Complaint was filed, inter-alia, alleging that the complainant has been carrying export business of garments to various countries. The services of opposite party – Bank was availed for negotiation of the bills of Exchange detailed below on the terms incorporating in the bills of Exchange drawn on Acropol, France:- S.No. Invoice No. Bill of Exchange Bank Ref. Amount in Terms of & Date No. & date No. & date FRF Negotiation of Bill ------------------------------------------------------------------------------------------------------------------ 1. SVMPL-23 023 1510/P/240851/ 100971 Document 31.10.97 18.11.97 97 against payment 2. SVMPL/15 016 1510/C/245128/ 161403 Document 26.8.97 18.9.97 97 against payment 3. SVMPL/16 015 1510/C/245127/ 42300 Document 29.8.97 20.9.97 97 against payment 4. Pol/19 035 1510/D/240239/ 47560 Document 31.1.98 20.2.98 98 against payment
5. SVMPL/28 028 1510/N/240922/ 74385 Negotiated 10.12.97 18.12.97 97 under L/C No. CIOVPAR 820394100 dated 29.11.97 6. POL/15 029 1510/N/240972/ 23275 Negotiated 10.12.97 30.12.97 97 under L/C No. CIOVPAR 820394100 dated 29.11.97. Bills of exchange were to be negotiated by the opposite party – Bank through Societe Marsellaise De Credit of France. It was further alleged that in respect of bills of exchange at S. Nos. 1 to 4 above, the tenor of bills mentioned was “documents against payment”. Accordingly, the opposite party had to instruct Societe Marsellaise De Credit of France to release the documents including Bills of Lading/Airway bills to Acropol, France-buyer only upon payment of the said Bills of Exchange. However, contrary to the tenor of those bills and without instructions from the complainant, the opposite party instructed the Societe Marsellaise De Credit of France to release the documents against acceptance of bills by the buyer, thus, altering the tenor of the bills. This had resulted in the Shipping/Airway bills being delivered to the buyer in respect of the above Bills of Exchange without payment being made for them. Complainant has not received any amount in regard to bill at S. No. 4 above. Only a part of FRF 80,000 was realized on 18.2.1998 in respect of bills of exchange referred to at S. Nos. 2 & 3. It was stated that though in regard to the bill at S.No. 1 above, the opposite party had instructed Societe Marsellaise De Credit of France about the tenor of the bill being “document against payment” initially, but at a later stage the opposite party gave instruction to Societe Marsellaise De Credit of France to release the documents against part payment. It was claimed that no concurrence of the complainant was taken to alter the tenor of the said bill. Shipping/Airway bill relating to this bill of exchange was delivered to the buyer on making part payment of FRF 77805 on 29.12.1997. It was further alleged that the bills at S.No. 5 & 6 above were to be negotiated under Letter of Credit No. C10PAR820394100 dated 29.11.1997 opened by Societe Marsellaise De Credit of France. In case, the negotiation for payment of these two bills under the LC was not possible, the opposite party ought to have reverted back to the complainant for appropriate instructions for alternate mechanism for negotiation of the bills. Shipping/Airway bills in respect of these two bills of exchange were delivered to the buyer without payment either under said Letter of Credit or directly. Complainant had, thus, no option but to receive later on, part payment of FRF 31,696.85 on 20.7.98 against the bill at S.No. 5 which was only a part payment. However, in respect of bill at S.No. 6, no payment whatsoever had been received. It was stated that on failure of the opposite party to furnish evasive reply dated 6.9.99 of the complainant’s letter, the complainant caused a legal notice on 30.9.99 served upon the opposite party calling upon it to pay a sum of FRF 3,44178 being the unrealized amount under the said bills and interest @ 18% p.a. Direction was sought to be made to the opposite party to pay to the complainant FRF 3,52,005 equivalent to Rs. 24,11,234.20 at the prevailing conversion rate of Rs. 6.85 per FRF, with interest thereon @ 18% p.a. from the date of filing of the complainant and the cost. Opposite party contested the complaint by filing written version. By way of preliminary objection, it was pleaded that the dispute raised by the complainant does not fall within the ambit of Consumer Protection Act, 1986. On merits, it was alleged that the opposite party is a nationalized bank having one of its branches at P.N. Road, Tirupur. Bank had dealt with so many similar bills of exchange drawn by the complainant of which complainant had chosen to raise the issue in respect of the 6 bills in question. The details of handling of each of these bills by the complainant as per instructions of the complainant are as under:- EXP. Bill REF. BILL AMOUNT EXP. INV. REF. TERMS OF PAYMENT --------------------------------------------------------------------------------------------------------------------------------- 1. 