National Consumer Disputes Redressal
Exprot Credit Guarantee Corporation Of ... vs Brig. G.S. Sawhney on 19 February, 2016
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI APPEAL NO. 213 OF 2007 (Against the Order dated 22/02/2007 in Complaint No. 368/1997 of the State Commission Delhi) 1. EXPROT CREDIT GUARANTEE CORPORATION OF INDIA LTD. REGIONAL OFFICE 8TH FLOOR, 22, KASTURBA GANDHI MARG, NEW DELHI - 110001 ...........Appellant(s) Versus 1. BRIG. G.S. SAWHNEY PROP M/S MEDHNA INTERNATIONAL B-504, SOM VIHAR, SANGAM MARG, NEW DELHI - 110022 ...........Respondent(s)
BEFORE: HON'BLE MRS. M. SHREESHA, PRESIDING MEMBER
For the Appellant : Mr. R.R. Kumar, Advocate for
Mr. Bharat Sangal, Advocate For the Respondent : Mr. Sudhir K. Makkar &
Mr. Samir Tandon, Advocate
Dated : 19 Feb 2016 ORDER
Challenge in this First Appeal under Section 19 of the Consumer Protection Act (for short the "Act") by the Complainant, is to order dated 22.2.2007 in Complaint Case No. 368 of 1997, passed by the State Consumer Disputes Redressal Commission, Delhi (for short the "State Commission"). By its impugned order, the State Commission directed the Opposite Party to pay an amount of Rs. 5,42,904/- towards the insurance claim, Rs. 15,000/- towards compensation and Rs. 10,000/- towards costs.
2. The brief facts as set out in the Complaint are that the Complainant, a retired Army Officer, started a proprietary concern in the name of Magna International, exporting leather garments and accessories to various countries. The Complainant averred that he had been availing the facilities provided by the Opposite Party/Corporation from the beginning and had applied and obtained credit limits against various buyers. The Complainant had obtained a policy bearing No. 46464-87/9-91 and 46464-89/9-93 for Rs. 16 lakhs valid upto 30.9.1993. While so, in the month of March, 1992, the Complainant had entered into an export commitment with M/s. Shalom Fashion Inc. 275, 7th Avenue, New York, U.S.A. (hereinafter referred to as the "Buyer"), based on a firm order for the supply of leather garments and accessories. This was brought to the notice of ECGC vide letter dated 5.5.92 when the Complainant requested for a Credit Limit of Rs. 25 lacs and also Credit Worthiness Report on an urgent basis on the buyer. The Complainant also paid the urgency charges alongwith the regular charges of Rs. 750/-. The ECGC provides the Credit worthiness Report within a period of 2 to 3 weeks. The Complainant applied vide letter dated 5.5.1992 for a Credit Limit (hereinafter referred to as the "C.L.") of Rs. 25 lacs. on the buyer by remitting Rs. 750/- towards the application charges and for obtaining a credibility report. This letter and application were duly accepted by the ECGC vide letter dated 12.5.1992 stating therein that they had already called for a report on the above buyer and thereafter nothing was heard from ECGC. Only in the 3rd week of June, a letter dated 18.6.92 was received from ECGC stating that they had been unable to obtain a report from their sources but that clause 21(b) of the Policy would continue to apply.
3. The Complainant averred that there was a deliberate delay caused by the ECGC of more than 2 weeks by sending the above letter dated 18.6.1992 against the norm of 2-3 weeks' time required for obtaining a credit worthiness report on the buyer. After an unexplained gap of over 5 months, the ECGC vide letter dated 12.10.92 approved a C.L. of Rs. 5 lakhs at 60 days DA on the buyer on terms stated therein. This approval on the buyer was to be effective from 12.10.92. The Complainant pleaded that as per the policy of ECGC, C.L. was approved on the buyer retrospectively either from the date from which application had to be received by their office or with retrospective effect from a date within a few days from which the limit was sought. This fact was brought to the notice of ECGC during one representation vide letter dated 24.12.92 and also vide letter dated 7.7.94. Thereafter, a letter dated 11.3.93 was addressed by ECGC not to make any further shipment to the above buyer without its permission. The Complainant pleaded that while applying for C.L. on the buyer vide letter dated 5.5.92 and also vide C.L. application form, substantial information required on the said buyer had already been provided. However, without delay once again the relevant information was supplied vide letter dated 22.3.93 indicating that except for U.S.$6596, the rest of the amounts had been received.
