V.L.CABLES LTD. vs TRADE TRANSPORT CO.

THE Complainant''s case is that he is a registered company manufacturing copper cables at its plant at Waghodia, Distt. Vadodara. It is his case that Opposite Party No.4 - Central Railway through its Controller of Stores V.T. Mumbai placed certain orders on the Complainant Company for supply of copper cables. Accordingly in all, seven consignments of copper wire totally valued at Rs.42,76,947/- were despatched to the 4th Opposite party, Central Railway through Opposite Party No.1 which is Trade Co., Baroda during the period of 4.3.1996 to 9.6.96. The goods were required to be delivered on door to door delivery basis. All the above seven consignments were insured with United India Insurance Co. Ltd., Baroda on all risk and S.R.C.C basis and warehouse to warehouse delivery. First Opposite Party the transporter orally informed one Anil Dhoot, Vice President of the Complainant Company at Mumbai that, he is utilizing the services of Gopal Maheswari, the 3rd Opposite Party to deliver the consignment to Railways. Shri Anil Dhoot told the 1st Opposite Party that he has no objection if Gopal Maheswari is engaged for the purpose, but only after verifying his credentials.

ON 31.8.1996 the Complainant noticed that none of the consignments were delivered to the Railways i.e. the 4th Opposite Party. The Complainant reported the matter to the Insurance Company on the same day and the latter appointed a Surveyor on 3.9.1996. The Surveyor admitted his report on 26.9.1996 in all the seven cases. At the suggestion of the Insurance Co., the Complainant lodged an FIR on 8.11.1996 with the police against 1st and 3rd Opposite Parties and the 3rd Opposite Party - Gopal Maheshwari after being arrested confessed to the crime of forgery. Investigations revealed that the 4th Opposite party i.e. Railways had not placed any purchase order, and they were in fact orders forged by Gopal Maheswari, the 3rci Opposite Party.

CLAIM lodged against the Insurance Co. was repudiated on 26.11.1997 on the grounds that; a) the purchase orders were not issued by the 4th Opposite Party, the Railways; b) the signatures on the lorry receipts do not belong to any of the officials of the Central Railways; c) that the consignments instead of being delivered to the consignee Railways on door to door delivery basis, were delivered to the agent appointed by the Complainant for onward delivery to the Railways and as such it is a misappropriation by an agent of the Complainant; d) the delivery by the carriers was complete the moment consignment was delivered to the agent to the Complainant and the risk under the insurance policy has ceased; e) The consignment was neither lost nor damaged during the transit while in custody of the carriers.

AGGRIEVED by the repudiation, the Complaint has been filed before us; a) The main argument of the Complainant is that the 3rd Opposite Party Gopal Maheshwari is not his agent, but the agent of the 1st Opposite Party. It is not the case of either Mr. Maheshwari or of the 1st Opposite Party that Mr. Maheshwari was the agent of the Complainant Company. b) Whether the supply order allegedly issued by the Central Railways was genuine or not does not affect the rights of the Complainant who dispatched the goods in good faith and that he was entering into a genuine commercial transaction. c) The plea that the insurance contract came to an end as soon as the goods are delivered to Mr. Maheshwari is flawed because the Complainant intended the goods to be delivered to the 4th Opposite Party, the Central Railways and not to Mr. Maheshwari. d) Since the Policy is an All Risk Policy, it would cover all unforeseen events and accidents, including forgery committed by 1st Opposite Party or his agent, the 3rd Opposite Party.

We have heard the parties and gone through the written arguments filed. Both the parties relied on a number of reported cases, the Complainant in support of his plea argued that it is the responsibility of the common carrier and hence the Insurance Co. is responsible for making good the loss and the OP''s in support of the plea they cannot be held responsible in the circumstances of the case.

THE main argument of the 2nd Opposite Party is that the various documents, and the investigation reports would prove that Complainant and the 1st and 3rd Opposite Parties are in collusion, that this is the clear case of misappropriation of the goods by three of them; and that it being a fraud, the question of his liability does not arise. If a case of fraud is established, the need to refer to various judicial decisions relied upon by the parties in support of legal contentions would not arise; it is therefore necessary to first examine the plea of fraud.

