State Consumer Disputes Redressal Commission
Rvj. Devadoss vs The Chief Manager, Canara Bank on 18 March, 2015
Daily Order BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI BEFORE HON'BLE THIRU JUSTICE R. REGUPATHI PRESIDENT THIRU.J. JAYARAM JUDICIAL MEMBER C.C.NO.48/2009 Dated this the 18th day of MARCH, 2015 RVJ Devadoss S/o Late. C.Royappan, Proprietor M/s Printech Fashions No.29, Erukkadu 4th street Karuvampalayam Tiruppur 641 604 ..complainant Vs 1.The Chief Manager M/s Canara Bank, SME Branch, Kurinji Towers, 40-B, Appachi Nagar Main Road Kongu Nagar Tirupur 641 607 2.Export Credit Guarantee Corporation of India Ltd Rep.by the Branch Manager, 137/2, C.G.Complex Kumaran Road Tirupur - 641 601 ..opposite parties Counsel for the complainant : M/s Fast Track Law Associates Counsel for the 1st opp.party : T.C.A. Srinivasan Counsel for the 2nd opp.party : M/s P.V.S. Giridhar and Sai Associates THIRU.J.JAYARAM, JUDICIAL MEMBER
1. This case coming before us for final hearing on 2.12.2014 and upon perusing the material records, this commission made the following order.
2. The case of the complainant are as follows:-
The complainant is proprietor of M/s Printech Fashions at Tiruppur exporting Hosiery items. The complainant's Firm was having account with the 1st opposite party from the year 2002 and in the year 2003, the 1st opposite party took over the assets and liabilities of the firm from Nedungadi Bank, Tirupur by sanctioning Rs.30 lakhs of Packing Credit Limit and Rs. 15 lakhs FBP (Foreign Bill Purchase) limit, interest being at the rate of 10% p.a. In the year 2008, the complainant had applied for renewal of the existing limit along with an adhoc PC limit of Rs. 45 lakhs and the 1st opposite party sanctioned Rs.45 lakhs along with the earlier limit renewal availing the enhanced adhoc Packing Credit Limit and other facilities sanctioned by the 1st opposite party, the complainant secured export orders from the company in Canada and on the direction of the 1st opposite party by Credit Limit Approval Letter of the 2nd opposite party dated 20.2.2008 under the Standard Comprehensive Risk(SCR), a sum of Rs. 2 Crores was approved on Ät Sight" basis from the date of shipment.
3. The 1st opposite party had taken a policy from the 2nd opposite party. The aforesaid importer was pleased to issue, 'At sight' letter of credit for USD 5,00,000. The 1st opposite party disbursed on various dates as per their pass sheet for PC Accounts dated 25.4.2009. The complainant sent goods by way of 4 shipments through the buyer nominated liner M/s Freight Lift Limited having Head office at Chennai and Branch office at Tiruppur, Tuticorin etc., and the complainant's firm is the consignor and the consignee is Bank Leumi, USA i.e., the importer's bank aboard.
4. After shipment of all the necessary documents relating to exports were handed over to the 1st opposite party. The 1st opposite party scrutinized the documents and on appreciation had sent the 1st export bills amounting to USD 1,44,936 for negotiation to the Applicant's Bank at USA. The export through documentary credit is governed by "The Uniform Customs and practice for Documentary Credit Rules" and the article 14 stipulates the standard for examination of documents. The 1st opposite party had negotiated the export bill on 19.3.2008 and the complainant was given the copy of the discrepancies letter only on 10.4.2008 by the 1st opposite party by the Bank of Leumi at USA through "SWIFT" (The Society for World-Wide Inter-Bank Financial Transaction) message dated 26.3.2008, but if the copies of the discrepancies were handed over to the complainant immediately by the 1st opposite party, the complainant could have called upon the buyer for secured payment and could have stopped the subsequent shipment and because of the negligent act of the 1st opposite party, the export bills were returned. On 20.7.2009, the legal notice was issued to the 1st opposite party claiming compensation for the negligence and deficiency in service.
5. The Bank Leumi, USA returned the export documents unpaid to the 1st opposite party through SWIFT messages dated 16.5.2008 and 19.6.08 stating that the applicant has finally refused to accept the discrepancies. By the Canada Customs Response Report, the goods were released on 30.4.2008, 7.5.2008 and 12.5.2008 and how the goods were released without the export documents. The buyer abroad played fraud on the complainant firm by colluding with the Indian liner referred above and took delivery of the 4 consignments without honouring the letter of credit and without the knowledge of the Bank abroad. On 8.11.2008, the complainant preferred a complaint against the liner and others with the police at Tiruppur and after an enquiry, FIR was registered on 3.3.09.
