National Consumer Disputes Redressal
M/S Royal Infraconstru Ltd., vs M/S Export Credit Guarantee ... on 28 November, 2023
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 104 OF 2014 1. M/S ROYAL INFRACONSTRU LTD., 18, R. N. Mukherjee Road, 6th Floor, KOLKATA. ...........Complainant(s) Versus 1. M/S EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LTD. & 4 ORS., A.C. Market Bldg, 9th Floor, 1, Shakespeare Sarani, KOLKATA - 700071. 2. STATE BANK OF INDIA, Commercial Branch, Alipore, 24/1/1, Alipore Road, 1st Floor, KOLKATA - 700027. 3. STATE BANK OF INDIA, World Trade Centre (Arcade), 3rd Floor, Cuffe Parade, MUMBAI - 400005. 4. M/S MOKARRAR ENGINEERING MATERIALS CO., No. 23, 64 St. Yusefabad St., TEHRAN. IRAN. 5. BANK KESHAVARZI IRAN, No. 247, Patrice Lumumba St., Jalal-al-Ahmad Exp. Way, TEHRAN - 1445994316 ISLAMIC REPUBLIC IRAN - PO BOX 14155-6395. ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE A. P. SAHI,PRESIDENT
FOR THE COMPLAINANT : MR. BARUN PRASAD, MR. ABHINAY
SHARMA, MR. P.C. ROYA, MS. DEEKSHA
PRAKASH, ADVOCATE AND
MR. S. BHOWMIK, ADVOCATE FOR THE OPP. PARTY : MR. ARIJI PRASAD, SR. ADVOCATE WITH
MR. GIRISH PANDEY AND MS. PRERNA
SINHA, FOR OP-1
MR. RAJEEV KAPOOR, MR. ADITYA
SAXENA, ADVOCATES FOR OP-2 & 3
Dated : 28 November 2023 ORDER
1. The Complainant, a manufacturer of steel railway sleepers, was successful in obtaining a purchase order on 27.12.2008 from M/s Mokarrar Engineering Material Company, the 4th Opposite Party herein, for supply of 50,000 sleepers for railway construction work in the Islamic Republic of Iran. On receipt of this order, the Complainant Company negotiated the financial transaction for which a Letter of Credit (hereinafter referred to as 'LC') was issued by State Bank of India, Trade Finance Central Processing Centre, Mumbai. That was addressed to the applicant and was tendered for being honoured by the Bank Keshavarzi Iran, Opposite Party no.5 herein. This LC is dated 01.12.2009 and the date of issue is 22.11.2009 with the date of expiry mentioned as 29.12.2010. The Buyer, namely the 4th Opposite Party was to make the payments at Keshavarzi Bank, Iran. The negotiating bank for the Complainant was the State Bank of India (Commercial Branch), Alipore, Kolkata. The terms of the payment under the LC was 100% by an irrevocable LC payable at site. The entire amount payable for the 50,000 sleepers together with freight charges was 2619000 Euros. The beneficiary under the LC was the Complainant and was available on a partial shipment basis as well. The latest date of shipment prescribed therein was 29.11.2010. According to the LC, the documents for payment were to be presented within 21 days and not later than the period of validity of LC.
2. For the said purpose of securing the transhipment of goods from India to Iran, the Complainant applied for insurance with the1st Opposite Party i.e. Export Credit Guarantee Corporation of India Ltd. On 15.06.2010, the insurance policy was issued and a specific approval by the 1st Opposite Party for securing the goods under the insurance cover for a sum of Rs.18,04,49,100/- was tendered on 12.07.2010.
3. With this financial arrangement, the transhipment was dispatched and consignment for 50% of sleepers i.e. 25000 pieces was supplied. According to the complainant, the consignments were duly documented through shipping bills and Bill of Lading.
4. The said consignment was dispatched and loaded at Kolkata Seaport and was discharged at Bandar Abbas Port in Iran.
5. The Complainant tendered the Bill of Lading dated 25.11.2010. The payments were due by 25.12.2010.
6. Since only the 50% of the supply had been made, the Complainant dispatched a letter on 13.01.2011 to the OP No.1 informing them of the shipments and the declaration already submitted in respect thereof. It was informed that the date of final shipment has been extended upto 29.03.2011 and, therefore, the approval dated 12.07.2010, which was for 6 months w.e.f. 18.06.2010 be further extended till 29.03.2011 in order to conclude the shipment of the balance of the sleepers. The Complainant was expecting the payments to be released but the Complainant was informed about certain developments that had taken place presumably on account of sanctions imposed by the United States and other European countries against Iran.
7. The financial transactions were governed and subject to the RBI guidelines which were in force, Asian Clearing Unit (ACU) mechanism which facilitates transfer of funds between two countries who are members of the said Unit. There is no dispute that India and Iran were members of the Unit when the said transaction was negotiated and the mechanism under the said scheme was in force.
8. However, due to the aforesaid impediments due to the sanctions against Iran, the Complainant called upon the Buyer to immediately respond for tendering the payments as the State Bank of India had stopped accepting all Iran linked transactions due to the said political sanctions. A request was, therefore, made vide mail dated 22.01.2011 by the Complainant to the Buyer to look into the option of amending the LC to British Pounds currency instead of ACU Euros. The said communication is extracted herein under:
"Dear Sir,
Our Banker has stopped accepting all Iran linked transaction due to sanction which you are aware of.
Can you kindly look into the option of amending the LC to currency GB Pounds instead of ACU Euro."
9. A reply was given by the Buyer on 28.01.2011, whereby it called upon to confirm officially as they would need something official to resolve the problem of non-payment. The aforesaid communication from the Buyer is also extracted herein under :
"For some peculiar reason, I have not received below mail dated Jan 22nd.
The unfortunate news is received as a shocking surprise. We need to confer with our bank. I am pretty sure their first reaction would be one of denial. Therefore, I ask you to please provide written confirmation of this claim from your banking system. They must have received something official from the Central Bank of India or something to that effect from a policy making organization. We would need official proof to prove the problem first and would then confer with the bank for a speedy remedy se to complete the project in due time."
10. The Buyer through mail dated 31.01.2011 confirmed that after contacting the Bank, the message forwarded by the Complainant that all Iran linked transactions had been stopped was correct and the alternative suggested by the Complainant was answered by stating that there is no scope of British Pounds being substituted instead of Euros under the LC and it could done only with the Korean currency. The other alternatives were also suggested that the initial LC was from Melli Bank who have opened an internal LC for the Buyers in Iran and in case the Complainant has any trust, he may send the documents on collection basis either through the State Bank of India and if it is not accepted then the same can be sent directly to them.
11. On 12.03.2011, the negotiating Bank, namely, State Bank of India (Commercial Branch), Alipore, Kolkata lodged its claim for reimbursement with SBI, International Services Branch, Mumbai.
12. The request for payments were renewed and having failed to get any response, the Complainant straightaway wrote to the Reserve Bank of India (hereinafter referred to as 'RBI') on 19.03.2011 informing them that the payment has been withheld for more than 3 months. This information to the RBI was accompanied by bank documents, invoices as well as other documents. RBI was, therefore, duly informed about the same, awaiting a response.
13. It is to be noted that LC issued had its validity till 29.06.2011.
14. In response to this, RBI on 09.05.2011 dispatched the aforesaid letter of the Complainant dated 19.03.2011 to the SBI for necessary action.
15. The complainant lodged its request with the SBI International Services Branch, Mumbai vide letter dated 14.06.2011, with a copy of the same to the SBI (Commercial Branch), Alipore, Kolkata.
16. In the meantime, requests for payments were renewed with the Buyer vide mail dated 11.07.2011.
17. SBI International Services Branch, Mumbai vide letter dated 13.07.2011 informed the Complainant that they were unable to honour the claim keeping in view the fact that even though they had received the reimbursement claim on 12.03.2011, in view of the extant instructions, the claim was treated as null and void which was informed via mail to the Bank at Kolkata on 25.03.2011. The Complainant was advised to seek reasons for non-payment of the claim from Bank Keshavarzi Tehran. The letter specifically stated that no fresh credit would be permitted in the account of Iranian Banks subsequent to 27.12.2010.
18. On 17.09.2011 an information was received from the SBI, ISB, Mumbai, that they are unable to honour the reimbursement claim calling upon the Complainant to take up the claim directly with the customer Bank i.e. Keshavarzi, Tehran and ascertain the reasons for non-payment.
19. Thus, this correspondence was being negotiated in order to ensure the payments from the Buyer but unfortunately of no avail.
20. The credit limit extended by OP No.1 was cancelled on 02.05.2012 with a copy of the same to the SBI (Commercial Branch), Alipore, Kolkata stating the reason 'Order Completed'.
21. It is in this background that OP No.1 was intimated by the Complainant about the default on 17.07.2012 and a claim form was submitted on 27.08.2012. It was specified therein that the value of LC was Rs.18,04,49,100/- against which the supply was made, that was delivered and no payment had been made as such, in terms of the policy, since 90% amount could be claimed to the maximum of rupees 20 crores under the policy, a sum of Rs.16,01,51,85/- was claimed.
22. On 15.10.2012, OP No.1 raised its query with regard to the claim which is extracted herein under:
1.Reason for obtaining L/C from Bank Keshavarzi, Iran when in the Proforma Invoice No.110110 dated 27/12/2008 it is clearly mentioned that Payment by LC from Post Bank.
2. Reason for non-payment from Bank Keshavarsi, Iran as State Bank of India, Mumbai also, vide their letter dated 13/07/2011 addressed to you, wanted to know the reason for non-payment from the said bank
3. Correspondence exchanged between your banker State Bank of India, Alipore Branch, Kolkata and the L/C opening bank Bank Keshavarzi, Iran.
4. Reason for not declaring the shipments to us as per ANNEXURE attached.
5. Copy of E-mail dated 23 September, 2009 regarding Buyer's order as mentioned in Proforma invoice No 110110 dated 27/12/2008.
6. Copy of Shipping Bill No.1812638 with Custom's Seal & Signature.
On receipt of the above, we shall proceed further in the matter."
23. A reply to the same was dispatched by the Complainant on 05.11.2012 which is extracted herein under
"Sir,
We refer your letter reference no. ECGC/KEB/C&C/17938/0050004892/12 dated 15.10.12 regarding captioned matter. In this connection we are giving reply point wise:
1. The L/C was opened from Bank Keshavarzi for which we have already enclosed L/C copy and the ECGC coverage was also done for Bank Keshavarzi as per ECGC cover no. 0050004892. Since the LC from Post Bank for proforma Invoice no. 110110 dated 27.12.2008 was not acceptable to SBI, Kolkata.
2. We have already informed to SBI for non payment from Bank Keshavarzi, Iran.
3. We have written letter dated 19.10.2012 to State Bank of India and copy enclosed for your reference as this is a internal documents of Bank.
4. We have declared all the shipment and we are looking for documents since it is almost more than two years back matters.
5. Copy of Email dated 23.09.2009 enclosed for your ready reference.
6. Copy of Shipping Bill no. 1812638 with Custom seal & signature is enclosed for your ready reference.
We hope you will find the same in order."
24. The SBI ( Commercial Branch) Alipore, Kolkata vide their letter dated 23.11.2012 confirmed that they had dispatched a bill for the consignment on 25.03.2011 and payments have not been received at their end. This letter was also dispatched to the OP No.1 by the Complainant on 26.11.2012.
25. The OP No.1 again through letter a dated 17.12.2012 regretted their ability to accept any liability and raised the following query :
"Dear Sirs,
Re: Claim A/c. Mokarrar Engineering Materials Co., Iran L/C Opening Bank: Bank Keshavarzi, Iran
With reference to your captioned claim filed on the Corporation, we would like to inform you that on a scrutiny we have observed the following:
1) The reason for non-payment by the L/C opening Bank is not ascertained.
2) Proper clarification is not received for non-declaration of shipments made In 2-year period prior to the shipment under claim.
3) Report of default is submitted late by more than 17 months.
4) Non-payment advice from the overseas bank is not received.
In view of the above observation, we are unable to consider your claim payable and we regret our liability for the above claim. However, we shall re-examine the case subject to compliance with the above and submission of all the above documents/information within 60 days from the date of this letter, failing which the matter shall stand closed."
26. Alongwith the query, an information was tendered to the Complainant that it will not be possible to consider the claim payable. However, OP No.1 was prepared to re-examine the case upon submissions of the documents as desired.
