1. THESE appeals arise from the order dated 05.03.2004 passed by the Karnataka State Consumer Disputes Redressal Commission, Bangalore in complaint case no.150 of 2000. By the impugned order the State Commission has partly allowed the complaint and has directed the opposite parties no. 1 to 3 to pay a sum of Rs.12333/- towards the value of consignment including the freight charges with interest @ 15% p.a. from 04.06.2000 till payment, Rs.1,00,000/- as compensation for the loss of the consignment in the custody of the opposite parties no. 1 to 3 besides a sum of Rs.2000/- with the stipulation that the said amount shall be payable within four weeks from the date of receipt of the order.
2. IN nutshell, the undisputed facts germane to the decision of these appeals are that M/s Chemad Exim Pvt. Ltd. (original complainant in the complaint) are the importers of sophisticated electronic equipment for supplying the same to the Defence Research and Development Laboratory ( in short, the Defence Laboratory, Hyderabad) and to other defence establishments in the country. It received an order dated 21.06.99 from the Defence Laboratory, Hyderabad for supply of 100 accelerometers at the cost of Rs.1,40,000/- for one accelerometer. On 31.07.99 the complainant placed a purchase order on M/s Future INformation Systems, Dubai, UAE, who in turn placed order on M/s Avia Export PLC 22, Ulanksi Per, Moscow, Russia for supply of 10 accelerometers (A-16) at a unit price of US $ 22,250/- totally valued at US $ 2,22,500/- and raised commercial invoice for US $ 28000. IN terms of the said order, the Russians firm shipped a consignment of 10 accelerometers vide Airway Bill No.020 3625 7314 dated 30.05.2000 in a package which arrived at Bangalore Airport by Lufthansa Cargo Flight on 03.06.2000. The complainant received the invoice / air cargo arrival notice no. UT 262/577/00 dated 05.06.2000 from M/s Union Transport (I) Pvt. Ltd., Vanguard Rise, Airport Road, Bangalore intimating them that one packet weighing 8 kgs has been received from the Moscow. The complainant also received a notice of the even date from MSIL ( OP No.2) informing that unaccompanied cargo packet kept in C location of the import warehouse got destroyed in a fire accident on 04.06.2000 and requested the complainant to furnish copy of the airway bill, invoice, packing slip, details of contents of consignment and the value of the each item and total claimed. M/s Mysore Sales INternational Limited, a Karnataka State Company was appointed as custodian by the custom authorities under section 45 of the INdian Customs Act, 1962. IN response to the said notice complainant lodged a claim of Rs.12,82,905/- towards import cargo and forwarded the relevant documents. It would appear that matter remained under consideration of MSIL for sometime but ultimately they did not settle the claim and hence the complainant filed the claim for recovery of sum of Rs.12,82,905/- besides interest and compensation. The complaint was initially filed against Managing Director and Joint Director of Mysore Sales INternational Limited, Bangalore Air Cargo Complex but later on Commissioner of Customs was also impleaded as OP No.3. The complaint was resisted by MSIL on the ground that the complaint was bad for non-joinder of necessary party, viz., Collector of Customs; it was a State Government undertaking and approved custodian of all goods by the Customs Act, 1962 and in that capacity it was obliged to receive in its custody all goods brought into the customs area, whether for import or export and to hold the same for and on behalf of custom authorities under the Customs Act. Yet another objection was that the complainant was not a consumer within the meaning of section 2 (1) (d) of the Consumer Protection Act, 1986, as it had neither hired nor availed of any service for the consideration viz-a-viz- the opposite parties. It was denied that there was any deficiency due to which the consignment in question was destroyed in the fire and it was sought to be explained that all necessary steps which were required for prevention and extinction of the said fire were taken promptly. Alternatively, it was pleaded that the liability, if any, to pay the damages for the loss occasioned to the complainant was limited to US 20 dollars per kg or the value of the damaged cargo, if declared, whichever was less in terms of a public notice dated 10.10.1984 issued by the State Government of Karnataka in consultation with and concurrence of the Commissioner of Customs. The Commissioner of Customs, however, denied any deficiency in service and liability to pay any compensation whatsoever on its part on the ground that it discharges sovereign / statutory functions to levy, collect and recover duty in accordance with the provisions of the Customs Act, 1962 and is not a service provider within the meaning of section 2 (1) (o) of the Consumer Protection Act. Reference was also made to section 155 (1) of the Customs Act providing immunity against any legal action by way of suit or proceedings, etc., against any officer of the Government or local authority for anything which is done or intended to be done in good faith.
The State Commission, on consideration of the respective pleas, framed the following points for consideration of the matter:
i. Whether complainant is a consumer of OPs and privity of contract is not necessary? ii. Whether there is deficiency in service by the OPs in not preventing the destruction by fire of the consignment of complainant, and are liable to pay the relief sought for by the complainant? iii. Whether the proceedings cannot be continued and disposed off pending Civil suit by Insurance Co. against the OPs? Iv Whether complainant is entitled to the relief sought for?
