State Consumer Disputes Redressal Commission
M/S Modern Overseas And Anr vs Union Of India & Ors on 15 March, 2023
FA/22/2013 DOD: 15.03.2023
M/S. MODERN OVERSEAS & ANR. VS CONTAINER CORP. OF INDIA LTD. AND ORS.
IN THE DELHI STATE CONSUMER DISPUTES REDRESSAL
COMMISSION
Date of Institution: 17.05.2013
Date of Hearing: 09.01.2023
Date of Decision: 15.03.2023
FIRST APPEAL NO. 22/2013
IN THE MATTER OF
1. M/S MODERN OVERSEAS
(A REGISTERED PARTNERSHIP FIRM),
KOTHI NO.1 BANNA DEVI, G.T. ROAD,
ALIGARH (U.P.) - 202001.
(THROUGH ITS PARTNER SHRI RAKESH KUMAR) .
2. MR. RAKESH KUMAR,
PARTNER M/S MODERN OVERSEAS
(A REGISTERED PARTNERSHIP FIRM),
KOTHI NO.1, BANNA DEVI, G.T. ROAD,
ALIGARH (U.P) - 202001.
(Through: Sagar & Sagar, Law Offices)
...Appellant
VERSUS
1. UNION OF INDIA
(THROUGH SECRETARY, MINISTRY OF FINANCE),
DEPARTMENT OF CUSTOMS AND EXCISE,
NEW DELHI - 110002.
2. COMMISSIONER OF CUSTOMS
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FA/22/2013 DOD: 15.03.2023
M/S. MODERN OVERSEAS & ANR. VS CONTAINER CORP. OF INDIA LTD. AND ORS.
INLAND CONTAINER DEPOT,
TUGHLAQABAD, NEW DELHI,
110062.
(Through: Pramod Bahuguna & Associates)
3. CONTAINER CORPORATION OF INDIA LTD.,
(A GOVT. OF INDIA UNDERTAKING)
INLAND CONTAINER DEPOT,
TUGHLAQABAD, NEW DELHI - 110062.
4. M/S GERMAN EXPRESS SHIPPING,
AGENCY (INDIA) PVT. LTD.,
GF 11, 12 & 16 HANS BHAWAN,
1, BAHADURSHAH ZAFAR MARG,
NEW DELHI - 110002.
(Through: MSA LEGAL)
...Respondent no. 4
Coram:
HON'BLE JUSTICE SANGITA DHINGRA SEHGAL
(PRESIDENT)
HON'BLE MS. PINKI, MEMBER (JUDICIAL)
HON'BLE MR. J.P. AGRAWAL, MEMBER (GENERAL)
Present: Mr. Arun Kumar, Counsel for the Appellant.
Mr. Rajeev Sagar, Counsel for the Respondent.
PER: HON'BLE JUSTICE SANGITA DHINGRA SEHGAL,
PRESIDENT
JUDGMENT
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M/S. MODERN OVERSEAS & ANR. VS CONTAINER CORP. OF INDIA LTD. AND ORS.
1. The facts of the case as per the District Commission record are:
"The complainant firm engaged in manufacture, export and import of building hardware, imported certain brass items from China from a trader M/S Shivalaya (Hong Kong) ltd, Hong Kong. The items imported were Steel door locks complete and cylindrical locks for further manufacturing. The goods were consigned through bill of lading dated 16.5.04 and all documents were given to consignee shipping company and all the items of consignment were packed separately in card board boxes. These goods arrived at Inland Container Depot, Delhi duly sealed and complainant submitted all documents for the release of goods and for payment of duty as per law which was paid. However, before the goods were released the customs intervened to check the goods. This process of customs took a long trajectory by examination of all goods by de stuffing the container in open drizzling rains and re stuffing in the container back after 100% physical inspection of goods, in custody of ICD. The complainant got embroiled with custom department's appraisal of goods on allegedly wrong basis. He questioned the assessment as per the provisions of Customs Act, before different authorities as detailed in the complaint. The stand of the complainant was vindicated, yet the custom department took the matter to Appellate Tribunal, which agreed with complainant and set aside the orders of customs and ordered release of MODIFIED PAGE 3 OF 12 FA/22/2013 DOD: 15.03.2023 M/S. MODERN OVERSEAS & ANR. VS CONTAINER CORP. OF INDIA LTD. AND ORS.
