Tamil Nadu

South Chennai

CC/248/2005

Bhandari Apparels, - Complainant(s)

Versus

The Export Credit Guarantee - Opp.Party(s)

M/s Srinath Sridevan

08 Dec 2017

ORDER

                                                                        Date of Filing :   28.02.2005

                                                                        Date of Order :   08.12.2017

DISTRICT CONSUMER DISPUTE REDRESSAL FORUM, CHENNAI (SOUTH)

     2^nd Floor, Frazer Bridge Road, V.O.C. Nagar, Park Town, Chennai-3

PRESENT: THIRU. M.MONY, B.Sc., L.L.B. M.L.,                     : PRESIDENT            

                  TMT. K.AMALA, M.A. L.L.B.,                                 : MEMBER I

             DR. T.PAUL RAJASEKARAN, M.A ,D.Min.PGDHRDI, AIII,BCS : MEMBER II

C.C.NO.248/2005

   FRIDAY THIS 8^th DAY OF DECEMBER 2017

 

Bhandari Apparels,

Rep. by its Director,

B-16, Phase II, MEPZ,

Tambaram, Chennai 600 045.                               Complainant

 

                                                                  Vs

 

The  Export Credit Guarantee

Corporation of India Ltd.,

Rep. by its Manager,

“Spencer Towers” VII Floor,

770-A, Anna Salai,

Chennai 600 002.                                                  Opposite party

 

 

Counsel for Complainant         :   M/s. Srinath Sridevan & others           

Counsel for opposite party       :   M/s. S.Ramasubramaniam & Associates.

ORDER

THIRU. M. MONY, PRESIDENT

This complaint has been filed by the complainant against the opposite party under section 12 of the Consumer Protection Act 1986 seeking direction to refund a sum of Rs.11,65,929/- with interest and also to pay a sum of Rs.2,00,000/- towards compensation and Rs.50,000/- towards compensation and to pay cost of the complaint.

 1. The averment of the complaint in brief are as follows:

         The complainant submit that  the complainant is a public Limited company and an exporter of Garments to one G.M. Store at Landon for Rs.50,00,000/- in order to cover the risk the complainant took an Insurance policy with the opposite party covering from 1.11.2002 to 30.11.2003 under policy No.SCR00700049213 and the maximum is liability in the above mentioned policy is Rs.50 lakhs.  

2.     Further the complainant state that they shipped the goods by invoice value Rs.26,50,000/-.The terms of payment, acceptance of documents are within 60 days from the date of shipment.   The complainant informed the opposite party bank on 28.8.2002 that Mr.John Mac farland the buyer store (G.M. Store) is not a  buyer and he is an International Criminal and he forged the document too.  The complainant further state that the buyer G.M. Stores had not taken delivery of the goods sent by the complainant and he has got to sell the undelivered goods with the prior permission of the opposite party.    The complainant also state that the opposite party gave permission to resell the undelivered goods to distributor  Austria;  when he made a claim for insurance the opposite party had sanctioned only 90% of the invoice value in which 50% was approved.   The complainant further state that  under clause 13 of the Insurance Policy the opposite party is liable to pay 90% of the loss ascertained in accordance with condition No.14  of the policy.    The complainant also state that if the goods were not accepted by the buyer and not brought back to India the gross amount payable is gross invoice value rest resell value. Accordingly the complainant realized  Rs.7,08150/- by way of resale and claims 19,05,188/- of the gross invoice value in which 90% is 17,17,097/- in addition to this the complainant’s claims of Rs.2,38,019/- towards flight and demurrage  charges suffered by the complainant and expenses incurred for reselling the non accepted Goods Rs.1,82,184/- total liability amounts to Rs.21,28973/-.       As such the act of  the opposite parties amounts to deficiency in service which caused mental agony and hardship to the complainant.  Hence this complaint is filed.

3.    The brief averments in Written Version of  the  opposite party is  as follows:

The  opposite party deny each and every allegations except those that are specifically admitted herein.    The opposite party argued that the complaint company was a public limited company which was incorporated on 7^th April 1995 with the registration No.30866 and this CIN No.U181 01 TN 9095 PLC 0303 86 which has unauthorized share capital of Rs.7 crores involving manufacturing of apparel to the tune of Rs.4 crores.  The opposite party also state that complainant company is doing the business of export for profits and the complaint is not  maintainable.   The opposite party had accepted the liability of insurance cover for Rs.50 lacs and where the risk are clearly stipulated on the face of the policy and all the terms of the cover, exclusion, conditions are mentioned in the above mentioned policy itself.  The  opposite party further state that the opposite party had sent  letter to the complainant on 2.9.2002 and as per Clause 5 of the policy the complainant should get prior approval to resell the consignment which was not accepted by the buyer.  The opposite party by receiving this information cancelled the credit limit to the complainant on 11.8.2002 for which the complainant informed on 28.9.2002 that they are shipping the consignment to barded warehouse.     Hence there is no deficiency in service on the part of the  opposite party and the complaint is liable to be dismissed.

