State Consumer Disputes Redressal Commission
K. Suresh Kumar, Proprietor vs The Idbi Bank, The Manager on 30 May, 2023
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IN THE TAMILNADU STATE CONSUMER DISPUTES REDRESSAL
COMMISSION, CHENNAI.
Present: Hon'ble THIRU. JUSTICE R. SUBBIAH : PRESIDENT
Thiru R VENKATESAPERUMAL : MEMBER
C.C.No.61 of 2012
Tuesday, the 30th day of May 2023
K. Suresh Kumar
S/o. Kalimuthu, Proprietor
SSS Global
68, Arokiya Nathar Street
Pollachi- 642 001
and presently having office at
31, Kabirdas Street
Antony Complex
Venkatesa Colony, Pollachi. .. Complainant
- Vs -
1. The IDBI Bank
Pollachi Branch
Rep. by its Manager
No.6, Kamaraj Street
Mahalingapuram,
Pollachi- 642 002.
2. The IDBI Bank
Coimbatore Main Branch
Trade Finance Department
May Flower Complex
Avinashi Road,
Coimbatore- 641 018. .. Opposite Parties
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Counsel for the Complainant : M/s. P. Venkitapathy
Counsel for the Opposite parties : M/s. Shivakumar & Suresh
This complaint came before us for final hearing on
23.01.2023 and on hearing the arguments of the counsel for the
complainant and the counsel for the opposite parties and on perusing
the material records, this Commission made the following :-
ORDER
R.SUBBIAH J., PRESIDENT The present complaint has been filed by the Complainant under Section 17 of the Consumer Protection Act, 1986, to direct the opposite parties to pay a sum of Rs.30 lakhs towards compensation for mental agony, damages, loss suffered by him and direct to issue 'No Due Certificate' and also to make endorsement in the ECGC claim form and to pay a further sum of Rs.25,000/- towards the expenses incurred by the complainant.
2. In brief, the case of the complainant as projected in the Complaint is as follows:
The complainant is running a business in the name and style of "SSS Global". He mainly deals with export of coir products namely, fibre export, coir, twisted fibre, coconut fibre and allied products. The 3 complainant has clients all over the world, mainly, in China Major, Malaysia, Germany and Polland etc. From September 2008 onwards, the complainant has been exporting the coir products to various places. During the period September 2008 and March 2009, the turnover was more than Rs.70 lakhs. In between the period from April 2009 and March 2010, it increased to Rs.1.50 crores. In order to develop his growing business, he approached the 1st opposite party to avail loan. The 2nd opposite party is the Trade Finance Department, which manages financial facilities for overseas, export credit granted by the 1st opposite party to the complainant and other borrowers of the opposite party Bank. The complainant availed loan from the 1st opposite party for development of his business. He availed the following credit facilities, agreeing to the terms and conditions of the loan facilities under CGFMSE Scheme, with Bill Discounting and LC with ECGC coverage.
Export Packing Credit Facility - Rs.25 lakhs with (Sub limit for FBD Rs.25 lakhs) As per Invoice No.011/2009 dated 28.11.2009, he sent 669 bales of coconut fibre consisting of 83 tonnes @ $325/ton valuing $26,975 corresponding to Rs.12,54,338/- and sent the same in 5 containers from India to Shangai, China on 04.12.2009. As per Invoice 4 No.12/2009 dated 05.12.2009 he sent 855 bales of coconut fibre consisting of 87 tonnes @ $325/ton valuing $55,250/- corresponding to Rs.13,10,556/- and sent the same in 5 containers from India to Shangai, China on 09.12.2009 for the Hong-Kong buyer M/s.SENCO International Enterprises Limited, Hongkong. The 10 containers were worth about Rs.25,64,984/-. The Letter of Credit for a value of $61,750/- dated 20.11.2009 with L/C No.00731010000577 sent by the 1st opposite party was returned by the buyer's bank China Construction Bank (Asia) Corp Ltd., for small and minor discrepancies in the documents. The 2nd opposite party had failed to intimate the same to the complainant at the earliest point of time and also failed to guide him to sort out the problem by getting time from the buyer's bank to correct the discrepancies. The 2nd opposite party had just asked the complainant to clear the dues. The complainant gave a request to the 2nd opposite party to send a message to the buyer bank to return back the documents on 31.12.2009, but no steps were taken by the 2nd opposite party. In the meanwhile, the buyer refused to take the goods and it was kept idle in the shipyard, which made the complainant incur heavy loss and damages. The efforts taken by the complainant to reduce the loss by finding another buyer for sale of the goods in shipyard, also failed due to the act of the opposite parties, in not 5 transferring the L/C documents. Hence, the abandonment of the entire consignment sent by the complainant in 10 containers to M/s.SENCO International Enterprises Ltd., caused heavy loss to him due to the negligent act of the opposite parties. In order to get relieved from the loss incurred, the complainant made a claim before ECGC India Ltd., and sent a request in February 2010 along with the form to ECGC. The complainant intended to do further export work but the opposite parties have failed to respond properly. Hence, the complainant had lost the entire business and incurred heavy loss and the ECGC had directed the complainant to get attestation for the claim from the 2nd opposite party. But the opposite parties have avoided to give the required particulars and to sign the attestation in order to make necessary claim by the complainant. The complainant made several requests to the opposite parties to make endorsement in the ECGC claim form in order to make a claim for the loss incurred by him. The 2nd opposite party had threatened the complainant and directed him to pay the amount soon and get rid of them and also asked him to give a letter for write off of the export bills on 27.09.2010. Hence, the complainant gave a letter for the same in order to get the 'No Due Certificate', but even after that till the date of filing the complaint, the complainant has not been issued with 'No Due Certificate' by the 6 opposite parties. Thereafter, the complainant made several requests over phone and emails on various dates from 27.09.2010, for 'No Due Certificate' for him and to make an endorsement in the ECGC claim. But the opposite parties had stated that unless they receive a letter from ECGC, they would not make endorsement for the claim application. But the ECGC officials had stated that no such letter from their side is needed to be sent to the opposite parties. On 15.09.2010, the ECGC had sent a letter regarding the complainant's ECGC SCR Policy No.01800003307, requesting the opposite parties to make attestation in the claim form and all documents required by the complainant and also sought the reasons for non-payment. The opposite parties sent a reply on 27.09.2010, by giving wrong information that the old bills were cleared on 07.12.2009 and 25.11.2009. Due to the act of the opposite parties, the complainant had incurred heavy loss and hardship. There is no proper guidance from the side of the opposite parties. The complainant has not been given NOC, even after payment of the entire dues to the 1 st opposite party Bank. The opposite parties have delayed in sending the swift message. Hence, alleging deficiency of service on the part of the opposite parties, the complaint has been filed praying the relief stated supra.7
3. The case of the complainant was resisted by the opposite parties, by filing a detailed version wherein they have stated that the complainant had approached the opposite parties for packing credit facility in order to export coir/coconut fibre. The said request was considered and the complainant was sanctioned loan to the limit of Rs.25 lakhs vide Sanction Lr. No.APC 49/2009-10. The said loan was repayable within 12 months or on demand. The validity period should not exceed 90 days for inland bills/LCs and 180 days for foreign bills/ LCs and the sanction is subject to periodic review by the bank. The complainant had accepted the terms and conditions of the said loan sanction letter and executed the loan documents. The complainant had taken the Export Shipment Policy with a maximum liability of Rs.30,00,000/- from Export Credit Guarantee Corporation of India Ltd. The complainant had submitted totally 11 bills, out of which 2 bills against LC were dishonored for non-acceptance by the buyer of the said two bills. Further, one bill was particularly paid leaving about USD 2137. The said bills were discounted and loan amounts were disbursed from and out of the said facility. The amounts disbursed on 27.11.2009 and 09.12.2009 got expired on 26.01.2010 and 05.02.2010 respectively. But the complainant was unable to adjust the 8 credit availments on the due dates. Considering the market situation, the Bank had extended the period to further 3 months to realise its dues. Inspite of sending several reminders by the bank through registered post to the borrower from Coimbatore branch and the reminder mails from Pollachi branch, there was no response from the complainant. With continuous follow up, the Bank had received the payment during March 2010. Subsequently, at the request of the complainant, the Bank had released loan amount of Rs.25 lakhs on 19.03.2010 to meet the export obligation of the borrower. However, the borrower was not prompt in honouring his commitment and the bills were not honoured in due time. On constant follow up with the borrower, the Bank was able to get the funds from him only during August 2010. From and out of the said sanctioned amount, the following amounts were disbursed to the complainant on various dates.
