CADBURY INDIA LTD. vs Rajanesh R. Swamy And Ors.

THIS appeal seeks to challenge the order of 28.10.2005 of the Karnataka State Consumer Disputes Redressal Commission, Bangalore (in short, the State Commission'') in complaint case No. 13 of 2001. By this order, the State Commission held opposite party (OP) No. 1 -the appellant before us guilty of defects in the chocolates sold by it through the network of retailers and also consequent deficiency in service and directed it to pay the following sums within four weeks from the date of the order - (i) Rs. 50,000 as compensation to the complainants with interest at 12% per annum from the date of the complaint till realisation along with costs of Rs. 10,000; and

(ii) Rs. 1,00,000 as damages under Section 14(1)(hb) and Rs. 50,000 under Section 14(1)(d) respectively of the Consumer Protection Act, 1986 (hereafter, the Act'') to the State Commission.

The State Commission further directed payment of interest on the above mentioned amounts @ 12% per annum in case of failure to comply within the stipulated time.

IN the complaint before the State Commission, complainant No. 1 (also representing complainant No. 2, his four year old daughter) gave a long narration of his version of the events, including his background of public service activism, ill effects of consumerism fostered and aided by multinational companies and their marketing strategies, exploitation of consumers, etc., and made several allegations against the appellant in particular. Referring to newspaper reports and material allegedly gathered from the worldwide web, he also claimed that his complaint ought to be treated as one on behalf of many unrepresented consumers who would have similarly suffered because of the sale of worm infested Cadbury chocolates, a popular consumer product. It is not necessary to detail either that narration or the facts recorded by the State Commission, except to the extent necessary for adjudication of this appeal. Suffice it to observe that in the complaint, the complainants sought compensation of Rs. 9,60,415, including Rs. 9,50,000 as that for causing "consumer grievance", interest @ 15% on the said amount from the date of the complaint till payment and costs of the proceedings.

THE appellant filed its written version vehemently countering all the allegations. The appellant denied in particular that it was guilty of manufacturing worm -infested chocolates or that the chocolates did not conform with the prescribed standards of use of chemicals in respect of food articles like chocolates. In addition, the appellant explained the chain of supply of the chocolates manufactured by it and the precautions that it adopted to ensure that the end products reaching the consumers were safe. In the impugned order, the State Commission, however, relied mainly on three documents, viz., the bill produced by complainant No. l purportedly for the chocolates purchased by him from the store of respondent No. 2 on 1.11.2000, medical certificate dated 2.11.2000 of a doctor regarding the latter having treated complainant No. 2 for the complaint of vomiting, etc., on consuming worm infested chocolates and three test reports dated 16.12.2000 of Lifeguard Laboratories, Bangalore. In addition, the State Commission took into account copies of press reports produced before it, to the effect that sale of popular brands of chocolates infested with worms had been noticed in Mumbai and led to seizure of the stocks by the local Food and Drug Administration. Though the State Commission accepted that newspaper reports could not be treated as evidence, it went on to conclude that there were several complaints of worms in the chocolates manufactured by the appellant. Taking into account the relevant letter written by complaint No. l to the appellant and the report of the corporate quality assurance division of the appellant, the State Commission also concluded that the complainants had established that the chocolates, manufactured by the appellant and purchased from respondent No. 3, were infested with worms and consumption of such infested chocolates was hazardous to the health of the consumers of the product. The State Commission also noticed that the appellant had failed to establish that it had taken any action against the retailer (respondent No. 3) for not following its instructions regarding safe storage of the chocolates. In this context, the State Commission observed in the impugned order as under: "When a manufacturer manufactures consumable goods and release the said goods to the market, it has to take all possible steps to see that all possible consumers should get the good quality of its product. If goods of good quality do nor reach the consumers, then ultimately the manufacturer is liable for the damage that may be caused to the consumers."

Finally, the State Commission also observed that this was not the first instance of such a complaint against the appellant. In another case (complaint No. 726 of 2003) before the one of District Consumer Disputes Redressal Forums, Bangalore, the State Commission, in appeal, enhanced the compensation awarded by the District Forum after recording a finding that there was deficiency in service on the part of the appellant. By its order of 24.2.2005 in revision petition No. 2603 of 2004, this (the National) Commission affirmed the order of the State Commission. Based on these considerations, the State Commission passed the impugned order.

