Case: SGS INDIA LTD Vs. DOLPHIN INTERNATIONAL LTD

2. The appellant herein is a testing, inspection and certification company that tests the quality and quantity of several products. The complainant engaged the appellant for providing services for inspection of groundnut procured by the complainant for the purpose of exporting the same to Greece and Netherlands. The appellant was responsible for carrying out the inspection of samples and further certifying in respect of different parameters of the groundnut. There were two sets of consignments, one to Piraeus, Greece and another to Rotterdam, Netherlands. The specification requirement in the communication dated 7.11.1997 was in respect of 122 containers of peanuts procured from M/s Shree Ram Industries, Rajkot. 10 containers out of 122 containers were required to be stuffed at Kandla Port and the rest at the factory of Shree Ram Industries, Rajkot. The specifications required by the complainant in respect of consignment to Greece were as under:1) Product Specificatio n : Moisture : Max 7.0% till 15/11/97 Max 6.5% thereafterAflatoxin : Max 5 PPBBroken/Split : Max 1%Admixture : Max 0.25%Damage : Max 0.5%Sprouty/yellow : Nil2) Packing Requirement : 50 Kg new jute bag of minimum 450 gms. Gross for net basis.3) Marking : As per contract with supplier4) Stuffing Instructions :- Containers should be new, without holes and with doors which close hermatically.- To protect bags from sweating and prevent them from touching the walls of the containers, every containers bottom, top and walls should be lined by bituminised paper (not simple craft paper) top-most layer of bags is to be covered with corrugated sheet.- Container should be fumigated by 48 Grams/cb.m. Methyl Bromide and sealing tapes used to cover container vents so as to ensure proper fumigation.- Sealing tapes must be removed as port prior to container being shipped.5) SGS Certificate: SGS Certificate of quality, quantity and aflatoxin can be issued at your Kandla/Jamnagar office on receipt of copy of B/L from our C&F agent in Kandla.xx xx xxHope you will find the above in order. Kindly carry out stringent continuous inspection of the cargo accordingly and do not hesitate to reject the cargo if the material/stuffing is not as per our requirements.3. The appellant carried out the inspection and analysis of Hand Picked and Selected peanuts(For short, HPS peanuts) which were to be exported to Greece. The peanuts were of two qualities – Bold and Java and the Inspection Certificate of quantity, quality, weight and packing certificates were issued from 2 12.1997 to 20.12.1997.One of the reports in respect of Bold and Java variety of peanuts is as under:Representative samples were drawn from 10% of the bags selected at random. Based on examination analysis of samples, we certify that the goods are:-350 BAGS INDIAN GROUNDNUT KERNELS CROP 1997 COUNT 45/55 JAVA VARIETY (WINTER CROP)- Moisture ……………… 5.65%- Admixture ……………… 0.07%- Damage ……………… 0.15%- Sprouty/Yellow ……………… 0.07%- Broken/Split ……………… 0.47%- Aflatoxin (B1 B2 G1 G2) 5 PPB ……………… Less thanNo responsibility can be accepted for the possible consequences of further development of aflatoxin producing moulds dependent up on condition of storage and/or transportation nor for differences arising from varying methods applied.4. The merchant vehicle Shun Cheng-12 reached Piraeus, Greece on 7.2.1998. The complainant thus sent a communication on 7.2.1998 to the appellant in respect of 20 full container loads. It was stated that peanut count size in 11 full container load was disputed and further asked to send all the sealed samples to SGS, Greece which was another unit of the Appellant. It was communicated as under:This buyer is now disputing the peanut count size in 11 FCLs and is demanding the following: (a) a discount of US$ 30 = PMT on these 11 FCLs (b) Our bearing detention/demurrage charges for these 11 FCLs till settlement of this matter (c) Our bearing cost of SGS inspection for these 11 FCLs at discharge port.5. The appellant thereafter responded to such communication on 9.2.1998 stating that the sealed samples for shipment retained by the appellant were couriered to the counterpart of the appellant in Greece. The samples were tested by the counterpart of the appellant. The result of type Bold of kernels per ounce was 52-54 whereas for Java type, the count was 57- 61. The dispute with regard to shipment in Greece is only in respect of the size/count of Java peanuts as against the limit of 45/55.6. In respect of shipment to Rotterdam, Netherlands, the product specifications as per the communication dated 7.11.1997 were as under:All cargo is originating from Shree Ram Industries, Rajkot and will be factory stuffed. Contracted specs. are as under:Moisture : Max 7.5%Broken kernels : Max 1.0%Admixture : Max 0.5%Aflatoxin (as per Code of Practice) : B1B2G1G2 : 4 PPB MaxGoods will undergo for final inspection by Dr. A. Verwey lab. at discharge port as per code of practice for peanuts of Product Board for Fruit of Vegetables, The Hague, January, 1996 (Copy given by the undersigned to Mr. Prafful).7. The Inspection Certificate dated 23.12.1997 of quantity, quality, weight and packing for the consignment to Netherlands is reproduced as under:INDIAN GROUNDNUT KERNELS CROP 1997 COUNT 50/60 JAVA VARIETY (WINTER CROP)- Moisture ……………… 6.30%- Admixture ……………… 0.14%- Broken Kernels ……………… 0.32%- Aflatoxin (B1 B2 G1 G2) 4 PPB ……………… Less thanGoods are free from Mould and infestation Crop 97No responsibility can be accepted for the possible consequences of further development of Aflatoxin producing moulds dependent upon condition of storage and/or transportation nor for differences arising from varying methods applied.8. Similar inspection certificate was given in respect of other containers for shipment by merchant vehicle Orient Patriot.9. Dr. Verweys Lab at Rotterdam, Netherlands conducted an inspection of the consignment and in its report dated 3.2.1998 reflected a higher level of Aflatoxin, including its variants B1, B2, G1 and G2. The test carried by SGS, Netherlands also confirmed high Aflatoxin level.

