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Judgment
Dr. Sadhna Shanker, Member
The present appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (hereinafter referred to as “the Act”) by M/s Kutch Shipping Agency Pvt. Ltd. (hereinafter referred to as the ‘shipping agency’) assailing the Order dated 02.03.2009 of the State Consumer Disputes Redressal Commission, Delhi (hereinafter to be referred to as ‘State Commission’) in complaint No. 325 of 2001 whereby the complaint was allowed.
Delay of 01 day in filing the present appeal has been condoned vide this Commission’s Order dated 30.06.2009.
Mr. Ajay K. Sharma, learned counsel appears for M/s Roop Apparel Exim (hereinafter referred to as the ‘complainant’). M/s J.B. Cargo Movers, the opposite party no. 2 (hereinafter referred to as the ‘clearing agent’) has been proceeded against ex parte vide Order dated 09.02.2015.
The brief facts of the complaint are that the complainant, who is engaged in the business of sale and export of readymade garments, entered into a contract with M/s Jupiter Imports & Exports Ltd. to export 6250 pieces of ladies' long dresses made of rayon georgette and moss-crape assorted prints to a buyer in Banjul, Gambia by sea at the price of US $4 per piece. The contract required the payment through a Letter of Credit managed by Peer & Peer Pvt. Ltd., Singapore, advised through Indian Overseas Bank, foreign exchange branch, New Delhi.
Initially, as per part contract, shipment of 3000 pieces was to be made and for which the Letter of Credit was issued. The complainant delivered the corresponding cargo to the clearing agent on 26.09.2000 along with required documentation for forwarding, clearing and shipment of goods to the buyer in Bangul by the shipping agency M/s Kutch Shipping Agency. On 30.09.2000, the clearing agent provided the complainant with pertinent documents-liner B/L No. IFT/ND/101793 dated 30.09.2000 and Bill No. 154-totaling Rs.32,169/-, inclusive of Rs.29,509/- for overseas transportation to Banjul, Gambia. The complainant submitted all necessary documents, as required, for negotiating letter of credit to Allahabad Bank, Lajpat Nagar, New Delhi, requesting to credit into their current account No. 2342. All cargo got proper customs clearance before shipment. The complainant's bank i.e. Allahabad bank vide its letter dated 24-10-2000 informed the complainant that the consignee had identified discrepancies in the documents. Subsequently, these discrepancies were removed and the complainant’s bank requested the consignee bank at Singapore to remit the proceeds promptly on the instructions provided on their covering schedule. On 06.11.2000, the letter of credit issuing bank i.e. Indian Overseas Bank at Singapore notified the complainant's bank that the letter of credit opening applicant had not accepted the documents due to discrepancies and sought disposal instructions. The complainant's bank relayed this information to the complainant in a letter dated 06.11.2000. Despite efforts to rectify the discrepancies, the complainant's bank informed them on 24.11.2000 that the foreign bank had returned the documents. The complainant's bank vide its letter dated 01-12-2000 advised that the foreign bank had claimed handling charges of US $ 100. Therefore, the complainant’s bank advised the complainant to arrange to reimport the goods or get alternate buyers under instructions to the bank. The complainant requested the buyer at Banjul to either arrange extension of letter of credit or suggest for early release of payment. The buyer replied that if documents were prepared and sent to Singapore, it would be better to deal with the bank at Singapore. The buyer suggested accepting the goods in Banjul and proposed sending documents for collection through banks there. This led to changes in the payment method and amendments in the Bill of Lading, specifying Trust Bank Ltd. as consignee and Jupiter Imports and Exports Ltd. as the notified party in Banjul.
On 15.12.2000, the complainant, via their bankers, air freighted specific documents to Trust Bank Ltd. in Banjul. They requested that these documents be released only upon receipt of payment, with the remittance to Allahabad Bank at Lajpat Nagar, New Delhi, to the complainant's account. The documents included:
(i) Original +2 copies of B/L IFT/ND/101793
(ii) At sight BE for C/F US $ 12,000
(iii) Signed Commercial invoice in duplicate
(iv) Certificate of origin 3
(v) Packing list.
(vi) Insurance Policy
As per the bill of lading, the goods’ delivery required the surrender of the endorsed original Bill of Lading or Bank's release orders. The shipping agency in Banjul, Gambia was the designated entity for delivery of goods. The buyers needed the endorsed Bill of Lading or Bank's release orders to receive goods as the shipping company or its agents could not deliver without these. The bank would issue the release order upon payment receipt. On 19.01.2001, the complainant asked the Trust Bank Ltd., Banjul, Gambia to remit the amount of US $12,000 after collecting it from M/s Jupiter Imports & Exports. They received a communication on 27.02.2001 for M/s Kutch Shipping Agency that goods had been discharged on indemnity form without proper endorsement or release orders. The complainant on 07.03.2001 informed the shipping agency that it shall be held responsible for issue of a delivery order without proper documents. On 10.05.2001, the complainant requested its banker to send fax to Trust Bank Ltd. not to release any documents to M/s Jupiter Imports and Exports.
The complainant thereafter served a legal notice dated 07.09.2001 to shipping agency & clearing agent. The notice highlighted their alleged defective and deficient services to the complainant as consumer. It accused them of unlawfully releasing goods/consignments without obtaining necessary title documents or Bank release orders. However no reply was received by the complainant to the legal notice. This act of failing to collect the title documents or bank release orders was deemed deficient service and willful default, and a complaint was filed before the State Commission with the following prayer:-
I. That the Hon'ble Commission may be pleased to hold that respondents have been deficient in providing service and have indulged in unfair trade practices and have committed willful default, as a result of which the complainant has suffered loss and injury which is liable to be compensated.
