The onus of proof that there was deficiency in service is on the complainant: Supreme Court

IN THE CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 5759 OF 2009 SGS INDIA LTD DOLPHIN INTERNATIONAL LTD JUDGMENT HEMANT GUPTA J The challenge in the present appeal is to an order passed by the National Consumer Disputes Redressal Commission1 on 1.7.2009 allowing the complaint filed by the respondent2 and directing the appellant to pay a sum of Rs.65 74 000 with interest @9% p.a. from the date of filing of complaint till realization. The appellant was also directed to pay Rs.25 000 as cost to the complainant 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 For short the ‘Commission’ For short the ‘complainant’ 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 Max 7.0% till Max 5 PPB 50 Kg new jute bag of minimum 450 gms. Gross for net basis As per contract with supplier 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 container’s bottom top and walls should be lined by bituminised papertop most layer of bags is to be covered with corrugated sheet Container 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 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 Hope 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.” The appellant carried out the inspection and analysis of Hand Picked and Selected peanuts3 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 VARIETYa discount of US$ 30 = PMT on these 11 FCLs Our bearing detention demurrage charges for these 11 FCLs till settlement of this matterOur bearing cost of SGS inspection for these 11 FCLs at discharge port.” 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 In respect of shipment to Rotterdam Netherlands the product specifications as per the communication dated 7.11.1997 were “All cargo is originating from Shree Ram Industries Rajkot and will be factory stuffed. Contracted specs are as under Broken kernels Aflatoxin in respect of consignment meant for Netherlands. The stuffing instructions were that the containers should be new without holes and with doors which closed hermetically. It was pointed out that hermetic means to exclude external air airtight as per the dictionary meaning. The appellant was thus liable to ensure not only the quality but also the stuffing and packaging of the containers and it was even authorized to reject the cargo if the material and or stuffing were not as per requirement. The cargo was to be tested by High Performance Liquid Chromatography method for which higher charges were claimed by the appellant. It was pointed out that Aflatoxin content for the consignment to Rotterdam Netherlands in respect of B1 B2 G1 and G2 was required to be maximum of 4 PPB. The certificate given by the appellant was to the effect that Aflatoxin content was less than 4 PPB but on arrival at the port of destination the Aflatoxin B1 B2 G1 G2 was found to be beyond 4 microgram Kg i.e. PPB. Mr Hansaria referred to the communication dated 17.2.1998 on behalf of Dr. Verwey’s Lab that on arrival of cargo no water damage to the contents of the container nor any visible mould growth was reported. Any mould growth on groundnut kernel will not take place unless the water activity of groundnut is 0.68 which is equal to the moisture content of 7%. When Aflatoxin producing moulds are present in groundnuts they will not metabolize Aflatoxins unless the water content of the nuts is above 10%. Dr. Verwey’s Lab was an independent expert nominated by the buyer. The appellant was informed that the goods would undergo final inspection at the discharge port by the said Lab In respect of the cargo to Greece the size of peanuts Java type were found to be 57 to 61 counts per ounce which was higher than what was certified by the appellant to be 45 to 55 counts per ounce. It was alleged that the appellant had deliberately withheld the report of its counterpart in Greece with regard to samples sent by it on 9.2.1998. It was even contended that the appellant did not send its sealed sample at the port of loading to its counterpart in Netherlands though the same was requested on 12.2.1998 and 19.2.1998. Since report has not been produced by the appellant adverse inference should be drawn against the appellant 17. The Commission found that the appellant has not led any evi dence in respect of the contention that quantity of Aflatoxin in peanuts is affected by various extraneous factors i.e. weather moisture humidity temperature and storage conditions. On the basis of the said fact the Commission returned a finding that the appellant was grossly negligent and deficient in ser vice as the count of Java type peanuts and content of Aflatoxin was more than what was specified. 18. We have heard learned counsel for the parties and find that the order of the Commission is not sustainable and it proceeds on the wrong understanding of law and facts 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.4 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 1 SCC 66 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 This Court in a Judgment reported as Indigo Airlines v Kalpana Rani Debbarma & Ors.5 held the the initial onus to substantiate the factum of deficiency in service committed by the opposite party was primarily on the complaint. This Court held as under: “28. In our opinion the approach of the Consumer Fora is in complete disregard of the principles of pleadings and burden of proof. First the material facts constituting deficiency in service are blissfully absent in the complaint as filed. Second the initial onus to substantiate the factum of deficiency in service committed by the ground staff of the Airlines at the airport after issuing boarding passes was primarily on the respondents. That has not been discharged by them. The Consumer Fora however went on to unjustly shift the onus on the appellants because of their failure to produce any evidence. In law the burden of proof would shift on the appellants only after the respondents complainants had discharged their initial burden in establishing the factum of deficiency 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 9 SCC 424 services therefore drawn adverse inference against the 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. 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 In view thereof we find that the order of the Commission holding the appellant as deficient in service is not sustainable in the absence of any clause in the work order that the specifications should remain the same even at the port of destination. Consequently the present appeal is allowed. The order passed by the Commission is thus set aside and the complaint is dismissed NEW DELHI OCTOBER 06 2021

Summary: 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 as upheld by the Hon’ble Supreme Court through the learned bench of Justice Hemant Gupta in the case of SGS India Ltd. v. Dolphin International Ltd. (CIVIL APPEAL NO. 5759 OF 2009) The brief facts of the case are that 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. The complainant sent a communication 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. 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. In respect of shipment to Rotterdam, Netherlands, similar inspection certificate was given in respect of other containers for shipment. Dr. Verwey’s 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. Mr. Gopal Sankaranarayanan, learned senior counsel for the appellant contented that there was no responsibility or assurance of the appellant beyond the borders of India and that they were to only satisfy the quantity, quality, weight and packaging of the consignment at the time of shipment. It was also pointed out that there were instructions that the appellant had to seal the containers for fumigation but after fumigation, tapes were to be removed. Therefore, the air could enter the container which may result in deviation in the reports at the port of destination. It was argued that the Commission has not given any finding in respect of any deficiency of service in respect of the inspection carried out by the appellant in the territory of India. Mr. Vijay Hansaria, learned senior counsel for the complainant contended that the appellant was liable to ensure not only the quality but also the stuffing and packaging of the containers and it was even authorized to reject the cargo if the material and/or stuffing were not as per requirement. It was pointed out that Aflatoxin content for the consignment to Rotterdam, Netherlands in respect of B1, B2, G1 and G2 was required to be maximum of 4 PPB. The certificate given by the appellant was less than 4 PPB but on arrival at the port of destination, it was found to be beyond 4 microgram/Kg i.e. PPB. In respect of the cargo to Greece, the size of peanuts Java type were found to be 57 to 61 counts per ounce, which was higher than what was certified by the appellant to be 45 to 55 counts per ounce. After hearing the learned counsel for the respective parties at length, referring to the cases of Ravneet Singh Bagga v. KLM Royal Dutch Airlines &amp; Anrthe and Indigo Airlines v. Kalpana Rani Debbarma &amp; Ors, the Hon’ble Court held, “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. We find that the order of the Commission holding the appellant as deficient in service is not sustainable in the absence of any clause in the work order that the specifications should remain the same even at the port of destination. Consequently, the present appeal is allowed and the complaint is dismissed.”