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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4861 OF 2012

Virender Khullar  … Appellant

Versus

American Consolidation Services Ltd. & ors. …Respondents

WITH

CIVIL APPEAL NO. 9217 OF 2012

J U D G M E N T

Prafulla C. Pant, J.

These  appeals  are  directed  against  common  judgment

and  order  dated  March  22,  2012,  passed  by  National

Consumer  Disputes  Redressal  Commission,  New  Delhi  (for

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short “NCDRC”) in Original Complaint Nos. 89 of 1995 and 90

of  1995,  whereby  the  Commission  has  dismissed  the

complaints  of  the  appellants,  filed  under  Section  23  of  the

Consumer Protection Act, 1986, as against Respondent Nos. 1,

2 and 4.  However, the complaints were partially allowed as

against  respondent  No.  3  M/s.  Zip  Code,  2615,  Elmhurst

Lane,  Portsmouth,  VA  23701,  USA,  for  an  amount  of

Rs.20,82,902.40 in favour of appellant Virender Khullar, and

Rs.15,27,461.76 in favour of appellant Girish Chander, with

interest at the rate of 12% per annum with effect from April

01, 1995 till the date of payment.

2. Brief  facts  of  the  case  are  that  the

appellants-complainants  entrusted  consignments  containing

men’s wearing apparels in December 1994 to Respondent No.

1 American Consolidation Services Ltd., Akruti Trade Centre,

402, 4th Floor, Andheri (East), Mumbai (hereinafter referred to

as  “ACS”),  and  cargo  receipts  were  issued  to  them  by

Respondent No. 1.  As per the cargo receipts so issued, the

consignments were to the order of Respondent No. 2 Central

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Fidelity Bank, Richmond VA, USA.  Respondent No. 1 on its

part handed over the consignments to respondent No. 4 M/s.

Hoeg  Lines,  Lief  Hoegh  &  Co.,  A/S  Oslo,  Norway/M/s.

American President Lines Limited, Tarde Plaza 2nd Floor, 414

Veer Savarkar Marg, Prabhadevi, Mumbai, for delivery of the

consignments at the port of destination.  It is alleged that in

the  Bill  of  Lading issued by  the  shipping  carriers,  name of

consignee was changed from Central Fidelity Bank to Coronet

Group Inc. besides there being several other changes in the

name and description of the shipper as Cavalier Shipping Co.

When  payment  was  not  received  till  March,  1995,  the

appellants/  complainants  made  enquiry  about  the

consignments.  After servicing legal notice, appellant Virender

Khullar filed a complaint for an amount of Rs.35,31,601.15 in

respect  of  300  cartons  containing  men’s  apparels  through

cargo receipt  Nos.  34307,  34308 and 34309,  and appellant

Girish  Chander  filed  the  complaint  for  an  amount  of

Rs.29,17,844.76  for  220  cartons  containing  men’s  apparels

sent  through  cargo  receipt  Nos.  34116,  34117  and  34118,

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before NCDRC, New Delhi.  Initially complaints were filed only

as  against  Respondent  No.  1,  i.e.  American  Consolidation

Services Ltd. (ACS).

3. Respondent No. 1 contested the complaints and pleaded

that  Respondent  No.  1 received the complainants’  goods on

behalf  of the buyer/consignee, i.e.  Zip Code Inc. which was

part of Coronet Group Inc. as its agent.  It is further pleaded

that  there  was  no  payment  made  by  the  appellants/

complainants for the service provided by Respondent No. 1,

nor  there  was  any  contract  between  the  complainants  and

Respondent  No.  1  for  shipment  of  the  goods.   The  receipt,

custody and forwarding of the goods of the complainants were

governed  by  the  provisions  of  bailment  agreement  as

mentioned  in  the  cargo  receipts.   The  bailment  agreement

provided that from and after the delivery by Respondent No. 1

to  a  carrier  in  accordance  with  the  instructions  of  the

consignee  or  other  cargo  owner,  the  sole  responsibility  and

liability for the care, custody, carriage and delivery of goods

was  that  of  the  concerned  carrier.   Respondent  No.  1  was

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under no liability whatsoever in respect of any failure on the