1510P-240851-97 FRF 100971 SVMPL/23/97 DP AT SIGHT 2. 1510D-245127-97 FRF 42300 SVMPL/16/97 60 DAYS SIGHT 3. 1510D-245128-97 FRF 161403 SVMPL/15/97 60 DAYS SIGHT 4. 1510D-240239-97 FRF 47560 POL/19/98 DP AT 30 DAYS SIGHT 5. 1510N-240922-97 FRF 74385 SVMPL/28/97 75 DAYS SIGHT 6. 1510N-240972-97 FRF 23275 POL/15/97 75 DAYS SIGHT Bill No. 1510P24851-97 dated 18.11.97 covered by Invoice 023 dated 31.10.97 for a sum of FRF 100971 was drawn at sight basis and specific instructions were given to the foreign banker to release the documents against payment only. However, the drawee of the bill remitted FRF 77805 only against this bill and the request of the drawee for release of the documents against part payment conveyed by the foreign bank was forwarded to the drawer for their concurrence. For the reasons best known to the complainant, the complainant did not issue any instruction to the bank in regard to release of the documents. It is not known how the complainant claims that the documents were released at the instance of the opposite party. Complainant never questioned the receipt of part payment which was adjusted in the bill liability ever since 29.12.1997 when the amount was received till the drawer’s notice was issued. Bill Nos. 1510D-245128-97 and 1510D-245127-97 dated 18.9.97 and 20.9.97 for FRF 161403 and FRF 42300 respectively covering invoice Nos. 016 and 015 were drawn at 60 days sight. In tune with the trade practice with M/s. Acropole, France – buyer and with the concurrence of the complainant oral instructions were given to release documents against acceptance. Complainant’s letter dated 23.4.98 would prove that the opposite party- bank had only carried out the specific instructions of the complainant. There was an agreement between the complainant and the buyer whereby complainant had agreed that only FRF 76,000 be paid covering both the said bills amounting to FRF 2,03,007. Vide letter dated 17.2.98 to the opposite party, the complainant in respect of these two bills had granted time to the drawee to make payment in two instalments which it had agreed. No such confirmation, however, was ever received from the drawee to the knowledge of the opposite party that it would make the payment in two instalments of the amount covering both these bills nor did the complainant follow up the non-receipt of the balance amount due under the two bills with the bank or the drawee as per its legal obligation to collect the entire sale proceeds. It was stated that bill No. 1510D-240239-97 dated 20.2.98 for FRF 47560 was a usance bill with 30 days DA basis as is evident from the complainant’s letter dated 23.4.98. Complainant had been in touch with the drawee and may be aware of the delay in making payment of the said bill beyond the over-due dates and for non-receipt of any amount under the said bill. Opposite party can not be held liable for non-payment thereof, if any. In regard to bill No. 1510N-240922-97 dated 18.12.97 for FRF 74385 under LC No. 20394100 dated 29.11.97, it was alleged that the bill had been paid in full by the drawee. It was denied that the bill was paid only in part. Drawee had made payment of FRF 31696.84 on 17.4.98 after adjusting the invoice value amounting to FRF 42685.16. The complainant can not blame the opposite party bank for the set off claimed by the drawee especially when it has been permitted by the complainant. It was, further, alleged that bill No. 1510N-240972-97 dated 30.12.97 for FRF 23275 was covered by LC dated 29.11.97 which had expired on 26.12.97. This LC was never re-validated. Complainant knew that LC had expired on 26.12.97 when the said bill was presented on 30.12.97. The return of the bill under LC had been informed to the complainant and it was for the complainant to have taken steps to realise the amount in time. Assuming that the opposite party bank had in any way violated the instructions, the complainant can not blame the bank for the insolvency or any consequent loss as the bills were negotiated much earlier to the drawee being declared insolvent and it was open to the complainant to cover the full amount much earlier and within the due dates of the bills. The