J.S. Global vs STATE BANK OF HYDERABAD

COMPLAINANT /Appellant firm has filed this Appeal against the judgment and order dated 16.11.2006 passed by the State Consumer Disputes Redressal Commission, Delhi (in short, ''the State Commission '') in Complaint Case No. 373/1998 whereby the State Commission partly allowing the complaint has directed the Respondent Bank to pay a lump sum compensation of Rs. 25,000 to the Appellant.

COMPLAINANT /Appellant partnership firm was engaged in the business of export of garments and was holding irrevocable Letter of Credit bearing No. L76-9640 dated 8.12.1997 issued from foreign bank Belgolaise S.A. London Branch corresponding to Canara Bank, foreign department (main), 6, Bhagwan Dass Road, for the purpose of negotiations of documents pertaining to the material exported by the Appellant. Appellant was maintaining a current Account No. 335730 with the Respondent Bank and was availing its services for negotiating the documents relating to the material exported by it to the Great Britain. On 28.4.1998, Appellant deposited two sets of documents with the Respondent Bank for presentation to the consignees '' Bank at Germany. Respondent Bank handed over the said documents to the Courier, DHL Worldwide Express for onward delivery to the consignees '' Bankers. The documents were lost in the transit by the Courier company and could not be presented to the consignees '' bank as a result of which no payment was received by the Appellant. Since as per Foreign Exchange Rules, the account holder was required to produce the second set of documents to the bankers for collection of money from the foreign buyer, Respondent Bank vide letter dated 29.1.1998 requested the Appellant to furnish the second set of documents but instead of furnishing the second set of documents, Appellant approached the Reserve Bank of India. vide letter dated 12.1.2000, RBI advised the Appellant to submit a duplicate set of documents and to make sincere efforts by pressurizing the buyer for realization of outstanding export proceeds. However, only after lapse of two years, Appellant submitted the second set of documents but the foreign buyer refused to make the payment as the Letter of Credit had already expired. Complainant, being aggrieved, filed the complaint before the State Commission.

RESPONDENT Bank, on being served, entered appearance and filed its written statement taking the preliminary objection that the complaint was not maintainable before the State Commission as no consideration was paid by the Appellant for negotiating the documents and taking steps for collecting the export proceeds. On merits, it was pleaded that the Respondent was not under any obligation to give any credit in the current account of the Appellant unless the amount is received from the drawee of the bills; that the Respondent had no liability in case the documents are lost in transit since the documents were sent through courier at the risk of the Appellant; that despite the request of the Respondent. Appellant did not furnish the duplicate set of the documents immediately for collection of the export proceeds; that after lapse of two years the Appellant supplied the duplicate set of the documents on advice of RBI but the buyer refused to make the payment as the LOC had already expired; that as the goods had already been delivered to the consignee, Appellant must have received the payment directly from the consignee; that the Respondent was not liable to pay the cost of the consignment due to no-delivery of documents.

STATE Commission, after taking into consideration the material available on record, the pleadings and the evidence led by the parties, came to the conclusion that there was no contract between the parties to the effect that if the Respondent Bank failed to deliver the documents to the buyer, it would be liable to indemnify the costs of the consignment. However, the State Commission held the Respondent Bank guilty of deficiency in service in not delivering the documents to the foreign buyer. Accordingly, State Commission partly allowed the complaint and directed the Respondent Bank to pay a lump sum compensation of Rs. 25.000 to the Appellant. State Commission observed thus: "It is a settled proposition of law that the parties are governed by the terms of contract. While availing the services of O.P. Bank the contract between the complainant and the O.P. Bank did not contain any term that in case O.P. Bank fails to deliver the documents to the buyer it shall be liable to indemnify the cost of the consignment. Therefore, the compensation as to the deficiency in service is to be assessed and ascertained in terms of the contract. Since the direct contract for transmission of documents to the consignees '' bankers was between the O.P. Bank and the complainant and not between the complainant and the courier, therefore, O.P. Bank is not liable to the complainant for any deficiency in service. Admittedly, in the instant case, the documents could not be delivered. So much so, the complainant also took inordinately long time for handing over the duplicate set of documents. In the absence of any particular contract between the parties as to the liability of OP Bank to compensate the complainant in respect of the cost of the consignment, the O.P. Bank could be at the most held guilty of deficiency in service in not delivering the documents given to it by the complainant to the buyer. O.P. Bank has independent remedy against the Courier service for their deficiency in service unto O.P. Bank. "

Respondent Bank has accepted the order passed by the State Commission and did not file any appeal. However, Appellant/Complainant, being aggrieved, has filed the present seeking enhancement of the compensation. We have heard the learned Counsel for the parties at length.

IT is not disputed before us that the Appellant submitted two sets of documents to the Respondent Bank on 28.4.1998 for presentation to the consignees '' bank at Germany. Respondent handed over the said documents to the Courier, DHL Worldwhile Express for onward delivery to the bankers. The documents were lost by the courier company in transit.

WE agree with the view taken by the State Commission that the Respondent Bank was not liable to pay the cost of consignment to the Appellant due to non-delivery of the documents. Respondent Bank, at the most, can be held deficient in service in not delivering the documents to the consignees '' banker for which State Commission has awarded a lump sum compensation of Rs. 25,000 to the Appellant. Even as per the Foreign Exchange Rules, if the original negotiable instrument is lost, the drawer of the instrument is under the legal obligation to issue the duplicate of the same and the beneficiary can claim payment of the same on the basis of such duplicate documents. Respondent vide letter dated 21.10.1998 requested the Appellant to furnish/issue the duplicate documents to enable it to send the same to the learned Counsel opening bank for realization of the dues of the Bills but the Appellant furnished the same after lapse of a period of two years on the intervention and advice of Reserve Bank of India. Had the Appellant furnished the duplicate documents immediately, the Respondent Bank would have been able to collect the export proceeds from the foreign buyer. Moreover, the Letter of Credit was governed with the provisions of Uniform Customs and Practices for Documentary Credit No. 500. As per the UCPDC No. 500, the Respondent Bank was not liable for the loss suffered by the Appellant on account of non-delivery of the documents to the consignees '' banker. UCPDC No. 500 reads as under: "Banks assume no liability or responsibility for the consequence arising out of delay and/or loss in transit of any message(s)/letter(s) or document(s) or for delay, mutilation or other error(s) arising in the transmission of any telecommunication. Banks assume no liability or responsibility for errors in translation and/or interpretation of technical terms, and reserve the right to transmit credit terms without translating them. "

IT is not the case of the Appellant that at any stage before the learned Counsel was acted upon, the Appellant had got the clause regarding the applicability of the provisions of UPCDC deleted. Once the said terms and conditions were accepted and the Appellant had required the Respondent Bank to negotiate the documents in terms of the said learned Counsel, the Appellant had agreed to absolve the Respondent from any liability in case of loss of document in transit. State Commission has rightly concluded that the Respondent Bank was not liable to pay the cost of the consignment due to non-delivery of the documents. However, State Commission directed the Respondent to pay compensation of Rs. 25,000 for the deficiency in not delivering the documents to the consignees '' bank. We are of the view that no ground is made out for enhancement of the compensation. For the reasons stated above we do not find any merit in the appeal and dismiss the same with no orders as to cost. Appeal dismissed.