part  of  the  consignee  or  any  other  party.   According  to

Respondent No.1, complainants’ claim, if any, can lie only as

against  the  principal,  i.e.  buyer/consignee  who  appears  to

have not made payment to the complainants for the value of

the cargo.  Since Respondent No. 1 acted only as an agent of

the  consignee,  i.e.  Zip  Code  Inc.,  a  subsidiary  of  Coronet

Group Inc, and acted only as a consolidator and forwarder (not

a carrier), it has no liability as provided in Section 230 of the

Indian Contract  Act,  1872,  on behalf  of  the principal.   The

carrier of the goods in question was Respondent No. 4 Hoegh

Lines/American  President  Line  Limited,  who  issued  the

relevant Bills  of  Lading covering the goods.   The appellants

were duly informed by Respondent No. 1 about the delivery of

consignment to Coronet Group Inc on surrendering of all the

original Bills of Lading.  Lastly, it is pleaded that it is not a

case of negligent act or careless handling of the shipment by

Respondent No. 1.

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4. After hearing the parties, the NCDRC, vide its separate

orders dated January 20, 2004, accepted both the claims (to

the  extent  of  Rs.20,82,908.40 of  appellant  Virender  Khullar

and claim to the extent of Rs.15,27,461.76 of appellant Girish

Chander) and directed the amount to be paid by Respondent

No. 1 with interest.

5. However,  above  orders dated January 20,2004,  passed

by  NCDRC,  were  challenged  by  Respondent  No.  1  in  Civil

Appeal Nos. 2079 of 2004 and 2080 of 2004, before this Court

and the same were disposed of vide order dated September 10,

2009, as under: -

“Heard learned counsel for the parties.

These  appeals  have  been  filed  against  the impugned  Judgment  of  the  National  Consumer Disputes  Redressal  Commission,  dated  20th January,  2004.  By  that  judgment,  certain  amount has been decreed against the appellant.

      Mr. R.F.Nariman and Mr. P.H.Parekh, learned senior  counsel  appearing  for  the  appellant, contended that the appellant was only an agent of the  consignee,  Zip  Code  Inc.,  which  is  part  of  the Coronet Group.  It appears that the grievance of the claimants (respondents in this case)  is that certain cartons, which were to be shipped to a party in USA, were  allegedly  not  delivered  there.   A  claim  was made for damages in that respect.

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      Mr. Nariman has contended that the appellant is only an agent of the consignee and not the consignee himself.   We  agree  with  the  contention.   In  our opinion,  the  claimants  should  have  impleaded  the consignee  as  well  as  the  carrier  as  parties  in  the claim petitions apart from impleading the appellant. The rules  of  natural  justice  require  that  necessary parties have to be impleaded, which appears not to have  been  done  in  this  case  before  the  National Commission.

       For the reason given above, we set aside the impugned judgment of the National Commission and remand the matters to the National Commission with liberty to the respondents-claimants to implead the consignee  as  well  as  the  carrier  in  their  claim petitions.  Notice  will  be  issued  to  the  newly impleaded parties and case will  be decided by the National  Commission  preferably  within  six  months from the production of a copy of this order.

       We   make   it    clear    that       we   have   not expressed any opinion on the merits of the case. All points of law and fact are expressly left open to the parties.

       The amount deposited here by the appellants will be refunded to them with accrued interest.

       The appeals are accordingly disposed of.

       No order as to costs.”

6. In  the  light  of  above  order,  Respondent  No.  2  Central

Fidelity Bank, Respondent No. 3 Zip Code and Respondent No.

