Delhi District Court
Punjab Stainless Steel Ltd vs Icici Bank Ltd. And Ors on 11 September, 2024
IN THE COURT OF SH. NARESH KUMAR MALHOTRA :
DISTRICT JUDGE (COMMERCIAL)-06
TIS HAZARI COURTS, WEST: DELHI
CS (COMM) No. 555/2019
CNR No. DLWT010092782019
11.09.2024
M/s. Punjab Stainless Steel Industries
Through its Partner Harjinder S. Sarna,
Head Office:-
B-61, Wazirpur Industrial Area,
New Delhi-110052.
.....Plaintiff
Vs.
1. ICICI Bank Ltd.
Through Branch Incharge,
Branch Office:
19 & 20, Central Market,
Punjabi Bagh, New Delhi-110026. .....Defendant no. 1.
2. Punjab And Sind Bank
Through Branch Incharge,
Branch Office:
Near Shish Ganj Gurudwara, (Proceeded ex-parte vide
Chandni Chowk, Delhi-06 order dated 02.07.2022)
(Performa Party) ....Defendant no. 2
3. Foreign Exchange Dealer's
Association of India.
Through Incharge
173, Maker Tower 'F', 17th Floor, (Deleted vide order
Cuffe Parade, Mumbai-400005, India. dated 22.10.2021)
(Performa Party) ......Defendant no. 3
4. Reserve Bank of India,
Through General Manager, (Vide order dated 05.02.2020 notice
Sansad Marg, New Delhi-110001. was not ordered to be issued)
(Performa Party) ......Defendant no. 4
Date of Institution : 20.11.2019
Date of arguments : 10.09.2024
Date of judgment : 11.09.2024
CS (Comm.) No. 555/2019 -1-
SUIT FOR RECOVERY OF Rs. 29,92,143/- AS ON 17.11.2019
WITH PENDENTE-LITE AND FUTURE INTEREST @ 15%
PER ANNUM TILL THE DATE OF REALIZATION OF SUIT
AMOUNT.
J U D G M E N T:
1. Vide this judgment, I am deciding the suit for recovery of Rs. 29,92,143/- as on 17.11.2019 with pendentelite and future interest @ 15% per annum till the date of realisation of suit amount filed by the plaintiff against the defendants.
2. In the plaint, it is mentioned that plaintiff is a Partnership concern comprising the partners named S. Paramjit Singh, S. Harvinder Singh Sarna, S. Preetpal Singh, S. Harpal Singh and S. Prabhjit Singh and running their business for export and manufacturing of Stainless Steel Utensils since long. The present suit is filed by one of the partner S. Harvinder Singh Sarna. It is mentioned that the defendant no. 1 is a Bank and having branches all over India including the one in which the plaintiff is availing the facility since January, 2012 and opened mutual current account bearing account no. 015505006344. It is mentioned that defendant no. 2 is a Nationalized Bank having branches all over India and one of them being at Chandni Chowk, Delhi. No relief is sought against the defendant no. 2. However, the defendant no. 2 is a necessary party to come to a just conclusion in the present suit. It is mentioned that the documents witnessing export of goods were submitted to this bank against advance payment of foreign currency received by the defendant no. 1. It is mentioned that defendant no. 3 is a body created by foreign exchange dealers authorizing it to frame CS (Comm.) No. 555/2019 -2- guidelines in respect of Foreign exchange business transactions including subject matter of suit. No relief is sought against defendant no. 3. It is mentioned that the defendant no. 4 is the Central Bank of India and custodian of foreign exchange, it regulates transactions including export of goods and keeps an overall supervision as to whether payment is received by the exporter in respect of the export from time to time. It is mentioned that no relief is sought against the defendant no. 4. It is mentioned that the plaintiff approached the defendant no. 1 and requested for opening of a open mutual current account. The open mutual current account No. 015505006344 was opened with the bank and the plaintiff started dealing with the said bank since 14.01.2012. It is further mentioned that from time to time plaintiff used to get advance payment in foreign currencies towards exports made by the plaintiff to its foreign purchaser and the said payment were to be received by the defendant no. 1 bank. On receipt of the said payment in foreign currencies, the defendant no. 1 used to convert the same in Indian currency and credit the proceeds in the open, mutual current account of the plaintiff equivalent to the foreign currency. It is mentioned that the plaintiff used to remit the proceeds of Foreign Inwards remittance to Defendant no. 2 to debit of open mutual current account with defendant no. 1 for regularization of export bills. The plaintiff was not availing any credit facilities from the defendant no. 1 and at no point of time there was an overdraft in the open mutual current account due to withdrawal by plaintiff over and above the amount available in the said open mutual current account. As such there was no element of interest whether normal or penal interest involved in the transactions CS (Comm.) No. 555/2019 -3- between the plaintiff and defendant no. 1. The account statement of plaintiff bearing account no. 015505006344 clearly shows the transactions made by the plaintiff with the defendant no. 1. It is mentioned that the plaintiff used to export the goods and hand over the export documents to the defendant no. 2 which used to send the documents to the correspondent bank in the country where the exports were made so as to take delivery of the goods as the documents sent included shipping documents. It is mentioned that as and when the payment was received from the foreign buyer as advance payment by the defendant no. 1, defendant no. 1 used to issue as per RBI requirement an instrument/ certificate of Foreign Inward Remittance. It is mentioned that as and when the exports were made by the plaintiff through defendant no. 2, the plaintiff used to handover documents with Foreign Inward Remittance Certificate issued by the defendant no. 1 as confirmation for having payment received in advance from foreign buyers in respect of the export of goods so that the defendant no. 2 can confirm that the foreign currency has been received against the exports and report the same to defendant no. 4. It is mentioned that defendant no. 2 as per RBI guidelines, report the export transaction on the shipping bills along with copy of documents confirming that the export has been made and the payment has been received from the foreign buyers against such exports. It is further mentioned that from time to time the plaintiff also used to inform the defendant no. 1 as to how the Foreign Inward Remittance Certificate were used to backup export through defendant no. 2 and submit such documents to defendant no. 1 so that it can match its accounts. It is mentioned that the defendant no. 1 did not provide any CS (Comm.) No. 555/2019 -4- overdraft facility to the plaintiff but still chose to levy penal charges for fictitious reason that the plaintiff failed to inform as to how the Foreign Inward Remittance Certificates have been used witnessing receipt of advance payment in foreign currency. The details of penal interest charged by the defendant no. 1 from the plaintiff is clear from the statement of account maintained by defendant no. 1. The defendant no. 3 did not issue any direction to the banks to levy any charges against the not advising of the use of Foreign Inward Remittance certificate. It is mentioned that the defendant No. 4 is over all controller of foreign exchange and governance and regulator of matter relating to export and import transactions including inward and outward remittances and defendant no. 4 also has not provided any guidelines as to levy any such charges. The defendant no. 1 has no power on its own to debit amount by way of penal charges as levied in the account which are as under:-
Sl. No. Date of Debit Amount (Rs) Remarks
01 30.12.2014 56,180/- Penal charges, Sept, 2014
02 28.03.2015 1,16,854/- Penal charges, Dec, 2014
03 30.12.2015 2,61,060/- Penal charges, Sept, 2015
04 29.03.2016 3,09,150/- Penal charges, Dec, 2015
05 29.09.2016 4,23,200/- Penal charges, June, 2016
06 29.03.2017 3,28,900/- Penal charges, Dec, 2016
07 31.03.2017 5,19,800/- Penal charges, Dec, 2016
Total 20,15,144/-
