Case Study: Consumer can’t claim compensation if the “Necessary Parties” are not included in the Consumer Court Case

Case Study: Consumer can’t claim compensation if the “Necessary Parties” are not included in the Consumer Court Case

Before filing their case at the consumer court, consumers should get the facts very clear and include all necessary/proper parties in the complaint to avoid dismissal of the same. Non-inclusion of necessary/proper parties can turn out be grounds for dismissal of the complaint even if all others facts are proven. It is absolutely necessary for a complainant to implead any party that is responsible for the cause of action.

You May Be Deprived of Any Relief for Non-Inclusion of Necessary Parties

A necessary party is a person in whose absence no effective decree can be passed by the court. If a necessary party is not impleaded, the suit itself is liable to be dismissed. The National Commission in the matter of Jet Airways (India) Limited versus Ethelwad O. Mendes (First Appeal No. 432 of 2012), vide its order dated 12.02.2018, allowed the appeal against the order of the State Commission filed by the respondent/complainant at the State Commission under Complaint No. 06/2010 against the appellant/ opposite party Jet Airways (India) Limited.

Let’s retrace the case.

The respondent/complainant had purchased air tickets from an agent, M/s Trade Wings Limited, for himself and his family (four persons) to travel to Toronto, Canada, from Mumbai via London-Heathrow. The tickets were for a Jet Airways flight, having arrangements for code-sharing with Air Canada. The journeys were to be happen between 10.05.2008 and 15.06.2008. On reaching Toronto by Air Canada, the said family discovered that their baggage had not yet arrived. This caused much inconvenience and they also had to incur costs in purchasing toiletries, etc.

The airline agreed to give them a mere US$ 100 and that too would be handed over only at the address in India. The respondent/complainant alleged that during the three days it took for the baggage to be delivered to them, they were unable to go anywhere and enjoy their holidays because they did not have any change of clothes. On the return journey on 31.05.2008, as stated by the respondent/complainant, the Air Canada flight was to depart at 0800 hours from Toronto for London. They were given boarding passes without seat numbers at Toronto Airport. When they reached the embarkment gate after going through the security checks, they were told that the said flight of Air Canada was overbooked and they could not be accommodated in the same. They were made to travel by a Lufthansa flight to Heathrow, London, via Frankfurt on the next date, 01.06.2008, and that too in the evening at 18:00 hours. They were given some vouchers for refreshments, etc., but the same was found to be inadequate. As the flight was changed, they could not reach London according to schedule, disturbing the arrangements made for pick-up. They had to hire two taxis to reach Nottingham. In addition, when their flight reached Heathrow Airport at London, they found that two pieces of their luggage had not arrived. The said luggage was delivered to them at Nottingham after a delay of 36 hours, causing great harassment/inconvenience to them.

On reaching India, the respondent/complainant filed a complaint before the State Commission against Jet Airways, from whom the air ticket had been purchased. The appellant/opposite party stated that the complaint was barred by limitation under Section 24A of Consumer Protection Act, 1986. The complainant was debarred under Section 30 (1) of Chapter III, Liability of the Carrier, IInd Schedule of Carriage, by Air Act, 1972, to make any claim for damages after two years from the date of travel. The State Commission, by its order dated 14.06.2012, allowed the complaint partly. The respondent/complainant was held entitled to a sum of 635.47 Canadian dollars (to be paid in equivalent Indian rupees as on the date of payment), as well as Rs 3,000 by way of pecuniary losses and Rs 2 lakh by way of non-pecuniary losses, in terms of Section (14) (1) (d) of Consumer Protection Act, 1986. The respondent/complainant was also held entitled to a sum of Rs 5,000 by way of cost of the complaint. The State Commission further directed that the amount shall be paid to the respondent/complainant within a period of four weeks and in case it was not paid, the same shall carry interest at the rate of 7% until it was paid. Aggrieved by the order of the State Commission, Jet Airways (India) Limited filed an appeal before the National Consumer Disputes Redressal Commission (NCDRC).

