This revision petition has been filed   against the impugned order dated 10.7.2006,  passed by the State Consumer Disputes Redressal Commission, Union Territory, Chandigarh (hereinafter referred as the ‘State Commission’) in Appeal Case No.609 of 2000/RBT No.72/2006, Punjab National Bank  vs. M/s. Riba Textiles  Ltd. and others, vide which, while dismissing the appeal, the order passed by the District Consumer Disputes Redressal Forum, Panipat on 30.1.2000 in Consumer Complaint  No.264 of 1996,  allowing the said complaint,  was upheld.

2.      The facts of this case are that respondent no.1/complainant M/s. Riba Textiles Ltd. is a limited company, manufacturing terry-towels and has its office at Panipat, Haryana.  The petitioner Punjab National Bank issued an irrevocable letter of credit in favour of the complainant on behalf of respondent no.4,  M/s.  Uni Fashion (P) Ltd., Faridabad, vide no.44/94 on 28.4.1994 with a lumpsum amount  of Rs.5 lakhs,  which was enhanced to Rs.10 lakhs on 2.6.1994 and finally enhanced to Rs.13 lakhs on 12.8.1994,  without any change in the previous terms and conditions. However, vide letter dated 12.8.1994 from the Bank, a new covenant was added that “Drafts were to be drawn within 30 days from the date of acceptance”.  The respondent no.4,  M/s. Uni Fashion (P) Ltd. is the customer of the complainant  and deals in the manufacturing of garments from terry-towels at Faridabad.  The respondent no.2 is the branch of the petitioner,  Punjab National Bank at Panipat and respondent no.3 is State Bank of India, Panipat, and is the banker of the complainant . In the consumer complaint filed before the District Forum, the complainant stated that they had presented three bills vide no.342, 468 and 540,  amounting to Rs.2,87,960/- to the petitioner Bank through their Bank, the State Bank of India, but  these  bills were not honoured by the petitioner bank on flimsy grounds. Later on, the complainant stated that there was a typographical mistake in mentioning the serial nos. of these invoices and in fact,  the numbers of these bills were 874, 904 and 964. The complainant alleged that the confirmed irrevocable letter of credit constitutes a definite undertaking of the issuing bank that the payment will be made to the confirming bank. There was, therefore, a grave deficiency in service on the part of the Punjab National Bank in dishonouring the said invoices. The complainant sought directions  for payment of the said invoices alongwith interest and also claimed a compensation of Rs.2 lakhs,  in addition.

3.      In their reply to the complaint filed before the District Forum, the petitioner/OP-1  Punjab National Bank admitted that irrevocable letter of credit no.44/94 was opened for Rs.5  lakhs on 28.4.1994 which was subsequently, enhanced to Rs.10 lakhs  on 2.6.1994 and then to  Rs.13 lakhs on 12.8.1994.  However, while making the last enhancement on 12.8.1994,  an amendment was made by adding a clause “drafts to be drawn in 30 days from the date of acceptance”.  The Bank denied that the irrevocable letter of credit constituted a definite undertaking of the issuing bank that the payment will be made to the confirming bank. The                       drafts were to be drawn in 30 days from the date of acceptance by the drawee in terms of letter dated 12.8.1994 and hence, the drafts could not be drawn,  unless and until,  the documents were accepted by the drawee. The Bank further stated that invoice no. 342,468 and 540 had already been honoured by them.

4.      It may be mentioned here that Ravinder Garg, Director of the complainant M/s. Riba Textiles Ltd. filed an affidavit  in which he stated that invoices no.874, 904 and 964,  totaling Rs.2,87,960/- were wrongly returned  by the petitioner and  the said  refusal was against the terms of the letter of credit and well settled norms of the banking rules.

5.      The OP-3/respondent no.3 State Bank of India, Panipat also filed a reply before the District Forum,  stating that as  collecting bank, they  had sent the bills for payment to the petitioner bank, but the same were not paid despite sending reminders. The bills  were returned,  vide letter from the petitioner dated 7.10.1994 with the remarks “acceptance refused”. The said bills were again sent for consideration, but  were returned with the remarks,  “acceptance refused again”. When they  referred the matter again to the petitioner,  the documents were returned  vide letter dated 30.10.1994, with the remarks “not accepted due to various discrepancies”.  However, the details of these discrepancies were not specified. The State Bank of India took the plea that there had been no deficiency in service,  in so far as they were concerned.

