The National Commission vide impugned order has reduced the amount of compensation to Rs.10,000/- (Rupees Ten Thousand) as against the amount granted by the State Commission to be paid to the 2 appellant herein i.e., a sum of Rs.13,79,901/- (Rupees Thirteen Lakhs Seventy-Nine Thousand Nine Hundred and One), together with compensation of Rs.50,000/- (Rupees Fifty Thousand) and cost of litigation amounting to Rs.10,000/- (Rupees Ten Thousand).
Ltd.) and respondent No.2- M/s
Fritz International are the subsidiaries and agents of respondent No.3- M/s Fritz Companies Inc. Respondent No.5 consignee appointed Respondent Nos.1-3 as their forwarding agents/consolidators to execute the entire transaction for respondent No.5 with the appellant herein. By letter dated 08.03.1999, respondent No.4 informed the bank of the appellant that in accordance with the Uniform Customs and Practice for Documentary Credits (“UCP 500”, for sake of convenience), the documents had been refused and that the Letter of Credit could not be honoured on account of discrepancies in the FCR issued to the appellant.
By letter dated 18.03.1999, respondent No.4 – Bank informed appellant’s bank that they had approached respondent No.5 for approval to pay the sale consideration but Respondent No.5 was not willing to honour such request and thereafter the documents were returned to the appellant’s bank i.e., the Canara Bank for further disposal. The appellant herein neither got the goods back nor did they get any payment in respect of the said goods and therefore the aggrieved appellant approached the concerned State Commission by way of a complaint claiming Rs.13,79,901/- (Rupees Thirteen Lakhs Seventy- Nine Thousand Nine Hundred and One) as value of goods consigned; Rs.4,53,666/- (Rupees Four Lakhs Fifty-Three Thousand Six Hundred and Sixty Six) as interest at the rate of 24% p.a., and Rs.1,50,000/- (Rupees One Lakh Fifty Thousand) in lieu of loss of profit. That the appellant herein had acted as a beneficiary of the services rendered by respondent Nos.1 and 2 and as such is a consumer within the meaning of Section 2(1)(d)(ii) of the Consumer Protection Act, 1986 (hereinafter, referred to as the Act of 1986.
The appellant herein filed an application seeking rectification of the typographical error in the judgment and order of the State Commission dated 09.02.2009 wherein the loss of amount towards loss was mentioned wrongly mentioned as Rs.79,901/- instead of Rs.13,79,901/-.
The National Commission held that the order of the State Commission holding respondent Nos.1 to 3 8 liable to the extent of the price of the goods, Rs.50,000/- as compensation and Rs.10,000/- as cost of litigation could not be sustained and respondent No.1 was thus directed to pay a sum of Rs.10,000/- as compensation to the appellant herein along with interest at the rate of 9% per annum from the date of filing of the complaint till the date of the payment. That the mistake in the document could not have been the reason for respondent No.5 declining to accept the documents 9 for payment unless the consignment itself had not reached its destination on account of the aforesaid mistake.
That it could be possible that the appellant lost its price of goods due to the connivance between the respondent No.4 and respondent No.5 as was contended by the appellant, as a result of the alleged endorsement made on the FCR which was later on concealed by putting ink on it. The submissions of the learned counsel for the appellant are summarised as under: 21.1 That the appellant was, as a seller, only obliged to hand-over the consignment at New Delhi to respondent No.2, which the appellant had duly carried out and therefore the appellant became entitled to sale consideration. 1 to 3 also admitted before the National Commission their mistake of writing the wrong port of loading in 11 the appeal and accepted that it was due to an oversight on their part.
12 21.7 That the delay in payment could not be attributed to the appellant herein since the Letter of Credit specified that the consignment had to be shipped in the month of March and the appellant herein on 11.02.1999 had informed the shippers to take the delivery. The submissions of the learned counsel for the respondent No.1 are epitomized as under: 22.1 That had the appellant herein been vigilant, the FCR could have been corrected before presenting the same to the banker. 22.3
That the endorsement made on the reverse side of the FCR and later on concealed by putting ink on it and the return of documents by respondent No.4 cannot be attributed to the mistake in the FCR but solely to the acts of connivance on the part of respondent Nos.4 and 5. Having heard the learned counsel appearing for the respective parties, the following points would arise for our consideration: (a) Whether the National Commission was justified in reversing the judgment and order passed by the State Commission thereby reducing the amount of compensation that the appellant herein was entitled to?
It is also noted that the 15 National Commission directed the payment of such amount from the amount deposited by the respondent No.1 before the National Commission while filing the appeal and the remaining amount was directed to be refunded to respondent No.1 after deducting the amount payable to the appellant herein. It is further noted that respondent No.5 appointed respondent Nos.1 to 3 as its shippers/forwarding agents and the said shippers/forwarding agents issued FCR dated 22.02.1999. By letter dated 18.03.1999 addressed by respondent No.4 Bank to the appellant’s bank, respondent No.4 returned the FCR and other documents to the appellant citing the reason that respondent No.5 is unwilling to make the payment. By such a contract the seller is to put on board at his own expenses which means this is a contract for sale of goods to be delivered free on board a ship. The buyer must name the ship upon which they are to be delivered and the seller must put them safely on board, meet the cost of doing so and for the buyer’s protection, give possession of them to the ship only upon the terms of a reasonable and ordinary bill of lading or other contract of carriage; there the contractual liability of the seller as seller ceases and delivery to the buyer is complete as far as he is concerned.
A letter of credit is a document issued by a bank (issuing bank) on behalf of a party (applicant) in favour of another party (beneficiary) under which, the issuing bank undertakes to pay to the 19 beneficiary, certain sums of money subject to compliance of the terms and conditions of the letter of credit. A seller can ask the issuing bank to honour the letter of credit to his own bank (confirming bank) within a certain maturity date. As per Section 2 (g) of the Act of 1986, ‘deficiency’ is defined as “fault, imperfection shortcoming or inadequacy in the quality, nature, and manner of performance which is required to be maintained by or under any law for time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.” What is needed to be assessed here is whether the admitted error on the part of the respondent Nos. It is only after the appellant approached respondent No.1 to issue a certificate/letter rectifying the error regarding the wrong point of loading that the respondent No.1 issued such a certificate/letter dated 30.03.1999 mentioning that the shipment was loaded from FOB New Delhi and effected from JNPT Bombay.
The National Commission in the impugned order has held that it is an admitted position that a mistake was committed by the respondent No.1 while issuing the FCR to the appellant.
If any amount has already been paid to the appellant by the respondents herein, then the balance amount, if any, as awarded by the State Commission shall be paid to the appellant within a period of two months from today. (B.R.
Case Title: M/S BAWA PAULINS PVT. LTD. Vs. UPS FREIGHT SERVICES (INDIA) PVT. LTD. . (2022 INSC 1194)
Case Number: C.A. No.-008298-008298 / 2022
