VIRENDER KHULLARversusAMERICAN CONSOLIDATION SERVICES LTD. & ORS.

                               [2016) 4 S.C.R. 504


 A                          VIRENDER KHULLAR
                                        v.
         AMERICAN CONSOLIDATION SERVICES LTD. & ORS.
                         (Civil Appeal No. 4861 of2012)
 B                             AUGUST 16, 2016
             [R.K. AGRAWAL AND PRAFULLA C. PANT, JJ.)
            Consumer Protection Act, 1986 - Agents liability -
      Applicability of s.230, Contract Act, 1.872 - Defence to agents u/
      s.230, Contract Act (Agents not personally bound by contracts on
 c    behalf of principal) in cases under Consumer Protection Act -
      Appellants entrusted consignment to R-1 (the Agent of R-3) who
      handed it over to R-4 (the export carrier) for delivery to R-2 (the
      Bank) - R-3 was the actual buyer (subsidiary of orie Coronet Group
      Inc.) which had to first make payment to R-2 and only then 1he
 D    goods were to be released in its favour - However, instead of R-2 it
      was R-3 ll'hich directly received the delivery of consignments without
      making any payment either to R-2 or the appellants - Appellants OJ]_
      non-receipt ofpayment filed complaint seeking compensation, before
      NCDRC, alleging change in name of consignee by R-I, from R-2 to
      R-3, as a result of which the consignment was delivered directly to
 E
      R-3 instead of R-2 - NCDRC by impugned order held only R-3 liable
      to pay compensation - Held: R-1 was simply acting as an agent of
      Coronet Group Inc. with whom the appellants entered into contract,
      as such, in view of defence u/s. 230 of Contract Act, 1872 it cannot
      be held personally liable to enforce the contract between its principal
. F   and the appellants - It is only R-3 (subsidiary of Coronet Group
      Inc.) which was liable, as it received the delivery without depositing
      price of the goods with R-2 - No infirmity in the impugned order -
      Consumer Laws - Contract Act, 1872.
             Dismissing the appeals, the Court
 G          HELD: 1.1 Admittedly, the goods in question were handed
      over by the appellants to Respondent No.1. 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 thereto. It
 H    has been shown on behalf of Respondent No.I that Respondent
                                  504         '
   VIRENDER KHULLAR v. AMERICAN CONSOLIDATION                           505
                 SERVICES LTD.

No.1 was simply an agent of the buyer with whom the appellants          A
entered into contract. The consignment was received by
Respondent No. 3 Zip Code Inc, a part of Coronet Group Inc.
[Para 11] [510-G-H]
     1.2 Since, Respondent No. 1 was simply acting as an agent
of Coronet Group Inc, thus, in view of S. 230 of Contract Act,           8
1872 it cannot be held· personally liable to enforce the contract
entered between its principal and the appellants. Defence under
S.230 of Contract Act, 1872 is available in the cases under
Consumer Protection Act, 1986 by the agents of the t>rincipal
with whom the complainant had the agreement. [Para 13] [511-F,
G-H]                                                                     C
      Marine Container Services South Pvt. Ltd. v. Go Go
      Garments (1998) 3 SCC 247 - relied on.
      2. As rightly held by NCDRC, Respondent No. 4 had carried
the consignment and delivered the same as per Bill of Lading.
There was no contract between appellants and Respondent No.              D
4. Also Respondent No. 2 Bank could not be held liable as the
amount was not collected from the consignee, as such there was
no question of remitting it to appellants/complainants by the
Bank. In the circumstances, respondent No, 3 Zip Code Inc, which
was subsidiary to Coronet Group Inc, the consignee named in              E
the cargo slips, was the only party which could be held liable for
taking delivery without depositing the price of the goods with
the Bank. [Para 14] [512-A-C]
                       Case Law Reference
(1?98) 3 SCC 247                relied on              Para 13           F
     CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4861
of2012.
     From the Judgment and Order dated 22.03.2012 of the National
Consumer Disputes Redressal Commission, New Delhi in Original
Complaint No. 89 and 90of1995                                            G
                                  WITH
      C. A. No. 9217 of2012.
       H. L. Tiku, Sr. Adv., Ms. Yashmeet Kaur, Ms. Arti Singh, Advs.
for the Appellant.                                                       H
506             SUPREME COURT REPORTS                            [20 l 6] 4 S.C.R.