Disbursement Amount Due Date Closed Date Remarks
Date Rs. in lacs
15.10.2009 19.00 14.12.2009 08.12.2009 Nil
27.11.2009 15.55 26.01.2010 17.03.2010 Overdue for
51 days
09.12.2009 9.90 05.02.2010 18.03.2010 Overdue for
43 days
19.03.2010 25.00 05.06.2010 09.08.2010 Overdue for
64 days
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Despite the advice and warning of the opposite parties that the credit facility would be withdrawn/ cancelled in case the limit is not operated properly, the PC drawals availed by the borrower remained irregular and were repaid with significant delay. Due to the delay in settling the bills in time, viz., beyond 05.06.2010 the account became a Potential NPA on threat. Hence, the credit facility was subsequently not renewed. The complainant vide his email dated 07.09.2010 had requested to extend the facility to meet his export obligations. In the said mail the complainant had accepted his mistakes and the delay in repayment of the facility to the Bank. Also the borrowers had not submitted the relevant documents namely, IT Returns, Audited balance sheets, projected balance sheets etc., that were required for renewal of limits. However, in view of the conduct of the borrower and after reviewing the account, the Bank had taken the decision not to extend the facility anymore to the borrower. Only the borrower have to be blamed for the situation and not the Bank. With regard to No Due Certificate, the opposite parties had already issued No Due certificate to Punjab National Bank, Pollachi and to Tamil Nadu Mercantile Bank Ltd., Pollachi on 06.10.2010, at the request of the complainant. Therefore, there is no deficiency of service on the part of the opposite parties. Further, it has been stated that the complainant is not a 10 Consumer as defined under Section 2(1)(d) of the Consumer Protection Act, 1986 and on this ground alone the complaint is liable to be dismissed. Further, the opposite parties has granted a Packing Credit loan amounting to Rs.25 lakhs to the complainant for his business purpose and hence the complainant is not at all a Consumer. The transaction between the complainant and the opposite parties falls under 'commercial purpose' and hence the complaint is liable to be dismissed on this ground also. Further the complainant is barred by limitation since the bills relate to the year 2009. The allegations in the complaint is not only towards non-issuance of No Due Certificate but also relating to return of documents relating to the said bills. The complainant has not impleaded ECGC as a necessary party and hence for non-joinder of necessary parties also the complaint is liable to be dismissed. Thus, the opposite parties sought to dismiss the complaint.
4. In order to prove the case, the complainant, along with proof affidavit, has filed 20 documents and the same were marked as Ex.A1 to A20. On the side of the opposite parties, along with proof affidavits 11 documents were filed and the same were marked as Ex.B1 to Ex.B11.
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5. Heard the submissions made by the counsel for the complainant and the counsel for the opposite parties and perused the entire material placed on record.
