# M/S. DIL~WARI EXPORTERS v. M/S. ALITALIA CARGO & OR$

- **Citation:** [2010] 4 S.C.R. 927
- **Court:** Supreme Court of India
- **Decided:** 2010
- **Case number:** Civil Appeal No. 8699 of 2002
- **Bench:** D.K. Jain, T.S. Thakur
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-s-dil-wari-exporters-v-m-s-alitalia-cargo-or-26719
- **Pages:** 15

## Headnote

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 r

## Text

.;: ..
[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
respondent No.1. Though it is true that in the said Air
Waybill the name of the Shipper has been mentioned as
F
that of respondent No.3 but the said Air Waybill has also
been signed by respondent No.3 as the agent of the
carter - respondent No.1. The other relevant particulars
like, the name of the consignee, the number of the House
Air Waybill; etc. tally with the House Air Waybill issued by
G
respondent No.3 to the appellant clearly showing the
name of the consignor as that of the appellant. From the
said documents, it would, appear that respondent No.3
was, in fact, acting in dual capacity - one as a Shipper
H
930
SUPREME COURT REPORTS
[2010] 4 S.C.R.
A on behalf of the appellant and the other as an agent of
respondent No.1. That being so, respondent No.1 was
bound by the acts of their agent, viz. respondent No.3,
with all its results. While holding that there was no privity
of contract between the appellant and respondent No.1,
B this vital aspect of the matter escaped the attention of the
Commission thus, vitiating its order. [Para 13] (940-C-G]
c
D
E
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
8699 of 2002.
From the Judgment & Order dated 15.4.2002 of the
National Consumer Disputes Redressal Commission, New
Delhi in Original Petition No. 156 of 1995.
Arvind Kumar Gupta for the Appellant.
Sanjay Gupta, Nina Gupta, lshita Sehgal, Akshat Goel,
Bina Gupta for the Respondent.
The Judgment of the Court was delivered by
D.K. JAIN, J. 1. Challenge in this appeal under Section
23 of the Consumer Protection Act, 1 ~86 (for short "the Act")
is to the order dated 15th April, 2002 passed by the National
Consumer Disputes Redressal Commission (for short "the
F Commission") in Original Petition No. 156 of 1995. By the
impugned order, the Commission has dismissed appellant's
complaint alleging deficiency in service on the part of M/s
Alitalia Cargo, respondent No.1 in this appeal, on the ground
that there was no privity of contract between the appellant and
G respondent No.1. Respondent Nos. 2 and 3 in this appeal are
M/s Omni Marg Travels (Pvt.) Ltd., General Sales Agents and
M/s Fourways Movers (P) Ltd., Cargo Clearing Agents of
respondent No.1 respectively.
H
DILAWARI EXPORTERS v. ALITALIA CARGO & ORS. 931
[D.K. JAIN, J.]
2. The salient facts giving rise to the present appeal are A
as follows:
The appellant is engaged in the business of export of
readymade garment$ and handicrafts. They obtained an order
from one M/s 0.0. Sales, a concern based in New York, USA B
for supply of 2050 pairs of Cotton Gents Dhotis, 150 sets of .
Cotton Ladies Ghagra-Choli, 150 pieces of Dupatas, etc. As
per the agreement between the appellant and the said concern
of New York, USA, these artides had to reach New York, USA
before 10th of October, 1994. Accorμingly, the appellant C
handed over the consignment of the said. articles to respondent
No.3 - M/s Fourways Movers (P) Ltd. on 4th October, 1994 for
. onward dispatch to New York, for which a House Air Waybill
No. FMPL 0841 was prepared by respondent No.3. For the
sake of ready reference, the said Bill is reproduced hereunder: D
"Shippers Name and Address:
Mis. DILWARI EXPORTERS Not Negotiable
HAWB
NO.
1-8 JANGPURA-8,
FMPL
0841
MATHURA ROAD,
E
NEW DELHl-14 INDIA
HOUSE ·AIR WAYBILL
FOURWAYS MOVERS PVT. LTD.