It is mentioned that the charges have been levied without any intimation and authority and the amount was debited by the defendant no. 1 is illegal and unauthorized. The defendant no. 1 and the plaintiff are in relationship of banker and customer. There is primarily contract between the parties. However, this contract does not authorize the defendant no. 1 to levy any charge, leave aside penal charges on the transactions which is subject matter of CS (Comm.) No. 555/2019 -5- present suit. The RBI as well as Foreign Exchange Dealers Association have not directed Banks to levy any charges. It is mentioned that the plaintiff has been requesting the defendant no. 1 to reverse the charges and in this regard various emails and letters dated 17.02.2015, 08.03.2018, 27.06.2018, 16.07.2018, 30.07.2018, 05.10.2018 & 11.10.2018 were sent to bank. However, in reply to these emails, mere assurances were given by defendant no. 1 to the plaintiff that the same charges will be waived off on the due course of business. The defendant no. 1 to utter disregard to the banking norms and contractual relationship between the parties, did not respond positively. As a result the plaintiff made complaint to RBI vide letter dated 02.08.2018 but instead of deciding the issue the RBI simply forwarded the said letter along with its own letter to defendant no. 1 vide letter dated 05.10.2018. As a result nothing happened and defendant no. 1 refused to repay the said charges amounting to Rs. 20,15,144/-. There is no provision of charging any of the amount/charges/ penalties which are subject matter of the suit. The plaintiff sent legal notice dated 05.11.2018 through its lawyer to the defendant no. 1. As per the plaintiff a sum of Rs. 20,15,144/- along with interest of Rs. 9,76,999/- up to 17.11.2019, total amounting to Rs. 29,92,143/- is due towards the defendant no. 1. It is prayed by the plaintiff that a decree of Rs. 29,92,143/- be passed in favour of the plaintiff and against the defendant no. 1. Plaintiff has also claimed interest @ 15% per annum from the date of filing of present suit till realization.
3. The defendant no. 1 has filed written statement taking preliminary objections that the plaintiff is a partnership firm CS (Comm.) No. 555/2019 -6- having 5 partners and the present suit has been filed by only one of its partner namely S. Harvinder Singh Sarna. The said partner is not competent person to initiate the proceedings alone on behalf of other partners and the present suit initiated by said partner is not maintainable as per Order 30 Rule 1 of CPC. It is mentioned S. Harvinder Singh Sarna has not filed the primary Partnership Deed dated 13.08.2018 and had only filed the supplementary partnership deed dated 02.07.2018. There is no clause in the supplementary partnership deed which provides that only one partner is competent to institute litigation in the name of partnership firm namely M/s. Punjab Stainless Steel Industries or on behalf of other partners. It is mentioned that no authorization letter or resolution of any kind has been filed along with the plaint. The present suit is barred as per Section 11 of the CPC, Explanation VIII, which clearly states that an issue heard and finally decided by a court of limited jurisdiction, competent to decide such issue, shall operate as Res Judicata in a subsequent suit. It is mentioned that the plaintiff had filed a consumer complaint bearing No. 187 of 2019 with case titled "M/s. Punjab Stainless Steel Industries Vs. ICICI Bank Ltd. & Ors." before the Delhi State Commission pertaining to the same facts in issue as filed before this Court and the said consumer complaint was decided by Hon'ble State Commission vide its final judgment/ order dated 04.04.2019 whereby the Hon'ble State Commission was pleased to return the complaint and directed the complainant to approach the District Forum. As such the present suit is liable to be dismissed. The present suit is barred by limitation as per The Limitation Act. It is mentioned that by way of present suit the plaintiff is seeking recovery of CS (Comm.) No. 555/2019 -7- money, which arose from the alleged disputed transactions dated 30.12.2014, 28.03.2015, 30.12.2015, 29.03.2016, 29.09.2016, 29.03.2017 & 31.03.2017. There is no cause of action in filing the present suit. It is mentioned that the defendant no. 1 is not the beneficiary in the present case and defendant no. 1 is only a service provider. This Court has no jurisdiction to try and entertain the present suit. The present suit is not maintainable as per Section 80 of CPC. The present suit is not instituted as per The Commercial Courts Act, 2015. In reply to the preliminary submissions, it is submitted that the plaintiff used to get inward remittances in answering defendant no. 1 bank from foreign buyer as advance payment and defendant no. 1 used to issue Foreign Inward Remittance Certificate as per guidelines and plaintiff used to submit the same to defendant no. 2 i.e. Punjab and Sind Bank along with shipping documents for regularization. Plaintiff's reason and rationale for routing remittances through defendant no. 1 is not clear as the remittances should have ideally been routed through defendant no. 2 i.e. Punjab and Sind Bank. It is submitted that as per RBI Master directions-Export of goods and Services RBI/FED/2015-16/11 FED Master Direction No. 16/2015-16, there is directions on export. It is mentioned that in terms of guidelines, AD Banks are required to follow up for submission of export bills for closure of overdue advances towards exports and for the said customer, the reminders were sent on periodic basis and also, bank officials corresponded with the customer and apprised customer of pendency as well as charges. As per the defendant no. 1, mails dated 18.02.2015 and 21.09.2015 clearly mention the fact that the plaintiff has been reminded multiple times of compliance pendency as well as CS (Comm.) No. 555/2019 -8- charges applicable. It is also mentioned that as per extant guidelines laid down vide aforesaid RBI Master directions- Export of Goods and Services, the plaintiff is supposed to make shipments within one year from the receipt of advance payment towards exports, which the plaintiff completely failed to do so and hence the plaintiff has been charged for non-submission of bills within stipulated timeline. As per the defendant no. 1, in terms of Regulation 16 of Notification No. FEMA 23/2000-RB dated 03.05.2000, where an exporter receives advance payment (with or without interest), from a buyer outside India, the exporter shall be under an obligation to ensure that the shipment of goods is made within one year from the date of receipt of advance payment; the rate of interest, if any, payable on the advance payment does not exceed London Inter-Bank Offered Rate (LIBOR) + 100 basis points; and the documents covering the shipment are routed through the AD Category-I bank through whom the advance payment is received. It is mentioned that in the event of the exporter's inability to make the shipment, partly or fully, within one year from the date of receipt of advance payment, no remittance towards refund of unutilized portion of advance payment or towards payment of interest, shall be made after the expiry of the said period of one year, without the prior approval of the Reserve Bank. It is submitted that as alleged by plaintiff regarding the imposition of penal charges on transaction dated 30.12.2014 amounting Rs. 56,180/-, the defendant no. 1 bank has sent email dated 02.18.2015, asking the requisite information as per aforesaid RBI Master circular, which the plaintiff completely failed to provide. It is further submitted that defendant no. 1 has sent various emails to the plaintiff for CS (Comm.) No. 555/2019 -9- submission of requisite documents pertaining to transactions as alleged by the plaintiff in para no. 19 of the plaint, but the plaintiff neither replied nor submitted the requisite documents with the defendant no. 1 and hence the penal charges got attracted and defendant no. 1 bank has acted as per rules by deducting the penal charges. In reply on merits, it is denied that the plaintiff is