27. The Complainant on 10.01.2013 requested SBI ( Commercial Branch), Alipore, Kolkata to provide the assistance with regard to the information sought by OP No.1 and, therefore, they should provide the documents after communicating with the Bank Keshavarzi Iran in order to support their claim before OP No.1.
28. Having failed to receive any further response, the Complainant wrote to OP No.1 on 16.01.2013 explaining the position that there was no intentional delay in notifying the default, and it was on account of the failure of ACU mechanism of transfer of funds between India and Iran that was withdrawn without any notice to the Complainant, that has resulted in all this impediment.
29. Simultaneously, a letter was also written to the SBI at Kolkata requesting them to provide the information with regard to the documents furnished by them in order to remove the doubt in the mind of the OP No.1.
30. The SBI ( Commercial Branch ) , Alipore in turn wrote a letter to the International Services Branch of the SBI Mumbai. They also referred to their earlier letter dated 26.02.2013. This letter also requests the Mumbai ISB to tender this information as this was required to be furnished to the OP No.1 for the settlement of the claim.
31. It appears that the SBI Alipore, Kolkata received some message on 06.04.2013 from Bank Keshavarzi Tehran that since LC had been cancelled, the unutilized balance under the LC was also cancelled on 20.05.2012 and the file had been closed. The said communication by mail was received by the Complainant on 08.04.2013 which also accompanied the said intimation from Keshavarzi Bank, Iran.
32. A composite reply thereafter alongwith a renewal of the claim and request for disbursement was lodged with OP No.1 on 26.04.2013. This letter also requested the OP to consider waiving of any alleged delay in intimation of the claim regarding the default. The said letter is crucial and is, therefore, extracted herein under:
"To
The Asst. General Manager
Export Credit Guarantee Corporation of India Ltd
Kolkata Exporter Branch
A.C. Market Building 9" Floor
1. Shakespeare Sarani
Kolkata-700071
Dear Sir.
Sub: Our Claim on L/C Opening Bank: Bank Keshavarzi, Iran, on behalf of buyer M/s Mokarrar Engineering Materials Co., Iran, Ref: Claim under Policy No SCR0050004892
We refer to our captioned claim lodged with your office for non-receipt of export proceeds from LC Opening Bank M/s Bank Keshavarzi, Iran, on behalf of the buyer M/s Mokarrar Engineering Material Co. Tehran, Iran.
We also refer to your letters dated 15 Oct 2012 & 17 Dec 2012 and would like to place before you, our reply & clarifications for your kind consideration of our genuine and valid claim.
As desired by you, we had been meticulously following up with our banker State Bank of India. Commercial Branch, Alipore, asking them the reason of non-payment by the LC opening bank and we had made several visits to their office and also written them number of mails and letters in this regard but we were not getting a clear reply. We could get a reply from State Bank of India. International Services Branch. Mumbai vide their letter dated ISB/CM/SER/11-12/092 dated 13 July 2011, wherein they had mentioned that they did received a reimbursement claim of EUR 261900 from SBI Commercial Branch. Alipore but in view of 'Extent Instructions, the said claim was treated null and void. This was also communicated to the L/C opening bank by SBI. It was also clearly mentioned in the said letter that"......no fresh credited is permitted in the a/c of Iranian Banks"
The captioned letter was submitted to your office vide our forwarding letter dated 27 Aug 2012 duly acknowledged by your office on 30 Aug 2012. Vide the same letter. we had also submitted you the following documents-
1) ECGC Claim Form
2) Statement of Exports from Nov 2008 to Nov 2010.
3) Hyundai Letter.
4) Mokarrar Engg Proforma.
5) Mokarrar Engg Invoice and Packing List.
6) Mokamar Engg Bill of Lading
7) Shipping Agents letter confirming materials discharged
8) Correspondences with Mokarrar Engg asking for payment
9) SBI Mumbai letter as mentioned above.
A copy of the said acknowledged letter is annexed herewith for your perusal.
Though we were very hopeful that the documents submitted by us to your office vide the above said letter would be sufficient for us to prove the reason of non-receipt of payment but on 20 Dec 2012, we received another letter dated 17 Dec 2012 from your office stating that you still required some more documents and clarification for our claim and also had mentioned that the same has to be submitted within 60 days from the date of your letter. We made several follow up with SBI in this matter and also submitted a letter to their office on 10 Jan 2013 & 25 Jan 2013 asking for their support. We are annexing copies of the same for your perusal. We also kept you posted of the development from time to time. Finally, we received the confirmation in writing from $81 and the mail confirmation from Bank Keshavarzi via SBI Mumbai on 08 April 2013 and thus the delay in fulfilling your requirements.
Our point-wise reply to the queries raised by you in the above said letter are as follows
1 Reason for non-payment by the L/C opening Bank
We again took up the matter with SBI and insisted for a concrete reply from their side citing reason of non-payment by the LC Opening bank. After several follow ups, we finally got a written reply from their end vide their letter annexure 1 wherein they have clearly mentioned that though the LC was accepted and the documentations were also in order, but because of sudden restrictions by SBI, the ACU fund receiving mechanism could not take place and thus they were unable to receive the funds. They have also stated that they had made several follow-ups thereafter to receive the funds but nothing fruitful happened. A copy of the said letter is annexed with this letter for your ready reference
2. Proper Clarification not received for non-declaration of shipments made in 2 year period prior to the shipment under claim:
Here we would like to refer your letter dated 15 October 2012 enclosing therewith Annexure for undeclared Shipment from Nov 2008 to Nov 2010. The reason for non declaration of shipment for exports during that period that we received payment in advance against those shipment. So there was no need to declare / Insure the shipment to ECGC.
3. Report of default is submitted late by more than 17 months:
We had dealt with this buyer in the past also and there was never any problem with regard to receipt of Sale proceeds, thus in this transaction also, we didn't foresee any problem in payment. In fact after the goods were dispatched, this restriction by RBI came into force but inspite of the same, the buyer did tried to transfer the money through other means but could not succeed. We were infact very hopeful that the money would be received by us so we were in continuous interaction with Our buyer for a prolonged period but unfortunately by that time the LC had expired and thus the L/C opening bank did not transferred the money to SBI The buyer also stopped responding after that. Then we realised that there was no further scope of receipt of this sale proceeds and lodged claim with your office.
You will appreciate that we did not wanted to lodge our claim on your office otherwise knowing that we have an insurance policy to take care of this type of events, why didn't we informed the incident to your office. We instead tried out best to retrieve the money from the buyer but finally when we failed, we had no other option but to lodge the claim with your company.