6. Though very many contentions have been raised in this case, at the outset it has to be seen as to whether the issue involved in this complaint relates to a commercial transaction or not. If this Commission comes to a decision that this is a commercial transaction then there is no need for this Commission to go into the merits of the case. A very reading of the complaint would show that the complainant is engaged in export business. It is evident from the records that the main activity of the complainant is to export coir and coconut fibre products to foreign countries like China, Malaysia, German, Poland etc. Under Section 2(q) of the Consumer Protection Act, 1986, the word "Trade" is defined as, " a trader in relation to any goods means a person who sells or distributes any goods for sale and includes the manufacturer thereof, and where such goods are sold or distributed in package form, includes the packer thereof." 12 Therefore, the complainant being an exporter of coir and coconut fibre products, it is clear that the complainant is a 'Trader' for gain, falling under the exclusion as provided under the definition of a Consumer under Section 2(d)(ii) of the Act. Since the complainant is a Trader, carrying on their business for commercial purpose, we are of the opinion that the complainant cannot be construed as a Consumer. So far as the merits of the case is concerned, the main grievance of the counsel for the complaint is that the Letter oc Credit for a value of $61,750/- dated 20.11.2009 with L/C No.00731010000577 sent by the 1st opposite party was returned by the buyer's bank China Construction Bank (Asia) Corp Ltd., for small and minor discrepancies in the documents. The 2nd opposite party had failed to intimate the same to the complainant at the earliest point of time and guide him to sort out the problem by getting time from the buyer's bank to correct the discrepancies. The complainant has sent a message to the buyer Bank to return the documents on 31.12.2009 but no steps were taken by the 2nd opposite party and hence the buyer had refused to take the goods. The efforts taken by the complainant to get another buyer for sale of the goods in shipyard also failed since the opposite parties failed to transfer the LC documents. Hence, the entire consignment sent 13 by the complainant in 10 containers caused heavy loss to the complainant, due to the abandonment of goods by the negligent act of the opposite parties. But this was denied by the opposite parties in their version. They have taken a specific stand that the complainant is not a consumer as per Section 2(1)(d) of the Consumer Protection Act 1986. The opposite parties had received the discrepancy message only on 15.12.2009 and 16.12.2009 from the buyer bank in which they informed the opposite party about the discrepancies in the documents submitted by the complainant and hence the goods could not be taken by the buyer. The opposite parties had informed the discrepancy message with the reasons to the complainant through telephone immediately and thereafter had contacted the complainant several times over phone for submitting the revised set of documents. But the complainant failed to respond to the phone calls of the opposite parties and hence left with no other choice they were forced to send the letters/emails dated 15.12.2009 and 16.12.2009 by post to the complainant. All the allegations made in the complaint are purely imaginary. The two bills against LC were dishonoured by the LC issuing bank due to discrepancy. The complainant had also accepted his mistakes and the delay in repayment of the facility to the Bank. The 14 complainant had also not submitted the relevant documents for renewal of limits. However, in view of the conduct of the complainant and after reviewing the account, the opposite party Bank had taken a decision not to extend the facility anymore to the complainant. The complainant has to blame himself for the situation and not the opposite parties.
7. Therefore, there is clear disputed question of facts. When there are disputed question of facts, this Commission cannot come to a justifiable conclusion by merely going through accepting the plea of the parties. The proper forum to decide the issue is only a Civil Court, where the parties can adduce oral evidence by affording opportunity of cross-examination to other side. In this regard, it would be appropriate to rely upon the judgment of the Hon'ble Supreme Court in the case of Khatema Fibres Ltd. Vs. New India Assurance Co. Ltd. & anr., reported in 2021 SCC Online SC 818. In paragraph 31, it is held as follows :-
" 31. This is not a case where the Insurance Company has repudiated the claim of the appellant arbitrarily or on unjustifiable 15 grounds. This is a case where the claim of the appellant has been admitted, to the extent of the loss as assessed by the Surveyor. In cases of this nature the jurisdiction of the special forum constituted under the Consumer Protection Act, 1986 is limited. Perhaps if the appellant had gone to the civil court, they could have even summoned the Surveyor and cross examined him on every minute detail. But in a complaint before the Consumer Forum, a consumer cannot succeed unless he establishes deficiency in service on the part of the service provider."