a partnership firm and the plaintiff is one of its partner. It is denied that the plaintiff has opened mutual current account bearing account no. 015505006344 whereas the fact of the matter is that the plaintiff had current account bearing no. 015505006344 maintained with the defendant no. 1. As per the defendant no. 1, the plaintiff has duly filled the application form for opening a current account (and not for an open mutual current account as alleged by plaintiff) which was received by the defendant no. 1 on 11.01.2012 and after verifying the details and following the guidelines, defendant no. 1 opened the current account bearing No. 015505006344 on 12.01.2012. It is mentioned that plaintiff used to get inward remittances in defendant no. 1 bank from foreign buyer as advance payment and defendant no. 1 used to issue Foreign Inward Remittance Certificate as per guidelines and plaintiff used to submit the same to defendant no. 2 along with shipping documents for regularization as the plaintiff is following the malpractice. As per the defendant no. 1, the plaintiff used to get the foreign remittance in defendant no. 1 bank and plaintiff needs to submit the shipping documents to defendant no. 1 bank, but plaintiff miserably failed to do so. It is mentioned that the defendant no. 1 also acts as Authorised Dealer Category I (AD Category-I) bank to borrow foreign currency from International/ Multinational CS (Comm.) No. 555/2019 -10- Financial Institutions (IFIs/MFIs) and is free to charge reasonable charges for the services rendered to their customers and for no- regularization of export advances, communication of pendency and charges were provided to the plaintiff. It is mentioned that the plaintiff used to get inward remittances in defendant no. 1 bank from foreign buyer and used to settle the same under P0103 as advance payment, however, plaintiff used to get the bills lodged and settled with defendant no. 2 i.e. Punjab and Sind Bank along with shipping documents for regularization and the plaintiff may be put to strict proof of the same. The submissions of shipping documents to defendant no. 2 bank is itself shows the ill-intention of the plaintiff. It is mentioned that defendant no. 2 bank has not levied any interest on the transactions between the plaintiff and defendant no. 1. It is mentioned that penal charges were imposed on the plaintiff upon all the transactions mentioned in para no. 19 of the plaint because the plaintiff did not provide the requisite documents as per RBI Master directions- Export of Goods and Services. As per the defendant no. 1, it was incumbent upon the plaintiff to submit export documents within one year from the date of receipt of advance payment from the foreign buyers, however, the plaintiff defaulted the due process of law as laid down vide RBI guidelines and hence the penal charges were imposed upon the plaintiff for regulatory noncompliance. It is further mentioned that despite repeated requests of defendant no. 1, the plaintiff miserably failed to prove requisite documents to the defendant no. 1 and due to non- compliance by the plaintiff, defendant no. 1 imposed penal charges. It is mentioned that the AD banks are free to have reasonable charges for the services rendered and for non CS (Comm.) No. 555/2019 -11- regularization of export advances, communication of pendency and penal charges was informed to the customers through various modes of communication such publishing the same on the website, send reminder mails verbal communications through relationship manager. It is mentioned that RBI has also conveyed to the plaintiff that AD Banks are free to decide their own policies with respect of penal charges. As per RBI letter dated 22.03.2019, the schedule of charges for various services extended by bank is fixed by the bank themselves with the approval of their Board of Directors. RBI does not prescribe the service charges. It is mentioned that with regard to the scale of penal charges, the same are also as per bank's internal policy and is a matter of contract with the customer. It is mentioned that defendant no. 1 did not provide any overdraft facility to the plaintiff. It is mentioned that defendant no. 1 had levied the penal charges for non-compliance of RBI guidelines and the plaintiff miserably failed to submit the shipping documents to the AD Bank. It is mentioned that Foreign Exchange Dealer's Association of India (FEDAI) regulates the conduct of inter- bank foreign exchange business among banks vis-a-vis public and liaison with RBI for reforms and development of Forex market. As per the defendant no. 1, the penal charges were attracted because the plaintiff has not complied with the terms and conditions as per guidelines issued by RBI, which can be clearly ascertained from the email dated 18.02.2015. As per defendant no. 1, it has acted as per guidelines issued by RBI and imposed penal charges for non-compliance of plaintiff as per the policy of the defendant no. 1. The defendant no. 1 bank required to follow up for submission of export bills for closure of CS (Comm.) No. 555/2019 -12- overdue advances towards exports and the reminders were sent on periodic basis and also bank officials communicated with the plaintiff and apprised plaintiff of pendency as well as charges and emails were sent to the plaintiff on 18.02.2015, 21.09.2015, which clearly mention the fact that the plaintiff has been reminded multiple time of compliance pendency as well as charges applicable. It is mentioned that the penal charges flows from the account opening form and according to which if the customer does not comply with the terms and conditions mentioned in RBI master directions then AD banks are free to impose the penal charges upon such customers and penal charges be decided by their Board of Directors. Dismissal of suit is prayed by the defendant no. 1.
4. The defendant no. 2 has not filed written statement despite various opportunities. Defendant no. 2 was proceeded ex-parte on 02.07.2022.
5. The defendant no. 3 has filed written statement taking preliminary objections that plaintiff has no locus standi to file the present suit. It is mentioned that defendant no. 3 is a non-profit company incorporated under Section 25 of Indian Companies Act, 1956 and is a self regulatory body for banks authorized to deal with Foreign Exchange by the Reserve Bank of India under Foreign Exchange Management Act, 1999 and has nothing to do with the present scenario as mentioned in the suit. It is mentioned that the FEDAI does not prescribe any charges that member bank should charge to its customers & authorized dealers and banks are free to decide their own charges. The CS (Comm.) No. 555/2019 -13- answering defendant does not act as regulatory between the customers and the banks. It is mentioned that since September 1999, the answering defendant has stopped prescribing any charges that member banks will charge their customers for foreign exchange transactions and member banks are free to decide their own charges for such transactions. In reply on merits, similar averments are made. Dismissal of suit is prayed by the defendant no. 3. Vide order dated 22.10.2021 the name of defendant no. 3 was deleted from the array of parties.
6. My Ld. Predecessor vide order dated 05.02.2020 held that defendant no. 4 is Reserve Bank of India and no notice under Section 80 CPC has been given to defendant no. 4. So, notice of the suit was not ordered to be issued to the defendant no. 4.
7. The plaintiff has filed replication to the written statement filed by the defendant no. 3 and controverted the allegations made in the written statement and further re-affirmed the averments made in the plaint.
8. On the basis of pleadings of the parties, following issues were framed by my Ld. Predecessor on 02.07.2022 , which are as under:-
1) Whether the plaintiff is entitled to recovery of Rs.
29,92,143/- levied by defendant no. 1 as penal charges as on 17.11.2019 with pendentelite and future interest @ 15% per annum from defendant no. 1? (OPP)
2) Relief.
