CONSUMER DISPUTES REDRESSAL FORUM (CENTRAL)
ISBT KASHMERE GATE DELHI
CC/39/2015
T.T. Ltd.
(Through its Authorised Representative)
Sh. Prabhu Singh Rathore
879, Master Prithvi Nath Marg,
Opp. Azmal Khan Park,
Karol Bagh, New Delhi-110005. …..COMPLAINANT
VERSUS
New India Assurance Company Ltd.
Through its Branch Manager,
Branch Office: 311301,
3, Arya Samaj Road, Karol Bagh,
New Delhi-110005.
Also at:
New India Assurance Company Ltd.
Delhi Regional Office-1,
Jeevan Bharti Building,
124, Connaught Circus,
New Delhi-110001. …..OPPOSITE PARTY
Coram : Ms. Rekha Rani, President
Ms. Manju Bala Sharma, Member
Dr. R.C. Meena, Member
ORDER
Ms. Rekha Rani, President
- Instant complaint was filed by T.T. Ltd. (in short complainant) under Section 12 of the Consumer Protection Act, 1986 as amended inter-alia pleading therein that in terms of the contract between the complainant and its overseas buyer Golden Eagle Company Limited, the complainant shipped 4040 bags of Rice Bran Extraction to Golden Eagle Company Limited. It is also pleaded that complainant took a Marine Cargo Open Cover Insurance Policy no. 31130121120300000009 vide certificate no. 31130121120400000500 from New India Assurance Company Limited (in short OP) on CIF basis in respect of the said consignment, which was shipped on board on 14.11.2014 under shipping bill dated 09.11.2012. The consignment was insured from the Port of Loading i.e. Insured's Warehouse at Kolkata to the Buyer's Warehouse at Cat Lai Port, Hochiminh City, Vietnam via Vessel. It is further stated that in the mid of December, 2012 complainant received information that a portion of the cargo was damaged and the complainant intimated OP vide letter dated 20.12.2012 in this respect but no action was taken by the OP. It is also stated that OP vide e-mail dated 29.11.2013 repudiated the claim of the complainant and no reasons were communicated to it. Complainant filed a complaint dated 11.01.2014 before the IRDA but its grievance was not resolved. Complainant issued a legal notice dated 28.08.2014 to OP claiming an amount of Rs. 8,56,179.53 (US $ 14035 x Rs. 61.00) along with interest at the rate of 15 % per annum but the amount was not paid. Hence the instant complaint was filed seeking direction for OP to pay the claim amount of Rs. 8,56,179.53/- along with interest @ 15% from 01.06.2003 till realisation.
- Notice of the complaint was sent to OP who appeared and contested the claim.
- Parties have adduced evidence by way of affidavits. We have heard Ms. Shilpi Jain, counsel for complainant and Sh. Subhash Singh, counsel for OP.
- Learned counsel for OP vehemently disputed the claim of the complainant on the ground that complainant has already lost its case before competent court in Suit No. 14618 of 2016 titled T.T. Limited v. Golden Eagle Company Limited wherein vide judgement dated 11.01.2018, Dr. Saurabh Kulshreshtha ADJ-II (Central), Delhi, dismissed the claim of the complainant which is to the same effect as the present complaint.
- Certified copy of the judgement of Dr. Saurabh Kulshreshtha, ADJ-II (Central), Delhi, is placed on record. We have perused the same. It was observed by learned ADJ that:
“.....31. ....contract of sale was on f.o.b. basis even when the contract of insurance proceeded on the basis that the transactions between the seller and the purchaser and meant to be covered by the policy would be on c.i.f. basis. The distinction between c.i.f. (cost, insurance and freight) and f.o.b. (free on board) contracts is well recognised in the commercial world. While in the case of c.i.f. contract the seller in the absence of any special contract is bound to do certain things like making an invoice of the goods sold, shipping the goods at the port of shipment, procuring a contract of insurance under which the goods will be delivered at the destination, etc., in the case of f.o.b. contracts the goods are delivered free on board the ship. Once the seller has placed the goods safely on board at his cost and thereby handed over the possession of the goods to the ship in terms of the bill of lading or other documents, the responsibility of the seller ceases and the delivery of the goods to the buyer is complete. The goods are from that stage onwards at the risk of the buyer.
32. It is common ground that the seller had, in the case at hand, reserved no right or lien qua the goods in question. In the absence of any contractual stipulation between the parties the unpaid seller's lien over the goods recognised in terms of Sections 46 and 47 of the Sale of Goods Act, 1930 stood terminated upon delivery of the goods to the carrier. The goods were from that stage onwards held by the carrier at the risk of the buyer and the property in the goods stood vested in the buyer.
33. The principle underlying transfer of title in goods in f.o.b. contracts was stated by a Constitution Bench of this Court in B.K. Wadeyar v. Daulatram Rameshwarlal [AIR 1961 SC 311]. The question as to the transfer of title in the goods arose in that case in the context of a fiscal provision but the principle relating to the transfer of title in goods in terms of f.o.b. contract was unequivocally recognised. This Court held that in f.o.b. contracts for sale of goods, the property is intended to pass and does pass on the shipment of the goods. The National Commission was, therefore, right in holding that the seller had no insurable interest in the goods thereby absolving the Insurance Company of the liability to reimburse the loss, if any, arising from the misdelivery of such goods...................."
