Delhi

StateCommission

CC/08/274

TANISHQA INDUSTRIES - Complainant(s)

Versus

STANDARD CHARTERED BANK - Opp.Party(s)

23 Aug 2018

ORDER

IN THE STATE COMMISSION : DELHI

(Constituted under Section 9 of the Consumer Protection Act, 1986)

Date of Arguments : 23.08.2018

Date of Decision : 05.09.2018

COMPLAINT NO.274/2008

 

M/s. Tanishqa Industries,

996/A, Gali No.31, Idgah Road,

Zafrabad, Delhi-110053.                                                                            …..Complainant

 

Versus

 

Standard Chartered Bank,

H-2, Second Floor,

Connaught Circus, New Delhi.                                                          …..Opposite Party

 

CORAM

Hon’ble Sh. O. P. Gupta, Member (Judicial)

Hon’ble Sh. Anil Srivastava, Member

1.     Whether reporters of local newspaper be allowed to see the judgment?                                                               Yes/No

2.      To be referred to the reporter or not?                                                                                                        Yes/No

Shri O.P. Gupta, Member (Judicial)

JUDGEMENT

 

1. The case presented by complainant is that he is a self employed person earning  his livelihood for himself and his family members, running a small scale business activity at rented premises. OP prevailed upon him to accept credit limit. OP granted inland letter of credit for Rs,90 lakhs and overdraft facility of Rs.10 lakhs vide letter dated 14.12.07. The letter of credit was for procurement of Copper and Aluminium, whereas overdraft facility was to meet the working capital requirement of the business. OP chargd processing fee of Rs.1.55 lakhs for one year. Complainant open his account with the OP and loan documents in blank  were got executed from him.  He gave deposits of Rs.3 lakhs, Rs.15 lakhs and Rs.18,67,000/- by way of FDR bearing interest @8.8% per annum.
2. OP honoured the letter of credits on 22.05.08, 03.06.08 and 11.06.08  for approximately Rs.90 lakhs  held by the beneficiary M/s.  Bharat Aluminium Company ltd., for few months. Later on OP started annoyance and harassment of complainant after opening the LCs for Rs.90 lakhs in favour of M/s. J&K Aluminium Company duly accepted by complainant for payment but dis-honoured by OP bank on the behest of Regional Head Shri Manish Gupta vide  communication dated 31.07.08 which ought  not to have been dishonoured, once the complainant had accepted the same with specific endorsement thereon. OP bank had no competency and authority  to return the said bill of exchange on the ground that there were some discrepancies noted in the documents. Another LCs having  same discrepancies have been paid by OP bank favouring the same party. Despite there being sufficient credit balance in the account, out of deliberations and malafides on the part of some senior  officials of the OP bank who nurtured enmity against the complainant, dishonouring of aforesaid bill of exchange seriously injured the goodwill and credit worthiness of the complainant in the market. The said act virtually ruined the complainant who has been denied the supplies of material by the accredited suppliers. OP bank was served with a legal notice dated 21.07.08 but of no avail.
3. Apart from aforesaid bill of exchange, OP also dishonoured a cheque of Rs.20 lakhs dated 09.07.08 in favour of M/s. Global Enterprises (India) despite the fact that there was sufficient credit balance in the account of complainant. Because of the same, M/s. Global Enterprises served legal notice dated 11.07.08 under Section 138 Negotiable Instrument Act.
4. Still further OP also dishonoured cheque of Rs.2 ½ lakhs dated 10.07.08 issued by complainant un favour  of M/s. Sourabh Metal despite the fact that there was sufficient credit in the account of complainant. M/s. Sourabh Metal served legal notice dated 16.07.08 under Section 138 Negotiable Instrument Act.
5. Cheque of Rs.2.5 lakhs dated 09.07.08 issued in favour of Shri Raj Kumar, presented at the counter was refused payment despite the fact that there was sufficient credit balance in the account of complainant. Shri Raj Kumar served an oral protest and threatened to proceeded under Section 139 Negotiable Instrument Act.
6. Because of unilateral withdrawal of limits by OP bank, complainant could not supply materials worth Rs.1,69,69,401/- to M/s. Rakman Industires Ltd. Whose order dated 04.07.08 was cancelled by complainant. Vide letter dated 01.09.08 OP informed the complainant that he should get in touch with the Relationship Manager for the purpose of  renewal of credit limits. The same  clearly amounts to admission on the part of the OP that the credit facility availed by complainant was still in force.
