PER SHRI. S.B.DHUMAL - HON’BLE PRESIDENT :
1) In brief consumer dispute is as under –
That the First Complainants are a Private Limited Company incorporated under the Indian Companies Act, doing business. The Second Complainants are Limited Company doing business of General Insurance. The Opposite Party is Private Limited Company doing business of carriage of goods by road.
2) It is submitted that First Complainant on14/05/2004, hired services of the Opposite Party for carriage, consideration and safe delivery of the Export consignment of 64 nos components for Industrial Water Treatment (Pressure Vessel) parts for water purifying Machinery (Model 80R607) Ex: Goa to Mumbai and entrusted into their charge, care and custody. Said consignment from JNPT Port the said container was loaded on the Trailor Truck No.MH-06/53209 of the Opposite Party and dispatched to Mumbai from Goa on 17/05/2004. The consignment was valued at US $ 40,834.64 i.e. IRS.17,97682.43. A copy of the Export Invoice dtd.17/05/2004 & Lorry Receipt No.713 dtd.14/05/2004 are annexed and marked as Exhibit-‘A’ & ‘B’ respectively.
3) It is alleged by the First Complainant that the Opposite Party could not deliver the aforesaid consignment at Mumbai for onward Export shipment to USA to the consignee since the Trailor Truck carrying container containing the entire consignment was involved in a road mishap enroute to Mumbai. Therefore, the entire consignment was brought back to Goa to the factory of the First Complainant for visualizing/estimating the extent of damage and the assessment of the loss. The First Complainant appointed M/s.The Indian Surveyors (P) Ltd., for preliminary survey and also M/s.J.B.Boda Surveyours (P) Ltd., to assess the final loss caused to the consignment. The extent of damage being severe and the consignment could not be utilized for the purpose for which it was intended therefore, it had no salvage value. The First Complainant were prohibited by Export regulations to sale or transact in their produced or by products of sub standard products. The Complainants have produced copies of the survey repots. Opposite Party have confirmed and certified the damage-delivery of the aforesaid consignment vide their letter dtd.07/06/2004 issued to the First Complainant which is marked as Exhibit-‘E’ to the complaint.
4) Thereafter First Complainants lodged their Monetary Claim with the Opposite Party vide letter dtd.24/06/2004 seeking reimbursement to the extent of the full value of their consignment which was damage delivered by the Opposite Party. The Complainants submit that they are the Owners/Insured as well as Consignors of the consignment and as such they are entitled in law to file this complaint against the Opposite Party for recovery of the said loss.
5) The First Complainants had taken Marine Open Policy in respect of above consignment bearing No.MO00001280 from the Second Complainants to cover the risk of said consignment in transit, etc. The Second Complainants have settled the claim of First Complainants for Rs.17,05,253/- after scrutinizing of the claim on the strength of documents. The First Complainants after receipt of the payment from the Second Complainant have executed Letter of Subrogation & Special Power of Attorney dtd.07/07/2004 for Rs.17,05,253/- in favour of Second Complainants. The Second Complainants are subrogated to the rights of remedies of the First Complainants in respect of said loss.
6) 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.17,05,253/-, and as such Second Complainants are Consumers alongwith First Complainants.
7)It is submitted by the Complainant that the damaged delivery to the said consignment was caused due to gross negligence as well as 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 is 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 provisions 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.
8) It is submitted that cause of action of this complaint arose on or about 17/05/2004 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.
9) The Complainants have prayed to direct Opposite Party to pay to the Second Complainants a sum of Rs.17,05,253/-. The Complainants have prayed for Rs.25,000/- towards cost of complaint. The Complainants have claimed interest @ 18 % p.a. from the date of loss until realization of entire amount.
10) Opposite Party has filed affidavit-in-reply and thereby resisted claim of the Complainants contending interalia that there is no privity of contract between the Complainants and Opposite Party. Opposite Party has admitted that they are engaged in business of carriage of goods by road. However, it is contended that First Complainant had hired services of APL Logistic for carriage, and delivery of the Export Consignment of the components for Industrial Water Treatment for water purification. That APL Logistic has in turn entrusted the work of carriage of said goods from Goa to Mumbai to the Opposite Party. The goods were also carried on owners risk.
11) It is the contention of the Opposite Party that the Complainant is Pvt. Ltd. Company and is not covered within the protection of Consumer Protection Act. There is privity of contract Act between Complainant No.2 and Opposite Party. Therefore, present complaint is not maintainable before this Consumer Forum.
12) The Complainant No.1 is already compensated by Complainant No.2 and therefore, cannot maintain present complaint. In support of the aforesaid contention, Opposite Party has relied upon decision of the Hon’ble Supreme Court in Oberoi Forwarding Agency V/s. New India Assurance Co. Ltd.
13) The Opposite Party has denied all the allegations made in the complaint and submitted that there is no deficiency in the service on the part of Opposite Party. Opposite Party has carried the goods at owners risk and there is no consideration paid to the Opposite Party till today. The damaged consignment was brought back to Goa factory. No intimation was given to the Opposite Party while estimating extent of damage by the surveyors. It is averred that the owners/insured as well as consignors of the consignment are not entitle in law to file complaint against Opposite Party and therefore, complaint is liable 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. It appears from the Roznama that from 25/06/2008 both the parties have not appeared before the Forum till 16/11/2009. On 16/11/2009 Ld.Advocate - Mr.Anand Gawand filed Vakalatnama of Advocate Mr.Sanjit Shenoy for the Complainant and sought adjournment for oral argument. Thereafter both the parties were absent. As both the have filed their written arguments on 26/08/2010 the complaint was closed for order.
