PARDES DEHYDRATION COMPANY vs State Bank of India

THE Complainant is a partnership firm and is engaged in processing fruits and vegetables including garlic and onion in the form of flakes and powder by dehydration process. It is alleged to be export oriented manufacturing unit having its dealing in foreign countries. THE Opponent No. 1 is the Bank, Opponent No. 2 is the International Banking Division and Opponent No. 3 is the local branch at Rajkot. It is alleged that the complainant sold about 50 tones of garlic flakes to a Japanese buyer in the year 1990. He received repeat order for another lot of 50 tones and irrevocable letter of credit dated 30.5.90 for US $ 60,000 was sent in favour of the complainant. THE complainant has further averred that the said buyer sent the letter of credit to the Opponent No. 2 Bank and the complainant got intimation by telex from the buyer saying that the letter of credit was opened and same was sent by its bankers Mitsui Taiyo Kobe Bank, Kokyo, Japan. THE complainant approached Opponent No. 2 Bank at Ahmedabad branch and made enquiries for about three four times during the last week of May 1990. He was informed that the letter of credit was received by the Bank but was misplaced and efforts were afoot to search it out However letter of credit was not sent by Opponent No. 2 Bank and the complainant was eager to get the letter of credit so that he can get raw material from the market and manage for production to meet with such huge order. THE complainant therefore sent a communication on 21.6.90 to Opponent No. 2 Bank and requested to send the said letter of credit through the Opponent No. 3 at Rajkot. THEreafter there is a correspondence and he went personally to Ahmedabad and was alleged to have been informed that the letter of credit was not traceable and advised to ask the Japanese buyer to retransmit the letter of credit. He further informed him that a telex was sent by the Bank on 3.7.90 to the Japanese Bank at Tokyo informing, that the original letter of credit was lost. It is further alleged that the opening bank retransmitted the letter of credit on 5.7.90 and intimation to that effect was received by telex by the complainant. THE complainant again approached Opponent No. 2 and enquired about the said retransmitted letter of credit on 8.7.90. He was informed that the bank has received the letter of credit and same will be sent by post to the complainant. THE complainant wailed till 12.7.90 and made a telephonic enquiry by STD with the Opponent No. 2 since the letter of credit was not received. He was told that the letter of credit will be sent by post. THE letter of credit having not been received, the complainant tried his level best with the local post office as well as Japanese buyer complaining about non-receipt of letter of credit. Ultimately the Opponent No. 3 bank sent an advice dated 30.7.90 to the complainant staling that a sum of Rs. 26/- was debited to the complainant''s account being its commission. THE letter of credit was received by the complainant alongwith the advice on 30.7.90. THE allegation of the complainant is that opponent No. 2 bank did not exercise care and caution and lost the letter of credit and did not give proper and prompt reply to the enquiries made by the complainant. When the letter of credit was retransmitted same was negligently sent to its Deesa Branch which in turn was diverted to the Opponent No. 3 bank which delivered the same to the complainant on 30.7.90. THE letter of credit in question was valid for two months and two months had already gone due to negligence on the part of Opponent No. 2. As a consequence it was not possible to procure garlics and manufacture the ordered goods as the price of garlic had already gone up. THE delivery period was also delayed. THEreafter the complainant made a complaint with the banking authority. THE complainant has claimed Rs. 5 lakhs as damages due to the sheer and gross negligence on the part of the Opponent No. 2 Bank:

IT appears that the complainant had suggested some formula which was rejected by the Bank. The complainant ultimately has claimed Rs. 2.50 lakhs as loss by way of loss of profits, Rs. 10,000/- by way of loss incurred by the complainant and Rs. 50,000/- as compensation for having suffered agony and mental torture. In this way he has claimed Rs. 3,10 lakhs as monetary damages. In reply to the complaint the Opponent No. 2 in para 8 has stated that the letter of credit was sent to Deesa by mistake but a message was sent to the complainant by telephone on 6.7.90 to the effect that repeated message from issuing bank was received. According to the opponent this telephone message itself was enough and sufficient for the complainant if he wanted to avail of the letter of credit and do his business as per contract. They have also stated that the complainant was also informed of retransmitted letter of credit by the Japanese importer by telex of 16.7.90. They have further submitted that the letter of credit was extended till January 1991 and the complainant could have executed the order but he chose not to do so. The underlying is that the complainant had no sufficient funds to execute the order. The Bank has further stated that the complainant has received financial facility from Bank of India, Gondal branch but it was not able to pay up that and the Bank has filed a suit for recovery of outstanding against the complainant, similarly the complainant had defaulted to repay the O.D. over TDR from Union Bank of India and the Bank has instituted a legal proceedings against the complainant. Other instances have also been cited to show that the complainant could not execute the order on account of litigations pending against him and financial problems and has filed a totally false, frivolous and exaggerated complaint against the Bank.

In para 9 the Bank has stated as under: "There is no consideration which the Bank has received in advising the letter of credit (except commission charge of Rs. 20/- in terms of FEDAI Rules and Rs. 6 Postal charges)."

MR. Zhumkawala, the learned Counsel appearing on behalf of the opponent states that since the Bank is spending for telephone and writing letters, under the FEDAI rules the Bank has a right to charge by way of incidental charges of Rs. 20/- and Rs. 6/- as postal charges as the bank is wasting time and advising the complainant at his request. According to MR. Zhumkawala there is no privity of contract between the complainant and the Bank with regard to letter of credit. The complainant was supposed to come to the bank for enquiry but in order to give facility to the complainant without any obligation the bank has informed him by telephone as well as by post and has taken some incidental charges and not any commission (consideration) as alleged by the complainant. Again, this amount has been charged by the Rajkot branch Opponent No. 3 in cash which is a unilateral action of the Bank. The complainant has not filed any evidence in support of his claim. It appears from the pleading that he has not purchased any goods from the market. It has been specifically averred by the complainant that he is manufacturing dehydrated garlics. He must be having a stock. When the rates go high it is more advantageous to him to sell the same in the market if he had stock but since the complainant has not stepped in the witness box we cannot conclude whether he had a stock or not. The complainant has not cared to produce any evidence whatsoever except cryptic affidavit which is based upon personal knowledge to each averment of the complaint which cannot be true on the face of it. Hence this affidavit has no meaning. It shows total non-application of mind. After the reply of the Bank no further rejoinder has been filed.

AGAIN, even if we go by the averment made by the complainant the letter of credit was sent to Deesa branch by mistake by the bank but information was given by telephone to the complainant. Even assuming that no information was given, only above copy of the letter of credit was given on 30.7.90 and, therefore, two three weeks have passed in between, considering this delay the buyer had extended the letter of credit upto January 1991, This clearly shows that the complainant had no case against the Bank even if he is a consumer. However, in the instant case the complainant is not a consumer at all. The contract is between the buyer and the foreign bank and the foreign bank had approached the State Bank of India. Therefore there is no privity of contract between the complainant and the opponent. Assuming even for the sake of argument that he could have derived benefits if the letter of credit was delivered to him earlier, he cannot sue the bank because he is not a contracting party. He is a stranger to a contract. In any view of the matter the payment of Rs. 26/- is not in consideration of the services of opening of letter of credit. The bank, at the most has to inform him and the bank has informed of the retransmission of the letter of credit by post which was sent to Deesa and, therefore, they also informed him by telephone and thereafter by post. We do not find any deficiency in service especially when the bank has informed him by telephone which has not been denied by filing an affidavit-in-rejoinder. But this service has no direct nexus with letter of a credit. It is for a different purpose for which there is no complaint. We feel that the complainant filed a false complaint. In any case the complaint is of a very high amount without any reasons. He has not proved any damages and, therefore, according to our opinion the complainant should be saddled at least with cost. ORDER The complaint is dismissed. The complainant shall pay cost which is quantified at Rs. 1,000/- collectively to the opponents. Complaint dismissed with costs.