INDIAN BANK Vs. ALUMINIUM INDUSTRIES LTD.

JUDGEMENT

(1.) This appeal by the defendant, is against a judgment on remand, decreeing the suit.

(2.) The plaintiff, The Aluminium Industries, Kundara (called the 'Company' hereinafter) obtained a licence under the I.D.A. Scheme to import aluminium ingots. The company by Ext. D-2 letter dated 4th February 1966 requested the defendant, Indian Bank (called the 'Bank' hereinafter) to execute an undertaking to the foreign supplier M/s. Alcoa International, to effect the import. Accordingly, the bank issued Ext. D-18 dated 21st February 1966 undertaking to make remittances, to the foreign supplier. Two consignments of 350 tonnes and 300 tonnes were to be imported, one at the Port of Cochin, and the other at the Port of Calcutta respectively. By Ext. D-1 letter dated 10th May 1966 after placing the funds with the bank the company requested them to remit the Rupee equivalent of U.S.$ 165,853.97 to the Government for the consignment for Cochin. The letter also stated that the Hirakud Office, was placing the funds with the bank for remitting to the Government the Rupee equivalent of U.S.$ 145,447.50 for the Calcutta consignment. This was paid to the head office of the bank at Madras on 23rd May 1966. Despite this, the bank made the remittance only on 10th June 1966 i.e., 30 days after the amount for the Cochin consignment was received and 18 days after the amount for the Calcutta consignment was received. The company avers that there was an unjustifiable delay, on the part of the bank necessitating additional payments, consequent on intervening devaluation. If the bank was diligent, they would have made the remittances long before 10th June 1966. It is averred that the remittances for the Cochin consignment at least could have been made, as soon as the amount therefor was received on 10th May 1966. The bank itself, chose the treasury at Delhi for remittance instead of Madras where their head office was, of Cochin, The treasury declined to accept the remittance, as columns 3 and 6 of the chalan were not filled up though all the requisite details were available with the bank in Ext. D-2 dated 4th February 1966. The company would also point out that strong rumours about possible devaluation were afloat, as seen from Exts. P-4 to P-23. This should have made the bank more alert. The company would say that the bank, as its agent did not exercise due care, skill and diligence required of an agent, in remitting the amount with the result that the company had to expend an additional amount of Rs.8,78,286.23 by reason of the devaluation of currency in the meanwhile. The suit was for recovery of the said amount.

(3.) The bank would contend that a period of 120 days was available to them to make the remittance, that on receipt of Ext. D-1 dated 10th May, 1966 the Cochin branch addressed the head office at Madras, and that the head office acted promptly. According to them the delay was due to the treasury, refusing to accept the remittance for want of particulars. The bank then had to make a reference to Cochin, entailing some delay. They also say that the delay was "due to incomplete particulars given by the plaintiff (company)" (para 10 of the written statement). The Government of India should have been impleaded in the suit, the bank would say.