M/S BAWA PAULINS PVT. LTD. versus UPS FREIGHT SERVICES (INDIA) PVT. LTD. AND ANOTHER

Citation: [2022] 9 S.C.R. 1162 · Decided: 10-11-2022 · Supreme Court of India · Bench: BHUSHAN RAMKRISHNA GAVAI · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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SUPREME COURT REPORTS
[2022] 9 S.C.R.
   [2022] 9 S.C.R. 1162
1162
M/s BAWA PAULINS PVT. LTD.
v.
UPS FREIGHT SERVICES (INDIA) PVT. LTD. AND ANOTHER
(Civil Appeal No. 8298 of 2022)
NOVEMBER 10, 2022
[B. R. GAVAI AND B. V. NAGARATHNA, JJ.]
Consumer Protection – Sale of Goods through ‘Free on Board’
Basis – Quantum of compensation – Appellant during the course of
its business entered into a contract with respondent no. 5 for export
of goods for a total invoice value of US$ 31,920 (Rs.13,79,901/-
approx.) – Mode of payment was agreed to be through Letter of
Credit (LC) against the Forwarder Cargo Receipt (FCR) – The sale
of goods was through a ‘Free on Board’ (FOB) contract –
Respondent Nos. 1-3 were appointed as forwarding agents to collect
goods and forwarding the same – Respondent no.1 mentioned the
port of loading to be Jawaharlal Nehru Post Trust, Bombay instead
of FOB, New Delhi on the FCR, which was rectified later on – After
shipping goods, the Letter of Credit presented by the appellant could
not be honoured on account of discrepancies in the FCR – The
appellant neither got the goods back nor did they get any payment
in respect of the said goods and therefore the appellant approached
the concerned State Consumer Commission – State Commission
allowed the complaint and awarded a sum of 13,79,901/- towards
loss suffered, 50,000/- for mental agony and 10,000 towards the
cost of litigation – National Commission set aside the judgment
passed by the State Commission – The National Commission, reduced
the compensation to Rs.10,000/- only along with an interest at the
rate of 9% p.a. – On appeal, held: It is only after the appellant
approached respondent no.1 to issue a certificate/letter rectifying
the error regarding the wrong point of loading, the respondent issued
such a certificate/letter mentioning that the shipment was loaded
from FOB New Delhi and effected from JNPT Bombay – The State
Commission has based its decision that a mistake was committed by
the respondent no.1 while issuing the FCR to the appellant – The
National Commission has categorically held that there was
deficiency in rendering services by the respondent no.1, therefore,
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the it ought not have reduced the compensation payable to the
appellant – National Commission was not right in setting aside the
judgment and order passed by the State Commission – Respondents
to make the payment as assessed by the State Commission.
Words and Phrases – Free on Board – Bill of Lading – Letter
of Credit – Explained.
Allowing the appeal, the Court
HELD : 1. As per Section 2 (g) of the Act of 1986,
‘deficiency’ is defined as “fault, imperfection shortcoming or
inadequacy in the quality, nature, and manner of performance which
is required to be maintained by or under any law for time being in
force or has been undertaken to be performed by a person in
pursuance of a contract or otherwise in relation to any service.”
What is needed to be assessed here is whether the admitted
error on the part of the respondent Nos. 1 to 3 would amount to
deficiency in service or not. In the factual matrix of the present
case, it is noted that the appellant herein vide its letter dated
11.02.1999 gave shipping instructions to respondent Nos. 1 to 3
wherein it was mentioned that the shipment is from FOB, New
Delhi to Baltimore. However, despite clear instructions vide the
said letter, respondent Nos. 1 to 3 negligently recorded the port
of loading to be JNPT Bombay. It is due to this negligence as
well as deficiency in service of the respondent Nos. 1 to 3 that
the respondent No. 4 Bank refused to accept/honour the
documents including the FCR and the same was returned to the
bank of the appellant. Due to refusal of honouring the said
documents, the sale consideration was not paid to the appellant
herein who suffered loss as well as mental harassment and agony.
[Paras 36 & 37][1176-F-H; 1177-A-B]
2. The appellant herein received the telex/letter on
08.03.1999 wherein the documents including the FCR were
refused. It is only after the appellant approached respondent No.1
to issue a certificate/letter rectifying the error regarding the wrong
point of loading that the respondent No.1 issued such a certificate/
letter dated 30.03.1999 mentioning that the shipment was loaded
from FOB New Delhi and effected from JNPT Bombay. The
M/s BAWA PAULINS PVT. LTD. v. UPS FREIGHT SERVICES
(INDIA) PVT. LTD. AND ANOTHER
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SUPREME COURT REPORTS
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