Delhi High Court
Corporation Bank vs Bahri Exports And Ors. on 3 July, 1990
Equivalent citations: ILR1991DELHI627
Author: D.P. Wadhwa
Bench: D.P. Wadhwa
JUDGMENT D.P. Wadhwa, J.
(1) The plaintiff, a bank constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1980 filed this suit on 18-10-1985 turn recovery of Rs. 1,86,290.80. There are four defendants. This claim is in the amended plaint and when the suit was originally instituted the claim was for an amount of Rs. 1,53,598.46. By amendment to the plaint the plaintiff was allowed to plead and claim an amount of Rs. 26,840.93 towards loss in the exchange rate.
(2) Defendant No. I is a partnership firm of defendants 2 and 3.. Defendant No. 4 is a banking corporation in Barcelona Spain. This defendant No. 4 is the collecting bank as the term is normally understood.
(3) The claim of the plaintiff is that defendants I to 3 were granted export bill discounted / purchase facility by the plaintiff and the defendants were allowed to avail the limit up to Rs. 1.50 lacs. For this purpose documents were documents by defendants 1 to 3. The plaintiff discounted three bills of defendants dants I to 3 amounting respectively as Us $ 2749.20, Us $ 3979 and Us $ 3720.40. The export order had been received from M[s. Kohinoor Blc, Barcelona, Spain. The airline carrier was Air India. The airline earner and the consignee, i.e., M/s. Kohinoor, have not been imp leaded as parties in the suit. On account of discounting of the aforesaid three bills the defendants 1 to 3 received various amounts totalling Rs. 1,00,658.76 in the sums of Rs. 26,460.06, Rs. 38,668.61 and Rs. 35,530.09. It is stated that these defendants agreed to repay the amount of the plaintiff out of the remittances received from M/s. Kohinoor and further .agreed to pay interest at the rate prescribed by the Reserve Bank of India as applicable for accounts of export bills remaining unpaid for a certain period. The plaintiff sent the documents for collection to defendant No. 4 and delivery of the goods in question .was to be allowed to M/s. Kohinoor after defendant No. 4 had received the payment. The documents which were sent by the plaintiff to defendant No. 4 were the export bills, the airway bills, covering shipment of consignment covered under the bills and drawn in favor of defendant No. 4. Since the amounts under the bills were not received, by the plaintiff it called upon defendants 1 to 3 to pay the amount as availed by them with interest from the date of a ailment of the amounts. These defendants did not respond to the demand of the plaintiff. Defendant No. 4, in the meanwhile, by its letter dated 3-10-1983 returned the documents to the plaintiff bank. The plaintiff bank corresponded with the airline carrier regarding delivery or no delivery of the consignments in question. The plaintiff, however, it is stated, came to know that defendant No. 4 by colluding with the foreign buyer M[s. Kohinoor allowed the delivery of the goods without collecting the amounts under the bills and without remitting the same to the plaintiff bank. The plaintiff further states that all the goods covered under the three export bills had been permitted to be delivered by defendant No. 4 to M/s. Kohinoor without collecting any amounts under these bills. The plaintiff has not only claimed the amounts under the export bills, but has further claimed that defendants were liable to pay for the exchange loss incurred by the plaintiff in the circumcise aforesaid. The plaintiff has given details of the exchange rate at the time of purchase and also at the- time of sale, the difference being of Rs. 26,840.93. This amount the plaintiff has claimed from the defendant. The rate of interest given is 19.5% per annum up to 31-3-1983, 18.5% per annum from 1-4-1983 to 1-4-1985 and 17.5% per annum from 1-4-1985 to 15-10-1985. Thus, the plaintiff has claimed the amount of Rs. 1,86,290.80 comprising the amounts credited to the account of the defendants I to 3 on purchase of the three export bills, the interest accrued thereon and the amount on account of loss in foreign exchange rate.
(4) Defendants I to 3 are ex parte. Only defendant No. 4 has contested this suit. It has raised various preliminary objections and has also denied the claim of the plaintiff on merit. It has denied the charge of any collusion between it and M/s. Kohinoor, the foreign buyer, or in permitting the foreign buyer to take delivery of the goods without receiving any payment It has contended that it acted under the I.C.C. Uniform Rules for Collection, and since no payment was forthcoming from the foreign buyer, the documents were duly returned to the plaintiff.
(5) It may be noticed at once that the plaintiff did not give any particulars whatsoever of the alleged collusion between defendant No. 4 and the foreign buyer and no particulars of the airway bills were also given in the plaint though it was averred that goods covered under the three airway bills were allowed to be delivered to foreign buyer by defendant No. 4. In the replication, however, the plaintiff referred to a letter of M/s. Air India, the airline carrier, staling that defendant No. 4 had authorised the delivery of the goods in respect of one airway bill to the foreign buyer It appears that M]s. Air India had forwarded the goods to another airline, namely. Iberian Airlines at Barcelona for onward delivery to the foreign buyer. Air Way Bill in respect of which delivery has been made unauthorisedly bears no. Awb 098/3709 8493.
