Calcutta High Court
Sushil Kumar More vs Sheikh Asadur Rahman & Ors on 22 November, 2022
1
IN THE HIGH COURT AT CALCUTTA
(Ordinary Original Civil Jurisdiction)
ORIGINAL SIDE
[COMMERCIAL DIVISION]
Present:
The Hon'ble Justice Krishna Rao
CS 105 of 2018
Sushil Kumar More
Versus
Sheikh Asadur Rahman & Ors.
Mr. Krishnaraj Thaker
Mr. Asit Kr. De
Ms. Sormi Dutta
.....For the Plaintiff
Heard on : 17.11.2022
Judgment on : 22.11.2022
Krishna Rao, J.:
Plaintiff has filed the suit claiming decree for an amount of US $ 615,264 against the defendant no. 1 and 2 in the alternatively decree for US $ 2,50,000 as loss and damages and decree for US $ 36702 against the defendant no. 1 along with interest @ 18 % per annum till the realization of the said amount.
2
The plaintiff is engaged in the business of trading and exporting of edible commodities including rice and wheat. In the month of May, 2015, the defendant no. 1 and his representatives approached the plaintiff and offered to purchase at a regular basis substantial quantity of wheat and non-basmati rice of Indian origin at mutually agreed price. It was also decided by and between the parties that the payment of the price for export of the wheat and Indian origin non-basmati rice would be made though irrevocable Letters of Credit issued by the defendant no. 2 as per the advice of the defendant no. 3. As per the negotiation between the plaintiff and the defendant no. 1, the defendant no. 1 caused defendant no. 2 to issue irrevocable Letters of Credit in favour of the plaintiff for supply of an aggregate quantity of 1,000 MT of Indian origin non-basmati rice for US $ 3,90,000 @ USD 388.00 per MT and freight @ 2.00 per MT. The plaintiff has raised its proforma invoice dt. 30.06.2015 for the defendant no. 1 to cause a Letter of Credit to be established in favour of the plaintiff.
On 02.07.2015, the defendant no. 2 established its irrevocable Letter of Credit dt. 02.07.2015 in favour of the plaintiff for US $ 3,90,000. The said Letter of Credit permitted partial shipments and stipulated 08.09.2015 as the latest date of shipments. The Letter of Credit was governed by the latest version of Uniform Customs and Practice for Documentary Credits namely, UCP 600. The plaintiff affected supply of an aggregate quantity of 1000 MT Indian non-basmati rice under the said Letter of Credit. On 09.07.2015, the plaintiff dispatched 240 MT of Indian non-basmati rice valued at US $ 93,600 for which the plaintiff raised an invoice dt. 05.07.2015. The invoice 3 and other documents required under the said Letter of Credit were tendered by the plaintiff to the defendant no. 4 for presentation to the defendant no.
2. The defendant no. 4 duly presented the documents to the defendant no. 2 and the same was received by the defendant no. 2 on 04.08.2015.
By a notice dt. 11.08.2015, the defendant no. 2 had wrongly claimed discrepancies in the documents presented by the defendant no. 4 under the 1st export bill. The documents presented by the plaintiff wherein in accordance with the terms of conditions of the Letter of Credit, applicable provisions of UCP 600 and International Standard Banking Practices. None of the purported discrepancies claimed by the defendant no. 2 in its notice dt. 11.08.2015 are valid or tenable.
In any event, the defendant no. 2 was precluded from claiming the documents did not constitute a complying presentation after five banking days had lapsed from the date of receipt of the document. On 09.07.2015, the plaintiff has dispatched 214 MT of Indian non-basmati rice valued at US $ 83,460 for which the plaintiff has raised an invoice dt. 05.07.2015. The plaintiff has tendered the invoice and other documents required under the Letters of Credit to the defendant no. 4 and the defendant no. 4 had presented the said documents to the defendant no. 2 on 04.08.2015. By a notice dt. 11.08.2015, the defendant no. 2 wrongfully claimed discrepancies in the documents presented by the defendant no. 4 in respect of the second export bill.
On 06.07.2015, the plaintiff has dispatched 246 MT of Indian non- basmati rice valued at US $ 173,940 for which the plaintiff has raised an 4 invoice dt. 05.07.2015. The invoice along with other documents as required under the Letters of Credit were tendered by the plaintiff to the defendant no. 4 and the defendant no. 4 had presented the same to the defendant no. 2 which was received on 04.08.2015. On 11.08.2015, the defendant no. 2 wrongly claimed discrepancies in the documents presented by the defendant no. 4 under the third export bill.
On 02.07.2015, the plaintiff has dispatched 80 MT of Indian non- basmati rice valued at US $ 7,800 for which the plaintiff has raised invoice on 05.07.2015 along with other documents required under the Letters of Credit and was presented to the defendant no. 4. The defendant no. 4 had presented the same to the defendant no. 2. On 23.08.2015, the defendant no. 2 had wrongly claimed discrepancies in the documents presented by the defendant no. 4 with respect of the fourth export bill.
