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.
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. 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:
"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 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.
Print Page
Supreme Court of India
Bharathi Knitting Company vs Dhl Worldwide Express Courier ... on 9 May, 1996
Bench: K Ramaswamy, F Uddin, G Pattanaik
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. 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:
"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 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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