(6) From the pleadings of the parties, i.e., the plaintiff and defendant No. 4, the following issues were framed :- 1. Whether the suit has been properly instituted on. behalf of the plaintiff? 2. Whether this court has jurisdiction to try this suit against defendant No. 4.? 3. Whether there is any obligation on the part of defendant No. 4 to collect the amounts of the bills as mentioned in para 8 of the plaint and did defendant No. 4 commit any breach thereof and if so, to what effect? 4. Can the plaintiff allege any collusion between defendant No. 4 and other defendants in the absence of any particulars? 5. Whether the suit is maintainable in the absence of the airline carrier and the foreign buyer, namely, Mi's. Kohinoor Blc, Barcelona, Spam? 6. What is the effect of non-production by the plaintiff of the collection order in respect of notice stated to have been served by defendant No. 4 on the plaintiff under section 65 of the Evidence Act? 7. If the above issues are held in favor of the plaintiff, is the plaintiff entiled to any interest, and if so, at what rate) and for what period? 8. Relief.
(7) Parties were showed to lead evidence by means of affidavits. The plaintiff filed two affidavits both of Mr. N. N.'Pal, Senior Manager of the plaintiff bank. It also brought on record copies of the certain documents. As I discuss the case the issues will get answered.
(8) As noted above, there are no particulars of the alleged collusion between the defendant No. 4 and M/s. Kohinoor, the foreign buyer. The goods were sent under three air-way bills with details as under :- Sl. Bill/Invoice Date Amount Air-way Bill No. No. (US Dollars) No. 1. Be 112 to 117 2-11-1982 2749.20 098-3708-9894 2. Be 119 10-11-1982 3979 098-3709-9493 3. Be 20 26-11-1982 3720.40 220-7681-1755 (9) The letter of Air India, the airline carrier, is dated 1040-1985 which is addressed to the plaintiff and in this it is stated that it had received confirmation from Iberian Airlines at Barcelona that consignments under the air-way bill No. 098- 3709-8493 were received by Iberian Airlines on 10-11-1982 and was taken delivery of by M/s. Kohinoor with authority of defendant No. 4 and this was on 25-11-1982. With this letter Air India also sent a photo copy of the aforesaid air-way bill and also a photo copy of authorisation given by defendant No. 4 for delivery of consignment to M/s. Kohinoor, the foreign buyer.
(10) Under the I.C.C. Uniform Rules for Collection all documents rent for collection must be accompanied by collection older giving complete and precise instructions. Banks are only permitted to act upon the instruction given in such collection order and in accordance with These) rules. By notice dated 6-6-1987 defendant No. 4 called upon the plaintiff to produce the original collection orders numbering three. It is not disputed that these collection orders were dally returned to the plaintiff bank by defendant No. 4 advising non-payment or non-acceptance. In terms of I.C.C. Uniform Rules for Collection, defendant No. 4 was not expected to do anything more than that. In spite of notice the plaintiff bank did not bring on. record the original collection orders. However, defendant No. 4 filed photo copies of these orders which were admitted by the plaintiff and these were exhibited as Exts. D-2,D-3 and D-4, Nothing, therefore, terms on it if the originals of collection orders were not produced. Issue No. 6 is decided accordingly. If reference is made to these collection orders instructions by the plaintiff are clear to the collecting bank, i.e. defendant No. 4, to "remit the proceeds to plaintiff bank's Bombay office a(c No. 544-7-22132 with Manufacturers Hanover Trust Co., 350 Park Avenue, New York Ny 10022 and request them to intimate plaintiff bank's Bombay office amount credited and also to plaintiff bank under airmail advice."
(11) As noted above, evidence in this case was led by means of affidavits. Defendant No. 4 has not filed any affidavit. Though with the affidavit of Mr. N. N. Pal of the plaintiff, letter dated 10-10-85 of airline carrier the Air India, has been filed, it is under the signature of one Mr. A. K. Mathur, Assistant Manager-Cargo Sales. With this there is a photo copy of a tatter purportedly to be authority letter given by defendant No. 4 to M/s. Kohinoor to take delivery of the consignment relating to air-way bill No. 098-3709-8493. This document is in Spanish and English translation thereof has also been filed. Nothing much can be made out from the English translation. In the letter of 10-10-85 Air India did say that delivery of the consignment covered under the aforesaid air-way bill was made on 25-11-1982 Authority letter purports to be of 20-11-1982 and further that consignments were received by Iberian Airlines by its flight No. Ib 411 dated 16-11-82. Now if reference is made to collection order (Ext. D-3) it was received by defendant No. 4 on 3-12-1982 and the collection order itself is dated 17-11-1982 and the air-way bill is dated 13-11-1982. It is, therefore, difficult to see how defendant No. 4 could have given any authority letter to M/s. Kohinoor for delivery of the consignment when the bank itself had not received the collection orderly 3-12-82. Moreover, photo copy of the authority letter or the letter dated 10-10-85 of Air India is no evidence in the case. When. the court directs a party to lead evidence by means of affidavits that does not mean that law of evidence has to be given ago bye. The letter of Air India dated 10-10-85 and the authority letter aforementioned are no evidence in the case and cannot be relied upon. Nothing has been said about the other two consignments.
(12) When the plaint was originally filed it was signed and verified on behalf o' the plaintiff by Mr. M. V. Nnir who was at that time Manager and Principal Officer of the plaintiff bank and holding 'General Power of Attorney which entitled hum to sign and verify the plaint and to institute the suit. After the plant was allowed to be amended it was signed and verified by Mr. B. R. Bhat, also the Manager and Principal Officer of the plaintiff bank at the relevant time and holding General power of Attorney entitling him to sign and verify the plaint and to institute the suit. Presently Mr. N. N. Pal is working as .the Manage,' and Principal Officer of the plaintiff bank's branch. He has deposed that he is conversant with the signatures and. writings of both Mr. M. V. Nair and Mr. B. R. Bhat and has stated that they were holding power of attorneys as aforementioned. No affidavit has been filed to controvert these averments and accordingly I will hold that the suit has been properly instituted on behalf of the plaintiff. Issue No. I is held in favor of the plaintiff.
(13) The collection orders were received by defendant No.4 at Barcelona and "were governed by the I.C.C. Uniform.Rules for Collection. The proceeds of (he consignment when realised were to be remitted in the account of Bombay, Office of the plaintiff with Manufacturers Hanover Trust Co New York which in turn were to. intimate .the Bombay Officer plaintiff bank's branch respecting the amount credited and defendant No. 4 was to intimate the advice to the plaintiff bank No.cause of action, therefore, arose against defendant No. 4 at Delhi and particularly when neither the airline carrier nor the consignee being the foreign buyer have been made as partite in the suit. There is no principle of law under which defendant No. 4 could be sued in Delhi. I would, therefore, hold thattbis court has no jurisdiction to try the present suit against defendant No. 4. Issue No. 2 is held against the plaintiff, (14) Defendant No. 4 has acted in terms of the Uniform Rules for Collection of the International Chambers of Commerce which admittedly were applicable to the present transaction and there was, thus, no obligation on the part of defendant No. 4 to collect the amounts of the three bills and defendant No. 4 did not commit any breach thereof. Issue No. 3 is also held against the plaintiff.
(15) Since there are no particulars of any collusion between defendant No. 4 and any of the other defendants, issue No. 4 is also held against the plaintiff.
(16) 1 see no impediment in the suit being decreed against defendants I to 3 in the absence of the airline carrier and the foreign buyer. Thus, issue No. 5 is, therefore, held in favor of the plaintiff.
(17) Since Issues Nos. 2, 3, 4 and 6 are held against the plaintiff, further issue No. 7 regarding payment of interest by defendant No. 4 to the plaintiff does not arise. The suit. against defendant No. 4 fails and is dismissed with costs.
(18) Defendants I to 3 availed of export bill discounted/purchase facility provided by the plaintiff bank and withdrew amounts totalling Rs. 1,00,658.76 credited to account of defendant No. 1 by the plaintiff bank. Since the plaintiff bank did not receive any amount, these defendants were duty bound to pay to the plaintiff bank this amount. In ihe circumstances of the case I am also of the view that plaintiff bank is also entitled to Rs. 27,499.69 being the loss suffered by it on account of exchange rates. Plaintiff bank is also entitled to interest at the rates claimed. The evidence led by the plaintiff bank on these three counts i.e. the principal amount, exchange loss and the interest claimed, remains unrebutted. The suit against defendants I to 3 has, therefore, to be decreed in the sum of Rs. 1,86,290.80. The plaintiff bank will also be entitled to claim interest on the amount of Rs. 1,00,658.76 at the rate of 17.5% per annum from the date of filing of the suit till payment Accordingly, I decree the suit of th6 plaintiff for Rs. 1,86,290.80 against defendants I to 3 with costs and interest both pendente It and future at the rate of 17.5% per annum on the amount of Rs. 1,00,658.76 from the date of institution of the suit till payment. Suit against defendant No. 4 is, however, dismissed with coats. Intitials