WE have heard Mr. Joseph Vallapally, senior Advocate on behalf of the appellant. Notice was issued to the respondents (including the two complainants), first on 5.12.2008 and secondly on 2.2.2009. Despite service of notice (service having had to be presumed as neither notice was received back undelivered), the respondents chose to remain absent. Still, we have carefully considered the complainant''s case as we have that of the appellant.

IN his submissions, Mr. Vallapally. learned Counsel has emphasised the following points: (i) The State Commission seriously erred in returning a finding of manufacturing defects in the chocolates in question without following the mandatory provision of Section 13(1)(c) of the Act and instead relying on the test results of a so -called (veterinary) laboratory chosen by complainant No. 1.

(ii) Admittedly, complaint No. l, a person engaged in espousing consumer causes, went out to buy Cadbury chocolate bars from the smallest retail outlet in the locality. This would only tend to show his predetermined motive, viz., to look out for a retail store where the conditions of storage of goods, etc., were most likely to be poor so that a grievance like that in the complaint could be easily made out.

(iii) The case of complainant No. l that his four -year old daughter (complainant No. 2) actually ate some Cadbury chocolate bars visibly infested with worms was patently unbelievable. No normal parent would allow his child to eat a piece of chocolate, which he himself found to be infested with worms immediately after purchase. Moreover, on receipt of telegrams of complainant No. 1, the appellant deputed one of the appellant''s officers who met the complainant on 4.11.2000 and obtained from him a written consumer grievance along with a sample of the allegedly infested chocolate bar. In this signed complaint, the complainant did not at all mention that his daughter (complainant No. 2) had actually consumed some of the infested chocolate bars and fallen sick as a result, for which she was treated on 2.11.2000 (the date of the medical certificate). It was only on 18.11.2000 that complaint No. l wrote a letter to the appellant stating for the first time that his daughter had consumed some of the worm -infested chocolates that he had bought and fallen sick as a result.

(iv) The certificate of analysis dated 29.11.2000 of the appellant''s corporate quality assurance division showed that the metal foil wrap of the sample chocolate bar had holes through which worm infestation took place in the sample bar. This would only establish defective storage by the retailer. Though the appellant ensured that the quality and safety measures prescribed in this behalf were observed scrupulously at all stages of manufacturing chocolates and also repeatedly advised the retailers in detail on safe storage practices for the chocolates manufactured by the appellant, it was in no position to fully control the actual storage modalities in lakhs of retail outlets. This was the legal responsibility of the local administration that issued licences to the retailers for storage and sale of food and other edible products like the chocolates in question.

(v) Thus, if the chocolates in question suffered from worm infestation as a result of poor storage, the resultant liability could not be fastened on the appellant. However, the State Commission had chosen to hold only the appellant guilty precisely on this ground, though even the complainants had not prayed for compensation from the appellant alone.

(vi) By letter 1.12.2000, the appellant informed the complainant No. l in detail about the quality control process as well as the distribution modality in order to ensure that retailers observed the precautions recommended by the appellant. Therefore, it is not that the appellant did not take reasonably expeditious action on the telegrams or subsequent communication of complainant No. 1.

WE are inclined to agree with some of the contentions of the learned Counsel for the appellant: (i) (a) First of all, to establish the validity of the alleged infestation of worms in some of the Cadbury chocolate bars purchased by complainant No. l, it would have been necessary for the latter to preserve the chocolate bars found to be worm -infested and produce them in the same condition before the State Commission. The State Commission should then have had them analysed at an appropriate and authorised laboratory competent to carry out such tests, in accordance with the mandatory provisions of Section 13(1)(c) of the Act. It was not enough to rely on the test reports dated 16.12.2000 of the Lifeguard Laboratories, Bangalore, copies of which were produced by the complainant.

(b) The State Commission''s order reproduced the findings of the aforesaid Laboratory. There are three reports each dated 16.12.2000 of Lifeguard Laboratories in respect of three different brands of Cadbury chocolates (Fruit and Nut, Dairy Milk and Roast Almond), tendered by complainant No. 1. Under physical appearance, each report found impression of insect bites on the chocolates. In respect of Fruit and Nut chocolate, there was evidence of off -white coloured larvae creeping over the chocolate. The bacterial contamination was, however, not found to have exceeded the standard limit. The figure of yeast and mould count was mentioned but the permissible range of such counts in sugar and sugar products was not stated. In respect of Dairy Milk chocolate, the observations on physical appearance again revealed holes and impression of inspect bites and eggs of parasites/insects on the surface. In respect of bacterial count, the observed value was mentioned without stating the permissible standard limits of such count. The observed count of yeast and mould also did not compare it with the permissible limit. In respect the sample of Roast Almond chocolate, physical observations again showed impression of holes, insect bites and of matted particles with insect fecal matter around the nuts in the chocolate. The value of the bacterial count was stated along with the remarks that the contamination was within the standard limit. In respect of yeast mould count, the observed value of the count was without reference to the permissible standard. These reports read together would point to a couple of conclusions.