4. The Complainant averred that he had received a letter dated 15.3.1994 from ECGC cancelling the C.L. on the buyer on the ground that there was an interval of more than 12 months between two successive shipments. The Complainant averred that ECGC had erroneously addressed this letter as they had approved the C.L. only on 12.10.92 and were provided by the relevant details shipment by the buyer which commenced in the month of April 1992 and ended in May 1992. After the buyer defaulted in making payments, the Complainant took all possible steps by initiating legal proceedings against the buyer in the U.S. and lodged a claim with the ECGC for an amount of Rs.11,19,208/- vide letter dated 21.7.1993. Thereafter, the Complainant had waited for 4 months for response from ECGC and again requested for a claim form to lodge a claim. On 23.11.1993, after receiving the claim form, the Complainant lodged a claim detailing the entire sequence of events chronologically and further submitted a list of documents on 20.12.92.
5. While so, the Complainant received a letter dated 13.1.94 from ECGC rejecting its claim on three grounds (a) that the shipments were made without firm orders; (b) shipments have been made on credit terms without valid C.L. on the buyer; and (c) when payments were not received the bills were not got noted and "Noted and Protested" for non-payment.
6. Regarding the first ground, it was explained by the Complainant that the buyer had established its bonafides by forwarding 30% of the total transaction value as advance and had accepted all the consignments sent and got the documentation released from the bankers and forwarded its bills of exchange.
7. With regard to the second ground of rejection that adequate C.L. had not been obtained on the buyer, it was submitted that the total blame of delayed and inadequate security lies on the ECGC as they did not provide the credit worthiness report on the buyer by delaying the grant of C.L. of more than 5 months. This amount was also granted against the desired Rs. 25 lakhs and that too with effect from 12.10.92 which is against their own practice and policy.
8. As regards the third ground of not having the bills "Noted & Protested", it is nowhere written in the Policy or the brochures and documentation issued by ECGC that bills whose payments have become due are to be got noted and protested. A claim of over U.S. $ 39,000 was also lodged in the U.S. and a favourable decree obtained in 1995. On 11.3.94, the ECGC requested for certified copies of documents which were provided.
9. The Complainant apprised the ECGC from time to time of the developments in the suit and vide letter dated 2.7.94, the Complainant in all fairness and with a view to resolve the problem pertaining to the claim withdrew his claim for the shipments sent before the 5th of May 1992, the day on which he had applied for the C.L. on the buyer. The Complainant had thus limited his claim to Rs. 5,42,904/-, which was the 5th shipment on 40 days DA as against the ECGC's condition of 60 days DA and fell within the terms specified by the ECGC. Thereafter, inspite of several representations dated 28.11.95, 9.2.96 and several discussions, the Opposite Party did not settle the claim. In their letter dated 14.5.1996, ECGC reverted back to the earlier three grounds of rejection, two of which had been dropped by them vide their own letter 31.01.96. Hence, the Complaint before the State Commission seeking direction to ECGC to pay Rs. 5,42,904/- and also Rs. 5 lakhs on account of loss of business opportunity with interest @ 20.75% and costs.
