National Consumer Disputes Redressal
Shakumbhri Exports vs Leif Heegh And Co. And Ors. on 14 November, 2003
Equivalent citations: II(2004)CPJ28(NC)
ORDER
Rajyalakshmi Rao, Member
1. The complainant Shakumbhri Exports, is a partnership firm exporting handloom products, especially handloom rugs and handicrafts. He entered into a contract on 11.6.1994 for supply of handloom, durries and floor covering to 3rd opposite party M/s. Hayem & Co. based at Norfolk, USA for a price of US $ 39,437/-. The goods were shipped through the 2nd Opposite Party M/s. Forbes Gokak Ltd. (Padvolk Division) Bombay who is the agent in India of the 1st opposite party M/s. Leif Heegh & Co., Oslo Norway. The shipment of these handloom products was carried by vessel "Hough Cairn" covered by Bill of Lading No. 054 dated 11.6.1994. One La Salle National Bank, Chicago was shown as the consignee in the Bill of Lading. The party to be notified is M/s. Hayem & Co., the 3rd Opposite Party. The delivery of the consignment was to be made against documents, and the documents were to be released by La Salle Bank only on payment being made to the said Bank by M/s. Hayem & Co.
2. It is the complainant's case that when they did not receive the payment for goods shipped, they made inquiries on 1.2.1995 with the 2nd opposite party about the fate of the consignment. The 2nd opposite party, the agent, vide his fax message dated 3.2.1995 informed the complainant that the goods were released and delivered to consignee on 27.7.1994. Again 2nd opposite party confirmed this vide his fax dated 27.3.1995. However, since no payments were received, the complainant persisted with further inquiries and asked for photo-copies of the Original Bill of Lading against which the release was made. The 2nd opposite party suddenly changed his stand and vide his fax message dated 25.4.1995 now informed that the goods could not be cleared as the consignee did not surrender the Original Bill of Lading and that the goods were still lying unclaimed at the docks.
3. It is further averred by the complainant that when they asked for a clarification on these contradictory statements, stand taken by 2nd opposite party, the latter vide his fax message dated 26.5.1995 informed them that the consignee has declined to accept the goods/ abandoned them. The 2nd opposite party also advised the complainant to find a new buyer for his goods and further added that the entire freight of US D 3,550/- apart from other costs have to be borne by the complainant. As there was no response from the 2nd opposite party to the legal notice issued by the complainant on 1.6.1995, he approached the National Commission alleging deficiency in service on the part of the opposite parties claiming reimbursement of price of goods of US $ 39,437/- (equivalent to Rs. 14,19,740) and damages of US $ 25,000 (equivalent to Rs. 9,00,000/-) in all Rs. 23,19,740/-.
4. The 1st and 2nd opposite parties advanced three arguments in regard to the jurisdiction of this Commission. The first argument of 2nd O.P. i.e., Forbes Co. Ltd., (Patvolk Division) Mumbai, is that they had agreed to ship the goods on the standard terms and conditions contained in the Bill of Lading and that Para 3 of the terms and conditions provided that "any dispute arising under the Bill of Lading shall be decided in the country where the carrier has its principal place of business and the law of that country shall apply unless provided in the Bill of Lading". His second argument is that the principal place of business of the carrier i.e. the 1st O.P. is in Oslo, Norway and thus this Commission does not have jurisdiction over the matter. The third argument of the 2nd O.P. is that he is an agent of 1st O.P. who are his disclosed principals, and as such he does not owe any liability to the complainant. It is further averred that 1st O.P. is a foreign company and cannot be sued in India.
5. In support of their plea that the proper Court of jurisdiction would be the one laid down in the Bill of Lading, the opposite parties relied on the judgment of the Supreme Court in British India Stream Navigation Co. Ltd. v. Shehmughavlas Cashew Industries, (1990) 3 Supreme Court Cases 481.