goods. In the meanwhile the goods remained in the custody of Respondent No.3, the ICD at Tuqghalkabad as bailee of goods for charges to be paid by complainant according to the tariff based on number of days taken in release of goods. The complaint shows that detention charges and demurrage etc, were slapped to the extent of 7 lakhs on the complainant against which he filed a writ petition No,3440/2005, and Hon'ble Delhi High Court vide its orders dated 28,4,2006 directed the release of goods of the petitioner under certain conditions. It is alleged in the complaint that when he went to take delivery of goods, which remained with ICD from 2004 till 2006, due to various detention orders of customs, on opening of container it was found that goods were all drenched in water and there was water in the container. Photographs were taken, the album of damaged goods is on record. It is alleged that the opposite party in spite of being the sole custodian itself absolved of any responsibility. These facts were brought to the notice of opposite party for issuing a certificate of condition of cargo but in vain. It is alleged that left with no option the complainant removed the damaged material from the custody of ICD and got the valuation through a registered valuer who valued the goods to the tune of Rs.5.00 lakhs only vide Valuation Report Annexure P 17. The goods were not fit for use but just scrap material. It is alleged that an advertisement was put in Daily Pravada Dainik newspaper in Aligarh Edition on 26.10.2006 for auction MODIFIED PAGE 4 OF 12 FA/22/2013 DOD: 15.03.2023 M/S. MODERN OVERSEAS & ANR. VS CONTAINER CORP. OF INDIA LTD. AND ORS.
of the goods on as is where is basis. The good fetched Rs.6,70,000/- lakhs as against the value of goods, which was determined by customs by its orders at Rs. 17.00 lakhs, in 2004.
The record shows that the complainant issued notice to Union of India, Respondent No,1, Custom Department, Respondent No2, The Inland Container Depot, Respondent No,3 and trader Respondent No.4 under Section 80 CPC, for claiming losses as compensation, harassment and mental agony etc. as seen by notice on record. It appears that all efforts were futile as no case against these respondents in Civil Court is stated to have been filed. The complainant, it appears, that thereafter filed the complaint for total compensation of Rs.37.00 lakhs before the State Commission under the Consumer Protection Act. The Hon'ble State Commission, however, took the view that on the face value of complaint, the compensation cannot exceed Rs.20.00 lakhs, and remanded the complaint to this Forum."
2. The District Commission after taking into consideration the material available on record passed the judgment dated 21.02.2013, whereby it held as under:
"We take this case as a case of complaint of deficiency only against respondent No.3, in whose container the goods remained till the same were released to the complainant on the orders of Hon'ble High Court in the Writ Petition. The Union of India and Department of Customs were carrying out only statutory duties and for any malafide in duties, the MODIFIED PAGE 5 OF 12 FA/22/2013 DOD: 15.03.2023 M/S. MODERN OVERSEAS & ANR. VS CONTAINER CORP. OF INDIA LTD. AND ORS.
appropriate proceedings against them for damages may lie elsewhere.
The respondent No.3 in its reply has admitted that it was in the position of bailee of goods, in terms of relevant sections of Indian Contract Act; and that in terms of the contract between the consignor and it, its liability was as per provided in the Railways Act, which was limited to only 7 days, for any loss or deterioration of goods. It is stated that after initial 7 days, the respondent 3 was not liable for any loss or compensation etc. No relief is claimed against respondent no.4, nor is any liability alleged against it. We have carefully considered the matter. It is admitted position that respondent no.3 was in the position of bailee of goods till the same were released or collected by the consignee. The Contract between it and consigner was for the benefit of complainant, who was to be charged as per the tariff of the ICD for the delayed release of the goods. This constitutes a consumer service relation between the two. The question of demurrage etc. charged by Custom Department is beyond this contract and that relationship and cannot form subject matter of this discussion here. The main question for consideration is whether the liability of the bailee ends itself, if for some reasons of intervention of other statutory authorities as Customs in this case, the complaint is prevented from taking delivery because of detention orders, after period of 7 days as per the contract between the consigner and bailee. The tariff structure itself shows that different rates apply for period after 7 days till MODIFIED PAGE 6 OF 12 FA/22/2013 DOD: 15.03.2023 M/S. MODERN OVERSEAS & ANR. VS CONTAINER CORP. OF INDIA LTD. AND ORS.
