State Consumer Disputes Redressal Commission
Md. Khurshidul Hasan, Calico India ... vs Bank Of Maharashtra on 15 March, 2016
Cause Title/Judgement-Entry STATE CONSUMER DISPUTES REDRESSAL COMMISSION WEST BENGAL 11A, Mirza Ghalib Street, Kolkata - 700087 Complaint Case No. SC/25/O/2003 1. MD. KHURSHIDUL HASAN, CALICO INDIA EXPORTS 38, MC'LEOD STREET, P.S. PARK STREET, KOLKATA- 700017, INDIA ...........Complainant(s) Versus 1. BANK OF MAHARASHTRA 31A, S.P. MUKHERJEE ROAD, P.S. BHOWANIPORE, KOLKATA- 700025 ............Opp.Party(s) BEFORE: HON'BLE MR. SAMARESH PRASAD CHOWDHURY PRESIDING MEMBER HON'BLE MRS. MRIDULA ROY MEMBER For the Complainant: Mr. Abhik Kumar Das, Advocate For the Opp. Party: Mr. Falguni Bandyopadhyay., Advocate ORDER Date of Judgment : 15th day of March, 2016 Judgment The instant complaint u/s 17 of the Consumer Protection Act, 1986 (hereinafter referred to as 'the Act') is at the instance of sole proprietor of 'Calico India Exports' against Bank of Maharastra for deficiency in service on the part of them amounting to Rs. 13,24,691/- on account of refund of money with interests thereon @ 18% p.a., Rs. 7,00,000/- as financial loss and damages including expenses of travelling, holding, lodging and expenses incurred towards Solicitor fees at Australia and also Rs. 52,00,000/- as compensation total value at Rs. 72,24,691/-.
In a nut shell, complainant's case is that being proprietor of M/S Calico India Exports carries on export business of diverse types products including Coated Paper Board printed and other printed materials and for such business maintains an account with the O.P. In course of business transaction, complainant receipt three export orders from a foreign buyer viz. Phone Book Covers W. A. Pty Ltd., 21, Parry Street, Fremantle, 6150, Western Australia for supply of coated paper board printed and printed folders and envelopes. Accordingly, complainant shipped three consignments on 20.10.2000, 08.11.2000 and 04.12.2000 respectively for value of goods of Australian Dollar 3139.00, 41004.00 and 7820.00 respectively. Pursuant to the aforesaid export of goods, the complainant submitted all relevant documents relating to said three shipments viz. invoices, original bill of lading, bill of exchange and other necessary documents for the purpose of collection of the proceeds from the foreign buyer through the buyer's bankers the Commonwealth Bank of Australia, (for short, C.B.A.) Adelaide, Western Australia. The said bills were to be collected after 30 days, 75 days and 30 days from the days of 1st, 2nd and 3rd bills of lading respectively. Those three bills were duly credited on the account of the complainant by the O.P. on 3.11.2000, 1.12.2000 and 20.12.2000 respectively. Subsequently, complainant came to learn that the O.P. sent those three bills to the C.B.A by their covered letters dated 03.11.2000, 17.11.2000 and 20.12.2000 respectively. After purchasing all the three bills mentioned above, the O.P. debited the said three bills with interests thereon in the phased manner of Rs. 83,492/-, Rs. 10,41,634/- and Rs. 1,99,565/- on 16.2.2001, 06.3.2001 and Rs. 30.4.2001 respectively aggregating Rs. 13,24,691/-. The complainant lodged protest against debiting the account of the complainant O.P., but O.P. was not showing any interests in realising the export proceeds from C.B.A. In April, 2001 complainant left for Australia and met the officials of C.B.A. but they refused to entertain the complainant. Finding no other alternative, complainant appointed one reputed Solicitor of Perth, Australia to take the matter with the C.B.A. stating the facts relating to the sending of three bills along with other documents by the O.P. for collection and payment under I.C.C. Uniform Rules for collections (URC - 522) requested the said Bank to notify the status if any take to carry out the instruction issued to it by the O.P. Subsequently, complainant was informed by his Solicitor in Australia on 31.5.2001 that the C.B.A. did not open the envelope addressed to his client but merely passed it like a Post Office. In July, 2001 complainant was informed by foreign exchange branch of the O.P. that they have received a swift massage from C.B.A. that the three bills which has been allegedly sent to the C.B.I. were never received nor accepted by the bank. The O.P. was making contact with the foreign collecting bank but no serious steps were being taken by the O.P. to realise the export proceeds vide three bills in question and no action was taken against C.B.A. In that perspective, the instant consumer complaint had been filed for deficiency in services on the part of the O.P. being service provider with the relief as indicated above.