7. Vide letter dated 18.09.08 issued by OP bank, complainant was informed that import bill of Rs21,10,002/- had been honoured and account of the complainant has been debited. Again it clearly amounts to admission on the part of the OP bank that credit facility availed by the complainant were still in force.
8. The complainant had filed this case for compensation for Rs.54 lakhs / value of returned documents held by J&K Aluminium Company Ltd, Rs.20 lakhs for compensation of amount of cheque held by M/s. Global Enterprises, Rs. 2 ½ lakhs for compensation for amount of cheque held by Shri Raj Kumar, Rs.16 lakhs for loss  of profit expected from M/s. Rakman Industries, Rs.10 lakhs for mental agony, harassment and torture, Rs.25,000/- for misc. Expenses for follow up action.
9. Complainant has also prayed for refund of Rs.3 FDR account no.522-3-281558-1 dated 31.01.08 for Rs.3 lakhs, account no.522-3-287356-5 dated 02.06.08 for Rs.18,67,000/-, account no.522-3-281557-3 dated 31.01.08 for Rs.15 lakhs bearing rate of interest as 8.79121%, 8.77610% and 8.79121% respectively with interest at the market rate of 2% per month from the date of issuance.
10. Notice to OP for 18.03.09 was not received back. The same was presumed to have been served, by ld. Predecessor of this Bench. It was proceeded exparte vide order dated 18.09.09.
11. Complainant filed affidavit of Shri Rakesh Gupta, Prop. Which is on the lines of complaint.
12. We have gone through the material on record and heard the arguments. Since the OP had not opted to appear and defend the complaint, there is no reason to disbelieve the averments made in the complaint. This is more so when the claim of the complainant is based on documentary evidence.
13. The issue of letter dated 01.09.08 and 18.09.08 by the OP bank which are Exbit. C-1/18 and C-1/19 show that the credit facility availed by the complainant were still in force. The reason being that renewal of credit limit can be of existing limit and not a limit which has already expired. For expired limits, there has to be sanction of fresh limit.
14. Act of the OP in dishonouring the bill of exchange and cheque despite there being a valid  credit limit is act of gross deficiency on the part of OP bank.
15. Counsel for the complainant submitted and rightly so that if  there was any discrepancy in the documents in favour of M/s. J&K Aluminium Company, there is no reason why other LC having same discrepancy was paid by OP bank. Said other LC is Exbit C-1/9.
16. Counsel for the complainant contended that due to dishonour of bill of exchange, the complainant had to face prosecution under Section 138 of the N.I. Act. It is different matter that these prosecution were settled by paying the amount to the payee of those documents. But still complainant had to face humiliation and prosecution, run the risk being imprisoned or fined. Thus complainant is entitled to compensation from the OP bank.
17. Any how brake up of details mentioned in para-16 of brief submissions filed by the complainant reveal that claim under (IV) of loss of profit expected from M/s. Rakman Industries has no nexus with the present credit limit. That was an independent order, complainant could not supply the goods, complainant cancelled the order. Similarly claim under V and VII have nothing to do with the dishonour of documents by OP bank.
18. After excluding amount of claims under heading 4, 5 and 7 the remaining  sum comes to Rs.66,50,000/-. But the compensation can not be equivalent to the amount of instrument/ documents returned / cheques. At the most the complainant can expect to have earned 10% of the amount of  transaction, that would come to Rs.6,50,000/-.
19. The complainant had not mentioned anything about FDs in his affidavit filed in evidence. Thus it appears that he is not pressing the said claim.
20. To sum up the OPs directed to pay Rs.6,50,000/- towards loss of profit which the complainant could earn, had the transaction materialised.
21. The OP is also directed to pay Rs.1 lakhs as compensation for mental harassment, torture including cost of litigation. The OP is directed to comply with the order within 45 days from the date of receipt of copy of this order failing which the complainant would be entitled to apply under Section 25 or 27 Consumer Protection Act.
22. Copy of the order be sent to both the parties free of cost.
23. File be consigned to record room.

 

(ANIL SRIVASTAVA)                                           (O.P. GUPTA)                                    

MEMBER                                               MEMBER (JUDICIAL)