The Carriage by Air Act 1972, expressly excludes the applicability of the Limitation Act,1963: Supreme Court

Law Centrum

30 Jul 2022

The Supreme Court has dismissed the judgment of the High Court of Judicature at Bombay in WP No. 6647 of 2014 and held that “Rule 30 of the Carriage by Air Act 1972, expressly excludes the applicability of the Limitation Act,1963”

Brief Facts

The appellant operates import and export business as a sole proprietorship. On January 4, 2010, the appellant used British Airways to ship a consignment of fruits and vegetables from Mumbai to Canada through London. However, on January 6, 2010, the aircraft to Canada was unable to take off because of terrible weather in London; as a result, the fruits and vegetables suffered damage and ultimately perished. The Appellant filed a claim with the Respondent for ₹1,70,221.56. The Appellant yet again transported a comparable consignment of fruits and vegetables from Mumbai to Canada on June 30, 2010. Yet again, packaging and other problems prevented the shipment from being shipped, so it had to be trashed. The appellant made a claim for ₹ 4,27,922 on July 20, 2010. On February 11, 2010, the Respondent submitted a letter acknowledging receipt of the notice and making a settlement offer equal to 50% of the claim amount. On September 15, 2012, the Appellant filed an OS No. 5164/2012 lawsuit with the City Civil Court of Mumbai to collect the sum of ₹ 9,17,642.56 plus interest at the rate of 21% per year. The Respondent submitted written declarations in which, it claimed that the lawsuit was time-barred.

Issues for consideration

The following issues arise for consideration:

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

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

Judgment

The Supreme court in this case has referred some leading judgments on the issue from the jurisdictions of the United Kingdom, United States of America and Australia which examined Article 29 of the Warsaw Convention. From comparative analysis of various jurisdictions, the supreme court observed that local limitation law will not apply in view of Article 29(1) of the Warsaw Convention. So far as India is concerned Supreme Court found that there is no direct decision of this Court on the Air Act, 1972. The closest decision of this Court under the Indian Carriage of Goods by Sea Act, 1925, which fell for interpretation in East and West Steamship Co. v. S.K. Ramalingam Chettiar (AIR 1960 SC 1058), where this Court had observed that “Rules of limitation are likely to vary from country to country. Provisions for extension of periods prescribed for limitation would similarly vary. We should be slow therefore to put on the word “discharged from liability” an interpretation which would produce results varying in different countries and thus keeping the position uncertain for both the shipper and the shipowner…It is hardly necessary to add that once the liability is extinguished under this clause there is no scope of acknowledgment of liability thereafter.”

The Supreme court has also referred to various high court decisions of India on Rule 30, Second Schedule. 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.

While dealing with Issue No.1, the court 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 the court 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.

Stating Rule 30, as the fulcrum of the case, the court while dealing with the Issue No.2 opined that 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. Thus, “Rule 30 of the Carriage by Air Act 1972, expressly excludes the applicability of the Limitation Act,1963.”.

Note:

Rule 29 Schedule I (Article 29 of the Warsaw Convention, 1929)

“The right of damages shall be extinguished if an action is not brought within two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped”.

Rule 30 Schedule II

“30. (1) The right to damages shall be extinguished if an action is not brought within two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped. (2) The method of calculating the period of limitation shall be determined by the law of the Court seized of the case.”