2015 (1) TMI 1169 - SC - Indian Laws

Failure to discharge liability - Non payment of goods delivered - Goods delivered with Consignee Copies - According to the respondent, all the relevant documents including the CONSIGNEE COPIES of the consignment notes were duly communicated by the respondent through its banker to the Islami Bank Bangladesh Ltd. It is specifically averred in the complaint that the said transaction was originally covered by letter of credit opened by the said Islami Bank but the said letter of credit had expired. Therefore, the documents mentioned above were sent to the said banker on collection basis. - Islami Bank Bangladesh, though received all the documents sent by the respondent, did not honour the same and made no payment for a long time - Upon the return of the original documents by the Islami Bank, the respondent herein, by its letter, dated 12th July, 1993, called upon the appellant to rebook all the five consignments for transportation to New Delhi and deliver the same to the complainant at New Delhi . (Para 10 of the Complaint)) In response to the said letter, the appellant herein, by its letter, dated 22nd July, 1993, assured the respondent that all the five consignments would be rebooked for delivery at New Delhi. The appellant further called upon the respondent to surrender the original consignee copies alongwith the invoice copies and pay one side freight and octroi at its Ahmedabad office for rebooking . - National Commission held in favour of Respondent. Held that - The appellant did not plead as to what is the procedure prescribed under the law of Bangladesh for the unloading of the imported goods at its Customs Stations? Nor does the appellant give the details of the dates of the actual delivery of each of the 4 consignments at Bengapole - However, the appellant placed heavy reliance on a letter, dated 11-4-2002 allegedly written by some officer of the Customs Department of the Republic of Bangladesh at Beanpole addressed to the Joint Commissioner, Customs Department, Benapole - Jessore (Bangladesh). It refers to four bills of entry, dated 9-1-1993, 13-12-1992, 20-12-1992 and 11-2-1993. It is rather difficult to understand the content of this document, apart from the other problems with the document which shall be discussed later. It speaks about three bills of entry having had been accepted through three different shipping agents of M/s. Azim Garments Ltd., Dhaka. Of the 4th bill of entry having not being accepted, the goods were auctioned. It is difficult to understand what exactly is meant by accepting a bill of entry . At least, insofar as the Indian law is concerned, a bill of entry is a document, under Section 46 of the Customs Act, which is required to be presented by the importer. Section 47 stipulates that on receipt of a bill of entry, the proper officer, on being satisfied about the legality of the import and the factum of payment of the appropriate duty on the import of such goods, is required to clear the goods. Assuming that the law of Bangladesh is similar to the law of Customs in India, it is therefore, difficult to understand the content of the said letter. It speaks about acceptance of three bills of entry on different dates by three different shipping agents of M/s. Azim Garments Ltd. No explanation in the pleading as to what exactly is the implication of the statement extracted above is available. The document purports to be the internal correspondence between the two officers of the Customs department of Bangladesh, no doubt purportedly with a copy marked to the appellant herein. There is no pleading explaining the occasion for such a correspondence. The proof of public documents is required to be made in the manner specified under Section 78 of the Evidence Act. Sub-section (6) stipulates the mode of proof of public documents other than those mentioned in sub-section (4) of a foreign country. - defence of the appellant based on the letter, dated 10-4-2002 (supra) that the appellant had delivered four consignments entrusted to it by the respondent at the Benapole Customs Station, Bangladesh cannot be accepted. The subject of drawback is dealt under Chapter X of the Customs Act 1962. The expression drawback is not defined under the Act. Sections 74 and 75 create a right to claim a drawback . Section 74 entitles an exporter to claim the repayment/return (drawback) of 98% of any duty paid on material imported into India when again exported out of India subject to the various conditions specified under the Section and the Rules made thereunder. - it is not clear from the pleadings of the appellant whether the respondent herein claimed a drawback either under Section 74 or under Section 75. Be that as it may. In either case, the right to a drawback accrues to the exporter once the exporter makes an entry for export of the goods under Section 50 of the Act and on the making of an order by the proper officer under Section 51 permitting clearance and loading of the goods. Rules are made by the Government of India from time to time in this regard. The Rules currently in vogue are known as the Customs, Central Excise, Duty and Service Tax Drawback Rules, 1995 , which are made in exercise of the rule making authority conferred under the various enactments including the Customs Act. However, these rules are subsequent to the export transaction in question. Neither the relevant rules governing the situation on the date when the respondent claimed the drawback are placed before us nor is there any clear pleading by either party as to the relevant date on which such a claim for drawback could be made. We are not sure whether under the rules applicable to the transaction in question, whether it is the date of the actual delivery of the goods in the foreign country which entitles the exporter to file an application claiming drawback or is it the date of the entry of the goods for export from India. In the absence of any material on record such as the one indicated above, the mere fact that the respondent did claim (the respondent admitted that they did claim a duty drawback as alleged by the appellant) a duty drawback does not necessarily lead to the inference that the appellant had duly delivered the goods in question at Benapole Customs station. Under the 1995 Drawback Rules, which are in force today, Rule 13 stipulates that the claim for a drawback can be filed on the date when the proper officer makes an order permitting clearance and loading of the goods under Section 51 of the Act. We refer to Rule 13 not because it is applicable to the facts of the case, but only to demonstrate that the law clearly provides for the date and event, the happening of which, entitles the exporter for seeking the drawback. - In view of the fact that the appellant admitted the entrustment of goods by the respondent to the appellant for transportation to Benapole (Bangladesh), the burden to prove that the appellant satisfactorily discharged his legal obligation to deliver the goods at Benapole (Bangladesh) in accordance with law is on the appellant which burden the appellant failed to discharge. In our opinion, therefore, the National Commission rightly allowed the claim of the respondent. - Decided against appellant.

