Tamil Nadu

StateCommission

CC/48/2009

RVJ. DEVADOSS - Complainant(s)

Versus

THE CHIEF MANAGER, CANARA BANK - Opp.Party(s)

18 Mar 2015

ORDER

BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI

 

BEFORE         HON’BLE THIRU JUSTICE R. REGUPATHI        PRESIDENT

                        THIRU.J. JAYARAM                                 JUDICIAL MEMBER 

                            

                                                                  C.C.NO.48/2009

 

Dated this the  18^th   day of MARCH, 2015

 

RVJ Devadoss

S/o Late. C.Royappan,

Proprietor M/s Printech Fashions

No.29, Erukkadu 4^th street

Karuvampalayam

Tiruppur 641 604                                            ..complainant

                                       Vs

1.The Chief Manager

M/s Canara Bank,

SME Branch, Kurinji Towers,

40-B, Appachi Nagar Main Road

Kongu Nagar

Tirupur 641 607    

 

2.Export Credit Guarantee Corporation of India Ltd

Rep.by the Branch Manager,

137/2, C.G.Complex

Kumaran Road

Tirupur – 641 601                                          ..opposite parties

 

Counsel for the complainant                   : M/s Fast Track Law Associates

Counsel for the 1^st opp.party                  : T.C.A. Srinivasan

Counsel for the 2^nd opp.party                 : M/s P.V.S. Giridhar and Sai

                                                            Associates

THIRU.J.JAYARAM, JUDICIAL MEMBER

1.        This case coming before us for final hearing on 2.12.2014 and upon perusing the material records, this commission made the following order.

 

2. The case of the complainant are as follows:-

 

          The complainant is  proprietor of M/s Printech Fashions at Tiruppur exporting  Hosiery items. The complainant’s Firm was having account with the 1^st opposite party from the year 2002 and in the year 2003, the 1^st opposite party took over the assets and liabilities of the firm from Nedungadi Bank, Tirupur by sanctioning Rs.30 lakhs of Packing Credit Limit and Rs. 15 lakhs FBP (Foreign Bill Purchase) limit, interest being at the rate of 10% p.a. In the year 2008, the complainant had applied for renewal of the existing limit along with an adhoc PC limit of Rs. 45 lakhs and the 1^st opposite party sanctioned Rs.45 lakhs along with the earlier limit renewal availing the enhanced adhoc Packing Credit Limit and other facilities sanctioned by the 1^st opposite party,  the complainant secured export orders from the company in Canada and on the direction of the 1^st opposite party by Credit Limit Approval Letter of the 2^nd opposite party dated 20.2.2008 under the Standard Comprehensive Risk(SCR), a sum of Rs. 2 Crores was approved on Ät Sight”  basis from the date of shipment.

 

 3.       The 1^st opposite party had taken a policy from the 2^nd opposite party. The aforesaid importer was pleased to issue, ‘At sight’ letter of credit for USD 5,00,000. The 1^st opposite party disbursed on various dates as per their pass sheet for PC Accounts dated 25.4.2009. The complainant sent goods by way of 4 shipments through the buyer nominated liner M/s Freight Lift Limited having Head office at Chennai and Branch office at Tiruppur, Tuticorin etc.,  and the complainant’s firm is the consignor and the consignee is Bank Leumi, USA i.e., the importer’s bank aboard.

 

4.         After shipment of all the necessary documents relating to exports were handed over to the 1^st opposite party. The 1^st opposite party scrutinized the documents and on appreciation had sent the 1^st export bills amounting to USD 1,44,936 for negotiation to the Applicant’s Bank at USA. The export through documentary credit is governed by “The Uniform Customs and practice for Documentary Credit Rules” and the article 14 stipulates the standard for examination of documents. The 1^st opposite party had negotiated the export bill on 19.3.2008 and the complainant was given the copy of the discrepancies letter only on 10.4.2008 by the 1^st opposite party by the Bank of Leumi at USA through “SWIFT” (The Society for World-Wide Inter-Bank Financial Transaction) message dated 26.3.2008, but if the copies of the discrepancies were handed over to the complainant immediately by the 1^st opposite party, the complainant could have called upon the buyer for secured payment and could have stopped the subsequent shipment and because of the negligent act of the 1^st opposite party, the export bills were returned. On 20.7.2009, the legal notice was issued to the 1^st opposite party claiming compensation for the negligence and deficiency in service.

