VISTA INTERNATIONAL Vs. CORPORATION BANK

JUDGEMENT

(1.) COMPLAINT was filed, utter alia, alleging that the complainant has been carrying on business of import and export of various merchandise since 1992. M/s. Pure Food Ltd., Dubai is one of the buyers of the complainant for purchase of chilies, cardamom turmeric and coriander seeds, etc. Complainant sold 25 metric tons of coriander seeds machine cleaned new crop � US $ 465 per MT and 50 metric tons @ US $ 490 per MT on C and F terms from Mumbai. Said buyer was to take open insurance policy covering the transit risks. Letter of credit bearing No. 177/LC 9400893 opened by the said buyer earlier for US $ 37,500 on Standard Chartered Bank, for supply of 50 MTs. coriander seeds Dubai was amended by the issuing bank through its Mumbai Branch on 11.4.1994 for supply of 75 MTs. of coriander seeds and period of shipment was extended upto 8.4.1994. It was alleged that the opposite party was the nominated bank of the issuing bank - Standard Chartered Bank, Dubai. Complainant shipped by vessel m.v. "G' Mother" from Mumbai to Dubai three consignments of 25 MTs. each of the coriander seeds under invoice Nos. PFL/ 044/94, PFL/045/94 and PFL/046/94, all dated 16.5.1994. M/s. Multimode Maritime Agencies Pvt. Ltd. local agent of the said ship issued three bills of lading, all dated 20.5.1994. It was stated that the complainant presented the documents relating to two consignments on 21.5.1994 and one remaining consignment on 26.5.1994 to the opposite party for negotiation. Said buyer had taken three marine certificates under open policy No,. M/open/1357/91 from M/s. Alliance Insurance covering the transit risks, on 27.5.1994, opposite party credited the amount of Rs. 11,53,573 to the complainant's account and forwarded the relevant documents for collection to the said issuing bank. On 2.6.1994 the ship sailed from Mumbai to Dubai. During voyage, water entered into the ship compelling the crew to abandon her at the high seas. Since the ship was drifting the Indian Navy towed it to Porbander. Assistant Collector and Sub Divisional Magistrate, Porbander was appointed as receiver of the wreck and cargo on board of the ship. By a fax dated 18.6.1994, complainant called upon the said buyer to accept the documents and lodged claim under the policy with the Insurance Company. The buyer declined to accept the documents and/or prefer claim on ground of cargo having not reached Dubai. Pursuant to the notice published in Times of India, dated 5.8.1994 the complainant lodged claim with the said receiver for the value of the bills drawn on the buyer. Complainant also called upon the issuing bank to lodge claim with the insurer. By the letter dated 16.8.1994 the opposite party bank informed the complainant in regard to issuing bank having rejected the documents on account of discrepancies. Discrepancies pointed out were that the expiry date of the produce was given as 16.3.1997 instead of March, 1996 and the name of manufacturer/producer was not furnished. It was pleaded that by the letter dated 24.8.1994 the opposite party without waiting the settlement asked the complainant to pay back the money paid. Due to pressure exerted by the bank the complainant paid amount of Rs. 4,15,000 upto 24.4.1995. Complainant later on paid the entire amount together with interest @ 19% p.a. Alleging deficiency in service on part of opposite party the complainant sought direction to the opposite party to pay amount of Rs. 41,07,733 as detailed in para No. 15 of complaint along with interest @ 18% p.a. from date of complaint upto the date of payment and also cost.

(2.) OPPOSITE party contested the complaint by filing written version. By way of preliminary objection, it was alleged that complaint is barred by limitation under Section 24 A of the Consumer Protection Act, 1986 (for short the 'Act') as also bad for non-joinder of LC issuing bank, LC opener and the buyer. On merit, it was not disputed that letter of credit No. 177/LC/9400/ 893 for US 37,500 was opened by the buyer for supply of 50 MTs. of coriander seeds which was amended on 11.4.1994 to cover the supply of 75 MTs. by the Standard Chartered Bank, Dubai as alleged. However, it was denied that answering opposite party is the nominated bank of the issuing bank to negotiate the documents. It was alleged that complainant presented the documents in respect of three consignments on 27.5.1994 for negotiation and the replying opposite party pointed out to the complainant discrepancies therein pertaining to manufacturer's name not being furnished and expiry date of products being 15.3.1997 as against 15.3.1996 as stipulated in the letter of credit. It was claimed that at the request of complainant the answering opposite party agreed to negotiate the documents under reserve notwithstanding the discrepancies on furnishing indemnity by the complainant. Complainant executed three letters of indemnity. It was stated that issuing bank pointed out the same discrepancies as also applicant of the LC refused to accept the documents. On receipt of intimation dated 7.6.1994 as to rejection of the documents by issuing bank the replying opposite party informed to the complainant on telephone on 8.6.1994. Thereafter, on 13.8.1994, LC issuing bank returned the documents to the opposite party who in turn intimated about the return to the complainant by the letter dated 16.8.1994. It was stated that replying opposite party lodged claims with the Insurance Company and the Receiver at the instance of complainant. Issuance of letters asking the complainant to repay the amount paid was admitted. It was stated that the documents under LIC were negotiated only under reserve and after obtaining indemnity from the complainant. Liability to pay the demanded amount was emphatically denied.

(3.) COMPLAINANT alleges that the opposite party was the nominated bank of the issuing bank i.e., Standard Chartered Bank, Dubai which fact is denied by the opposite party. Thus, the controversy between the parties mainly revolves around the issue if the opposite party bank acted either as a 'nominated bank' or 'advising bank' in the transaction.