Summary

Issues Involved:
1. Validity of the National Commission's order directing the appellant to pay the respondent.
2. Whether the appellant fulfilled its contractual obligation to transport and deliver goods.
3. Admissibility and credibility of the appellant's documentary evidence.
4. Impact of the respondent's duty drawback claim on the case.

Detailed Analysis:

1. Validity of the National Commission's Order:
The appeal was filed under Section 23 of the Consumer Protection Act, 1986, challenging the National Commission's order dated 20th December 2006. The National Commission had directed the appellant to pay Rs. 29,74,321.45 with interest @ 12% per annum from the date of the complaint till realization, along with Rs. 25,000 as costs. The Supreme Court upheld the National Commission's order, finding no reason to interfere with the decision.

2. Fulfillment of Contractual Obligation:
The respondent, a manufacturer and exporter of yarn and fabric, had entrusted five consignments of goods to the appellant for transportation from Ahmedabad to Benapole, Bangladesh. The appellant admitted the entrustment but claimed that four consignments were delivered to Bangladesh Customs and the fifth was not exported due to rebooking instructions from the respondent. The appellant's defense was that its obligation ended upon delivery to Bangladesh Customs, but it failed to provide necessary documents like the BILL OF EXPORT and EXPORT REPORT to substantiate the claim of delivery.

3. Admissibility and Credibility of Documentary Evidence:
The appellant relied on three sets of documents (Annexures X, Y, and Z) and letters from Customs authorities to support its case. However, the National Commission found discrepancies in the invoices and consignment notes produced by the appellant, deeming them "bogus." The Supreme Court noted the lack of proper proof for these documents under Section 78 of the Evidence Act. Additionally, the letter from the Bangladesh Customs Department was not adequately proven and did not conclusively establish delivery of the goods.

4. Impact of Duty Drawback Claim:
The appellant argued that the respondent's claim for duty drawback under the Customs Act implied that the goods were exported. The Supreme Court clarified that the right to a drawback accrues upon the proper officer's order permitting clearance and loading of goods for export, not necessarily upon actual delivery in the foreign country. The Court found no clear evidence or relevant rules to support the appellant's inference that the duty drawback claim confirmed delivery.

Conclusion:
The Supreme Court dismissed the appeal, affirming the National Commission's decision. The appellant failed to discharge the burden of proving that it had fulfilled its legal obligation to deliver the goods at Benapole, Bangladesh. The respondent was entitled to the claimed amount with interest and costs as awarded by the National Commission.