3916-7A, COMMUNITY CENTRE
EAST OF KAILASH,
NEW DELHl-110065
F
Consignee's Name and Address
MIS D.D. Sales, 110-53
62ND DRIVE, FOREST HILLS N.Y.
11375, U.S.A.
G
Issuing Carter's Agent (Name and City)
FOURWAYS MOVERS P. LTD.
Accounting Information
NEW DELHI
"FREIGHT : PREPAID"
H
932
SUPREME COURT REPORTS
[2010) 4 S.C.R.
A
Agent's IAT A CODE
14-3-3775
Airport of Departure (Addr. Of first Carter) MASTER AWB NO.
NEW DELHI I AZ
055 - 2342 9276
B
By First Carter
Routing & Destination
NYC
p;z
Airport of Destination
Currency
Declared Value Declared
for Customs
Value for
c
Customs
NEW YORK
INR
NVD
US$29441. 70
Amount of Insurance
Rs.1012706-00
The landing information
NOTIFY: SAME AS ABOVE. PLS. INFORM CONSIGNEE
D
IMMEDIATELY ON ARRIVAL OF SHIPMENT AT DESTINATION.
E
F
G
H
TEL. NO. (718)- 896-0575. ORIGINAL VISA (3 SETS) COPY OF
INVOICE (3 SET) PACKING LIST (3 SET), ALL INDIA
HANDICRAFT BOARD CERTIFICATE AND DECLARATION TO
ACCOMPANY WITH THE SHIPMENT.
Carter
CommOdity Chargeable Ratel
Total
Nature and Quantity
Weight
Item No.
Weight
Charge
of Goods {Incl.
POWERLOOM COTTON
GENTS DHOTIES & INDIA
ITEM GARMENTS HAND/
EMDI PRINTED/ ZARI/
APPLIQUE/
BEAD/
MIRROR
WORK {PIL COTTON
LADIES CHOU GHAGRA
SET & DUPTATTAS)
AS PER INV. NO.
DE/EXP/358194-95
Dt. 28-9-94 RBI : DD :
008597
48
1360-0K
1360-0K
85.00
115600-00
IEC:NC:05880 0952
Prepaid
Weight
Collect
Other Charges
Charge
215600-00
AWB: 60-00 HAWB: 150-00 SB: 175-00
CTG: 500-00 APT: 545-00
INS: 2886-00
DILAWARI EXPORTERS v. ALITALIA CARGO & ORS. 933
[D.K. JAIN, J.]
Total other charges Due Agent
1230-00
Total other Charges Due Carter
2886-00
FOURWAYS MOVERS PVT. LTD., NEW DELHI
Total' prepaid
119716-00
4/10/94
NEW DELHI
INDIA v.k.
Signature of Issuing Carter or its Agent
055 - 2342 9276
ORIGINAL 3 (FOR SHIPPER)"
Simultaneously, a Master Air Waybill on a numbered (055 -
2342 9276) proforma printed by "ALIT ALIA" - respondent No.1
was prepared. The said Air Waybill, containing relevant
particulars, is also reproduced. herein below:
"DEK 2342 9276
Shippers Name and Address:
Mis. FOURWAYS MOVERS P. LTD.
39/6, 7-A COMMUNITY CENTRE,
EAST OF KAILASH,
NEW DELHl/INDIA
Consignee's Name and Address
MIS D.D. Sales, 11053
62ND DRIVE, FOREST HILLS N.Y.
11375, U.S.A.
Not Negotiable
Air Way Bill
Issued by
Alltalia S.p.A.
055- 2342 9276
ALITALIA
Issuing Carter's Agent (Name and City)
FOURWAYS MOVERS P. LTD.
Accounting Information
NEW DELHI
Agent's IATA CODE
14-3-3775
Account No.
73279
"FREIGHT : PREPAID"
Airport of Departure (Addr. Of first Carter) and requested Routing
NEW DELHI I AZ.
