Delhi

StateCommission

CC/10/283

SUSRI DEVICES INDIA & ANR. - Complainant(s)

Versus

AIR INDIA & ORS. - Opp.Party(s)

01 Nov 2019

ORDER

IN THE STATE COMMISSION : DELHI

(Constituted under Section 9 of the Consumer Protection Act, 1986)

Date of Arguments :01.11.2019

Date of Decision : 06.11.2019

COMPLAINT NO.283/2010

In the matter of:

 

1. M/s. Suri Devices India

Mr. Arun Kumar Suri, Proprietor,

B/35, Basement Motinagar,

New Delhi-110015.

 

2. M/s. S.T. Enterprises,

Mr. Arun Kumar Suri, Partner

228 Upper Ground Floor,

DDA Plot, New Rajinder Nagar,

New Delhi.……Complainants

 

Versus

1. Air India,

3. Safdarjung Airport,

Aurobindo Marg,

New Delhi-110003.

Through Managing Director

 

2. The Station Manager (ATQ),

89, Court Road,

Amritsar, Punjab.

 

3. M/s. HTL Logistics India (P) ltd.,

2A & 2B, Rushabh Chambers,

Makwana Road, Marol, Andheri (E),

1.  

 

4. Office of the Commissioner of Customs (Preventive),

Custom Preventive Commissionerate,

New Custom House, New Delhi-110037.

 

5. Directorate of Revenue Intelligence,
7.  

I.P. Bhawan, I.P. Estate,

New Delhi.

Through the Director General….Opposite parties

CORAM

Hon’ble Sh. O. P. Gupta, Member (Judicial)

1.     Whether reporters of local newspaper be allowed to see the judgment?                                                      Yes/No

2.      To be referred to the reporter or not?                                                                                                           Yes/No

Shri O.P. Gupta, Member (Judicial)