On 23.07.2015, the plaintiff has dispatched 20 MT of Indian non- basmati rice valued at US $ 31,200 for which the plaintiff raised invoices along with other required documents under the Letters of Credit and were tendered to the defendant no. 4 and accordingly the defendant no. 4 had presented the defendant no. 2. On 23.08.2015, the defendant no. 2 had wrongly claimed discrepancies in the documents presented by the defendant no. 4 under the fifth export bill.
By three several letters all dt. 13.12.2015 and one letter dt. 14.12.2015, the defendant no. 2 had returned the document presented by the defendant no. 4 for payment under the Letter of Credit in which the 5 defendant no. 2 had wrongly alleged for non-receipt of goods supplying by the plaintiff.
As per record, the writ of summons were served upon all the defendants and the defendant no. 4 had entered appearance and filed written statement but defendant nos. 1, 2 and 3 have not entered appearance and the case has proceeded undefended against the defendant nos. 1, 2 and 3.
The plaintiff has examined one witness in support of his case and during his examination two documents were exhibited i.e. examination-in- chief tendered by the plaintiff as Exhibit '1' and Letters of Credit and invoices as Exhibit '2' collectively.
On 06.07.2015, the plaintiff has dispatched 446 MT of non-basmati rice of Indian Origin by truck and invoice for USD 1,73,940 was raised. The defendant no. 4 being the negotiating bank of the plaintiff has placed all the documents as per Clause 46A of the Letter of Credit under export bill covering schedule dt. 29.07.2015 before the defendant no. 2. All the documents were received by the defendant no. 04.08.2015 which appears from the stamp affixed on the said document. On 11.08.2015, i.e. after the period of 5 working days of received of the documents which expired on 10.08.2015, the defendant no. 2 refused to release the amount of USD 1,73,940 on the following grounds of discrepancies in the document :
"a. Source of incoterm is not mentioned in the invoice (not a requirement under clause 46A of the LC term) (invoice -Pg. 100 of Judges Brieff forming part of Exhibit 2) 6 b. Consignee mentioned in the truck receipt is not as per clause no. 3 under field no. 46A of the credit (not a requirement under Clause 46A of the LC term). (Truck receipt - 93 to 96 of Judges Brief forming part of Exhibit 2) c. Port of loading is not mentioned specified in the truck receipt (not a requirement under Clause 46A of the LC term).
d. Gross weight in certificate of origin conflicts with truck receipt and packing list. (not a requirement under Clause 46A of the LC term.) (certificate of origin - pg 98 of Judges Brief forming part of Exhibit 2) e. Number of bags in the certificate of origin conflict with that of truck receipt and packing list. (not a requirement under Clause 46A of the LC) term).
None of the said grounds of discrepancies in documents are tenable and valid. Moreover rejection of payment on the alleged above- mentioned discrepancies cannot be considered as the same was raised beyond 5 days of receipt of the documents which is in contravention of Article 14 (b) and 16 (d) and 16 (f) of the UCP 600."
The defendant no. 2 thereafter on 13.12.2015 had returned all the documents on the grounds that the concern custom authority has confirmed non receipt of goods against the Letters of Credit. The ground raised by the defendant no. 2 is contrary to the documents i.e. invoice cum packing list which appears at page 116 of judge's brief of documents which is exhibited as part of Exhibit '2' which bears the signature and stamp of Bangladesh Customs Authority confirming the entry of goods to Bangladesh.
As regard the dispatch of 240 MT of non-basmati rice of India origin on 09.07.2015 by truck, the plaintiff has raised invoice for USD 93,120 to the defendant no. 4 and the defendant no. 4 being the negotiating bank of the plaintiff placed all the documents as per Clause 46A of the Letter of Credit under the export bill covering schedule dt. 09.07.2015 which is marked as part of Exhibit '2' before the defendant no. 2 for release of the 7 amount of the Rs. 93,600/-. All the documents under the export bill covering schedule dt. 29.07.2015 was received by the defendant no. 2 on 04.08.2015 as it appears from stamp affixed on the said document. The defendant no. 2 on 11.08.2015 being part of Exhibit '2' after the period of five working days from the receipt of the documents which expired on 10.08.2015 refused to release the amount of USD 93600 on the following discrepancies in the documents:
"a. Description of the goods mentioned in the invoice does not correspond to credit. (ground not valid as invoice mentioned country of origin - Invoice pg. 14 of Judges Brief forming part of Exhibit 2) b. Source of incorterm not mentioned in the invoice (not a requirement under clause 46A of the LC term) c. Truck receipts made out the order of the issuing bank I/O Straight Consignment. (not a requirement under clause 46A of the LC term, Truck receipt - Pg. 9 to 12 of judges Brief forming part of Exhibit 2) d. Consignment information in the Truck receipt omits the business identification no. (not a requirement under clause 46A of the LC term) e. Carrier and Capacity of signatory in the truck receipt is not identified. (not a requirement under clause 46A of the LC term)."
