NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Through one of its partners – Anil Singla Complainant
1. M/s. Leigh Hoegh & Co. A/S
2. Forbes Gokak Limited
19, J. N. Heredia Marg
3. M/s. Hayim & Co.
Harish J. Panjabi
Vice President, Hayim & Co.
S-124, Greater Kailash I,
HON’BLE MR. ANUPAM DASGUPTA, MEMBER
For the Complainant: Mr. M. C. Dhingra, Advocate with Ms. Alaka Agarwal, Advocate
For the Opposite Parties: Mr. T. K. Ganju, Senior Advocate with Mr. P. K. Jain,
The complainant, M/s.
Shakumbhri Exports is an exporter of handloom and handicraft goods from
The complainant sent
the requisite goods to OP no. 3, the purchaser, against the documents drawn by
its Bank in favour of the LaSalle National Bank, International Banking
The goods were sent by a vessel owned/controlled by OP no. 1, M/s. Leigh Hoegh & Co. It is pointed out that the relevant consignments were dispatched against the following invoices and bills of lading:
Bill of lading no. and date
Value in US $
031 dt. 29.8.1994
038 dt. 29.8.1994
037 dt. 11.6.1994
Total US $ 1,37,817.60
i.e., Rs. 50,71,687.68.
The bills of lading confirming that the goods were shipped on board were issued by the Master of the Vessel (“Hoegh Dyke”) owned and/or controlled by OP no.1 which is a company registered under the laws of Norway while OP no. 2 is the Agent of OP no. 1 in India.
As the complainant did not receive the payment for the aforesaid consignments of the goods, it addressed several communications to OP no. 2 (as well as OP no.1) asking for the status of the consignments. OP no. 2 also, in turn, sent various communications to the complainant.
The payment was not
released in spite of prolonged correspondence and hence the complainant filed
this complaint before this Commission on
After receipt of notice
in these proceedings, the complainant as well as OP nos. 1 and 2 filed their
written versions and written submissions. The latter contended that the
consignments, covered by the three relevant bills of lading, were released to
the purchaser, OP no. 3, along with several other consignments, on the basis of
the complainant’s letter (fax) dated 21st October, 1994. There was
no reason for OP nos. 1 and 2 to doubt the authenticity of the complainant’s
said communication because, on earlier occasions too, the complainant had sent
such communications. After the delivery of the goods to the purchaser, for the
first time, on 1.2.1995, the complainant made an inquiry about its shipments.
It was further contended by OP nos. 1 & 2 that there was no privity of contract between the complainant and OP no. 1 (Shipper); that the freight was payable at the destination by OP no. 3, and, therefore, the complainant was not a consumer vis-ŕ-vis OP no. 1. It was also pointed out that there was dispute between the complainant and the purchaser of the goods (OP no.3). It was further contended that by its order dated 25.9.1998, this Commission had rightly dismissed the complaint on the ground that it involved disputed questions of fact, particularly, forgery.
In appeal, the
In the proceedings
OP nos.1 and 2 have also produced on record a fax message sent by OP no. 3 to OP no.1 after the institution of the complaint. In our view, this fax message is most relevant for the reasons discussed below.
Fax Message of
Before deciding the contentions
raised by the parties, we reproduce below the fax message dated
“In reply to Hoegh memo (1/15) from
Richard Perez; as you know we have an on-going dispute with Shakumbhri over
quality issues and his financial responsibility for shipping inferior
merchandise to Hayim. We feel our position is correct and justified. We
have given the matter over to our lawyer in India; Mr. Girdhar Govind of
Girdhar Govind & Co. ……..
“The original bill of lading is still, to the best of my knowledge, at LaSalle Bank; we never received it since we never paid for these goods. I have enclosed, as you requested:
A) Release letter from Shakumbhri with the fax number it was sent from on the top of the letter. The signature is difficult to read. I have other correspondence signed by them which is also difficult to read, several different signatures. I never had reason to question the validity of what he sent prior to this and would have had no reason to question it.
