Maharashtra

DCF, South Mumbai

279/2005

Aventis Pharma Ltd.ors. - Complainant(s)

Versus

Mata Transport Pvt. ltd - Opp.Party(s)

U.Ramdas

20 Aug 2010

ORDER

 
Complaint Case No. 279/2005
 
1. Aventis Pharma Ltd.ors.
Mumbai
...........Complainant(s)
Versus
1. Mata Transport Pvt. ltd
Mumbai
............Opp.Party(s)
 
BEFORE: 
 HON'ABLE MR. JUSTICE Shri S B Dhumal PRESIDENT
  Shri S.S. Patil , HONORABLE MEMBER
 
PRESENT:
तक्रारदारतर्फे वकील श्री.रामदास हजर.
......for the Complainant
 
सामनेवालातर्फे वकील श्रीमती परमार हजर.
......for the Opp. Party
ORDER

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 of pharmaceutical. 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 on09/12/2004, hired services of the Opposite Party for carriage, consideration and safe delivery Ex: Bhiwandi to Kolkata and entrusted into their charge, care and custody the consignment of 549 cartons containing Harmless medicines for Human Consumption. The consignment was dispatched by the First Complainant from the factory to their Depot/branch under the Stock Transfer Note Nos.4421524138/2004 dtd.09/12/2004, total Stock Transfer Invoice value being Rs.47,88,760.90/-. The said consignment was accepted by Opposite Party on ‘Door Delivery’ basis. Opposite Party accepted the aforesaid consignment of 549 cartons and booked under their Lorry Receipt No.7876 dtd.09/12/2004.
 
3) It is alleged by the Complainant that the Opposite Party delivered short and damage consignment. The Opposite Party have confirmed and certified the Shortage & Damage to the aforesaid consignment vide their ‘Witness Certificate’ for Shortage & Damage to the Consignment bearing Certificate No.1004 dtd.24/12/2004 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.27/12/2004 alongwith claim bill as required U/s.10 of the Carriers Act, 1865 within stipulated time limit. The First Complainants had insured said consignment with Second Complainant vide Policy No.260800/21/04/44/4400010 from the second Complainant 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.4,51,036/- 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 jointly and severally the sum of Rs.4,51,036/-, and as such Second Complainants are Consumers alongwith First Complainants.
 
6)It is submitted by the Complainant that the short and damaged 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.
 
7) It is submitted that cause of action of this complaint arose on or about 09/12/2004 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.4,51,036/-. 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 17/01/2006 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.4,51,036/- on the basis of alleged shortage and damaged to the consignment under the Opposite Parties goods consignment note dtd.09/12/04 Ex : Bhiwandi to Kolkata 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 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 for purview from 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.4,51,036/-/- or any other amount. There was no negligence default or deficiency in service on the part of Opposite Party. The material was loaded in Truck and there was theft in transit and FIR was duly lodged by the Opposite Party and its copies were furnished to the Complainant. The alleged shortage/damaged was beyond the control of the said truck driver. There is no cause of action to file present complaint and the present complaint deserves to be dismissed with cost.
 
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 both the Complainants were absent. As the Complainants have filed their written argument, we heard oral submissions of Ld.Advocate Mrs.Kalyani 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 Hon’ble 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 Constitutional 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 valu.e 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.”
 
         In view of aforesaid judgement we do not find substance in the contention raised by the Complainant that present complaint which is based on right of subrogation is not maintainable before Consumer Forum.
 
          Second point raised by the Opposite Party that present complainants are not consumers as defined under Consumer Protection Act, 1986 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.4,51,036/- 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 National Insurance Co. is also a Ltd. Co. & Opposite Party is also a Pvt. Ltd. Co. doing business as a Road Carriers. On 09th Dec., 04 the Complainants no.1 had hired services of Opposite Party for carriage of consignment of 549 cartons containing harmless medicine for Human consumption Ex: Bhiwandi to Kolkata. It is alleged by Complainants No.1 that Opposite Party delivered short & damaged consignment & the same was confirmed by Opposite Party vide their witness certificate for shortage & damage dtd.24/12/04 issued to the first Complainant. It is undisputed fact that the 1st Complainant had lodged their monetary claim with Opposite Party by their letter dtd.27/12/2004. The 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.4,51,036/-in favour of 2nd Complainants and thereafter they have filed present complaint against the Opposite Party.
 
In the written argument it is submitted by the Complainants that 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 have 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 their medicines from Bhiwandi to Kolkata. 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) 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 31/12/04. It is specifically mentioned in the complaint that cause of action for this complaint arisen on or about 31/12/04 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 Constitutional 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 constitutional 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 09/12/2004 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.  
Facts of the present case are not similar with the facts in M/s.Harsolia Motors case decided by Hon’ble National Commission. It appears that in the case of M/s.Harsolia Motors, complaint was filed against National Insurance Co. Ltd. for reimbursement of loss on the basis of Insurance Policy. In the instant case complaint is filed against the Opposite Party, common carriers for reimbursement of the loss caused to the consignment. Before filing this complaint the Complainant No.2 – Insurance Company has settled claim of the Complainant No.1.As mentioned above on 31/12/04 Complainant No.1 had availed services of Opposite Parties for transport of their 549 cartons of medicines from Ex:Bhiwandi to Kolkata. Service of Opposite Party were availed after 15/03/2003 i.e. after commencement of amendment provision 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. 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 1st Complainant No.2 and Opposite Party. The Complainants No.2 has not availed any services of the Opposite Party. The Complainants are claiming that the Complainant No.2 is a consumer on the basis of principle subrogation. Even on the basis of principle subrogation Complainant No.2 cannot claim higher rights than 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.279/2005 is hereby dismissed with no order as to cost.  
ii.Certified copies of this order be furnished to the parties.
 
 
[HON'ABLE MR. JUSTICE Shri S B Dhumal]
PRESIDENT
 
[ Shri S.S. Patil , HONORABLE]
MEMBER

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