Sangrur Agro Ltd vs Fairmaces Shipping & Transport Services Pvt. Ltd. & 2 Ors

These two appeals i.e. FA No. 700/2006 and FA No. 433/2014, have been filed against the orders dated 31.07.2006 and 30.06.2014, respectively passed by the State Consumer Disputes Redresssal Commission, Chandigarh (in short, the State Commission) in Complaint Case No.42 of 2001.

The facts of the case are that the complainant Sangrur Agro Ltd. entered into an Agreement dated 05.10.1999 with INNO-WAGNA SDN. BHD- a Malaysian Firm for the import of 95 MT RBD Palmolein for $38,000. The commercial invoice subsequently issued in favour of the complainant, mentioned that delivery was to be made at ICD Ludhiana. On 21.10.1999, the consignment was handed over to opposite party No.1 at Singapore and according to the Bill of Lading issued by them, the consignment was to be imported through Mumbai Sea Port and delivered at ICD Ludhiana. It was also stipulated that charges from Mumbai port to ICD Ludhiana were to be borne by the complainant. It was the case of the complainant that opposite party No.1 informed the complainant that delivery can not be effected at ICD Ludhiana because its main agent i.e. opposite party No.3 does not have services at Ludhiana and consequently, the complainant was left with no option but to accept the consignment at ICD New Delhi. It was also the case of the complainant that the consignment reached ICD New Delhi on 15 01.2000 and 16.01.2000, i.e. after almost two months from the date of confirmation of the order by the complainant on 29.11.1999. Thereafter, the delivery was effected only on 23.02.2000. It was submitted that the Ministry of Finance increased the custom duty of import on Palmolein from 15% to 35% vide Notification No. 139/99 dated 30.12.1999, and the complainant had to pay Rs.6,54,484/- instead of Rs. 2,80,492/-. It has been also alleged that the complainant had to make additional payments towards detention charges, ground rent, demurrage etc. It was further alleged that on account of delayed delivery, the production process of the complainant suffered. Aggrieved, the complainant was compelled to file a consumer complaint before the State Commission, claiming Rs.15,09,269/- for loss and damages.

Upon service of notice, opposite party Nos.1 and 2 contested the maintainability of the complaint on the ground that the complainant is not a consumer under the Consumer Protection Act, 1986. It has been also contested that the right of the complainant to claim stood extinguished as the same has not been filed within one year from the date of discharge of the cargo from the vessel as per Article III, Rule 6 of the Indian Carriage of Goods by Sea Act. It was submitted that the opposite parties are not personally liable for the alleged breach as they had acted only for a disclosed principal namely, M/s. F.M.L. Container Lines, Singapore who had issued the Bill of Lading at the port of shipment; hence the complaint was liable to be dismissed under Section 230 of Indian Contract Act. It was further stated that the Bill of Lading issued by the principal of the opposite parties provided for the shipment from Singapore to Mumbai, although the final destination of the cargo was ICD Ludhiana. It was also stated that the opposite parties never agreed to carry the cargo to Ludhiana and the prepaid fright could not be extended to Ludhiana and the liability of the carrier ceased once the cargo was discharged at Mumbai. In this regard, it was submitted that it was endorsed on the bill of lading that the port of discharge would be Mumbai (India). It was also submitted that if it was the intention of the carrier to discharge the cargo at ICD Ludhiana, the total freight for the said carriage would have been demanded as the freight was on prepaid and not collect basis. It was stated that since the containers reached New Delhi on 15.01.200 and the consignment could be taken for delivery only on 23.02.2000 due to the delay in clearance, which cannot be attributed to the opposite parties. Denying allegations of deficiency in service, the opposite parties prayed for the dismissal of the complaint.

The complaint was decided vide order dated 31.07.2006 by the State Commission when opposite party No. 3 was proceeded ex - parte and it was held as follows:-

"Therefore, in view of the discussion above, the complaint succeeds and is accepted with costs of Rs. 10,000/- and opposite parties are directed to make payment of Rs. 11,09,269/- (Rs. 10,09,269/- + Rs. 1,00,000/-) to the complainant within one month alongwith interest @ 9%p.a. from 23.02.2000 till payment".

Aggrieved by the said order, on 14.11.2006, opposite party Nos. 1 and 2 preferred Appeal No. 700/2006 before this Commission. Thereafter, opposite party No.3 preferred First Appeal No.642/2007 before this Commission. Vide order dated 12.03.2014, this Commission disposed of the FA No.642 of 2007 as follows:-

"8. Consequently, appeal filed by the appellant is partly allowed and impugned order dated 31.7.2006 passed by learned State Commission in Org. Complaint Case No. 42/2001 M/s. Sangrur Agro Ltd. Vs. Fairmaces Shipping and Transport Services Pvt. Ltd. & Ors. is set aside to the extent of appellant and matter is remanded back to learned State Commission to take written statement of appellant on record and decide complaint afresh in accordance with law after giving an opportunity of being heard to the appellant. Appellant is directed to appear before learned State Commission on 21.4.2014 and further directed to file written statement on or before this date".