6.      The District Forum,  after taking into account the averments made by the parties,  allowed the complaint vide  their order on 30.1.2000   and found the petitioner negligent in providing services to the complainant. They directed the petitioner to pay a sum of Rs.2,87,960/- to the complainant alongwith interest @ 12% per annum from 3.10.1994 till realization. The District Forum observed that the Bank was not justified in refusing  to accept the invoices without giving any specific reason and by ignoring the provisions contained in Article 14(d)(ii) of the Uniform Customs and Practice for Documentary Credits (UCPDC) 1993 Revision, ICC Publication 500.

7.      Being aggrieved against the order of the District Forum, the petitioner Bank filed an appeal before the State Commission which was dismissed,  vide impugned order. Being aggrieved against the same, the petitioner is before us by way of the present revision petition.

8.      During arguments, the learned counsel for the petitioner stated that invoices no.342, 468 and 540 had already been honoured by them and to that extent,  the averments made in the consumer complaint was not correct.  The learned counsel has drawn attention to the affidavit filed by  Ravinder Garg, Director of the complainant,  in which he stated that the correct invoice numbers were   874, 904 and 964.  It was clear therefore, that the version of  the  complainant in the consumer complaint was not correct.  The learned counsel further stated that the consumer complaint was barred by limitation under Section 24(A) of the Consumer Protection Act, 1986,  having been filed after a lapse of 2 years from the date of cause of action. The cause of action had occurred on 3.10.1994, when the invoices were rejected by the petitioner Bank. However, the complaint had been filed on 28.10.1996,  which was beyond he period of two years. The complaint, therefore, deserved to be dismissed on this ground alone.  The learned counsel further argued that the complainant did not fall under  the definition of ‘consumer’,  as the service had been availed for commercial purpose only.  Moreover, in case the documents were not being accepted by respondent no.4 buyer, the petitioner could not have made payment of the amount in question.

9.      Per contra, the learned counsel for the respondent no.1/complainant stated that the invoice numbers had been wrongly mentioned as 342, 468 and 540 due to typographical mistake in the complaint before the District Forum.  In fact, the correct invoice nos. were 874, 904 and 964 amounting to Rs.2,87,960/-. The learned counsel further stated that after the petitioner had returned the documents with the remarks, ‘Acceptance Refused” ;   their collecting bank, the State Bank of India had returned the bills to them many a time, but still the bills were not honoured. The petitioner had not provided the details of the discrepancies as mentioned by them in their  remarks,  while returning the bills. The learned counsel further stated that as clarified in the reply of the State Bank of India,   the cause of action would arise from 31.10.1994, the date on which the documents were finally returned by the petitioner  to the State Bank of India. Since the complaint had been filed on 28.10.1996, it was within limitation.  The learned counsel further argued that an irrevocable letter of credit constituted a definite undertaking of the issuing bank,  provided  the stipulated documents are presented to the nominated bank or to the issuing bank,  as per the terms and conditions of the letter of credit.  The letter dated 12.8.1994 sent by the petitioner containing the clause,  “within 30 days from the date of acceptance”,  does not specify whether the documents were to be accepted by the buyer. The acceptance of documents by  the buyer had no relevance in view of the irrevocable letter of credit given by the petitioner.  The State Commission  had, therefore, rightly concluded that the documents were not to be accepted by the buyer,  but by the issuing bank itself. The learned counsel further argued that the complainant did fall under the definition of ‘consumer’ under Section 2(d)(ii) of the Consumer Protection Act, 1986 as the complainant was beneficiary of the services hired by respondent no.4, buyer from the Punjab National Bank.  The learned counsel also stated that this plea had been  taken by the petitioner at the appellate stage only.  The learned counsel has also drawn attention to the  Uniform Customs and Practices for Documentary Credits 1993 Revision ICC Publication 500, saying that the petitioner  had acted in contravention of the provisions contained therein, because they had not stated any discrepancy in the documents,  while refusing to accept the same. It was their duty to do so under Article 14(d)(ii) of the said UCPDC.

