Bharathi Knitting Company vs Dhl Worldwide Express Courier ...

on 9 May, 1996

Supreme Court of India

Bharathi Knitting Company vs Dhl Worldwide Express Courier ... on 9 May, 1996
Bench: K. Ramaswamy, Faizan Uddin, G.B. Pattanaik
PETITIONER:
BHARATHI KNITTING COMPANY

Vs.

RESPONDENT:
DHL WORLDWIDE EXPRESS COURIER DIVISION OF AIRFREIGHT LTD

DATE OF JUDGMENT: 09/05/1996

BENCH:
K. RAMASWAMY, FAIZAN UDDIN, G.B. PATTANAIK

ACT:

HEADNOTE:

JUDGMENT:

O R D E R Leave granted.

We have heard learned counsel on both sides. This appeal by special leave arises from the appellate
order of the National Consumer Disputes Redressal Commission, New Delhi dated 17.1.1996 made
in FA No.317 of 1993 which in turn reversed the order of the State Forum Commission, Madras in
O.P. No.364/93 dated June 9, 1993. The admitted facts are that the respondent-plaintiff
manufacturer appears to have an agreement with a German buyer for summer season, 1990 and
consigned certain goods with documents sent in a cover on May 25, 1990 Containing (1) invoice
No.32; (2) packaging list; (3) Original Export Certificate and certificate of origin No.T/WG/001316
dated 24.5.90; and (A) Original GSP Form A No.E1. It would appear that the cover did not reach the
destination. Consequently, though the duplicate copies were subsequently sent by the date of receipt
of the consignment, the season was over. Resultantly, the Consignee agreed to pay only DM
35,000/- instead of invoice value DM 56,469.63. As a result, the appellant laid the complaint before
the State Commission for the difference of the loss incurred by the respondent in DM 21,469.63
equivalent to Rs.4,29,392.60 which was ordered. The respondent carried the matter in appeal. The
National Commission in the impugned order held that since the liability was only of an extent of US
$ 100 as per the receipt, the appellant is entitled for deficiency of service only to that extent which is
equivalent to Rs.3,515/- with interest at 18% from May 25, 1990 till date of realisation with cost.
Thus, this appeal by special leave.

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 Bharathi Knitting Company vs Dhl Worldwide Express Courier ... on 9 May, 1996

It is contended by Mr. M.N. Krishnamani, learned senior counsel appearing for the appellant that
the Consumer Protection Act, 1986 (for short, the 'Act') is a beneficial legislation envisaged to accord
expeditious and inexpensive relief to the consumer; when the Commission gave a finding that there
was a deficiency in service, the National Commission was wrong in law to reduce the liability of US
$100 Contained in the receipts There is no consensus ad idem between the appellant and the
respondent who is a courier vis-a-vis the appellant. Therefore, the National Commission was wrong
in awarding deficiency amount only to the extent of US $100. He seeks to contend that until there is
an agreement by the appellant by consensus at idem with the respondent for carriage of the invoice
with limited liability, it must be presumed that in the event of nor- delivery of the cover thereof, the
resultant damages must be born by the courier. The State Commission would be entitled to award
the difference of the damages to the appellant. The State Commission, therefore, was right in
awarding the damages. We find no force in the contention.

It is true that the Act is a protective legislation to make available inexpensive and expeditious
summary remedy. There must be a finding that the respondent was responsible for the deficiency in
service, the consequence of which would be that the appellant had incurred the liability for loss or
damages suffered by the consumer due to deficiency in service thereof. When the parties have
contracted and limited their liabilities, the question arises: whether the State Commission or the
National Commission under the Act could give relief for damages in excess of the limits prescribed
under kha Contract?