6. In these circumstances, the 1st opposite party had authorized an agency at Canada to inspect/verify the consignment and take appropriate action including criminal/Civil and to lodge claim/damages and on their behalf in the appropriate court of law against all the concerned.
7. When the recovery proceedings were in full force and in the circumstances where the export bills were purchased and negotiated by the 1st opposite party, SARFAESI Act, proceedings were initiated by the 1st opposite party and immediately on receipt of the notice, the complainant went to the Bank and explained his position and raised objection and the 1st opposite party had assured him of not taking further action and also promised to provide working capital for running his further business. In spite of the request, the 1st opposite party with the illegal intention to sell the secured property for the meager amount and issued "possession notice" dated 21.4.2009 under 13(4) of the SARFAESI Act. After issuance of the 13(2), notice to the 1st opposite party had received the claim from the 2nd opposite party for the bill amount which the buyer abroad played fraud in non payment of bill amount and in the possession notice dated 21.4. 2009 at schedule D, the 1st opposite party fixed the liability on the complainant as on 6.1.2009 as follows:-
Liability as on 6.1.2009 Interest due from Interest Rate PC Rs. Nil 1.1.2009 0.00% FDB/FBE Rs. 61,09,066.00 1.1.2009 15.25% TOD in current A/c No. 10542 Rs. 10,297.21 1.1.2009 16.75% Total Rs.61,19,363.21
8. In response to the representation of the complainant dated 22.4.2009, the 1st opposite party by their letter dated 30.4.2009 answered the said queries and to reduce the total out standing amount and bills and his account was classified as NPA as on 31.7.2008 and the 1st opposite party had credited the claim amount received from the 2nd opposite party to the "packing credit dues". Thus the complainant had presented the export bill in time and the same had been purchased by the 1st opposite party and credited the same to the complainant's Packing Credit Loan Account and further the 1st opposite party bank had charged exorbitant rate of interest contrary to the interest agreed in the sanction memorandum dated 19.2.2008.
9. The complainant preferred an appeal before the "Debts Recovery Tribunal, Coimbatore and the Tribunal without consent of his counsel or the complainant, passed the impugned order directing him to deposit Rs.14 lakhs without considering his grievance and hence the same was challenged in CRP. NO. 1861/2009 and MP. No.1/2009 and a conditional order was passed granting interim stay of the possession notice directing the complainant to deposit Rs. 5 lakhs before the 1st opposite party's bank on or before 7.8.2008 and accordingly the complainant deposited the amount.
10. The 1st opposite party had given a report to the 2nd opposite party as, "The payment could not be secured in any event on the export bills" and the 2nd opposite party had paid only 25% of gross invoice value. The complainant claimed 80 -90 %, as per the easy-GC on the export bills, but the 2nd opposite party by their letter dated 6.3.09, stated that if the offer of 25% of the bill value i.e, Rs. 46,57,889/- would lapse unconditionally.
11. Having no other go, he accepted the offer of the 2nd opposite party for a lesser value and the 2nd opposite party ought to have allowed the 90% of the value of export bills. The action of the 1st opposite party bank in making his account as NPA is illegal and done with malafide intention.
12. Because of the negligence on the part of the 1st opposite party, even though the complainant complied with the export obligation, he was not able to realize the amount from the buyer abroad. In these circumstances, the Superintendent of Customs initiated the proceedings against the complainant. The 1st opposite party by reply notice dated 1.8.2009 to the complainant's legal notice dated 20.7.2009 as denied in his claim.
13. Hence the complainant praying for direction to the 1st opposite party
i) to credit Rs. 58,53,965/- (Fifty Eight Lakhs Fifty Three Thousand Nine Hundred and sixty Five only) to the complainants packing credit loan account with subsequent interest, for the export bill purchased and negotiated by the 1st opposite party vide their reference No.1246 N-260118 - 08 dated 19.3.2008.
to revoke the notice issued by the 1st opposite party published in Dinamalar News paper on 9.9.2008 and intimated to the complainant through registered post on 17.9.2008. to pay Rs.5,39,000/- (Five lakhs and Thirty Nine Thousand only) being the damage caused because of illegal paper publication caused by the 1st opposite party in Dinamalar news paper on 9.9.08 and not allowing the complainant to lease out his factory premises and collect the rent at the rate of Rs.49,000/- (Forty nine Thousand only) per month. to pay such other damage caused because of illegal paper publication caused by the 1st opposite party in Dinamalar newspaper on 9.9.2008 and not allowing the complainant to lease out his factory premises from the date of the petition to the date of revocation of the notice. to pay Rs.21,83,000/- (twenty one lakhs eighty three thousand) received by the 1st opposite party towards duty drawback amount claimed by the customs authority. to pay Rs.10,00,000/- (Ten Lakhs only) towards loss of reputation in business circles and mental agony suffered by the complainant.