The O.P. by filing a written version disputed the allegation levelled by the complainant stating that the case is not maintainable. The specific case of the O.P. is that all the three bills were sent by them through D.H.L. Courier to the Commonwealth Bank of Australia, for collection. The C.B.A should present the shipping documents and other commercial documents and bill of exchange to the buyer, phone book covers who after examining the documents used to pay or agrees to pay the price of the draft to the collecting bank in order to obtain possession of the documents. The collecting bank thereafter has to send the money to the remitting bank i.e. O.P. but the collecting bank did not collect the money from the foreign buyer. The buyer took delivery all goods in question without making any payment to the C.B.A. or to the O.P. The O.P. states that they sent the documents to the C.B.A. for collection, but C.B.A. in collusion with the importer (buyer) deliver the documents to the buyer and buyer took delivery of the goods on the strength of documents, but without any endorsement by the C.B.A. Since no payment was made by the phone book covers, the O.P. had to debit account with the amount which was earlier credited to the account of Calico India Exports. Hence, claim, if any, to be realised by the complaint directly from the Shipping Company and the C.B.A. The O.P. submits that the disputes was referred to Australian Banking Industry Ombudsman for settlement, but after considering the matter the Ombudsman stated that it needed to have evidance and was not prepared to settle the dispute. According to O.P., there was no deficiency in service on the part of them and as such the complaint should be dismissed.
During hearing of the case, Md. Khurshidul Hassan, proprietor of Calico India Exports has filed evidence on affidavit to which questionnaire has been filed by the O.P. against which reply has been filed by the complainant. Similarly, on behalf of O.P. Sri Rahul Anurag, Senior Manager of O.P. Bank has filed evidence on affidavit against which questionnaire has been filed on behalf of complainant to which reply has been filed on behalf of O.P. Both the parties have also filed several documents in support of their respective cases.
At the time of final hearing a B.N.A's. has been filed on behalf of the complainant.
On the basis of materials indicated above, the following points are framed for adjudication :-
1) Is the complaint maintainable in its present form?;
2) Is the complainant is a 'consumer' within the meaning of Section 2(1)(d) of the Act?;
3) Was there any deficiency in service on the part of O.P. as service provider to the complainant?,
4) Is the complainant entitled to get the reliefs as prayed for?.
DECISION Point Nos. 1&2 - Both the points are taken up together for the sake of convenience and brevity of discussion.
Maintainability of instant consumer complaint was seriously challenged by the O.P. In fact, after entering appearance in this case, O.P. filed an application challenging the maintainability on the ground that the complainant is not a consumer within meaning of Section 2(1)(d)(ii) of the Act. By an order dated. 08.3.2005 this Commission held that the complainant earns profit through his main business, viz. exports of various products , but the banking services hired by him from the O.P. is not used for any activity directly intended to generate profit, therefore, the complaint case filed by the complainant is legally maintainable under the Act. Being aggrieved by the said order the O.P. preferred a Revision Petition before the National Consumer Disputes Redressal Commission, New Delhi and by an order dated 09.7.2009 in RP/1678/2005, the Hon'ble National Commission has held that in a case where goods purchased or services hired in an activity which is not directly intended to generate profit, it would not be commercial purpose and dismiss the revision petition by holding that the complainant is a 'consumer' under the Act and he has not availed banking services from the petitioner for commercial purposes. Therefore, complainant is entitled to relief if it is found that there is deficiency in service of the O.P. bank.