CS (Comm.) No. 555/2019 -14-9. In evidence, SPA of plaintiff appeared as PW-1. This witness has filed affidavit on the lines of plaint. This witness has proved GPA dated 25.09.2021 as Ex. PW1/1, partnership deed as Ex. PW1/2, Letter dated 02.08.2018 as Ex. PW1/3, Statement of account as Ex. PW1/4, Statement of account maintained by defendant no.2 as Ex. PW1/5, Email as Ex. PW1/6, Letter dated 17.02.2015 as Ex. PW1/7, Letter dated 08.03.2018 as Ex. PW1/8, Letter dated 27.06.2018 as Mark A, Letter dated 16.07.2018 as Ex. PW1/9, Email dated 30.07.2018 as Ex. PW1/10, Letter dated 05.10.2018 as Ex. PW1/11, Letter dated 12.02.2018 and 22.03.2019 as Ex. PW1/12 and Ex. PW1/13 respectively, Legal demand notice along with receipt and tracking report as Mark B, Mark-C and Mark-D, Certified copy of order dated 04.04.2019 as Ex. PW1/14, Non starter report as Ex. PW1/15, Certificate U/s 65-B as Ex. PW1/16. This witness is duly cross examined by Ld. Counsel for defendant no. 1. During cross examination, this witness has stated that he is looking after the account work of the plaintiff company and he himself had made transactions with the defendant on behalf of the plaintiff. This witness has admitted that he has written letter dated 06.01.2012 to the defendant no. 1. This witness has admitted that the plaintiff had not written any letter to defendant no. 1 requesting it to open a mutual current account. This witness has admitted that account No. 015505006344 is a normal current account and not a open mutual current account. This witness has stated that the plaintiff had deposited shipping bills and copy of Foreign Inward Remittance Certificate (FIRC) with Punjab and Sind Bank, Chandni Chowk Branch, Delhi for the advances which have been received in CS (Comm.) No. 555/2019 -15- ICICI bank. This witness has admitted that firstly the plaintiff had deposited the shipping documents only with Punjab and Sind Bank i.e. defendant no. 2 and thereafter, the advances were received in ICICI Bank and thereafter, aforementioned FIRC was deposited with Punjab and Sind Bank. This witness has stated that plaintiff was not having any tie up with defendant no. 2 and plaintiff has only tie up with ICICI Bank. This witness has stated that cash credit facility of the plaintiff was available with defendant no. 2, this is the reason that plaintiff has deposited all the documents with defendant no. 2. This witness has stated that the cash credit limit with defendant no. 2 is Rs. 90 crores. This witness has admitted that the plaintiff had communicated to ICICI bank about the receiving of the advance amount from the overseas buyer's bank. This witness has admitted that whenever shipping documents are being sent on collection to the buyer's bank, a bill ID is created and it will keep on showing as outstanding/ pending until funds are received in the same. This witness has admitted that plaintiff had field a complaint against defendant no. 1 with RBI. This witness has admitted that document Ex. PW-1/DX-2 bears the signatures of Sardar Harvinder Singh Sarna, who is one of the partner of the plaintiff.
10. Plaintiff has also examined Sh. Sabu P. Babu, Assistant General manager, Reserve bank of India, Sansad Marg, New Delhi as PW-2. This witness has proved application dated 02.08.2018 written by the plaintiff to RBI, letter dated 05.10.2018 written by RBI to ICICI Bank with copy to plaintiff, reply dated 29.10.2018 given by ICICI Bank to the plaintiff with copy to RBI, letter to RBI by plaintiff dated 12.02.2018 and letter CS (Comm.) No. 555/2019 -16- dated 22.03.2019 written by RBI to the plaintiff as Ex. PW-2/1 to Ex. PW-2/5. This witness is duly cross examined by Ld. Counsel for defendant no. 1. During cross examination, this witness has stated that so far Ex. PW-2/1 to Ex. PW-2/5 are concerned, upon receipt of complaint from the plaintiff, nothing against ICICI Bank was noted in these documents. This witness has admitted that circular dated 01.01.2016 is updated one. This witness has admitted that the circulars issued by RBI from time to time are binding upon authorized dealers (AD) Banks as well as exporters while dealing in export import business.
11. Plaintiff has also examined Sh. Bharat Kumar Chandela , AVP (Assistant Vice President), Foreign Exchange Dealer's Association of India as PW-3. This witness has proved circular dated 06.02.2012 bearing no. SPL 14/FIRC/2012 as Ex. PW-3/1 and circular bearing No. SPL-04/2016 as Ex. PW-3/2. This witness is duly cross examined by Ld. Counsel for defendant no.
1. During cross examination this witness has admitted that Foreign Exchange Dealer's Association of India (FEDAI) is not a regulatory authority under the Government of India or the State Government. This witness has voluntarily stated that it is an association of certain authorized dealers i.e. mostly the banks under the Foreign Exchange Management Act, 1999 and it works under authorization of RBI. This witness has stated that he has not brought any such written authorization from RBI in favour of FEDAI. This witness has stated that whenever a bank or other similar financial institution becomes a member of FEDAI, the said member undertakes to abide by such circular/ instruction issued by FEDAI, to the extent applicable to them and FEDAI CS (Comm.) No. 555/2019 -17- has power to issue such circulars to their members. This witness has stated that he has not brought any such undertaking signed by the ICICI Bank by becoming member of FEDAI. This witness has admitted that he cannot admit or deny the suggestion that members of FEDAI were not obliged to follow the circulars or that the circulars issued by FEDAI were merely directive in nature. This witness has admitted that the circulars issued by RBI are mandatory in nature to be followed by the financial institutions. This witness has admitted that FEDAI cannot issue any circular directly in confrontation with circular of RBI on the same subject. This witness has admitted that FEDAI did not reply to letter dated 02.08.2018, which is Ex. PW-3/D1 and FEDAI did not conduct any inquiry on receipt of Ex. PW-3/D1. This witness has voluntarily stated that FEDAI simply forwarded the said documents to the ICICI Bank to look into the matter.
12. On the other hand, defendant no. 1 has examined Sh. Sanjay Sharma, Manager (Legal) and AR of ICICI Bank Ltd., having office at ICICI Bank Towers, 2nd Floor, NBCC Place, Bhishma Pitamah Marg, New Delhi as DW-1. This witness has filed affidavit on the lines of written statement. This witness has proved copy of power of attorney dated 18.10.2005 as Mark-A, copy of power of attorney dated 13.12.2017 as well as supporting Board Resolution as Ex. DW-1/1. This witness is duly cross examined by Ld. Counsel for plaintiff. This witness has stated that he is working with the defendant bank since June, 1996.
