PREM GS INTERNATIONAL vs Iraqui Airways

THIS is an appeal filed by the complainant against the order passed by the State Consumer Disputes Redressal Commission, Delhi in Case. No. C -314/91. The State Commission vide Order dated 25th June, 1993 dismissed the complaint with costs subject to the observation that the complainant may file a civil Suit if so advised. The present respondent was arrayed as opposite party in the complaint.

THE facts as gathered from the records are that the complainant is carrying on business of exporting ready -made garments, artistic handicrafts and other items of interest. Mr. T.S. Sawhney is its Managing Trustee. M/s. Dalligan Incorporate of the Dallas, Texas (USA) placed an order for ready -made garments with the complainant. They opened an irrevocable letter of credit dated 8th January, 1990 for US Dollars 1,24,200 in favour of M/s. Sawhney Bros. The letter of credit was transferable and it was transferred in favour of the complainant. An amount of US Dollars 18,450 was arranged on the basis of the said letter of credit by M/s. Sahwney Bros, and transferred in favour of the complainant. The complainant prepared garments as per the requirement of the foreign customer and packed them in 25 bags and sent them vide invoice No. 660 on 2nd February, 1990 through the opposite party. The price of the garments was US Dollars 18,450. The opposite partys agent, it is alleged, has issued air waybill on 20th February, 1992. The consignment was to be delivered to or at the instructions of Bank 1, Texas (USA). A sum of Rs. 28,035 was to be collected by the opposite party on account of freight on delivery of the consignment to the consignee. It was further alleged by the complainant that a bill of exchange dated 8th March, 1990 for US Dollars 18,450 was drawn and delivered to the Bank of Rajasthan, Janpath, New Delhi with other documents for collection. M/s. Dalligam is said to have some problem with the customs and, therefore, they could not take the delivery of the consignment. The complainant approached M/s. Ivory International Incorporate which agreed to accept the goods. The complainant informed the new customer by Fax dated 24th April, 1991 that the consignment had been transferred to them and instructions were issued to that effect to the opposite party. On enquiry by M/s. Ivory International Inc., the opposite party intimated to them that no consignment was available in USA. It is alleged that inspite of various inquiries by the complainant and M/s. Ivory International Inc., the opposite party has not delivered the consignment and thus the complainant has suffered a loss of US Dollars 21,033 which amount includes the price of the garments and interest. The complainant prayed that the opposite party be directed to pay US Dollars 21,033 with interest at the rate of 24% p.a. from 30th November, 1991 till the date of payment.

THE complaint was contested by the opposite party who inter alia pleaded that the consignment was entrusted to M/s. Friends Clearing Agent Pvt. Ltd. (hereinafter referred to as the clearing agent) on 12th March, 1991. According to the terms of the letter of credit (Addendum) if the consignment was sent after 2nd March, 1990, it was to be sent by air and the master air waybill was to be marked ''freight paid''. The complainants agent did not fulfil the basic condition as the consignment was sent without payment of the freight charges. Thus one of the main conditions of contract entered into between the parties was not complied with, by the complainant. Due to this reason, the goods were not accepted by the consignee. This fact complicated the matter.

IT may be mentioned that during the pendency of the complaint before the State Commission an application was filed by the opposite party under Section 13(5) of the (Consumer Protection Act, 1986 read with Sections 195 & 340 of Criminal Procedure Code and Section 193 of Indian Penal Code, inter alia, stating that in the letter of credit (Addendum) it was stated that if the goods were shipped one day after the latest ship date specified therein but not more than 14 days later, the goods must be shipped by air in which case the copy of the master air waybill must be marked ''freight paid'' with the shipping terms CNF USA Airport. It was alleged that the goods were sent by the complainant to the clearing agent on 12th March, 1990 and accordingly the air waybill was prepared on the same day i.e. 12th March, 1990 and was issued to the complainant. However, later the complainants realised their mistake and in order to save themselves from the consequences of breach of contract intentionally scored out the date on the copy of the air waybill which was with them and changed the date as 20th February, 1990 with the motive to save the freight and thus they committed forgery and was liable to be prosecuted. It was further pleaded by the opposite party that the complaint was liable to be dismissed on this short ground. The version of the complainant is that they sent the goods to the clearing agent on 20th February, 1990 but, the clearing agent did not prepare the air waybill on that day awaiting the availability of aircraft space. The clearing agent prepared the air waybill on 12th March, 1990 after confirmation of the space in the aircraft. The shippers copy of the air waybill was delivered to the complainant who pointed out to the clearing agent that the consignment was delivered to them on 20th February, 1990 and, therefore, the air waybill should also be of the same date i.e. 20th February, 1990. The agent accordingly recorded on the shippers copy of the air waybill as 20th February, 1990 was issued by the agent of the opposite party which has been confirmed by their letter dated 16th February, 1992 supported by their affidavit.