10. The Opposite Party filed their reply affidavit before the State Commission stating that the Exporter intends to send some shipments to any purchaser to obtain a Credit Limit in regard to that specific purchaser under Clauses 20 and 21 of the Policy from the Respondent Corporation and the liability on the Respondent is limited to the extent of the C.L. only. Every C.L. sanctioned by the Corporation is operative from a certain date mentioned therein and any shipment made by the Exporters to the concerned purchaser in the period not covered by the C.L. would be solely at the risk of the Exporter and the Respondent Corporation cannot be held liable for any loss suffered by the Exporter due to such shipments. After the C.L. is obtained by the Exporter, he has to file declarations and pay premium within the time required under Clauses 8 and 10 of the policies. The Complainant requested vide letter dated 5.5.1992 to obtain a Credibility Report of the buyer and to issue ECGC Policy for Rs. 25 lakhs. Vide letter dated 18.6.92, the ECGC conveyed its inability to approve any Credit limit for the proposed buyer. On 6.8.1992, the Complainant sent an urgent message to ECGC to inform ECGC that as the buyer's Banker had sent a favourable report to ECGC to approve C.L. in favour of the Complainant. By that point of time the said buyer was in default in regard to payment for 5 shipments and the Complainant did not inform ECGC regarding the said default.
11. Vide letter dated 12.10.92, ECGC approved credit limit of Rs. 5 lakhs in favour of the Complainant. The approval of the C.L. was subject to the conditions that the buyer had not already dishonoured any bill either by non-acceptance or by non-payment. The Complainant had concealed that the said buyer had defaulted in 5 shipments dated 24.3.1992, 13.4.1992, 1.5.1992 and 13.5.1992. Clause 2 states that the approval of the said credit limit is subject to the conditions that the buyer did not dishonour any bill either by non-acceptance or non-payment.
12. It was averred that the Complainant did not adhere to Clause 14 of the Insurance Policy and had diverted two shipments intended for one party to another without obtaining written approval from the Corporation. The Complainant had also violated Clause 19 (a) of the Policy as the Exporter did not intimate to the Corporation, non-payment of its amount, by the Importer, by the 15th of next calendar month.
13. The Corporation denied that there was an unexplained gap of over 5 months in approving credit limit in favour of the Complainant. The Complainant vide message dated 6.8.1992 had informed that their Banker sent a favourable report on 1.7.1992 to ECGC to grant credit limit in favour of the Complainant. Based on the said letter, the ECGC on 12.10.1992, granted credit limit of Rs. 5 lakhs. There is no clause in the Policy of ECGC that credit limit approved on buyer shall always be retrospective in nature. The Corporation was constrained to cancel the credit limit by its letter dated 15.4.1993 as it was discovered that the Complainant had not made any shipment after 13.5.1992. It is the Policy of the Corporation that any credit limit approved by it should be made operative for a period of one year or so and a fresh limit is necessary to be approved if the period of shipments becomes longer. The claim filed by the Complainant was considered by ECGC in detail and was rejected vide letter dated 13.1.1994 interalia, on the ground that the shipment had been made on credit limit without valid credit limit on the buyer. The Corporation pleaded that the 5th shipment was sent by the Complainant at his own risk as the credit limit was not approved by them. Hence, there is no deficiency of service on their behalf and seek for disposal of the Complaint with costs.
14. The State Commission, while allowing the Complaint, observed as follows:
"13. Even if we read clause 21 along 21 (b) still the claim of the complainant could not have been repudiated as the first two grounds of rejection or repudiation of the claim stood nullified by virtue of complainant having obtained a decree in its favour from USA Court. After having obtained said decree it was not open to the OP to continue to maintain that valid credit limit has not been obtained by the buyer.
14. Complainant has entered into the insurance contract by valid terms and conditions of the concerned insurance policy. In terms of Hon'ble Supreme Court in the case of Oriental Insurance Co. Ltd. Vs. Sony Cherian (1996) 6 Supreme Court Cases 451, an insurance policy between the insurer and the insured represents a contract between the parties. Since the insurer undertakes to compensate the loss suffered by the insured on account of risks covered by the insurance policy, the terms of the agreement have to be strictly construed to determine the extent of liability of the insurer. The insured cannot claim anything more than what is covered by the insurance policy.
