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NATIONAL CONSUMER DISPUTES
REDRESSAL COMMISSION, NEW DELHI
Hon’ble Mr. Justice M.B. Shah, President &
Mrs. Rajyalakshmi Rao, Member
Pearl Syntex Pvt. Ltd.—Complainant
versus
KLM CARGO & ORS.—Opposite Parties
Original Petition Nos. 217 of 1997, 47, 296 of 1998—Decided on 29.9.2006
For the Complainant in Original Petition No. 217/97 :Mr. Vikramjit Reen, Advocate.
Original Petition No. 296/98 :Mr. Vineet Malhotra, Advocates.
Original Petition No. 296/98 :Mr. J.R. Midha, Mr. Neeraj Singh and Mr. Vaibhav Mehta, Advocates.
For the Opposite Party No. 2 (State Bank of India) In OP No. 217/97) : Nemo.
For the K.L.M. CARGO (OP No. 1 in OP No. 217/97), OP No. 3 in OP No. 47/98 and OP No. 2 in OP No. 296/98 Opposite Parties) :Ms. Yogita and Mr. Rakesh Agarwal, Advocates.
For the Natwest Bank (OP No. 1 in OP No. 217/97), OP No. 2 in OP No. 47/98 and OP No. 4 in OP No. 296/98) :Ms. K.S. Devi and Mr. Dinesh Sabharwal, Advocates.
For the FM Mir Jewellers (Opposite Party No. 4 in OP No. 217/97) and OP No. 5 in OP No. 296/98) : Nemo.
For the Service Air (Handling Agents for KLM at Birmingham Airport) OP No. 4 in OP No. 47/98 :Mr. O.P. Popli, Advocate.
For the Vysya Bank Ltd. (OP No. 5 in OP No. 47/98 and OP No. 3 in OP No. 296/98) :Mr. Vijay Kumar, Advocate.
For the United India Insurance Co. Ltd. (OP No. 1 in OP No. 47/98) :Mr. R. Narayanan, Advocate.
For the Oriental Insurance Co. Ltd. (OP No. 1 in OP No. 296/98) :Mr. Vishna Mehra and Ms. Sakshi Mittal, Advocates.
A carrier is liable for the loss of goods entrusted to it if the loss is caused by the carrier's negligence.
Headnote:
In three separate complaints, the complainants alleged that gold jewelry they exported to the United Kingdom was not delivered to the consignee, a bank, but instead was released to an unauthorized person due to the carrier's negligence. The complainants sought compensation from the carrier, KLM Cargo, and in two cases, from the insurance companies that had issued policies for the shipments. The complaints were consolidated for hearing.
Fact of the Case:
The complainants, three separate exporters of gold jewelry, alleged that KLM Cargo, the carrier, negligently released their shipments of gold jewelry to unauthorized persons, resulting in the loss of the jewelry. The complainants sought compensation from KLM Cargo and, in two cases, from the insurance companies that had issued policies for the shipments.
Finding of the Court:
The court found that KLM Cargo was liable for the loss of the gold jewelry because its employees had acted recklessly in releasing the shipments without verifying the identity of the recipient or obtaining the necessary documentation. The court also found that the insurance companies were not liable because the loss was not covered by the terms of the policies.
Issues: 1. Whether KLM Cargo was liable for the loss of the gold jewelry. 2. Whether the insurance companies were liable for the loss of the gold jewelry.
Ratio Decidendi: 1. KLM Cargo was liable for the loss of the gold jewelry because its employees had acted recklessly in releasing the shipments without verifying the identity of the recipient or obtaining the necessary documentation. 2. The insurance companies were not liable for the loss of the gold jewelry because the loss was not covered by the terms of the policies.
Final Decision: The court directed KLM Cargo to pay compensation to the complainants and to deposit a sum of money with the National Consumer Disputes Redressal Commission. The court also directed the insurance companies to deposit a sum of money with the National Consumer Disputes Redressal Commission.
O.P. No. 217/97
Mr. Justice M.B. Shah, President.— These three complaints are of similar nature, cause of action is the same, there is no material difference in facts as well as in evidence except the weight and value of the gold jewellery that was exported, the dates of invoices and their dispatch; in short, the complainants have sold gold jewellery to M/s. F.M. Mir Jewellers, a partnership firm of the United Kingdom, as one of the partners of the firm came to India and agreed to purchase the same. Consignor was the complainant, consignee was M/s. National Westminster Bank (hereinafter referred to the Bank), and notified party was M/s. FM Mir Jewellers. The said gold articles were dispatched through the Carrier, M/s. KLM Royal Dutch Airlines (hereinafter called the KLM). Thereafter, the goods were delivered, without verification of the required documents, within minutes of customs clearance, by the agent or employees of the KLM, on the basis of so-called fax message. That was a fraud committed by some persons against whom prosecution was launched in the Crown Court of Northampton, the United Kingdom, and some of them were convicted. The aforesaid complaints are filed for recovery of the amount of loss suffered by the complainants, from the carrier. In addition, in two cases, namely, (i) O.P. No. 47 of 1998, and (ii) O.P. No. 296 of 1998 complaints are filed against the Insurance Companies on the ground that the complainants have taken insurance policies for a loss in such cases.
2. Further, it is established on record that for the alleged fraud committed in taking the delivery of the goods without producing original bank release notes, prosecution was launched before the Crown Court, Northampton. In that case it was alleged that there was an agreement of dishonest use of forged instrument, namely, bank release notes, which were altered and then used for obtaining the release of jewellery from the cargo agents. It was the say of the prosecution that to secure the system for payment of the amount on the basis of the arrangement between banks in India and in the U.K., Fine Arts was able to obtain credit which they were not entitled to. After the goods were dispatched from India, the necessary documents were sent to English Bank. The procedure for obtaining delivery of consignment is, once the goods arrive at the port of destination the importer goes to the bank, signs the bill of exchange and collects the documents. According to the terms of the bill he may make payment immediately ‘on sight’ or ‘within 30 days or 60 days’, as per the terms.
3. In the criminal case, the Crown Court discussed two Counts, i.e. Count No. 1, whether there was any conspiracy to use forged bank release notes and whether the four defendants/accused were party to it; and, Count No. 2 is, whether there was a conspiracy to defraud the suppliers of jewellery and whether each of the defendant was a party to it?
4. On these two counts the Jury awarded the following sentences to the four accused:
1. Sunil Dutt
: 2 years imprisonment on Count 1.
4 years imprisonment on Count 2.
2. Abdul Rauf
: 4 years imprisonment on Count 2, ordered to pay compensation of Pounds 50,000 out of which Pounds 12,272.34 were awarded to PP Jewellers (OP 296/98); Pounds 8,854.79 were Awarded to Bholasons Exports (OP No. 118/98); Pounds 14,967.10 were awarded to Yellow Metal Inc. (OP. 47/98).
3. Ashok Kumar
: 18 months imprisonment on Count 1, Pounds 1,500 costs.
4. Harjeet
: 7 months imprisonment. Dhariwal
5. It is contended by the learned Counsel for the complainant that no amount is received by the complainants on the basis of the direction issued in the criminal case.
6. We would take the facts in Original Petition No. 217 of 1997 for the purpose of deciding the contentions in these matters.
Original Petition No. 217 of 1997
7. It is the case of the complainant Company that it exported—
* 4.282 kgs (net weight) of plain and meenakari jewellery of fineness .930 (kdm soldered) as per
