1. The learned DRT, vide its order dated 28.9.2007 issued a recovery certificate in the sum of Rs. 18,48,892/- along with pendente lite and future interest @9% p.a. with monthly rests from 7.12.2001 till its realization and costs in favour of State Bank of India and against the defendants. Aggrieved by that order, the defendants have preferred the instant appeal. The facts which are relevant for the disposal of this appeal are these. The appellants/defendants were granted Export Packing Credit Limit (EPCL) of Rs. 50 lakhs by the State Bank of India, respondent herein. M/s. Shyam Garments, appellant No. 1, raised two bills, one for USD 38750.00 and the other for USD 37073.00. The payment against the bill for USD 37073 was duly received and the dispute arose only with regard to the bill for 38750.00.
2. The respondent Bank sent both the bills for collection to National Commercial Bank, Jeddah along with all the necessary documents with instructions of mode of reimbursement. The documents pertaining to both the bills were identical in nature. No discrepancy was reported in the bill with respect to USD 37073 and the said amount was remitted. However, the National Commercial Bank, Jeddah sent a telex message dated 28.2.2000 to Overseas Branch of the respondent Bank informing it that the documents with respect to the bill for USD 38750.00 were discrepant and they were still holding the documents related to the said bill. A copy of the said telex message is on the record of this file which reads as under:-
:72. COST OF THIS MSG. AND OUR CHARGES WILL BE DEDUCTED FROM THE PROCEEDS.
:770:1. AMOUNT INSURED IN RUPEES 1/0 USD
2. INS. POLICY NOT SHOWING I.O.
3. VESSEL AGE ON SEPARATE CERT. AND NOT ON B/L
4. LC RESTRICTED.
:77B: HOLDING DOCS AT YR DISPOSAL UPON ACCEPT. WE WILL DELIVER TO THEM UNLESS WE HEAR CONTRARY FROM YOU.
3. The stand set up by the respondent Bank is that they had no information about the said telex message. It is alleged that the Bank was negligent and irresponsible in not furnishing the said information to the appellants.
4. On 7.3.2000, the appellants informed the respondent Bank that they had not received the payment of the said amount though they were informed by the overseas buyer that he had released the payment. On the same day, the respondent Bank vide its telex message called upon National Commercial Bank to know about the fate of the both the bills sent to it for collection. The bill for USD 37073 was paid and the respondent Bank received an advise dated 28.3.2000 from the Bank of America that they had transferred the amount of USD 38750 in their account with Chase Manhattan Bank, New York, USA. The money was paid to the appellants and the said transaction stood closed on 5.4.2000.
5. On 4.11.2000, the respondent Bank received a telex message from National Commercial Bank, Jeddah informing that the documents of the appellants submitted to the respondent Bank for USD 38750 were discrepant and the drawee of the bill had not honoured the same and had not made any payment. It was requested that the amount be refunded back to National Commercial Bank, Jeddah and the documents were still lying with National Commercial Bank. The Bank did not inform this fact to the appellants. The appellants had no knowledge of the foreign buyer not retiring the documents or of not making any payment or of goods of the appellants lying on the port of Jeddah.
6. In the meantime, M/s. Transworld Shipping Service (I) Pvt. Ltd. informed the respondent Bank, on their query, that the said cargo was auctioned inside the port of Jeddah Customs on 6.11.2000 itself. On 9.11.2000, the respondent Bank vide its telex message informed the opening Bank, i.e., National Commercial Bank, Jeddah that the refund of the account was not possible as the documents were negotiated under LC and the matter was closed at their end. Vide its letters dated 10.12.2000 and 17.12.2000, National Commercial Bank, Jeddah demanded the refund of the claim made by the respondent Bank upon its account maintained with Bank of America. The respondent Bank did not take any action. The appellants received a letter dated 13.10.2000 through courier wherein the appellants were informed for the first time about the abovesaid dispute. Though the said letter stated to be prepared on 13.10.2000, it was delivered to the appellants in December 2000. Even in the said letter the whole facts were not mentioned.
7. On 7.12.2001, the respondent Bank debited the account of the appellant No. 1 with an amount of Rs. 18,48,492/-. The respondent Bank refunded the amount of USD 38579 to the opening bank account of Bank of America. The appellant were called upon to refund an amount of Rs. 18,50,289/29 with interest vide legal notice dated 25.11.2002. It is stated that in the proceedings before the Delhi Legal Authority in file No. 100/2002 titled as "Shyam Garments Vs. State Bank of India" the respondent Bank admitted to the fact that the appellant No. 1 was not at fault.
