MARKETING CO-OPERATIVE SOCIETY LIMITED vs RAGHUNATH PAL

THIS is an appeal against the final order dated 1.11.1995 of the District Consumer Disputes Redressal Forum, Puri-Nayagarh at Puri in C.D. Case No. 161 of 1994 Uttarayani P.G.S. and M.C.S. Ltd. which was opposite party before the District Forum is the appellant before us. The complainant R.N. Pal is the sole respondent. The facts alleged in the complaint are that the complainant had given 155 qtls. and 50 kgs. of potato to the appellant in two consignments in March and April, 1992 for storage in the latter''s cold storage. He received back the potatoes on 17.4.1992 and 22.4.1992. He alleged that the entire potato stock received back had been damaged but appellant''s clerk, on authorisation by appellant, certified on 22.5.1992 that 50% of the complainant''s stock had been damaged. Complainant thereupon approached the appellant several times to get back the price of the damaged potatoes and at last served a legal notice on appellant. Failing to get back the money he filed complaint before the District Forum praying for direction to appellant-opposite party to pay Rs. 33,677.98 towards damage and costs.

THOUGH noticed, opposite party neither filed its show-cause nor participated in hearing. Consequently appellant was set ex parte on 17.1.1995 and ex parte order was pronounced on 30.1.1995 directing opposite party-appellant to pay Rs. 31,000/- to complainant with 12% interest from the date of storage till date of payment and besides, Rs. 1,000/- towards cost. Opposite party-appellant, on receiving copy of ex parte order on 6.2.1995 filed a petition before the District Forum on 1.3.1995 to set aside the ex parte order. Forum after hearing both parties set aside the ex parte order and entertained show-cause from the opposite party-appellant. In its show-cause the opposite party-appellant averred that despite its taking all care and precautions and getting certificate to that effect from refrigeration engineer of the Orissa State Co-operative Marketing Federation who verified the cold storage plant before its commissioning in 1992, there was leakage of ammoia gas on 13.4.1992 leading to damage of the potatoes stocked in the cold storage and as such it could not be held liable under the provisions of its bye-laws to recompense the complainant. Opposite party-appellant denied other allegations of the complainant. The District Forum after hearing both parties and perusing the documents filed by them came to the conclusion that 50% of complainant''s potato stock which came to 77.50 qtls. was damaged inside the cold storage and the same valued at Rs. 300/- per quintal, the complainant suffered a loss of Rs. 23,400/-. Adding the storage charge of Rs. 2,177/- paid by the complainant to the appellant-opposite party, the latter was directed to pay Rs. 25,577/- to complainant together with interest at the rate of 15% per annum from the date of order till payment and besides pay Rs. 1,000/- towards cost.

Aggrieved with the aforesaid order, appellant filed this appeal. Appellant''s grounds of appeal are that despite its taking all precautions and care, there was leakage of ammonia gas resulting in damage of the stocked potatoes and since the registered bye-laws protect the appellant society against liability to pay compensation and complainant being its member, was bound by the bye-laws it had no liability to compensate the complainant for the loss on account of damage of the potatoes. Appellant''s other ground is that against its claim for compensation of Rs. 24,78,504/- from its insurers, it got only Rs. 4,47,160/-.

WE have examined the records of the District Forum and heard the respondent. Appellant did not participate in the hearing. The points requiring examination are whether complainant suffered loss, whether appellant has liability to compensate the complainant and if so what should be the quantum of compensation. Admittedly complainant''s 77.50 qtls. potato stocked in appellant''s cold storage got damaged due to leakage of ammonia gas. The loss has been certified by the clerk of the appellant. There is no dispute, therefore, on the point of loss. According to registered bye-laws of the society which binds the complainant, the appellant-Co-operative Society "shall not be responsible for any damage or deterioration caused to the producer while in its custody, but it shall take all necessary precautions to store the goods in such a way as not to make them liable to damage or deterioration". Appellant-opposite party had filed a xerox copy of Refrigeration Engineer''s letter dated 5.3.1992 purported to be a certificate from the expert that all care and precaution were taken to store the potatoes properly. This letter reads : "With reference to your letter No. 44 dated 15.2.1992, this is to state that I had visited your Cold Storage on last 18.2.1992 and on inspection of the plant, it was found that your operating staff had already taken up the annual maintenance/over-hauling of the plant as per my instructions and had put the Chamber No. 2 in operation. The plant was found to be operating satisfactorily."

FROM the above letter it is clear that as on 18.2.1992 when the engineer inspected the Cold Storage it was found to be operating satisfactorily. Ammonia leakage took place on 13.4.1992 and appellant-opposite party has not filed any document to show that due care and precaution were taken after 18.2.1992. Again, the aforesaid letter of the engineer refers to Chamber No. 2 whereas ammonia leakage damaged the potatoes stocked in Chamber 1 as claimed by appellant vide insurance claim papers, copy of which appellant filed before the Forum. FROM this it cannot be said that the protection clause contained in the registered bye-laws can provide any protection to the appellant against liability to compensate the complainant. We, therefore, held that the appellant is liable to compensate the complainant for the loss. Coming to the quantum of loss it appears that the District Forum has committed an error. The two receipts filed by complainant to say that the potatoes he had stocked with the appellant were purchased from the Rama Chandra Sahu and Sons of Laxmi Bazar, show that the first consignment was purchased on 24.3.1992 at the rate of Rs. 300/- per quintal and the second consignment was purchased at the rate of Rs. 296/- per quintal. FROM the copy of claim form which appellant filed with Insurance Company it is seen that prevalent market rate of potato was Rs. 261/-. This statement of the appellant is believable because of two reasons. Firstly, the insured will never undervalue its loss. Secondly, the rate of potato had a downward trend, the same having fallen from Rs. 300/- on 24.3.1992 to Rs. 296/- on 31.3.1992. Since appellant is called upon to compensate complainant for the latter''s loss and the loss can be determined after knowing the quantum of potatoes damaged and its prevailing market value, the actual loss has to be quantified at Rs. 20,227.50 (77.5 qtls. x Rs. 261.00). The District Forum has allowed the claim for reimbursement of Rs. 2,177.00 which complainant had paid to appellant towards storage rent. This is unfair. Storage rent cannot be reimbursed because in lieu of the rent the appellant has given the service namely, storage facility. Again, the complainant suffered loss to the extent of 50% only. As such 100% reimbursement cannot be allowed. We would next deal with the rate of interest. Their Lordship in the Supreme Court have held in United India Insurance Co. Ltd. v. M.K.J. Corporation, reported in III (1996) CPJ 8 (SC), that Insurance Corporation should not be charged interest at more than 12% per annum because the premium money when invested by them fetches 11.5% interest. Following the same principle we have allowed 12% interest in several cases and we consider that in this case the appellant, the Co-operative Society, should pay 12% interest to the respondent. We have already held that the storage charge of Rs. 2,177/- should not be reimbursed to the respondent. In the result, the respondent will be entitled to compensation of Rs. 20,227.50 for the loss of 77.5 quintals of potatoes at the rate of Rs. 261/- per quintal with interest at the rate of 12% per annum from 1.8.1992, that is, about two months after the loss was certified by the clerk of the appellant till the date of payment. We also order that the payment of cost should be reduced to Rs. 500/- as against Rs. 1,000/- awarded by the District Forum. With the above modification, the appeal is allowed in part. Appeal partly allowed.