6. In support of his contention that the 2nd O.P. who is an agent for disclosed principal, cannot be sued by virtue of Section 230 of the Contract Act, 1872, he relied on the judgments in--
(i) Steel Authority of India Ltd. v. Trans World Marine Ltd., AIR 1982 Calcutta 161;
(ii) Midland Overseas v. CMBT Tana, AIR 1999 Bombay 401;
(iii) Marine Container Services South Pvt. Ltd. v. Go Go Garments, (1998) 3 Supreme Court Cases 247; Section 230 of the contract reads as follows :
Section 230 reads "In the absence of any contract to that effect, an agent cannot personally enforce contract entered into by him on behalf of his principal, nor is he personally bound by them. Presumption of contract to contrary; such a contract shall be presumed to exist in the following cases : (1) Whether the contract is made by an agent for sale or purchase of goods for a merchant resident abroad. (2) Where an agent does not disclose the name of his principal.
(3) Where the principal though disclosed, cannot be sued.
7. Referring to the judgments which have been cited above by the 2nd opposite party, we are elaborating the facts of these cases below.
In the Steel Authority of India case, defendant No. 2 was an Indian agent of a Shipping Company incorporated in Taiwan. The principal was impleaded as defendant No. 1. It was argued before the Court that defendant No. 2 is not a party to the contract of carriage between the plaintiff and defendant No. 1 and that he did not sign the Bill of Lading. The learned High Court on facts of the case held that the mischief of Section 230 of the Contract Act cannot be got over and that both the principal and the agent cannot be sued. It, therefore, directed that the name of the defendant No. 2 be struck out and deleted from the cause list of the plaint.
8. In the Marine Containers case, the National Commission held that the protection given to the agent, under Section 230 of the Contract Act will not apply to complaints filed under the Consumer Protection Act. Further, the National Commission relied on Clause 3 of Section 230 and held that the agent can be sued because the disclosed principal is a company located in Taiwan far outside the jurisdiction of Consumer Courts in India and cannot be sued. Supreme Court while reversing this decision and holding that Section 230 of the Contract Act applies even to complaints filed under the Consumer Protection Act, further observed that just because some company is in Taiwan, it cannot be inferred that it cannot be sued.
9. In the Midland Overseas case, it has been also held that where the principal is disclosed and has been impleaded as a defendant, no action would lie against the agent.
10. The complainant argues that his firm is situated at Panipat, India, that the cpntract was entered into at Panipat, that the Bill of Lading was issued at Bombay, that the goods were loaded into the ship at Bombay and that 2nd opposite party also has his office/ establishment at Bombay and works for gain from the said establishments, and that therefore the National Commission has jurisdiction to decide the matter. He has further argued that when he (complainant) brought some problems to the notice of 1st opposite party, he was clearly advised that he should not directly address any questions to 1st opposite party but should only address all correspondence to 2nd opposite party who is the Indian agent, vide letter dated 16.5.1995 (Exhibit CW 1/7).
11. In support of his argument that the agent is liable for the damages, the complainant relied on the judgment of this commission in the case of A.V. Thomas & Co. Ltd. v. Meridian Apparel and Anr., reported at II (1998) CPJ 1 (NC). In that case, the Shipping Co. handed over delivery of goods to the consignee without obtaining from him the original Bill of Lading. The Commission held that there was a deficiency in service. The appellants who were the booking agents of the Shipping Co. Air Sea Broker of Switzerland, argued that being merely agents, they have no responsibility or liability whatsoever towards the consignor. The Commission held that though the Bill of Lading is on a firm bearing the name of the principal, Air Sea Broker of Switzerland, they were issued by M/s. A.V. Thomas & Co. Ltd., and that it is a combined transport document which covers all modes of transport ranging from road to sea to air and that A.V. Thomas & Co. Ltd. are responsible for the loss suffered by the consignor.
12. It is, therefore, necessary to first decide about the jurisdiction of this Commission, and whether on the facts of the case the 2nd opposite party (the main contesting party) or the principal, (the 1st opposite party) are liable to be proceeded against, before this Commission. The norms expected by both the parties and the practical approach is that when an agent on behalf of the principal shipping Company has entered into a contract in India, namely by way of issuing a Bill of Lading in India, the Courts in India will have certainly the jurisdiction under Section 20 of the Code of Civil Procedure, 1908. Further, Clause 3 of Bill of Lading cannot be read in isolation and in derogation of the rights of a consignor to institute the complaint before this Commission inasmuch as the said clause in the Bill of Lading has not categorically excluded such jurisdiction nor the jurisdiction at Oslo, Norway has been specifically described to be the "only jurisdiction vested by the contract in exclusion of the jurisdiction of any other Court or country" which might arise out of dispute, for instance as in the present case.