B) Memo to Brian Stabler from Tim Ward requesting release of the goods - as you know this was not the 1st or last time this occurred, it was a standard practice to make goods available quickly to satisfy customer needs.
C) Copies of non-negotiable documents.
“Please advise if we can do anything else to assist
you and feel free to contact our attorney’s in
cc: Stuart Hayim
Mr. Girdhar Govind”
(a) From the admitted facts stated in this fax, it is amply clear that the goods were delivered by OP no. 1 to OP no. 3 without the original documents, namely, the bills of lading, and without informing the consignee Bank. This is an apparent deficiency in service by OP nos. 1 and 2.
(b) Next, we have to find out
whether the said act was justified. It is contended that the goods were
released on the basis of the letter (fax message) dated
(c) Further, in this fax, OP no. 3 – the Purchaser - admitted that there was some ongoing dispute with the complainant with regard to the allegedly inferior quality of the exported goods. In such circumstances, it is difficult to believe that the complainant would have sent a fax message to the purchaser that it could take possession of the goods without getting the original documents released from the consignee bank - LaSalle National Bank - after making the necessary payment.
is also apparent that OP nos. 1 & 2 were not sure about the complainant’s
said fax message and, therefore, by its fax dated
On 17.4.1995 OP no. 2 sent a message to the complainant again stating that the consignments had been released without obtaining the bills of lading but after obtaining corporate guarantee from OP no. 3 and on the basis of the complainant’s letter of authority, which, according to the complainant, was never issued by it.
Thereafter, by its communication
dated 2.5.1995, the complainant conveyed to OP no. 1 that while by its fax
dated 3rd February 1995 its Agent’s (OP no. 2) office at Mumbai
office had informed that all the above shipments had been delivered to the
consignee M/s Hayim & Co., the same office (OP no. 2), however,
confirmed vide fax dated 27.3 1995 that all the above shipments had been
released to Hayim & Co without the original bills of lading after getting
corporate guarantee. In response, the complainant received another fax
message on 4.5.1995 from OP no. 2 that the consignments had not been delivered
to the consignee till date and they were lying un-cleared at Port
On 17.5.1995, the complainant received yet another message from the Mumbai of office (PATVOLK Division) of OP no. 2 that the complainant should not be in direct communication and the queries, if any, should be routed through the Bombay office of OP no.2. The same day, the complainant asked OP no. 2 to repeat its fax message of 17.5.1995 as it was garbled. In response, the complainant received another fax on 18.5.1995 wherein the OP took a u-turn and re-iterated the old message that the consignments had been released on the basis of the complainant’s letter of authority and after obtaining a corporate guarantee from OP no. 3 “to protect the Line’s (OP’s) interests”.
After receiving the said fax, on 31.5.1995 the complainant sent a fax message to OP no. 2 asking it to remit the invoice amount of the consignment with 24% per annum interest thereon to avoid litigation. In reply, OP no. 2 sent a fax on 2.6.1995 declining the complainant’s claim and also refusing to furnish the so called corporate guarantee.
From the aforesaid facts, it is clear that the conduct of OP no. 1 in releasing the goods to OP no. 3 without receiving the original documents for the said cargo was in contravention of the shipping instructions and contrary to the terms of the contract, particularly that regarding releasing the goods to the consignee only against cleared and paid original documents released by the consignee bank, viz., LaSalle National Bank. It appears that there was an oblique purpose in releasing the goods to OP no. 3 without the latter securing and producing the original documents.
Further, it is also amply clear from the aforesaid exchange of fax messages how inconsistent the stand taken by OP nos.1 and 2 from time to time was, obviously to suit their own purposes and, for reasons best known to them.
In this view of the matter, it can be said that there is apparent deficiency in service on the part of the opposite party nos.1 and 2 in releasing the goods in favour of the purchaser without informing the complainant and the consignee Bank.
question for consideration is, whether the Consumer Fora in
The jurisdiction of the Consumer Fora is prescribed of section 11 of the Consumer Protection Act, 1986 (hereinafter referred to as “the Act”). The relevant part of section 11(2)(a) & (c) are reproduced below:
“11. Jurisdiction of the District Forum.—
(2) A complaint shall be instituted in a District Forum within the local limits of whose jurisdiction,—
(a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for gain, or
(c) the cause of action, wholly or in part, arises”.
