JUDGMENT PER JUSTICE V.R. KINGAONKAR, PRESIDING MEMBER 1. Both the appeals arise out the same judgment rendered by the State Commission in a complaint case bearing No. OP 285/1999. By that judgment, the complaint filed by the respondent No. 1 – M/s. Sathya Exports Ltd. was allowed. Both the appellants were jointly and severally held liable to pay an amount of Rs. 6,06,991/- with interest @ 12% p.a. from the date the amount became due, till the entire payment and also to pay cost of Rs. 5,000/- to him. The State Commission held that the respondent No. 3 – Bank of Madurai which is now taken over by the ICICI Bank Ltd is not liable to pay any amount and the complaint was liable to be dismissed against the respondent No. 3. 2. Being aggrieved, while Lord Krishna Bank, which is now taken over by the HDFC Bank Ltd has preferred FA No. 273/2007, the original second opposite party – M/s. Aryan Trading Co. has preferred FA No. 693/2007. 3. The respondent No. 1 (complainant - M/s. Sathya Exports Ltd.) filed the complaint before the State Commission, Tamil Nadu, alleging that there were business relations between itself and M/s. Aryan Trading Co. The textile goods were sent to M/s. Aryan Trading Company, as per the Business Order through M/s. All India Transport Corporation on 26.09.1998. The value of the textile goods was Rs. 6,06,991/-. The documents like Invoice, Lorry Receipt (LR), Packing List and the Hundi, dated 28.09.1998, had been sent to the Banker of M/s. Aryan Trading Company through the respondent No. 3 – Bank. The payment was to be collected by the Bank of Madurai Ltd. through Lord Krishna Bank to whom the said documents were forwarded. The goods were delivered to M/s. Aryan Trading Company though the payment was not obtained by Lord Krishna Bank, in accordance with the Hundi and instructions of the Banker of the respondent No. 1 (complainant). 4. The respondent No. 1 (complainant – M/s. Sathya Exports) further alleged that there was deficiency of service rendered by the respondent No. 1 – Lord Krishna Bank (before State Commission) which facilitated delivery of the goods to M/s. Aryan Trading Company, without realisation of the amount shown in the Hundi and though the services were required to be rendered as per terms of regular usage and custom prevailing in the mercantile transactions. The purchaser i.e. M/s. Aryan Trading Company and the Banker of the purchaser i.e. Lord Krishna Bank, together were liable to indemnify him (complainant) for the loss sustained by him. 5. The complaint was resisted by Lord Krishna Bank by filing written version. It was the case of Lord Krishna Bank that the State Commission, Tamil Nadu had no jurisdiction to entertain the complaint. It was alleged further that there was no privity of contract between M/s. Sathya Exports (complainant) and the Bank i.e. Lord Krishna Bank, nor there was any relationship with M/s. Sathya Exports as a ‘consumer’. It was further contended that there was no negligence or deficiency of service on the part of Lord Krishna Bank. It was alleged that Lord Krishna Bank persuaded purchaser i.e. M/s. Aryan Trading Company to pay the amount due to the complainant (M/s. Sathya Exports Ltd.) but it could not be regarded as deficiency in service. It was further alleged that the Bank of Madurai Ltd., had not instructed to withhold the Hundi and other documents till the payment was received from M/s. Aryan Trading Company. It was further alleged that the documents were ultimately returned to Bank of Madurai Ltd (now, ICICI Bank Ltd.) vide letter dated 10.06.1999. It appears that no written version was filed before the State Commission by M/s. Aryan Trading Company (second appellant). 6. The State Commission held that the Banker of the purchaser ought not to have allowed the release of the documents without payment of the consignment by the purchaser i.e. M/s. Aryan Trading Company. The State Commission held that there was deficiency of service on the part of Lord Krishna Bank, in view of the fact that the documents were forwarded by the Bank of Madurai Ltd, under instructions of M/s. Sathya Exports Ltd., for delivery of the goods only on the payment of the amount shown under the Hundi. The State Commission, therefore, allowed the complaint and directed M/s. Aryan Trading Company and Lord Krishna Bank to pay the amount of loss along with interest and the cost, as indicated at the outset, jointly and severally, by the appellants. 7. We have heard learned counsel for the parties. We may clarify that the respondent No. 3, i.e. Bank of Madurai Ltd. (now ICICI Bank Ltd) has been exonerated by the State Commission and rightly so because the documents like Lorry Receipt, Invoice and the Hundi were forwarded by the said Bank to the Banker of the purchaser i.e. Lord Krishna Bank. So, there was no deficiency of service, in terms of the banking transactions between the complainant (M/s. Aryan Trading Company) and the Bank of Madurai Ltd. (now ICICI Bank). We have considered the contentions of the learned counsel for the HDFC Bank Ltd that the State Commission, Tamil Nadu had no territorial jurisdiction to entertain the complaint. We do not find any merit in such contention. The reasons are not far to seek. The cause of action is compendium of various facts and parts of events. The textile goods were delivered by M/s. Sathya Exports from Salem and the payment was to be made to its Banker at Salem. There is absolutely nothing on record to show that the parties had entered into mutual agreement to confine the jurisdiction to any particular place, needless to say, a part of cause of action arose at Salem, when the payment was not received by the complainant, as per the terms of the business agreement. 