A            Vikramjit Banerjee, Kuna! Chatterji, Amit Mishra, Ms. Hima
      Lawrence, Keshav Roy Chowdhury, Ms. Maitrayee Bane1jee, Advs.
      for the Respondents.
            The Judgment of the Court was delivered by
            PRAFULLA C. PANT, J. 1. These appeals are directed against
B     common judgment and order dated March 22, 2012, passed by National
      Consumer Disputes Redressal Commission, New Delhi (for short
      "NCDRC") in Original Complaint Nos. 89 of 1995 and 90 of 1995,
      whereby the Commission has dismissed the complaints of the appellants,
      filed L!nder Section 23 of the Consumer Protection Act, 1986, as against
c     Respondent Nos. I, 2 and 4. However, the complaints were partially
      allowed as against respondent No. 3 Mis. Zip Code, 2615, Elmhurst
      Lane, Portsmouth, VA 23 70 I, USA, for an amount of Rs.20,82, 902.40 in
      favour of appellant Vi render Khu liar, and Rs.15,27,461. 76 in favourof
      appellant Girish Chander, with interest at the rate of l 2% per annum
      with effect from April 0 l, 1995 till the date of payment.
D
             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, 4"' Floor, Andheri (East), Mumbai (hereinafter referred
      to as "ACS"), and cargo receipts were issued to them by Respondent
E     No. 1. As per the cargo receipts so issued, the consignments were to
      the order of Respondent No. 2 Central Fidelity Bank, Richmond VA,
       USA. Respondent No. I 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 2"d Floor, 414 Veer
F      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/
G      complainants made enquiry about the consignments. After servicing
       legal notice, appellant Virender Khullarfiled a complaint for an amount
      .of Rs.35,31,601. l 5 in respect of300 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
H      cartons containing men's apparels sent through cargo receipt Nos. 34116,
   VIRENDER KHULLAR v. AMERICAN CONSOLIDATION                                   507
         SERVICES LTD. [PRAFULLA C. PANT, J.]

34117 and 34118, before NCDRC, New Delhi. Initially complaints were             A
filed only as against Respondent No. I, i.e. American Consolidation
Services Ltd. (ACS).
       3. Respondent No. I contested the complaints and pleaded that
Respondent No. I received the complainants' goods on behalf of the
buyer/consignee, i.e. Zip Code Inc. which was part of Coronet Group              B
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. I, nor there was any contract between the complainants and
Respondent No. I 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.
                                                                                 c
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 thatofthe concerned
carrier. Respondent No. l was under no liability whatsoever in respect           D
of any failure on the part of the consignee or any other party. According
to Respondent No. I, 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. I
acted only as an ~gent of the consignee, i.e. Zip Code Inc., a subsidiary
of Coronet Group Inc, and acted only as a consolidator and forwarder             E
(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 infom1ed by Respondent No. I about the delivery         F
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.
      4. After hearing the parties, the NCDRC, vide its separate orders
dated January 20, 2004, accepted both the claims (to the extent of               G
Rs.20,82,908.40 of appellant Vi render Khu liar 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. I with interest.
   . 5. However, above orders dated January 20,2004, passed by
NCDRC, were challenged by Respondent No. I in Civil Appeal Nos.                  H
508            SUPREME COURT REPORTS                       [2016] 4 S.C.R.


A     2079 of 2004 and 2080 of 2004, before this Court and the same were
      disposed ofvide order dated September I 0, 2009, as under: -
            "Heard learned counsel for the parties.
            These appeals hme been filed against the impugned Judgment
      of the National Consumer Disputes Redressal Commission, dated
B     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 th<?. appellant, contended that the appellant was only
      an agent of the consignee, Zip Code Inc., which is part of the Coronet
c     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.
            Mr. Nariman has contended that the appellant is only an agent
D     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
E     not to hme been done in this case before the National Commission.
             For the reason given above, we set aside the impugned
      iudgment of the National Commission and remand the matters to
      the National Commission with liberty to the respondents-claimants
      to iinplead the consignee as well as the carrier in their claim
      petitions. Notice will be issued to the newly impleaded parties and
 F
      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
G · expressly left open to the parties.
            The ampunt deposited here by the appellants will be refunded
      to them with accrued interest.
            The appeals are accordingly disposed of
            No order as to costs. "
H
    VIRENDER KHULLAR v. AMERICAN CONSOLIDATION                                  509
          SERVICES LTD. [PRAFULLA C. PANT, J.] .