A perusal of the entire case record shows that there is enough material to show a prima facie case of fraud and misappropriation and collusion between the Complainant, the transporter and Mr. Gopal Maheswari and that the complaint cannot be sustained for the following reasons: a) The facts that goods have been received by Mr. Gopal Maheshwari and disposed of elsewhere in Mumbai has not been disputed. The dispute is whether Gopal Maheswari is the agent of the transporter or of the Complainant. Mr. Anil Dhoot, Vice President of the Complainant company states that the transporter had told him orally that he (transporter) is appointing Gopal Maheswari as an agent to clear the goods and whether he was any objection. But it has come on record that Mr. Anil Dhoot has given at least three letters dated 7.2.1996, 6.5.1996 and 1.6.1996 to the transporter authorizing that Gopal Maheswari be given delivery of the goods. He can''t now say that he has not authorized Gopal Maheshwari to receive the goods. Anil Dhoot is said to have left the service of the Complainant company in 1997 and he has not been examined. b) There is enough evidence in the reports dated 30.1.1997; 28.2.1997 and 30.5.1997 of the investigator M/s. Essex Investigator appointed by the Insurance Co., to show that the so called purchase orders allegedly issued by the Central Railway, are forged and fictitious. The purchase order numbers are not the numbers issued by the Dy. Controller of Stores, Matunga. The purchase orders and the G.C. notes carry the same signatures of an alleged railway official; the Railways have confirmed in writing that such a practice of the same officer signing both the purchase orders and G.C. notes does not exist in the Railways. Railways have also confirmed that M/s. V.L. Cables Ltd, the Complainant is not one of their suppliers at least since May 1994. It appears that all these are fictitious and forged purchase orders. Railways have also stated that after the last date for receiving tenders it takes a couple of months to place an order. However, fictitious purchase order no.74193 dated 29.2.1996 was issued one day after the date for receipt of tenders i.e. 28.2.1996. Mr. Anil Dhoot in his statement to the Surveyor mentioned that he came to know through his sources that Central Railway is in urgent requirement of copper wires and so he gave quotations and obtained orders for supply of the same. Thus Anil Dhoot is in the know of real facts and is a material witness. Anil Dhoot is also named by the Gujarat Police as one of the key witnesses to be examined in the fraud case. But the said Anil Dhoot whose examination would have revealed vital facts has not been produced before us. c) Thirdly, the Complainant supplied the goods over a period of three months from 4.3.1996 to 9.6.1996. While the receipt of the first consignment is said to have been acknowledged by the Railways (which subsequently turned down to be a fictitious acknowledgement) the other consignments have not been acknowledged by the Railways. It is most surprising that the Complainant did not notice anything wrong for five and a half months and strangely he says that he noticed that consignments were not delivered only on 31.8.1996. It is strange that he was not in touch with the Railways regarding payments to be made etc. d) Even after the fraud was detected by him, he did not on his own approach the police for registering a criminal case. His first reaction was to get the money from the Insurance Co. after obtaining non delivery certificates from the transporter. It is only at the insistance of the Insurance Co. that he lodged the police complaint. e) The Complainant received Rs.8 lakhs by draft from Gopal Maheshwari as part payment of the consignments. The Complainant promptly received it and credited it to his "suspense" account and claims the remaining money of Rs.34,76,947/-(42,76,947-8,00,000/-) from the Insurance Co. which is strange behaviour. f) Gopal Maheshwari was arrested by Gujarat Police on 1.6.1996 but released on bail on 30.6.1997 on furnishing a surety bond of Rs.10 lakh with a direction that he must report to the police every month. However, the Complainant pleads that he cannot be located that he is not a necessary party to the litigation and made a request to this Commission to delete his name as the 3rd Opposite Party.

It is true that the criminal case filed by the Complainant is still pending. However, there is most certainly a prima facie strong case of fraud and collusion on his part. It is not merely an unfounded allegation of fraud. Under the circumstances, we wish to follow our rulings in the case of Ghai Agro Mills Ltd. vs. New India Assurance Co. and Ors. 1986-96 Consumer 2213 (NS) : [III (1996)] CPJ P.46 (NC) and also in the case of Reliance Industries Ltd. vs. United India Insurance Co. Ltd. 1986-99 Consumer 4362 (NS) : 1997 (2) CCC 381 (NS) : I (1998) CPJ P. 13 (NC).

WE see no substance in the Complaint and dismiss the same.