Bombay High Court: The issue in the present appeal was “whether the suit filed by the New India Assurance Company Limited along with four other Insurance Companies against respondent-Janus Aviation Pvt. Ltd. for subrogated recovery of an amount of USD 31,77,696.98 along with pendente lite and future interest would lie on the commercial division under the Commercial Courts Act, 2015 (‘2015 Act’)?”. The Division Bench of Bharati Dangre and Abhay J. Mantri, JJ., observed that as there was absence of privity of contract between respondent and Interglobe Aviation Limited (Indigo), the Court dismissed the appeal and held that there was no fault with the impugned order as the present case did not arise of the agreement of insurance or reinsurance, as given under 2(1)(c)(x) of the 2015 Act.
Appellants submitted that they were entitled for damages from respondent, who was engaged in business of providing ground handling services at Airport for losses suffered by them due to its negligence and as the dispute in the suit arose out of an insurance agreement, it was to be considered as a commercial dispute in terms of Section 2(c)(xx) of the 2015 Act. The suit was filed against respondent on account of the amount that was repaid by Appellants 1 to 5 to Interglobe Aviation Limited (Indigo) on account of the damages suffered by Indigo’s Airline, in an accident caused due to the alleged negligence of respondent at Dr. Babasaheb Ambedkar International Airport, Nagpur on 26-05-2018.
Appellants insured Indigo’s aircraft, including the aircraft involved in the incident, vide policies “Airline Hull” (including spares) & Liability Insurance” and “Aviation Hull Deductible Insurance” to the percentage of insurance shared by Appellants 1 to 5.
On 26-05-2018, an aircraft of Indigo Airlines-ATR-72-600 was parked at Bay No. 4 at the Nagpur Airport and was ready to be operated between Nagpur to Hyderabad and it was alleged that respondent was operating the said Airport and was responsible for providing Ground Handling Services to Go Air and Air Asia. Respondent had parked their passenger step ladders parked at the Ground Service Department area and Indigo was not availing ground handling services from respondent. Thus, respondent was under an obligation to act only towards the companies to which it was providing the services operating at the Airport. However, weather warning was received by the Airport Operation Command Centre from Air Traffic Control, and there was a storm and after the passing of the storm, the aircraft remained parked stationary at Bay No. 4 but the ladder belonging to respondent was blown by wind and struck the left wing trailing edge of the aircraft, causing considerable damage to it, as a result of which, the aircraft could not take off and the passengers were required to be offloaded.
The Safety Investigation Coordinator along with respondent, the representatives of the airport authorities Mihan India Limited and Indigo’s flight safety and ramp safety representatives carried out a detailed investigation of the incident and a report was furnished analyzing the probable cause of the incident as being the non-operational equipments in the parking area without being safely secured. A legal notice was served on respondent on 24-01-2020 as respondent did not pay any heed to its liability, where it was alleged that appellants suffered substantial loss of USD 31,77,696.98 due to sole negligence of respondent and respondent was accused of wilful neglect of its obligation and liability, thus, the suit for subrogated recovery for realization of the amount due to appellants was instituted.
The Court observed that the lower court held that there was no privity of contract between Indigo and respondent in respect of the insurance or reinsurance and there was no agreement between appellants and respondent about any insurance or reinsurance, thus, the application filed under Order VII, Rule 10 of the Civil Procedure Code, 1908 was allowed.
The lower court referred to the clause “arising out of transactions relating to aircraft, aircraft engines, aircraft equipments and helicopters, including sales, leasing and financing of the same” and concluded that respondent was right in his contentions that a claim for damages caused to the aircraft would not fall within the said clause.
The Court relied on Ambalal Sarabhai Enterprises Ltd. v. K.S. Infraspace LLP, (2020) 15 SCC 585 and opined that only those disputes which were commercial disputes within the meaning of Section 2(1)(c) of the 2015 Act could be entertained by the Commercial Courts or the Commercial Division and Commercial Appellate Division of High Courts.
The Court held that the entries should be strictly construed in the order under challenge in the present case and as there was absence of privity of contract between respondent and Indigo, the Court dismissed the appeal and held that there was no fault with the impugned order as the present case did not arise of the agreement of insurance or reinsurance, as given under 2(1)(c)(x) of the 2015 Act.
[New India Assurance Co. Ltd. v. Janus Aviation Pvt. Ltd., 2024 SCC OnLine Bom 3282, decided on 10-10-2024]
Advocates who appeared in this case :
For the Appellants: Ritesh Dawda, Advocate
For the Respondent: Deoul Pathak, Advocate i/b Ishaan Chhayya, Advocate