15) The Opposite Party in their written statement as well in written argument stated that there is privity of contract between Complainants and Opposite Party. The First Complainant had hired services of APL Logistic for carriage for their Export Consignment stated in the complaint and subsequently APL Logistic has entrusted of the said goods from Goa to Mumbai to the present Opposite Party. Opposite Party has not produced any evidence to support their contention.
16) In this case Opposite Party has 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 M/s.Harsolia Motors V/s. National Insurance Co.Ltd. & Ors., [2005(1)CPR1(NC)], M/s.Shobha Rani V/s. M/s.National Insurance Co.Ltd. [2006(2)CPR334] etc.
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 1entrusted 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.”
In view of aforesaid judgement we do not find substance in the contention raised by the Opposite Party 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.
17) 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.17,05,253/- with interest from the Opposite Party alongwith
cost of this proceeding ?
Findings : No
Reasons :-
Point No.1 :- Following facts are admitted facts 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 General Insurance. The Opposite Party is Private Limited Company doing business of carriage of Goods by road. It is submitted that First Complainant on14/05/2004, hired services of the Opposite Party for carriage, consideration and safe delivery of the Export consignment of 64 nos. components for Industrial Water Treatment (Pressure Vessel) parts for water purifying Machinery (Model 80R607) Ex: Goa to Mumbai and entrusted into their charge, care and custody. Said consignment from JNPT Port the said container was loaded on the Trailor Truck No.MH-06/53209 of the Opposite Party and dispatched to Mumbai from Goa on 17/05/2004. The consignment was valued at US $ 40,834.64 i.e. IRS.17,97682.43. A copy of the Export Invoice dtd.17/05/2004 & Lorry Receipt No.713 dtd.14/05/2004 are annexed and marked as Exhibit-‘A’ & ‘B’ respectively.
It is alleged by the First Complainant that the Opposite Party could not deliver the aforesaid consignment at Mumbai for onward Export shipment to USA to the consignee since the Trailor Truck carrying container containing the entire consignment was involved in a road mishap enroute to Mumbai. Therefore, the entire consignment was brought back to Goa to the factory of the First Complainant for visualizing/estimating the extent of damage and the assessment of the loss. The First Complainant appointed M/s.The Indian Surveyors (P) Ltd., for preliminary survey and also M/s.J.B.Boda Surveyours (P) Ltd., to assess the final loss caused to the consignment. The Complainants have produced copies of the survey repots. Opposite Party have confirmed and certified the damage-delivery of the aforesaid consignment vide their letter dtd.07/06/2004 issued to the First Complainant which is marked as Exhibit-‘E’ to the complaint.
Thereafter First Complainants lodged their Monetary Claim with the Opposite Party vide letter dtd.24/06/2004 seeking reimbursement to the extent of the full value of their consignment which was damage delivered by the Opposite Party. The Complainants submit that they are the Owners/Insured as well as Consignors of the consignment and as such they are entitled in law to file this complaint against the Opposite Party for recovery of the said loss. Opposite Party has admitted that they carried the goods of First Complainant from Goa to Mumbai. Opposite Party has not denied damage to the goods enroute due to the mishap to the Truck Trailor. However, according to the Opposite Party, no intimation was given to the Opposite Party before assessment of the loss by the surveyor. Opposite Party has not disputed the fact that vide their letter dtd.07/06/2004 they certified the damage delivery of the consignment.
In the written argument it is submitted by the Complainants it is stated 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 Complainants No.2 has stepped in the shoes of Complainant No.1 as such, Complainants 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 therefore, 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”.
According to the Opposite Party, 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 consignment Ex: Goa to Mumbai. As the Complainants No.1 had hired services of Opposite Party for commercial purpose Complainants No.1 is not a consumer.
The amended provisions of Section 2(1)(d)(ii) of the Consumer Protection Act, 1986 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).”
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 provisions came into effect from 15/03/03. Transactions in question took place between Complainants No.1 on 29/04/06. It is specifically mentioned in the complaint that cause of action for this complaint arisen on or about 17/05/2004 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. Present complaint is filed against Opposite Party who is a common carriers alleging deficiency in his service.
The Hon’ble Supreme Court in Economic Transport Organization V/s. M/s.Charan Spinning Mills (P) Ltd. 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 17/05/2004 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 Complainants and Opposite Party. The Complainants have produced photo copy of Consignment Note of the goods in question dtd.14/05/04 issued by the Opposite Party. Theconsignment note is issued by the Opposite Party in which Consignors names are mentioned as M/s.APL Logistics A/c Pentair Water India Pvt. Ltd. The Complainants in their written arguments have not explained how name of APL Logistics appear in the consignment note. Therefore, it appears that there is considerable substance in the contention raised by the Opposite Party. It is submitted that 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 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 lost cost of the consignment. Before filing this complaint the Complainant No.2 – Insurance Company has settled claim of the Complainant No.1.As mentioned above on 14/05/04 Complainant No.1 had availed services of Opposite Parties for transport of their Export consignment of 64 nos components for Industrial Water Treatment (Pressure Vessel) parts for water purifying Machinery (Model 80R607) Ex: Goa to Mumbai. 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 constitution 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 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.278/2006 is hereby dismissed with no order as to cost.
ii.Certified copies of this order be furnished to the parties.