We earnestly request you to waive this delay in intimation from our side and process our claim.
4. Non Payment advice from the overseas bank is not received:
We have received a mail from Chief Manager (Service) in SBI 1SB, Mumbai, dated 08 April 2013, Report ID: 20130408121236, wherein a Message received from Keshavarzi Bank with Message Sender Reference: 201304061411KESHIRTHXXX021184802, has been forwarded to us, the narrative part of which says that Their "LC No 00160/488701142 had expired on 29/06/2011 and thus they have cancelled unutilized Balance of amount of LC on 20/05/2012 and closed their file".
We are annexing herewith a copy of the said mail for your reference which we believe would suffice your requirement of 'Non Payment advice"
We believe to have submitted sufficient evidence from our bankers in writing to prove the fact of "Extent Instructions" & "sudden restrictions by RBI, the ACU fund receiving mechanism could not take place" due to which, payment could not be accepted by SBI and while we were looking out for alternate ways to receive funds and were having conversation with the buyers, during this period, the LC expired due to which the LC issuing bank cancelled the unutilized balance of amount in the captioned LC and thus there are no further chances of receiving the payment.
We now would like you to refer to the Point No 1 (b) (iv) Political Risks under the heading "Risks Insured and Exclusions" of your Shipments (Comprehensive Risks) Policy, which reads as follows "....Operations of law or of an order, decree or regulation having the force of law which, in circumstances outside the control of the insured and/or the buyer, prevents restricts or controls the transfer of payment from the buyer's country to India"
Our claim is admissible in this policy under the above said coverage available under Political Risks and moreover it was beyond our control though as a prudent insured, we tried our best to recover the money from the buyer.
We now request you to kindly approve our claim and disburse the amount of money lost by us because we have suffered huge financial loss due to non-receipt of payment from LC Opening Bank.
Looking forward to your kind cooperation and assuring you of our continuous patronage as ever.
33. It appears that after having received the said intimation, the OP No.1 made two queries from the SBI ( Commercial Branch), Alipore, which communications were also copied to the complainant and have a direct bearing on this dispute. The letters are extracted herein under:
Letter dated 06.06.2013
Date: 06/06/2013
To
The Assistant General Manager,
State Bank of India
Commercial Branch, Alipore,
24/1/1, Alipore Road, 1st Floor,
Kolkata - 700027
Dear Sir,
Sub: Documents for non-payment by M/s. Mokarrar Engineering Materials Co., Iran under L/C opened by Bank Keshavarzi, Iran, regarding L/C No.-00160/488701142A
This has reference to the above mentioned subject.
Sir, please let us know what action has been taken on behalf of your bank against the non-payment regarding the above mentioned L/C. If the required action has been taken then please provide us the following documents that are needed in this particular default case since the matter pertains to country Iran
Debit note by the L/C opening bank M/s. Keshavarzi, Iran
Non-payment advice from the bank that has blocked the funds with the reasons
Correspondence showing OFAC ( Office of Foreign Assets Control) action viz. applying for the license to OFAC
Copy of "Application for Release of Blocked Funds" submitted to OFAC, U.S. Department of Treasury
Sir, your early reply regarding the above mentioned matter will be highly appreciated and will enable us to examine the PH's claim.
Thanking you.
Letter dated 13.06.2013
To
The Assistant General Manager,
State Bank of India,
Commercial Branch, Alipore,
24/1/1, Allpore Road, 1" Floor,
Kolkata: 700027
Dear Sir,
Re: Non-payment of bills drawn by Royal Infraconstru Ltd. Kolkata on M/s.Mokarrar Engineering Materials CoIran'under L/c- No.00160/488701142A opened by Bank Kesharvarzi, Iran
The above exporter made shipments to Iran worth EURO 261900/on 25.11.2010 under above L/C and documents were negotiated through your branch. But the exporter has not received the payment owing to RBI's sudden restrictions ACU Fund mechanism could not take place and exporter have filed claim on us.
Kindly let us know the action initiated by you for realization of payment under the L/C and let us have copies of your swift messages, if any exchanged with Bank Kesharvarzi, Iran or any other authorities.
Thanking you.
34. A turn took place thereafter, which is most crucial and which is a certificate issued by the SBI (Commercial Branch), Alipore, which is extracted herein under:
"This is to certify that we had send export documents of Royal Infra Constru Limited to Bank Keshavarzi, Teheran, Iran, (Ref No. 0426310GC0000032 dtd 14.12.2010) under L.c. No. 00160/488701142A dtd. 22.11.2009 amendment dtd. 03.12.2009, 10.12.2009, 21.12.2009 & 21.07.2010 issued by Mokarrar Engineering Materials Co, No 2364 St.Yusefabad St.Tehran - Iran for EUR 261,900.00 and as the documents were in order, they had also accepted through authenticated swift message received by us, but because of restriction by RBI the ACU fund receiving mechanism could not take place and we were unable to receive the funds. Further by our several attempts and follow-ups we have not received the funds till date."
35. A perusal of the aforesaid letters would indicate with the final certification by the SBI that all the documents tendered with regard to this transaction were in order and had also been accepted through authenticated swift messages received by the bank but on account of the restrictions by the RBI, the ACU fund receiving mechanism could not be invoked and hence the Bank was unable to receive the funds from the Bank in Iran.
36. This was also directly informed to OP No.1 by the SBI Alipore Commercial Branch vide its letter dated 27.06.2013 which is extracted herein under:
Dear Sir,
"Export Credit Guarantee Corporation of India Ltd.
A C Market Bldg.
9th Floor,
1, Shakespeare Sarani
Kolkata-700071
Attn : Mr. T C Sen Sharma, Manager
Sub: Non-payment bills drawn by Royal Infraconstru Ltd., Kolkata on Mokarrar Engineering Materials C. Iran under L/C No.00160/488701142A Opened by Bank Keshavarzi, Iran
Dear Sir,
"We refer your letter reference no. KEB/C&D/18620/SCR-4892/13 Dated 13.06.2013 regarding the captioned subject. Kindly note that due to restriction by RBI, the ACU mechanism for receiving the fund was cancelled by RBI. The above Export transaction was made under the above mentioned L/C with Iranian Bank but due to Extent Restriction, the payment could not take place. Since the above mentioned L/C expired on 29th June 2011, Bank Keshavarzi cancelled the unutilized balance on 20th May 2012 and closed the file. A copy of the message MT 799 dated 06:04.2013 is enclosed for your information and ready reference.