Accordingly, opposite party No.3 filed its written statement wherein preliminary objections with respect to territorial jurisdiction and limitation were taken. It was stated that there was no privity of contract between the complainant and itself. It was further stated that the opposite party No.3 never agreed to send the consignment to Ludhiana since it never provided services to ICD Ludhiana. It was submitted that opposite party No.3 was an agent of Orient Overseas Container Line Limited since 29.05.1993 but the agency stood terminated w.e.f. 05.08.2003, and Orient Overseas Container Line Limited gave an indemnity indemnifying it from all claims, losses etc. suffered by them during the operation of the Agency Agreement. In this regard, it was also submitted that the liability, if any, was that of Orient Overseas Container Line Limited only. Denying allegations of deficiency in service, the opposite party No.3 prayed for dismissal of the complaint.

After hearing the learned counsel for the complainant and the opposite party No.3 , respectively and after appreciation of evidence, the State Commission vide order dated 30.06.2014 dismissed the complaint qua opposite party No.3

Aggrieved by the said order, the complainant preferred First Appeal No. 433/2014 before this Commission.

As both the appeals relate to same set of parties and the same complaint case, they were being heard together and are being decided together.

First Appeal No.700 of 2016

Learned counsel for the appellants stated that the appellant/opposite party Nos.1-2 are the agent of the principal Company FML Container Lines Singapore. The bill of lading was issued by the principal company and the complainant has not made the FML Container Lines Singapore a party in the present case. Hence, the complaint suffers from the defect of non-joinder of necessary party. It was further stated by the learned counsel that the appellants' job was only to shift the cargo from Singapore to Mumbai and not either to ICD New Delhi or ICD Ludhiana. It was clearly informed to the complainant that it will not be possible to take cargo to ICD Ludhiana as respondent No.3 did not have any facility at ICD Ludhiana. The respondent No.3 finally decided to take cargo to ICD New Delhi. Appellants were not involved in any of the arrangement for taking cargo from Mumbai port to ICD New Delhi. Hence, if there was any delay in delivery of cargo to the complainant, appellants are not responsible for the same.

Learned counsel for the appellants stated that the State Commission failed to appreciate that the appellants have never agreed to carry the Cargo to Ludhiana though the destination of the cargo might be at Ludhiana. It would be pertinent to point out that the prepaid freight cannot be extended to Ludhiana and the responsibility and liability of the carrier ceases once the cargo was discharged at Mumbai.

It was further argued by the learned counsel that the State Commission has jointly and severally fixed the liability on the appellants as well and has allowed various items of loss stated to have occurred to the complainant. It has been argued that the State Commission has allowed refund of Rs.3,73,992/- for the excess custom duty that the complainant had to pay because of revision of rates. The appellants had no role in the revision of rate and this was purely an act of Government of India for which the appellants cannot be held responsible in any manner. This could have happened at any time and the basic liability to pay the custom duty remains with the complainant, whatever be the rate. The State Commission has allowed the refund of the amount charged by respondent No.2/opposite party No.3 as inland haulage charges or detention charges. Out of this amount Rs.1,07,940/- was the inland haulage charges and the remaining was the detention charges. So far as the inland haulage charges are concerned appellants had no relation with the same as this was the responsibility of respondent No.2/opposite party No.3 or the complainant. It was informed by the learned counsel for the appellants that in the agreement the shipment was paid upto Mumbai port and not beyond that. It was clear in the agreement that all the charges from Mumbai port upto ICD Ludhina will be taken care by the complainant. Hence, all these charges of inland haulage charges and detention charges were to be paid by the complainant.

Similarly, the transport charges paid by the complainant when the item was delivered to the complainant at ICD New Delhi are also to be borne by the complainant. However, the State Commission has allowed the same to be refunded to the complainant, which is totally against the agreement. Similarly, Rs.4,42,875/- was paid as demurrage charges by the complainant and the State Commission has ordered even refund of this amount from the opposite parties. These charges were paid by the complainant because of his insistence that the cargo be delivered at ICD Ludhiana, though later he agreed to take delivery at ICD New Delhi. Appellants are not liable to make payment of these amounts to the complainant as the same were levied as per the rules.

