State Consumer Disputes Redressal Commission
M/S Rachat Exports vs Pheonix Air Services on 26 September, 2016
Daily Order IN THE STATE COMMISSION: DELHI (Constituted under Section 9 of the Consumer Protection Act, 1986) Date of Decision:26.09.2016 Complaint Case No. 170/1997 & Complaint Case No. 171/1997 In the matter of: M/s Rachat Exports Through its Authorised Signatory Mr.V.K.Chopra, 104 Nag Raj Appt. J-10, Laxmi Nagar, West High Courts Road Nagpur-440022 .........Complainant Versus Pheonix Air Services SF-8 Bhikaji Kama Place New Delhi Swift Freight Moovers L-2, Ist Floor, Green Park Ext. New Delhi-110016 State Bank of India (International Division) Central Office Post Box No. 10121 3a. State Bank of India (California) 707, Wilshire Bouleyard, STE 1995 Los Angeles California 90017-3587 Punchline Clothing Co. 3838 So Hill Street Los Angeles CA 90017, USA Korean Airlines 303-304, Prakash Deep Building 7-Tolstoy Marg New Delhi-110001 Singapore Airlines Ltd. 315, InderParkash 21, Barakhamba Road New Delhi-110001 Syndicate Bank Kirti Nagar New Delhi Oriental Bank of Commerce (Overseas Branch) 85-A, RishyaMook Buildings Panchkuian Road New Delhi-110001 ..........Opposite Parties CORAM N P KAUSHIK - Member (Judicial) 1. Whether reporters of local newspaper be allowed to see the judgment? Yes 2. To be referred to the reporter or not? Yes N P KAUSHIK - MEMBER (JUDICIAL) JUDGEMENT
This order shall dispose of Complaint Case Nos. 170/1997 and 171/1997 by way of a common judgment. Both these complaints were earlier disposed of by this Commission vide separate orders both dated 13.11.2006. Facts in both the complaints are common. On an appeal preferred by State Bank of India, California (in short the OP No. 3(a))Hon'ble National Commission vide orders dated 08.10.2012 setaside both the orders dated 13.11.2006 and remanded the matters back to this Commission to decide them afresh in accordance with law. It was observed by the Hon'ble National Commission that it was difficult to comprehend and understand the impugned orders. Counsels for the parties had also submitted that they were unable to explain the basis on which this Commission had passed the orders.
For straightening the records, the memos of parties of both the complaints are separately given. Complaints revolve around the question of a letter of credit issued in favour of the complainant by Punchline Clothing Co. 3838 So HillStreet Los Angeles CA 90017, USA. Complainant M/s Rachat Exports J-10Laxmi Nagar West High Courts Road Nagpur is doing the business of export in leather goods. Swift Freight Mooversis a cargo agent and Pheonix Air Services is a sub cargo agent of Swift Freight Moovers. Punchline Clothing Company is a firm of buyers based in Los Angeles. Its bankers are State Bank of India California (in short the OP No. 3a). It is a branch of State Bank of India Bombay (in short the OP No.3). Korean Airlines (in Complaint Case No. 170/1997) and Singapore Airlines (in Complaint Case No. 171/1997) are the carriers of the goods from New Delhi to Los Angeles Airport.
In brief, case of the complainant (in Complaint Case No. 170/1997) is that it sold 15 bags of leather goods to M/s Punchline Clothing Co. vide invoice No. RE-0004 dated 14.08.1995 for a value of US$ 8713, booked at New Delhi with M/s Pheonix Air Services Pvt. Ltd. for delivery at Los Angeles, cleared by customs department. M/s Swift Freight Moovers New Delhi being a cargo agent issued a House Airway Bill bearing No. 006285 and Master Airway Bill bearing No. 130-4232-6620 dated 14.08.1995. M/s Korean Airlines New Delhi (OP-5) issued House Airway Bill No. 006284 & 85 for leather goods against two consolidated invoices bearing Nos. SF-0091 and RE-0004.
Delivery of goods through bank against 100% payment was agreed to. Syndicate Bank Kirti Nagar New Delhi (OP-6) forwarded the documents to State Bank of India Bombay (OP-3) for retiring goods against payment. State Bank of India Bombay (OP-3) issued letter dated 25.08.1995 to M/s Punchline Clothing Co. Gurgaon (OP-4) for collection of goods against payment. State Bank of India California (OP-3 (a)) issued authorisation letter dated 18.08.1995 to release the goods and directed M/s Singapore Airlines Los Angeles to handover the consignment to M/s Punchline Clothing Co. against payment of Airlines charges. Goods however stood delivered. Grievance of the complainant is that he did not receive payment of the consignment.