CS (Comm.) No. 555/2019 -18-13. Defendant no. 1 has also examined Ms. Kanika Agarwal, Sr. Relationship Manager, having office at ICICI Bank Ltd., 19 West Avenue Road, Punjabi Bagh, Delhi as DW-2. This witness has filed affidavit on the lines of written statement. This witness has proved copy of account opening form pertaining to the plaintiff as Ex. DW-2/1, copy of email communication exchanged between the plaintiff and defendant no. 1 as Ex. DW- 2/2, copy of RBI Master directions- Export of Goods and services RBI/FED/2015-16/11 FED Master Direction No. 16/2015-16 as Ex. DW-2/3, copy of screenshot of official website of the defendant no. 1 bank evidencing penal charges displayed on it as Ex. DW-2/4 and certificate u/s 65-B of Indian Evidence Act as Ex. DW-2/5. This witness is duly cross examined by Ld. Counsel for plaintiff. During cross examination, this witness has stated that she cannot tell without seeing the record if the KYC of the plaintiff was updated from time to time. This witness has stated that the plaintiff has opened current account with defendant no. 1. This witness has admitted that the plaintiff has not utilized any money of the defendant no. 1. This witness after seeing the document submits that the clause of levying charges is mentioned at point- A of Ex. DW-2/1. This witness has admitted that at point-A there is only mention of sechedule of charges. This witness has admitted that the defendant no. 1 has not filed any suit for recovery of penal charges. This witness has admitted that no legal notice demanding the penal charges has been sent to the plaintiff. This witness has admitted that defendant no. 1 has levied penal charges on some of the transactions. This witness has stated that plaintiff had not submitted the shipping bills to the ICICI bank within one year of CS (Comm.) No. 555/2019 -19- receiving the advance remittances. This witness has admitted that in other transactions also the compliance on the part of plaintiff was not complete and no penal charges were levied on the rest of the transactions. This witness has admitted that it is no where mentioned in the contract that plaintiff has to submit shipping bill to the defendant no. 1. This witness has admitted that no notice was sent to the plaintiff when the plaintiff did not submit the shipping bills in respect of first five transactions. This witness has admitted that the ICICI Bank is a Member of Foreign Exchange Dealers Association of India. This witness has admitted that email dated 19.07.2024 which is Ex. DW-2/PX-1 was received by the defendant no. 1. This witness has stated that she is not aware if any reply to the above mentioned document has been sent by the concerned branch or not. This witness has stated that she had placed on record the document of RBI to show that the defendant no. 1 can make a policy regarding imposition of service charges and penal charges. This witness after seeing the record submits that the plaintiff has itself had placed document at page no. 104 of the court file. This witness has admitted that the plaintiff has not utilized any money of defendant no. 1.
14. I have heard Ld. Counsel for plaintiff and Ld. Counsel for defendant no. 1 at length and perused the record carefully.
15. My issue-wise findings are as under:-
16. Issue No. 1 - Whether the plaintiff is entitled to recovery of Rs. 29,92,143/- levied by defendant no. 1 as penal charges as CS (Comm.) No. 555/2019 -20- on 17.11.2019 with pendentelite and future interest @ 15% per annum from defendant no. 1? (OPP)
17. At the very Outset, I may observe that the provisions of Section 2 (1) (c)(xviii) of Commercial Courts Act, 2015 are very clear which reads as under:-
(c) "commercial dispute" means a dispute arising out of-
(i) ordinary transactions of merchants, bankers, financiers and traders such as those relating to mercantile documents, including enforcement and interpretation of such documents;
(ii) export or import of merchandise or services;
(iii) issues relating to admiralty and maritime law;
(iv) transactions relating to aircraft, aircraft engines, aircraft equipments and helicopters, including sales, leasing and financing of the same;
(v) carriage of goods;
(vi) construction and infrastructure contracts, including tenders;
(vii) agreements relating to immovable property used exclusively in trade or commerce.
(viii) franchising agreements;
(ix) distribution and licensing agreements;
(x) management and consultancy agreements;
(xi) joint venture agreement;
(xii) shareholders agreements;
(xiii) subscription and investment agreements pertaining to the services industry including outsourcing services and financial services;
(xiv) mercantile agency and mercantile usage;
(xv)partnership agreements;
(xvi) technology development agreements; (xvii) intellectual property rights relating to registered and unregistered trademarks, copyright, patent, design, domain names, geographical indications and semiconductor integrated circuits;
(xviii) agreement for sale of goods or provision of services;CS (Comm.) No. 555/2019 -21-
(xix) exploitation of oil and gas reserves or other natural resources including electromagnetic spectrum; (xx) insurance and re-insurance;
(xxi) contracts of agency relating to any of the above; and (xxii) such other commercial disputes as may be notified by the Central Government.
18. The provisions of Section 2 (1) (c) (xviii) of Commercial Courts Act as above are very much clear. Sale of goods are governed by Sale of Goods Act, they pertain to movable properties, any dispute of sale or agreement to sale of goods of specified value do come within the jurisdiction of Commercial Courts Act. The clause also includes the services and guarantee given for the goods sold. The service or guarantee may be oral or written. Therefore, the facts which alleged in the plaint comes under the Commercial disputes.
19. Secondly, now the question arises whether this Court has the pecuniary jurisdiction to adjudicate the matter which is dispute. In this regard, the provisions of Section 3 of Commercial Courts Act, 2015 provides that:
Section 3 : Constitution of Commercial Courts:
(1) The State Government, may after consultation with the concerned High Court, by notification, constitute such number of Commercial Courts at District level, as it may deem necessary for the purpose of exercising the jurisdiction and powers conferred on those Courts under this Act:
[Provided that with respect to the High Courts having ordinary original civil jurisdiction, the State Government may, after consultation with the concerned High Court, by notification, constitute Commercial Courts at the District Judge level:CS (Comm.) No. 555/2019 -22-
Provided further that with respect to a territory over which the High Courts have ordinary original civil jurisdiction, the State Government may, by notification, specify such pecuniary value which shall not be less than three lakh rupees and not more than the pecuniary jurisdiction exercisable by the District Courts, as it may consider necessary. ] 3[1A) Notwithstanding anything contained in this Act, the State Government may, after consultation with the concerned High Court, by notification, specify such pecuniary value which shall not be less than three lakh rupees or such higher value, for whole or part of the State, as it may consider necessary.]
20. Admittedly, the Commercial Court Act was amended on 03.05.2018 and by virtue of the amendment and by virtue of the notification, the pecuniary value of the Commercial Courts Act shall not be less than Rs. 3,00,000/-. In the present case, the claim amount which is shown in the plaint is of Rs. 29,92,143/-. So, commercial court has jurisdiction to try and entertain the present suit.
21. The burden to prove this issue is upon the plaintiff. To prove this issue, plaintiff has proved GPA dated 25.09.2021 as Ex. PW1/1, partnership deed as Ex. PW1/2, Letter dated 02.08.2018 as Ex. PW1/3, Statement of account as Ex. PW1/4, Statement of account maintained by defendant no.2 as Ex. PW1/5, Email as Ex. PW1/6, Letter dated 17.02.2015 as Ex. PW1/7, Letter dated 08.03.2018 as Ex. PW1/8, Letter dated 27.06.2018 as Mark A, Letter dated 16.07.2018 as Ex. PW1/9, Email dated 30.07.2018 as Ex. PW1/10, Letter dated 05.10.2018 as Ex. PW1/11, Letter dated 12.02.2018 and 22.03.2019 as Ex.
CS (Comm.) No. 555/2019 -23-PW1/12 and Ex. PW1/13 respectively, Legal demand notice along with receipt and tracking report as Mark B, Mark-C and Mark-D, Certified copy of order dated 04.04.2019 as Ex. PW1/14, Non starter report as Ex. PW1/15, Certificate U/s 65-B as Ex. PW1/16.