 

5.         The Bank Leumi, USA returned the export documents unpaid to the 1^st opposite party through SWIFT messages dated 16.5.2008 and 19.6.08 stating that the applicant has finally refused to accept the discrepancies. By the Canada Customs Response Report, the goods were released on 30.4.2008, 7.5.2008 and 12.5.2008 and how the goods were released without the export documents. The buyer  abroad played  fraud on the complainant firm by colluding with the Indian liner referred above and took delivery of the 4 consignments without honouring the letter of credit and without the knowledge of the Bank  abroad. On 8.11.2008, the complainant preferred a complaint against the liner and others with the police at Tiruppur and after an enquiry, FIR was registered on 3.3.09.

 

6.       In these circumstances, the 1^st opposite party had  authorized an agency at Canada to inspect/verify the consignment and take appropriate action including criminal/Civil and to lodge claim/damages and on their behalf in the appropriate court of law against all the concerned.

 

7.       When the recovery proceedings were in full force and in the circumstances where the export bills were purchased and negotiated by the 1^st opposite party, SARFAESI Act, proceedings were initiated  by the 1^st opposite party and immediately on receipt of the notice, the complainant went to the Bank and explained his position and raised objection and the 1^st opposite party had assured him of not taking further action and also promised to provide working capital for running his further business. In spite of the request, the 1^st opposite party with the illegal intention to sell the secured property for the meager amount and issued “possession notice” dated 21.4.2009 under 13(4) of the SARFAESI Act. After issuance of the 13(2), notice to the 1^st opposite party had received the claim from the 2^nd opposite party for the bill amount which the buyer abroad played fraud in non payment of bill amount and in the possession notice dated 21.4. 2009 at schedule D, the 1^st opposite party fixed the liability on the complainant  as on 6.1.2009 as follows:-

Liability as on 6.1.2009         Interest due from       Interest Rate

PC                   Rs. Nil                   1.1.2009                 0.00%

FDB/FBE           Rs. 61,09,066.00    1.1.2009                 15.25%

TOD in current

A/c No. 10542     Rs. 10,297.21       1.1.2009                16.75%

                        

Total                 Rs.61,19,363.21

                       

8.       In response to the representation of the complainant dated 22.4.2009, the 1^st opposite party by their letter dated 30.4.2009 answered the said queries and to reduce the total out standing amount and bills and his account was classified as NPA as on 31.7.2008 and the 1^st opposite party had credited the claim amount received from the 2^nd opposite party to the “packing credit dues”. Thus the complainant had presented the export bill in time and the same had been purchased by the 1^st opposite party and credited the same to the complainant’s Packing Credit Loan Account and further the 1^st opposite party bank had charged exorbitant rate of interest contrary to the interest agreed in the sanction memorandum dated 19.2.2008.

9.        The complainant preferred an appeal before the “Debts Recovery Tribunal, Coimbatore and the Tribunal without consent of his counsel or the complainant, passed the impugned order directing him to deposit Rs.14 lakhs without considering his grievance and hence the same was challenged in CRP. NO. 1861/2009 and MP. No.1/2009 and a conditional order was passed granting interim stay of the possession notice directing the complainant to deposit Rs. 5 lakhs before the 1^st opposite party’s bank on or before 7.8.2008 and accordingly the complainant deposited the amount.

 

10.      The 1^st opposite party had given a report to the 2^nd opposite party as, “The payment could not be secured in any event on the export bills” and the 2^nd opposite party had paid only 25% of gross invoice value. The complainant claimed 80 -90 %, as per the easy-GC on the export bills, but the 2^nd opposite party by their letter dated 6.3.09, stated that if the offer of 25% of the bill value i.e, Rs. 46,57,889/- would lapse  unconditionally.