The main issue to consider before the National Commission was this: whether under the code sharing arrangement Jet Airways could be held accountable for any deficiency in service on the part of the participating airlines, which in this case were Air Canada and Lufthansa. In this regard, the National Commission referred to a document titled ‘Worldwide Slot Guidelines’, 8th Edition, English Version, effective from 1 January 2017, published by the International Air Transport Association (IATA). In clause 8.14, titled ‘Shared Operations’, this is stated: ‘The operating airline is responsible for all usage and performance requirements.’ From the above provision, an impression was gathered that the operating airlines – Air Canada and Lufthansa – where the alleged deficiency in service took place were responsible for the usage and performance requirements. In any case, for taking a just decision with regard to the consumer complaint at hand, it was absolutely necessary that the versions of the operating airlines should be on record, so that a rational assessment about their deficiency in service, if any, could be made.

So it was that the National Commission held that Air Canada and Lufthansa were necessary parties in the case and it was necessary to obtain their versions before taking any decision. The consumer complaint in its present form was dismissed. At the same time, liberty was given to the respondent/complainant to file a fresh complaint, if he desired to do so, by impleading the other airlines as necessary parties. There was no order as to costs. Had the complainant known, it would have been easy for him to implead Air Canada and Lufthansa as opposite parties in the original complaint. Of course he still has the option to file a fresh case but that will take considerable time and it may turn out to be an indefinite wait for a verdict.

In its order dated 02.02.2018 (WP [0C] 12006/2015 & CM No. 31848/2015 WP [C] 12006/2015 & CM No. 31848/2015), the High Court of Delhi has confirmed that the Civil Aviation Rules provide an immediate relief as compensation to domestic passengers who are denied boarding. DGCA 2010 Rules does not put a cap on the compensation that can be demanded from the airline in cases of overbooking. A passenger has full right to approach civil and consumer courts for relief. Domestic as well as international airlines are responsible for deficiency in service and can be sued in Indian consumer courts.

Earlier, in the case of Air France versus O.P. Srivastava & Others (First Appeal No. 310 of 2008), NCDRC held that not permitting a passenger holding a confirmed ticket to board a flight amounted to deficiency in service on the part of the airline. It directed the premier French national carrier to pay a compensation of Rs 400,000 each to three officials of the Sahara Group on the grounds of causing them inconvenience and harassment by denying boarding on a Paris–Delhi flight in 2002.

Not Allowed to Board a Flight? The airline could be at fault

Not Allowed to Board a Flight? The airline could be at fault

In the recent case of Air France versus OP Srivastava & Others (First Appeal No. 310 OF 2008), the National Consumer Disputes Redressal Commission (NCDRC) held that not permitting a passenger holding a confirmed ticket to board a flight amounted to deficiency in service on the part of the airline. Let’s follow the details of the case to understand what to do when it happens and what airline compensation to expect, in addition to what legal options are available to aggrieved passengers.

On 05.11.2002, the complainants, who held senior management positions in the Sahara Group of Companies, had booked their ‘H’ Class confirmed air tickets with Air France through their agent, for travelling to Paris to attend a business meeting. As per their travel itinerary, their departure from Delhi to Paris was on 06.11.2002 and return was on 09.11.2002. Due to change in the schedule of the meeting, at Paris, on 08.11.2002 they requested for change of date of return journey from 09.11.2002 to 10.11.2002. The complainants were issued three ‘K’ Class confirmed tickets from Air France at Delhi, and for this change they were required to pay a differential amount of Rs 10,270 per person.

As it happened, on 10.11.2002 they were not allowed to board Flight No. AF-148 at Charles De’ Gaulle Airport at Paris due to overbooking. The complainants said that they were subjected to humiliation and embarrassment by the staff of Air France. Their tickets were also not endorsed to travel by Air India Flight No. AI-146, departing on the same day. According to the complainants, a valuable 24 hours were lost. They being commercially important persons, (CIP), their every minute was precious for the company; and in their absence, the schedule of meetings got disturbed, resulting in a monetary loss of Rs 5,000,000 to the company as consequential business loss.

Accordingly, the complainants filed a consumer case before the Uttar Pradesh State Commission, praying for direction to Air France to return to them the excess amount charged on tickets with 24 per cent compound interest and a compensation of Rs 5,000,000 for the losses suffered by the company and mental agony undergone by them. Air France, on its part, claimed that as per the accepted practice the passengers were given 300 euros each (equivalent to approximately Rs 53,600) besides free accommodation at a hotel with meals, two telephone vouchers and nine telephone cards for denying boarding. After availing these facilities, the complainants had filed the complaint in order to take undue advantage of the situation.

The UP State Commission allowed the complaint and directed Air France to pay to each of the three complainants a sum of Rs 630,000, totalling 1,890,000, with simple interest @10% p.a., within a period of one month from the date of the order, with a default stipulation of enhanced interest @15% p.a. on the said amount if the same was not paid within the stipulated period. Aggrieved with the said order, the Opposite Party filed an appeal in National Commission.

Air France stated in their appeal before NCDRC that denied boarding is an accepted practice internationally and nationally, and for the same the complainants were sufficiently compensated by being provided with free accommodation and other facilities. The airlines further alleged that the complainants were trying to take “undue advantage of the situation”.

Dismissing the contention of Air France, the National Commission said that the practice of overbooking may be a commercially viable international practice being adopted by all the airlines, probably to ensure that seats in the flights do not go vacant in the event of no-shows by booked passenger(s), but the same cannot be at the altar of the passengers. Not permitting a passenger holding confirmed ticket to board a flight amounted to deficiency of service on the part of the airline, a bench headed by NCDRC President Justice DK Jain said.

The National Commission also said that if a freehand practice of overbooking was approved, it could cause havoc against the interest of the ticketholders as the airlines might invoke the malpractice of overbooking indiscriminately and beyond reasonable dimensions. Instead of taking recourse to this sort of policy, the airlines must impose stringent conditions for the eventuality of cancellation of tickets. To be specific, the airlines may lay down a condition that in the case of a long journey like the one at hand, if a passenger does not report for boarding up to a certain time before departure, his ticket would be cancelled or refund would be permissible to a minimal extent. Refunding of money equivalent to the entire price of the ticket or with minor deductions to a passenger under contemplation of earning profit by overbooking of the tickets to a large number of passengers would create instability, indiscipline and unfair trade practice, the National Commission said.

The NCDRC held that not permitting a passenger holding a confirmed ticket to board a flight amounted to deficiency of service on the part of the airline. The National Commission upheld UP State Commission’s decision, barring the quantum of compensation, and directed the premier French national carrier to pay a compensation of Rs 400,000 each to the three officials of Sahara Group for causing inconvenience and harassment to them by denying boarding on the Paris–Delhi flight in 2002.

Cause of Action

Another hotly contested issue raised by Air France was that the UP State Commission had not proper territorial jurisdiction to entertain the complaint. The NCDRC observed that the cause of action, wholly or in part, arose at Kanpur.

The NCDRC relied on the Supreme Court case Kandimalla Raghavaiah & Co. versus National Insurance Co. Ltd. (2009) 7 SCC 768), where the expression ‘cause of action’ was defined. It was said by the Supreme Court that it is a bundle of essential facts necessary for the plaintiff to prove and obtain a decree but does not comprise evidence necessary to prove such facts. Failure to prove such facts would give the defendant a right to judgement in his favour. Cause of action thus gives occasion for, and forms, the foundation of the suit. The question of territorial jurisdiction must be decided on the facts pleaded in the petition. National Commission relied on another Supreme Court case, Alchemist Ltd. & Anr. versus State Bank of Sikkim and Ors. (2007) 11 SCC 335, where it was said that even if a small fraction of the cause of action arises within the jurisdiction of the court, the court would have territorial jurisdiction to entertain the suit/petition. Nevertheless, it must be a part of cause of action, nothing less than that.

After observing the aforesaid judgements, the National Commission agreed with the State Commission finding that a part of the cause of action did arise at Kanpur when the tickets were purchased and, hence, it was vested with territorial jurisdiction to entertain and deal with the complaint. The air tickets were purchased through an agent of Air France based at Kanpur who, on receipt of the consideration towards the cost of the tickets, had created PNR through Amadeus (host system of Air France). Thus, UP State Commission had proper territorial jurisdiction to entertain the matter.

Consumer Voice’s advice to consumers

Passengers aggrieved by the action of an airline denying boarding can approach consumer as well as civil courts to claim damages, in addition to minimum damages prescribed under the DGCA regulations. A passenger who holds a confirmed ticket has full right to board the flight and that should not be denied by the airline. In case of overbooking where a passenger is denied boarding, he/she should get compensation from the airline.