13. Further, merely because of the fact that opposite party No. 1 is a foreign company registered in a foreign country namely Norway, it cannot be argued that the complaint in question cannot be entertained by this Commission. On their own showing the opposite party No. 1 has admitted specifically that they are represented in India by their agent namely "Forbes Gokak Limited" which is a registered company under the Companies Act, 1956. Therefore, whatever transaction has taken place between the complainant and opposite party No. 1's agent Indian Company has to be deemed that part of the transaction in question has taken place substaintly within the territorial limits of India, we see that the agent i.e., opposite party No. 2, has its registered office at Bombay and works for gain from the said establishment. The Bill of Lading issued, is a combined transport document which covers all modes of transport ranging from road to sea to air and hence the opposite party No. 2 can be shed in India by the consignor. The Supreme Court decision in the Marine Containers case and in the Midland Overseas case, clearly prohibits simultaneously suing both the principal as well as the agent. We are not taking any decision on this question as to whether the principal or agent is responsible in this matter since according to us the case of the complainant fails on merits. The Bill of Lading in this case though is issued by a firm bearing the name of the principal, the 1st opposite party, it was signed and issued by the 2nd opposite party Forbes Ltd. (Patvolk Division). The firm is "for combined transport and port to port shipment". The complainant was all thorugh in correspondence with the agent only. The one time on 15.5.1995 when he addressed a fax to the principal, he was clearly told not to correspond with the principal, but to approach the Bombay-based agent for all purposes. The complainant urged that these facts are similar to those in the case of A.V. Thomas & Co. Ltd. and argued that he should be compensated. We agree with this view and in the light of a clear decision of this commission in the case of A. V. Thomas & Co. we hold that this Commission has jurisdiction to hear the case.
14. The 1st and 2nd opposite parties further argued that the consignee as per the Bill of Lading was La Salle Bank, Chicago, USA and that nobody came forward to collect the goods and that the goods remained on the docks at Norfolk after they were unloaded on 15.7.1994. Opposite party No. 2 admits that the averments made by him in fax messages 3.2.1995 and 27.3.1995 that the goods were released to the consignee on the presentation of original Bill of Lading were wrong and were genuine mistakes and were based on the information given to him from Shipping Agents of O.P. No. 1 based in USA and those facts were not within his personal knowledge. Thereafter when he came to know from the US agent the correct facts, the same were communicated to the complainant vide fax message of 26.5.1995. The truth according to him is that when the consignee had declined to take delivery of the cargo and abandoned the same, the cargo was disposed of in November 1995 were USD 9187.50 and after adjusting the amount due to them, they debited the balance amount of US $ 3,140.35 to the complainant. Incidentally the complainant also accepts this as the truth, since he stated that the original Bill of Lading has been returned to him by the La Salle Bank subsequently.
15. In support of the plea that the carrier obligation under the contract ended after it carried the goods safely to the destination and it was under no obligation to inform the consignor about the failure of the consignee to take the delivery of the goods. Opposite parties 1 and 2, relied on this Commission's order in Saddler Shoes Pvt. Ltd. v. Air India, 1995 III CTJ 904 CP (NCDRC) which was also confirmed by Supreme Court. The Commission in that case held as follows :
"The obligation of the 1st respondent in the contract must be regarded as having been fully discharged, on the goods having been safely carried to Gdansk (Poland) and on due intimation being given to the consignee about the arrival of the goods. In law, the responsibility undertaken by the carrier came to an end on the expiry of a reasonable period from the date on which intimation of arrival was given to the consignee, so that he could take delivery within such reasonable period..........There is no obligation in law for the carrier to intimate the consignor about the failure of the consignee to take delivery of the goods."
16. In that particular case when the consignee in Poland did not take delivery, the complainant instructed Air India to take the cargo to Gothenbarg, Sweden for delivery to another named consignee. This Commission held that there was no further obligation on the part of the Air India to re-shift the goods to another country viz., Sweden unless a fresh contract for carriage of goods from Gdansk was gone to Gothenbarg was entered between the parties. It held that admittedly there was no such contract and hence there can be no deficiency in service on the part of Air India.
