M/S. DILAWARI EXPORTERS versus M/S. ALITALIA CARGO & ORS.

Citation: [2010] 4 S.C.R. 927 · Decided: 16-04-2010 · Supreme Court of India · Bench: D.K. JAIN · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

.;: .. 
[2010] 4 S.C.R. 927 
M/S. DIL~WARI EXPORTERS 
v. 
M/S. ALITALIA CARGO & OR$. 
(Civil Appeal No. 8699 of 2002) 
APRIL 16, 2016 
[D.K. JAIN AND T.S. THAKUR; JJ.) 
Contract Act, 1872 - ss. 186, 187, 188 and 237 - Agent's 
A 
B 
act - Whether binding on the Principal - Exporter/consigner C 
entering in contract of shipping consignment with shipper, who 
was an agent of carter - Complaint by consigner against the 
carter as well as shipper - Complaint dismissed by National 
Consumer Commission holding that there was no privity of 
contract between the consigner and the carter -
He~d: The o 
Principal is bQy,nd by the acts or obligation$ of the agent, if 
the agent has by 1his words or conduct induced third persons 
to believe that such acts were within scope of hi~ authority -
The onus to prove that the act of agent was within scope of 
his authority, is on the person claiming against the Principal · E 
- On facts, it is proved that shipper was the agent of the carter 
- Carter is bound by the acts of its agent i.e. shipper- Matter 
remitted to Commission to decide on merits - Evidence -
Onus to prove - Carriage Act, 1865 - s. 4;11 Schedule, rr. 
5,6, 10 and 11. 
F 
The appellant obtained an export order, it handed 
over the consignment to respondent No. 3 (Cargo 
clearing agent of respondent No. 1) for onward dispatch. 
For this, House Air Waybill! was prepared by respondent G 
No. 3. Simultaneously respondent No. 1 prepared Master 
Air Waybill. 
Since the consignment did not reach the destination 
927 
H 
928 
SUPREME COURT REPORTS 
[2010] 4 S.C.R. 
A 
by the stipulated date, the importer cancelled the order. 
The appellant filed complaint before National Co;isumer 
Dispute Redressal Commission alleging deficiency in 
service on the part of the respondents, in particular by 
respondent No.1. The Commission dismissed the 
B complaint on the preliminary ground that the appellant 
had no locus standi to file the complaint against 
respondent No. 1 as there was no privity of contract 
between the appellant and respondent No. 1. 
C 
Allowing the appeal and remitting the matter to 
National Consumer Dispute Redressal Commission, the 
Court 
HELD: 1. In the light of s. 4 of the Carriage Act 1865 
D and rr. 5, 6, 1 O and 11 of the Second Schedule to the Act, 
the Commission was right in saying that the "air waybill" 
is prima facie evidence of the conclusion of the contract; 
of the receipt of the cargo and of the conditions of 
carriage. However, the Commission has failed to examine 
E the question in regard to the capacity in which 
respondent No.3 was operating and had collected the 
cargo from the appellant for being shipped, i.e. the nature 
of relationship between respondent No.3 and respondent 
F 
No.1. [Paras 9 and 10) [938-E-G; 939-A-C] 
2. Section 186 of the Contract Act, 1872 lays down 
that the authority of an agent may be expressed or 
implied. As per Section 187 of the Contract Act, an 
authority is said to be express when it is given by words 
G spoken or written, and an authority is said to be implied 
when it is to be inferred from the circumstances of the 
case; and things spoken or written, or the ordinary 
course of dealing, which may be accounted 
H 
.DILAWARI EXPORTERS v. ALITALIA CARGO & ORS. 929 
circumstaoces of the case. Section 188 of the Contract A 
Act prescribes that an agent having an authority to do an 
act has authority to do every lawful thing which is 
necessary in order to do such act. Section 237 of the 
Contract Act provides that when an agent has, without 
authority, done acts or incurred obligations to third 
B 
persons on behalf of his principal, the principal is bound 
by such acts or obligations, if he has by his words or 
conduct induced such third persons to believe that such 
acts and obligations were within the scope of the agent's 
C 
authority. There is no gainsaying that onus to show that 
the act done by an agent was within the scope of his 
authority or ostensible authority held or exercised by him 
is on the person claiming against the principal. This, can 
be shown by practice as well as by a written instrument. · 0 
[Para 11] [939-D-G] 
3. Respondent No.3 had an express authority to 
receive the cargo for and on behalf of respondent No.1. 
This is manifest from the Master Air Waybill issued and 
E 
signed by respondent No.3 on the Air Waybill printed by 
respondent No.1. But for the said authority, respondent 
No.3 could not use the Air Waybill proforma printed by 

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