Mr. P. R. Sinha Sarkar, Ld. Counsel appearing for the O.P. has submitted that a sea change has been made subsequent to the order of the Hon'ble National Commission and referring to a decision reported in 2012 (1) CPR 51 (NC) (Victoria Electrical Ltd. ,through his Managing Director -vs- IDBI Bank Ltd.) he was submitted that the complainant had availed the services of the O.P. for the purpose in furtherance of their business etc., and as such the instant consumer complaint is excluded from the purview of the Act.
Mr. Abvik Kr. Das, Ld. Advocate for the complainant has submitted that the referred decision may be applicable in respect of a limited company incorporated under the Company's Act, 1956 but since his client is sole proprietor of a firm referred decision will have no application in our case.
Having heard the Ld. Advocates for the parties, we feel that when the order of this Commission dated 8.3.2005 challenging the maintainability of the instant consumer complaint raised by the O.P. was dismissed and the same was upheld by the Hon'ble National Commission, the said order attend finality and no question mark can be raised over the same.
In view of the above, since no other dispute has been raised regarding any technical ground, both the points are decided in the affirmative in favour of the complainant.
Point No. 3 :- Admittedly, pursuant to a contact between the complainant and phone book covers W.A. Pty. Ltd., an Australian Company the complainant agreed to sale quoted paper book, printed product and envelop and the same was informed to the O.P. Bank before exports were effected to facilitate the transaction, collection of proceeds of such exports. On every occasion, the complainant submitted all the relevant documents like - invoices, original bill of lading, bill of exchange and other necessary documents. It also remains undisputed that the complainant shipped three consignments on 20.10.2000, 8.1.2000 and 4.12.2000 over value of goods of Australian Dollars 3139.00, 4104.00 and 7820.00 respectively with a stipulation that bills were to be collected after 30 days, 75 days and 30 days respectively from the dates of bills of lading. The bills were duly credited by the O.P. in the account of complainant on 3.11.2000, 1.12.2000 and 20.12.2000 respectively.
Subsequently, the O.P. without giving any information to the complainant resorted to debating the account of complainant of the said three bills with interests thereon amounting to Rs.83,492,/-, Rs. 10,41,634/- and Rs. 1,99,565/- on 16,2,2001, 6.3.2001 and 30.4.2001 respectively.
The O.P. in their written version has admitted that as no payment were made by the phone book covers, they had to debit the account with the amount, which was earlier credited to the account of Calico India Exports. The O.P. has also specifically stated in their written version that they sent the documents to the Commonwealth Bank of Australia for collection but the Commonwealth Bank of Australia in collusion with the importer delivered the documents to the buyer and the buyer took the delivery of the case on the strength of documents but without any endorsement by the CBA under the Banking Rules. The O.P. has referred the dispute to Australian Banking Industries, Ombudsman for settlement but it yielded no result.
Mr. Abhik Kumar Das, Ld. Advocate appearing for the complainant referred the decision of Supreme Court of India dated 25.01.2000 ( Corporation Bank and Another -vs- Navin J. Shah) and submitted that the bank after crediting the amount in the account of customer cannot debited the same without concurrence of the customer. The relevant portion of the judgment is recorded below :-
'When a bank, after purchasing or discounting an instrument from a customer, credits the customer with the amount of the instrument and allows the customer to draw against the amount as credited before the bill or instrument is cleared, then the bank would be collecting the money not for the customer but chiefly for itself. If the bills and the relevant documents presented by its drawer are accepted by a banker with endorsement in its favour and the same are immediately discounted by the banker without waiting for its collection, by giving full credit for the entire amount of the document, so presented, the banker itself becomes a purchaser and the holder thereof for full value. A banker discounts a bill as opposed to taking it for collection or as security for advances, when he takes it definitely and at once as transferee for value and that it does not matter that the amount of the bill, less discount, is carried to current account as in the case of a customer that is the usual course and where the transaction is really one of discounting, the banker is of course at liberty to deal with the bill as he pleases rediscounting or transferring it'.