II. That the Hon'ble Commission may be pleased to direct that the complainant may be awarded the following compensation:
In US $ 29,000 Rs. 13 lakhs (app.)
III. Cost of these proceedings.
IV. Pendente lite and future interest till the realization of the amount under the judgment of the Hon'ble Commission.
V.Any other relief in the facts and circumstances of the case.
Upon notice, shipping agency contested the complaint and raised preliminary objections. The first objection is that the complaint is not maintainable against the shipping agency as it functioned solely as an agent for a disclosed principal and cannot be held liable under Section 230 of the Indian Contract Act for contracts made on the principal's behalf. Another objection is that the complaint's deficiencies lie in the absence of essential parties, such as Trust Bank Ltd., Jupiter Import and Export Ltd., Gambia Port Authorities, Gambia Shipping Agencies Ltd. and Allahabad Bank and this complaint deserves to be dismissed for non-joinder of parties. Additionally, the shipping agency stated that the complainant itself was responsible for documents’ discrepancies, which remained uncorrected despite opportunities. This deliberate omission of crucial facts regarding the refusal of the letter of credit indicates sole responsibility for any resulting loss on the complainant's part. Regarding the goods transportation, the shipping agency stated that the goods were lying at port due to improper documents. Thereafter, the port authorities auctioned the goods due to the complainant's failure to complete necessary procedures to claim them. It is further stated that the complainant exported the goods with some malicious intention to claim duty drawback from government and the complainant is not entitled to the relief as claimed for.
After appreciation of the facts of the case, the State Commission accepted the complaint and directed as under:
“However keeping in view the peculiarity of facts of the case and time taken by the complainant in rectifying the documents we feel inclined to allow the complaint by directing the OP No.1 to pay Rs.6 lacs towards cost of the consignment besides Rs.50,000/- towards compensation on account of mental agony and harassment which shall include cost of litigation also.”
The shipping agency has filed the present appeal before this Commission with the following prayer:
a. Set aside and quashed the impugned order dated 02.03.2009 in the complaint Case No. C-325/2001 of the Hon'ble State Commission at Delhi, in the interest of justice.
b. Stay the operation of the impugned order dated 02.03.2009 of the Hon'ble State Commission Delhi, till the final disposal of the present appeal.
c. Called the record of the state commission of the complaint Case No. C-325/2001.
d. Pass any other order(s) deemed fit and proper under the facts and circumstances of the case may kindly be passed in favour of the appellant and against the respondents.
The shipping agency’s main contention against the impugned order of the State Commission is that the State Commission failed to appreciate that the complainant had changed the mode of payment from letter of credit to documents against payment without any information to the shipping agency and therefore the shipping agency cannot be held responsible for the change of the mode of payment. The other contention of the shipping agency is that the buyer did not take the delivery of the goods from the destination and the responsibility for the same cannot be fastened on the shipping agency as the shipping agency is only a service carrier. The shipping agency has also placed on record documents purportedly regarding the auction of the goods by the port authority. The shipping agency has also moved an application for placing additional documents, i.e. the documents pertaining to auction of goods, on record, allegedly verified by the Gambia High Commission dated 27.02.2013. These documents are claimed to be false and forge by the complainant. It is seen that the unverified copies of the documents were also before the State Commission.
I have heard the learned counsel for both the parties and have gone through the record including the Order dated 02.03.2009 of the State Commission and the memorandum of appeal.
The issue at hand is whether the shipping agency is liable for deficiency in service or not.
It is seen that the shipping agency, vide a letter dated 27.02.2001, had written to the complainant as under:
“To
Roop Apparels
New Delhi
Sub: Banjul shipment B/L No. IFT/ND/101793
Dear Sir
With ref to the subject shipment pls forward us the packing list against B/L No. IFT/ND/101793. Since the cargo was delivered on indemnity form the goods are been called back to the warehouse and to be checked are in order.
Looking forward for your kind cooperation.
Sorry for the inconvenience caused.
Thanking You
Yours Sincerely
For Kutch Shipping Agency”
It is an admitted fact that the goods were released on indemnity whereas the contention of the complainant as under para 31(a) of the complaint before the State Commission is that the consignee as per bill of lading was Trust Bank Ltd. and the shipping agency instead of delivering the goods/consignment to the consignee, i.e. Trust Bank Ltd., delivered the same to someone else without production of duly endorsed Bill of Lading in their favor or bank release orders, without which delivery of goods could not have been effected. It is also noted that the legal notice dated 07.09.2001 served on the shipping agency also remained unanswered.
The complainant had notified the shipping agency about the shipment's circumstances and payment issues, granted ample time for the shipping agency to take necessary actions before releasing the goods on indemnity. The deficiency in service was primarily attributed to the erroneous release of goods on indemnity, causing financial harm to the complainant. The auction event is subsequent and not directly relevant to the core issue at hand.
In view of the fact that the shipping agency released the goods on indemnity without obtaining any bank release order or documents from the consignee i.e. Trust bank Ltd., it amounts to deficiency in service. Hence, I find no illegality and infirmity in the State Commission’s Order and it is a well-reasoned order and requires no interference.
Therefore, the appeal being devoid of merit is dismissed. All pending applications, if any, stand disposed of.