First Appeal No.2314 of 2006,IN Consumer Complaint No.110 of 2003

29th November, 2007

Petitioner Counsel: Mr. PANKAJ SAWANT,Mr. V. N. KULKARNI
Respondent Counsel: Mr. P. V. BHAGAT

Cases Cited:
Dr. Arun Jain Vs. Thai Airways International Ltd., 1986-2002 Consumer 6515 (NS) [Para 5]
Rajinder Pal Jaura (NRI) Vs. Secretary, Union of India, I(2003) CPJ 24 (NC) [Para 5]
Proxima Steel Foge Ltd. Vs. Air India Ltd., IV(2005) CPJ 181 (NC) [Para 5]

JUDGMENT

B. B. VAGYANI, President:- This appeal filed by Jet Airways (India) Pvt. Ltd. is directed against the order dated 28/9/06 passed by South Mumbai District Consumer Forum.

2. We heard Mr. Pankaj Sawant-Advocate @ Mr. V. N. Kulkarni-Advocate for the appellant/org. O.P. and Mr. P. V. Bhagat, Advocate for the respondent/org. complainant.

3. Original complainant wanted to go to Ahmedabad for business meeting. He therefore booked one ticket with Jet Airways (India) Pvt. Ltd. for 23/12/2002. Complainant was to board the flight at Mumbai. Jet Airways (India) Pvt. Ltd. gave confirmed O.K. ticket to the complainant. Complainant reported in time at the Airport. However, he was not given boarding pass, as there was no accommodation due to over booking. Complainant therefore approached District Consumer Forum for grant of compensation. Complainant has made serious grievance about deficiency in service and unfair trade practice in the matter of over booking.

4. Consumer complaint was resisted by the original O.P. Original O.P. denied to have rendered deficient service. It is contended by the O.P. that over booking is international recognised practice and therefore, it cannot be an unfair trade practice. Forum below allowed the complaint and granted following reliefs in favour of the complainant :

"(i) Complaint is allowed.

(ii) The Opposite party is directed to pay Rs.25,000/- by way of compensation and expenses incurred by the Complainant due to the deficiency in service on the part of opposite party within six weeks from the date of receipt of the copy of this order.

(iii) The Opposite party is directed to pay cost of Rs.5,000/- to the complainant within six weeks from the date of receipt of the copy of this order.

(iv) The Opposite party is directed to restrain themselves from indulging into and/or resorting to unfair trade practice as to overbooking of their each and every flight by issuing confirmed ticket to the passengers henceforth.

(v) The copy of this order be sent to the Ministry of Civil Aviation Government of India for their information, action in respect of the unfair trade practice established in this present complaint."

5. Ld. Advocate Mr. Sawant vehemently submitted that practice of over booking is an international recognised practice and therefore, in no case it can be termed as unfair trade practice. In support of his submissions, he relied upon following judgments of National Commission :-

1. Dr. Arun Jain Vs. Thai Airways International Ltd. reported in 1986-2002 Consumer 6515 (NS).

2. Rajinder Pal Jaura (NRI) Vs. Secretary, Union of India & Anr. reported in I(2003) CPJ 24 (NC).

3. Proxima Steel Foge Ltd. & Anr. Vs. Air India Ltd. & Ors. reported in IV(2005) CPJ 181 (NC).

6. On the other hand, Ld. Advocate Mr. Bhagat supported the impugned order under challenge. According to him, denial of boarding pass for no reasons in case of confirmed O.K. ticket amounts to deficiency in service. He further submitted that over booking is an unfair trade practice.

7. We gave anxious consideration to the rival submissions made at the bar. National Commission in the case of Dr. Arun Jain Vs. Thai Airways International Ltd., observed that there is no law in our country, which prescribes amount of compensation in case of Denied Boarding Compensation and it would depend on the contract between the passenger and the Airlines. In case of there being no such contract passenger will be awarded compensation under the Law of Torts. Consumer Courts in our country, even Courts in England, have in consumer disputes awarded damages for mental distress, upset, disappointment and injured feelings. But we have to approach this area cautiously.

8. National Commission has referred European Union Council Regulation (EEC) No.295 of 4/2/1991 in the judgment of Dr. Arun Jain's case, while reads as under:-

"Article 4

1. In the event of boarding being denied, a passenger shall have the choice between:

# reimbursement without penalty of the cost of the ticket for the part of the journey not made, or

# re-routing to his final destination at the earliest opportunity, or'

# re-routing at the later date at the passenger's convenience.

2. Irrespective of the passenger's choice mentioned in the case referred to in paragraph 1, the air carrier shall, immediately after boarding has been denied, pay minimum compensation, without prejudice to paragraphs 3 and 4, amounting to :

# ECU 150 for flights of upto 3500 km,

# ECU 300 for flights of more than 3500 km,

# having regard to the final destination specified in the ticket.

3. Where the air carrier offers re-routing to the final destination on an alternative flight, the arrival time of which does not exceed the scheduled arrival time of the flight originally booked by two hours for flights of upto 3500 km, and by four hours for flights of more than 3500 km, the compensation provided for in paragraph 2 above may be reduced by 50%.

4. The amounts of compensation need not exceed the price of the ticket in respect of the final destinations.

5. The compensation shall be paid in cash, or, in agreement with the passenger, in travel vouchers and/or other services.

6. If, on an overlooked flight, a passenger agrees to be placed in a class lower than that for which a ticket has been purchased, he shall be entitled to reimbursement of the difference in price.

