While the consignment was stored in MSIL"s warehouse, a firedestroyed the accelerometers. On being informed about the incident,Chemad claimed Rs 12.83 lakh for the loss. As MSIL did not settlethe claim, Chemad filed a consumer complaint against MSIL and thecustoms authorities. MSIL objected to the maintainability of the complaint on the groundthat it is a state government undertaking appointed as a custodianby the Customs authorities and had not rendered any services toChemad. |
MSIL argued that Chemad could not be termed its consumer.Also, there was no privity of contract between MSIL and Chemad andso the complaint was not maintainable. Alternatively, MSIL claimed if at all any compensation is payable,it would have to be restricted to a maximum of $20 per kg as fixedby the government of Karnataka in consultation with the Customsauthorities. The Customs commissioner stated he performed the sovereign andstatutory function of collecting Customs duty and could not beconsidered a service provider and, hence, the complaint was notmaintainable. He claimed he enjoyed immunity under the Customs Actfor anything done in good faith. The Karnataka State Commission held both MSIL and the Customsjointly liable, restricted the claim to Rs 12,333 calculated at $20per kg, but granted additional compensation of Rs 1 lakh.
Feelingaggrieved, all the parties approached the National Commission. The Commission considered the duties and responsibilities of MSILas custodian to provide service to importers for which it wasreceiving certain charges, including demurrage. Therefore,regardless of the existence or otherwise, of any direct privity ofcontract, such custodian would be deemed to be a service provider.Consequently, the custodian on behalf of the customs, would beliable to reimburse the loss caused to the person to whom the goodsbelonged. On the role of the customs, the National Commission held thatCustoms authorities discharge functions, which are sovereign innature and restricted to levy of duty, and / or confiscation ofgoods under the Customs Act.
Moreover, since a custodian had beenappointed, the customs could not be held guilty of deficiency inservice and no liability could be fixed on them for the loss. As the goods were destroyed by fire, Chemad did not pay the foreignsupplier for the goods imported, despite the latter having sent alegal notice. Since the importer had not paid for the goods, theNational Commission observed the title or ownership of the goodshad not been passed on to Chemad. The importer tried arguing theoverseas supplier could initiate legal action for recovering theprice of the goods, and hence, was entitled to claim the amountwithout having paid for the goods. However, since no such suit had been filed till the time the appealcame up for hearing, the Commission held that Chemad could not besaid to have any title to the goods and, hence, did not have thelocus standi to claim the loss of the goods.
Since the goods had not been paid for, no loss had occurred toChemad, and, hence, claiming the amount terming it a loss was anattempt to get undue enrichment. On this ground, the complaint wasdismissed. An importer can file a consumer complaint to recover the losscaused to him while his goods are in the custody of the custodianappointed by the customs authorities, provided he establishes hisownership or title to the goods. A person who defaults in makingpayment only complicates the issue and increases his losses.
The writer is a consumer activist.
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