discrepancy that existed at the time of negotiation, well in the knowledge of the complainant, were – late shipment, expired LC, sample approval missing, bill of lading tendered by trans shipment mode, bill of lading not signed by the carrier of the vessel and the discrepant bills had to be negotiated by the opposite party since they had to recover the packing credit outstanding. The complainant on the other hand, was not interested to rectify the discrepancies and requested for negotiating the discrepant bills. Liability to pay the amount claimed was emphatically denied. Complainant filed rejoinder to the written version of the opposite party. Affidavit of A. Giridhara Deepan, one of the partners of the complainant was filed in support of the complaint. Opposite party also filed affidavit of A.R. Santhamoorthy, Chief Manager at P.N. Road branch of the Bank by way of evidence. We have heard Ms. V. Mohana, Adv. for the complainant and Shri A.B. Dial, Sr. Adv. for the opposite party and have considered the written submissions filed on behalf of the parties. It is admitted by the opposite party- bank that the complainant had negotiated through it 6 bills of exchange drawn on Acropole, France of the amounts shown in the tabular statement in the complaint. Complainant alleges that the tenor of the bills mentioned at S.Nos. 2 to 4 of the tabular statement was “documents against payment”. However, contrary to that tenor of the bills and without concurrence of the complainant and without any instructions from the complainant the opposite party instructed Societe Marsellaise De Credit of France to release the documents including the Bills of Lading/ Airway bills to the buyer against “acceptance of bills”, thus, altering the tenor of the bills to the detriment of the complainant. Tenor of the bill of exchange at S.No. 1 was “documents against payment” and the opposite party though had so instructed Societe Marsellaise De Credit of France initially but it had at a later stage given instruction to Societe Marsellaise De Credit of France to release the “documents against part payment” without the concurrence of complainant. Complainant further alleges that bills of exchange at S. Nos. 5 & 6 of the tabular statement were negotiated for payment by the complainant under Letter of Credit No. C10PAR820394100 dated 29.11.1997 opened by the Societe Marsellaise De Credit of France and if there was any difficulty in compliance with that term of Letter of Credit and payment not being made under the Letter of Credit, the opposite party bank ought to have reverted back to the complainant for appropriate instructions for alternate mechanism for the negotiation of the said bills. However, no such instructions were sought from the complainant and documents including the Shipping/Airway bills in respect of said two bills were delivered to Acropole, France- buyer without payment either under the Letter of Credit or directly to the complainant. Attributing deficiency in service/ negligence, a total amount in Indian currency equivalent to FRF 3,52,205 with interest has been claimed. Copies of covering letter alongwith bill of exchange No. 016 at S.No. 2 in the tabular statement for an amount of FRF 1,61,403 sent to the opposite party by the complainant are at page Nos. 14 & 15 on the paper book. Copy of the letter sent by the opposite party to the buyer’s bank- Societe Marsellaise De Credit of France for negotiation of the said bill with instructions is at page No. 16. Said covering letter and the bill would show that those were for a tenor of DP at 60 days. Said letter of the opposite party would indicate that the instructions given to the buyer’s bank under the said sub-heading “Other Instructions” was for “deliver documents against acceptance”. Copy of covering letter along with bill of exchange No. 015 at S. No. 3 for an amount of FRF 42,300 sent by the complainant to the opposite party for negotiation is at page Nos. 11 & 12. Copy of the letter sent by the opposite party- bank to the said buyer’s bank for negotiation of the said bill with instructions is at page No. 13. Reading of the complainant’s said covering letter and the bill would show that they were for a tenor of DP at 60 days. Opposite party’s letter would show that the instruction given under “Other instructions” was – “delivery documents against acceptance”. Copy of covering letter alongwith bill of exchange No. 035 at S.No. 4 for an amount of FRF 47,560 sent to the opposite party bank by the complainant for negotiation is at pages 31 & 32. Copy of the letter sent by the opposite party bank to said