        6. In the light of above order, Respondent No. 2 Central Fidelity       A
Bank, Respondent No. 3 Zip Code and Respondent No. 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
                                                                                 B
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                    c
complainants, and, as such, liable to pay the compensation to the
appellants, and accordingly directed Respondent No. 3 to make the
payment ofRs.20,82,902.40 in favour ofappellant Vi render Khu liar 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 0 I, 1995.
                                                                                 D
       7. Respondent No. 3 has not challenged the above order. Rather,
 the complainants have challenged the fresh decision ofNCDRC 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.
                                                                                 E
         8. Learned counsel for the appellant~ argued before us that it is
  Respondent No. I who changed the name of consignee and the name of
  Coronet Group Inc. was inse1ted in the Bill of Lading depriving realization
  of damages by the complainants. It is further contended that Respondent
  No. I 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       F
  to be delivered to Coronet Group without getting payment realized through
. the bank. It is futther 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 notifi.e.d. As such, the
  delivery of goods should not have been allowed to be made without              G
  getting realized payment of goods through Respondent 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
                                                                                 H
510            SUPREME COURT REPORTS                           [2016] 4 S.C.R.



A     consolidation procedure said to have been agreed between Respondent
      No. I 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 fmiher
B     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. I once the consignment arrived
      in Norfolk, USA. In turn, Respondent No.3 was to inform Respondent
c     No. 2, subsequent to which Respondent No.3 was to pay for 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
D     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 fo gischarge.
             I 0. We have considered the arguments advanced on behalf of
E     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 23 70 I, USA. In the column ofname ofconsignee
      "To order of Central Fidelity Bank Richmond VA" is mentioned. Cargo
      slips further disclose that (Vessel, Voyage) Hoegh Clipper/Eagle Prestige
F     was export carrier.
             I I. Admittedly, the goods in question were handed over by the
      appellants to Respondent No. I 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. I at the time the goods were handed
G     over to it or subsequent there to. It has been shown on behalf of
      Respondent No. I that Respondent No. I 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.
H     3 Zip Code Inc, a part of Coronet Group Inc.
     VIRENDER KHULLAR v. AMERICAN CONSOLIDATION                                 511
          SERVICES LTD. [PRAFULLA C. PANT, J.]

       12. At this stage, we think it just and proper to reproduce relevant      A
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                 B
         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.
                     xxx                    xxx                       xxx
           In receiving the goods and pending the consolidation                  c
         services covered by this agreement, ACS is acting as agent
         only for the consignee 1iamed 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               D
         agent on behalf of the consignee and shall be under no
         liability whatsoever in respect of any fttilure 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                E
         salvage charges or general average contribution."
        13. Since Respondent No. I 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       F
dated September I 0, 2009, has accepted the plea of Respondent No. I
that Respondent No. I is not a consignee, but only an agent of the
intermediate consignee. That being so, Respondent No. I cannot be held
to be liable in respect of claim made by the appellants. We think it relevant
to mention here that in Marine Container Services South Pvt. Lill. v.
                                                                                 G
Go Go Garments', this Court has already made clear that defence under
Section 230 oflndian 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.
1
    (1998) 3   sec 247                                                           H
512            SUPREME COURT REPORTS                           (2016) 4 S.C.R.



A            14. As far as liability of Respondent No. 2 Central Fidelity Bank
      and that of Respondent No. 4 is concerned, we agree with the NCO RC
      that Respondent No. 4 had carried the consignment and delivered the
      same as per Bill ofLading 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
B
      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 taking
      delivery without depositing the price of the goods with the Bank.
c            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.
      Divya Pandey                                              Appeals dismissed.
D