 

11.          Having no other go, he accepted the offer of the 2^nd opposite party for a lesser value and the 2^nd opposite party ought to have allowed the 90% of the value of export bills. The action of the 1^st opposite party bank in making his account as NPA is illegal and done with malafide intention.

 

12.          Because of the negligence on the part of the 1^st opposite party, even though the complainant complied with the export obligation, he was not able to realize the amount from the buyer abroad. In these circumstances, the Superintendent of Customs initiated the proceedings against the complainant. The 1^st opposite party by reply notice dated 1.8.2009 to the complainant’s legal notice dated 20.7.2009 as denied in his claim.

 

13.         Hence the complainant praying for direction to the 1^st opposite party

 

i)  to credit Rs. 58,53,965/- (Fifty Eight Lakhs Fifty Three Thousand Nine Hundred and sixty Five only) to the complainants packing credit loan account with subsequent interest, for the export bill purchased and negotiated by the 1^st opposite party vide their reference No.1246 N-260118 – 08 dated 19.3.2008.

 

2. to revoke the notice issued by the 1^st opposite party published in Dinamalar News paper on 9.9.2008 and intimated to the complainant through registered post on 17.9.2008.
3. to pay Rs.5,39,000/- (Five lakhs and Thirty Nine Thousand only) being the damage caused because of illegal paper publication caused by the 1^st opposite party in Dinamalar news paper on 9.9.08 and not allowing the complainant to lease out his factory premises and collect the rent at the rate of Rs.49,000/- (Forty nine Thousand only) per month.
4. to pay such other damage caused because of illegal paper publication caused by the 1^st opposite party in Dinamalar newspaper on 9.9.2008 and not allowing the complainant to lease out his factory premises from the date of the petition to the date of revocation of the notice.
5. to pay Rs.21,83,000/- (twenty one lakhs eighty three thousand) received by the 1^st opposite party towards duty drawback amount claimed by the customs authority.
6. to pay Rs.10,00,000/- (Ten Lakhs only) towards loss of reputation in business circles and mental agony suffered by the complainant.

 

14.        The 1^st opposite party filed version stating that the complaint is not maintainable before the consumer Forum since the transaction relates to financial assistance extended by the 1^st opposite party to the complainant and  since the complainant defaulted to repay the same they have initiated proceeding under  13(4) of the SARFAESI Act and filed a suit for recovery before DRT, Coimbatore and the same is pending. In the version, the various allegations and averments, in  the complaint have been denied by the 1^st opposite party  and has stated that there is no deficiency in service on their part.

 

15.         The 2^nd opposite party has filed version contending that the complainant is not a consumer within the meaning of sec 2(1)(d) of the Consumer Protection Act, as he has admittedly availed the services of the opposite party for commercial purpose and admittedly the complainant carries on the business of exporting Hosiery items. Therefore the complaint is not maintainable before the consumer Forum and also that there is no deficiency in service on their part.

 

16.             The complainant and the opposite parties 1 and 2 have filed their proof affidavits reiterating the averments in the complaint and the version filed by them.

 

17.       Documents 1 to 46 were filed and marked on the side of the complainant as Ex.A.1 to A.46. Documents 1 to 31 were filed and marked on the side of the opposite parties as Ex.B.1 to B.31.

 

18.           The first and the foremost point to be decided is whether the complainant is a consumer as contemplated u/s 2(1)(d) of the Consumer Protection Act and whether the complaint is maintainable before the consumer Forum?

 

19.             Admittedly the complainant is doing business exporting hosiery to their clients abroad and the transactions are of commercial nature and for commercial purpose and so the complainant is not a consumer as defined u/s 2(1)(d) of Consumer protection Act and therefore the complaint does not come under the purview of Consumer protection Act and therefore we hold that  the complaint is not maintainable before the Consumer Forum and that the complaint is liable to be dismissed.

