National Consumer Disputes Redressal
Tata Iron & Steel Company Ltd vs Mr. Biswanath on 23 April, 2013
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO.422 of 2008 (From the Order dated 25.08.2008 in Complaint Case No.17/0/03 of the State Consumer Disputes Redressal Commission, West Bengal) Tata Iron & Steel Company Ltd. (Now Tata Steel Ltd.) Having its regd. Office at Bombay House, 24, Homi Modi Street, Mumbai-4000001 AND P-4, Transport Depot Road, Kolkata-700088 .. Appellant Vs. Mr. Biswanath, Proprietor of M/s. Bharatya Road Transport, 134, Cotton Street, First Floor, Kolkata-700007 ..Respondent AND FIRST APPEAL NO.167 of 2009 (From the Order dated 25.08.2008 in Complaint Case No.17/0/03 of the State Consumer Disputes Redressal Commission, West Bengal) Mr. Biswanath, Proprietor of M/s. Bharatya Road Transport, 134, Cotton Street, First Floor, Kolkata-700007 ..Appellant Vs. Tata Iron & Steel Company Ltd. (Now Tata Steel Ltd.) P-4, Transport Depot Road, Kolkata-700088 .. Respondent BEFORE: - HONBLE MR. JUSTICE ASHOK BHAN, PRESIDENT HONBLE MRS. VINEETA RAI, MEMBER For the Appellant in FA No.422/08 : Mr. Ajay Aggarwal, & Respondent in FA No. 167/09 Mr. Siddharth Banthia and Ms. Arushi Sethi, Advocates For the Respondent in FA No.422/08 : Ms. Aishwarya Bhati and & Appellants in FA No. 167/09 Group Capt. K.S. Bhati, Advocates PRONOUNCED ON: 23.04.2013 O R D E R
ASHOK BHAN, J., PRESIDENT Complainant and the Opposite Party before the State Commission have filed these Appeals against the order and judgment dated 25.08.08 passed by the State Consumer Disputes Redressal Commission, West Bengal (in short, the State Commission) in Complaint Case No. 17/0/03 whereby the State Commission partly allowing the complaint has directed the Respondent Transporter to pay compensation of Rs.3,13,128/- being 50% of the value of the consignment to the Complainant for the loss suffered by it.
FACTS:-
Complainant/Appellant firm, M/s. Tata Iron & Steel Co. Ltd. (hereinafter to be referred to as the Appellant) entrusted a consignment of 204 pieces of 80 Galvanized Medium Screwed and Socketed Tubes to the Respondent Transporter (hereinafter referred to as the Respondent) on 28.11.2000 for transportation and delivery to Ambari, Gram Panchayat, District Cooch Bihar vide invoice No.TD/CAL/STP/Dir/48/1191. On the same day, another consignment of 206 pieces of 80 Galvanized Medium Screwed and Socketed Tubes was entrusted by the Appellant to the Respondent for transportation and delivery to Marich Bari Kholta Gram Panchayat, District Cooch Bihar vide invoice No. TD/CAL/STP/Dir/ 48/1192. The total value of both the consignments was Rs.6,26,256.67. Respondent acknowledged the receipt of consignments by issuing consignment Notes No. BRT/5228 and BRT/5229 both dated 28.11.2000. The freight charges of Rs.17,018/- were paid to the Respondent by the Appellant. However, on 28.02.2000 the Appellant came to know that the consignments were not delivered to the consignees in Cooch Bihar.
On taking up the matter with the Respondent, Appellant was informed vide letter dated 8.03.01 that the lorry driver and the owner of the lorry in which the consignments were sent committed criminal breach of trust and misappropriated the goods. It was further informed that an FIR was lodged by the Respondent on 13.02.01 against the lorry driver and the lorry owner and in fact one person was arrested and presented before the Magistrate. Appellant sent a legal notice dated 12.06.01 to the Respondent for payment of Rs.6,26,256.67 towards the value of the consignments entrusted to it. On 03.07.01, Respondents Advocate sent reply to the legal notice denying any liability towards the Appellant for the lost goods. Complainant, being aggrieved, filed the complaint before the State Commission claiming a sum of Rs.6,26,256.67 towards value of the consignments, Rs.17,018 for refund of freight charges and Rs.2,05,708.60 as interest.
