PER SHRI. S.B.DHUMAL - HON’BLE PRESIDENT :
1) In brief consumer dispute is as under –
That the First Complainants are a Limited Company incorporated under the Indian Companies Act, doing business. The Second Complainants are Limited Company doing business of insurance. The Opposite Party is Private Limited Company doing business of carriage of goods by road.
2) It is submitted that First Complainant on28/07/2004, hired services of the Opposite Party for carriage, consideration and safe delivery Ex: Renukot to Faridabad and entrusted into their charge, care and custody the two consignment of 9.279 MT Aluminium Ingots-Alloy Purity. The consignment was dispatched by the First Complainant from the factory to their depot at Faridabad under Invoice No.19104 & 19105, both dtd.28/07/2004 total Invoice value being Rs.10,54,765.15/-. The said consignment was accepted by Opposite Party on ‘Door Delivery’ basis. Opposite Party accepted the aforesaid consignment and booked under their Lorry Receipt No.442-30623 dtd.28/07/2004.
3) It is alleged by the Complainant that the Opposite Party Non-delivered the aforesaid consignment and certified the ‘Non-delivery Certificate’ dtd.25/08/2004 issued to the First Complainants.
4) Thereafter First Complainants lodged their monetary claim with the Opposite Party vide Registered (R.P.A.D.) letter dtd.28/08/04 alongwith claim bill as required U/s.10 of the Carriers Act, 1865 within stipulated time limit. Till today Opposite Party has not settled claim of the First Complainant. The First Complainants had insured said consignment with Second Complainant vide Policy No.MO 00000268-000-00 to cover the risk of consignment. The Second Complainants have settled the claim of First Complainants after scrutinizing of the claim on the strength of documents. The First Complainants have executed letter of Subrogation and Special Power of Attorney for Rs.10,54,765/- in favour of Second Complainants. The Second Complainants are subrogated to the rights of remedies of the First Complainants in respect of said loss.
5) The First Complainants are ‘Consumer’ under Consumer Protection Act, 1986 and upon settlement of the claim and based upon the letter of Subrogation and Special Power of Attorney, the Second Complainants are entitled to the indemnified by the Opposite Party the sum of Rs.10,54,765/-, and as such Second Complainants are Consumers alongwith First Complainants.
6)It is submitted by the Complainant that the Non-delivery to the said consignment was caused due to the failure on the part of Opposite Party is not exercising due care, caution and diligence. The absolute obligation is imposed upon the Opposite Party in their position as common carriers exercising public employment, not only by virtue of state but also under common law. Moreover, position of the Opposite Party as common carriers. Common carrier is that of Insurers of goods consigned to them against every extraneous risk. Failure to deliver the goods safely is a breach of duty independent of any contract of carriage. The Opposite Party are also liable for deficiency in service, negligence as bailees of the consignment. There is a liability imposed upon Opposite Party as common carriers and under the provision of Consumer Protection Act, 1986 Section 2(1)(d) and Section 2(1)(o) the Complainants are Consumers since they had hired services of Opposite Party for consideration and such services my be for any connected commercial activity and would be related to services indicated in Section 2(1)(o) of the Consumer Protection Act. Opposite Party has failed to settle the claim of the Complainants, therefore, the Complainants have filed this complaint.
7) It is submitted that cause of action of this complaint arose on or about 28/07/2004 when the consignment was entrusted to the Opposite Party for carriage and safe delivery. It is submitted that this Forum has jurisdiction to entertain and try this complaint.
8) The Complainants have prayed to direct Opposite Party to pay to the Second Complainants a sum of Rs.10,54,765/-. The Complainants have prayed for Rs.30,000/- towards cost of complaint. The Complainants have claimed interest @ 18 % p.a. from the date of loss until realization of entire amount.
9) On 13/04//2006 the Opposite Parties filed an application to decide the preliminary point regarding maintainability of complaint on the ground of jurisdiction. The Complainant filed detailed reply to the aforesaid application. This Forum after considering submission of both the parties observed that “application for deciding preliminary issue of maintainability shall be heard alongwith all other issue involved in the present complaint at the time of final disposal of complaint”. The Opposite Party was directed to file written statement.
