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TMI Blog2022 (11) TMI 1361X X X X Extracts X X X X X X X X Extracts X X X X ..... the State Commission to be paid to the appellant herein i.e., a sum of Rs.13,79,901/- (Rupees Thirteen Lakhs Seventy-Nine Thousand Nine Hundred and One), together with compensation of Rs.50,000/- (Rupees Fifty Thousand) and cost of litigation amounting to Rs.10,000/- (Rupees Ten Thousand). 4. The issue involved in the present appeal is in a very narrow compass and relates only to the quantum of compensation that the appellant is entitled to receive from the respondents. 5. The appellant herein- original complainant, a private limited company, filed a consumer complaint before the State Commission against the present respondents-opposite parties. Respondent No.1- UPS Freight Service (India) Pvt. Ltd. (formerly known as M/s Fritz Freight Forwarding India Pvt. Ltd.) and respondent No.2- M/s Fritz International are the subsidiaries and agents of respondent No.3- M/s Fritz Companies Inc. to administer, look after and carry out the business of respondent No. 3, in India. Respondent No.4- Bank of Boston is the consignee's bank and respondent No.5- M/s County Seat Stores, New York is the consignee company. 6. IA No. 1 of 2015 seeking deletion of respondent No.5 was allowed and IA No. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iscrepancy was that respondent No.1 mentioned the port of loading to be Jawaharlal Nehru Post Trust ("JNPT", for short), Bombay instead of FOB, New Delhi on the FCR. 12. By letter dated 18.03.1999, respondent No.4 - Bank informed appellant's bank that they had approached respondent No.5 for approval to pay the sale consideration but Respondent No.5 was not willing to honour such request and thereafter the documents were returned to the appellant's bank i.e., the Canara Bank for further disposal. 13. On being notified by the appellant's bank of Respondent No. 5's refusal to release the sale consideration, the appellant approached respondent No.1 herein in connection with the negligence on their part in mentioning the wrong point of loading in the FCR. Respondent No.1 then issued a letter/certificate dated 30.03.1999, rectifying the error and mentioning therein that the shipment was loaded from FOB, New Delhi and was effected from JNPT, Bombay. 14. As per the appellant's version, the aforesaid letter/certificate was accepted by respondent No.4 Bank which thereafter released the documents to respondent No.5 but later respondent No.5 returned the documents to respondent No.4 Bank an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egligence of the respondent Nos.1 and 2, the Letter of Credit was not honoured by respondent No.4 and therefore the appellant had to suffer loss due to negligence of the respondent Nos. 1 and 2. That more than ten years had passed and respondent Nos.1 and 2 have to make up for the loss suffered by the appellant herein. 17. The appellant herein filed an application seeking rectification of the typographical error in the judgment and order of the State Commission dated 09.02.2009 wherein the loss of amount towards loss was mentioned wrongly mentioned as Rs.79,901/- instead of Rs.13,79,901/-. The State Commission vide its judgment and order dated 17.03.2009 rectified the error and granted Rs.13,79,901/- (Rupees Thirteen Lakhs Seventy-Nine Thousand Nine Hundred and One) towards loss suffered by the appellant, Rs.50,000/- (Rupees Fifty Thousand) towards compensation for mental agony and harassment and Rs.10,000/- (Rupees Ten Thousand) towards cost of litigation. 18. Aggrieved by the judgment and order passed by the State Commission, respondent Nos. 1 to 3 approached the National Commission by way of an appeal. The National Commission vide order dated 18.08.2010 admitted the appeal and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stake committed by respondent No.1 while issuing FCR. That it could be possible that the appellant lost its price of goods due to the connivance between the respondent No.4 and respondent No.5 as was contended by the appellant, as a result of the alleged endorsement made on the FCR which was later on concealed by putting ink on it. However, such conduct of Respondent No. 4 and 5, which may have resulted in loss in the price of the appellant's goods, could not be attributed to the mistake in the FCR. 19. Aggrieved by the reduction in the amount of compensation, the appellant-original complainant has approached this Court by way of the present appeal. 20. We have heard Sri Rajiv Garg, learned counsel for the appellant, Sri Sudhanshu S. Choudhari, learned counsel for respondent No.1 and Sri Vikas Kumar, learned counsel for respondent No.4 and perused the material on record. 21. Learned counsel for the appellant at the outset submitted that the State Commission was right in assessing the claim of the appellant and had rightly granted the same, whereas, the National Commission has erred in reducing the said amount towards the loss of goods, compensation for mental agony and harassmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant herein since the Letter of Credit specified that the consignment had to be shipped in the month of March and the appellant herein on 11.02.1999 had informed the shippers to take the delivery. Any delay occasioned was only on account of the conduct of the shippers in taking delivery of the goods and not on the part of the appellant. 