PARDES DEHYDRATION COMPANY vs STATE BANK OF INDIA

THIS is an appeal against the order dated 17th August, 1992 of the State Consumer Disputes Redressal Commission, Gujarat in Original Complaint No. 369/91 by which the complaint filed by the present Appellant (hereinafter referred to as Complainant) against the different branches of State Bank of India situated at Bombay, Ahmedabad, Rajkot (hereinafter referred to as opposite party Nos. 1 to 3 respectively) was dismissed with costs.

ACCORDING to the allegations in the complaint, the complainant Company is engaged in processing of fruits and vegetables including garlic and onions in the form of flakes and powders by dehydration process. It is export oriented manufacturing unit. The complainant sold about 50 tonnes of garlic flakes to one Japanese buyer in the year 1990. Being fully satisfied with the quality of goods being supplied, a repeat order of another lot of 50 tonnes of garlic flakes was placed by the said buyer and irrevocable Letter of Credit dated 30th May, 1990 for US $ 60,000 was sent in favour of the complainant. The complainant got intimation on Telex from the said buyer saying that Letter of Credit was opened and the same was sent by its banker, Mitusi Taiyo Kobe Bank, Tokyo, Japan. The said Bank sent Letter of Credit to opposite party No. 2. The complainant approached Opposite Party No. 2 and made enquiries on three or four occasions during the last week of May, 1990. It was stated by the concerned officer of opposite I party No. 2 that the said Letter of Credit was received by the bank but was misplaced and efforts were afoot to search it. Opposite party No. 2 did not send the Letter of Credit. The complainant was eager to get the Letter of Credit so that he could procure raw material from the market and manage for production to meet with such a huge order. The complainant addressed a letter to opposite party No. 2 on 21st June, 1990 and requested to send the said Letter of Credit to opposite party No. 3 at Rajkot. When it did not receive any response of the aforesaid communication, he went to opposite party No. 2. The concerned officer of the said Branch of the Bank stated that the said Letter of Credit was lost and advised the complainant to ask the Japanese buyer to arrange to retransmit the Letter of Credit. The complainant was also informed that a Telex has been sent by the Bank on 3rd July, 1990 to the foreign Bank saying that original Letter of Credit was lost and the same be retransmitted. The foreign Bank retransmited the Letter of Credit on 5th July, 1990 and an intimation to that effect was received by Telex by the complainant. The complainant approached opposite party No. 2 on 8th July, 1990 and enquired about the retransmitted Letter of Credit and he was informed that the same had been sent to him by post. The complainant waited upto 12th July, 1990 and made telephonic enquiries from opposite party No. 2 about the Letter of Credit which was not received by him by post. The complainant also went to the Rajkot Post Office and enquired if any mail from opposite party No. 2 had been received but he was told that no such mail has been received. In the meanwhile, the Japanese buyer telephoned on 14th July, 1990. The complainant informed him about the non-receipt of the Letter of Credit. The Japanese buyer then sent Telex on 16th of July, 1990 to the complainant saying that the Telex had been sent to opposite parties Nos. 2 and 3 asking them to send the Letter of Credit in question to the complainant. On 21st July, 1990, the complainant sent a telex to opposite party No. 2 requesting it to send the Letter of Credit immediately and further pointed out that due to non-receipt of the Letter of Credit the business of the complainant was suffering. Opposite party No. 3 sent an advice dated 30th July, 1990. According to the said advice a sum of Rs. 26/- was debited to the complainant''s account being its commission. Alongwith the said advice the complainant also received the Letter of Credit. It appeared that opposite party No. 2 had sent the said Letter of Credit to its Deesa Branch on 6th July, 1990 which in turn sent it to opposite party No. 3. According to the complainant opposite party No. 2 did not exercise due care and caution and lost the Letter of Credit and did not give proper and prompt reply to the enquiries made by him. Again when the Letter of Credit was retransmitted the same was negligently sent to its Deesa Branch. The Letter of Credit was valid for four months only and two months had already gone due to the negligence on the part of opposite party No. 2. As a consequence it was not possible for the complainant to procure garlic from the market and manufacture the ordered goods as the price of the garlic had in the meantime gone up. The delivery period was also got curtailed due to the delay in getting the Letter of Credit. Thus the complainant was unable to do business in respect of the aforesaid order. He suffered losses and asked for the damages vide letter dated 30th July, 1990 sent to opposite party No. 1. The said letter was forwarded by the Deputy Managing Director (Commercial Banking) of the opposite party No. 1 to the Chief General Manager, State Bank of India, Ahmedabad for necessary action. The Deputy General Manager of opposite party No. 2 addressed letter dated 10th September, 1990 admitting to have lost the Letter of Credit and then upon having received the retransmitted Letter of Credit on 6th July, 1990, the same was wrongly sent to Deesa Branch. The complainant vide his letter dated 18th September, 1990 addressed to the Deputy General Manager, State Bank of India, Ahmedabad claimed Rs. 5.00 lakhs as damages due to the sheer and gross negligence on the part of the opposite party No. 2. The complainant vide his letter dated 28th September, 1990 addressed a communication to opposite party No. 2 in which an offer was made by the complainant to arrive at an amicable resolution and it was offered by the complainant that the opposite party should arrange for the packing credit of Rs. 5.00 lakhs against the Letter of Credit in question upto 31st March, 1991 as an amicable settlement subject to extension of the Letter of Credit by the foreign buyer. Vide letter dated 27th October, 1990 the opposite party No. 2 denied its liability for the loss suffered by the complainant and the suggestion/formula for granting export packing credit of Rs. 5.00 lakhs was also rejected. The complainant prayed for the grant of Rs. 3,10,000/- as compensation for suffering monetary loss and for mental torture and agony. According to the complainant he had suffered monetary loss due to the sheer and gross negligence and deficiency in the service on the part of the opposite parties. The complaint was contested by opposite parties. It was admitted that the Letter of Credit was sent to the Deesa Branch by mistake but it was pleaded that the message was sent to the complainant by telephone on 6th July, 1990 to the effect that repeat message from issuing Bank has been received. According to the opposite party this telephonic message was enough and sufficient for the complainant if he wanted to avail of the Letter of Credit and to do its business as per contract. It was also averred that the complainant was informed of the retransmitted Letter of Credit by the Japanese importer by Telex on 16th July, 1990. The Letter of Credit was further extended till January, 1991 and the complainant could have executed the order but he chose not to do so. The underlying plea is that the complainant had not sufficient funds to execute the order. The complainant has received financial facility from Bank of India, Gonda Branch but it was not able to pay up that amount and the Bank has filed a suit for recovery of outstanding amount against the complainant. Similarly the complainant had defaulted to pay overdraft over T.P.R. froun Union Bank of India and the Bank has initiated legal proceedings against the complainant. Other instances were also cited to show that the complainant could not execute the order on account of litigation pending against it and due to financial problems. The State Commission held that: 1. That the Bank had not received any consideration and the amount of Rs. 26/- was charged only as incidental expenses in respect of post and telephone. 2. The complainant is not a consumer qua the opposite party as the contract was between the buyer and the foreign Bank and the foreign Bank has approached the State Bank of India, thus there was no privity of contract between the complainant and the opposite parties. 3. The complainant had no stocks to execute the order. No evidence was produced to prove that the price of garlic had arisen. 4. That there was no deficiency in service on the part of the opposite parties and the complainant had been informed on telephone as well as by telex about the retransmitted Letter of Credit which later on had been extended upto January, 1991.