By First Carter
Routing & Destination
NYC
AZ
A
B
c
D
E
F
G
H
934
SUPREME COURT REPORTS
[2010] 4 S.C.R.
A Airport of Destination
Currency
Declared Value for
Declared Value for
Customs
Customs
NEW YORK
NVD
Amount of Insurance
Rs.1503101-00
US$ 43698.60
B
The landing information
NOTIFY: SAME AS ABOVE. PLS. INFORM CONSIGNEE IMMEDIATELY ON ARRIVAL OF
SHIPMENT AT DESTINATION. TEL. NO. (718)-896-0575. ONE ENV. CONTG. DOCS ATID.
ORIGINAL VISA (3 SETS) COPY OF INVOICE (3 SET), PACKING LIST, MALL INDIA
HANDICRAFT BOARD CERTIFICATE AND DECLARATION TO ACCOMPANY WITH THE
SHIPP.ENT
C Carter
Commodity Chargeable
Rate/
Total
Weight Item No.
Weight
Charge
Nature and Quantity of
Goods (Incl.
POWERLOOM COTTON
GENTS DHOTIES & INDIA
D
48
1993-0KQ
1993-0K
85.00
ITEM GARMENTS
169405-00 GRl:AG:493861
493995, 493896
HAWS NO: 0841, 0842
Prepaid
Weight
Collect
Other Charges
Charge
E
169405-oo
AWB: 60-00 HAWB: 300-00 SB: 250-00
CTG: 500-00 APT: 800-00 INS:4284-00
INS: 2886-00
Total other charges Due Agent
2010-00
Total other Charges Due Carter
4284-00
F
FOURWAYS MOVERS
G
H
4/10/94
NEW DELHI
INDIAv.k.
Signature of lssui ng Carter or its Agent
055 - 2342 9276
ORIGINAL 3 (FOR SHIPPER)"
On 6th October, 1994, a carting order was prepared by
"ALITALIA AIRLINES" handing over the consignment to AAI,
Cargo Terminal (NITC), IGI Airport, New Delhi-110037 for
shipment by Flight AZ-1905. The carting order bore the
DILAWARI EXPORTERS v. ALITALIA CARGO & ORS. 935
[D.K. JAIN, J.]
are ad idem that the said House Air Waybill as also the Master
A
Air Waybill were issued under the seal and signatures of Mis
Fourways Movers (P) Ltd - rpspondent No.3. It is pertinent to
note at this juncture itself that House Air Waybill No'.0841 had
the Master Air Waybill ·No.055 - 2342 9276, the running Bill
number printed on ALITALIA's printed bill book. Similarly, the
8
House Air Waybill No.0841 was recorded on the Master Air
Waybill.
3. Since the consignment did not reach New York by the c
stipulated date, Mis. D.D. Sales, the importer, cancelled the
order on or around 16th October, 1994 and claimed damages
from the appellant. The consignment reached the destination
only on 20th October, 1994.
4. Alleging deficiency in service on the part of the
respondents, in particular by respondent No.1, the appellant
filed a complaint before the Commission claiming Rs.22.46
lakhs towards the value of the consignment along with interest
D
at the rate of 18% per annum thereon and Rs.15 lakhs as
E
special damages.
5. The complaint was contested by respondent No.1,
repudiating the claim mad.e by the appellant. In the counter
F
affidavit filed by respondent No.1, while denying any negligence
on their part resulting in deficiency in service, by way of a
preliminary objection, it was pleaded that there was no privity
of contract between them and the appellant and, therefore, the
complaint was liable to be dismissed on that short ground. The
G
stand of respondent No.1 before the Commission was that the
Air Waybill No.055 2342 9276 dated 4th October 1994, which
was issued by respondent No.3 "on behalf of respondent No.1"
did not mention the flight number and the date in the column
H
936
SUPREME COURT REPORTS
[2010] 4 S.C.R.