Undisputedly, OP no.1 was carrying on business at Mumbai through its agent OP no.2. This is clear from the correspondence produced on record. Admittedly, OP nos. 1 and 2 carried on business at Mumbai; the goods were delivered at Mumbai and the contract was also executed at Mumbai. Under section 11 of the Act, a complaint can be filed in such cases at a place, inter alia, where the OPs actually and voluntarily carry on business or have a branch office. Secondly, the cause of action has also arisen at Mumbai. Hence, a complaint before the Consumer Fora is maintainable.
the learned Senior Counsel for the Ops has contended that that in view of
clause (3) of the bills of lading of the goods in question, the Courts/Consumer
“Clause 3 – Any dispute arising under this Bill of Lading shall be decided in the country where the carrier has his principal place of business and the law of such country shall apply unless and until provided for in this Bill of Lading”.
In support of his
contention, the learned Senior Counsel for OPs no. 1 & 2 also places
reliance on the decision of the
In our view, the
aforesaid decision does not support the case of the OP no.1. In the present
case, mere registration of the OP no.1 company at
The defendants have not placed any material before the Court that the
The aforesaid observations would also be applicable to the present case.
Secondly, OP no.2 is a company registered under the Companies Act, 1956 and is carrying on its business shipping agent handling incoming as well as outgoing cargo, as stated by the Deponent, Manager – Marketing, OP no.2 in his affidavit before this Commission. Further, the entire contract was executed at Mumbai with OP no. 2 and OP no. 1, which is specifically clear from the correspondence. The complainant was informed by fax dated 17.5.1995 that instead of contacting OP no. 1, it should contact only OP no. 2.
Thirdly, from the facts of the present case, it is difficult to say that the dispute between the complainant and the opposite parties no.1 and 2 arose under the bills of lading. The dispute pertained to wrongful delivery of goods dehors the bills of lading, by taking the pretext of fictitious or forged documents, to a third party and not to the consignee bank.
Finally, even presuming that no proceedings are maintainable against OP no. 1, proceedings would be maintainable against OP no.2, in view sections 230 and 232 of the Indian Contract Act. Sections 230 and 233 of that Act provide as under:
“230. Agent cannot personally enforce, nor be bound by, contracts on behalf of principal.‑
In the absence of any contract to that effect an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them.
Presumption of contract to the contrary: Such a contract shall be presumed to exist in the following cases:
(1) Where the contract is made by an agent for the sale or purchase of goods for a merchant resident abroad; or
(2) Where agent does not disclose the name of his principal; or
(3) Where the principal, though disclosed, cannot be sued.”
Further, section 233 along with illustration reads as under:
“233. Right of person dealing with agent personally liable.‑
In cases where the agent is personally liable, a person dealing with him may hold either him or his principal, or both of them liable.
Illustration: A enters into a contract with B to sell him 100 bales of cotton, and afterwards, discovers that B was acting as agent for C. A may sue either B or C, or both for the price of the cotton.”
Hence, in this case where the agent (here, OP no. 2) is personally liable, the complaint is maintainable against both the agent (OP no. 2) and its principal (OP no. 1).
In this view of the matter, the complaint is allowed. Opposite parties no.1 and 2 are directed to reimburse the complainant the sum of Rs. 50,71,687.68 (Rupees fifty lakh seventy one thousand six hundred eighty seven and paise sixty eight) only with interest at the rate of 10 per cent per annum with effect from 1st January, 1995 till the date of payment for the mischief of wrongful delivery of the goods to opposite party no.3.
As regards the rights of the opposite parties no. 1 and 2 to recover any sums from the opposite party no.3 on the basis of the latter’s corporate guarantee, it is a matter that we are not required to deal with.
[M. B. SHAH, J]