National Consumer Disputes Redressal
Basf India Ltd. (Previously Known As ... vs State Bank Of India And Catholic Syrian ... on 12 November, 2002
ORDER
D.P. Wadhwa, J. (President)
1. Application of the complainant for substituting the name of BASF India Ltd. in its palace is allowed subject to all just exceptions.
2. On 1.11.2002 we passed the following order:
"There is a letter from K. Madhavan, Ld. Counsel for the Complainant dated 22.10.02 requesting for an adjournment on the ground that he is proceeding to U.S.A. On 24.10.02 and will be back in Delhi on 27.11.02. Mr. Sharma who appears on his behalf repeatedly made the same request. The matter pertains to the year 1995. On 12.4.02 we adjourned the matter to this date for final arguments. If Mr. Madhavan was not available, alternative arrangements should have been made. Since, he is not available for arguments, we reserve the orders in the matter".
3. This compliant was filed on 24.1.95 under Section 21 of the consumer Protection Act, 1986 claiming the following reliefs:
"It is prayed that this Hon'ble Commission may be pleased to:-
(a) Order the Opposite Parties to pay, jointly and severally to the Complainant Rs. 36,34,678.52 being the loss sustained by the Complainant as set out above.
(b) Order the Opposite Parties to pay, jointly and severally, to the Complainant interest at 18% per annum on Rs. 36,34,678.52 with quarterly rests as per the normal banking practice from 1.7.1993 till the date of payment.
(c) Order the Opposite Parties to pay, jointly and severally, to the Complainant Rs. 5,00,000 towards loss of business suffered by the complainant due to the non-availability of the aforesaid amounts for business purposes.
(d) Grant costs of these proceedings.
(e) Pass such other order as this Hon'ble Commission may deem fit and proper under the circumstances of the case."
4. There are two opposite parties, first is the State Bank of India and second is the Catholic Syrian Bank Ltd. Complainant is the manufacture and markets pharmaceutical formulations, animal health and nutrition products, pesticides and insecticides. For the sale of these commodities complainant had regional offices and one such office was at Madras (now Chennai) Complainant also appointed dealers in Tamil Nadu. It was Shri Lakshmi & Company at Salem. Sri Lakshmi & Co. was a partnership firm and was stockist of the complainant at Salem. Under arrangement between the complainant and Sri Lakshmi & Co. commodities were being supplied by the complainant to Sri Lakshmi & Company and against those supplies Sri Lakshmi & Co. used to make payments by means of cheques drawn on their bankers Catholic Syrian Bank Ltd. These cheques in turn were presented by the complainant to its banker State Bank of India for collection proceeds of which were used to be credited in the cash credit account of the complainant with the State Bank of India.
5. Complainant is that 40 cheques given by Sri Lakshmi & Co. to the complainant were deposited with the State Bank of India for collection but the proceeds thereof were not credited in time by the State Bank of India. The amount of these 40 cheques is stated to be Rs. 48,34,678,52. It is stated that subsequently a sum of Rs. 12.00 lakhs was since realised and the complaint is nw for the balance amount of Rs. 36,34,678.52. These cheques have been returned as dishonoured. Alleged deficiency on the part of the State Bank of India is that it failed to realise the proceeds of these cheques in time and against the Catholic Syrian Bank Ltd. is that it failed to transmit the proceeds of these cheques in time resulting in loss to the complainant. There is striking silence on the part of the complainant as to why proceedings were not initiated by the complainant against Sri Lakshmi & Company for realisation of the amounts. It is surprising that claim is made against the Banks and Sri Lakshmi & Co. is let off.
6. Catholic Syrian Bank has taken the plea that there was no privity of contract between the complainant and itself and that the Catholic Syrian Bank could not be accused of any deficiency in service. There was no consideration which passed from the complainant to the Catholic Syrian Bank. It was stated that it was always the case that the realisation of the cheque was made at later stage and in fact this has become an agreed practice between the parties which was well known to all the parties. As and when Sri Lakshmi & Co. deposited the amount in their account it covered the amount of any cheque. It was sent to the State Bank of India. At no point of time, complainant ever objected to delayed payments.
7. State Bank of India took the stand that the complainant was availing cash credit facility (working capital) of Rs. 5.00 crores and in fact it was a borrower of the State Bank of India which fact was not mentioned by the complainant in its complaint. State Bank of India further said that whatever cheques of Sri Lakshmi & Co. were deposited by the complainant these were sent to Catholic Syrian Bank on which these were drawn and proceeds credited to the cash credit account of the complainant. State Bank of India took up the stand that the amounts of the cheques were realised later and the complainant was habitually accepting the collection instrument which were always paid delayed and for this complainant was also taking up the matter directly with Sri Lakshmi & Co. It is then mentioned that Veerapandian, a partner of Sri Lakshmi & Co. filed a petition in the Civil Court at Salem on 21.1.1994 for declaring Sri Lakshmi & Co. as insolvent. Complainant was the first respondent in those insolvency proceedings. After the filing of the insolvency petition, it is stated that Sri Lakshmi & Co., ceased to do any business and thus failed to clear its outstanding. Complainant is also stated to have filed a criminal complaint against Sri Lakshmi & Co. before the Inspector of Police District, Crime Branch, Salem. State Bank of India says that this complaint came to be filed after the complainant had received notice of the insolvency proceedings. It is further stated that Veerapandian, partner also filed criminal complaint on 16.3.94 in the Court of Judicial Magistrate No. 1, Salem against the complainant and its officers. It is alleged therein that complainant had taken blank cheques from Sri Laxmi & Co. with the assurance that the blank cheques were necessary to satisfy their superior officers at Bombay and that these would kept for that purpose only. This practice had been in vogue for several years. With the complaint photo copies of blank cheques were filed and it was alleged that these were forged by the complainant and as necessary securities. State Bank of India, therefore, took up the stand that the complaint was the offshoot of all these proceedings with which it had no concern and this complaint was filed to settle its disputes with Sri Lakshmi & Company and Catholic Syrian Bank.
8. In support of its case complainant filed affidavit of Mr. A.S.R. Nair, Manager (Legal), BASF Ltd. Apart from stating that there has been delay in realisation of the cheques in question nothing had been said as to what action, if any had been taken against Sri Lakshmi & Co. for realisation of the amounts and also as regards the allegation of pendency of insolvency proceedings is admitted which showed that against claim of nearly Rs. 1.75 crores against Sri Lakshmi & Co. to various credits it had assets/liquid resources of only a few lakhs of rupees. This would rather fortify the stand of the opposite parties as to why complainant thought of filing this complaint against them. The stand of the Bank that there had always been delay in the collections of the cheques which had already become a practice known to the complainant and accepted by it does not stand controverted. When the complainant had failed against Sri Lakshmi for realising its amount for supplies made to it, complainant could not fall back on the Bank to recover whole of that amount on the plea of deficiency in service by the Banks. Complainant had not explained why it was depositing one cheque after the other knowing fully that the amounts had not been realised from the Catholic Syrian Bank in which the account of Sri Lakshmi & Co. was kept. That rather itself show the practice of receiving delayed payments accepted by the complainant. Remedy of the complainant lay against Sri Lakshmi & Co. and not against opposite parties-Bank.
9. Accordingly this complaint fails and it is dismissed with cost which we assess at Rs. 20,000/- payable to both the opposite parties to be shared equally by them.