10) Opposite Party has filed written statement and thereby resisted claim of the Complainants contending interalia that this Forum has no jurisdiction to entertain and try this complaint filed under the subrogation rights. Present complaint filed by the Complainant No.2 by joining Complainant No.1 after settling the claim of Complainant No.1 under subrogation provision of the Marine Insurance Act, allegedly claiming Rs.10,54,765/- on the basis of alleged non-delivery consignment of 9.279 MT Aluminium Ingots-Alloy under the Invoice No.19104 to 19105 both dtd.28/07/04 Ex : Renukot to Faridabad and for other relief. It is submitted that as per the decision of Hon’ble Supreme Court and Hon’ble National Commission claim based on the strength subrogation is not amenable to the jurisdiction of Consumer Forum for the reason that the Insurance Company, herein is not beneficiary of the transportation Services hired by the Complainant No.1 and is therefore, not a consumer. Therefore, present complaint is liable to be dismissed in limine.
11) It is submitted by the Opposite Party that the Complainants have admitted that they are limited company doing business and Opposite Party is also carrying on business. Subject transaction between Complainant No.1 and Opposite Party have transportation service render are part of normal business and the Complainant No.1 availed a transportation services for the Opposite Party not for their personal and potential use but for the commercial purpose. Even the Complainant No.2 is carrying on business of insurance for gain. The transaction involved is commercial transaction and are thus, excluded from the purview of the Consumer Protection Act as amended U/s.2(1)(i)(ii). Therefore, complaint is liable to be dismissed.
12) Opposite Parties has denied the allegations made in complaint para no.3, 4 & 5. It is contended that issue involved is complicated nature and it requires elaborate evidence, proof of documents which cannot be decided by this Forum in a summary manner.
13) It is submitted that the Complainants are not Complainant as defined under Consumer Protection Act, to enable them to file the complaint U/s.2(1)(d)(ii) read with (e)(g) and (o) of the said Act. The Opposite Party has denied allegations of deficiency in service. It is contended that Complainant No.1 has already recovered his alleged claim from Complainant No.2 as they have already assigned a transferred all rights in favour of Complainant No.2 and their claim being satisfied by Complainant No.2 cannot enforce the claim against Opposite Party vide Section 41 of Indian Contract Act. The Opposite Party has denied that the Complainant No.1 and 2 are either of them are entitle to be Indemnified by the Opposite Party of sum of Rs.10,54,765/- or any other amount. There was no negligence default or deficiency in service on the part of Opposite Party. The alleged non-delivery was due to hijacking of Truck No.RJ-23-G-2311 in which the material was transported resulting in the murder of the driver and cliner for which FIR was lodged by Opposite Party & furnish the same to the Complainant. The incident was reported in the New Papers. Alleged non-delivery of consignment was beyond control of the said truck driver. Opposite Party cannot be held liable for the alleged lodged due to the unforeseen incident hijacking of the truck.
14) Alongwith complaint, the Complainants have filed documents as per list of document. The Complainant have filed affidavit of evidence. Opposite Party has also filed affidavit of evidence. In this case the Complainants have filed written argument as well as Opposite Party has filed written argument. On 07/08/2010 we heard oral submissions of Ld.Advocate Mr.S.R.Singh for the Complainant’s and Ld.Advocate Mrs.Kalyani Parmar for the Opposite Party.
In this case Opposite Party have challenged maintainability of the complaint mainly on two grounds. Firstly that the Complainant’s claim is based on the strength of subrogation is not amenable to the jurisdiction of this Consumer Forum for the reasons that the Insurance Company i.e. Opposite Party No.2 herein is not beneficiary of the services hired by the Complainant and therefore, the Complainant No.2 is not a consumer. Further the Complainant No.1 having transferred and assigned all rights in favour of Complainant No.2 so adding of Complainant No.1 as a Co-Complainant under subrogation is not maintainable before Consumer Forum. In support of aforesaid contention Ld.Advocate for Opposite Party has relied upon decision as Hon’ble Supreme Court in Oberai, Forwarding Agency V/s. New India Assurance Co.Ltd. and Another. The New India Assurance Co.Ltd. reported in AIR 2000(SP)855.