4.     In order to prove the averments of the complaint, the complainant has filed proof affidavit as his evidence and documents Ex.A1 to Ex.A20 marked.  Proof affidavit of opposite parties filed and Ex.B1 to Ex.B8 marked on the side of the  opposite parties.

 

5.   The points for the consideration is: 

1. Whether the complainant is eligible for Rs.11,65,929/- together with interest at the rate of 12% from 25.4.2003 as prayed for ?

 

2. Whether the complainant  is eligible for Rs.2,00,000/- as compensation as prayed for ?

 

3. Whether the complainant is claims for mental agony  a sum of Rs.50,000/- as prayed for ?.

 

 

 

6.   POINTS  1 to 3 : -

Heard both sides.  Perused the records.    The complainant is a public Limited company is an exporter of Garments to one G.M. Store at Landon for Rs.50,00,000/- in order to cover the risk the complainant took an Insurance policy with the opposite party covering from 1.11.2002 to 30.11.2003 under policy No.SCR00700049213 and the maximum is liability in the above mentioned policy is Rs.50 lakhs.  

Under the said policy the following risk are  covered

1 Insolvency of the buyer

2. Failure of the buyer to pay the insured within 4 months after due date of payment the gross invoice value of the goods delivered to and accepted by the buyer

3)     Failure or refusal on the part of the buyer to accept the goods which have already been exported from India. 

4)   The failure or refusal on the part of the buyer to fulfill the terms of the contract, such refusal not arising from any breach of contract or warranty on the part of the insured nor any other cause within the control of the insured.

7.     The complainant shipped the goods by invoice value Rs.26,50,000/- the terms of payment, acceptance of documents within 60 days from the date of shipment.   The complainant informed the opposite party bank on 28.8.2002 that Mr.John Mac farland of the buyer store (G.M. Store) is not a  buyer and he is an International Criminal and he forged the document also by the documents filed to this Forum under page 21.    The allegation of the complainant is that the buyer G.M. Stores had not taken delivery of the goods sent by the complainant and he has got to sell the undelivered goods with the prior permission of the opposite party.    Accordingly it is contended that the opposite party gave permission to resell the undelivered goods to distributor  Austria;  when he made a claim for insurance the opposite party had sanctioned only 90% of the invoice value in which 50% was approved.    The complainant contended that under clause 13 of the Insurance Policy the opposite party is liable to pay 90% of the loss ascertained in accordance with condition No.14  of the policy.    The complainant also contended that if the goods were not accepted by the buyer and not brought back to India the gross amount payable is gross invoice value rest resell value.  Accordingly the complainant released Rs.7,08150/- by way of resale and claims 19,05,188/- of the gross invoice value in which 90% is 17,17,097/- in addition to this the complainant’s claims of Rs.2,38,019/- towards flight and demurrage  charges suffered by the complainant and expenses incurred for reselling the non accepted Goods Rs.1,82,184/- total liability amounts to Rs.21,28973/-.  

8.     The contention of the opposite party is that the complainant claimed 90% of the invoice value in which 50% for loss is tenable by them is not accepted by the complainant.    It is an admitted fact that the opposite party had paid Rs.11,76,002/- to the complainant on 31.7.2003 which was not denied by the complainant.    It is contended by the complainant that the  cause of action starts from 31.7.2003 the date of repudiation of the claim and the complaint filed the said complaint on 2.5.2005 which is within the period of two years of limitation.  

9.     The learned counsel for the opposite party contended that the complaint company was a public limited company which was incorporated on 7^th April 1995 with the registration No.30866 and this CIN No.U181 01 TN 9095 PLC 0303 86 which has unauthorized share capital of Rs.7 crores involving manufacturing of apparel to the tune of Rs.4 crores.  The learned counsel for the opposite party also contended that complainant company is doing the business of export for profits and the complaint is not  maintainable.   The opposite party had accepted the liability of insurance cover for Rs.50 lacs and where the risk are clearly stipulated on the face of the policy and all the terms of the cover exclusion conditions are mentioned in the above mentioned policy itself.  The learned counsel for the opposite party further contended that the opposite party had sent  letter to the complainant on 2.9.2002 and as per Clause 5 of the policy the complainant should get prior approval to resell the consignment which was not accepted by the buyer.    It is very clear from the collecting bankers of the buyer that G.M. Stores representative was an international Criminal and he had submitted forged documents to their bankers the policy also informed to the bankers about the non genuineness of G.M. Stores representative.   The opposite party by receiving this information cancelled the credit limit to the complainant on 11.8.2002 for which the complainant informed on 28.9.2002 that they are shipping the consignment to pounded warehouse.   But the complainant before sending this letter they have already made shipment on 26.7.2002 wherein the opposite party in their letter dated 18.12.2002 stated “Kindly note to obtain prior approval before finalizing resell or re-import and to take all possible step for minimizing the loss “.  The complainant wrote a letter on 30.12.2002 seeking the discount of 18.75 % and resubmitted his claim form on 27.12.2002.  The opposite party replied to the complainant on 17.1.2003 that under Clause 5 of the policy “ No shipment should be made to the above buyer without corporation prior approval.”    Further as per Clause 9 of the policy the opposite party liability shall be  50%  of the original invoice value.  On 23.1.2003 the complainant informed to the opposite party “already instructed out agents Mrs. Panalpano World Transport Indian to reship the goods from well fast to our customer staried distributor and demanding 100% loss. 