21.8 That the facts narrated above would demonstrate that the respondents acted in collusion with each other to deceive the appellant herein. The modus operandi was to issue a defective FCR and withhold the documents till the expiry of the Letter of Credit and thereafter, rectify the FCR and in the meanwhile, get the goods delivered without payment of consideration to the appellant. 22. Per contra, the learned counsel for the respondent No.1 supported the judgment and order passed by the National Commission and contended that the National Commission has rightly set-aside the order passed by the State Commission, thereby reducing the compensation and amount payable to the appellant. The submissions of the learned counsel for the respondent No.1 are epitomized as under: 22.1 That had the appellant herein been vigilant, the FCR could have been corr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n ought to have been paid to the appellant and as to what should be the quantum of the said compensation, if at all the same is to be allowed. 25. The State Commission had awarded compensation of Rs.13,79,901/- towards loss suffered by the appellant plus Rs.50,000/- towards compensation for mental agony and harassment plus Rs.10,000/- towards cost of litigation. The National Commission, on the other hand, reduced the compensation to Rs.10,000/- only along with an interest at the rate of 9% per annum from the date of filing the complaint till the date of payment. It is also noted that the National Commission directed the payment of such amount from the amount deposited by the respondent No.1 before the National Commission while filing the appeal and the remaining amount was directed to be refunded to respondent No.1 after deducting the amount payable to the appellant herein. 26. On a perusal of the purchase order issued by respondent No.5 dated 30.10.1998 to the appellant, it is clear that respondent No.5 herein placed an order for Two Hundred and Thirty Four (234) packages of MN's 100% CTN Twill Messenger Bags. The mode of payment was agreed to be through an irrevocable Letter of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondents herein have acted in collusion with each other and have got the goods cleared based on the said FCR itself without paying the sale consideration to the appellant. It is alleged that the respondents put an ink blot on the endorsement to camouflage their misdeeds. Aggrieved by the non-payment of dues as well as the action of the respondents in getting the goods released, the consumer complaint was filed. 30. In the instant case, the sale of goods was through a 'FOB' contract. 'FOB' contract means a contract "Free on Board". By such a contract the seller is to put on board at his own expenses which means this is a contract for sale of goods to be delivered free on board a ship. The buyer must name the ship upon which they are to be delivered and the seller must put them safely on board, meet the cost of doing so and for the buyer's protection, give possession of them to the ship only upon the terms of a reasonable and ordinary bill of lading or other contract of carriage; there the contractual liability of the seller as seller ceases and delivery to the buyer is complete as far as he is concerned. The goods are then at the risk of the buyer, he is responsible for the fre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirming bank would ask for advice of the issuing bank to confirm whether the documents produced by the beneficiary is compliant to the terms and conditions of the letter of credit. Once the issuing bank confirms the document, the confirming bank is obligated to pay to the beneficiary on demand, the credit amount and in turn recover the same from the issuing bank. 35. In Hindustan Steel Workers Construction Ltd. V G.S. Atwal & Co. (Engineers) (P) Ltd. [ (1995) 6 SCC 76] this Court held that a letter of credit is independent of and unqualified by the contract of sale or underlying transactions. The autonomy of an irrevocable LOC is entitled to protection and as a rule, courts refrain from interfering with that autonomy. If courts interfere in such transactions, it would be prone to misuse by the applicant party to gain undue advantage leaving the issuing bank at peril in the international financial market. 36. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commission was not right in setting aside the judgment and order passed by the State Commission and therefore, the impugned judgment and order passed by the National Commission is liable to be set aside. 41. In the result, the appeal filed by the appellant-complainant is allowed and the impugned judgment and order passed by the National Commission is hereby quashed and set aside and the judgment and order passed by the State Commission is restored. The respondents, being severally and jointly liable, shall make the payment of the amount as assessed by the State Commission within a period of two months from today. In the event the respondents fail to pay the said compensation within the stipulated time, the appellant shall be at liberty to seek remedy in accordance with the law. 42. If pursuant to the order of the State Commission, any amount has been deposited by the respondents, the same shall be withdrawn by the appellant in accordance with the order of the State Commission. If any amount has already been paid to the appellant by the respondents herein, then the balance amount, if any, as awarded by the State Commission shall be paid to the appellant within a period of two mont ..... X X X X Extracts X X X X X X X X Extracts X X X X
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