JUDGEMENT

1. The case of the complainant is that Shri Arun Kumar Suri is proprietor of complainant no.1 and partner of complainant no.2. The complainants are running business of import of electric equipments from foreign countries and selling them in Indian market to earn their livelihood. They placed an order with Alliance East Ltd (AEL) a company based in Hong Kong for supply of mobile phones made in China. The phone were to be exported from Hong Kong to India by M/s. HTL Logistics India (P) Ltd/ OP-3 and were to arrive at Amritsar from Hong Kong. Complainant no.2 imported one consignment of Chinese mobile phones consisting of 2140 pcs from M/s.  Alliance East Ltd. vide invoice no.AEL-0809-0112 dated 24.04.09. Complainant no.1 imported two consignments of Chinese mobile phones consisting of  2500 pcs and 2045 pcs from same supplier vide invoice no.AEL-0809-0111 dated 24.04.09. The goods were consigned from Hong Kong to Amritsar as international cargo. The clearing house agent namely AFL Dascher Pvt. Ltd. of the complainants deposited the duty Amount on 02.05.09 and filed respective bills of entry nos. 80 to 82 all dated 05.05.09 before the customs, Amritsar.
2. The shipment was handed over by OP-3 with all permissions from custom authorities alongwith airway bill to OP-1  i.e. Air India in the presence of custom escort from Mumbai Custom Bond area to be transferred to Amritsar Custom Bond area. It was within the knowledge  of concerned staff of OP-1 that the consignment was under custom bond and the same has to be custom cleared at Amritsar on payment of duty.  
3. Staff of OP-1 while transporting the said  consignment from Mumbai airport to Amritsar acted in a negligent and deficient manner, knowing fully well that the consignment is the custom bond. Instead of depositing the consignment in the custom bond area in Amritsar and without getting the same cleared through custom, transported the goods to its city godown. The said fact has been admitted by staff of OP-1 in its letter dated 01.05.08 to Directorate of Revenue Intelligence copy of which is Annexure-8. The same recites that on realising that it has committed the aforesaid negligent act, it  brought the goods back to the custom bond area of Amritsar Airport where upon the consignment was seized by the Directorate of Revenue Intelligence (DRI) on the ground  of violation of provisions of Custom Act. A panchnama was prepared by DRI copy of which is Annexure (C ). In view of the fact that consignment was confiscated by DRI, the same was not released to complainants.
4. Since the mobile phone fall under the category of perishable goods as price of the said goods godown with time and in view of the fact that because of confiscation of goods, the complainants were suffering huge loss for the reason that the price of the goods was going down, the complainant had to file writ petition before High Court of Punjab and Haryana at Chandigarh. The same was registered as WP(C ) 7580 of 2009. The High Court passed an order dated 30.05.09 directing DRI to dispose off the application for provisional release of the confiscated goods within 10 days. In pursuance to the said order, DRI vide order dated 03.06.09 allowed the confiscated goods to be provisionally released pending final adjudication subject to certain conditions. The complainant furnished indemnity bond of Rs.1,67,80,450/- and bank guarantee of Rs.16,78,045/-.
5. When the goods were inspected by the DRI it was found that 58 mobile phones were short i.e. the same were stolen when they were in the custody of OP-1 and OP-2. The complainants suffered loss of Rs.1,10,000/- towards cost of 58 stolen mobile phones.
6. On 10.06.09 the confiscated consignment was finally released to the complainant. By that time the value of the goods went down less than around 40% approximately. The complainant had to sell the goods at a loss of 40%. The complainant issued legal notice date  12.10.09 claiming compensation. OP-1 and OP-2 sent reply making a bogus and frivolous defence that they were not aware regarding consignments being custom bond. But in the very next sentence they admitted that consignment goods were transferred to City Cargo Office and on realising the mistake the consigned goods were transferred back to the custom bond. Although the lapse was admitted by OP-1 and OP-2 but they choose to name the same “an act of inadvertence”. The said act of the OPs caused harassment, loss of goodwill, embarrassment of being called smugglers, mental agony and mental and physical torture.
7. DRI issued show cause notice dated 20.04.10 to complainants as well as Ops no.1, 2 and 3. The OPs no.1 and 2 filed reply annexing there with letter dated 13.0-8.09 intimating Sr. Intelligence Officer, the procedure for import cargo. From said letter it was apparent that complainants have no role to play with regard to the taking delivery of the consignment without paying the necessary custom duty and release order. The news was published in the newspaper Jagran City at  Amritsar on 07.05.09 and 11.05.09. Hence this complaint for directing Ops to pay Rs.1,10,000/- towards compensation for loss of 58 mobile phone, direct OPs to pay Rs.51 lakh on account of loss suffered because of selling consignment at a lower value, directing OP to pay Rs.50,000/- towards cost and expenses incurred in furnishing bank guarantee as per order of ADG, DRI. Complainants further sought directions to pay compensation to the tune of Rs.15 lakhs towards loss of reputation, harassment and mental agony, humiliation in public as well as amongst his relatives and friends  circle after the news of the confiscation of his goods on the charges of smuggling was known to their family and friends from publication in newspaper. They also prayed that OP may direct to pay Rs.2,11,217 towards charges paid for storage of goods from the date of seizure till delivery which was paid by the complainant to M/s. JAC Services at Amritsar, compensation of Rs.20 lakhs towards exemplary damages, Rs.2,85,000/- as cost for legal expenses at High Court in Chandigarh, interest @21% p.a. from date of filing the complaint till realisation.