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4  Hoegh  Lines/American  President  Lines  Limited)  were

impleaded and the case proceeded and decided afresh by the

NCDRC.  The case against Respondent No. 3 M/s. Zip Code

and Respondent No. 4 Hoeg Lines/American President Lines

Limited appears to have proceeded ex parte as they failed to

turn up in response to the notices sent to them.  There was no

relief  sought  as  against  Respondent  No.  2  Central  Fidelity

Bank.  In the impugned order dated March 22, 2012, it has

been held  by  NCDRC that  it  is  only  Respondent  No.  3  Zip

Code, the intermediary consignee of  the cartons in question

mentioned  in  cargo  slips,  who  received  the  delivery  of  the

consignments  without  making  payment  to  the  bank  or  the

complainants, and, as such, liable to pay the compensation to

the appellants, and accordingly directed Respondent No. 3 to

make the payment of Rs.20,82,902.40 in favour of appellant

Virender Khullar and Rs.15,25,461.76 in favour of appellant

Girish Chander, with interest at the rate of 12% per annum

with effect from April 01, 1995.

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7. Respondent No.  3 has not  challenged the above order.

Rather, the complainants have challenged the fresh decision of

NCDRC as other respondents are held not liable to make the

payment.   Respondent  Nos.  3  and  4,  even  after  service  of

notice, have not turned up to contest the appeals.   

8. Learned counsel for the appellants argued before us that

it  is Respondent No. 1 who changed the name of consignee

and the name of Coronet Group Inc. was inserted in the Bill of

Lading depriving realization of damages by the complainants.

It  is  further contended that  Respondent No.  1 accepted the

goods from the complainants to be delivered to the order of

Respondent  No.  2  by engaging  a  carrier,  but  it  caused the

goods  to  be  delivered  to  Coronet  Group  without  getting

payment realized through the bank.  It is further submitted

that in the cases other than Letter of Credit when the goods

are sent on collection basis, the same are consigned to bank,

and foreign buyer is named as party to be notified.  As such,

the delivery of goods should not have been allowed to be made

without getting realized payment of goods through Respondent

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No.  2  Bank.   It  is  also  contended  that  Section  2(d)  of  the

Consumer  Protection Act,  1986,  came into  force  with effect

from  15.3.2003,  and  prior  to  that  there  was  no  exclusion

regarding  service  of  commercial  purposes  under  the  Act.

Lastly, it is submitted that the appellants have nothing to do

with  the  consolidation  procedure  said  to  have  been  agreed

between Respondent No. 1 and Coronet Group Inc.

9. On behalf  of  Respondent  No.  2  Central  Fidelity  Bank,

now known as Wells Fargo Bank, it is submitted that there is

no relief sought against it by the appellants/complainants in

their complaints.  It is further submitted that Respondent No.

2 was only a consignee as per the records of the case, i.e. it

was the consignee as set out  in the cargo receipts and the

notify  party/intermediate  consignee  was  Zip  Code  Inc.

(respondent No. 3).  As such, it  was Respondent No. 3 who

was  the  actual  buyer  and  who  was  to  be  notified  by

Respondent  No.  1 once the consignment arrived in Norfolk,

USA.  In turn, Respondent No. 3 was to inform Respondent

No. 2, subsequent to which Respondent No. 3 was to pay for

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the goods and obtain a certificate from Respondent No. 2 to

show that such payment has been made.  It was subsequent

to this process that Respondent No. 2 was to release the goods

to Respondent No. 3.  It is further submitted that it is also an

admitted  fact  that  no  shipment  was  ever  delivered  to

Respondent  No.  2.   The appellant  himself  submits  that  the

“shipment  was  not  delivered  to  the  consignee  name in  the

cargo receipts”.  As such, there was no obligation whatsoever

upon Respondent No. 2, that it had to discharge.

10. We have considered the arguments advanced on behalf of

the appellants and that of Respondent No. 2 and perused the

record.  Copies of cargo slips, which are on record, disclose

that  notified  party/intermediary  consignee  was  Respondent

No. 3 Zip Code, 2615 Elmhurst Lane, Portsmouth, VA 23701,

USA.  In the column of name of consignee “To order of Central

Fidelity Bank Richmond VA” is mentioned.  Cargo slips further

disclose  that  (Vessel,  Voyage)  Hoegh  Clipper/Eagle  Prestige

was export carrier.  

