(1.) This complaint was answered by this Commission earlier vide order dated 17.2.2004. The complaint was partly allowed with the direction to the Opposite Party No. 2- Central Bank of India, Madurai branch, to pay a sum of Rs. 65,20,250/- alongwith interest @ 12% p.a. from 29.06.1995 till realization. Aggrieved by the said order, Central Bank of India filed Civil Appeal No. 5044 of 2004. The said appeal was decided by the Supreme Court vide order dated 28.7.2009. Supreme Court allowed the said appeal, set aside the order of this Commission dated 17.2.2004 and remanded back the matter to this Commission for fresh disposal of the complaint in accordance with Law after taking into consideration the judgment in the case of United Commercial Bank Vs. Bank of India & Ors., 1981 2 SCC 766 observing as under:-
(2.) In nutshell, the case of the complainant is that it deals in the business of manufacturing and marketing of Polyster Staple Fibre (PSF) being sold under the trade mark "Jailene". On 30.12.1994, the complainant received an order from Opposite Party No. 4- Sree Meenakshi Mills Ltd. for supply of "Jailene" Polyster Staple Fibre. In order to ensure the payment for the material to be supplied, the Opposite Party No. 4 had established an irrevocable Letter of Credit (LC) dated 19.4.1995 bearing No. 95-7 INLC 001 at Opposite Party No. 2 i.e. Central Bank of India, Madurai Branch. The said LC was amended on 7.6.1995. The LC so established guaranteed payment of the material supplied by the complainant to Opposite Party No. 4 on fulfillment of certain conditions fully recorded in the LC. Case of the Complainant is that during the period 13.6.1995 to 29.6.1995, it had forwarded 9 consignments of Polyster Staple Fibre to Opposite Party No. 4 through a certain road carrier and requisite documents viz signed copies of the invoices alongwith lorry receipts and other requisite documents were submitted to Opposite Party No. 2 through State Bank of India, Ghaziabad- the banker of the complainant for negotiating the said documents against the aforesaid LC and obtaining payment of the invoices. Opposite party No. 2 did not honor the said invoices which they were duty bound to do once all the conditions were complied with. It rather declined to make the payment of the invoices on certain wholly extraneous grounds that the documents submitted by the complainant through its banker did not conform to the terms and conditions of the LC. Some correspondence was exchanged between the complainant and the opposite parties in that behalf. Despite Opposite Party No. 4 having waived the alleged discrepancies in the documents furnished by the complainant, the payment was not released. The Opposite Party No. 3 did not the return unpaid documents to the complainant. Opposite Party No. 3, however, offered to settle the invoices and to remit the amount in case the Opposite Party No. 4 could settle by making payment to Opposite Party No. 2. Ultimately the documents were returned to the complainant unpaid through SBI, Ghaziabad. According to the complainant, the act of Opposite Party No. 3 in not honoring the documents submitted by the complainant was for wholly unjustified and untenable reasons in as much as there were no material discrepancy (s) in the said documents submitted by it and therefore the action of the Opposite party No. 3 would amount to negligence on their part tentamounting to deficiency in service for which they are liable to compensate the complainant. Complainant claimed a sum of Rs. 65,25,280/- as the sale price of the goods as per the 9 invoices alongwith interest @ 20.25% from 29.6.1995 till the date of realization besides a sum of Rs. 40.00 lakhs as damages for the financial loss of reputation suffered by the complainant due to the alleged gross deficiency in service on the part of the Opposite Party Nos. 2 & 3.
(3.) Complaint was resisted by the Opposite Party Nos. 1 & 2 by filing written version thereby raising certain preliminary objections about the maintainability of the complaint. On merits, any deficiency in service on the part of Opposite Party Nos. 1 & 2 has been categorically denied. It is, however, not disputed that Opposite Party No. 4 had opened the LC which contained the stipulation that the payment would be made on presentation of the requisite documents and compliance of the terms & conditions of the LC. It is also not disputed that the Opposite Party No. 2 received the documents from the complainant through its banker which were not immediately honored because there existed certain discrepancies in the invoices and lorry receipts submitted by the complainant and the complainant had not furnished the insurance policy or the certificate of insurance as was required. It is clarified that while doing so, the Opposite Party-Bank has followed the UCP 500 subject to which the LC was issued.