Ld. Advocate for the complainant has also referred a decision of the Supreme Court of India, dated 29.9.2000 in Appeal (Civil) 5626 of 2000 (Federal Bank Ltd. -vs- V. M. Jog Engineering Ltd. and Others) where it has been held that the contact between the issuing banker and the paying or negotiating banker may partake of a dual nature. The relationship is mainly that of principal and agent, mandator and mandatory. The facts and circumstances of the case clearly indicate that the O.P. Bank without taking any appropriate steps against the C.B.A. debited the amount from the account of the complainant which itself indicates deficiency in service on the part of the O.P. The facts and circumstances, clearly indicate that O.P. failed to render proper service to the complainant which becomes evident from the internal letters and also from the correspondences made by the O.P, with the C.B.A. Ld. Advocate for the complainant has submitted that there was collusion and conspiracy between the foreign buyer Shipping Company and the C.B.A. for which no liability can be attributed upon them. Such submission does not appear to us acceptable because being service provider the Bank is responsible to account for the action taken by them against the collecting bank and further they had no occasion to debit the money from the account of the complainant without any consent. The I.C.C. U.N. Rules for collection i.e. U.R.C 522 has not been followed at all. According to Article I(c) of U.R.C. 522 if a bank elects for any reason not to handle a collection or any related instruction received by it, it must advice the party for whom it received the collection or the instructions by delivery communication or if that is not possible by other expeditious means, without delay. The O.P. referred the matter to the Australian Banking Ombudsman but when the Ombudsman expressed their inability to settle the dispute some positive steps should have been taken by the O.P. In any case, for the fault on the part of the engaging bank i.e. O.P. or the collecting bank i.e. C.B.A. the complainant must not suffer in view of the fact the complainant was a 'consumer' under the O.P. being service-provider of the complainant.
Accordingly, this point decided is affirmative and in favour of the complainant.
Point No.4:- On evaluation of materials on record and in view of our foregoing discussion we have no hesitation to hold that the complainant is entitled to the reliefs. The complainant entitled to get Rs. 13,24,691/- i.e. the amount debited from his account together with interests thereon @ 9% p.a. taking into consideration the rate of interests at the relevant period. The complainant had to travel to Australia and engage a lawyer and also for last 13 years he is struggling with his claim and as such he is entitled to Rs. 5,00,000/- on account of litigation costs including his journey to Australia and engagement of a lawyer etc. Moreover, during this long period the complainant had to suffer mental agony and harassment and being a business man he has been harassed like anything and the incident happen in his case is unknown in commerce and trade resulting which the complainant had to suffer business loss, financial stress etc. The amount of compensation is quite difficult to assess but certainly the claim of the complainant appears to be not in consistent with the loss suffered by him.
In our estimation an amount of Rs. 10,00,000/- as compensation for harassment and mental agony, loss of business, financial stress etc. would meet the ends of justice.
This issue is also disposed of accordingly.
In the result, case succeeds in part. It is, accordingly, ORDERED that the instant case is allowed on contest with costs.
The complainant do get Rs. 83,492/-, Rs. 10,41,634/-, and Rs. 1,99,565/- on and from 16.2.2001, 6.3.2001 and 30.4.2001 respectively together with interests thereon @ 9% p.a. till the date of realisation of the same. However, the amount deposited by the O.P. in accordance with the direction of the National Consumer Commission by stay order dated 3.8.2005 would be excluded from the said amount and the complainant shall have liberty to withdraw the same from the office of the Commission after expiry of the period of appeal.
The O.P. is also directed to make payment of Rs.5,00,000/- as expenses incurred by the complainant including expenses for visiting Australia and appointing Solicitor thereon and also a sum of Rs. 10,00,000/- as compensation. The aforesaid amount must be paid within 30 days from date otherwise the complainant shall have liberty to get the award executed through this Commission. [HON'BLE MR. SAMARESH PRASAD CHOWDHURY] PRESIDING MEMBER [HON'BLE MRS. MRIDULA ROY] MEMBER