15. The foregoing reasons persuade us to allow the complaint in the following terms:-
OP shall pay Rs. 5,42,904/- towards the insurance claim.
OP shall further pay Rs. 50,000/- as compensation on account of mental agony, harassment and wrongful repudiation of the claim.
iii. OP shall also pay Rs. 10,000/- towards cost of the complaint.
16. Payment shall be made within one month from the date of receipt of this order".
15. Aggrieved by this order, the Corporation preferred this Appeal.
16. Learned counsel for the Appellant submitted that the working of the Shipments (Comprehensive Risks) Policy, hereinafter referred to as "SCR Policy", is broadly mandated under Clauses 3,8,9,10,20,21,22, 28 & 29. Obtaining credit limit and declaring all shipments made by the Exporter to its overseas buyers during the currency of SCR Policy is mandatory. Irrespective of any credit limit in respect of any particular overseas buyers of the Exporter being granted or rejected by ECGC under Clause 21 of SCR Policy, the Exporter is bound to declare all the shipments made on monthly basis to ECGC in accordance with Clause 8 of SCR Policy. If no shipment is made, a 'NIL declaration' to ECGC is mandatory. Clause 19 (a) limits liability of ECGC in case Exporter fails to declare the shipments as required under Clause 8(a) and pay premium thereon under Clause 10. The liability of ECGC is further limited by Clause 19(b) in case Exporter fails to submit overdue payments in terms of Clause 8(b). Clause 20 limits the liability of ECGC under SCR Policy to the amount of credit limit extended to the Exporter. Clause 22 limits the Maximum Liability of ECGC under SCR Policy.
17. Learned counsel for the Appellant contended that it was communicated by ECGC vide its letter dated 12.10.92 to the Respondent herein, that the credit limit on the concerned buyer shall be Rs. 5 lakhs and shall be applicable for shipment made to the concerned buyer on or after 12.10.92. Clause 21(b) applies only when no credit limit has been specified and communicated to the Exporter by ECGC. In the present case the credit limit application was firstly rejected on 18.6.92, but later, on request dated 6.8.92, the amount of credit limit and conditions applicable to the same were communicated to the Respondent on 12.10.92. The Respondent/Complainant had violated the terms and conditions of the Policy and has not acted in good faith and therefore, cannot draw any benefit whatsoever under Clauses 19, 27,28 & 29 of the SCR Policy. The learned counsel contended that there was no question of applicability of Clause 21 of the Policy in this present case as the credit limit was already communicated to the Respondent/Complainant.
18. A brief point that falls for consideration is whether the repudiation of the claim made by the Appellant herein is justified?
19. It is an admitted fact that on 5.5.1992, a Credit Limit Application for Rs. 25 lakhs was made by the Respondent/Complainant with the Appellant Corporation and an amount of Rs. 750/- was made towards fee of Credibility Report. The letter reads as follows:
"Magna International
The Regional Manager,
EXPORT CREDIT GUARANTEE CORPN.
OF INDIA LTD.,
Antriksh Bhawan, 8th Floor,
22, Kasturba Gandhi Marg,
New Delhi-110 001.
______________________________________________________________
OUR REF: MI/ECGC/92/173 DATE: 05-05-1992
Sub: Credit Limit Application for Rs. 25 lakhs to cover our export of LEATHER GARMENTS to M/s. SHALOM FASHION INC., 275, 7TH AVENUE, NEW YORK, N.Y.10001, U.S.A., Bankers: CHEMICAL BANK, 305, 7th Avenue, New York, N.Y.10001, USA.