goods are released. The bare fact of non-release of goods will not render the goods without any legal relationship or duty of care or prudence as one would require to protect one 's own goods by reasonable care towards the goods held for another. The delay may lead to huge financial liability but would not derogate from the duty to preserve the goods in the manner possible. It is beyond dispute that after re stuffing of goods subsequent to custom checks, the goods remained with ICD. We have considered the evidence in the light of these facts. The complaint in its affidavit, it evidence has deposed that it repeatedly requested to issue a certificate of condition of cargo, vide letter dated 12.10.06 which is Exhibit P 16. It is stated in Para 28 of the affidavit that the authorities only shifted onus on each other. Exhibit 17 is the report of registered valuer showing the value of damaged goods at Rs.5 lakhs. There is no contrary evidence produced by respondent 3, who is the main contestant. IT has simply taken a legal position of no liability after 7 days. We have considered other evidence and Exhibits particularly Exh. P18 and Exh. P 19 to know the loss.
The order dated 17.8.04 passed by Additional Commissioner of Customs mentions all facts about the costs in the Bill of Entry. Its copy is on record. It is found that the value of the imported goods were worth Rs.9, 68,772/- in INR. The customs held these as undervalued and re determined it to Rs.17, 05363/- This valuation has been set aside by the superior Commissioner of Customs MODIFIED PAGE 7 OF 12 FA/22/2013 DOD: 15.03.2023 M/S. MODERN OVERSEAS & ANR. VS CONTAINER CORP. OF INDIA LTD. AND ORS.
and this setting aside has been upheld by the Tribunal on appeal by the Customs. In view of these facts the value of goods can be taken at only Rs.9,68,772/- for the purpose of determining loss due to drench of container and goods and water in container in custody of Respondent No.3. The complainant has claimed the custom duty paid on the goods as part of the compensation. This duty for importing paid before the damage to goods cannot be called loss due to deficient service. The loss to business etc, and mental agony and harassment due to repeated detention orders passed and its wrong valuation of goods, leading to litigation due to demand of demurrage claimed by customs due to detention is matter sub -judice in the writ petition, where the goods. have been ordered to be released on certain terms till final out come of the writ petition. Such claim for damages etc. due to wrong action of Customs in discharge of statutory functions is to be determined by writ or other appropriate proceedings.
In the light of these findings, we hold the respondent no.3, guilty of deficiency of service in not properly placing the container protected from rains or water seeping into the container by covering it from outside, as the goods were to be released to the consignee on termination of custom proceedings. The complainant has suffered the loss of Rs.9, 98,772/- LESS Rs. Rs.6.70,000/-fetched by public auction. Thus the loss of value due to damage to raw material which to could not be turned by manufacture to be able sell as finished product to be sold in market is taken at MODIFIED PAGE 8 OF 12 FA/22/2013 DOD: 15.03.2023 M/S. MODERN OVERSEAS & ANR. VS CONTAINER CORP. OF INDIA LTD. AND ORS.
Rs.3,28,772/-. We allow loss of business at 30 percent of the value of original value of goods of Rs.9, 98772/- i.e. Rs.3.00 lakhs. The complainant has been litigating by coming from Aligarh since2007 and has claimed travel and stay expenses., charges of surveyor, advertisement charges, litigation expensed and of course we have to compensate him of deficiency in service. We award lump sum compensation on these accounts assessed by us at Rs.3.0 lakhs. Thus, the total amount awarded to complainant against respondent no.3 works out to a sum of Rs.9, 28,772/- This sum will carry interest at the rate of 9% from the date of complaint till payment."
3. Aggrieved by the aforesaid judgment of the District Commission, the Appellants have preferred the present appeal, contending that the District Commission failed to appreciate the fact that the appellants paid the import duty to respondent no.1 and 2 only to get its good released in marketable condition, however, the goods were damaged due to negligence of the Respondent no.1 and 2. The counsel for the appellants contended the appellants would not have paid the import duty if he had known that the goods are damaged. He further submitted the wrongful detention of the good prevented the appellant from selling the goods/completing the manufacturing of cylindrical locks by using the cylinders imported. Also, the Respondent no.1 and 2 denied to appoint surveyor, therefore, the appellant had to appoint his own surveyor. Pressing the aforesaid contentions, the Appellants prayed to modify the order of the District Commission.