23. Adverting to the facts of the present case it is seen that as per commercial invoice Ex. PW1/D-1 the material was sold on CNF basis. The correct expression for CNF under Incoterms, 2010 is CFR (Cost & Freight). Under a CFR (CNF) contract the risk passes on to the buyer when the goods have been placed safely on board and therefore the risk of the plaintiff ceased once the goods passed through the ship's rails. Accordingly, in the present case when the cargo was delivered on board the risk passed on to the buyer i.e. the defendant no. 1. No evidence has been led by the plaintiff to establish as to when the property in the goods was intended to pass. The contract was for sale of specific goods in deliverable state, though they were to be weighed etc., and therefore the under the normal course the property in the goods passed on to the buyer at any rate before the goods were delivered on board. Conversely, there is no evidence to show that the property in the goods had not passed on to the buyer at the time of loading of the goods on board or that the parties had agreed that the property in the goods shall pass on a later date.
24. Be that as it may, after loading of the cargo on board, the cargo was at the risk of the defendant no. 1 as the contract was a CFR (CNF) contract and therefore the plaintiff had no insurable interest in the cargo thereafter. As per the case of the plaintiff the cargo was damaged during the course of voyage. As per section 8 of the Marine Insurance Act the plaintiff must establish insurable interest in the goods at the time of the loss/ when damage was caused to the goods. The result is that the plaintiff has failed to show any insurable interest in the cargo during the voyage when it was allegedly damaged since the risk already stood transferred to the buyer i.e. the defendant no. 1. Since there was no insurable interest at the time of the loss the plaintiff is not entitled to any insurance claim with respect to the damaged cargo and the insurance claim was therefore rightly repudiated by the defendant no. 3 Insurance company.”
6. Facts as well as the relief prayed in Suit No. 14618 of 2016 titled T.T. Limited v. Gold Eagle Company Limited are same as prayed in the instant complaint. The claim already having been adjudicated and rejected by a court of competent jurisdiction cannot be re-adjudicated by this Forum which exercises only summary jurisdiction.
7. The claim is otherwise also not maintainable before this Forum, the nature of transaction being purely commercial. As per complainant’s own case it supplied 4040 bags of 200.28 MT each of “De-oiled Rice Bran Extraction” at a unit price of US $ 226.00 per MT to its overseas buyer which is obviously sold for profit and thus purely a commercial transaction.
- Section 2 (1)(d) of the Consumer Protection Act which defines the term ‘consumer’, to the extent it is relevant, reads as under:-
“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 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 purposes;
- The Supreme Court has discussed the term 'consumer' in the judgment reported in Laxmi Engineering Works v PSG Industrial Institute, II (1995) CPJ 1 (SC) = 1995 3 SCC 583, wherein it was held :
"The National Commission appears to have been taken 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 - 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 of expression of expression 'consumer'. If the commercial use is by the purchaser himself for the purpose of earning 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 emphasise 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 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".
The purpose behind enactment of the Act was to provide a speedy remedy to small consumers and the Act is not intended for the benefit of large business entities like the complainant. Complainant hired services of OP to secure export of its goods which is aimed at earning profits or advancing its business activities such a transaction will be out of the purview of the Act.
- National Commission in Interfreight Services Pvt. Ltd. Vs. Usha International 1 (1995) CPJ 128 (NC), inter-alia observed that the special remedy before the consumer forums can be invoked only by ordinary consumers, purchasing goods for their private and personal use and consumption and not by business organization buying/selling goods for commercial purposes.
- In Eicher Motors Ltd. vs Dilip Chandra Kant Vaidya, I (2007) CPJ 51 NC, complainant claimed to be an educated unemployed who purchased two buses from M/s Eicher Motors Ltd. State Commission directed M/s Eicher Motors Ltd. to replace two vehicles by new vehicles of the like nature and in the event of failure, to refund price of Rs. 14,58,000/- with 18% interest thereon from the date of delivery till payment with cost of Rs. 10,000/-. Appeal against the order of the State Commission filed by M/s Eicher Motors Ltd. was allowed by National Commission and it was observed that when complainant purchased two buses, it cannot be said that he could drive both buses without employing drivers. It was not his case that any other family member of the complainant was driving the same. The fact that the buses were in his care would not mean that they were not being run by employees for the purposes of running travel business.
- In Sakthi Engineering Works And Anr. vs Sri Krishna Coir Rope Industry, complainant Sri Krishna Coir Rope Industry purchased machinery for producing coir rope. Andhra Pradesh State Commission directed Sakthi Engineering Works to pay Rs. 3,07,632/-being the value of a machinery to be paid by it to the Complainant with interest at 18% per annum from 01.04.1992 till the date of realisation. A sum of Rs. 50,000/- towards compensation for loss of business and cost of Rs. 2,000/- was also awarded. Sakthi Engineering Works preferred an appeal before National Commission where it was argued that the machinery was purchased for commercial purpose. The appeal was allowed. Complaint was dismissed. National Consumer Disputes Redressal Commission vide its order dated 08th August, 2000 observed that the proprietor himself does not run the machine. He has employed trained personnel to run the machine. In view of Laxmi Engineering Works, National Commission held the complainant not to be a consumer.
It is complainant’s own case as pleaded in Para 1(Page 102 of the case file) of replication that complainant is an exporter company and 4040 Bags of Rice Bran Extraction were shipped to its overseas buyer.
- Complaint is dismissed for the reason that the transaction secured through OP was commercial. Therefore, complainant is not a consumer and that complainant’s claim has already been adjudicated and rejected by a court of competent jurisdiction and it cannot be re-adjudicated by this Forum which exercises only summary jurisdiction. Copy of this order be sent to the parties as per rules. File be consigned to record room.
Announced this of 2019.