Court's reasoning:
19. The onus of proof of deficiency in service is on the com- plainant in the complaints under the Consumer Protection Act, 1986. It is the complainant who had approached the Commission, therefore, without any proof of deficiency, the opposite party cannot be held responsible for deficiency in service. In a judgment of this Court reported as Ravneet Singh Bagga v. KLM Royal Dutch Airlines & Anr. (2000) 1 SCC 66,  this court held that the burden of proving the deficiency in ser- vice is upon the person who alleges it.6. The deficiency in service cannot be alleged without attributing fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be performed by a person in pursuance of a contract or otherwise in relation to any service. The burden of proving the deficiency in service is upon the person who alleges it. The complainant has, on facts, been found to have not established any wilful fault, imperfection, shortcoming or inadequacy in the service of the respondent.21. The Commission has referred to the samples collected at the time of dispatch of consignments to Netherlands but the report of such samples has not been produced by the appellant to hold that the appellant is deficient in providing services therefore, drawn adverse inference against the appellant.22. The onus of proof that there was deficiency in service is on the complainant. If the complainant is able to discharge its initial onus, the burden would then shift to the respondent in the complaint. The rule of evidence before the civil proceedings is that the onus would lie on the person who would fail if no evidence is led by the other side. Therefore, the initial burden of proof of deficiency in service was on the complainant, but having failed to prove that the result of the sample retained by the appellant at the time of consignment was materially different than what was certified by the appellant, the burden of proof would not shift on the appellant. Thus, the Commission has erred in law to draw adverse inference against the appellant.23. The orders on the appellant to quality check the groundnuts do not indicate that there was any obligation on the part of the appellant to ensure that the requirements as specified at the port of loading should also be met at the port of destination. The appellant has certified the weight, packing, quality and quantity of the consignment at the port of loading. There is no allegation that there was any deficiency either in respect of weight, packing, quality or quantity against the appellant. There is even no allegation that the directions regarding containers or packing were not complied with. Once there was a direction that after fumigation the tapes should be removed, then it cannot be said that the appellant was duty bound to send in air-tight containers. The two things do not reconcile. The certificates issued by the appellant had a disclaimer that no responsibility can be accepted for the possible consequences of further development of Aflatoxin producing moulds dependent upon condition of storage and/or transportation nor for differences arising from varying methods applied. Thus, the appellant cannot be held responsible for the excess content of Aflatoxin for the reason that the result was a variance with the results in the certificates given by the appellant. Still further, there was no obligation upon the appellant to ensure that the consignment would have the same product specification at the port of destination which were at the port of loading.24. The complainant has not produced best evidence which they were expected to produce in respect of the test results of the samples sent by the appellant to the port of destination. There could be a deficiency of service only if the complainant was able to prove that the certificate issued by the appellant at the time of dispatch and the samples sent to the complainant or his agents is materially different. In the absence of any such proof, the appellant cannot be held deficient in service.25. Therefore, in the absence of any proof of negligence on the part of the appellant at the time of loading of the consignment, the appellant cannot be held responsible if at the port of destination, the products specifications were not the same as certified by the appellant at the time of loading of consignment. In the absence of any clause in the contract to ensure that the goods consigned has to meet the products specifications at the time of loading of consignment, the appellant cannot be held liable for change in specifications of the agricultural produce at the destination port after being in transit for two months on the high seas.