Respondent Transporter, on being served, entered appearance and filed its written statement contesting the complaint, inter-alia, on the grounds; that the material was lifted from TISCO at owners risk and they supplied only truck for transportation of the goods; that on 4.01.01, the Sales Manager of the Appellant Company verbally intimated to them that the consignment was delivered on 05.02.01 but on 28.02.01 they again informed that the consignment had not been delivered; that the FIR was lodged against the Truck owner/driver on the basis of which one person was arrested; that the Appellant is not a consumer as they are engaged in commercial activities.
State Commission after considering the facts, pleadings and evidence led by the parties, held that the Appellant had complied with mandatory requirement of serving the notice u/s 10 of the Carriers Act. That since the Respondent had received the goods under proper acknowledgement, it was incumbent on the Respondent to compensate the Appellant for the loss suffered by it for non-delivery of the goods, but the State Commission restricted the relief to 50% of the value of the goods on the ground that the Appellant was partly negligent in not getting the goods insured which he had sent on owners risk. 50% of the loss was directed to be borne by the Appellant. Complaint was partly allowed and the Respondent was directed to reimburse the loss of Rs.3,13,128/- being 50% of the value of the consignment to the Appellant for the loss suffered by it.
State Commission in its order observed as under:-
The contentions of the Complainant is that since the OP received the goods by proper acknowledgement it is incumbent on the part of the OP to compensate the Complainant for the loss of goods and other incidental costs. We also find that the Complainant had served necessary notice as requirement u/s 10 of the Carrier Act which is mandatory provision to proceed against any carrier.
In the ordinary circumstances the OP must have made good the full loss suffered by the Complainant as they received the goods under proper receipts. However, we also find that the Complainant has dispatched the goods without any insurance coverage which means that they have sent the goods on owners risk and thus failed to take proper precautionary measures against such loss.
In such circumstances, the complainant is not entitled to full compensation due to loss of the goods as per settled position of law as decided in 2008 CTJ 354 (CP) (NCDRC). The deficiency of the OP carrier in terms of Section 2 (1)(g), however stands substantiated. The Carrier is, therefore, legally bound to compensate the complainant in part. The OP relied on the decision in AIR 1977 Delhi, 182, in support of their arguments. The Complainant relied on the decisions in 2007 CTJ 333 (SC) CP but the said decision are not strictly applicable to the present case.
Dis-satisfied with the order passed by the State Commission both the parties have filed appeals. First Appeal No. 422/08 has been filed by the Complainant seeking full amount of the consignment whereas the First Appeal No. 167/09 has been filed by the Opposite Party for setting aside the impugned order.
We have heard the Ld. Counsel for the parties at length.
Ld. Counsel appearing for the Appellant relying upon the judgment of the Supreme Court in the case of Nath Bros. Exim International Ltd. Vs. Best Roadways Ltd. (2000) 4 SCC 553 contends that the liability of a carrier to whom the goods are entrusted for carriage is that of an insurer and is absolute in terms, in the sense that the carrier has to deliver the goods safely, undamaged and without loss at the destination indicated by the consignor. That so long as the goods are in the custody of the carrier, it is the duty of the carrier to take due care as he would have taken of his own goods and he would be liable if any loss or damage was caused to the goods on account of his own negligence or criminal act or that of his agent and servants. That the State Commission has erred in restricting the claim to 50% of the value of the goods. That the State Commission has further erred in not ordering reimbursement of freight charges of Rs.17,018/- and granting interest on the awarded amount.
Ld. Counsel appearing for the Respondent, on the other hand, contends that the Appellant was negligent in sending the goods without getting them insured. That the Respondent promptly engaged a truck for carrying the goods to the respective designations, however, the goods were not delivered to the consignee as the owner and driver of the truck had sold the goods unauthorizedly in collusion with some anti-social elements. That the Respondent was not liable for criminal act of owner and driver of the vehicle. He further submits that the State Commission erred in directing the Respondent to reimburse the loss to the extent of 50% of the value of the goods sent.