Recently Constitution Bench of the Hon’ble Supreme Court in the matter of Economic Transport Organization - Applicant V/s. M/s.Charan Spinning Mills (P) Ltd. & Anr. - Respondents, reported in 2010(2)(CPR) 181(SC) has held that -
“(i) Consumer Protection Act, 1986 – Section 2(1)(g) – Respondent 1 a manufacturer of cotton yarn took a policy of insurance from respondent 2 ‘Insurer’ covering transit risks in respect of cotton yarn sent by it to various consignees through rail or road against theft, pilferage, non-delivery and/or damage. Respondent 1 entrusted a consignment of hosiery cotton yarn of the value of Rs.7,70,948/- to appellant ‘carrier’ for transportation and delivery to a consignee at Calcutta – The goods vehicle carrying the said consignment met with an accident and the consignment was completely damaged – On the basis of a surveyor’s certificate issued after assessment of the damage, respondent 2 settled the claim of respondent 1 for Rs.447,436/- - On receiving the payment, respondent 1 executed a Letter of Subrogation-cum-Special Power of Attorney in favour of respondent 2 – Thereafter, respondents 1 and 2 filed a complaint under the C P Act, 1986 against appellant claiming compensation of Rs.447,436/- with interest at 12 % per annum, for deficiency in service, as the damage to the consignment was due to the negligence on part of appellant and its servants – It was averred that insurer as subrogee was the co-complainant in view of statutory subrogation in its favour on settlement of the claim and the letter of subrogation-cum-special power of attorney executed by the Assured – District Forum allowed the complaint and directed the appellant to pay Rs.447,436/- with interest at the rate of 12 % per annum from the date of accident till date of payment to the Insurer, on the basis of subrogation. District Forum held that failure to deliver consignment in sound condition was a deficiency in service, in view of the unrebutted presumption of negligence arising under section 8 and 9 of the Carriers Act, 1865 Appeal –Dismissed by State Commission – Revision Petition there against – Dismissed by National Commission – Appeal – Case of appellants that what was executed in favour of Insurer, though termed a ‘subrogation’ was an assignment, and therefore, Insurer was not entitled to maintain the complain-Held insurer, as subrogee, can file a complaint under Act either in the name of the assured as his attorney holder or in the joint names of the assured and insurer for recovery of amount due from the service provider- The insurer may also request the assured to sue the wrong doer (service provider) – Even if the letter of subrogation executed by assured in favour of the insurer contains in addition to words of subrogation , any words of assignment, complaint would be maintainable so long as the complaint is in the name of the assured and insurer figures in complaint only as an attorney holder or subrogee of assured-The insurer cannot in its own name maintain a complaint before a consumer forum under the Act, even if its right is traced to the terms of a Letter of subrogation cum-assignment executed by the assured-Oberai is not good law insofar as it construes a Letter of subrogation-cum-assignment, as a pure and simple assignment-But to the extent it holds that an insurer alone cannot file a complaint under the Act, the decision is correct- Appeal dismissed.”
Ld.Advocate Mrs.Kalyani Parmar for the Opposite Party has submitted that if the subrogation letter/assignment is done prior to the loss or damage to the goods, the Insurance Company would be a ‘Consumer’, as assignment would have been in regard to the property. However, if the subrogation letter/assignment is done after loss caused to the goods, the Insurance Company would not be a Consumer. In view of aforesaid decision of the Hon’ble Supreme Court in the matter of M/s.Charan Spinning Mills Pvt.Ltd. we do not find substance in the aforesaid submissions raised by the Opposite Party.
Second point raised by the Opposite Party that present complainants are not consumers as defined under Consumer Protection Act, 1986 as services to the Opposite Party were availed for commercial purpose, therefore, complaint is not maintainable and deserves to be dismissed with cost.
Following points arises for our consideration and our findings thereon are as under -
Point No.1 : Whether the Complainants are consumers as defined U/s.2(1)(d)(ii) of the Consumer Protection Act. ?
Findings : No
Point No.2 : Whether the Complainants are entitled to recover Rs.16,40,459/- with interest from the Opposite Party alongwith
cost of this proceeding ?