As a result of the above finding, the State Commission dismissed the complaint. Feeling aggrieved the Complainant has filed this appeal.

WE have heard the learned Counsel for the parties and gone through the records. At the outset we say that we are not prepared to accept the finding of the State Commission that the complainant is not a consumer. Though the Letter of Credit was issued by a foreign Bank but it was transmitted to the State Bank of India. The complainant was the beneficiary under that Letter of Credit. Thus the complainant becomes, ''consumer'' as defined is Section 2(1 )(d)(ii) of the Consumer Protection Act.

THE finding of the State Commission that the Bank is not negligent in rendering the service also cannot be upheld. The Bank''s case is of course to the effect that the original Letter of Credit was not received by opposite party No. 2. As appear from the letter dated 11th September, 1990 (at page 52 of the paper book) written by the Regional General Manager to the complain- | ant, it is mentioned that on verification of books J and records, it was found that the Letter of | Credit cited as subject had not been received but j on 2nd July, 1990 when the representative of the complainant again called on opposite party No. 2 and reported that he had enquired about the Letter of Credit at the local Head Office and was I told that it had been received but misplaced/ lost and as per his statement L.C. opening Bank was requested by telex to repeat the message on I the telex machine and they repeated message on I 5th July, 1990 which was promptly advised to the complainant on 6th July, 1990 through the Rajkot Branch and this information was also given to him on phone. However, in this letter it is admitted that due to oversight this repeat Letter of Credit was indavertently despatched to the Deesa Branch and on receiving back the L.C. from that Branch it was immediately redirected to the Rajkot Branch and this has resulted in some delay. So far as the despatch of the Letter of Credit to Deesa Branch is concerned the bank is clearly negligent in discharge of its duties. As noticed above the repeat Letter of Credit was received on 5th July, 1990 and it was sent to the complainant on 30th July, 1990 when it was received back from the Deesa Branch. Though the complainant is said to have been informed on telephone and by post about the receipt of repeat Letter of Credit but on the basis of that information the complainant could not raise loan from other bank. Moreover there is no ground for disbelieving the complainant''s allegation that opposite party No. 2 had misplaced/ lost the original Letter of Credit as told to him by the official concerned of that branch of the Bank. If this allegation was not true, the Bank would not have sent a telex on 3rd July, 1990 to the Opening Bank to retransmit the Letter of Credit. Thus the Bank was definitely, negligent and deficient in rendering banking service. However, the question that arises is j whether the complainant has suffered any loser on account ;f "his negligence of the Bank. Under* Section 14(2) of the Consumer Protection Act the consumer can be awarded compensation for loss or injury suffered by him due to the negligence of the opposite party. In the present case there is no evidence to show that prices of garlic had risen and the complainant was unable to execute the order. As noticed above the Letter of Credit had been extended up to January, 1991. As admitted by the complainant vide his letter dated 28th September, 1990 his bankers had refused to grant any further loan for executing this order. He, therefore, requested the State Bank of India to arrange for packing credit of Rs. 5.00 lakhs against the said Letter of Credit upto 31st March, 1991. These facts clearly show that though the Letter of Credit has reached the complainant on 30th July, 1990 he was unable to execute the order for want of money. The plea that the price of garlic had risen appears to be false one otherwise the complainant would not have asked for packing credit of Rs. 5.00 lakhs from the State Bank of India. Hence we hold that the complainant has failed to prove that he has suffered any loss or injury due to the negligence in the rendering of service by the opposite parties. Accordingly we do not find any force in the present appeal and dismiss the same but make no order as to costs.