THE State Commission held that the date on the shippers copy of the air waybill has been changed and it was evident from the pleadings and documents that the benefit of that change would have been derived by the complainant. The complainant produced a letter dated 16th February, 1992 from the clearing agent addressed to them (i.e. the complainant) wherein it has been certified by them that the air way -bill No. 073 10171792 dated 20th February, 1990 was issued against booking of 25 cartoons containing garments in favour of Bank One, Texas, N.A. USA, the consignor of which was M/s. Prem Gs International. Before the State Commission the complainant laid emphasis on the said letter and the affidavit of the clearing agent and submitted that the consignment was received by the clearing agent on 20th February, 1990. The respondent also produced before the State Commission the export cargo summary sheet showing that the consignment was not delivered to the agent on that date and it also produced another letter dated 12th May, 1993 from the clearing agent wherein they certified that the above air waybill was issued on 12th March, 1990 and that the letter issued earlier to the complainant was given without checking the old records. Thus the State Commission found that the letters given by the clearing agent to both the parties are contradictory. The State Commission came to the opinion that the question whether the cargo was handed over to the clearing agent on 20th February, 1990 or on 12th March, 1990 is the crucial question for deciding the complaint on merits, and in view of the contradictory versions of the parties it was not possible to decide the said question in the summary proceedings on the basis of the affidavits of the parties. The State Commission also noticed that if the finding goes against the complainant the Commission shall have to record a finding on the application of the opposite party for prosecuting the complainant and it was not proper to do so in the summary proceedings and, therefore, it was just and proper that the matter should be decided by the Civil Court where the parties can examine and crossexamine witnesses, prove documents, issue interrogatories etc. In the light of the observations as noticed above, the State Commission dismissed the complaint giving liberty to the complainant to file a civil suit.

WE have heard Shri T.S. Sawhney, Managing Trustee of the complainant and the learned Counsel for the opposite party and gone through the records of the case. The main argument of Shri Sawhney was that the clearing agent is deemed to be an agent of the opposite party and, therefore, the opposite party is bound by the action of its agent. There is no doubt about the principle that the principal is bound by the action of his agent. However, in the present case the opposite partys case is that the change in the shippers copy of the air waybill was made by the complainant or at his instance by the clearing agent. Anyhow, this point is material only for the purpose of criminal prosecution, if any. As noticed by the State Commission the main question to be decided in the present case is whether the consignment was handed over to the clearing agent on 20th February, 1990 as alleged by the complainant or on 12th March, 1990 as alleged by the opposite party. It definitely requires elaborate evidence -documentary as well as oral -and the State Commission was right in holding that in the time bound proceedings that question cannot be decided.

MR . Sawhney argued that this Commission has tried to curb the tendency of the lower Forums directing the parties to Civil Court as they themselves are competent to record evidence. It is correct that in some cases this Commission has depreciated the practice of directing the parties to seek remedy in Civil Court by lower FORA, but every case has to be decided on its own facts. In the present case elaborate evidence -documentary as well as oral evidence - is to be recorded about the date on which the cargo was handed over to the clearing agent and whether the change in the shippers copy of air waybill was made at the instance of the complainant to avoid the consequences of the term contained in the letter of credit (Addendum) and this cannot be done in such timebound proceedings.

MR . Sawhney also tried to argue that the change in the date does not affect the ownership of the complainant in the consignment. That question is immaterial for the purpose of deciding the complaint and we, therefore, need not go into that argument. In the light of the observations we think that the State Commission was right in holding that, in the facts and circumstances of the case, the complainant should seek his remedy in a Civil Court particularly when there was an application on behalf of the opposite party for the prosecution of the complainant for committing forgery in the air waybill and that question can only be decided by a Civil Court. In view of the above, we do not find any force in the present appeal and dismissed the same. No costs. Appeal dismissed.