8. OPs no.1 and 2 filed written statement raising preliminary objections that this Commission has no jurisdiction  as the mobile phone were exported by complainant from Hong Kong and were consigned to Amritsar via Mumbai. The goods were received by the complainant at Bombay. Complainants invoked jurisdiction of Punjab and Haryana High Court at Chandigarh. The complainants are not consumer as  business activities do not come within the definition of consumer. Complaint is devoid of cause of action and is abuse / misuse of process of law. It was a case of short supply by the vendor and not theft. Had it been a case of theft, the complainants would have lodged report of theft which complainants have not done till date. The complaint is barred by limitation.
9. On Merits it stated that it was not within the knowledge of concerned staff of OP-1 that consignment was under custom bond or had to be custom cleared at Amritsar on payment of duty. 87 pcs were booked with M/s. Cathy Pacific Airlines showing the name of shipper at Smart Frieght (HK) and consignee HTL Logistic India (P) Ltd. for carriage from Hong Kong to Mumbai. The same arrived at  Mumbai. M/s. HTL Logistics carried out all the necessary transhipment formalities and cargo to Air India for further carriage from Mumbai to Amritsar under three different  airway bill all dated 26.04.09. The name of the shipper was reflected on the airway bills at HTL Logistics India Pvt. Ltd. And the name of the consignee was Suri Device India / complainant no.1. The shipper had not declared any value nor paid supplementary charges. Ops no.1 and 2 carried shipment from Mumbai to Delhi on its domestic flight IC168 on 27.04.09 and subsequently from Delhi to Amritsar by flight IC 881 of 28.04.09. The shipments were off loaded from the aircraft within a short span of time but the accompanying documents remained un off loaded. The documents retrieved from aircraft on return did not indicate whether  the shipments were  international or domestic. Clarifications was sought from the originating point and it was established that the shipments were booked with Air India under custom bond. Immediate steps were  taken to hand over the shipments at custom custodian at Amritsar. On 1^st May in the evening it was observed from letter from DRI that the shipment was not to be delivered to the consignee. On 02.05.09 consignee contacted for taking delivery which was denied as per instructions from DRI. On 05.05.09 consignee again contacted for delivery on  order which was issued by Airport staff after Sr. Intelligence Officer called and informed to give the delivery at 15:30 hours. After taking permission from the account, customs opened the seals in the presence of representative of JAC Cargo and consignees. One consignment of 25 boxes was thoroughly examined by DRI and shortage box wise were recorded/ One box having packing list of 100 mobiles had 90 mobiles and there was no space/ capacity in the carton to take more than 90 boxes. Total number of shortages recorded was 53 mobiles. There was no malafide on the part of OPs  to show shipment as domestic cargo. OPs denied that complainant suffered loss of Rs.1,10,000/- towards cost of 58 stolen mobile phones. The consignment was intact when taken to Air India’s City office or opened for inspection. The DRI passed order of release of consignment on 03.06.09 and complainant got it released on 10.06.09. Market’s move upwards and downwards is a normal phenomenon in trade and business. They denied that value of the goods went down less than 40%. In notice dated 12.10.09 complainants claimed loss of 45%. Complainants are not entitled to any amount.
10. OP-3 filed separate WS raising preliminary objections that no cause of action arisen against it. On merits it stated that it transported the consignment to the entire satisfaction of the complainants and the consignment arrived at its destination place at international cargo. The shipment were handed over with all permissions from  custom  authorities alongwith airway bills to OP-1.
11. Complainants filed separate rejoinder, one to WS of OPs no.1 and 2 and other to WS of OP-3. They filed affidavit of Shri Arun Suri in evidence. They filed application for additional evidence dated 06.05.14 and additional evidence by way of affidavit on 20.02.14 to prove the receipts of payment made by it for  . charges of Rs.72,835 and 74,602/-.
12. On the other hand the OPs no.1 and 2 filed affidavit of Shri K.A. Nagamani, Sr. Manager. OP-3 filed affidavit of Shri Atul Kumar Pasricha, Sr. Ex Accountant.
13. The complainants have filed written arguments. OP-1 and 2 filed written arguments.
14. OP-5 was served dasti by complainant on 19.12.12, copy of dasti notice containing endorsement of receipt of summons by OP-5 is attached with application for permission to file proof of service on OPs no.4 and 5 dated 07.01.13. Representative  of OP-4 i.e. Shri Anil Ghaekar, Custom Inspector appeared on 13.12.11. Anyhow neither any relief has been claimed against OPs no.4 and 5 and nor OPs no.4 and 5 being contested the case.
15. I have gone through the material on record and heard the arguments. So far as the objection of territorial jurisdiction is concerned, it may be observed that goods passed through Delhi while being carried form Bombay to Amritsar. Moreover registered office of OP-1 is in Delhi. That is sufficient to confer territorial jurisdiction on this Commission. It is only branch office where cause of action has to be shown. In case of registered office, the jurisdiction is  there irrespective of the fact that no cause of action arose there.