(c) The chocolates were bought on 2.11.2000 but the samples were sent to the aforesaid laboratory on 5.12.2000, i.e., after nearly five weeks. Hence, the storage of the chocolate bars with the complainant for this length of time would have a bearing on the test results. Secondly and more important, none of the observations of the said laboratory would point to defects in manufacturing and only reflect moulding and infestation on account of defective storage at the point(s) in the retail chain where the chocolates were stored and then sold. This was also the observation in the report of the Quality Assurance Division of the appellant in respect of the sample that complaint No. l had handed over to an officer of the appellant on 4.11.2000. Thus, the contention of the appellant that the infestation stated to have been observed by complainant No. 1 in the chocolate bars he bought was due to defective storage by admittedly a very small retailer would appear to be more credible.

(ii) The next allegation that complaint No. 2, i.e., the daughter of complaint No. l actually consumed some of the worm -infested chocolates soon after they were bought and fell ill is, in our view, prima facie unacceptable. We are inclined to agree with the learned Counsel for the appellant that no parent would allow his four -year old daughter to eat even a small piece of worm -infested chocolate immediately after purchase. Further, there is complete absence of any mention of the daughter''s illness after consuming the worm -infested chocolates in the consumer grievance recorded by complainant No. 1 on 4.11.2000 with a visiting officer of the appellant company. This would also show that the alleged illness of his daughter on this account was an afterthought and included in the complaint only to make the allegations look graver. Even the medical certificate dated 2.11.2000 produced by complainant No. 1 merely recorded that complainant No. 2 was brought to the doctor''s clinic with "history of vomiting and psychologically disturbed after consuming worm infested Cadbury''s chocolate". It was thus not the doctor''s finding that she suffered from eating something contaminated. The medical certificate also mentioned that only "symptomatic treatment" was given to the child. This cannot be the conduct expected of a bona fide and highly aware consumer genuinely aggrieved at finding visible contamination in a popular consumer product like the chocolates manufactured by the appellant. In our view, the State Commission should have taken due note of this attempt at fabrication by complainant No. 1.

(iii) The State Commission also did not think it fit to investigate the nature of contract, if any, between the appellant and the retail dealers like respondent No. 3. If the relationship were found to be that of principal and agent, it would have been very much in order for the State Commission to take a grim view of the whole case qua the appellant here. However, neither the complainant alleged anything on this score nor did the State Commission require the appellant to establish the exact nature of its relationship with respondent No. 3.

(iv) We have also looked at the order of this Commission in revision petition No. 2603 of 2004, on which the State Commission has relied to some extent, to justify the impugned order. We find that the facts of that case were very different. In that case, the complaint was that of a sharp piece of plastic being found in a Cadbury chocolate eaten by a child. Such a foreign body could not have gotten inside a chocolate because of faulty storage by the retailer concerned and hence the Consumer Fora rightly held the appellant Cadbury India Ltd. guilty and directed it to pay a compensation of Rs. 25,000. It is clear that the facts in the case before us do not point to such defects in the chocolates that the appellant has to be held similarly guilty.

(v) Finally, we are unable to see why the impugned order does not deal at all with the role and liability of the retail dealer of the chocolates in question (opposite party No. 2 before the State Commission and respondent No. 3 here) for his negligence in service, which is palpable in the facts of the case.

IN view of the foregoing, the impugned order cannot be sustained and is accordingly set aside. However, as prayed for in the complaint, the complainants would be entitled to some reasonable compensation from respondent No. 3 (opposite party No. 2 before the State Commission) for its proven negligence in service, viz., selling Cadbury chocolates infested with worms. Considering the nature of deficiency in service, in our view it would meet the ends of justice if respondent No. 3 is directed to pay to the complainants a compensation of Rs. 25,000 within a period of four weeks from the date of this order. We order accordingly. There shall be no order as to costs. Ordered accordingly.