State Commission did not decide the question regarding the maintainability of the complaint. Since this point was raised during the course of arguments, we propose to decide the same as well.
Contention of the Ld. Counsel for the Respondent is that since the services had been availed for a commercial purpose, the Appellant was not a consumer falling within the definition of consumer given in Section 2 (1) (d) (i) and (ii) of the Consumer Protection Act, 1986 (in short, the Act). Section 2 (1) (d) (i) and (ii) read as under:-
(d) Consumer means any person who,-
(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
(ii) hires or avails of any service for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person but does not include a person who avails of such services for any commercial purposes (Added by Act 62 of 2002 w.e.f 15.03.2003).
Explanation For the purposes of this clause, Commercial purpose does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-employment.
(Emphasis supplied) Underlined words but does not include a person who obtains such goods for resale or for any commercial purpose in sub clause (i) of Section 2 (1) (d) were there from the inception of the Act. The words to the similar effect were not there in sub clause (ii) of Section 2 (1) (d) of the Act for a person who hired or availed of services for a commercial purpose. Underlined words in Section (2) (1) (d) (ii) but does not include a person who avails of such services for any commercial purposes were introduced in this sub-clause by Act 62 of 2002 which came into force w.e.f. 15.03.2003. Persons availing of services for commercial purpose were treated to be consumers prior to the amendment of sub clause (ii) of Section 2 (1) (d) of the Act. Question as to whether the amendment introduced by Act 62 of 2002, would have prospective or retrospective effect, came up for consideration before a Bench of this Commission in Kurji Holy Family Hospital Vs. Boehringer Mannheim India Ltd. III (2007) CPJ 371 (NC). The Bench after taking into consideration the earlier judgments in the cases of Jay Kay Puri Engineers and Anr. Vs. Mohan Breweries & Distilleries Ltd. (1998) CPJ 38 and Birla VXL Ltd. Vs. National Insurance Co. Ltd. OP NO. 172 of 1995 (decided on 29.05.03) held that the amendment in the definition to Section (2) (1) (d) (ii) to the effect but does not include a person who avails of such services for any commercial purposes, do not have retrospective effect and that the amendment was prospective in operation. The relevant observations read as under:-
14. This would mean that prior to the coming into force of the amended provision, a person would be a consumer for the services which are to be rendered for commercial purposes. Admittedly, the complaint was filed in the year 1998, i.e. much prior to the amendment of the Act in the year 2003.
15. Keeping this in mind we would refer to a few judgments on the subject:-
In Amtrex Ambience Ltd. vs. M/s. Alpha Radios & Anr. I(1996) CPJ 324, this Commission observed that it had in several cases already taken the view that where the allegations of the complainant was that there was malfunctioning of the machinery/equipment during the period of warranty and when the manufacturer had undertaken to keep the machinery in good working condition, then the purchaser will certainly be a consumer under Section 2(1)(d)(ii) in respect of services rendered or to be rendered by the seller for the proper functioning of the machinery/equipment, during the period of warranty. This would be so even if machinery/equipment is sold for commercial purpose.
16. Similarly, this Commission in Jay Kay Puri Engineers & Anr. vs. Mohan Breweries & Distilleries Ltd. I (1998) CPJ 38, observed that the State Commission correctly stated the settled legal position that even where the goods were purchased for commercial purpose, if there is a warranty, as in this case, for its maintenance, the purchaser becomes a consumer in respect of the services rendered or to be rendered by the manufacturer or supplier during the warranty period.
17. Finally, in the case of M/s, Birla VXL Ltd. vs. National Insurance Co. Ltd. (Original Petition No.172 of 1995, decided on 29th May, 2003) , this Commission held that amendment in the definition to Section 2(1)(d)(ii) by adding but does not include a person who avails of such services for any commercial purpose came into force from 15th March, 2003 and it would not have any retrospective effect and that the amendment was prospective in nature. Therefore, pending cases are required to be decided on the basis of un-amended definition.
18. From the aforesaid law, it is apparent that complaint was maintainable even though the hospital was using the machine for commercial purpose as the complaint was filed in the year 1998 i.e., prior to amendment of Section 2(1)(d)(ii).