Thereafter we had no options for recovery of the said amount from the LC opening bank. This situation which arouse suddenly was neither in our control nor due to any fault of our client.
Thanking you"
37. The Complainant, thereafter, renewed its request to OP No.1 to accept the claim and disburse the same vide letters dated 21.08.2013, 22.08.2013 and 31.08.2013, whereafter they received an email on 18.09.2013 calling upon the Complainant to furnish certain documents relating to the correspondence and status of LC as well as messages regarding the default communicated with the Indian as well as Iranian Bank. This was responded too by the complainant on 23.09.2013.
38. Having furnished all these documents in detail and the entire exhaustive reply referred to earlier as well as subsequent replies to herein above, the complainant was surprised to receive the repudiation letter dated 25.11.2013, which is extracted herein under :
Dear Sirs,
Re: Your representation for the settlement of claim on account of Non-realization of export dues under L/C opened by bank
M/s Keshavarzi, Iran under SCR Policy No.0050004892
Please refer to your letters dated 26/04/2013 and 23/09/2013 on the above
In this connection, we would like to inform you that your claim was examined based on the documents and information provided by you through the letters under reference. However, we sincerely regret our inability to settle any claim in this case because of the lapses and deficiencies stated as under:
As per the terms of the L/c, the documents were to be presented to the L/C opening Bank within 21 days from the date of Bill of Lading. However, it is observed from the communication No.ISB/CM/SER/11-12/92 dated 13/07/2011 of SBI, International Services Branch (ISB), Mumbai to you that the reimbursement claim with SBI (ISB), Mumbai under the L/C was lodged on 12/03/2011 by SBI Commercial branch, Alipore, Kolkata, even though the bill of lading was 25.11.2010. The reason for delay in lodgement of claim to SBI (ISB0, Mumbai by SBI, Kolkata is not available. Further, I the absence of the relevant acknowledgement of documents by the L/C Opening bank, it could not be ascertained whether the documents were submitted within the stipulated time as per the L/C terms to the L/C opening bank.
From the available correspondences of SBI, Kolkata, it is observed that the payment under L/C which was drawn on ACU Euro was not realized due to discontinuation of the ACU payment settlement mechanism in INOD-IRAN trade by RBI. It is to be noted that the said discontinuation of ACU mechanism was made effective as per the relevant circular of RBI issue on 27.12.2010 and as per the report of default submitted by you the due date for payment under the above L/C was on 25/12/2010. Hence, the said ACU guidelines of the RBI were not applicable for the payment settlement under above L/C.
It is observed from the copy of Bill of Lading (B/L) that in the B/L the consignee was mentioned as the buyer M/s.Mokarrar Engineering Materials Company, Iran which was not as per the L/C terms because the B/L was to be issued or endorsed "To the order of Bank Keshavarzi, Iran".
The documents under the L/C were to be presented to L/C opening bank for settlement of payment. Reasons as to how the buyer was able to take delivery of the goods without settlement of payment under the L/C are not available.
The report of default was submitted on 17/07/2012 with a delay of more than 17 months which is a violation of terms and conditions as per clause-8(b) of the above policy. Further, such delay was not justified in view of the letter dated 05/05/2012 of the branch office seeking Information from you regarding overdue payment, if any, under the L/C.
It is observed that in response to the query vide dated 06/04/2013 of SBIMumbaithe L/C opening bank informed through message dated 08/04/2013 that the above L/C had expired on 29/06/2011 and the L/C opening bank had closed the file on 20/05/2012. The non-payment advice of the L/C opening bank after the payment became overdue stating the reasons for non-payment has not been submitted. Also, the messages exchanged between SBI, Kolkata/SBIMumbai with the L/C opening bank at the time of due date of payment under the L/C regarding the reasons for non-payment have not been submitted. In the absence of these documents it could not be concluded that the reason for non- payment was the default of the L/C opening bank. Hence, it is not established that the loss under the claim has arisen due to the risks namely protracted default of L/C opening bank that are covered under the Policy issued to you.
Thanking you.
39. Having heard the learned counsel for the parties, contention of the Complainant is that all the grounds taken for repudiation are unwarranted in as much as there was no such delay so as to disentitle the Complainant of his entire claim and the delay as indicated by the OP in the lodging of the claim, the same was explained with the request that in the event any delay was being perceived, the same should be waived.
40. It was contended that all the papers which were to be presented within 21 days as per the terms and conditions of LC, the Bill of Lading had already been tendered on 25.11.2010 and the declaration of the shipment was also made on 10.12.2010. The default, according to the terms of the policy was to be reported within 4 months and as is evident from the correspondence herein above, the default was ultimately located with an information that was confirmed later on that the RBI had issued a circular on 27.12.2010 which resulted in withholding of the payments and the disbursement to the Complainant. Thus, the default was clearly assigned both by SBI of the International Services Branch at Mumbai and also by the Commercial Branch at Alipore, Kolkata to the aforesaid contingency of the ACU mechanism having been withdrawn resulting in non-release of the funds. The contention is that there was no default at all on the part of the Complainant and this was an impediment for the Bank Keshavarzi as well that resulted in non-negotiation of the LC resulting in non-payment to the complainant. It is urged that the Buyer was ever willing to make payments but with this impediment in between the entire financial transaction was blocked. This fact has been brought to the notice of OP No.1 and has been verified through their documents as well as the certificate issued as extracted herein above in para 34.
41. Thus, it is urged that declaration of the shipment had been made within time on 10.12.2010 and that the default before being finally intimated, was being investigated, and the facts regarding the same were being explored as explained hereinabove. It is, therefore, urged that aforesaid contingency of withdrawal of the ACU Mechanism vide RBI Circular dated 27.12.2010 was not within the control of the complainant and it was on account of the aforesaid impediments experienced by the Banks that this contingency of non-payment arose.
42. Learned counsel then contends that the repudiation letter indicates that the outer limit of the claim / payments was 25.12.2010 and hence the circular of the RBI which came into effect on 27.12.2010 would not be applicable. Counsel submits that if the same was inapplicable, then the invoking thereof in order to withhold the reimbursement was erroneous and cannot be in any way attributed as a default of the complainant or of the LOC opening bank i.e. Bank Keshavarzi of Iran. The intervention of RBI circular dated 27.12.2010 was according to the complainant an outcome of the political sanctions against Iran resulting in withdrawal of the ACU mechanism under which the financial transaction was being undertaken by the complainant for the supply of the goods to Iran. This was a clear risk covered under the policy under the head of Political Risks.