10.    But the complainant is claiming Rs.23,28,089/-   from the opposite party taking the original invoice value of Rs.28,60,036/- plus freight, demurrage charges at well fast Rs.2,38,019/, customs clearance and other charges on account of resell Rs.1,82,184/- total amounting to Rs.30,36,236/- out of which the complainant realized Rs.7,08,150/- by way of resale and net loss claimed by him Rs.23,28,089/-

11.    The opposite party had given an offer vide their letter dated 31.7.2003 that the shipment value is Rs.26,13,388/- and 50% of the value Rs.13,06,669/- agreed by them in which 90% works out to Rs.11,76,002/-based on that the opposite party had made a provisional payment Rs.12,00,000/- to the complainant which was not disputed by the complainant. 

12.  The opposite party had cited the following decisions:-

1.    1996  6  Supreme Court Case 428

United India Insurance Co. Ltd

1.  

M.K.J. Corporation

2)  2014 I Supreme Court case 686

Export Credit Guarantee Corporation of India Limited

..Vs..

Gars Sons International

 

3.                       III 2009 CPJ V (SC)

KARNATAKA POWER TRANSMISSION CORPN. & anr.

..Vs..

Ashok Iron Works Pvt. Ltd.

It is observed that the definition of “person” in Sec 2 (1) (m) inclusive non exhaustive company is a person within the meaning of Sec.2 (1) (b) and sec. 2 (1) (m) the within mention complaint the said company will not come under the definition of consumer.     It is also mentioned in para-2 of the order of the issue involve in this case is whether the export credit which issued shipment  committed  deficiency  in service to reimburse the loss suffered by an export due to fraudulent committed by the buyer in collution by bank employee. “

13. complainant is not entitled for any relief as prayed for in the complaint and the point is answered accordingly.   

        In the result the complaint is dismissed.  No cost.

          Dictated by the President to the Assistant, taken down, transcribed and computerized by her, corrected by the President and pronounced by us in the open Forum on this the 8^th day  of  December 2017.  

 

 MEMBER-I                        MEMBER-II                             PRESIDENT.

Complainant’s side documents:

Ex.A1- 8.1.2003   - Copy of policy.

Ex.A2- 4.7.2002    - Copy of opposite party letter.

Ex.A3- 13.8.2002  - Copy of Bank of India letter.

Ex.A4- 28.8.2002  - Copy of complainant letter.

Ex.A5- 2.9.2002    - Copy of opposite party letter.

Ex.A6- 11.9.2002  - Copy of opposite party letter.

Ex.A7- 20.9.2002  - Copy of monthly payment.

Ex.A8- 24.9.2002  - Copy of complainant letter to opposite party.

Ex.A9- 18.12.2002         - Copy of letter of opposite party.

Ex.A10- 30.12.2002- Copy of application for resale.

Ex.A11- 2.1.2003  - Copy of complaint to opposite party.

Ex.A12- 17.1.2003         - Copy of opposite party’s letter

Ex.A13- 28.1.2003         - Copy of complainant letter

Ex.A14- 20.3.2003         - Copy of monthly shipment declaration.

Ex.A15- 24.2.2003         - Copy of complainant letter.

Ex.A16- 21.4.2003         - Copy of claim for shipment.

Ex.A17- 17.6.2002         - Copy of complainant letter to opp. party.

Ex.A18- 21.7.2003         - Copy of opposite party letter to complainant.

Ex.A19- 11.8.2003         - Copy of legal notice.

Ex.A20- 9.9.2003  - Copy of reply notice.

Opposite parties’ side document: -   

 

Ex.B1- 2.9.2002    - Copy of letter sent by the opposite party.

Ex.B2- 2.1.2003    - Copy of letter sent by the complainant

Ex.B3-                   - Copy of application for approval of resale.

Ex.B4- 17.1.2003  - Copy of letter sent by the opposite party.

Ex.B5- 31.7.2003  - Copy of letter sent by the opposite party.

Ex.B6- 11.8.2003  - Copy of legal notice.

Ex.B7- 9.9.2003    - Copy of reply

Ex.B8-                - Copy of the policy.

 

MEMBER-I                        MEMBER-II                             PRESIDENT.