Societe Marsellaise De Credit of France for negotiation of the said bill with instructions is at page 33. Covering letter and the bill would show that the tenor thereof was DP at 30 days. Letter of the opposite party to the buyer’s said bank would show that the instruction under the sub-heading “Other instructions” was for “delivery documents against acceptance”. Obviously, in respect of said three bills specific instructions as to the terms of negotiation were altered by the opposite party- bank from “documents against payment” to “documents against acceptance”. “Documents against payment” (for short DP) involves the bank partying with the documents enabling the customer to take delivery of the documents only on payment in respect thereof whereas “documents against acceptance” (for short DA) enables the documents to be released to the customer merely on acceptance of bill of exchange. Said material alteration in the tenor had resulted in the Shipping/Airway bills being delivered to the buyer without payment being realized and buyer taking delivery of the goods. In the affidavit filed by way of evidence by A. Giridhar Deepan, partner of the complainant in support of the complaint, it is averred that entire amount of the bill of exchange at S. No. 4 has not been realized till date and only a part payment of FRF was realized on 18.2.1998 in respect of the bills of exchange at S. Nos. 2 & 3. It is further averred that no concurrence of the complainant was taken to alter the tenor of the said bills. On the strength of complainant’s letter dated 17.2.1998 to the opposite party- bank, it was submitted on behalf of the opposite party- bank that in respect of the bills at S. Nos. 2 & 3, the complainant had agreed to receive the payment in two instalments of FRF 80,000 and FRF 1,20,000 pursuant to the discussion with the foreign buyer thereby altering the instruction given in the covering letters and the said bills. Attention was also drawn to the swift message dated 12.2.1998 of Societe Marsellaise De Credit of France. Omitting immaterial portion, said letter dated 17.2.1998 is re-produced below:- “Dear Sir, REF: Allowing part payment for the Bills; Bill ID No. 1510C24512797 & 1501C24512897 We have received a request from our buyer to clear the above two bills in two instalments, for which we have agreed so. Kindly instruct the buyers bank to allow the payment in two parts i.e. 80,000 FF & 1,20,000 FF. As per the discussion we had earlier our buyer would keep his commitment in honoring the deal.” It was pointed out on behalf of the complainant that in the said letter the complainant had not altered the tenor of the bills of exchange but had agreed only to receive the payment in two parts. Further, the letter does not indicate that the complainant had consented to receive any smaller payment in full satisfaction of the amounts of the two bills as alleged. Having considered the contents of the said letter, swift message and the submissions, we are of the view that the complainant without altering the tenor of the two bills had only agreed to receive the payment thereof in two parts. Opposite party, therefore, can not escape liability arising out of alteration of the tenor of the Bills at S.No. 2,3 & 4. Copy of the covering letter alongwith the bills of exchange No. 023 at S. No. 1 above is at pages 17 & 18. Copy of the letter sent by the opposite party bank to Societe Marsellaise De Credit of France for negotiation of the said bill with instruction is at page No. 19. Reading of the said bill and the two letters would reveal that the instruction given under the sub-heading “Instructions” by the opposite party bank to the buyer’s said bank was – “delivery documents against payment” which was also the tenor for negotiation of the said bill in the covering letter and the bill of exchange. There was, thus, no discrepancy as to the term of negotiation in respect of the said bill of exchange. Complainant’s case is that at a later stage the opposite party gave instructions to Societe Marsellaise De Credit of France to release the “documents against part payment” without the concurrence of the complainant and this had resulted in the Shipping/Airway bill relating to the said bill being delivered to the foreign buyer upon making part payment of FRF 77,805 on 29.12.97. In the written version, it is alleged that it is not known how the complainant has claimed that the documents were released to the foreign buyer at the instance of the opposite party. To be only noted that the complainant has not adduced any cogent evidence in regard to the opposite