CORPORATION BANK Vs. NAVIN J SHAH

JUDGEMENT

(1.) The respondent before us filed a petition before the National Consumer Disputes Redressal Commission (hereinafter referred to as 'the Commission') to claim that the respondent has been exporting tea to Sudan from 1970 till 1982. The respondent had effected exports of 13 consignments of tea to M/s. Sudan Tea Company, Khartoum, Sudan during the period between December 11, 1980 and March 2, 1981. The respondent who had credit facilities with the appellants entrusted the documents relating to export of tea for the purpose of realising the proceeds thereof from the consignee. The appellants issued advice of purchase of bills to the respondent in respect of the goods covered by several invoices. The appellants negotiated the documents relating to the exports effected by the respondent through M/s. EL Nilein Bank, Khartoum, Sudan (hereinafter referred to as 'the foreign bank'). The respondent claimed that he did not ask the appellants to negotiate the export documents through any particular bank in Sudan but the appellants on their own appointed the foreign bank for realising the export proceeds from the consignee; that the appellants had not at any time consulted or even obtained the respondent's opinion in the matter of appointing the foreign bank; that the appellants had to release the export documents to the consignee only on payment of the export value in U.S. Dollars and the instructions to release the shipping documents to the consignee to enable him to take delivery of the consignment as denoted by the expression cash against documents. It is further claimed that the appellants should not have realised the export documents without receiving the export value from the consignee in U.S. Dollars. It is contended that the invoices were realised in U.S. Dollars and the appellants could not have realised the export documents before ensuring that the export proceeds could be repatriated to India in U.S. Dollars. In accordance with the directions of the Reserve Bank of India in the matter of exports, the proceeds had to be realised and repatriated to India only in U.S. Dollars and not in any other currency. The appellants did not inform the respondent of any difficulties experienced by them in the matter of negotiations of the aforesaid export documents at any time prior to the completion of the exports covered by the invoices in question. Moreover, the appellants did not approach the respondent in effecting any changes in the authority given by it in the matter of negotiating the said documents. The respondent had taken insurance coverage for the exports effected by them from the Export Credit Gurantee Corporation of India Limited (hereinafter referred to as the Corporation) to cover the risks involved in the export business. After the respondent was advised by the appellants that they could not realise the export proceeds in U.S. Dollars due to certain restrictions imposed by the Sudan Government (sic) requested the respondent to approach the Corporation to settle the claim using the insurance policy taken by the respondent in respect of the goods covered by the documents in question. The Corporation finally paid ninety per cent of the export proceeds covered by the documents. The appellants illegally recovered the balance from the respondent by adopting the balance of ten per cent of the export value to the account of the respondent with them. The respondent also claimed a sum of Rs. 52,816.76p towards interest for the period until the insurance claim was settled by the Corporation. These amounts were debited to the account of the respondent. The appellants also recovered a sum of Rs. 97,482.19p towards foreign exchange fluctuations charges from the respondent. It was claimed by the respondent that the appellants had totally failed to execute the specific instructions of the respondent to realise the export documents to the consignee only after accepting in cash in U.S. Dollars but were negligent in handling the consignment given to them as a result whereof the goods released to the consignee without realising the export proceeds for and on behalf of the respondent. It was contended that the appellants had originally purchased the export documents and, therefore, the respondent could not have been held to be responsible for the delay in settling the insurance claim as also the fluctuation charges of foreign exchange from the respondent. The delay in the matter of repatriation of export proceeds are attributable to the appellants but the Reserve Bank of India had been pressursing the respondent for repatriation of the export proceeds. Therefore, it was claimed that an amount of Rs. 2,25,377.04p U.S. Dollars was due to the respondent towards the export proceeds from Sudan which were covered by the documents negotiated through the appellants. It was claimed that the respondent is a consumer under the Consumer Protection Act, 1986 and had hired the services of the appellants for consideration and there has been a total deficiency or absolute breach of agreement in the performance of the duty or otherwise in relation to the service rendered by the appellants. The appellants contended that the claim had become stale as it related to the years 1979 to 1982; that the matter did not fall under the provisions of the Consumer Protection Act and accordingly, the Commission had no jurisdiction; that there was no transaction with the respondent and the bank's customer was a firm carrying on business in partnership by name M/s. Javerilal and Sons and thus the respondent had no locus standi at all that there was no deficiency of service on the part of the appellant bank because it carried out its obligations by sending the document in the bill of exchange to the named bank in Khartoum, Sudan and as a collecting bank, it was not its responsibility to ensure that payments are collected. If and when the named bank in Sudan sent the amount the same will be to the benefit of the exporter; that in any case the exporter had received 90% of the value of the export from the Corporation and, therefore, the claim made in the petition was in excess of the actual loss suffered; that the appellant bank had already filed a suit against the export company including the respondent before the Sub-Court, Cochin in O.S. No. 48/92 on February 20, 1992 for recovery of about Rs. 18 lakhs due under various credit facilities.

(2.) The Commission, however, rejected the point relating to the limitation or that the claim being stale on the ground that the Reserve Bank of India has been pressurising the complainant before them for the repatriation of the export proceeds in U.S. Dollars and it is incumbent on the respondent to do so and the respondent has been obtaining the extensions from the Reserve Bank of India for realising the foreign exchange. Therefore, the amount due by way of foreign exchange is still outstanding and its recovery is not barred by limitation. On the other objection that the claim made in these proceeding was a subject-matter of a suit it was stated that the suit pertains to the recovery of the amounts due to the appellants under cash credit and packing credit loans given to the respondent. The cash credit loan was granted in 1989 while packing credit loan was granted in 1990 and 1991 whereas the transactions with which we are concerned in the present case were export of tea are in the year 1980-81. Thus the two matters had no connection.

(3.) On the merits of the matter, the Commission stated: