HARYANA STATE WARE-HOUSING CORPN. vs KISAN SEWA SADAN

THE Haryana State Ware-Housing Corporation appeals against the order of the District Forum, Gurgaon allowing the respondent''s complaint and directing compensation for the deposited stock at the market rate.

THE facts are not in serious dispute. THE respondents deposited 200 bags of gram weighing 190 quintals in all in the go down of the appellants in the year 1991 on the stipulated terms and conditions. THE delivery of 80 bags was duly taken on the 23rd of October, 1992. However, on the 19th of January, 1993 delivery of the balance was sought. It was found that 44 bags were missing and only 76 bags were delivered to the respondents. Inevitably a claim was lodged with the appellants and in the complaint the grievance was that no satisfactory reply thereto was given, compelling the respondents to knock at the door of the District Forum on the 13th of August, 1993 seeking compensation for the 44 missing bags at the market rate computed at Rs. 47,652/-. The appellant-Corporation in their reply very fairly admitted the fact of the deposit and equally of the loss of 44 bags. The plea taken however was that they are liable to pay compensation only at the rate declared by the respondents themselves or the market rate which ever is less. Consequently compensation could only be given at Rs. 700/- per quintal being the rate declared in the deposit receipt minus storage charges etc. The plea was that the requisite amount was duly tendered by cheque to the respondents but was not accepted by them.

Despite the fact that the issue raised was of significance and general application with regard to the quantum of compensation to all depositors in the innumerable ware-houses of the Corporation, the District Forum treated the matter somewhat summarily. It was first held that because copy of the F.I.R. was not attached or proved on the record, therefore, theft of the goods could not be accepted. After reference to Clause 6(c) of the conditions of storage only, it was cryptically observed that this would apply only, if loss took place due to fire, theft, burglary or flood and since herein the F.I.R. had not been proved the compensation must be granted at the market rate and a payment of Rs. 47652/- as claimed was decreed.

MR. Jagat Narain, the learned Counsel for the appellants had forcefully assailed the order under appeal as somewhat cryptic and unreasoned in so far as it did not advert to the admitted conditions of storage to which the respondent was a signatory. It was highlighted that a statutory body like the appellant''s Corporation was governed by the Act and the Rules constituting the same and equally by the conditions of storage on which deposits were accepted. The plea was that in conforming to these there could possibly be no deficiency of service. The core of the argument was that both the statutory and contractual provisions limited the liability of the Corporation to the value of goods on the date of the deposit and not on the basis of the vagaries and fluctuations of the market rate day to day, unless it was lower than the original declared value. There is a patent merit in the aforesaid submission. It is not in dispute that the appellant-Corporation is a creature of the statute and bound by the rules and regulations and the contractual stipulation in accordance therewith. Our attention was brought to Rule 23(i) of the Punjab Ware-houses (Haryana First Amendment) Rules, 1982. The proviso thereof indicates that the amount of compensation payable was not to exceed the market value of the goods at the time of the deposit of the goods. It is elementary that the statutory rules virtually become a part of the parent statute and have binding force. Despite being pin-pointed the learned Counsel for the respondents Mr. Suman Jain could not bring to our notice any statutory or contractual stipulation which mandates or sanctified the payment of compensation by the appellant-Corporation at the rate of the day to day fluctuations of the market price in innumerable goods in the warehouses of the Corporation.

APART from the rule it was common ground before us that the matter herein is governed by conditions of storage duly published and to which the respondent is either a deemed or a actual party. Condition No. 5 expressly pertaining to the liability of the Corporation is primal to the issue and the relevant Clauses (a) and (b) thereof merit notice in extenso : - "(a) The Manager undertakes to exercise reasonable care and diligence required by the law for keeping goods. (b) The Manager''s liability is limited to the value of goods on the date of deposit." It is somewhat plain from the above that the Corporation''s liability has been in terms limited to the value of the goods on the date of deposit irrespective of the market fluctuations whether they rise higher at the time of the redelivery of the goods to the depositors. It would appear that the District Forum was altogether remiss in not adverting to this primal proviso in the conditions of storage. Once it is there, the Corporation in adhering to the terms thereof by offering payment of the value of goods on the date of the deposit can not possibly be held as guilty of any deficiency in service and, therefore, liable in consumer jurisdiction to pay a higher rate. In all fairness we may also refer to Clause 6(c) (i) of the conditions of storage relied upon by the District Forum which alone were considered somewhat summarily by the District Forum in granting the relief it did. This may be noticed in extenso : - "6(c) (i) All goods stored in the warehouse will be insured against the risks of fire, theft and burglary, and floods, but no insurance for floods will be taken in areas known to be free from floods. Provided that where there is no State Warehousing Act in force or where it is permissible for this Corporation to indemnify the depositor for the goods deposited in its warehouse, the Corporation agrees to compensate the depositor at the rate not exceeding the market rate of the goods at the time of the deposit for any loss or damages which may be caused to them during the period of deposit by fire, theft and burglary and floods." What deserves highlighting is the fact that Clause (6) as its heading shows, pertains to the schedule of charges and insurance. On the face of it, it is not conclusive with regard to the limit of the liability of the Corporation and can not possibly over-ride the express terms of the preceding Clause (5) specifically framed on the question of liability. This apart, Clause 6 (c) as its tenor shows, pertains to the obligation of the depositors to insure the goods against the risks of fire, theft, burglary or flood. The proviso only refers to the alternative situation where no State Warehousing Act is in force or where it is permissible for the Corporation to indemnify the depositors for the goods deposited in its warehouse. It is in this context that this provision lays down that the appellant-Corporation would compensate the depositors but not exceeding the market rate of the goods at the time of the deposit. This aspect can not be read as the District Forum seems to have done that in case not coming within its ambit the Corporation had undertaken to compensate the depositors at the fluctuating higher market rate at the time of redelivery. The somewhat summary conclusion arrived at by the District Forum appears to us both contrary to principle and to the statutory and contractual stipulations attracted to the situation. In view of the above, it has necessarily to be held that the Corporation is not liable to pay more than the rate of goods declared at the time of the deposit in the deposit receipt. In tendering the amount to the respondents it can not be faulted or foisted with any further liability.

FOR the fore-going reasons this appeal is allowed and we are constrained to set aside the order of the District FORum and dismiss the complaint preferred by the respondents. However, it goes without saying that the appellant - Corporation would be liable to tender the calculated amount according to the conditions of storage expeditiously to the respondents. There will be no order as to costs. Appeal allowed.