16. As regard objection of complainants not being  consumer is concerned, the stand of the OP is that business activities do not come within the definition of consumer. Firstly the complainants have specifically mentioned that they imported the mobile phone with a view to earn their livelihood. Secondly the case pertains to service of carriage by OP-1 which has nothing to do with the business. That was incidental to business. Services were not availed for direct earning of profit. On analogical ground reliance can be placed on decision of NC in TPDDL vs. R.K. Rohilla I (2015) CPJ 249 where it was held that connection of electricity for office use is not for generation of profit and is not commercial. Similarly in Air France vs. O.P. Srivastava III (2018) CPJ 57 NC held that in travel by airlines for official meeting, the person travelling is a consumer. 
17. The third objection of OP is that complaint is barred by limitation. I am at a loss appreciate the said objection. The complainant placed order for importing consignment vide invoice dated 24.04.09. The complaint has been filed on 15.09.10 and is well within limitation.
18. On merits the OPs no.1 and 2 have just tried to escape the liability by submitting that it was not within their knowledge that the consignment was under custom bond or had to be custom cleared at Amritsar at payment on duty. The counsel for complainant drew my attention towards copy of letter dated 01.05.09 which is Annexure-B to complaint and is at page-22 of the documents filed alongwith complaint. It contains a clear admission that consignment were wrongly taken to their city  office alongwith other domestic cargo due to error and over sight of its staff handling cargo. In the end they sincerely regretted the error committed by their staff and  stated that they assumed that this type of error by the staff will not be repeated in future. This is a letter of OP-1. This leave no scope for OP-1 to raise any defence.
19. Counsel for complainant drew my attention towards copy of order dated 16.05.11 passed by DRI which is Annexure-J to rejoinder to WS of OPs no.1 and 2 and is at page-10 to 54 of the documents filed alongwith rejoinder. Para no.34.4 at page-40 recites that from facts discussed in respect of the role of the noticee no.6 in the case, it accrues that there is no evidence to conclude that noticee no.6 have violated any provision of the customs act or any other law and that by way of their such act or omission they have rendered the impugned goods liable to confiscation under the Act, They  can not be charged with abetment of an act or omission. There was no conspiracy or meetings of minds between the notices in this case. The counsel  for complainant drew my attention para 36.6 at page 46  where it is mentioned that even if the airlines staff had any doubt about cargo being domestic or international, the procedure presecrbied for airlines stipulated, to atleast declare the cargo to the customs officer at Amritsar and to take his clearance. In para 42 the goods were directed to be provisionally released to noticee no.2 and noticee no.3. In point no.3 (a) and 3 (b) at page-52 penalty of Rs.1 lakh was imposed on M/s. Air India under Section 112 Custom Act and Rs.20,000/- under Section 30 of the Customs Act.
20. The counsel for OP submitted that HTL Logistic India Pvt. Ltd. from whom the goods were imported was a necessary party. But has not been joined as OP. The counsel for complainant suitably refuted the same by stating that the copy of airway bill at page-17 and 18 of the documents filed with the complaint show the name of consignee as S.T. Logistic Enterprises and Suri Device India who are complainants no.1 and 2. Non joinder of S.T. Enterprises is immaterial. I find considerable force in the argument for counsel  for complainant.
21. The counsel for OP also argued that as per panchnama at page-28 serial no.14 on one carton it was mentioned as 8 GB whereas on phone 16 GB was mentioned. Similarly as serial no.18 on one carton it was mentioned at 8 GB where on phone 16 GB was mentioned. At page 31 at serial no.1 it is mentioned that MRP sticker were not affixed on the individual cartons of mobile phone. I am unable  to understand how this plea help OP. OP was simply a carrier, it acted negligently in taking the consignment to City Cargo office instead of getting it cleared from custom bond.
22. The last  arguments for counsel  of OP was that liability of OP-1 is confined to one mentioned in Carriage by Air Act. The same is not tenable in view of decision of NC in Emirates vs. Dr. Rakesh Chopra III (2013) CPJ 500 where it was held  that compensation is apart from damages under Air Act. Similar view was taken in Air France vs. O.P. Srivastava (supra) where it was held that compensation is not confined to Air Act.
23. Coming to the  quantum of compensation, it is but natural that an innocent person is likely to suffer loss on account of loss of reputation, harassment, loss of goodwill, embarrassment of being called smugglers. The complainants suffered loss of Rs.1,10,000/- on account of price of 58 mobile phones which were found short. OP has not given any contrary figure. So the figure of complainant is to be accepted which is Rs.1,10,000/-. As regards quantum of loss due to decrease in price, it may be observed that complainant had not adduced any  satisfactory evidence of fall in price. It has claimed the fall to the extent of 40% of price. I deem it proper to assess the loss at 20%. The DRI took bond of Rs.1,57,80,450/- for releasing the mobile  phone. So that can be taken as price of the mobile phone. 20% of the same would come to Rs.32 lakhs. Complainants also suffered loss of Rs.2,11,217/- towards charges paid for storage of goods, to JAC services at Amritsar. The total comes to Rs.35,21,217/-. OP-1 is directed to pay Rs.35,21,217/- as compensation including damages with interest @9% p.a. from the date of filing complaint i.e. 15.09.10 till payment by OP-1.
24. Copy of the order be sent to both the parties free of cost.
25. File be consigned to record room.

 

(O.P. GUPTA)                                                     

MEMBER (JUDICIAL)

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