22. It is contended by Ld. Counsel for defendant that plaintiff has not placed on record any registered partnership deed so plaintiff is not entitled to file the present suit against the defendant no.1. It is also contended by Ld. Counsel for defendant no. 1 that the partnership deed filed by the plaintiff is not registered so present suit is not maintainable. It is contended by Ld. Counsel for defendant no. 1 that as per Section 69 (2) of the Indian Partnership Act, 1932, the plaintiff can not file the present suit against the defendant no. 1.
On the other hand, Ld. Counsel for plaintiff contends that defendant has placed on record the account opening form which is proved on record as Ex. DW-2/1. On this document the date of incorporation of plaintiff is mentioned as 06.06.1979. Ld. Counsel for plaintiff has also contended that alongwith documents the defendant no. 1 has also placed on record the documents submitted by the plaintiff and these documents show that plaintiff firm is registered. The defendant no. 1 has placed on record a certificate which shows that plaintiff firm is registered with the Registrar of Firm. As defendant no. 1 has itself filed documents which show that plaintiff is registered with the Registrar of Firm, I am of the view that this contention of Ld. Counsel for defendant no. 1 carries no force.
CS (Comm.) No. 555/2019 -24-23. The next contention raised by Ld. counsel for defendant no. 1 is that the present suit is barred by the Principle of resjudicata as plaintiff had approached the State Commission of Delhi and the petition was decided on 04.04.2019 and the present suit is filed on the same facts and cause of action, so the present suit is barred by principle of resjudicata. Ld. Counsel for defendant no. 1 has placed reliance on judgment titled as "Kesoram Industries Limited Vs. Allahabad Bank" II (2018) CPJ 89 (Cal.) wherein, it is held that " having respectfully gone through the cited decisions, in my opinion, the State/National Forums have trappings of Courts and are adjudicatory bodies, though not in strict sense Courts, which decide and settle the consumers disputes and matter connected therewith by adhering to the provisions of Civil Procedure Code and these Consumer Courts are judiciary set up by the Government to protect the consumer rights and would fall within the meaning of Section 3 of Indian Evidence Act". In this judgment, it is also held that " In the present case having gone through the pleading of the parties and the evidence on record and the judgments rendered by the said Forums, in unequivocable term it is clear that the issues involved in this suit were substantially the issues before the State Consumer Disputes Redressal Commission which stood decided by the judgment dated 31.03.2008 which attained its finality with the merger of judgment and order of the National Consumber Dispute Redressal Commission". In this judgment it is held that "In the context of the foregoing discussions, on critical examination of the judgments of the said Forums and considering the nature of the litigation and the issues raised and decided therein being similar to the facts and circumstances of CS (Comm.) No. 555/2019 -25- the instant case, the issues now cannot be reopened and re- agitated as in my opinion the suit is barred by the principal of res judicata within the meaning of Section 11 of Code of Civil Procedure". I have perused this judgment with utmost regard. This judgment is not helpful to the defendant no. 1 as the petition filed befoer the Hon'ble State Commission, Delhi was ordered to be returned to the plaintiff. So, the petition was not finally adjudicated by Hon'ble State Commission of Delhi. I am of the view that the ingredients of Section 11 CPC are not fulfilled in the present case. I am also of the view that the matter was not finally adjudicated before the State Commission of Delhi. The Hon'ble State Commission of Delhi has ordered to return the file to approach District Forum. I am of the view that present suit is not barred by the principle of res judicata.
24. It is contended by Ld. Counsel for defendant no. 1 that plaintiff is a partnership firm having five partners and present suit is filed by one of its partner namely S. Harvinder Singh Sarna. It is mentioned that the said partner is not competent person to initiate the proceedings alone on behalf of other parnters and the present suit initiated by said partner is not maintainable as per Order 30 Rule 1 of the CPC.
I have perused the record. The present suit is filed by S. Harvinder Singh Sarna, who is one of the partner of M/s. Punjab Stainless Steel Industries. I have perused the provisions of Order 30 Rule 1 CPC. The order 30 Rule 1 CPC does not prescribe that any suit filed by one of the person is not maintainable. As per Section 18 of Indian Partnership Act, a parnter is agent of the CS (Comm.) No. 555/2019 -26- firm for the purpose of business of the firm. Section 19 of the Parntership Act reads as under:-
19. Implied authority of partner as agent of the firm - (1) Subject to the provisions of Section 22, the act of a partner which is done to carry on, in the usual way, business of the kind carried on by the firm, binds the firm.
(2) In the absence of any usage or custom of trade to the contrary, the implied authority of a parnter does not empower him to -
(a) submit a dispute relating to the business of the firm to arbitration,
(b) open a banking account on behalf of the firm in his own name,
(c) compromise of relinquish any claim or portion of a claim by the firm,
(d) withdraw a suit or proceeding filed on behalf of the firm,
(e) admit any liability in a suit or proceeding against the firm,
(f) acquire immovable property on behalf of the firm,
(g) transfer immovable property belonging to the firm,
(h) enter into partnership on behalf of the firm, Section 22 of the Indian Partnership Act reads as under:-
22. Mode of doing act to bind firm - In order to bind a firm, an act or instrument done or executed by a partner or other person on behalf of the firm shall be done or executed in the firm name, or in any other manner expressing or implying an intention to bind the firm.CS (Comm.) No. 555/2019 -27-
So, as per Section 22 of the Indian Partnership Act, the act or instrument done or executed by a partner or other person on behalf of the firm shall be done or executed in the firm's name, or in any other manner expressing or implying an intention to bind the firm. In view of the above said provisions, I am of the view that there is no strengh in the arguments of ld. Counsel for defendant no. 1.
25. It is contended by Ld. Counsel for defendant no. 1 that presnt suit is time barred as in the order dated 04.04.2019 passed by Hon'ble State Commission of Delhi, it is held that five transactions are not within the period of limitation. It is also contended by Ld. Counsel for defendant no. 1 that by way of present suit the plaintiff is seeking recovery of money which arises from old transactions dated 30.12.2014, 28.03.2015, 30.12.2015, 29.03.2016, 29.09.2016, 29.03.2017 & 31.03.2017 and the suit is barred by limitation as same was filed on 20.11.2019. It is also contended that the transaction dated 29.03.2017 and 31.03.2017 cannot be considered as plaintiff has acquiesced the disputed transaction by not objecting to the charges lawfully charged by the defendant no. 1. It is also contended that plaintiff was not maintaining mutual, open and current account. So, the limitation of suit transaction is to be taken individually and the present suit is barred by limitation. Ld. Counsel for defendant no. 1 has placed reliance on the order of Hon'ble State Commission of Delhi, where Hon'ble State Commission has held that the account maintained by the plaintiff is not open, mutual and current account.
CS (Comm.) No. 555/2019 -28-I have perused the order dated 04.04.2019 passed by Hon'ble State Commission of Delhi. The para no. 6 & 9 of order dated 04.04.2019 reads as under:-
6. I have gone through the material on record and heard the arguments. Details of penal charges mentioned in para 20 of the complaint reveals that only last two entries datd 29.03.2017 and 31.03.2017 are within limitation.