It is true that the limit of damages would depend upon the terms of the contract and facts in each
case. In Anson's Laws of Contract, 24th Edn. at page 152, on exemption clause with regard to notice
of a printed clause, it was stated that a person who signed, a document containing contract and
terms is normally bound by them even though he has not read them, and even though he is ignorant
of their precise legal effect. But if the document is not signed, being merely delivered to him, then
the question arises: whether the terms of the contract were adequately brought to his notice? The
terms of the contract have elaborately been considered and decided, The details thereof are not
necessary for us to Pursue. It is seen that when a person signs a document which contains certain
contractual terms, as rightly pointed out by Mr. R.F. Nariman, learned senior counsel, that normally
parties are bound by such contracts it is for the party to establish exception in a suit. When a party
to the contract disputes the binding nature of the signed document, it is for him to prove the terms
in the contract or circumstances in which he came to sign the documents need to be established. The
question we need to consider is; whether the District Forum or the State Commission or the rational
Commission could go behind the terms of the contract? it is true, as contended by Mr. M.N.
Krishnamani, that in an appropriate case, the Tribunal without trenching upon acute disputed
question of facts may decide the validity of the terms of the contract based upon the fact situation
and may grant remedy. But each case depends upon fits own facts. In an appropriate case where
there is an acute dispute of facts necessarily the tribunal has to refer the parties to original civil
Court established under the CPC or appropriate State law to have the claims decided between the
parties. But when there is a specific term in the contract, the parties are bound by the terms in the
contract. The National Commission in the impugned order pointed out as under:

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 Bharathi Knitting Company vs Dhl Worldwide Express Courier ... on 9 May, 1996

"We have considered the submissions of the counsel for the parties on the facts of the
case and having regard the earlier decisions of this Commission. The consignment
containing the documents sent in the cover had been accepted by the Appellant and
was subject to the terms and conditions mentioned on the consignment note. The
Complaining the documents sent in the cover had been accepted by the Appellant
and was subject to the terms and conditions mentioned on the consignment note .
The Complainant had signed the said note at the time of entrusting the consignment
and had greed to and accepted the terms and conditions mentioned therein. Clauses
5 and 7 of the terms and conditions as also the important notice mentioned on The
consignment note are reproduced below:

Clause 6: "Limitation of liability: Without prejudice to clause 7 the liability of DHL

for any loss or damage to the shipment, which term shall include all documents or
parcels consigned to DHL under this Air bill and shall not mean any one document or
envelope included in the shipment is limited to the lesser of

a) US $ 100

b) The amount of loss or damage to a document or parcel actually sustained or

c) The actual value of the document or parcel as determined under Section 6 hereof,
without regard to the commercial utility or special value to the shipper.

Clause 7: Consequent damages excluded: DHL shall not be liable in any event for any
consequential or special damages or other indirect loss however arising whether or
not DHL had knowledge that such damage might be incurred including but not
limited to loss of income, profits interest, utility or loss of market. Important Notice:
by the conditions set out below DHL and its servants and agents are firstly not to be
liable at all for certain losses and damages and secondly wherever they are to be liable
the amount of liability strictly limited to the amount stated in condition and
customers are therefore advised to purchase insurance cover to ensure that their
interests are fully protected in all event. Under clause 5 of the terms end conditions of
the contracts the liability of the Appellant for any loss or damage to the consignment:
was limited to US $ 100. Clause 7 of the contract specifically provided that the
liability of the Appellant for any consequential or Especial damages or any otter
indirect loss, that may occur including the loss of market or profits etc. was excluded.
It is also pertinent to note that despite the advice in the important notice, the
Complainant did not did one at the time or Consignment the contents of the cover
and also not purchased the insurance cover to ensure that their interests are fully
protected in all events."

In view of the above consideration and findings we are of the opinion that the national Commission
was right in limiting the liability undertaken in the contract entered into by the. parties and in
awarding the amount for deficiency service to the extent of the liability undertaken by the

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 Bharathi Knitting Company vs Dhl Worldwide Express Courier ... on 9 May, 1996

respondent. Therefore, we do not think that there is any illegality in the order passed by the
Commission. Shri Krishnamani has brought to our notice that there are number of judgments
covering divergent views. In view of the view we have expressed above, it is now settled law and the
Tribunals would follow the same. Lastly, it is Contended that besides the amounts awarded by the
State Commission, liberty may be given to the. appellant to pursue the remedy available in law. It is
needless to mention that the remedy available at law would be pursued accordingly to law.

The appeal is dismissed. No costs.

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