43. Learned Counsel then invites the attention of the Bench to the bill of lading to urge that bill of lading categorically mentions the consignee as the buyer on order from the Bank in Iran. The submission is that the inference drawn that the Bill of Lading was not to the order of LOC opening bank is incorrect.
44. He then submits that LOC was available with the Keshavrazi Bank Iran and it had not been withdrawn or shut out and was subject to "payable at site". It was on this assurance and financial documents that 50% of the consignment was delivered to the buyer which is evident from the entire facts narrated herein above. The goods were, therefore, delivered in good faith and on the strength of these documents, hence it is incorrect to suggest that goods were delivered in violation of the terms.
45. Learned counsel then contends that the allegation of 17 months of default in lodging the claim with OP No.1 is bereft of all the facts that have been narrated above and consequently to conclude that delay was not justified, is not correct. He submits that as a matter of fact, the delay cannot be attributed to the Complainant, as the cause for non-payment itself was unearthed and discovered after this long drawn communication between the banks and resulting in the issuance of certificate quoted in para 34 hereinabove by the SBI confirming the same in the year 2013.
46. The complainant had been fighting for his cause through the communications and the complaint before RBI itself right from January 2011 onwards and as such to attribute delay on the part of complainant without there being any fault in any of the documents, the repudiation is unjust and claim deserves to be allowed.
47. The last submission of the learned counsel is that communications between the bank at Iran and SBI with the complainant and other documents on record including the swift messages, the same could not have been an issue of debate once the SBI Commercial Branch, Alipore, Kolkata had through its certificate extracted hereinabove in para 34 verified that all the documents and the messages received by them were in order. He further submits that these facts have also been admitted by the Bank in its written version before this Commission as well and he has made a specific reference to paragraph nos. 6 and 8 of the written version, which confirms the said evidence. It is, therefore, submitted that even this reason, about absence of documents or non-availability of reasons for non-payment is an artificial excuse ignoring the aforesaid documents on record.
48. Learned counsel for the OP- SBI submits that documents which are on record clearly indicate that there was no default on the part of the SBI at any stage and that the circular of the RBI dated 27.12.2010 came as an impediment in the disbursement that has been indicated in the reply as also in the documents that have been filed on record.
49. Learned counsel for the OP No.1, however, vehemently contended that keeping in view the terms of the policy, particularly clause 8 (b) of the special risks covered, there is a clear violation by the Complainant in not setting up his claim of the alleged default within 4 months before the corporation as stipulated in the policy. The claim having been made alleging default in payment on 17.07.2012 and claim form having been submitted thereafter, it is evident that there was an inordinate delay in the submission of the papers relating to default, hence, the claim was inadmissible. He further submits that there was no clarity in the documents with regard to the submission of the claim by the SBI, Commercial Branch, Alipore before the Bank in Iran and hence the lapses are clearly established and latches on the part of the complainant remained unexplained with any supporting document, hence the repudiation is perfectly justified.
50. Learned counsel relying on the judgment in the case of Export Credit Guarantee Corporation of India Limited Vs. Garg Sons International reported in ( 2014) Volume 1 SCC Page 686 has clearly held that such terms of the contract, which specify the lodging of claim on default within time are mandatory, and any default by an importer or the buyer in not making the payment as assured, has to be declared by the complainant/ claimant compulsorily within time. Any failure on that count would therefore, not make the insurance company liable.
51. In rejoinder, learned counsel for the complainant relying on the judgment in the case of Haris Marine Products Vs. Export Credit Guarantee Corporation ( ECGC) Limited reported in 2022 SCC Online SC page 509 has urged that the Apex Court in the said case came to the conclusion that a claim deserves to be accepted and not rejected on technical grounds. He further submits that technical objections in situations which are beyond the control of complainant, should not impede the award of the claim by insurance company. He has invited the attention of the Bench to the judgment in the case of Gurmel Singh Vs. Branch Manager, National Insurance Co. Ltd. 2022 SCC Online Page 666 and on another judgment of Three Judges Bench in the case of Gurshinder Singh Vs. Shriram General Insurance Company Limited and Another reported in (2020) Volume 11 SCC page 612.
52. Having considered the submissions raised it deserves to be stated that this Complaint arises out of a repudiation by the Export Credit Guarantee Corporation of India Limited, which is a Government of India Enterprise for facilitating trade of exporters and also provides insurance coverage. The Organization is a Government Insurance Company constituted especially for providing coverage to exports and is also governed by the DGFT Guidelines. This facility of insurance is to protect exporters against the failure of a foreign buyer in paying the Indian exporter the price for the goods exported. As a matter of fact, it is the only Government Company offering such services and is exempted from following the Trade Credit Insurance Guidelines periodically revised by the Insurance Regulatory and Development Authority of India. Reference be had to the Apex Court's judgment in the case of Haris Marine Products vs. Export Credit Guarantee Corporation (ECGC) Limited, reported in 2022 SCC Online SC 509.
53. The Complainant received an order for exporting a consignment of 50,000 steel sleepers that were to be dispatched from Mumbai Port, India to Bander Abbas, Iran. The shipment was covered under a Shipments Comprehensive Risk Policy of the Opposite Party No.1 for which a premium was paid and the maximum limit covered under the same was 90% of the amount of loss. The duration of the policy was from 01.04.2010 to 31.03.2012 and the maximum liability stipulated therein was ₹20 Crores.
54. The buyer in the present case was impleaded as Opposite Party No.4, M/s Mokarrar Engineering Materials Co. No.23, 64, St, Yusefabad St, Tehran, Iran and the Banker in Iran was Bank Keshavarzi Iran, No.247, Patrice Lumumba St. Jalal-al-Ahmad Exp. Way, Tehran 1445994316, Islamic Republic Iran, P.O. Box 14155-6395 impleaded as Opposite Party No.5. Both these Opposite Parties, who were arrayed as Proforma Opposite Parties, appear to have been deleted by the Complainant as appears from a deletion carried out in red ink in the array of parties.