 

20.        Further it is very clear from the pleadings and the documents that the issues which arise for consideration are civil matters and the complainant has to seek his remedy  before the Civil Court and not before the Consumer Forum.

 

        In the result, the complaint is dismissed as not maintainable before the consumer Forum. The complainant is at liberty to approach the Civil Court or any other appropriate Forum to seek his remedy.

         The period of pendency of the complaint before this Commission shall be excluded while determining limitation as contemplated u/s 14 of the Limitation Act.

           No order as to costs .

 

 

  J.JAYARAM                                                             R.REGUPATHI

JUDICIAL MEMBER                                                   PRESIDENT

                            

LIST OF DOCUMENTS FILED BY THE COMPLAINANT :

Ex.A1	09.01.2007	Copy of Certificate of Registration
Ex.A2	14.02.2008	Copy of Letter of Credit
Ex.A3	19.02.2008	Copy of Renewal cum enhanced Sanction order
Ex.A4	20.02.2008	Copy of Credit Limit approval given by ECGC
Ex.A5	05.03.2008	Copy of Invoice No.PF-011/07
Ex.A6	15.03.2008	Copy of Multimodal Transport Document
Ex.A7	18.03.2008	Copy of Bill of Exchange
Ex.A8	19.03.2008	Copy of Covering letter for documentary bill for purchase /Discourt/Negotiation
Ex.A9	19.03.2008	Copy of Export Bill Negotiation Advice letter of Canara Bank
Ex.A10	19.03.2008	Copy of Invoice No.PF.012/07
Ex.A11	23.03.2008	Copy of Multimodal Transport Document
Ex.A12	25.03.2008	Copy of Bill of Exchange
Ex.A13	25.03.2008	Copy of Covering letter for documentary Bill for Purchase / Discount / Negotiation
Ex.A14	26.03.2008	Copy of Photocopy of Discrepancy letter received by Canara Bank from Bank of Leumi, USA
Ex.A15	26.03.2008	Copy of Export Bill Collection Advice Letter of Canara Bank
Ex.A16	27.03.2008	Copy of Invoice No.PF-013/07
Ex.A17	29.03.2008	Copy of Multimodal Transport Document
Ex.A18	02.04.2008	Copy of Bill of Exchange
Ex.A19	02.04.2008	Copy of Covering letter for documentary Bill for Purchase /Discourt / Negotiation
Ex.A20	04.04.2008	Copy of Photocopy of Discrepancy letter received by Canara Bank from Bank of Leumi, USA
Ex.A21	16.04.2008	Copy of Invoice No.PF-01/08-09
Ex.A22	20.04.2008	Copy of Multimodal Transport Document
Ex.A23	25.04.2008	Copy of Bill of Exchange
Ex.A24	25.04.2008	Copy of Covering letter for documentary Bill for Purchase / Discount /Negotiation
Ex.A25	29.04.2008	Copy of Photocopy of Discrepancy letter received by Canara Bank from Bank of Leumi, USA
Ex.A26	16.05.2008	Copy of Swift message regarding return of Export bills
Ex.A27	19.06.2008	Copy of Swift message regarding return of Export Bills
Ex.A28	31.07.2008	Copy of letter of Stikeman Elliott, Barristers & Solicitors, Canada With authorization letter of Canara Bank
Ex.A29	30.08.2008	Copy of E-mail messages
Ex.A30	17.09.2008	Copy of letter of Canara Bank
Ex.A31	06.01.2009	Copy of 13 (2) –Demand Notice
Ex.A32	03.03.2009	Copy of First Information Report
Ex.A33	06.03.2009	Copy of Letter of ECGC
Ex.A34	21.04.2009	Copy of 13 (4) – Possession Notice
Ex.A35	25.04.2009	Copy of Pass Sheet for PC Accounts from 01.01.2008 to 24.04.2009
Ex.A36	30.04.2009	Copy of letter of Canara Bank
Ex.A37	14.05.2009	Copy of Memorandum of SARFAESI Appeal
Ex.A38	21.05.2009	Copy of Counter
Ex.A39	08.06.2009	Copy of order of Debts Recovery Tribunal
Ex.A40	08.07.2009	Copy of Letter of Canara Bank
Ex.A41	09.07.2009	Copy of order in CRP.No.1861/2009
Ex.A42	20.07.2009	Copy of Legal notice
Ex.A43	21.07.2009	Copy of Legal Notice
Ex.A44	27.07.2009	Copy of Proof of Deposit
Ex.A45	01.08.2009	Copy of Reply Legal notice of the 1st opposite party
Ex.A46	19.03.2008	Copy of Certificate issued by Canara bank

