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KEY TAKEAWAYS

  • The Supreme Court observed that the opposite party cannot be held responsible for deficiency in service if the complainant approaches the National Consumer Disputes Redressal Commission without any proof of deficiency.
  • The following was observed by Justices Hemant Gupta and V. Ramasubramanian.
  • The apex court was hearing an appeal filed by SGS India Ltd challenging an order passed by NCDRC which directed them to pay Rs. 65.74 lakh with interest.

BACKGROUND

  • Dolphin International Ltd, the complaining company, hired SGS India Ltd to check groundnuts it had purchased for export to Greece and the Netherlands.
  • The appellant company is a testing, inspection, and certification firm that evaluates the quality and quantity of a variety of goods.
  • The appellant was in charge of inspecting samples and certifying them for certain groundnut characteristics.
  • SGS India Ltd, according to the complainant, inspected and analysed hand-picked and selected peanuts that were to be exported to Greece.
  • The peanuts came in two varieties: Bold and Java, and inspection certificates for quantity, quality, weight, and packaging were supplied.
  • When the cargo arrived in Greece, the complaint notified SGS India Ltd in respect of 20 full container loads, claiming that the size of the peanut count in 11 full container loads was contested.
  • Other containers for shipping to the Netherlands were subjected to a similar inspection, which revealed a greater amount of Aflatoxin, a naturally occurring by-product of mould that affects the crops.
  • The NCDRC determined that the appellant failed to present any evidence to support its claim that the amount of Aflatoxin in peanuts is altered by a variety of external elements such as weather, moisture, humidity, temperature, and storage conditions.
  • The Commission concluded that the appellant was highly negligent and inadequate in service since the number of Java-type peanuts and Aflatoxin concentration were greater than what was specified.

COURT’S OBSERVATION

  • The Supreme Court stated that the complaint bears the burden of proving that there was a failure in service, but that in the case at hand, the complainant has not shown the best evidence in support of its claim.
  • "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 an adverse inference against the appellant," the bench said.
  • The Supreme Court said that SGS India Ltd cannot be held liable for the excess Aflatoxin concentration.


Do you believe SGS India Ltd should have been held liable for the excess Aflatoxin content in the groundnuts?

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