A
provided for the same, since airlifting of cargo was always
subject to load/space. It was reiterated that House Air Waybill
No.0842 dated 4th October 1994 was neither issued by
respondent No.1 nor on its behalf. Both the parties led evidence
before the Commission by way of affidavits. Upon consideration
B
of the evidence on record, the Commission dismissed the
complaint on.the afore-stated ground, namely, the appellant had
no locus standi to file the plaint against respondent No.1. While
holding so, the Commission observed thus:
c
D
E
F
G
H
"It is not disputed by the parties that Air Waybill (sic) alone
is a contract between the parties. Firstly we see that part
Ill Chapter II of Schedule II of the Act does not even
remotely refer to any other·document except Air Waybill
(sic). We find that on the Air Waybill (sic) which happens
to be prima facie evidence of conclusion of contract of the
receipt of Cargo and the conditions of Carriage, the name
of the Shipper is shown as Fourway Movers Pvt. Ltd., O.P.
No. 3, and not that of the Complainant nor is there any
evidence/indication of any such capacity of the
Respondent No.3 on the Air Waybill (sic). Therefore, it will
not be possible to reach in the Air Waybill (sic) what is not
set out or indicated therein. It is for this reason that we tend
to agree with Respondent No.1 and accept its plea that
the complainant has no locus-standi to file the present
complaint against Respondent No.1, the Airline. Things
would have been different if at the time of booking the
cargo the Respondent No.3 had issued a communication
to Respondent No.1 that it was acting as agent of the
complainant."
The Commission, thus, declined to go into the merits of
DILAWARI EXPORTERS v. ALITALIA CARGO & ORS. 937
[D.K. JAIN, J.]
the complaint though it did observe that there was a lot that
A
could be said on merits of appellant's case.
6. Being aggrieved, the appellant - claimant is before us
in this appeal.
B
7. Mr. Arvind Kumar <;7upta, learned counsel appearing on
behalf of the appellant, submitted that the Commission
committed a serious error of law and on facts in dismissing the
complaint on the sole ground that the appellant had failed to c
prove any privity of contract between them and the carrier i.e.
respondent No.1. According to the learned counsel, it is clear
from the House Air Waybill as also the Master Air Waybill No.
055 2342 9276, that both the bills were prepared·
contemporaneously by r~spondent No.3 as respondent No.1 -
D
carter's agent when the consignment was handed over to them,
and since the House Air Waybill records the appellant as the
Shipper and respondent No.3 as the Issuing Carter's Agent,
the mention of respondent No.3 as the Shipper as well as the
Issuing Carter's Agent in the Master Air Waybill is of no
E
consequence. It was strenuously urged that from the said Air
Waybills, it is clear that respondent No.3 was acting as an
agent of respondent No.1 and, therefore, the said respondent,
as principal, was bound by all the acts of omission and
commission of his agent. It was asserted that the Commission
failed to apply its mind on t.his aspect of the matter and,
therefore, erred in holding that there was no privity of contract
between the appellant and respondent No.1.
8. Mr. Sanjay Gupta, learned counsel appearing on behalf
of respondent No.1, on the other hand, supported the decision
of the Commission and submitted that since the Master Air
Waybill is the only contract of carriage between the Consignor
F
G
H
938
SUPREME COURT REPORTS
[2010] 4 S.C.R.
A and the Carter and in the said Bill, respondent No.3 having
been nG.1!1ed as the Shipper and Mis D.D. Sales of New York
as the consignee, respondent No.1 had no liability towards the
appellant, notwithstanding the fact that the appellant had been
named as the Shipper in House Air Waybill No. 0841. It was
B submitted that since as per Part Ill of Chapter II of the Second
Schedule to the Carriage by Air Act, 1972 (for short "the
Carriage Act"), it is the consignor who is required to make out
the Air Waybill and handover the same to the carrier, it was the
C responsibility of the consignor to see that all the particulars and
details of the cargo inserted in the Air Waybill are correct. It
was thus, argued that respondent No.1 not being a party to the
contract of carriage vis-a-vis the appellant, the said respondent
cannot be held to be liable for any delay in delivery of the
0 consignment in question.