Ref: Our existing Policy No. 46464-87/9-93 valid upto 30.9.93 for Rs.16,00,000/- (Rupees Sixteen Lakhs only)
Dear Sir,
The above party M/s. Shalom Fashion Inc., New York, had placed export orders worth US$ 25,297.70 on us for supply of Leather Garments which we have already executed. We have received an advance payment of US$ 9,990/- through our Bankers. This new buyer will be placing export orders worth Rs.1,00,00,000/- on us in the immediate future as per indications given by them. Payment terms will be 90 days DA.
We enclose herewith the following with a request to kindly obtain a Credibility Report on the above party (PLS OBTAIN URGENT REPORT) & issue us an ECGC Policy for Rs. 25,00,000/- (Rupees Twenty Five Lakhs only) to cover our exports to M/s. Shalom Fashion Inc:
Enclosures:
Credit Limit application on the prescribed Form No. 144 dated 5/5/92 in duplicate.
Cheque No. 620461 dated 5/5/92 for Rs. 750/- (Rupees Seven hundred fifty only) towards fee of Credibility Report - PLS OBTAIN URGENT REPORT.
Thanking you,
Yours faithfully,
For MAGNA INTERNATIONAL
Sd/-
(G.S. SAWHNEY)
Proprietor
20. In the above Application, the details of two shipments dated 7.4.1992 and 20.4.1992 were also mentioned. Further reminder letter for settlement of the claim dated 23.11.1993, referring to previous letters dated 21.7.93 and 16.11.93, the Respondent/Complainant had sought for the Credibility Report and submitted that a fax was also sent on 6.8.92. It is also an admitted fact that the credit limit for the buyer for Rs. 5 lakhs in 60 days DA, was received during October, 1992, by which time all shipments had already been made.
21. As the buyer did not make good the payment, the Complainant had initiated legal proceedings in the Court of New York against the buyer and had stated so in their letter dated 23.11.93 that the entire proceedings would take 1½ to 2 years' time and requested them to examine their case sympathetically.
22. The learned counsel for the Appellant relied on the Judgment of the Hon'ble Supreme Court reported in M/s. BHS Industries vs. Export Credit Guarantee Corpn. & Anr., Civil Appeal No. 2729 of 2009 dated 7th July, 2015, in which the Hon'ble Apex Court had held that the non-declaration of shipments which was the main ground for repudiation of the claim by the Insurance Company was justified. The learned counsel for the Appellant contended that 'uberrima fide' i.e. good faith, has not been adhered to by the Complainant and that he had wilfully and fraudulently suppressed material facts with respect to the fifth shipment.
23. Needless to say, in the instant case, the Appellant Corporation vide letter dated 13.1.1994 had repudiated the claim on three grounds, which facts are different from the judgment cited. The repudiation letter reads as follows:
"EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LTD.
M/s. Magna International, HO:C&D:10764:94
B-504, Som Vihar, January 13, 1994
Sangam Marg,
NEW DELHI.
Dear Sir,
This has reference to your above mentioned claim.
Your case has been examined by our higher authorities and regret to inform you that, your claim cannot be considered favourably in view of following lapses on your part:-
Shipments under claim have been made without firm orders.
Shipments have been made on credit terms without valid C.L. on the buyer.
When payments were not received the bills were not got 'Noted & Protested' for non-payment.
Thanking you,
Yours faithfully,
Sd/-
(JAYSHREE P. VARIA)
EXECUTIVE OFFICER
24. Learned Counsel for the Respondent/Complainant contended that with respect to the first ground of repudiation, all shipments had been made against firm order by the buyer which is evidenced by the signed bills of exchange and acceptance of goods for a total value of US $56,122.95. Learned counsel for the Respondent further argued that fifth consignment was shipped after asking for credit limit of Rs. 25 lakhs on DA basis and also making payment of Rs. 750/- for urgent Credibility Report. He vehemently argued that due to fault of ECGC, they took over 5 months to get the telegraphic C.L. on the buyer and finally a credit limit of Rs. 5 lakhs only on 60 days DA was granted vide their letter dated 12.10.92.
