National Consumer Disputes Redressal
M/S. Galundia Textiles Pvt. Ltd. vs E.C.G.C. Ltd. on 18 April, 2018
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 2015 OF 2017 (Against the Order dated 03/08/2017 in Complaint No. 71/2015 of the State Commission Rajasthan) 1. M/S. GALUNDIA TEXTILES PVT. LTD. THROUGH THEIR MANAGING DIRECTOR, SUDEEP GALUNDIA, S/O. SH. KUSHAL SINGH GALUNDIA, F-244/245, RICO INDUSTIRAL AREA, III PHASE BHILWARA RAJASTHAN ...........Appellant(s) Versus 1. E.C.G.C. LTD. THROUGH THEIR BRANCH MANAGER, 2 FLOOR CHANDRA ROAD JAIPUR RAJASTHAN ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN,PRESIDING MEMBER
For the Appellant : Mr. Piyush Singh, Advocate For the Respondent :
Dated : 18 Apr 2018 ORDER
FA/2015/2017 & IA/14872/2017 & IA/14873/2017
The complainant/appellant company obtained a 'Buyer Exposure Policy' of the respondent E.C.G.C. Ltd., which is a public sector enterprise, for reimbursement of the loss which the complainant/appellant might sustain in the export of goods to a Srilankan buyer, namely, M/s National Traders. The complainant/appellant supplied fabric and yarn to the overseas buyer from time to time. According to the buyer M/s National Traders, the fabric supplied by the complainant/appellant was found to be inferior and defective. The unexecuted order was, therefore, cancelled by the overseas buyer and the complainant/appellant was not paid for the goods worth Rs.2652817/- which it had exported to M/s National Traders.
2. The complainant/appellant then sought reimbursement of its loss in terms of the policy which it had taken from the respondent. The claim was rejected vide respondent's letter dated 6.3.2014, on the following grounds:-
"1.The buyer has raised quality issues with regard to the shipment that was received by them. The buyer has stated that the fabrics received were of inferior quality and has therefore, decline to acknowledged the debt. As per the terms and conditions of the policy, unresolved dispute between the buyer and the insured is not covered under the policy. Please refer to the policy bond, Part lll Point no. 3(b).'
2. The term of payment was DA-30 Days from presentation. Copy of unpaid accepted bill of exchange has not been submitted.
3. Copy of non-payment advice from the overseas bank has not been submitted.
4. The unpaid bill of exchange was not noted and protested.
5. It is observed from your bank swift copy that subject bill of exchange was modified /revised from sight bill to DA-30 days on 03.08.2013. Reasons for the same have not been provided.
6. As per the Proforma invoice, the consignee is M/s Cliftex industries Ltd, Sri Lanka and not M/s National Traders. Order placed or Proforma lnvoice accepted by M/s National traders, Sri Lanka has not been submitted."
3. The representations submitted by the complainant/appellant to the respondent were also rejected by the respondent vide its letters dated 15.9.2014 and 19.2.2015. Being aggrieved from the rejection of the claim, the appellant/complainant approached the concerned State Commission by way of a consumer complaint.
4. The complaint was resisted by the respondent primarily on the ground that the unresolved disputes between the buyer and the insured were not covered under the policy.
5. The State Commission having dismissed the complaint, the appellant/complainant is before this Commission by way of this appeal.
6. Clause 3(b) of Part III of the policy taken by the complainant/appellant provided as under:-
" PART - III EXCLUSIONS < >< > Unless we have agreed otherwise in writing we shall not be liable for any losses where:
< > There is an unresolved dispute between you and the insured Buyer."
[Emphasis supplied] It would thus be seen that unless otherwise agreed, the respondent was not liable to reimbursement any loss where there was any unresolved disputes between the insured and the overseas buyer.
7. The letter dated 12.12.2013 sent by the overseas buyer M/s National Traders to M.A.H. International Corporation, an agency through which an attempt was made by the complainant/appellant to recover its dues from the overseas buyer, interalia reads as under:-
"As when the shipments were received we were supplying the same to our ultimate buyer concerned. When buyer concerned received one or two shipments and opening of the same they found inferior in quality, defects and damages of the goods and they informed the same to us and we carried out a joint inspection i.e. our Quality Department and Buyers Quality Department and we found the consignment shipped was inferior In quality, defects and damages.
Further the buyer returned the consignment delivered to them and cancel the entire order and also filed the damages claim against our agreement of non-performance.
The same was informed to your client by our mails dated May14,18,30 June 03, 04,07,10,11,12 17, 18,26, 27, July 02, August 01 ,09,11, 17, 21, September 03, October 03, 06, 07,21, December 04 and 08 2013. In all our above mails we have informed the Problems we are facing regarding inferior in quality, defects and damages of the goods, cancellation of Order and claim. Farther in our all above mails we requested your client to come down to Sri Lanka and/or to send a responsible officer and/or to appoint a recognized international Quality firm to inspect the fabric to find a solution of the problems for the mutual benefit and for future business relationship. As your client failed and/or neglected to give a positive solution and/or response of the problems we took following further steps to find solution and get a positive reply from your client.
On June 13, 2013 we dispatched the inferior in quality, defects and damages fabric samples to your Client by TNT Courier No.644782320.
ii. By our mail dated June 26,2013 we informed your client that we are prepared to reship the entire consignment and to advice details and to obtain necessary approvals in India to effect the reshipment failing to accept reshipment will compel us to take legal action against your client.
iii. As further measure by our email dated October 03, 2013 we dispatched the photographs of the entire lot rejected fabric and also we offered a free Air Passage and Accommodation to your client or his authorized representative to call over for an inspection.
All our attempts failed and our entire request to solve the problem has fallen in deaf ears of your clients.
Under the above circumstances we presume that your client purposely shipped the inferior quality, defects and damaged fabric to our warehouse and lacking to face the problem and / or responsibility.
At this stage too we are prepared to settle the dispute amicably with your client provided he visit our warehouse inspect the fabric and find a solution for mutual benefit."
The emails dated 14.5.2013, 3.6.2013, 10.6.2013, 27.6.2013 and 4.12.2013 also show that issues/disputes had arisen between the complainant and the overseas buyer as the overseas buyer claimed the goods supplied by the complainant/appellant were defective. The mails coupled with the letter dated 12.12.2013 also show that the disputes between the complainant and the overseas buyer could not be resolved. Therefore, Clause 3(b) of Part III of the policy clearly became applicable, and the respondent is not liable to reimburse the complainant/appellant for the loss alleged to have been suffered by it. What is material for the purpose of this complaint is that there were unresolved disputes between the complainant/appellant and the overseas buyer and those unresolved disputes were the cause of the payment not being made by the buyer. It is immaterial, whether the goods were actually defective or not. Once the buyer took the position that the goods were defective and the complainant did not accept the stand taken by the buyer, an issue arose with respect to the quality of the goods exported by the complainant/appellant and that issue having remained unresolved, reimbursement in terms of the policy is not available to the complainant/appellant.
8. For the reasons stated hereinabove, I find no ground to interfere with the view taken by the State Commission. The appeal being devoid of any merit is hereby dismissed, with no order as to costs, along with the accompanying application seeking condonation of delay in filing the appeal.
......................J V.K. JAIN PRESIDING MEMBER