14. The 1st opposite party filed version stating that the complaint is not maintainable before the consumer Forum since the transaction relates to financial assistance extended by the 1st opposite party to the complainant and since the complainant defaulted to repay the same they have initiated proceeding under 13(4) of the SARFAESI Act and filed a suit for recovery before DRT, Coimbatore and the same is pending. In the version, the various allegations and averments, in the complaint have been denied by the 1st opposite party and has stated that there is no deficiency in service on their part.
15. The 2nd opposite party has filed version contending that the complainant is not a consumer within the meaning of sec 2(1)(d) of the Consumer Protection Act, as he has admittedly availed the services of the opposite party for commercial purpose and admittedly the complainant carries on the business of exporting Hosiery items. Therefore the complaint is not maintainable before the consumer Forum and also that there is no deficiency in service on their part.
16. The complainant and the opposite parties 1 and 2 have filed their proof affidavits reiterating the averments in the complaint and the version filed by them.
17. Documents 1 to 46 were filed and marked on the side of the complainant as Ex.A.1 to A.46. Documents 1 to 31 were filed and marked on the side of the opposite parties as Ex.B.1 to B.31.
18. The first and the foremost point to be decided is whether the complainant is a consumer as contemplated u/s 2(1)(d) of the Consumer Protection Act and whether the complaint is maintainable before the consumer Forum?
19. Admittedly the complainant is doing business exporting hosiery to their clients abroad and the transactions are of commercial nature and for commercial purpose and so the complainant is not a consumer as defined u/s 2(1)(d) of Consumer protection Act and therefore the complaint does not come under the purview of Consumer protection Act and therefore we hold that the complaint is not maintainable before the Consumer Forum and that the complaint is liable to be dismissed.
20. Further it is very clear from the pleadings and the documents that the issues which arise for consideration are civil matters and the complainant has to seek his remedy before the Civil Court and not before the Consumer Forum.
In the result, the complaint is dismissed as not maintainable before the consumer Forum. The complainant is at liberty to approach the Civil Court or any other appropriate Forum to seek his remedy.
The period of pendency of the complaint before this Commission shall be excluded while determining limitation as contemplated u/s 14 of the Limitation Act.
No order as to costs .
J.JAYARAM R.REGUPATHI JUDICIAL MEMBER PRESIDENT LIST OF DOCUMENTS FILED BY THE COMPLAINANT : Ex.A1 09.01.2007 Copy of Certificate of Registration Ex.A2 14.02.2008 Copy of Letter of Credit Ex.A3 19.02.2008 Copy of Renewal cum enhanced Sanction order Ex.A4 20.02.2008 Copy of Credit Limit approval given by ECGC Ex.A5 05.03.2008 Copy of Invoice No.PF-011/07 Ex.A6 15.03.2008 Copy of Multimodal Transport Document Ex.A7 18.03.2008 Copy of Bill of Exchange Ex.A8 19.03.2008
Copy of Covering letter for documentary bill for purchase /Discourt/Negotiation Ex.A9 19.03.2008 Copy of Export Bill Negotiation Advice letter of Canara Bank Ex.A10 19.03.2008 Copy of Invoice No.PF.012/07 Ex.A11 23.03.2008 Copy of Multimodal Transport Document Ex.A12 25.03.2008 Copy of Bill of Exchange Ex.A13 25.03.2008 Copy of Covering letter for documentary Bill for Purchase / Discount / Negotiation Ex.A14 26.03.2008 Copy of Photocopy of Discrepancy letter received by Canara Bank from Bank of Leumi, USA Ex.A15 26.03.2008 Copy of Export Bill Collection Advice Letter of Canara Bank Ex.A16 27.03.2008 Copy of Invoice No.PF-013/07 Ex.A17 29.03.2008 Copy of Multimodal Transport Document Ex.A18 02.04.2008 Copy of Bill of Exchange Ex.A19 02.04.2008 Copy of Covering letter for documentary Bill for Purchase /Discourt / Negotiation Ex.A20 04.04.2008 Copy of Photocopy of Discrepancy letter received by Canara Bank from Bank of Leumi, USA Ex.A21 16.04.2008 Copy of