9. There is no quarrel with the proposition that as per
Section 4 of the Carriage Act. Rules contained in the Second
Schedule govern the rights and liabilities of carriers,
E consignors, consignees, etc. Rules contained in the Second
Schedule apply to all international carriage ot persons,
baggage or cargo performed by aircraft for reward. Chapter II
of the said Schedule enumerates the documents of carriage.
Rule 5 of Part Ill of the said Chapter stipulates that every carrier
F of cargo has the right to require the consignor to make out and
hand over to him a document called as "air waybill"; every
consignor has the right to require the carrier to accept this
document. Rule 6 provides that the air waybill shall be made
out by the consignor in three original parts and be handed over
G with the cargo in the manner prescribed therein. Rule 1 O makes
the consignor responsible for the correctness of the particulars
and statements relating to the cargo which he inserts in the air
waybill. As per Rule 11, the air waybill is prima facie evidence
H of the conclusion of the contract, of the receipt of the cargo and
DILAWARI EXPORTERS v. ALITALIA CARGO & ORS. 939
.
[D.K. JAIN, J.]
of the conditions of carriage. In the light of these provisions, we
A
agree with the Commission 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.
10. However, the question which, in our view, the
Commission has failed to examine is in regard to the capacity
B
in which respondent No.3 was operating and had collected the
cargo from the appellant for being shipped to New York. In other
words, what was the nature of r~lationship between respondent
C
No.3 and respondent No.1?
11. Section 186 of the Indian Contract Act. 1872 (for short
"the Contract Act") lays down that the authority of an agent may
be expressed or implied. As per Section 187 of the Contract
D
Act, an authority is said to be express when it is given by words
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 circumstances of the case. Section 188 of
E
the Contract 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 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
F
of the agent's authority. There is no gainsaying that orus to
G
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, of course, can
be shown by practice as well as by a written instrument.
H
940
SUPREME COURT REPORTS
[2010) 4 S.C.R.
A
12. Thus, the questior:l·for consideration is whether on the
evidence obtaining in
1the instant case, can it be said that
respondent No.3 had an express or implied authority to act on
behalf of respondent No.1 as their agent~ If respondent No.3
had such an authority, then obviously respondent No.1 was
B bound by the commitment respondent No.3 had made to the
appellant.
13. Having examined the question in the light of the two
C afore-extracted "air waybills", which, according to both the
contesting parties, are determinative of terms and conditions
of contract between them, we are of the opinion that 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
D Waybill No.055 - 2342 9276 issued and 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 respondent No.1. Though it is true that in
the said Air Waybill the name. of the Shipper has been
E mentioned as that of respondent No.3 but the said Air Waybill
has also been signed by respondent No.3 as the agent of the
carter - respondent No.1. The other relevant particulars like,
the name of the consignee, the number of the House Air Waybill
·(0841 ), etc. tally with the House Air Waybill issued by
F respondent No.3 to the appellant clearly showing the name of
the consignor as that of the appellant. From the said documents,
it would, appear that respondent No.3 was, in fact, acting in
dual capacity - one as a Shipper on behalf of the appellant and
the other as an agent of respondent No.1. That being so,
G respondent No.1 was bound by the acts of their agent, viz.
respondent No.3, with all its results. We are of the opinion that
while holding that there was no privity of contract between the
appellant and respondent No.1 this vital aspect of the matter
H
DILAWARI EXPORTERS v. ALITALIA CARGO & ORS. 941
[D.K. JAIN, J.]
escaped the attention of the Commission thus, vitiating its A
order.
14. In view of the afore-going discussion, we have no
option but to allow the appeal and set aside the impugned order.
We order accordingly and remit the matter back to the
B
Commission for fresh adjudication of the claim preferred by the
appellant on merits. However, in the facts and circumstances
of the case, there will be no order as to costs.
K.K.T.
Appeal allowed.
C