Findings : No
Reasons :-
Point No.1 :- Following facts are admitted facts that Complainants No.1 is a Pvt. Ltd. Co. incorporated under Indian Company’s Act. Complainant’s No.2 is also Insurance Co. incorporated under the Company’s Act, 1956 and doing business of General Insurance. Opposite Party is also a Pvt. Ltd. Co. doing business as a Road Carriers. On 06/09/04 Complainants no.1 had hired services of Opposite Party for carriage of consignment of 660 Pieces of A1.Ingots Weighing 15.198 MT Ex: Renukot to Vadodara. It is alleged by Complainants No.1 that Opposite Party failed to delivered consignment & the same was confirmed by Opposite Party vide their non-delivery certificate dtd.28/09/04 issued to the first Complainant. It is undisputed fact that the FirstComplainant had lodged their monetary claim with Opposite Party by their letter dtd.06/10/04 and as yet Opposite Party have not settled the said claim. The First Complainants had insured said consignment with 2nd Complainants to cover the risk of consignment. The 2nd Complainants have settled the claim of 1st Complainants. Thereafter the 1st Complainants have executed letter of subrogation and special power of Attorney for Rs.16,40,459/-in favour of 2nd Complainants and thereafter they have filed present complaint against the Opposite Party.
Ld.Advocate Mr.S.R.Singh for the Complainants has submitted that the Complainants No.1 had hired services of the Opposite Party for transport of their consignment & as such, Complainants No.1 is a consumer as defined under CPA, 1986. It is further submitted that after Complainants No.2 Insurance Co. settled claim of Complainants No.1, Complainants No.1 executed letter of subrogation & special power of attorney in favour of Complainant No.2 thereby Complainant No.2 has stepped in the shoes of Complainant No.1 as such, C.No.2 is also a consumer under the provision of CPA. It is submitted that there is no substance in the contention raised by the Opposite Party that as the services are hired for commercial purpose the Complainants are not consumers. In support of aforesaid contention the Complainants have relied upon decision of Hon’ble National Commission in M/s.Harsolia Motors V/s M/s. National Insurance Co. & Ors. Reported in [2005 (1) CPR1(NC)]. In the aforesaid case Hon’ble National Commission has held that -
“Insurance Policy taken by Commercial units cannot be held to be hiring of services for commercial purposes so as to exclude it from purview of Consumer Protection Act”.
Besides aforesaid decision, the Complainants Advocate has relied upon another decision of the Hon’ble National Commission in Amrutsar Transport Co. Pvt. Ltd. V/s. United India Insurance Co., Transport Corporation of India V/s. Aluminium Extrusion Centre & National Insurance Co. Ltd., United India Insurance Co. Ltd. & Anr. V/s. M/s. Green Roadways, etc.
Ld.Advocate Mrs.Parmar for the Opposite Party has submitted that admittedly both the Complainants & Opposite Party are Ltd. Companies. The Complainant No.1 had hired services of Opposite Party for commercial purpose i.e. for transport of 660 Pieces of A1.Ingots Weighing 15.198 MT from Renukot to Vadodara. As the Complainants No.1 had hired services of Opposite Party for commercial purpose Complainants No.1 is not a consumer. Ld.Advocate for Opposite Party had referred to amended provisions of Section 2(1)(d)(ii) of CPA, 1986 which are as under –
“Hires or avails of any services 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 purpose).”
According to the Ld.Advocate for the Opposite Party the object of adding of words “it does not include a person who avails of such cervices for commercial purpose is to exclude consumers who availed services for any commercial purpose because Consumer Forums will be flooded with numerous cases filled by many Businessmen and Traders whose main aim is to earn money and thereby actual consumer deprive of speedy justice in Consumer Forum. It is submitted that aforesaid amended provision came into effect from 15/03/03. Transactions in question took place between Complainants No.1 on 12/01/04. It is specifically mentioned in the complaint that cause of action for this complaint arisen on or about 12/01/04 i.e. after commencement of the amended provisions of the Sect.2(1)(d) (ii) of CPA, 1986. It is submitted that in case of M/s.Harsolia Motors complaint was filed against National Insurance Co. In the instant case Complainants No.2 Insurance Co. Ltd. has allegedly settled the claim of shortage & damaged delivery of the Complainants No.1.