Invoice No.PF-01/08-09 Ex.A22 20.04.2008 Copy of Multimodal Transport Document Ex.A23 25.04.2008 Copy of Bill of Exchange Ex.A24 25.04.2008 Copy of Covering letter for documentary Bill for Purchase / Discount /Negotiation Ex.A25 29.04.2008 Copy of Photocopy of Discrepancy letter received by Canara Bank from Bank of Leumi, USA Ex.A26 16.05.2008 Copy of Swift message regarding return of Export bills Ex.A27 19.06.2008 Copy of Swift message regarding return of Export Bills Ex.A28 31.07.2008 Copy of letter of Stikeman Elliott, Barristers & Solicitors, Canada With authorization letter of Canara Bank Ex.A29 30.08.2008 Copy of E-mail messages Ex.A30 17.09.2008 Copy of letter of Canara Bank Ex.A31 06.01.2009 Copy of 13 (2) -Demand Notice Ex.A32 03.03.2009 Copy of First Information Report Ex.A33 06.03.2009 Copy of Letter of ECGC Ex.A34 21.04.2009 Copy of 13 (4) - Possession Notice Ex.A35 25.04.2009 Copy of Pass Sheet for PC Accounts from 01.01.2008 to 24.04.2009 Ex.A36 30.04.2009 Copy of letter of Canara Bank Ex.A37 14.05.2009 Copy of Memorandum of SARFAESI Appeal Ex.A38 21.05.2009 Copy of Counter Ex.A39 08.06.2009 Copy of order of Debts Recovery Tribunal Ex.A40 08.07.2009 Copy of Letter of Canara Bank Ex.A41 09.07.2009 Copy of order in CRP.No.1861/2009 Ex.A42 20.07.2009 Copy of Legal notice Ex.A43 21.07.2009 Copy of Legal Notice Ex.A44 27.07.2009 Copy of Proof of Deposit Ex.A45 01.08.2009 Copy of Reply Legal notice of the 1st opposite party Ex.A46 19.03.2008 Copy of Certificate issued by Canara bank LIST OF DOCUMENTS FILED BY THE OPPOSITE PARTIES :
Sl.No Date Descriptions Ex.B1 17.07.2008 Copy of Revision of rate of Interest W.E.F. 18.07.2008 Ex.B2 08.07.2009 Copy of Letter sent by the 1st opposite party to the complainant Ex.B3 29.06.2009 Copy of Letter sent by the complainant to the1st opposite party Ex.B4 14.08.2008 Email sent by the 1st opposite party to the complainant Ex.B5 01.08.2008 Copy of letter sent by 1st opposite party to the complainant Ex.B6 25.07.2008 Copy of letter sent by the 1st opposite party to Mr.Andre Goguen Ex.B7 24.07.2008 Copy of letter sent by the 1st opposite party to Mr.Andre Goguen Ex.B8 24.07.2008 Copy of Letter sent by the 1st opposite party to Mr.Maret Guilonard Ex.B9 22.07.2008 Copy of letter sent by the Bank to Mr.Claude Daigneault Ex.B10 07.07.2008 Copy of letter sent by the 1st opposite party to M/s.La Freightift Pvt. Ltd with coy to the complainant Ex.B11 05.07.2008 Copy of letter sent by the 1st opposite party to the complainant Ex.B12 05.06.2008 Copy of letter sent by the 1st opposite party to the complainant Ex.B13 03.06.2008 Copy of letter sent by the 1st opposite party to the complainant received by Devadoss Ex.B14 03.06.2008 Copy of letter sent by the 1st opposite party to the complainant received by Madhavan Ex.B15 26.05.2008 Copy of letter sent to complainant by Texwell Group Ltd Ex.B16 16.04.2008 Copy of letter by complainant to 1st opposite party Ex.B17 02.04.2008 Copy of letter sent by Texwell Group Ltd to complainant copy sent to 1st opposite party Ex.B18 08.04.2008 Copy of letter sent by complainant to the 1st opposite party Ex.B19
20.02.2008 Copy of letter sent by Texwell Group Ltd to complainant copy given to 1st opposite party Ex.B20 24.03.2008 Copy of letter sent by Texwell Group Ltd to complainant Ex.B21 13.05.2008 Copy of letter sent by the complainant to1st opposite party Ex.B22 22.04.2008 Copy of letter sent by Texwell Group Ltd to complainant Ex.B23 Copy of Swift message notifying discrepancy with the ack of the complainant, to have received the same day Ex.B24 08.04.2008 Copy of letter sent by complainant to 1st opposite party Ex.B25 18.02.2008 Copy of letter sent by Texwell Group Ltd to complainant Ex.B26 15.07.2008 Copy of Email sent by 1st opposite party to complainant Ex.B27 10.07.2008 Copy of Email sent by 1st opposite party to complainant Ex.B28 09.07.2008 Copy of Email sent by 1st opposite party to complainant Ex.B29 09.07.2008 Copy of Email sent by complainant to 1st opposite party Ex.B30 21.06.2008 Copy of Email sent by 1st opposite party Ex.B31 23.07.2009 Copy of Statement of Account J.JAYARAM R.REGUPATHI (J) MEMBER PRESIDENT