party – bank having given instruction at a later stage to the buyer’s bank to release the documents against part payment. In absence of such an evidence, the opposite party bank cannot be held legally responsible if the documents in respect of the bill at S. No. 1 were released by the buyer’s bank against part payment. This brings us to bill Nos. 028 for FRF 74,385 at S. No. 5 and 029 for FRF 23,275 at S. No. 6. Copy of the covering letter alongwith the above bill of exchange No. 028 sent by the complainant to the opposite party for negotiation is at page Nos. 25 & 26. Letter sent by the opposite party to the buyer’s said bank for negotiation of the above bill is at page 27. Likewise, copy of the covering letter alongwith bill of exchange No. 029 for an amount of FRF 23,275 is at page Nos. 28 & 29. Copy of the letter sent by the opposite party Bank to the Societe Marsellaise De Credit of France for negotiation of this bill with instruction is at page No. 30. Both the bills were drawn under Letter of Credit(s). Letter sent by the opposite party to the buyer’s said bank for negotiation of bill No. 028 at page 27 under the heading “”We enclose the following bill”, reads as under:- “Negotiate as per the terms of L/C No. CIOVPARB20394100 issued by the Societe Marsellaise De Credit of France. The Bill amount endorsed on the back side of the L/C.”. Similar is the endorsement made on another letter sent by the opposite party to the buyer’s bank in regard to bill No. 029. In support of the case set up in the complaint that the instructions in opposite party’s two letters to the buyer’s bank were contrary to the tenor of bill Nos. 028 & 029 and the covering letters thereof, our attention was drawn on behalf of the complainant to the instruction at No. 1 under the sub-heading “Other instructions”. In the opposite party’s letter pertaining to Bill No. 028, instruction at S.No. 1 reads as “ delivery documents against payment”. Another letter pertaining to bill No. 029 says that “deliver documents against acceptance”. It is pertinent to mention that in the written version the opposite party has pleaded that the bill No. 029 dated 30.12.1997 was covered by LC dated 29.11.1997 which had expired on 26.12.1997 and was never revalidated; that the complainant knew that the Letter of Credit had expired even before the bill was presented. By the letter dated 16.7.1998 (copy at page 99), the opposite party had intimated the complainant that the overseas collecting banker had returned the export document in respect of bill No. 029. Accordingly, complainant was asked for repatriation of the export proceedings and to submit ETX for seeking further extension of time from RBI, Chennai for the purpose. Factum of the Letter of Credit having expired even before the presentation of bill No. 029 has not been categorically denied. If the Letter of Credit itself was not alive on the date of presentation of bill No. 029, the bill could not have been drawn and negotiated under the Letter of Credit. In our view, the contents of the said two letters sent by the opposite party to the buyer’s said bank have to be read in their entirety. Endorsement referred to above made in the letters would indicate that two bills were negotiated under the aforesaid Letter of Credit issued by the foreign bank and the amounts thereof endorsed on the back side of the Letters of Credit. There was, thus, no alteration of the tenor of the two bills. Opposite party cannot be held liable if the buyer’s said bank who has not been impleaded as party, had chosen to release the documents of Shipping/Airway bills to the buyer and not remitted the L.C. amount to the opposite party-bank. As noticed above, in respect of bill No. 016 the complainant has received part payment of FRF 80,000 out of the abill amount of FRF 1,61,403. In respect of bill No. 015 of FRF 42,300 and 035 of FRF 47,560 the complainant is stated to have not received any amount. In view of aforesaid discussion holding the opposite party negligent/ deficient in service in respect of said three bills, it is held liable to pay balance amount of FRF 81,403 and amount of bill Nos. 015 of FRF 42,300 and bill No. 035 of FRF 47,560, totaling FRF 1,71,263 to the complainant. When converted into Indian Rupee @ Rs. 6.85 per FRF, the total amount payable would come to Rs.11,73,151.55. Resultantly, the complaint is partly allowed with direction to the opposite party bank to pay amount of Rs. 11,73,151.55 alongwith interest @ 6% p.a. from the date of filing of complaint to the complainant. Complainant will be entitled to cost of Rs. 15,000/-. |