 

 

LIST OF DOCUMENTS FILED BY THE OPPOSITE PARTIES :

Sl.No	Date	Descriptions
Ex.B1	17.07.2008	Copy of Revision of rate of Interest W.E.F. 18.07.2008
Ex.B2	08.07.2009	Copy of Letter sent by the 1st opposite party to the complainant
Ex.B3	29.06.2009	Copy of Letter sent by the  complainant to the1st opposite party
Ex.B4	14.08.2008	Email sent by the 1st opposite party to the complainant
Ex.B5	01.08.2008	Copy of letter sent by 1st opposite party to the complainant
Ex.B6	25.07.2008	Copy of letter sent by the 1st opposite party to Mr.Andre Goguen
Ex.B7	24.07.2008	Copy of letter sent by the 1st opposite party to Mr.Andre Goguen
Ex.B8	24.07.2008	Copy of Letter sent by the 1st opposite party to Mr.Maret Guilonard
Ex.B9	22.07.2008	Copy of letter sent by the Bank to Mr.Claude Daigneault
Ex.B10	07.07.2008	Copy of letter sent by the 1st opposite party to M/s.La Freightift  Pvt. Ltd with coy to the complainant
Ex.B11	05.07.2008	Copy of letter sent by the 1st opposite party to the complainant
Ex.B12	05.06.2008	Copy of letter sent by the 1st opposite party to the complainant
Ex.B13	03.06.2008	Copy of letter sent by the 1st opposite party to the complainant received by Devadoss
Ex.B14	03.06.2008	Copy of letter sent by the 1st opposite party to the complainant received by Madhavan
Ex.B15	26.05.2008	Copy of letter sent to complainant by Texwell Group Ltd
Ex.B16	16.04.2008	Copy of letter by complainant to 1st opposite party
Ex.B17	02.04.2008	Copy of letter sent by Texwell Group Ltd to complainant copy sent to 1st opposite party
Ex.B18	08.04.2008	Copy of letter sent by complainant to the 1st opposite party
Ex.B19	20.02.2008	Copy of letter sent by Texwell Group Ltd to complainant copy given to 1st opposite party
Ex.B20	24.03.2008	Copy of letter sent by Texwell Group Ltd to complainant
Ex.B21	13.05.2008	Copy of letter sent by the complainant to1st opposite party
Ex.B22	22.04.2008	Copy of letter sent by Texwell Group Ltd to complainant
Ex.B23		Copy of Swift message notifying discrepancy with the ack of the complainant, to have received the same day
Ex.B24	08.04.2008	Copy of letter sent by complainant to 1st opposite party
Ex.B25	18.02.2008	Copy of letter sent by Texwell Group Ltd to complainant
Ex.B26	15.07.2008	Copy of Email sent by 1st opposite party to complainant
Ex.B27	10.07.2008	Copy of Email sent by 1st opposite party to complainant
Ex.B28	09.07.2008	Copy of Email sent by 1st opposite party to complainant
Ex.B29	09.07.2008	Copy of Email sent by complainant to 1st opposite party
Ex.B30	21.06.2008	Copy of Email sent by 1st opposite party
Ex.B31	23.07.2009	Copy of Statement of Account

 

 

 

 J.JAYARAM                                                                              R.REGUPATHI

(J) MEMBER                                                                                PRESIDENT