We respectfully agree with the view taken by this Commission in Kuriji Holy Family Hospitals case (supra) and follow the same. In the present case, cause of action had arisen prior to the amendment of clause (ii) of Section 2 (1) (d) of the Act. Complaint was also filed on 27.02.03 prior to the coming into force of the amendment Act of 2002. Since the cause of action and complaint was filed prior to the coming into force of the amendment Act 62 of 2002, the Appellant would be a consumer and the complaint filed by it would be maintainable.
On merits, we agree with the contention raised by the Ld. Counsel for the Appellant that the liability of a carrier to whom the goods were entrusted for carriage is that of an insurer and is absolute in terms.
The carrier was liable to deliver the goods safely, undamaged and without any loss at the destinations indicated by the consignor. It was the duty of the carrier to take due care of the goods while they were in his custody as if it were his own goods and he would be liable if any loss or damage is caused to the goods on account of his own negligence or criminal act of his agent and servants. The view we have taken is supported by the judgment of the Honble Supreme Court in Nath Bros. Exims case (supra). The Honble Supreme Court after considering the entire case law on carriers liability held as under:-
27. From the above discussion, it would be seen that the liability of a carrier to whom the goods are entrusted for carriage is that of an insurer and is absolute in terms, in the sense that the carrier has to deliver the goods safely, undamaged and without loss at the destination, indicated by the consignor. So long as the goods are in the custody of the carrier, it is the duty of the carrier to take due care as he would have taken of his own goods and he would be liable if any loss or damage was caused to the goods on account of his own negligence or criminal act or that of his agent and servants.
28. Ld. Counsel for the Respondent contended that the goods were booked at OWNERS RISK and, therefore, it any loss was caused to the goods, may be on account of fire, without suddenly engulfed the neighbouring warehouse and spread to the godown where the goods in question were stored, the carrier would not be liable.
29. OWNERS RISK in the realm of commerce has a positive meaning. It is understood in the sense that the carrier would not be liable for damage or loss to the goods if it were not caused on account of the carriers own negligence or the negligence of its servants and agents. In Burton V. English and again in Wade V. Cockerline it was held that in spite of the goods having been booked at OWNERS RIKS, it would not absolve the carrier of its liability and it would be liable for the loss or damage to the goods during trans-shipment or carriage. These decisions granted absolute immunity to the carrier, but they have lost their efficacy on account of subsequent decision in Svenssons V. Cliffe S.S.Co. which was considered in Exercise Shipping Co.
Ltd. Vs. Bay Maritime Lines Ltd. (The Fantasy) in which it was observed as under:-
The question whether words such as at Charters risk can operate as an exemption clause in favour a party otherwise liable for negligence was decided by Mr. Justice Wright (as he then was) in Svenssons Travaruaktiebolag v. Cliffe Steamship Co. He considered the authorities in detail and concluded:-
It is quite clear, in my judgment, on the authorities as they now stand, that the words at charterers risk , standing alone and apart from any other exception in the charter-party, do not excuse the ship-owner in the case of a loss due to the breach of warranty of seaworthiness.. I think that the words standing by themselves have also to be read as limited to losses and damages where there has been no negligence on the part of the ship-owner or his servants.
He went on to consider the charter-party terms in that case which also included an exceptions clause, clause 11. He held that clause should have its full effect whereas if at charterers risk had included an exception of negligence, it might not have done so.
That judgment has been followed since 1932, for example in The Stranna and East & West Steamship Co. v. Hussain Bros.
and it has not, so far as I am aware, been dissented from.
30. In Mitchell v. Lancashire and Yorkshire Rly. Co. it was held that OWNERS RISK only exempts the carrier from the ordinary risks of the transit and does not cover the carriers negligence or misconduct. So also, in Lewis v. Great Western Rly. Co. the words OWNERS RISK, were held to mean, at the risk of the owner, minus the liability of the carrier for the misconduct of himself or servants.
31. Thus the expression at owners risk does not exempt a carrier from his own negligence or the negligence of his servants or agents.