25. It is also an admitted fact that the claim for shipment was withdrawn by the Exporter. It is also not in dispute that the application for telegraphic C.L. on the buyer was made prior to the export of the fifth shipment. A brief perusal of the record shows that there was a delay on behalf of the Appellant Corporation, who took over 5 months for granting credit limit. At the time of granting of the credit limit, the Appellant Corporation was aware of the 5 shipments and that payments for these 5 shipments were due from Monthly Delay Reports of July and August, 1992, which was submitted by the Exporter. Vide their letter dated 2.7.1994, the Exporter had withdrawn its claim for first 4 shipments and only requested for settlement of the claim of Rs.5,42,904/- against the 5th shipment. The contention of the Appellant Corporation that the buyer had defaulted in making payment of all the 5 shipments and this was suppressed by the Exporter is not sustainable in the light of the correspondence between the Appellant and the Respondent and their monthly delay report which were furnished by them. Moreover, to reiterate the claim of the first 4 shipments has been withdrawn by the Respondent/Complainant. Even on 6.8.1992 the Complainant had admittedly sent a fax which reads as follows:
"Magna International
FACSIMILIE TRANSMISSION
To
The General Manager,
Export Credit Guarantee
Corpn.of India Ltd.,
Express Building,
10th Floor, Nariman Point
ATTN:Bombay-400021
FAX (022) 2045253
FROM: Brig. (Retd.) G.S. Sawhney DATE: 06.08.1992
IF YOU DO NOT RECEIVE ALL PAGES OR ANY PORTION OF THE TRANSMISSION ARE ILLEGIBLE, PLEASE NOTIFY US VIA OUR FAX OR PHONE IMMEIDATELY.
FAX:011-5434832 PHONE:011-653940, 6883074
Sub: Our Application dated 06.05.92 for Credit Limit of Rs. 25 Lakhs to cover our Export of Leather Garments to M/s. SHALOM FASHION INC., 275, 7th Avenue, New York, N.Y. 10001, U.S.A. -Bankers: Chemical Bank, 305, 7th Avenue, New York, N.Y. 10001, USA.
Our Policy No. 46464-87/9-93 for Rs. 16,00,000/- valid upto 30.09.1993.
Dear Sir,
Reference our above Credit Limit Application & your reply vide letter No.:ST/533/0-920481/0119024/92 dated 18.06.1992 expressing your inability to approve any limit as per sources are unable to provide report on the buyer in question.
In this connection, the buyer has informed us that their Bankers, Chemical Bank, New York, have already sent a favourable report on 1.7.92 to ECGC, Bombay.
Therefore, we request you to kindly check at your end and approve the Credit Limit requested for at the earliest and oblige. The matter may please be treated as "URGENT" as our export consignments to the buyer are held up for want of ECGC cover.
Thanking you,
Yours faithfully,
For MAGNA INTERNATIONAL, Confirmation copy by
Post to:
Sd/-
(Brig.(Retd.) G.S. SAWHNEY) The General Manager,
Proprietor ECGC, Bombay-400 021.
------------------------------------------------------------------------------------------------
26. The material filed on record evidences that the Respondent/Complainant had made an application for sanctioning of credit limit on 5.5.1992 prior to the fifth shipment and also time and again sought for Credibility Report and an amount of Rs. 5 lakhs was sanctioned. A brief perusal of the repudiation letter which has been extracted in para 23 does not talk about violation of Clause 8 with respect to declaration of shipment or declaration of overdue payments. Even otherwise a brief perusal of the application made for the Credit Limit construes declaration of the shipment. Clause 21 of the SCR reads as follows:
"Amount of Credit Limit: The amount of Credit Limit on any particular buyer shall be:
Where, on an application made by the insured, the Corporation has approved and communicated to the insured in writing an amount on specified terms of payment as the Credit Limit for that particular buyer, the amount so specified;
Where no such amount has been specified and communicated by the Corporation, then:
i.If the transaction is on Documents Against Payment or Cash Against Documents terms, Rs. 5,00,000/- PROVIDED THAT the liability of the Corporation to pay claims on Credit Limits availed under this sub-clause shall be limited to two buyers during the currency of this Policy; or If the insured has made atleast three shipments to that particular buyer during a period of two years immediately preceding the date of shipment and has received payments on the due dates, the highest amount that remained outstanding at any one time on similar payment terms, PROVIDED THAT the Credit Limit under this sub-clause shall not exceed Rs.3,00,000/- for Documents Against Acceptance transactions and Rs. 10,00,000/- for Documents Against Payment or Cash Against Documents transactions".