Ld.Advoate for the Opposite Party has relied upon aforesaid judgement of the Hon’ble Supreme Court in Economic Transport Organization V/s. M/s.Charan Spinning Mills (P) Ltd. submitting that facts of the present case are very much similar/identical with the facts of the case of Economic Transport Organization V/s. M/s Charan Spinning Mills (P) Ltd. In the aforesaid judgement delivered by Constitution Bench consisting of 5 Judges of the Hon’ble Supreme Court, Their lordships in judgement para no.25 have clearly stated that -
“We may also notice that Sec.2(d) of the Act was amended by amendment Act, 62/2002 with effect from 15/03/03 by adding the words “but does not include a person who avails of such services for any commercial purpose” in the definition of Consumer. After the said amendment, if the services of the carrier had been availed for any commercial purpose, then the person availing the services will not be a “Consumers” and consequently, complaints will not be maintainable in such cases. But the said amendment will not apply to Complainants filed before the amendment.” It is submitted that on behalf of Opposite Party that constitution bench of the Hon’ble Supreme Court has clearly mentioned that after amendment of the Act 62/02 services of carriers if availed for any commercial person then the person availing services will not be a consumer and consequently complaints will not be maintainable in such cases. It is vehemently submitted that admittedly Complainants No.1 had availed services of Opposite Party on 28/07/2004 i.e. after commencement of the amended provisions of Sec.2(d)(i) of the Consumer Protection Act therefore, Complainants No.1 is not a consumer. It is further submitted that there is no privity of contract between the Complainant No.2 and Opposite Party. The Complainant No.2 has not availed any services from the Opposite Party. Therefore, Complainant No.2 is also not a consumer.
Fact of this case are different than the facts in M/s.Harsolia Motors. As mentioned above on 28/07/04 Complainant No.1 had availed services of O.P. for transport of their consignment of Aluminium Ingots from Ex:Renukot to Faridabad. Service of Opposite Party were availed after 15/03/03 i.e. after commencement of amended provisions of Sec. 2(1)(d) (ii) of CPA. The Complainants have not pointed out any other judgment of the constitutional bench of the Hon’ble Supreme Court on this point. Judgements of constitutional bench have binding effect.
Ld.Advocate Mr.S.R.Singh for the Complainant’s has submitted that in Economic Transport Organization V/s.M/s.Charan Spinning Mills Pvt.Ltd. issues which were framed by Their Lordships were regarding doctrine of subrogation. Ld.Advocate referred to the issue which were framed by Their Lordships and submitted that decision in the case of economic Transport Organization is an authority principles of subrogation. It is further submitted that the above quoted observations in reported judgement para in no.25 relied upon by the Ld.Advocate for the Opposite Party may not be accepted as a binding precedent.
Hon’ble Justice Krishna Iyer in a case reported in (1975) 1 SSC 794 has held “judicial propriety, dignity and decorum demand that being highest judicial tribunal even obiter dictum of the Supreme Court should be accepted as binding – but statement of matters other than law have not binding force”. Aforesaid decision of the Hon’ble Supreme Court in Economic Transport Organization V/s. M/s.Charan Spinning Mills (P) Ltd. is binding on this Forum. Therefore, in view of aforesaid judgement we hold that Complainants No.1 is not a consumer as he has availed services of Opposite Party for commercial purpose after the commencement of amended provision of Sec.2(1)(d) of CPA. Admittedly there is no privity of contract between Complainant No.2 and Opposite Party. The Complainants No.2 has not availed any services of the Opposite Party. The Complainants are claiming that Complainant No.2 is a consumer on the basis of principle of subrogation. Even on the basis of principle subrogation Complainant No.2 cannot claim higher rights than that of Complainants No.1. Therefore, we hold that Complainant No.1 & 2 are not a consumers as defined under amended provisions of Sec.2(1)(d)(ii) of the Consumer Protection Act, 1986. In the result we answer point no.1 in the negative.
As the Complainants are not consumers as defined under section 2(1)(d)(ii) of the Consumer Protection Act, the complaint is not maintainable before this Forum. Therefore, the Complainants are not entitled to claim any relief against Opposite Party. Therefore, we answer point no.2 in the negative.
For the reasons discussed above, the complaint deserves to be dismissed hence, we pass following order -
O R D E R
i.Complaint No.298/2005 is hereby dismissed with no order as to cost.
ii.Certified copies of this order be furnished to the parties.