Complaint has been filed on 20.02.2019. The prior entries till 29.09.2016 are beyond limitation of two years prescribed under section 24 (A) Consumer Protection Act. The sum total of the last entries comes to Rs. 8,48,700/- which lies within the pecuniary jurisdiction of District Forum.
9. I am unable to agree. There is no term mutual running current account. The proper term used in Article 1 of schedule of the limitation Act is open, mutual and current account. That has been interpreted as an account in which sometime the amount is due to plaintiff and sometime the amount is due to defendant. In this case it is not the case of complainant that at any juncture anything was payable by it to OP-1. According to him his account always had a credit balance. So the complainant is not entitled to invoke benefit of open mutual and current account.
The Hon'ble State Commission of Delhi has held that account of the plaintiff bearing No. 015505006344 with the defendant no. 1 is not open, mutual and current account. The plaintiff has not challenged the order dated 04.04.2019 passed by Hon'ble State Commission. If we peruse the record, it reveals that plaintiff has claimed the amount of penal charges imposed CS (Comm.) No. 555/2019 -29- upon the plaintiff by the defendant no. 1 on 30.12.2014, 28.03.2015, 30.12.2015, 29.03.2016, 29.09.2016, 29.03.2017 & 31.03.2017. I am of the view that all these transactions of penal charges are to be taken individually for calculating the period of limitation. The present suit was filed on 20.11.2019, I am of the view that transactions dated 30.12.2014, 28.03.2015, 30.12.2015, 29.03.2016, 29.09.2016 are barred by limitation and present suit for recovery in respect of transaction dated 29.03.2017 & 31.03.2017 is maintainable.
26. It is also contention of Ld. Counsel for defendant no. 1 that plaintiff has acquiesced the transactions in respect of transactions dated 29.03.2017 & 31.03.2017 as plaintiff has not sent any letter.
This contention of Ld. Counsel for defendant no. 1 is devoid of any merit. The plaintiff has written letter dated 17.02.2015 and vide this letter, it was requested to reverse the entry of Rs. 56180/-. The plaintiff has also written letter dated 08.03.2018 which is Ex. PW-1/8 and vide this letter, defendant no. 1 was requested to debit the amount of the penality levied upon the plaintiff. The plaintiff has also sent letter dated 27.06.2018, letter dated 16.07.2018 and letter dated 05.10.2018. So, it can be said that plaintiff has not acquiesced in respect of last two transactions. So, this contention of Ld. Counsel for defendant no. 1 carries no force.
27. It is contended by Ld. Counsel for plaintiff that defendant no. 1 has wrongly levied the penal charges. Plaintiff has examined Sh. Bharat Kumar Chandela, AVP (Assistant Vice CS (Comm.) No. 555/2019 -30- President), Foreign Exchange Dealer's Association of India as PW-3. This witness has proved documents Ex. PW-3/1 & Ex. PW-3/2 and both these documents show that plaintiff has deposited the documents with the defendant no. 2 and defendant no. 1 cannot impose any charges in respect of non-depositing of shipping documents with the defendant no. 1.
28. Now, it is firstly to be seen whether plaintiff has deposited all the shipping documents with the defendant no. 2 or not. In the present case, defendant no. 2 has not filed written statement and was proceeded ex-parte. It is no where denied by the defendant no. 1 that plaintiff has not deposited documents with the defendant no. 2. In any of the communication by the defendant no. 1 to the plaintiff, it is no where stated that documents were not submitted by the plaintiff to the defendant no. 2. The plaintiff has sent various letters to the defendant no. 1 and in the letter dated 05.10.2018 which is proved on record as Ex. PW-1/11, it is mentioned by the plaintiff that "The Punjab and Sind Bank was duly informed about appropriation of the said payments, and necessary documents were also submitted to Punjab and Sind Bank, giving details of the payment and the corresponding invoices, as well as informing the bank about appropriation of advance payments, with corresponding invoices. No suggestion is given by Ld. Counsel for defendant no. 1 to the plaintiff that plaintiff has not deposited the shipping documents with the defendant no. 2. In cross examination, PW-1 has categorically stated that "it is correct that firstly the plaintiff had deposited the shipping documents only with Punjab and Sind Bank i.e. defendant no. 2 and thereafter, the advances were CS (Comm.) No. 555/2019 -31- received in ICICI Bank and thereafter, aforementioned FIRC was deposited with Punjab and Sind Bank. A question was asked to PW-1 by Ld. Counsel for defendant no. 1 as to what was the reason for the plaintiff for not depositing the shipping documents with ICICI bank ? The witness replied that that the cash credit facility of the plaintiff was available with defendant no. 2, this is the reason that plaintiff has deposited all the documents with defendant no. 2. PW-1 has stated that the cash credit limit with defendant no. 2 is Rs. 90 crores. It is no where suggested that plaintiff has not deposited the documents with the defendant no. 2, nor any evidence has been brought on record by the defendant no. 1 to prove that plaintiff has not submitted the shipping document with Punjab and Sind Bank after receiving advance from the defendant no. 1. Plaintiff has also made complaint to Reserve Bank of India and witness PW-2 proved the copy of complaint Ex. PW-2/1 and in this complaint, plaintiff has mentioned that the export documents against the said payments were submitted to Punjab and Sind Bank, Chandni Chowk Branch, Delhi. I am of the view that plaintiff has deposited the shipping documents with defendant no. 2.
29. Now, the question arises whether the defendant no. 1 can impose penal charges upon the plaintiff for not submitting shipping document with it by the plaintiff.
The plaintiff has summoned PW-3 Sh. Bharat Kumar Chandela, AVP (Assistant Vice President), Foreign Exchange Dealer's Association of India. This witness has proved the documents Ex. PW-3/1 and Ex. PW-3/2. In Ex. PW-3/1, it is mentioned in para no. 7(a) that "The AD Bank that actually CS (Comm.) No. 555/2019 -32- receives the inward remittance or reimbursement in foreign exchange should issue certificate". In clause- B(9) of Ex. PW- 3/1, it is mentioned that "Whenever FIRC is utilized for release of GR Forms or repatriation with AD bank other than FIRC issuing bank, it should communicate to the issuing bank the fact of utilising the FIRC for their nothing". In the present case, FIRC was used as receipt by the defendant no. 2 in respect of documents. As per this circular, it is clear that it was duty of the defendant no. 2 to communicate to the issuing bank the fact of utilizing the FIRC for release of GR/BRC (Bank realisation certificate) forms and it was not the duty of the plaintiff to submit the shipping documents with the defendant no. 1. As per Ex. PW-3/2 wherein, it is mentioned in para no. 4 (e) that "Wherever, FIRC is utilised for release of export documents, or repatriation, the bank must advise FIRC issuing bank and they must take note of the same. This would prevent wrongful issuance of duplicate FIRC". In view of these provisions, it is clear that the export proceeds can be received by one bank (ICICI Bank) in this case and the export documents can be handled by the another bank (Punjab and Sind Bank).
