In a recent legal case, the court delves into the complexities of determining liability for service deficiencies in the context of consignment inspections. The court’s thorough legal analysis focuses on the crucial question of whether inspection agencies bear responsibility for ensuring product specifications remain consistent from loading to destination port. This case sheds light on the nuanced legal considerations impacting consumer rights and service provider obligations in the realm of international trade and inspection services.
Facts
- The complainant engaged the appellant for inspecting groundnut procured for export.
- Specifications required for consignment to Greece were communicated to the appellant.
- Samples were tested by the appellant’s counterpart in Greece.
- Inspection certificates for peanuts were issued between 2.12.1997 to 20.12.1997.
- Sealed samples for shipment were sent to the appellant’s counterpart in Greece.
- Two sets of consignments were sent to Piraeus, Greece and Rotterdam, Netherlands.
- Dispute regarding the size/count of Java peanuts for the consignment to Greece.
- Higher level of Aflatoxin found in the consignment to Rotterdam, confirmed by tests in Netherlands.
- Order passed by National Consumer Disputes Redressal Commission in favor of the complainant.
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Arguments
- Appellant was responsible for supervising weighing, packing, and certifying quality and quantity of peanuts only at the time of shipment from Indian port.
- Appellant’s responsibility did not extend beyond Indian borders, disclaimed any liability for conditions at the port of destination.
- Variations in aflatoxin levels and peanut sizes during transportation attributed to natural causes like weather, moisture, and storage conditions.
- No evidence presented of testing, packing, or weighment deviating from appellant’s specifications.
- Appellant not liable for content variation at destination port.
- Samples retained by appellant couriered on the same day as destination testing, but report not shared by complainant.
- Size difference in groundnuts expected after 2½ months of transportation from Indian to Greece port.
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Analysis
- The orders do not indicate any obligation on the part of the appellant to ensure requirements at the port of loading are met at the destination port.
- Dr. Verwey’s Lab was an independent expert nominated by the buyer.
- Allegations of withholding reports and lack of evidence in respect of various factors affecting Aflatoxin in groundnuts.
- High Performance Liquid Chromatography (HPLC) method for testing the cargo for Aflatoxin.
- Discrepancies in Aflatoxin content as per certification and actual findings at the port of destination.
- The complainant carries the initial burden of proof of deficiency in service.
- Certificates issued by the appellant had disclaimers relieving responsibility for consequences of mold development.
- No obligation on the appellant to ensure product specifications remain consistent from loading to destination port.
- Lack of best evidence produced by the complainant in respect of test results of samples.
- Commission’s error in drawing adverse inferences against the appellant without sufficient proof.
- Burden of proving deficiency in service is on the person alleging it
- Initial onus to prove deficiency in service is on the complainant
- In the absence of a clause in the contract ensuring goods meet product specifications at the time of loading, the appellant cannot be held liable for changes in specifications at the destination port.
- The order of the Commission holding the appellant as deficient in service is not sustainable without a clause in the work order stating that the specifications should remain the same at the port of destination.
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Decision
- The present appeal has been allowed.
- The order passed by the Commission has been set aside.
- The complaint has been dismissed.
Case Title: SGS INDIA LTD. Vs. DOLPHIN INTERNATIONAL LTD. (2021 INSC 622)
Case Number: C.A. No.-005759-005759 / 2009