On consideration of the matter and its own interpretation of the provisions of the Customs Act and the Consumer Protection Act and some precedents cited before it, the State Commission answered points no 1 & 2 in the affirmative holding that the complainant is a consumer entitled to maintain the complaint before the Consumer Fora and that the opposite parties were guilty of deficiency in service and hence liable to compensate the complainant for the said deficiency in service. Even after holding so, however, the State Commission, going by the public notice issued by the State of Karnataka in regard to the extent of liability of the opposite parties and the weight of the consignment, restricted the liability of the opposite parties to a sum of Rs.12,333/- only and directed the opposite parties to pay the said amount towards the value of the consignment besides a sum of Rs.1,00,000/- as compensation.
3. AGGRIEVED by the said order, all the three parties to the complaint have filed the present appeals. FA No.124/2004 has been filed by original opposite party no.1 Mysore Sales International Limited; FA No. 209/2004 has been filed by Commissioner of Customs praying to set aside the findings and order of the State Commission holding them guilty of deficiency in service and liable to compensation while FA No.127/2004 has been filed by M/s Chemad Exim Pvt. Ltd seeking upgradation of the relief and enhancement of compensation granted to it by the State Commission.
We have heard Mr. B.V.Kumar and Mr.E.C.Vidyasagar, Advocate (s), learned counsel the complainant M/s Chemad Exim Pvt. Ltd., Mr. K.M. Prakash, Advocate, learned counsel representing Mysore Sales International Pvt. Ltd. and Mr.Sanjay Kumar, Advocate, learned counsel representing the Commissioner of Customs and have given our thoughtful consideration to their respective submissions.
4. THESE appeals raise the following important questions of law:
(i) Whether the complainant company can be said to be a consumer within the meaning of section 2 (1) (d) of the Consumer Protection Act, 1986, and the opposite parties, viz., the Commissioner of Customs and Mysore Sales International Limited service providers within the meaning of section 2 (1) (o) of the said Act.
(ii) Depending upon the answer to the above question, next question would be Whether the complainant company had the requisite locus standi to file the complaint for recovery of compensation as claimed in the complaint.
In regard to the question no (i), the learned counsel representing the Commissioner of Customs has emphatically argued that a complaint like the one filed by the complainant-company in the present case is not maintainable before a Consumer Forum because the Commissioner of Customs cannot be said to a service provider in terms of section 2 (1) (o) of the Act, it being a statutory authority appointed under the Customs Act for the discharge of purely sovereign functions of levy, collection and recovery of customs duly in accordance with the provisions of the Customs Act, 1962. Yet another submissions is that section 155 (1) of the said Act bars any suit or other legal proceedings against the Central Government or any officer of the Government or a local authority for anything which is done, or intended to be done in good faith in pursuance of the said Act or the rules or regulations framed thereunder. In any case, no such suit and legal proceedings can be initiated unless a three months notice has been served on the Central Government or the concerned functionary. In support of his contention. reliance has been placed on a Supreme Court decision in the case of Board of Madras Port Trust Vs. Vinod Selvextracts Pvt. Ltd. 23 (151) ELT 290, wherein it has been held that Department of Customs is not liable for the losses suffered by the importer on account of fires, etc. It is also argued that if at all any liability for any loss suffered by the complainant is to be fixed, it will be solely on the custodian ( Mysore Sales International Limited in the present case). Appointment of custodian being necessitated for the purpose of storing of goods for levying the duty, etc., before it could be released to the consignee. Reference has also been made to a recent decision of the Honble Supreme Court in the case of UT Chandigarh Administration & Anr. Vs Amarjeet Singh & Ors. (2009) wherein Apex Court has held that the purchase of land site by public auction from a statutory body is not a consumer of services.
Almost similar contentions have been raised on behalf of the appellant Mysore Sales International Limited and in addition it is urged that there was no privity of contract between them and the complainant and the complainant having been appointed as custodian under section 45 of the Customs Act. As against the above, learned counsel for the complainant M/s Chemid Exim (P) Ltd. contended that Mysore Sales International Limited having been appointed as custodian by the custom authorities will be liable to pay compensation for any loss or damage suffered by the complainant due to their negligence in preserving the goods safely irrespective of the fact that there was no privity of contract between the parties. In this connection it is necessary to refer to certain provisions of the Customs Act, 1962.