On the other hand, Ld. Counsel for defendant no. 1 has placed reliance on document Ex. PW-3/2 towards clause- 3(b) which reads as under:-
"When the export proceeds are received by a bank other than the one through which documents are submitted. FIRC is required for connecting the two. Here, the banks that received the payment would issue FIRC. At this stage, the customer is aware as to which bank is handling documents. Customer can therefore approach the bank CS (Comm.) No. 555/2019 -33- receiving payment and apply for FIRC addressed to the bank holding documents. This will restrict the use of FIRC. The bank that receives FIRC may send communication to FIRC issuing bank about details of the documents for which FIRC was used. The FIRC issuing bank would then mark of details of FIRC usage in their records. This will prevent issual of duplicate FIRC for such remittance".
So, as per clause 3(b), it is not barred for the plaintiff for submitting the shipping document with the defendant no. 2 Punjab and Sind Bank, who had received FIRC from the plaintiff. During cross examination, PW-3 has stated that it is an association of certain authorized dealers i.e. mostly the banks under the Foreign Exchange Management Act, 1999 and it works under authorization of RBI. This witness has admitted that whenever a bank or other similar financial institution becomes a member of FEDAI, the said in coming member undertakes to abide by such circular/ instruction issued by FEDAI, to the extent applicable to them and therefore, he said FEDAI has power to issue such circulars to its members. I am of the view that plaintiff was not wrong in submitting the shipping documents with the defendant no. 2 and it was incumbent on the part of the defendant no. 2 to send the documents to the defendant no. 1.
30. Now, it is to be seen whether defendant no. 1 has imposed genuine penal charges upon the plaintiff.
The defendant no. 1 has not placed on record any agreement executed between the plaintiff and defendant no. 1 that in case of non-filing of shipping documents defendant no. 1 can impose penal charges. It is contended by Ld. Counsel for CS (Comm.) No. 555/2019 -34- defendant no. 1 that as per account opening form Ex. DW-2/1, plaintiff has declared as under:-
"I/we have read, understood and hereby agree to the terms stated in this Application Form as well as the Terms and conditions governing the Current Account/ EEFC account and various facilities/ services such as mobile banking, corporate internet banking, corporate care debit cum ATM card and such other services available under ICICI Bank current account/ EEFC account and as displayed on www.icicibank.com and agree to abide by the same. I/we understand that the said terms are subject to revision from time to time. I/we agree to keep ourselves updated of such changes and be bound by the terms as are in force from time to time".
Ld. Counsel for defendant no. 1 has also contended that plaintiff also furnished another undertaking which is mentioned in Ex. PW-1/2, which is as under:-
"I confirm that I have read the Terms & Conditions at www.icicibank.com which details the rules governing account operations and am in possession of the Schedule of Service Charges, which specifies the charges applicable for various services".
Even, if this contention of Ld. Counsel for defendant no. 1 is admitted to be true then defendant no. 1 can only impose service charges. The defendant no. 1 cannot impose penal charges on the plaintiff for not submitting the documents particularly when the defendant no. 1 has levied penal charges only for some transactions and for some transactions defendant no. 1 has not levied any penal charges upon the plaintiff. During CS (Comm.) No. 555/2019 -35- cross examination, DW-2 Ms. Kanika Agarwal, Sr. Relationship Manager, ICICI Bank has admitted that " it is correct that at point-A of Ex. DW-2/1 there is only mention of Schedule of charge". This witness has admitted that the defendant no. 1 had levied penal charges on some of the transactions. This witness has also clearly admitted that in other transactions also the compliance on the part of the plaintiff was not complete and no penal charges were levied on the rest of the transactions. This witness has also admitted that it is no where mentioned in the contract that the plaintiff has to submit shipping bills to the defendant no. 1. This witness has admitted that ICICI Bank is a Member of Foreign Exchange Dealers Association of India. The defendant no. 1 has not placed on record any document which authorizes it to impose penal charges on the plaintiff in case of non submission of shipping document with the defendant no. 1. I am of the view that defendant no. 1 has wrongly imposed the penal charges upon the plaintiff. As in the preceding para, it is held that transactions dated 30.12.2014, 28.03.2015, 30.12.2015, 29.03.2016, 29.09.2016 are barred by limitation and transaction dated 29.03.2017 & 31.03.2017 are within limitation. I am of the view that plaintiff is only entited for refund of penal charge imposed on 29.03.2017 amounting to Rs. 3,28,900/- and penal charge imposed on 31.03.2018 amounting to Rs. 5,19,800/- from the defendnat no. 1.
31. Now, the question arises whether plaintiff is entitled to interest or not.
The plaintiff has claimed interest @ 15% per annum from the defendant no. 1. Reliance can be placed in this regard on the CS (Comm.) No. 555/2019 -36- judgment of Central Bank of India Vs Ravindra & Ors MANU/SC/0663/2001 passed by Hon'ble Supreme Court of India. In this judgment it is held that according to stroud's Judicial dictionary of Words and Phrases interest means, inter alia, compensation paid by the borrower to the lender for deprivation of the use of his money. In Secretary, Irrigation Department, Government of Orissa & Ors Vs G. C. Roy Manu/ SC/0297/1992 (1992) 2 SCC 508, it is held that the constitution bench opined that a person deprived of the use of money to which he is legitimately entitled has a right to be compensated for the deprivation, call it by any name. It may be called interest, compensation or damages. This is the principles of Section 34 CPC.
In this judgment, Judgment of Dr. shamlal Narula Vs CIT Punjab MANU/ SC/0109/1964 (53) was also relied upon wherein it is held that interest is paid for the deprivation of the use of the money. In this judgment it is also held that in whatever category "interest in a particular case may be put, it is a consideration paid either for the use of money or for forbearance in demanding it, after it has fallen due, and thus, it is charge for the use of forbearance of money. In this sense, it is a compensation allowed by law or fixed by parties, or permitted by customs or usage, for use of money, belonging to another, or of the delay in paying money after it has become payable.
Reliance can also be placed on the judgment of Aditya Mass Communication (P) Ltd Vs APSRTC MANU/SC/0759/2003 wherein Hon'ble Supreme Court granted interest @ 12% per annum. Reliance can also be placed on the judgment of "M/s IHT Network Limited Vs. Sachin Bhardwaj"
CS (Comm.) No. 555/2019 -37-in RFA No. 835/2016 & CM Appl.14617/2020 wherein the Hon'ble High Court of Delhi has granted interest @12% per annum. I am of the view that interest claimed by the plaintiff is every excessive and plaintiff is entitled to interest @ 12% per annum which is reasonable and usually prevailing market rate of interest. Accordingly, issue no. 1 is decided in favour of the plaintiff and against the defendant no. 1.
32. RELIEF:
In view of my above discussions, the suit of the plaintiff is partly decreed and a decree of Rs. 9,48,700/- is passed in favour of the plaintiff and against the defendant no. 1. The plaintiff is also entitled to interest @ 12% per annum from 31.03.2017 till realization. Plaintiff is also entitled to the proportionate cost of the suit. Decree sheet be prepared accordingly. File be consigned to record room, after necessary compliance.
Announced in the (NARESH KUMAR MALHOTRA)
open court on 11.09.2024 District Judge, Comm. Court-06
West, Tis Hazari Courts
Extension Block, Delhi/11.09.2024
Digitally
signed by
NARESH
NARESH KUMAR
KUMAR MALHOTRA
MALHOTRA Date:
2024.09.11
16:49:54
+0530
CS (Comm.) No. 555/2019 -38-