HEIGHTS TRADE PVT. LTD. Vs. UCO BANK

JUDGEMENT

(1.) The main question which falls for consideration is, "Whether this 'complaint' is maintainable, before this Commission?". M/s. Heights Trade (P) Ltd., the complainant in this case, in May-June, 2013, obtained orders from abroad for export of rice IR 36 quality, for a total consideration of USD 10 Million, (INR 55 crores). Copy of the contract is placed on record, as Annexure-1. The complainant booked forward contracts with UCO Bank, OP1, to secure exchange rate of amount, equivalent to export orders at the time of signing export contracts at the hedging rate as available and applicable on that particular day, which varies from USD 1, equivalent of INR 55.07 to Rs.61.76. The complainant had ensured that whatever was the exchange rate applicable on the date of establishing of foreign contract, would be the rate ensured by the Bank, on the date of receiving the remittance of price of exported goods. It is averred that to explain the norms regarding such forward contracts for exchange value, it may be considered as an example that if any exporter is expecting to receive USD 2,00,000 during the month of August, 2013, then he enters into a contract with the Bank to sell to the Bank, the said amount of USD 2,00,000, at an agreed exchange rate, on the agreed future scheduled date of receiving the price of exported goods whole or in part. The remittance could come at any time during the forward contract period, i.e., up to the specified date and credit would be given at the agreed forward contract rate.

(2.) The forward contract could be terminated freely at any time, in advance of the expiry of the contract, subject only to the condition that where the contract is reduced in writing, providing for payment of difference, either way, viz., if the exchange value has gone up, then the bank will debit the difference between the assured rate and the current value on the date of cancellation, and in case, the rupee gains against the dollar, then, even in the event of pre-cancellation, the exporter will get credit of the difference.

(3.) However, no contract document was ever signed between the complainant and the OP. There was simply an e-mail from the Bank's side which also does not, either recite or even refer to general terms and conditions. In the absence of any contract, in writing, it is for the OP Bank to justify under what general principles of law, it is entitled to charge from the complainant, the difference in the rate of USD, as agreed at the time of forward contract and as prevailing on the scheduled date of receipt of price from abroad. The forward contracts were booked not only upon complainant's request but to increase the revenue generation of the Gurgaon Branch of OP Bank. On coming to know of complainant's huge turn-over from exports, the Gurgaon Branch, offered hedging facility in relation to the anticipated receivables from the export business, even though complainant was an absolutely new company and new business which was less than one year old, with no track record of three years', as required by RBI. Copies of e-mails have been placed on record as Annexure 2.