Facts in brief of Complaint Case No. 171/1997 are that the complainant disclosed that he sent 15 bags of leather goods to M/s Punchline Clothing Co. Gurgaon vide invoice No. RE-0005 dated 16.09.1995 for a value of US$ 4174.50. Goods were booked at New Delhi with M/s Pheonix Air Services Pvt. Ltd. Delhi for delivery at Los Angeles. These were cleared by customs department. M/s Swift Freight Moover was the cargo agent who issued House Airway Bill No. 006313 and Master Airway Bill No. 618-3857-3006 dated 18.09.1995. Singapore Airlines New Delhi (OP-5) issued House Airway Bill No. 006312 and 006313 against consolidated two invoices bearing Nos. SF-0108 and RE-0005. Delivery of goods through bank was agreed to against 100% payment. Oriental Bank of Commerce,Punchkuian Road New Delhi (OP-6) forwarded the documents to State Bank of India Bombay for retiring goods against payment. State Bank of India Bombay (OP-3) issued letter dated 25.09.1995 to M/s Punchline Clothing Co. (OP-4) for collection of documents against payment to OP-6. Goods stood delivered. Complainant contented that he did not receive the payment of the consignment.
Legal notices in both the complaints (Nos. 170/1997 and 171/1997) were sent.
Defence raised by the OP-1 i.e. M/s Pheonix Air Services in both the complaints is that the goods had been got released by trick by the buyers without verifying the documents by State Bank of India Bombay (OP-3). OP-4 i.e. M/s Punchline Clothing Co. has acted smart by getting the consignment of the two separate House Airway Bills released against the documents of the consignment. It was the duty of State Bank of India Bombay to mention the House Airway Bill and Master Airway Bill while giving the release orders in favour of M/s Punchline Clothing Co. to M/s Korean Airlines/M/s Singapore Airlines.
Arguments in the matter have been addressed at length by the Counsels for the Complainant Sh. Dinesh Kumar Gupta Advocate, Counsel for the OP-3a Sh. Arjun Gupta Advocate, Counsels for the OP-5 Sh. Vijay Chawla Advocate and Sh. Rajesh Kumar Sharma, Sh. Dilpreet Singh and Sh. ShantanuPatra Advocates.
Counsels appearing for OPs have raised an objection that the complainant is not a 'consumer' within the purview of the Section 2(1)(d) of the Consumer Protection Act 1986. Ld. Counsels have relied upon the case of Laxmi Engineering Worksv. PSG InternationalInstitute II (1995) CPJ 1 (SC). Para 12 of the judgment is relevant and the same is reproduced below:
"12.Now coming back to the definition of the expression 'consumer' in Section 2(d), a consumer means in so far as is relevant for the purpose of this appeal, (i) a person who buys any goods for consideration; it is immaterial whether the consideration is paid or promised, or partly paid and partly promised, or whether the payment of consideration is deferred; (ii) a person who uses such goods with the approval of the person who buys such goods for consideration (iii) but does not include a person who buys such goods for resale or for any commercial purpose. The expression "resale" is clear enough. Controversy has, however, arisen with respect to meaning of the expression "commercial purpose". It is also not defined in the Act. In the absence of a definition, we have to go by its ordinary meaning. "Commercial" denotes "pertaining to commerce" (Chamber's Twentieth Century Dictionary); it means "connected with, or engaged in commerce; mercantile; having profit as the main aim" (Collins English Dictionary) whereas the word "commerce" means "financial transactions especially buying and selling of merchandise, on a large scale" (Concise Oxford Dictionary). The National Commission appears to have been taking a consistent view that where a person purchases goods "with a view to using such goods for carrying on any activity on a large scale for the purpose of earning profit" he will not be a "consumer" within the meaning of Section 2(d)(i) of the Act. Broadly affirming the said view and more particularly with a view to obviate any confusion the expression "large-scale" is not a very precise expression the Parliament stepped in and added the explanation to Section 2(d)(i) by Ordinance/Amendment Act, 1993. The explanation excludes certain purposes from the purview of the expression "commercial purpose" - a case of exception to an exception. Let us elaborate: a person who buys a typewriter or a car and uses them for his personal use is certainly a consumer but a person who buys a typewriter or a car for typing others' work for consideration or for plying the car as a taxi can be said to be using the typewriter/car for a commercial purpose. The explanation however clarifies that in certain situations, purchase of goods for "commercial purpose" would not yet take the purchaser out of the definition o expression "consumer". If the commercial use is by the purchaser himself for the purpose of earing his livelihood by means of self-employment, such purchaser of goods is yet a "consumer". In the illustration given above, if the purchaser himself works on typewriter or plies the car as a taxi himself, he does not cease to be a consumer. In other words, if the buyer of goods uses