Read Judgment: Sgs India Ltd. vs. Dolphin International Ltd 

Pankaj Bajpai

New Delhi, October 7, 2021: The Supreme Court has ruled that the onus of proof of deficiency in service is on the complainant in the complaints under the Consumer Protection Act, 1986 and it was the complainant who had approached the Commission, therefore, without any proof of deficiency, the opposite party could not be held responsible for deficiency in service. 

The Division Bench of Justice Hemant Gupta and Justice V. Ramasubramanian observed that 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, added the Bench. 

The observation came to be passed in reference to an appeal challenging an order passed by the National Consumer Disputes Redressal Commission, whereby the complaint filed by the respondent (Dolphin International) came to be allowed and the appellant (Sgs India) was directed to pay a sum of Rs.65,74,000 with interest @9% p.a. from the date of filing of complaint till realization, in addition to a direction to pay Rs.25,000 as cost to the complainant. 

The background of the case was that the appellant, a testing, inspection and certification company, was engaged by the complainant for providing services for inspection of groundnut procured by the complainant for the purpose of exporting the same. In pursuance of the same, 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 both of which were certified by the appellant. However, when the consignments reached their respective destinations, it was found to be not as per specifications.

With respect to Greece consignment, the issue was with regard to the size/count of peanuts. Whereas with regard to Netherlands, the consignment which reached the destination, reflected higher levels of Aflatoxin. 

After considering the engagement specifications, the Top Court found that the Commission had referred to the samples collected at the time of dispatch of consignments to Netherlands but the report of such samples had not been produced by the appellant to hold that the appellant was deficient in providing services.Thus, the Commission had erred in law to draw adverse inference against the appellant.

The Division Bench elaborated that the orders on the appellant to quality check the groundnuts did 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 had certified the weight, packing, quality and quantity of the consignment at the port of loading and there was no allegation that there was any deficiency either in respect of weight, packing, quality or quantity against the appellant. There was even no allegation that the directions regarding containers or packing were not complied with, added the Bench. 

The Top Court noted that 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, added the Court. 

The Apex Court therefore opined that 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. 

Accordingly, the Apex Court held that the Order of the Commission holding the appellant as deficient in service was 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.

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