On the other hand, learned counsel for the respondent No.1/complainant stated that as per the agreement and bill of lading the final destination was clearly mentioned as ICD Ludhiana and therefore, the appellants including respondent No.2 were duty bound to bring cargo to ICD Ludhiana. However, the respondent No.2/opposite party No.3 did not have facility at ICD Ludhiana, respondent No.2 brought the cargo to ICD New Delhi. The consent was given by the complainant on 29.11.1999, however the delivery was given on 23.02.2000. Thus, the huge delay occurred in actual delivery of cargo to the complainant and for this delay opposite parties were responsible. In order to take the delivery, the complainant had to pay different amounts of detention charges, demurrage and inland haulage charges and other transport charges amounting to Rs.10,09,269/-. The State Commission has rightly accepted the deficiency on the part of the opposite parties and has allowed payment of these amounts by the opposite parties jointly and severally to the complainant. A compensation of Rs.5,00,000/- was demanded in the complaint, however, the State Commission has only allowed compensation of Rs.1,00,000/-.

Learned counsel for the respondent No.1/complainant further stated that the argument of the learned counsel for the appellants that the excess payment of the custom duty due to revised notification of Government of India was not due to any deficiency on the part of the opposite parties is not tenable in the eyes of law. Had the cargo been delivered in time, the complainant would not have paid the excess custom duty. Similarly, had the opposite parties made proper arrangement for quick transportation of cargo from Mumbai port for ICD New Delhi, the demurrage charges and detention charges may not have been accrued and the same may not have been paid by the complainant. Thus, all these payments had to be made only because of the deficiency on the part of the opposite parties.

Learned counsel for respondent No.2/opposite party No.3 stated that in the original complaint case opposite party No.3 was proceeded ex-parte and the order dated 31.07.2006 passed in the original complaint case No.42 of 2001 was challenged before the National Commission in appeal No.642 of 2007, wherein this Commission allowed the appeal and remanded the matter to the State Commission for deciding the complaint qua the opposite party No.3 after giving an opportunity to opposite party no.3 for filing written statement. Accordingly, written statement was filed before the State Commission and the State Commission vide its order dated 30.06.2014 dismissed the complaint against opposite party No.3.

FIRST APPEAL No.433 of 2014

Learned counsel for the appellant/complainant stated that it was the opposite party No.3, who had taken responsibility to bring the cargo from Mumbai Port to ICD Delhi. The complainant has paid an amount of Rs.1,78,843/- to opposite party No.3 as inland haulage charges and detention charges due to deficiency of opposite party No.3. The complainant had also to pay Rs.84,000/- to the Container Corporation of India without any fault of the complainant. The State Commission has wrongly observed that opposite party No.3 did not have any privity of contract with the complainant.

On the other hand, learned counsel for the opposite party No.3 stated that he was proceeded ex-parte before the State Commission when the original complaint matter was taken up by the State Commission. However, he then preferred an appeal against the ex-parte order. This Commission allowed the appeal and remanded the matter in the year 2014 to decide the complaint afresh qua the opposite party No.3. The State Commission has clearly given finding that there was no privity of contract between the complainant and opposite party No.3 and therefore, complaint was not maintainable against opposite party No.3. Accordingly, the complaint was dismissed qua opposite party No.3 vide order dated 30.06.2014. Learned counsel further mentioned that the opposite party No.3 was in no way liable for any of the alleged deficiency or negligence as alleged by the complainant. It was further stated that at no point of time, the answering opposite party was communicated or informed that the time was the essence of contract. It was further stated that the answering opposite party was the only agent of Orient Overseas Container Line Limited and the liability if any, was that of Orient Overseas Container Line Limited and w.e.f. 05.08.2003 when there was termination of the agency agreement, the answering opposite party was not liable for any claim etc. of the principals.

FINDINGS

I have given a thoughtful consideration to the arguments advanced by the learned counsel for the parties and have examined the material on record. As per the conditions of the agreement, freight was paid only upto Mumbai Port. Beyond Mumbai Port to ICD Ludhiana, it was the responsibility of the complainant to pay the charges. Thus, it is clear that inland haulage charges of Rs.1,07,940/- and transportation charges paid to Kapil Transport Services for Rs.37,500/- were the responsibility of the complainant himself and opposite parties cannot be burdened with the same.

So far as the question of increased custom duty is concerned, it is seen that the complainant had claimed an amount of Rs.3,73,992/- due to increase in the custom duty ordered vide Government Notification dated 30.12.1999. Here I agree with the arguments of the learned counsel for the appellant/opposite parties No.1 & 2 that opposite parties have nothing to do with this increase as they did not have any role in issuance of this notification. The payment of custom duty is the sole responsibility of the importer (complainant herein) and no liability can be fastened on the opposite parties for payment of custom duty. It was just a coincidence that the government increased the custom duty by notification dated 30.12.1999 and the complainant took the delivery after this date. As the opposite parties did not have any facility at ICD Ludhiana and freight paid, was only upto Mumbai Port. As per the agreement, the complainant was requested to take delivery at Mumbai Port. He agreed to take delivery at ICD Delhi and therefore, the cargo was sent to ICD Delhi. This has resulted in some delay.