27. The State Commission had relied on Clause 21 and allowed the Complaint. Letter dated 31.1.1996, addressed by the Appellant Corporation to the Respondent reads as follows:
"EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LTD.
M/s. Magna International, DL:CCL:418/95 B-504, Som Vihar, January 31, 1996 Sangam Marg, NEW DELHI. Dear Sirs, Re: Your representation regarding claim for shipments sent to M/s. Shalom Fashion Inc. U.S.A.
Please refer to your representation No. MI/ECGC/1/95 dated 28.11.95 on the above subject.
The matter has been reviewed by our higher authorities. We regret that we are unable to admit any liability for the above shipments since there was no valid credit limit on the dates of shipments.
Thanking you, Yours faithfully, Sd/-
(MS VARDHINI R) ASST. MANAGER"
28. This letter does not address itself to any other ground except to not having valid Credit Limit on the date of shipment. Even otherwise, the first ground of repudiation that shipments have not been made under firm order cannot be sustained as is evidenced by the bills of exchange and acceptance by the buyer for a total value of US$ 56,122.95. The second ground addressed by the Appellant Corporation in their letter dated 13.1.1994(first letter of repudiation) that shipments have been made on credit terms without valid C.L. on the buyer, is unsustainable as is evidenced under the chronological orders of dates that application for credit limit of Rs. 25 lakhs was made by the Exporter on 5.5.92 itself and that admittedly the Credit Limit of Rs. 5 lakhs was sanctioned only on 12.10.1992. After asking for credit limit, Exporter had sent two consignments viz. MI/LG/134 dated 13th May 1992 for US $19370.25 and MI/LG/135 dated 13th May 92 for US $ 6596.50. Out of these, US $ 6596.50 had been received against consignment MI/LG/135 dated 13th May 1992. It was also informed to the Appellant about despatch of 4 earlier consignments and requested for covering these consignments also. The Appellant did not cover the earlier consignments, but they accepted the premiums. The Complainant had also reported the delay about receipt of payments to their office. It is also pertinent to note that the Respondent Exporter had withdrawn the claim for the first four shipments and has only confined their claim to the 5th consignment. Repeated correspondence between the Appellant and the Respondent evidences that despite reminders and payment of Rs. 750/- towards Credibility Report, there was delay of 5 months on behalf of the Appellant Corporation in sanctioning the Credit Limit. The third ground for repudiation is unjustified in the light of the fact that it was only vide letter dated 20.12.1993 that the Exporter realised that the buyer had been using delaying tactics. Therefore, non-settlement of the claim on the ground that the bills were not "Noted and Protested" in the light of the facts and circumstances and the sequence of events in the instant case, cannot be sustained.
29. Having addressed to all the grounds of repudiation which are unjustified, I do not see any illegality or infirmity in the order of the State Commission with respect to deficiency of service. It is observed that the State Commission did not award any interest by way of damages but awarded only a reasonable lumpsum compensation of Rs. 50,000/- in addition to the claim amount of Rs. 5,42,904/- . For all the afore-mentioned reasons, this Appeal is dismissed confirming the order of the State Commission. No order as to costs.
...................... M. SHREESHA PRESIDING MEMBER