ZENITH COMPUTERS LTD. vs Elbee Services Ltd.

THE complainant - company has filed this complaint alleging deficiency in service by the opposite party while transporting goods and have claimed compensation of Rs. 7,60,575/- along with interest and further Rs. 50,000/- as compensation.

IT is the case of the complainant that it engaged the opposite party for transporting its goods to various destinations in India for the past few years. The rates of the services were reduced in writing between the parties by way of memorandum of understanding. As per the said memorandum, the complainant had to pay 2% of the value of the consignment for the purpose of insurance. On 30.4.2001 the complainant despatched a consignment to M/s. Gaurav Aircon Computers, Jaipur under two invoices of value Rs. 20,56,390/- and Rs. 5,57,750/- through the opposite party vide the way bill No. 285169776. The consignment was loaded in the opposite party''s truck bearing No. MH-03-N-1100. The said truck met with an accident on 3.5.2001 at Kehda, District Ratnagiri when it collided against S.T. bus MH-20-D-2954. As a result the computer goods fell off the cargo body and got crushed as well as suffered impact damages. After the accident, the opposite party transported all the damaged goods to another truck and delivered the consignment back to complainant''s works at Goa in damaged condition on 14.5.2001.

The consignment was received and checked by the complainant in the presence of the representative of the opposite party and it was noticed that the cartoons were in a crushed, de-shaped and deformed condition.

THE complainant suffered loss of Rs. 7,60,575/-. The opposite party had billed 2% of the consignment value towards insurance cover for the loss of goods while in transit amounting to Rs. 52,283/-.

UPON being noticed, the opposite party filed its written version and raised preliminary objections that the complainant was not a consumer and that the transaction, being of a commercial nature, did not come within the purview of the Consumer Protection Act. It was denied that the complainant had paid any consideration before the carriage of the consignment nor was the same paid till date. The accident had taken place due to the negligence of the ST bus driver, as seen from the Panchanama report. The opposite party filed an FIR of the accident with the police on the same day and immediately informed their Surveyors "M/s. Dambe Surveyors and Company" who have given their report. The Surveyors report shows that the number of items that were damaged were much less than that claimed by the complainant. On merits, it was submitted that the terms of the Memorandum of Understanding between the parties clearly stated that all the consignments would be subject to the terms and conditions of carriage mentioned in the way bill. Clause 14 of the way bill gave an option to the complainant to either insure the consignment with its underwriters or pay 2% of the value of the consignment to the opposite party. The subject consignment was not to be insured by the opposite party which was evident from the way bill. Clause C of the Memorandum of Understanding stipulates that the Shipper (the complainant) would be responsible for the insurance of all commercial consignments, while insurance cover on non commercial consignments would be as per terms of the opposite party''s Way Bill. Parties filed their affidavit-in-evidence along with Annexure and reiterated the stand taken by them in their pleadings.

THE complainant filed affidavit and report of Shri R.C. Shukla, Approved Valuer. THE opposite party''s Surveyor Shri B.R. Dambe was cross-examined by the complainant by way of questionnaire.

COUNSEL for the parties filed written arguments. We have perused the pleadings and evidence on record and considered submissions of learned Counsel.

The issue that arises for our consideration is whether the opposite party committed deficiency in service by not insuring the consignment and is, therefore, liable to compensate the complainant for the loss incurred by it.

IT is an admitted fact that the parties entered into a Memorandum of Understanding dated 13.2.2001 for transportation of the complainant''s consignments to various parts of the country. Clause C of the Memorandum of Understanding stipulates that in case of commercial consignments, the shipper (i.e., the complainant herein) would be responsible for insurance of the consignment and the liability of Elbee for any loss or damage to the shipment would be regulated by the limitation of liability clause as mentioned on the Way Bill. Clause 14(ii) on reverse of the way bill provides that the shipper may pay to Elbee "freight on value" charges that would be fixed on the invoice value of the consignment; in such a case Elbee would reimburse to the shipper the amount received by it from the Insurance Company and that the amount would be reimbursed to the shipper only after the same is paid by the Insurance Company. Admittedly, the opposite party issued a Way Bill dated 30.4.2001 for the said consignment and raised an invoice bearing No. GO1/192 dated 15.5.2001 on the complainant. The said invoice was for an amount of Rs. 73,419/-. An amount of Rs. 52,283/- was shown as "Valuation amount" which is 2% of the invoice value of Rs. 26,14,150/- which is also reflected on the said invoice. Further an amount of Rs. 17,640/- is shown as "freight amount" and a service tax of 5% amounting to Rs. 3,496/- was also charged. The said amount of Rs. 73,419/- was paid by the complainant to the opposite party by cheque No. 043439 dated 3.8.2001 drawn on State Bank of India.

IT is clearly apparent from the above cited documents on record that the complainant paid to the opposite party the insurance premium amounting to 2% of the consignment value and it was the duty of the opposite party to have the goods insured with their Insurance Company. IT is seen from the records that the said consignment was not insured by the opposite party. The opposite party has taken a stand that the accident to vehicle was a result of negligence on the part of the ST bus and placed heavy reliance on the accident Panchanama report. In our opinion, this fact has no relevance to the dispute between the parties. The complainants have estimated the value of damaged consignment at Rs. 7,60,575/- and have relied on report of Shri R.C. Shukla, who has also filed his affidavit. On the other hand the opposite party has relied on report of M/s. Dambe Surveyors and Co. The said Surveyors have enlisted the material damaged in the accident, however, no opinion as to its value was given as they have no information about the rates of the items. There appears to be a difference of opinion as to the number of items damaged in the accident. The opposite party''s Surveyor was cross-examined by the complainant by way of questionnaire. In cross, the said witness has admitted that he had conducted only a "preliminary spot survey" and that detailed assessment is to be carried out at the final survey i.e., to be carried out upon getting instructions of the Insurance Authorities. It was further stated that the preliminary survey was carried out "for the safer side of the transporter.

IN these circumstances, we are inclined to accept the valuation of the complainant''s Valuer Shri R.C. Shukla.

AS stated earlier, we are convinced that the opposite party committed deficiency in service by not insuring the goods despite receiving the premier amount from the complainant. In view of our discussion above, we pass the following order. (i) The complaint is partly allowed. (ii) The opposite party is directed to pay to the complainant an amount of Rs. 7,60,575/- along with interest at 12% p.a. from 3.5.2001 till date of settlement, within 30 days. (iii) The opposite party is directed to pay to the complainant an amount of Rs. 5,000/- as cost of this litigation. Order accordingly.

Complaint partly allowed.