Obviously, if there is a delay, the opposite parties may be held guilty for such delay and may be liable for payment of detention charges/ demurrage charges. But they are not liable to pay any difference due to increase in custom duty, which is the sole responsibility of the complainant. In my view, the additional payment of Rs.3,73,992/- due to increase in custom duty is not consequent to late delivery of cargo to the complainant, rather, it is due to notification of Government of India dated 30.12.1999. As there was no time limit fixed for such delivery in the agreement, no deficiency can be put on the opposite parties for this late delivery except for their liability to pay demurrage charges or detention charges. Thus, in my view, the State Commission erred in ordering the payment of Rs.3,73,922/- due to the increase in custom duty as paid by the complainant. In my view, the payment of custom duty is the sole responsibility of the complainant and opposite parties cannot be burdened with the same. Therefore, opposite parties are not liable to pay Rs.3,73,992/-.

It is further seen that originally all the three opposite parties jointly and severally were asked to pay Rs.10,09,269/- by the State Commission alongwith Rs.1 lakh as compensation. However, the opposite party no.3 was proceeded ex-parte and then he preferred an appeal before this Commission. After remand order from this Commission, the State Commission has observed the following in its order dated 30.06.2014:-

"15. The next question, which falls for consideration is, as to whether, Opposite party No.3 was deficient in rendering services/and was liable to pay compensation along with other opposite parties to the complainant or not. From the facts, on record, it is evident that there was neither any privity of contract, between the complainant and opposite party No.3, at any point of time, nor it had in no way dealt/transacted with the complainant directly. In our considered view, the complaint qua opposite party No.3, is liable to be dismissed because there existed no agreement between the complainant and opposite party No.3, or even with the principals of opposite party Nos.1 and 2. The freight was paid by the complainant to the foreign supplier in Malyasia to FML container Lines for carriage of goods from Malaysia to Mumbai Port. Thereafter the goods were to be carried by opposite party No.1 for delivery of the same originally at ICD Ludhiana but on reconsideration to ICD New Delhi. In our considered opinion no liability can be fastened on opposite party No.3."

From the above observations of the State Commission, it is quite clear that after examination, the State Commission has found that there was no privity of contract between the complainant and opposite party No.3 and therefore, the complaint against opposite party No.3 has been dismissed. During the arguments, learned counsel for the complainant could not clearly state whether there was any contract between the complainant and opposite party No.3. Learned counsel for the complainant emphasised that the opposite party No.3 has charged inland haulage charges and detention charges from the complainant. He had filed complaint against opposite party No.3 as well. It is true that the complainant has suffered an amount of Rs.1,78,843/-, which was paid to opposite party No.3. However, as there was no contract between opposite party No.3 and complainant, I do not find any merit in this appeal No.433 of 2014 filed by the complainant and the order dated 30.06.2014 of the State Commission is upheld and complaint against opposite party No.3 stands dismissed. Clearly whatever amount is to be paid to the complainant is to be paid by the appellant/opposite party No.1 & 2 in Appeal No.700 of 2006.

From the above analysis, it has been concluded that the amount of Rs.3,73,992/- as payment of increased custom duty and an amount of Rs.1,07,940/-as inland haulage charges as well as Rs.37,500/- as transport charges paid to the Kapil Transport Services are not required to be paid by the opposite parties and these charges were the liability of the complainant. Hence, the opposite parties No.1 and 2/appellants in Appeal No.700 of 2006 are liable to pay Rs.4,89,837/- (Rs.10,09,269/- - Rs.5,19,432/-) to the complainant instead of Rs.10,09,269/- as ordered by the State Commission.

It is seen from the order of the State Commission that the State Commission has allowed 9% p.a. interest from 23.02.2000 till actual payment on the amount ordered of Rs.10,09,269/-. As sufficient time has elapsed and the interest rate scenario has changed drastically, I deem it appropriate to reduce 9% p.a. interest to 6% p.a. interest and is allowed from the date of the order of the State Commission when the case was actually decided.

Accordingly, the appeal No.700 of 2006 is partly allowed and appeal No.433 of 2014 is dismissed and appellants/opposite party Nos.1 & 2 are directed to pay Rs.4,89,837/- along with 6% p.a. interest from 31.07.2006 within a period of 45 days. Compensation awarded by the State Commission of Rs.1,00,000/- is maintained. No order as to costs for this first appeal.