Recently, vide order dated 02.02.2018 (W.P.(C) 12006/2015 & C.M. No. 31848/2015W.P.(C) 12006/2015 & C.M. No. 31848/2015), the High Court of Delhi clarified the compensation and refund procedure in case the passenger is denied boarding even after having a confirmed ticket. The Delhi High Court also said that airlines must pay for denying seats to those with confirmed tickets. A passenger has the right to seek compensation in case of denial to fly due to overbooking, over and above its rules that provide slab-wise refund. DGCA 2010 rules do not put a cap on the compensation that can be demanded from the airline in case of overbooking and a passenger has full right to approach civil and consumer courts for relief.

The union aviation ministry has recommended increasing compensation to up to Rs 20,000 per flyer for deficiencies in airline services such as flight delays and cancellations. The ministry will soon put up the draft for public comments. The airlines are against these suggestions on the ground that domestic airfares in India are among the lowest. The Federation of Indian Airlines has also opposed it, saying that the existing rules and compensation levels already safeguard passenger interests in a fair and adequate manner, and increasing the compensation levels will only result in an increase in costs for airlines.

Consumer Voice supports the recommendation made by the aviation ministry to increase the level of compensation.

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Consumers can approach civil and consumer courts too for compensation in case denied boarding: DGCA

Consumers can approach civil and consumer courts too for compensation in case denied boarding: DGCA

The Delhi High Court has confirmed that the Civil Aviation Rules provide an immediate relief as compensation to passengers who are denied boarding. This does not mean that there is a cap on compensation payable and passenger can sue for deficiency in service as well. In its order dated 02.02.2018, the High Court of Delhi clarified the compensation and refund procedure in case the passenger is denied boarding even after confirmed ticket. It also said that airlines must pay for denying seats to those with confirmed tickets.

In 2015, the petitioner had booked his tickets to travel from Delhi to Patna on 12.12.2015 and was due to return on 13.12.2015. He accordingly booked tickets with Air India well in advance on 28.10.2015. The petitioner averred that he reached the airport on time on 12.12.2015 but was denied boarding by Air India on account of overbooking of flights.

The petitioner stated that paragraph 3.2 of Civil Aviation Requirement (herein referred to as CAR) dated 06.08.2010 permitted overbooking of flight, which according to the petitioner cannot be permitted. Paragraph 3.2 provides for airlines to ask for volunteers to give up their seats so as to make seats available for other booked passengers to travel on the flight, in exchange of such benefits/facilities as the airlines, at its own discretion, may wish to offer, provided airports concerned have dedicated check-in facilities/gate areas that make it practical for the airlines to do so. If the boarding is denied to passengers against their will, the airlines shall as soon as practicable compensate them in addition to refund of air ticket. Under the provisions of the CAR, airlines shall be liable to pay compensation to passengers who are denied boarding. However, in order to minimise No Shows, the airlines are allowed to levy appropriate No Show penalties in relation to the fare to be deducted from the fare paid by the passenger.

A plain reading of paragraph 3.2 of CAR indicates that the Director General of Civil Aviation (DGCA) has recognised that certain airlines follow the practice of overbooking flights; however, the same cannot be read to mean that the DGCA has permitted the airlines to do so, and it certainly cannot mean that such practice has the sanction of law as stated by the counsel appearing for DGCA.

The petitioner also contended that the compensation payable to the passengers, who were denied boarding despite holding confirmed bookings, had been restricted by the CAR. He further contended that the DGCA had no power to issue directions restricting the compensation payable to such passengers. He further submitted that the amount of compensation mentioned in CAR indicated only the immediate relief that the airlines were required to provide to the passengers who had been denied boarding. The counsel of Air India also submitted that not permitting the passenger holding confirmed tickets to board a flight would amount to deficiency in service and passenger would have the right to seek compensation/ damages for such deficiency of service.

Thus, DGCA and national carrier Air India told the Delhi High Court that a passenger had the right to seek compensation in case of denial to fly due to overbooking, over and above its rules that provided slab-wise refund. It was added by DGCA that its 2010 rules did not put a cap on the compensation that could be demanded from the airlines in cases of overbooking and a passenger had full right to approach civil and consumer courts for relief.