchasing tickets in advance and the action stopping of the flight was unilateral and arbitrary action of the Airlines. He has also relied upon the decisions which indicate that money is deposited by one in expectation of return of service which service in the instant case was denied because of subsequent conduct of the Airlines, thus the complainant is entitled for interest. The rate of interest applicable has posed another problem. Fortunately enough guidance is by now available through the decision of Hon''ble Supreme Court. Considering all the facts and circumstances of the instant case, interest at the rate of 6% from the date of deposit of the amount by the complainant with the Airlines till the date of its refund is hereby decreed. Since interest has been awarded and justifiable claim has been decreed, no further compensation is to be awarded to the complainant. Coming to the claim costs of the litigation, it is apparent that the complainant and opposite parties can well afford to litigate such matters and as such neither party needs to be paid costs and may bear the same. Complaint allowed.