10.    I have examined the entire material on record and given a thoughtful consideration to the arguments advanced before me.

11.    The first issue that requires consideration is that in the consumer complaint filed before the District Forum, reference has been made to invoice nos.342, 468 and 540. However, it has been clarified later on through affidavit by the complainant that in fact,  the details of these invoices were nos.874, 904 and 964,  totaling Rs.2,87,960/- and that wrong numbers had been mentioned in the consumer complaint due to typographical error. It is clear therefore that the present issue concerns  invoices nos.874, 904 and 964 and no adverse inference needs to be drawn against the complainant for the said mistake.

12.    The next point for consideration is whether the complainant falls under the definition of the ‘consumer’. It is evident from record that the services of the petitioner bank were hired by OP-4,  buyer of the goods. The complainant/respondent no.1 is a beneficiary of the said services. The complainant/respondent have raised the contention that this issue was not taken up  by the petitioner,  while filing their reply to the consumer complaint. A perusal of the order passed by the State Commission also reveals that the  issue does not find mention in that order as well. It shall therefore  be not, in the interest of justice, to take any adverse view against the complainant  on this ground as well,  in the exercise of the revisional jurisdiction.

13.    Now coming to the point of limitation, the case of the petitioner is that the cause of action had arisen on 3.10.1994 when the bills were returned with the remarks “acceptance refused”.   It is clear from record, however,  that the collecting Bank, the State Bank of India had returned the documents to the Punjab National Bank for consideration again. There had been correspondence between the Punjab National Bank and the  State Bank of India on the issue from time to time and the Bank asked them to give the details of the discrepancies etc. The petitioner sent the documents back with the remarks “acceptance refused” in the beginning, but vide their letter dated 30.10.1994, they returned the  documents with the remarks “not accepted due to various discrepancies”. Even if,  the date of cause of action is taken as 30.10.1994, the complaint having been filed on 28.10.2996, is clearly within a period of two years and hence, not barred by limitation under Section 24A of the Act. 

14.    The main question that merit consideration in the present case is whether the petitioner bank was justified in refusing to honour the three invoices  sent to them by the complainant. The plea of the petitioner is that vide letter dated 12.8.1994, they had added a clause  “drafts to be drawn in 30 days from the date of acceptance”.  The State Commission in the impugned order have dealt  with this issue at length and concluded that the acceptance in terms of this letter does not mean that the acceptance was to be made by the buyer i.e. OP-4. Once an irrevocable letter of credit is granted by the petitioner, it was their duty to honour the said invoices or to point out the details of the discrepancies, if any.  The State Commission have rightly relied upon article 14(d)(ii) of the Uniform Customs and Practices for Documentary Credits 1993, Revision ICC Publication 500, in which,  it has been clarified that if a bank decided to refuse the document, it has to give a notice to the bank within seven days from which the documents were received,  stating all the discrepancies in respect of which the Bank refused such documents. Further, it has been clarified in clause 9(a) that an irrevocable letter of credit constitutes a definite undertaking of the issuing bank,  provided  that the stipulated documents are presented to the nominated bank or to the issuing bank and that the terms and conditions of the Credit are complied with.  In the present case, the petitioner has not been able to explain anywhere as to how the terms and conditions of the Credit were not complied with.  The State Commission has rightly relied upon the decision of the Hon’ble Supreme Court of India in Federal Bank Ltd. vs. V.M. Jog Engineering Ltd. and others  2001(1) SCC 663 in which,  after consideration of  the UCP Code etc., it was held that a bank cannot refuse  encashment , if the seller prima facie complies with the terms of bank guarantee or the letter of credit.  In the present case, sin ce  no discrepancies were pointed out by the petitioner, it is clear that the refusal to honour  the encashment of the invoices constituted deficiency in service on their part.

15.    Based on the discussion above, it is held that there is no irregularity, illegality or jurisdictional error in the order passed by the State Commission and the same is upheld.  This revision petition is ordered to be dismissed being devoid of any force.  There shall be  no order as to costs.