5. SECTION 45 of the Customs Act, 1962 is the relevant provision for our purpose and reads as under: Restrictions on custody and removal of imported goods (1) Save as otherwise provided in any law for the time being in force, all imported goods, unloaded in a customs area shall remain in the custody of such person as may be approved by the Commissioner of Customs until they are cleared for home consumption or are warehoused or are transshipped in accordance with the provisions of Chapter VIII. 2. The person having custody of any imported goods in a customs area, whether under the provisions of sub-section (1) or under any law for the time being in force,-
a. shall keep a record of such goods and sent a copy thereof to the proper officer. b. shall not permit such goods to be removed from the customs area or otherwise dealt with, except under and in accordance with the permission in writing of the proper officer.
6. IN the case in hand, it is not disputed that M/s Mysore Sales INternational Limited was working as custodian of the consignment in question inasmuch as the said consignment was in its custody when it was destroyed in a fire. Going by the charter of their duties and responsibilities, we have no hesitation in holding that as custodian of goods it was providing service to the importers of goods and for that it was receiving certain charges including, demurrage, etc. IN the alternative, the stand of this appellant is that their liability is to pay limited compensation in terms of the notification of State Government dated 10.10.1984 issued by Govt. of Karnataka in consultation with Commissioner of Customs. Therefore, irrespective of there being no direct privity of contract between the complainant and the custodian of goods, they would still be deemed to be service provider and consignor as beneficiary of the said service once it was admitted that the consignment was burnt / misplaced on account of the fire which took place at their premises where the consignment was stored. There is no escape from the conclusion that they ( Mysore Sales INternational Limited) are liable to reimburse the person to whom the goods in question belonged at the relevant time. However, so far as the liability of the Commissioner of Customs is concerned, we are of the clear view that the functions being sovereign in nature and restricted to levy of duty, etc., or confiscation of goods under the Customs Act and he having already appointed a custodian of goods within the meaning of section 45 of the said Act, it cannot be held guilty for deficiency in service and no liability can be fixed on them for any loss occasioned to the complainant or original owner of the consignment at the time of its damage.
Learned counsel for the complainant M/s Chemad Exim Pvt. Ltd. has urged before us that the State Commission was not justified in allowing the claim only to the extent of Rs.12,333/- on the basis of the public notice dated 10.10.84 issued by the Government of Karnataka restricting the award of compensation to US 20 $ per kg. His submission is that once the State Commission found Mysore Sales International Limited guilty of deficiency in service in not safeguarding the consignment, it ought to have allowed compensation equivalent to the total value of consignment, viz., Rs.12,82,905/- besides interest and compensation on the said amount. As against this, the submission of the learned counsel for the Mysore Sales International Limited is that the complainant had no locus standi to file the complaint and hence ineligible even for the amount of compensation which has been awarded by the State Commission. The basis of this submission is that the complainant was neither the owner of the consignment nor it can be said to be the beneficiary because by the time the consignment had arrived in the warehouse of the Mysore Sales International Limited, the complainant had not paid the price of the consignment either to M/s Future Information Systems, Dubai, UAE or to the original supplier M/s Avia Export PLC, 22, Ulanksi Per, Moscow, Russia. On our query, Mr. B.V.Kumar, learned counsel representing the complainant submitted that by the time the consignment was received in India or till the decision of the complaint or even till date, the complainant has not paid the value of the consignment either to M/s Future Information Systems, Dubai, UAE or to M/s Avia Export. On the strength of legal notice dated 24.12.2004 purportedly sent by Mr. Sunil Dutt Yadav, Advocate on behalf of M/s Future Information Systems, it is contended that liability to pay the value of the consignment is still on the complainant and the said foreign supplier may institute legal proceedings for the recovery of value of the consignment, etc., as has been held out in the said notice. On our further query, we are informed that so far no legal proceedings have been initiated by the said foreign supplier. On the face of this factual position, we must hold that complainant was neither the owner of the consignment in question on the relevant date nor had any such interest in the matter which would have entitled it to lay a claim for compensation for the loss / damage of the consignment in question. In other words, it had no locus standi to file the complaint. The right to receive the compensation for the loss to the consignment was either with Future Information System or M/s Aviva Export, Russia. It appears to us that the complainant had filed this complaint simply to get undue enrichment. In view of the above discussion, we hold that the order of the State Commission even for the award of compensation of Rs.12,333/- cannot be upheld and is legally unsustainable and is required to be set aside. The complaint is liable to be dismissed.
In the result, appeal no. 124/2004 titled M/s Mysore Sales International Limited Vs. Chemad Exim Pvt. Ltd. and appeal no. 209/2004 titled Commissioner of Customs Vs M/s Chemad Exim Pvt. Ltd. are hereby allowed and the order passed by the State Commission is hereby set aside. The complaints are accordingly dismissed. Consequently appeal no. 127/2004 titled M/s Chemad Exim Pvt. Ltd. Vs. Managing Director, M/s Mysore Sales International Ltd. is dismissed as infructuous. In the peculiar facts and circumstances of the case, parties are left to bear their own costs.