them himself, i.e., by self- employment, for earning his livelihood, it would not be treated as a "commercial purpose" and he does not cease to be a consumer for the purposes of the Act. The explanation reduces the question, what is a "commercial purpose", to a question of fact to be decided in the facts of each case. It is not the value of the goods that matters but the purpose to which the goods bought are put to. The several words employed in the explanation, viz., "uses them by himself", "exclusively for the purpose of earning his livelihood" and "by means of self-employment" make the intention of Parliament abundantly clear, that the goods bought must be used by the buyer himself, by employing himself for earning his livelihood. A few more illustrations would serve to emphasis what we say. A person who purchases an auto-rickshaw to ply it himself on hire for earning his livelihood would be a consumer. Similarly, a purchaser of a truck who purchases it for plying it as a public carrier by himself would be a consumer. A person who purchases a lathe machine or other machine to operate it himself for earning his livelihood would be a consumer. (In the above illustrations, if such buyer takes the assistance of one or two persons to assist/help him in operating the vehicle or machinery, he does not cease to be a consumer.) As against this a person who purchases an auto-rickshaw, a car or a lathe machine or other machine to be plied or operated exclusively by another person would not be a consumer. This is the necessary limitation flowing from the expressions "used by him", and "by means of self-employment" in the explanation. The ambiguity in the meaning of the words "for the purpose of earning his livelihood" is explained and clarified by the other two sets of words.
Coming to the case in hand 30 boxes of the leather goods (15 boxes in Complaint Case No. 170/1997 and 15 boxes in Complaint Case No. 171/1997) were exported by the complainant. Clearly these leather goods were to be used by the importer,Punchline Clothing Co. Los Angeles USA for 'resale'. The said resale clearly was made for earning profits.
Clearly the complainant had availed of the services of all the OPs for commercial purposes alone. Complainant has not availed of the services of the OPs for the purpose of earning his livelihood by means of self-employment. I am, therefore, of the considered opinion that the complainant is not a 'consumer' in terms of the Section 2(1)(d) of the Consumer Protection Act 1986.
Coming to the merits of the complaints, the complainant submitted his bills of exchange with the Airways Bill with his banker for collection from Punchline Clothing Co. (OP-4) at USA. Banker of the complainant (OP-6) sent the bills of exchange, Airways Bills and other documents to State Bank of India California (OP No. 3a) for collection from Punchline Clothing Co. (OP No. 4). Incidentally, theyalso exported the similar goods to Punchline Clothing Co. The said incident took place in case of both the complaints. The said export of consigned goods took place through Pheonix Airways Services (OP No. 1) who initially availed of the services of the Airlines in these complaints. The bills of exchange (of the third party exported) were also sent by the banker. Cargo agent of Punchline Clothing Co. paid the amount of bills issued by the third party exporter and sought the release order. Incidentally the goods of this third party exporter were also consigned under the same Master Airways Bills (in both the complaints), even though the bills of the complainant and the third party exporter were bearing separate Houseway Bill numbers. It was in this scenario that State Bank of India California prepared release orders for the goods involved in both these complaints.
Contention of the State Bank of India California (OP No. 3a) is that Punchline Clothing Co. was in connivance with Airlines and managed the delivery of the entire consignment (under one Master Airways Bill in both the complaints). State Bank of India California came to know of the mistake only from the complainant that the Punchline Clothing Co. had taken the delivery of the entire goods. Now the question arises whether the contesting OPs i.e. State Bank of India California or the Airlines could be held guilty for'deficiency in service'?
As discussed above, it is thePunchline Clothing Co. who has received the consignment sent by the complainant. On the contrary, the complainant has not sought any relief against Punchline Clothing Co. (OP No. 4) for the reasons best known to him. Having once found that the payment was not sent to the complainant (in complaint case No. 170/1997), why did the complainant choose to send the goods through the same agencies again (in complaint case No. 171/1997). It shows that the complainant has not approached this Commission with clean hands. Complainant is thus not entitled to the relief prayed for. Both the complaints i.e. Complaint Case No. 170/1997 and Complaint Case No. 171/1997 are hence dismissed.
Copy of the orders be made available to the parties free of costs and thereafter the file be consigned to Records.
(N P KAUSHIK) MEMBER(JUDICIAL)