4. The Respondent no. 1 and 2 contested the present case and submitted that the respondents have performed their statutory duties in the matter MODIFIED PAGE 9 OF 12 FA/22/2013 DOD: 15.03.2023 M/S. MODERN OVERSEAS & ANR. VS CONTAINER CORP. OF INDIA LTD. AND ORS.
under law and under section 155(1) of the customs Act, 1962, therefore, no suit, prosecution or other legal proceedings shall lie against the respondent no.1 and 2 for anything which is done in good faith, in pursuance of the customs act, or the rule or regulations thereof. The counsel for the Respondent no.1 and 2 further submitted that the appellant failed to allege any consumer relationship or deficiency of services on the part of the respondents. Therefore, the present appeal be dismissed with heavy cost.
5. During the course of proceedings, multiple opportunities were given to the Respondent no. 3 to file reply to the appeal but the Respondent no.3 failed to file the same till date.
6. On the other hand, the Respondent no.4 contested the present case and submitted that the appellants failed to show any cause of action against the Respondent no.4. The counsel for the Respondent no.4 further submitted that it was only acting as an agent of its principal agency and there is no deficiency on the part of the Respondent no.4.
7. We have perused the material available on record and heard the counsel for the parties.
8. On perusal record, it is noted the that District Commission only hold Respondent no.3 deficient in providing its services to the Appellants. More so, no service was availed from the Respondent no.1 and 2 by the Appellant and also no relief has been sought against the Respondent no.1 and 2. Therefore, it is clear that that respondent no.1 and 2 are not liable to pay any compensation to the appellants.
9. The only question for consideration before us is whether District Commission erred in awarding lump sum of Rs. 9,28,772 /- due to the deficiency of the part of the Respondent no.3.
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M/S. MODERN OVERSEAS & ANR. VS CONTAINER CORP. OF INDIA LTD. AND ORS.
10. On perusal of record, it is clear that the Appellants availed the services of the Respondent no. 3 for importing the goods in question. Thereafter, the goods remained with the Respondent no.3 as the same could not be released by the Appellants due to legal formalities and the said goods got damaged in custody of the Respondent no.3.
11. Further, it is also clear that the total value of the goods is Rs. 9,98,772/- as valued by customs and upheld by the Tribunal Court. As the said goods were damaged, the Appellant got the valuation through a valuer, which tunes to Rs. 5,00,000/- (Annexure P 17) attach with complaint. But later, the appellants sold the goods in question in auction of Rs. 6,70,000/-. Accordingly, the District Commission awarded 30% of total amount Rs. 9,98,772/- amounting to Rs. 3,00,000/- and total 9,28,772/- including travel and stay expenses, charges of surveyor, litigation cost etc.
12. However, it is clear from the record that appellants paid the import duty of Rs. 4,00,000/- to respondent no.3 only to get its good released in marketable condition but the goods were damaged due to negligence of the Respondent no.3, which forced the Appellants to sold the same in auction. Therefore, the Respondent no.3 is also liable to pay import duty of Rs. 4,91,127/- to the Appellants.
13. Consequently, we modify the judgment dated 21.02.2013 passed by the District Consumer Disputes Redressal Forum VI, 'M' Block, 1st Floor, Vikas Bhawan, I.P. Estate, New Delhi - 110001. The Respondent no.3 is also directed to Rs. 4,91,127/- and the rest of contents of the said impugned judgement remain unchanged.
14. The Respondent no.3 is directed to comply with the directions passed in Para 13 of this judgment within one month from the date of this judgment, failing which, the Respondents have to pay interest @ 9% MODIFIED PAGE 11 OF 12 FA/22/2013 DOD: 15.03.2023 M/S. MODERN OVERSEAS & ANR. VS CONTAINER CORP. OF INDIA LTD. AND ORS.
per annum on Rs.4,91,127/- from the date of this Judgment till actual realization of the amount.
15. No order as to cost.
16. Application(s) pending, if any, stand disposed of in terms of the aforesaid judgment.
17. A copy of this judgment be provided to all the parties free of cost as mandated by the Consumer Protection Regulations, 2005. The judgment be uploaded forthwith on the website of the commission for the perusal of the parties.
18. File be consigned to record room along with a copy of this Judgment.
(JUSTICE SANGITA DHINGRA SEHGAL) PRESIDENT (PINKI) MEMBER (JUDICIAL) (J.P. AGRAWAL) MEMBER (GENERAL) Pronounced On:
15.03.2023 MODIFIED PAGE 12 OF 12