55. One of the principle bone of contention in the present case is the intervention of the Reserve Bank of India Circular dated 27.12.2010. The same is extracted hereinunder:-
To All Authorised Dealer Category - I Banks
Madam/Sir,
Asian Clearing Union (ACU) Mechanism - Indo - Iran trade
Attention of Authorised Dealer Category -1 (AD Category-1) banks is invited to Regulations 3 and 5 of Notification No.FEMA.14/2000-RB dated May 32000 read with items 7(b) and 7(e) of the Memorandum of Procedure for channelling transactions through Asian Clearing Union (ACU) in terms of which all eligible current account transactions as defined by the Articles of Agreement of the International Monetary Fund and export/import transactions between ACU member countries on deferred payment terms respectively are to be routed through the ACU mechanism.
2. In view of the difficulties being experienced by importers / exporters in payments to /receipts from Iran, the extant provisions have been reviewed and it has been decided that all eligible current account transactions including trade transactions with Iran should be settled in any permitted currency outside the ACU mechanism until further notice.
3. Necessary amendments to the Foreign Exchange Management (Manner of Receipt and Payment) Regulations. 2000 are being issued separately.
4. AD Category-1 banks may bring the contents of this circular to the notice of their constituents concerned.
5. The directions contained in this circular has been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA)1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.
Yours faithfully.
56. It is alleged by the Learned Counsel for the Complainant that this circular had emanated on account of impact of political sanctions imposed against Iran by the United States of America and the European Union. The State Bank of India, who are the Opposite Party Nos.2 & 3 have categorically taken a stand that their role was limited to the issuance of Letter of Credit and it acted only as an intermediary. This fact has been stated in Paragraph 3 of the written version of Opposite Party No.3 namely, the State Bank of India, Commercial Branch Alipore, Kolkata the said averment is extracted hereinunder:-
3. That the role of the Answering Respondent Bank is limited to issuing the Letter of Credit in favour of the Complainant against the exports made to the Respondent No. 4, for which the said policy was taken by the Complainant from the Respondent No.1. Thus, the Answering Respondent Bank only acted as an intermediary between the exporter and the importer's banker (i.e. the Complainant and the Respondent No.5 respectively).
57. The Bank further confirmed its stand taken in the certificate extracted hereinabove in para 34that owning to the instructions enforced by the Reserve Bank of India, the funds could not be received from the Keshavarzi Iran Bank, Respondent No.5. Para 8 is extracted hereinunder:-
8. In view of the aforesaid, the Answering Respondent Bank even issued a certificate (Pg 165) to the Complainant that owing to the restrictions imposed by the RBI, ACU Fund receiving mechanism could not take place and despite several attempts the Answering Respondent Bank could not receive the funds from the Respondent No.5.
58. Even though the Letter of Credit issued expired on 29.06.2011 and the unutilized amount lying in the account of Iranian Bank was cancelled on 20.05.2012, yet the claims made for the payments were impeded only on account of the RBI Circular which is evident from the correspondence between the Complainant and the buyer between 22.01.2011 and 31.01.2011. These documents are on record which clearly indicate that due to this financial blocking and the withdrawal of the Asian Clearing Unit (ACU) mechanism, the payment was not disbursed.
59. This has further been confirmed by the communications between the State Bank of India, Commercial Branch Alipore, Kolkata and the International Banking Services Branch of the State Bank of India at Mumbai. Thus, the conclusion drawn on repudiation with regard to any delay on the part of the Complainant in lodging his claim does not appear to be justified. The aforesaid situation which is evident from the communication referred to above was unprecedented and beyond the control of the Complainant and it was only because of the Circular of the Reserve Bank of India that the transaction got impeded. This being established, it is also clear that there is no denial of the fact that the ACU mechanism was withdrawn in the background of the political sanctions against Iran. Such a contingency, therefore, is a clear coverage under the Political Risk clause of the insurance cover issued by the Corporation to the Complainant that was valid on the date of the default of payment by the exporter. This was, therefore, indemnifiable subject to other terms on record.
60. In this regard, there is one aspect which deserves to be noted, namely that Opposite Party No.1 while repudiating the claim has indicated that the payment under the Letter of Credit was due up to 25.12.2010. Hence, the guidelines of Asian Clearing Unit (ACU) mechanism even if withdrawn by the Reserve Bank of India were on 27.12.2010, which is beyond the due date of payment. This reason given in the order of repudiation contradicts the evidence on record filed by the State Bank of India and its averment which has been indicated hereinabove. The financial transaction therefore, was blocked not on account of any default but on an incorrect understanding of the Circular of the Reserve Bank of India which according to the Opposite Party No.1 came into force, two days after the due date of payment. None the less the default in payment has occurred in spite of the fact that the Complainant had declared the shipment on 10.12.2010 itself.
61. This document of declaration of the shipment on the form supplied by the Opposite Party No.1 and tendered at Kolkata is at page No.95 of the paperbook that was despatched through the letter dated 10.12.2010, which is Annexure C-7, on record. The aforesaid document containing the description of the consignment sent to Iran on 25.11.2010 is clearly recorded at Serial No.2 of the said form. Thus, this document which was also with the Opposite Party No.1 does not seem to have been noticed and an incorrect inference has been drawn in the repudiation letter.
62. It would be appropriate at this stage itself to deal with the judgment cited by the Learned Counsel for the Opposite Party in the case of Export Credit Guarantee Corporation of India Limited (Supra), where relying on Clause 8(b) of the Policy, the Apex Court came to the conclusion that the insured has to make a declaration on the 15th of every month about default in payments.
63. In the instance case, the declaration about the shipment has been made. But so far as the default in payment is concerned, correct information came to be available only after the entire correspondence referred to above from 2011 to 2012 had been gone into. The default therefore, according to the Complainant arose on account of the aforesaid political sanctions imposed on Iran and therefore, the claim is admissible and has been covered under the political risk clause. From the facts on record, it is also cleared that there is a four months period provided for reporting of default under the terms of the policy. As noticed above, the policy even though makes provisions for time lines to intimate about a default in payment, it is evident there the Complainant was making all efforts to obtain the payments or otherwise trying to collect information about the cause of such impediment including the documents that was supplied to the Complainant with great efforts after several letters were communicated right from the Reserve Bank of India to the Opposite Parties that have been detailed here in above.
