SGS India Ltd. v. Dolphin International Ltd.
Background
Dolphin International had hired SGS India, an inspection and certification company, to inspect and certify groundnut consignments being exported to Greece and the Netherlands for quality, quantity, and aflatoxin content before shipment. When the consignments arrived at their destinations, independent labs found the peanut sizes and aflatoxin levels did not match SGS's certified figures, and Dolphin filed a consumer complaint alleging deficiency in service. The National Consumer Disputes Redressal Commission ruled in Dolphin's favour, ordering SGS to pay over Rs. 65 lakh with interest, and SGS appealed to the Supreme Court.
Decision Breakdown
The Supreme Court allowed the appeal, set aside the Commission's order, and dismissed the complaint. It held that the burden of proving deficiency in service lies on the complainant, and Dolphin had failed to produce evidence, such as test results of the samples SGS retained at the time of loading, showing that SGS's certification at the port of loading was itself wrong or different from what was shipped. The Court found that SGS's certificates covered only the condition of the goods at the point of loading in India, carried an explicit disclaimer about changes from storage and transportation conditions, and contained no obligation that the goods retain identical specifications after two months at sea; natural variation during transit could not be blamed on the inspector.
Lesson Learnt
In a consumer complaint, the person alleging deficiency in service must actually prove it with evidence: a certifying agency cannot be held liable merely because test results differ later at a different location, if its certificate only covered conditions at the time and place of its own inspection, with no promise about conditions after transit.