This judgment squarely applies to the facts of the present case. Hence, the proper forum to decide this case is only the Civil Court. Therefore, the complaint is liable to be dismissed.
8. In the result, the Complaint is dismissed. No costs. However, the parties are at liberty to approach the Civil Court.
R VENKATESAPERUMAL R.SUBBIAH, J.
MEMBER PRESIDENT
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LIST OF DOCUMENTS MARKED ON THE SIDE OF THE COMPLAINANT Sl.No. Date Description of Documents Ex.A1 28.11.2009 Copy of the Invoice No.11/2009 Ex.A2 05.12.2009 Copy of the Invoice No.12/2009 Ex.A3 10.08.2010 Copy of the email for new orders sent to the 1st opposite party with Purchase Order and Sales Contract.
Ex.A4 11.08.2010 Copy of the email for new orders sent to the 1st opposite party Ex.A5 13.08.2010 Letter sent by the complainant to the opposite parties for attestation of documents Ex.A6 07.09.2010 Copy of the email for release of PC sent to the 1st opposite party Ex.A7 08.09.2010 Copy of the email for release of PC sent to the 1st opposite party Ex.A8 15.09.2010 Letter sent by the ECGC of India Ltd. Ex.A9 27.09.2010 Copy of the email for ECGC letter and for No Due Certificate sent to the opposite party Ex.A10 28.09.2010 Copy of the email for new orders sent to the opposite party for No Due Certificate along with write off letter Ex.A11 29.09.2010 Reply from the opposite party Ex.A12 13.10.2010 Lr. sent to the opposite party by the complainant together with attachments 17 Ex.A13 13.10.2010 Lr. sent by the complainant to the opposite Party Ex.A14 27.12.2010 Copy of the email letter sent by the complainant Ex.A15 27.12.2010 Reply from the opposite party Ex.A16 Copy of the claim form submitted by the complainant Ex.A17 15.08.2011 Office copy of the legal notice issued by the complainant's counsel Ex.A18 24.08.2011 Acknowledgement card of the 1st opposite party Ex.A19 24.08.2011 Acknowledgement card of the 2nd opposite party Ex.A20 03.09.2011 Reply sent by the opposite parties' counsel LIST OF DOCUMENTS MARKED ON THE SIDE OF THE OPPOSITE PARTIES Ex. B1 10.12.2009 Letter from the opposite party, Coimbatore Branch to the China Construction Bank (Asia) Corp. Ltd., along with proof of despatch Ex.B2 14.12.2009 Letter sent by the opposite party Bank to China along with the proof of despatch Ex.B3 15.12.2009 Proof of despatch through Professional Courier by the Opposite Party Bank Ex.B4 28.12.2009 Letter sent by the Opposite parties along with proof of service 18 Ex.B5 04.01.2010 Letter from the complainant to instruct the buyer bank to return back the documents due to the huge discount is being asked by the buyer Ex.B6 05.01.2010 The swift message sent to the complainant with proof of service Ex.B7 07.01.2010 The swift message sent by the opposite Parties Ex.B8 11.01.2010 The message sent by the China Construction Bank and the message sent by the opposite party Ex.B9 18.01.2010 The instructions received from China Construction Bank along with Opposite Party's mail Ex.B10 10.02.2010 The returned documents dated 10.02.2010 & & which has been returned to the complainant Ex.B11 16.02.2010 on 16.12.2010 R VENKATESAPERUMAL R.SUBBIAH MEMBER PRESIDENT Index : Yes/ No AVR/SCDRC/Chennai/Orders/May/2023 19 C.C.No. 61 of 2012 HON'BLE JUSTICE THIRU R.SUBBIAH, PRESIDENT In the result, the Complaint is dismissed. No costs. However, the parties are at liberty to approach the Civil Court.
MEMBER PRESIDENT
30.05.2023 30.05.2023