7. The distances given in paragraphs 2 and 3 shall be measured by the great circle track method (great circular route).

Article 6 :

1. Apart from the minimum compensation amounts set out in Article 4, the air carrier shall offer free of charge to passengers who are denied boarding:

a. the expenses for a telephone call and/or telex/fax message to the point of destination;

b. meals and refreshments in a reasonable relation to the waiting time;

c. hotel accommodation in cases where an additional stay of one or more nights is necessary.

2. When a town, city or region is served by several airports and an air carrier offers a passenger, who has been denied boarding, a flight to an airport other than the destination airport that the passenger had booked, the cost of travelling between the alternative airports or to an alternative close-by destination, agreed with the passenger, shall be borne by the air carrier."

4. Earlier to the European Union Regulations provisions of DBC also existed in the United States of America in the Code of Federal Regulations (Title 14-Aeronautics and Space). These Rules even provide for boarding priority rules and where request is made by the Airlines to 'volunteers' for denied boarding. As to who is volunteer has also been defined. Rules prescribes how much amount is to be paid to the volunteer and also to those passengers who are denied boardings involuntarily. (The regulations of the European Union and the rules of the United States can be assessed through their respective websites.)

5. It would appear that the Central Government is also contemplating to assume power to prescribe the law of air carriers. It is submitted that the Civil Aviation Act, 2000 of which draft has been put on the internet, it is Chapter XI which deals with law of carriers. Section 103 in the proposed draft legislation concerns denied boarding compensation (DBC) and we may set out the same."

9. Central Government has formulated a draft scheme for payment of suitable compensation by carriers to the passengers who denied boarding, in specified circumstances, on flights from India to any point outside India, or on flights within India, for which they have confirmed reservations, or on flights within India, for which they have confirmed reservations, or for any other kinds of passenger grievances which in the opinion of the Central Government have assumed significant level of public dissatisfaction. This draft scheme has not yet been achieved finality in the form of Law.

10. During the course of arguments, we are told that the appellants offered hotel accommodation and complimentary ticket in business class for the next flight, which was scheduled on 24/12/2002. However the complainant refused to accept the offers made by the appellant. We are also told during course of arguments that appellant has already paid cost of ticket to the extent of Rs.12,275/- to the complainant on 6/1/2003.

11. After having examined the issue of unfair trade practice in the light of well settled legal position, we are of the clear opinion that over booking, which is international recognized practice is not an unfair trade practice. Forum below failed to digest the issue of over boarding. The Forum below ignored the well settled legal position and concluded without there any basis, that practice of over booking is an unfair trade practice. Forum below has read the contentions raised in the written statement out of context. Forum below has made following observations while dealing point no.(b)

"The Opposite Party in its Written Statement has not only admitted its unfair trade practices as above, but, also they have admitted that they have offered compensation to the complainant in kind. Even on today, the Opposite Party is ready to compensate the complainant. This act of omission on the part of the Opposite Party established unfair trade practice."

12. All the Airline companies follow practice of over booking. Ld. Advocate Mr. Sawant in order to highlight the issue of over booking, brought to our notice the practice followed by leading Airline companies.

1. Indian Airlines

2. Jet Airways

3. British Airways

4. Oman Air

5. Gulf Air

6. Skywards (Emirates).

These companies follow practice of overbooking.

13. We are satisfied that the practice of over booking is not an unfair trade practice. The observations made by the Forum below in this respect are erroneous. We propose to reproduce the note on air tickets issued to the passengers so far as appellant company is concerned.

"Overbooking :

Like most airlines worldwide, overbooking may occur in Jet Airways flights in order to minimize the effect of 'No shows', and to enable their seats to be used by passengers who otherwise would not be able to travel on their chosen flight. This aspect is closely monitored wherein we do our utmost, in a manner that the number of overbooked seats matches the number of 'No Shows' or last-minute cancellations. While Jet Airways makes every effort to provide seats for which confirmed reservations have been made, no absolute guarantee of seat availability is denoted by the expression reservations, bookings, status OK and the timings attached to them."

14. After scrutiny of the material placed on record and after having considered legal position, we are of the clear opinion that over booking is an international business practice recognized worldwide. This is not an unfair trade practice.

15. Under the circumstances, directions contained in the clauses (iv) and (v) of the operative part of the order under challenge are bad in law and deserves quashment. Complainant has claimed compensation for denial of boarding pass in spite of having confirmed O.K. ticket. We have already made reference to the offer made by appellant to the complainant. Cost of the ticket is already paid to the complainant. However international practice of overbooking does not totally exonerate the appellant. The appellant has to pay denied boarding compensation. Concept of Denied boarding compensation is also worldwide recognised practice. Denied boarding compensation necessarily follows victim of overbooking. In this particular case, denial boarding compensation is not paid to the complainant. The quantum of compensation need not exceed cost of the ticket. We are therefore, inclined to award Rs.12,275/- to the complainant instead of Rs.25,000/-. In the result, we pass following order :-

ORDER

1. Appeal is partly allowed.

2. Figure of "Rs.25,000/-" in item no.(ii) of the operative part of the order is to be read as "Rs.12,275/-".

3. Rest of the order is confirmed.

4. Item Nos.(iv) & (v) of the operative part of the order stand quashed and set aside.

5. No order as to costs.

6. Misc. application no.2680/2006, which is for stay stands disposed of.

7. Copies of the order herein be furnished to the parties.

Appeal partly allowed.