The grounds of discrepancies in the documents is not tenable as the same was raised after the period of five days of receipt of the documents which is in contravention of Article 14 (b) and 16 (d) and (f) UCP 600. The defendant no. 2 vide message dt. 13.12.2015 returned all the documents on the allegation that the concern customs authority has confirmed non-receipt of goods against the Letter of Credit but in the invoice cum packing list which is exhibited as part of Exhibit '2' bears the signature and stamp of Bangladesh Customs Authority confirming the entry of goods to Bangladesh. 8
As regard dispatch of 240 MT of non-basmati rice of Indian origin by truck on 11.12.2015, the plaintiff has raised invoice of USD 83460 to the defendant no. 4 and the defendant no. 4 has placed the documents as per Clause 46A of the Letters of Credit under export bill covering schedule dt. 29.07.2015 which is part of Exhibit '2' to the defendant no. 2 for release of the said amount. All the documents under the export bill was received by the defendant no. 2 on 04.08.2015 as per the stamp affixed on the said document. On 11.08.2015, the defendant no. 2 has sent message being part of the Exhibit '2' after the period of five working days of receipt of document which expired on 10.08.2015 and refused the release the amount of USD 83460 on the same grounds as stated above. Vide message dt. 13.12.2015, the defendant had also returned all the documents on the ground that the concern customs authority has confirmed non-receipt of goods against the Letter of Credit which is marked as exhibit being part of Exhibit '2' but as per the said document, the ground raised by the defendant no. 2 is not correct as the signature and stamp of the Bangladesh appearing on the invoice cum packing list confirming the entry of goods at Bangladesh.
The plaintiff had against dispatched 80 MT and 20 MT of non-basmati rice under two consignments notes dt. 22.07.2015 and 23.07.2015 and the plaintiff has raised invoice for a sum of USD 31200 and USD 7800 respectively total amounting to USD 39000. The defendant no. 4 had raised all the required documents which is exhibited as part of the Exhibit '2' to the defendant no. 2 for releasing of USD 39000 and the same was received by the defendant no. 2 on 18.08.2015 as the same confirmed from the stamp of 9 defendant no. 2. On 23.08.2015, the defendant no. 2 through a message being part of Exhibit '2' had refused to release the said payment on the following discrepancies :
"a. Carrier is not identified in truck receipt. (not a requirement under Clause 46A of the LC term.) (Truck receipts - pg. 179 to 180 and 135 to 139 of Judges Brief of document forming part of exhibit 2) b. Capacity of the signatory is not identified in the truck receipt. (not a requirement under Clause 46A of the LC term.) c. Consignment mentioned in the truck receipt "to the order of" instead of "Straight consignment" (not a requirement under Clause 46A of the LC term.) d. Country of origin not mentioned in the phytosanitary certificate. (Phytosanitary Certificate - pg. 172 & 173 of Judges Brief forming part of Exhibit 2).
Although the purported discrepancies in these documents were raised within 5 working days of receipt of the document, none of the discrepancies are tenable."
On 14.12.2015, the defendant no. 2 had returned all the documents on the ground that the concerned customs authority had confirmed non- receipt of goods against Letter of Credit which is part of the Exhibit '2' but from record, it reveals that the ground on which the defendant no. 2 has returned the document is not correct as from the invoice cum packing list of 80 MT rice and 20 MT rice which is part of the Exhibit '2' bears the signature and stamp of Bangladesh Customs Authority confirming the entry of the said goods at Bangladesh.
As per DOS Circular letter no. 12 dt. 15.09.2005 issued by the Bangladesh Bank being the regulatory bank of Bangladesh with respect of authorized dealer (AD) Bank which is exhibited as part of Exhibit '2' for the 10 purpose of calculating five working days from receipt of documents, Saturday has been considered as working day and Khulna Branch of defendant no. 2 has been recognized as Authorized Dealer (AD) Bank which is exhibited as part of Exhibit '2'.
As per part of the Exhibit '2', the defendant no. 2 even on previous occasions also despite of raising similar discrepancies in the documents had released the payments.
The plaintiff has also delivered and sold 100 MT of wheat on 16.08.2015 and raised invoice of USD 24000 against the defendant no. 1 which is also marked as part of Exhibit '2' but the defendant no. 1 inspite of receipt of the invoice did not make any payment to the plaintiff.
After going through the plaint, evidence of PW -1 and the documents exhibited in the instant case, it is found that the grounds which have been raised by the defendant no. 2 and has not released the payment are contrary to the documents as the discrepancies which are mentioned by the defendant no. 2 are not in consonance with the UCP 600 and from the documents it also prove that all the goods have been received at Bangladesh.
In view of the above, this Court finds that the plaintiff has transported the Indian non-basmati rice and wheat and the same have been received at Bangladesh and thus the defendant no. 1 and 2 are liable to pay USD 615624 along with interest @ 18% per annum from the date of the invoices raised by the plaintiff till the realization of the said amount. 11
The plaintiff is entitled to get a decree for the sum of USD 615624 along with interest @ 18% per annum from the date of respective invoices till the realization of the said amount from the defendant nos. 1 and 2.
CS 105 of 2018 is disposed of. Decree be drawn accordingly.
(Krishna Rao, J.)