64. The conclusions drawn in the letter of repudiation about and incorrect endorsement made on the Bill of Lading also does not appear to be correct inasmuch as the Bill of Lading, which is at page 92 of the paperbook, indicates that the consignee is the Islamic Republic of Iran Railway and the consignment is clearly recorded to the order of the Bank Keshvarzi Iran. The column of consignee for order mentions the names of the buyer i.e. the Respondent No.4. The Bill of Lading therefore, is to the order of the Respondent No.5 - Bank Keshvarzi Iran. The endorsement therefore appears to have been incorrectly interpreted. Hence, and therefore, the conclusion drawn about an incorrect endorsement is erroneous.
65. One of the other conclusions drawn that there was no protracted default on the part of Letter of Credit opening bank i.e. Bank Keshvarzi Iran is also overlooking the fact that the said bank could not disburse the payments because of the embargo that occurred on account of the sanctions against Iran and the withdrawal of the Asian Clearing Unit (ACU) mechanism. There is no other reason available for non-disbursement when the Letter of Credit has already been tendered before the Bank Keshvarzi Iran. What appears to be that the repudiation omits these political developments arising out of sanctions imposed against Iran. The Bank could not transact money in Euros which might have been due to the sanctions of the European Union and there was no other possible currency available worth credit under which the payments could be disbursed or accepted under the Letter of Credit. Consequently, the opening bank at Iran also clearly did not make any arrangements for the disbursement due to this embargo that came into existence.
66. It is in this background that the political risk coverage under the policy has to be understood and which demonstrates that the risk is covered as a political risk which was beyond the control of the Complainant or either of the parties and hence the Opposite Party No.1 was under an obligation to extend the benefit of indemnification to the Complainant. On principle this is a deficiency in service on the part of Opposite Party No.1. The loss and damage suffered by the Complainant was because of this contingency and no other that was covered under the Comprehensive Risk Policy issued to the Complainant and which was valid as on the date when the loss occurred.
67. Thus the entire correspondence and the material lead to the only conclusion that the loss was not attributable on account of any shortage of documents or infirmity in the Letter of Credit but it was on account of the withdrawal of the Asian Clearing Unit (ACU) mechanism under the Circular of the Reserve Bank of India dated 27.12.2010 in the background of the political sanctions against Iran.
68. The contention has therefore, been examined in terms of the Clause 3(ii)(f), 3(iii) and 3(iv) of the Policy conditions dated 15.06.2010 coupled with the tenure for filing of a claim mentioned as 24 months with a four months waiting period. This aspect also seems to have been not taken into account in correct perspective while repudiating the claim together with the facts as narrated above.
69. The judgments which have been relied on by the Learned Counsel for the Complainant do indicate the strict interpretation of the timeline clauses being relaxed to a certain extent in insurance contracts. In the judgment of the Apex Court in the case of Haris Marine Products (supra) a dispute was raised with regard to the date of loading of goods on to the vessels where the loading had commenced one day prior to the effective date of the policy. In that context, it was observed that it was not as significant as the date on which the foreign buyer failed to pay for the goods exported which was well within the coverage period of the policy. It was therefore, held that the claim could not be dismissed on such basis especially given that the date of loading of the goods was immaterial to the purpose for which the policy was taken by the Appellant. The aforesaid case may not have any exact application inasmuch as the ratio thereof turned on its own facts whereas, the present case in question is a dispute about repudiation on account of the delay in the lodging of the claim in terms of the policy.
70. The other two decisions in the case of "Gurmel Singh (Supra) and Gushender Singh (Supra) make general observations in respect of Insurance claims where there is a delay in intimation about the occurrence of a contingency covered under the risk and it was held that it would be a hyper technical view. The case was relating to an occurrence of theft. The decision in the case of "Gurmel Singh (supra)" was a case where the report of the theft of a vehicle involving non-availability of details of registration on the computer data and the consequential refusal by the RTO to issue a duplicate certified copy was held to be beyond the control of the claimant and, therefore, such a technical issue could not create an impediment in entertaining of the complaint. The said decision also does not apply as the ratio thereof was clearly in a contingency which in no way is similar to the contingency of the present case. A general principle of an amnesty or of waiving delay therefore, cannot be invoked for the purpose of construing a contractual obligation under an Insurance Contract.
71. At this stage, the judgment in the case of Export Credit Guarantee Corporation of India Limited vs. Garg Sons International, (supra) needs to be looked at from the point of view the Clause 8(b) of the declaration regarding overdue payment to the Opposite Party No.1.
72. From the facts on record, it is correct that the Complainant was making all efforts to find out as to the cause which led to non-disbursement of the amount and which ultimately came to be attributable to the withdrawal of the Asian Clearing Unit (ACU) mechanism referred to herein above. This was found to be the Circular of the Reserve Bank of India dated 27.12.2010. None the less the fact of the default in payment which was communicated to the Opposite Party No.1 does not appear to have been done within the stipulated time of the relevant Clause referred to above. Not only this the default which occurred on the due date of payment i.e. 25.12.2010, even if presumed to have allowed another four months' time for tendering of the information, the same also does not appear to have been done till 25.04.2011. It is correct that Complainant was corresponding with the Reserve Bank of India as well as with the State Bank of India and, the State Bank of India, Commercial Branch Alipore Branch, Kolkata that had lodged the reimbursement claim with the International Banking Services Branch at Mumbai on 12.03.2011. Yet the claim had not been lodged with the Opposite Party No.1 within the said period. Even thereafter the correspondence was continuing between the Complainant and the foreign buyer as well as the Banks, yet the Opposite Party No.1 does not appear to have been kept in the loop of this communication with any copies of such information regarding default in payment.
73. Consequently, even though a strong justification has been put forth for pursing the banks and other authorities informing them about the default, yet the said default was not lodged with the Opposite Party No.1. It is therefore, difficult to overcome the reasoning given by the Opposite Party No.1 that the report of default was submitted on 17.07.2012 and the claim was lodged on 23.08.2012 which was after a delay of more than 17 months. The delay may appear to be justified in the background above but the Opposite Party No.1 has not chosen to waive it and has rather defended the repudiation on the ground of violation of Clause 8(b) of the policy. This stand therefore, is supported by the judgment in the case of Export Credit Guarantee Corporation of India Limited vs. Garg Sons International, (2014) 1 SCC 686.
74. Consequently, with the mandate of the said judgment and its ratio, the complaint cannot be allowed and is accordingly, rejected.
.........................J A. P. SAHI PRESIDENT