In the present case, the goods had been entrusted by the Appellant to the Respondent under proper acknowledgement. It was incumbent on the part of the Respondent to take due care of the goods while they were in his custody. The liability of the Respondent Carrier to whom the goods were entrusted for carriage was absolute and he was to deliver the goods safely, undamaged and without any loss to the destinations indicated by the Appellant. Respondent had admitted the receipt of the goods under proper acknowledgement. However, Respondent instead of carrying the goods himself entrusted the same to its agent for safe delivery at the destination. The agent sold the goods and mis-appropriated the proceeds of the goods. As held by the Honble Supreme Court in Nath Bros. Exims case (Supra) the Owner would be liable for the loss of the goods caused either due to his own negligence or negligence of his agent, Respondent, in the present case, is liable to reimburse for the loss or damage to the goods caused by his agent. In our considered view, State Commission has erred in restricting the liability of the carrier to the 50% of the value of the goods.
Respondent is liable to reimburse the total loss suffered by the Appellant due to non-delivery of the goods at the indicated destinations. Otherwise also, even in terms of Section 3 of the agreement, Respondent was liable for the acts of his agent. Relevant Section 3 of the Agreement reads as under:-
The Transport Operator shall have the right to entrust the goods to any other lorry or service or transport. In the event of the goods being so entrusted by the Transport Operator to another carrier, the other carrier shall as between the Consignor, the Consignee bank and the Transport Operator be deemed to be the Transport Operators agent so that the Transport Operator shall, nothwithstanding the delivery of the goods to the other carrier, continue to be responsible for the safety of the goods and for their due delivery at the destination.
State Commission has further erred in not granting the freight charges of Rs.17,018/- paid by the Appellant to the Respondent. State Commission also erred in not awarding interest on the amount of loss suffered by the Appellant. Appellant has been deprived of use of the money and as such they are entitled to the interest at a reasonable rate. Supreme Court in the case of Alok Shanker Pandey vs. Union of India & Ors. (2007)3 SCC 545 has held that interest is neither a penalty nor punishment but is a normal accretion on capital; that the person who kept the money, utilized the same and earned interest thereon (which otherwise would have been earned by the person who was entitled to that amount), equity demands that the person who kept the money should pay the principal amount to the person to whom it is due with interest. Relevant observations of the Supreme Court read as under:
It may be mentioned that there is misconception about interest. Interest is not a penalty or punishment at all, but it is the normal accretion on capital. For example if A had to pay B a certain amount, say 10 years ago, but he offers that amount to him today, then he has pocketed the interest on the principal amount. Had A paid that amount to B 10 years ago, B would have invested that amount somewhere and earned interest thereon, but instead of that A has kept that amount with himself and earned interest on it for this period. Hence equity demands that A should not only pay back the principal amount but also the interest thereon to B. For the reasons stated above, the First Appeal No.167 of 2009 filed by the Respondent for setting aside the impugned order is dismissed while the First Appeal No. 422 of 2008 filed by the Appellant for enhancement of the compensation, freight charges and interest is allowed with costs. Costs in both the appeals are assessed at Rs.25,000/-. Respondent is directed to pay Rs.6,26,256.67 towards the value of the goods and Rs.17,018/- towards freight charges to the Appellant along with interest @ 9% p.a. from the date of filing the complaint till realization.
It is not disputed before us that during the pendency of these Appeals, Respondent had paid a sum of Rs. 3,13,128/- to the Appellant in compliance of the order dated 02.02.09 passed by this Commission.
Respondent is directed to pay the sum of Rs.3,13,128/- being the balance 50% value of the goods and Rs.17,018/- towards freight charges to the Appellant along with interest @ 9% p.a. from the date of filing the complaint till payment.
Respondent is also directed to pay the interest @ 9% p.a. on the amount of Rs.3,13,128/- already paid by him to the Appellant from the date of filing the complaint till the date of payment.
Respondent is granted eight weeks period to pay the balance amount as per direction issued above failing which the Appellant would be at liberty to get the order executed.
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(ASHOK BHAN J.) PRESIDENT . . . . . . . . . . . . . . . .
(VINEETA RAI) MEMBER Yd