8. Another limb of the argument advanced by the learned counsel for the Lord Krishna Bank (HDFC Bank Ltd.) is that the complainant was not the ‘consumer’ qua the said bank, and, therefore, the ‘commercial dispute’ cannot be decided by the State Commission. The complainant was admittedly a ‘consumer’ of Bank of Madurai Ltd. However, there was internal arrangement between the Bank of Madurai Ltd., and Lord Krishna Bank for the realisation of the amount, after releasing the necessary papers to the purchaser (M/s. Aryan Trading Company), on obtaining the amount shown in the Invoice and the Hundi. It is, therefore, amply clear that the complainant impliedly became the ‘consumer’ of Lord Krishna Bank (now HDFC Bank Ltd) due to such liability accepted by the said Bank, on behalf of the purchaser. It is important to note here that M/s. Aryan Trading Company wrote letter dated 14.01.1999 to the Manager of Lord Krishna Bank Ltd. The said letter reads as under : “Dear Sir, Please refer to Bill of M/s. Sathya Exports for Rs. 6,06,991/- due for payment on 11.12.1998. We would request you to please confirm to M/s. Sathya Exports that the payment of above bill will be made by 10th February, 1999. Thanking you, Yours faithfully, For ARYANS TRADING CO. Sd/- AUTHORISED SIGNATORY”. The Assistant General Manager of Lord Krishna Bank forwarded the copy of the said letter to the Manager to the Bank of Madurai by letter dated 15.01.1999 through courier service. The letter correspondence goes to show, therefore, that the amount shown under the Invoice and the Hundi was not paid by M/s. Aryan Trading Company. It is also crystal clear that without any payment by M/s. Aryan Trading Company, the Hundi and Invoice along with Lorry Receipt had been released by Lord Krishna Bank in favour of M/s. Aryan Trading Company. It was for such a reason that the delivery could be obtained by M/s. Aryan Trading Company, without making any payment. It appears that though demand Notice was issued by the respondent No. 1 i.e. M/s. Sathya Exports Ltd on 05.05.1999, yet, neither of the appellants’ gave any response to such notice. The respondent No. 1 thereafter issued another legal notice dated 22.06.1999. The appellants responded to the said notice and admitted the legal liability. They undertook to make the payment till the end of July, 1999. Thus, such admission on part of the appellants go to show that both of them were liable to pay the said amount to M/s. Sathya Exports Ltd. (complainant). 9. On behalf of M/s. HDFC Bank Ltd, learned counsel Mr. Rishab Raj Jain invited our attention to observations in “Panna Lal Lachhman Das Vs. Hargopal Khubi Ram – AIR 1920 Lahore 264”. The Lahore High Court held that ”the mercantile community at Delhi recognised the custom of accepting Hundis by word of mouth and a mercantile usage exists where the drawee, who signifies his assent by word of mouth, is made liable on the Hundi accepted by him”. This is now an abrogated decision. Nobody pleaded such custom nor now, it can be said that such custom is prevailing in the mercantile community at Delhi. Moreover, the fact situation in the present case is on different footings. The Hundi and other documents were sent to Lord Krishna Bank through the Bank of Madurai by the complainant i.e. M/s. Sathya Exports for realisation of the amount. The learned counsel further invited our attention to “India Export Corporation & Ors. Vs. Chairman-cum-Managing Director, Syndicate Bank & Ors. – IV (2003) CPJ 45 (NC). This Commission has held: “where the loan was sanctioned by over draft facility, it was a commercial activity and the complainant could not be treated as ‘consumer’ within the meaning of section 2(1)(d) of Consumer Protection Act, 1986”. Reliance was also placed on “Brahm Arenja Vs. AJS Builders Pvt. Ltd. & Ors. – IV (2010) CPJ 329”. In that case, there was ‘agreement’ for purchase of farm house, and, Clause 38 of the ‘Agreement’ specifically confined to ‘place of jurisdiction’. As stated before, in the present cases, there is no ‘agreement’ between the parties which confines the ‘place of jurisdiction’ to ‘any particular place’. Since a part of the cause of action arose within the territorial jurisdiction of the State Commission, Tamil Nadu, the State Commission had the jurisdiction to deal with the subject matter. 10. Taking over all view of the matters, we do not find any substantial error committed by the State Commission while allowing the complaint. The impugned judgment and order will have to be, therefore, confirmed. Hence the appeals are dismissed. The appellants shall jointly and severally pay further cost of Rs. 10,000/- to the respondent No. 1 – M/s. Sathya Exports Ltd., being the cost in these appeals. The appeals are accordingly disposed of. 11. The statutory amount deposited by the appellants, if any, shall be released by the Registry, in favour of the appellants, along with interest, accrued thereon, if any. |