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11. Admittedly, the goods in question were handed over by

the appellants to Respondent No. 1 as pleaded.  But there is

neither any pleading nor proof that the appellants paid any

sum for transportation or any other service to Respondent No.

1 at the time the goods were handed over to it or subsequent

there to.  It has been shown on behalf of Respondent No. 1

that Respondent No. 1 was simply an agent of the buyer with

whom the appellants had entered into contract.  It is nobody’s

case that the goods were lost in transit.  Rather it is a case

where  it  has  come  on  record  that  the  consignment  was

received by Respondent No. 3 Zip Code Inc, a part of Coronet

Group Inc.   

12. At this stage, we think it just and proper to reproduce

relevant  additional  terms  and  conditions  attached  with  the

cargo slips, which read as under: -

“ACS undertakes to receive the goods on behalf of  the  consignee,  hold  the  same as  an agent  and deliver or forward them to carriers or transporters in accordance with the instructions of the consignee or other cargo owners for subsequent transportation by water or air carrier and for distribution and ultimate delivery to the consignee.

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xxx xxx xxx

In  receiving  the  goods  and  pending  the consolidation  services  covered  by  this  agreement, ACS is acting as agent only for the consignee named on the face hereof and not as carrier, transporter or distributor of the goods.

xxx xxx xxx

The  shipper  hereby  acknowledges  that  ACS acts solely as agent on behalf of the consignee and shall be under no liability whatsoever in respect of any failure by the consignee or any other party to do any act or pay any amounts due in respect of the cargo received hereunder including but not limited, to the  purchase  price  of  such  cargo,  freight,  storage charges  insurance  premium,  lighterage  changes, demurrage  salvage  charges  or  general  average contribution.”

13. Since Respondent No. 1 was simply acting as an agent of

Coronet  Group Inc,  as  such,  in  view of  Section 230 of  the

Indian Contract Act, 1872 it cannot be held personally liable

to enforce the contract entered between its principal and the

appellants.   This  Court,  in  its  order  dated  September  10,

2009,  has  accepted  the  plea  of  Respondent  No.  1  that

Respondent No. 1 is not a consignee, but only an agent of the

intermediate  consignee.   That  being  so,  Respondent  No.  1

cannot be held to be liable in respect of claim made by the

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appellants.   We  think  it  relevant  to  mention  here  that  in

Marine  Container  Services  South  Pvt.  Ltd.  v.  Go  Go

Garments1,  this Court has already made clear that defence

under Section 230 of Indian Contract Act, 1872 is available in

the cases under Consumer Protection Act, 1986 by the agents

of  the  principal  with  whom  the  complainant  had  the

agreement.

14. As far  as liability of  Respondent No. 2 Central Fidelity

Bank and that  of  Respondent No. 4 is  concerned, we agree

with  the  NCDRC  that  Respondent  No.  4  had  carried  the

consignment and delivered the same as per Bill of Lading and

there is no contract between the appellants and Respondent

No. 4.  Also Respondent No. 2 Bank cannot be held liable for

the deficiency of service, as the amount was not collected from

the consignee, as such there was no question of remitting it to

the  appellants/complainants  by  the  Bank.   In  the

circumstances,  respondent  No,  3  Zip  Code  Inc,  which  is

subsidiary to Coronet Group Inc, the consignee named in the

cargo  slips,  is  the  only  party  which  can  be  held  liable  for

1 (1998) 3 SCC 247

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taking delivery without depositing the price of the goods with

the Bank.   

15. For the reasons discussed above, we find no infirmity in

the impugned order passed by the NCDRC and, as such, these

appeals  are  liable  to  be  dismissed.   Accordingly,  both  the

appeals are dismissed.  There shall be no order as to costs.

………………………………J. [R.K. Agrawal]

………………………………J. [Prafulla C. Pant]

New Delhi; August 16, 2016.