17. They also relied on para 456 of Hallsbury's Laws as regard liability of common carrier in a case of non-acceptance of goods by a consignee. The complainant relied on various judgments reported at I (1992) CPJ 154 (NC); II (1992) CPJ 992; II (1996) CPJ 520; I (1997) CPJ 36 and III, (1997) CPJ 5, in support of his argument that the carrier cannot deliver the goods to ultimate consignee bypassing the Bank when the lorry receipts of Goods Receipts are with a Bank. However, we think that these judgments are not applicable to the case before us, as the facts are different and it is not the case of the complainant that goods were given to the notified party bypassing La Salle Bank, nor is there any evidence that the goods were given to the notified party.
18. The complainant also relied on the judgment in the case of Sze Hai Tong Bank v. Rambler Cycle Co. Ltd. reported at All England Law Reports 1959 (3) page 182. In that case, the carrier released the goods to the notified party without the later producing the Original Bills of Lading which were with a Bank. Here again, the case before us can be distinguished on facts since the goods here have not been released to the notified party.
19. As brought out above, the facts in this case are that the notified party refused to receive the goods by producing the Original Bill of Lading. On 25.4.1995, O.P. No. 2 informed the complainant by fax "No Original B/L Surrendered by your Consignee and, therefore, cargo still pending and uncleared, cargo remains on docks. Kindly advise as to what to do with the shipment." The complainant replied on 1.5.1995 asking as to why contradictory statements are being made by O.P. No. 2, but did not reply to the specific query as to "what to do with the shipment". On 26.5.1995, O.P. No. 2 again faxed a message "the consignee has declined to accept this merchandise/ abandoned it. The shipment is still lying uncleared and pending. For your information we suggest you find an alternative buyer for you to dispose of the consignment. An urgent reply to this matter is expected".
20. It is seen that the complainant did not send any specific reply to O.P. No. 2 covering this aspect. O.P. No. 2 produced befort the Commission a fax dated 19.5.1995 (Exhibit RW/ 1/8) addressed to him by O.P. 3, the (notified party) mentioning clearly that due to some disputes between the buyer and seller, O.P. 3, is abandoning the container in question, and that O.P. 3 has also informed the La Salle Bank to return the original B/L to the complainant's Bank. On behalf of the complainant, a suggestion has been made that the letter was obtained by O.P. No. 2 by collusion; but no evidence has been led to that effect. We, therefore, hold that O.P. 1 and O.P. 2 took all reasonable steps to deliver the consignment, and only when it was refused and further the complainant also did not give any instructions for the disposal of the same, that they had disposed of the same by auction.
21. The complainant tried to build his case essentially on the basis that in the fax messages dated 3.2.1995 and 27.3.1995, O.P. No. 2 informed him that the consignment was cleared after receiving the original Bill of Lading and later on changed the version. We believe that this is a genuine mistake, as argued by O.P. No. 2. In the course of business involving events in two countries and especially when many consignments between the same parties are involved, it is possible for some mistakes to creep in. To give an example, in his fax message of April 21, 1995, the complainant referred to a consignment covered by Bill of Lading No. 0626, wrongly as covered by B/L 026. This mistake was pointed out by O.P. 2 by fax dated April 25, 1995, wherein he stated "kindly check the B/L No. 026, as it belongs to a different shipper and not Shakumbhri Exports as shipper." It is also seen from the correspondence that the complainant sent at least four consignments on the same ship "Hoegh Cairn, to the same party. These are by Bills of Lading Nos. 020, 054, 013 and 027. Three of these consignments were properly delivered against original Bill of Lading and correct information was conveyed. The mistake in replying happened only in as regards B/L 054. Further, by this fax dated 24.3.1995, complainant made inquiries about many consignments covered by as many as 12 Bills of Lading. Under the circumstances, it is possible that a genuine mistake could creep in communication. Further the fact remains that the complainant did not bother to enquire for the status of the shipment for a period of 71/2 months after the shipment. This is a very unusual behaviour on the part of an exporter who normally is anxious to receive his payments and so would be making inquiries soon after the anticipated delivery date.
22. With these above discussions and observations, we do not think that there is any deficiency of service on the part of O.P. No. 1 and O.P. No. 2. We, therefore, see no merit in the complaint and dismiss the same. No order as to costs.