8. I have heard the learned counsel for the parties. The learned counsel for the appellants vehemently argued that had the Bank taken the trouble to inform the appellants about the said telex message, the appellant would have got an opportunity to rectify the defects in the documents. It was argued that the negligent and irresponsible attitude of the respondent Bank can be further gauged from the fact that despite having knowledge of the overseas buyer not retiring the documents and of not taking delivery of the goods, no information of the same was furnished to the appellants, thereby failing miserably in performing its duties and responsibilities. The counsel for the appellants argued that even if it is assumed that the respondent Bank was merely a collecting Bank and not the negotiating Bank, in that event, too, the responsibility squarely lies at the door of the respondent Bank. It was also argued that the appellants were informed of all these developments for the first time in December 2000. Again, the negligence of the Bank is apparent from the fact that the letter stated to have prepared on 13.10.2000 was sent to the appellants in December 2000. Even in the said letter; the entire facts were not mentioned and the gravity of the matter was not intimated to the appellants. It was argued that it is the Bank, and nobody else, which is to be held responsible for the abovesaid negligence and delay and, consequently, the impugned order passed by the learned DRT against the appellants be set aside.
9. On the other hand, the learned counsel for the respondent Bank vehemently argued that the respondent Bank was working as collecting Bank simpliciter. The learned counsel explained that the negotiating Bank was Union Bank of India which issued LC in favour of the appellants. He contended that the terms of LC are not binding upon the respondent Bank and that all these facts stand established by the admission made by the appellants themselves. In this context, he drew my attention towards the averments made by the Bank in paras G(i) and G(ii) of its application moved before the Tribunal under Section 19 of the Act for recovery of Rs. 23,52,289.29 and the reply thereto filed by the appellants. The said paras G(i) and G(ii) of the application under Section 19 of the RDDBFI Act read as under:-
i) That the Defendants have availed and enjoyed the aforesaid Export Packing Credit Limit of Rs. 50.00 lacs from time to time and the Applicant Bank advanced the moneys to the Defendants for, the purpose of manufacture of goods/garments for the purpose of exports.
ii) That the Defendants received an order for the supply of the agreements from M/s. Talib H.A. Habtoor, Jeddah and National Commercial Bank (NCB) Jeddah opened a Letter of Credit in favour of Defendant No. 1 in USD 86320.00. The said Letter of Credit (LC) was advised to the Applicant Bank for onward transmission to the Defendant No. 1. through Union Bank of India, New Delhi. The negotiation of the documents under the Letter of Credit was restricted to Union Bank of India, Overseas Branch, New Delhi. The Defendants supplied the goods to the foreign buyer and had drawn two bills, one for USD 38750.00 other for USD 37073.00. The Bill for USD 37073 is not the subject matter of this suit as the payment against this Bill has been received.
10. In the reply, the appellants have admitted the averments made in the abovesaid paras.
11. Its was explained that the terms of the LC was not advised to the respondent Bank. The LC was not placed on record. The negotiating Bank was Union Bank of India.
12. It was also argued by the learned counsel for the respondent Bank that the alleged telex message was never received by the Delhi branch of the Bank. The address mentioned in the telex message was different. It was explained that the telex message dated 28.2.2000 was sent to Bombay branch and it did not come to their notice that such a telex message had been received by the Bank.
13. After hearing the counsel for both the parties at length, I am of the opinion that this is a case of contributory negligence. Both the parties are equally responsible for the mess they had created for themselves. Had the parties been vigilant enough, the abovesaid goods could have been saved. It is a national loss. First of all, I advert to the negligence on the part of the appellants. All the four defects detailed in the telex message dated 28.2.2000 clearly go to show that these were inherent defects in the consignment. LC was restricted, but extra goods were sent beyond the limit given in the LC. The appellants were well aware of this fact in advance. This defect could have been removed or, at the best, the extra goods could have been taken back. Again, the insurance was made in rupees whereas it should have been made in dollars. The other two defects mentioned in the said telex message were also deliberate. The defects, if any, could have been nipped in the bud. However, the appellants did not take care of the same and sent the defective consignment.
14. It is also surprising to note that the foreign buyer remained silent and did not inform the appellants that he could not receive the consignment. The attitude of the appellants in not making any enquiry for a long time is also questionable. Consequently, inaction, negligence and passivity is writ large on their conduct and behaviour.
15. Now, I turn to the conduct of the Bank. Even if its is assumed that the telex message was received at Bombay branch, it was the bounden duty of the Bombay branch to inform the concerned branch office at Delhi. The telex message clearly
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, specifically and unequivocally mentions that it pertains to New Delhi, address. Again, when they came to know of this fact, they should have informed the appellants on 13.10.2000 itself. It would have given an opportunity to the appellants to save the goods. The Bank did not make any effort to straighten out the problem. It is difficult to fathom as to why the Bank sat tight at the crucial time. All these facts expose the sloth and callousness on the part of the bankers. Bankers have no love for the country. They did not take immediate steps to save the goods. 16. In the light of the above discussion, I find that both the parties are equally at fault and they should share the consequence whereof, too, equally. Accordingly, the appeal is partly allowed and it is ordered that the appellants shall be liable to pay to the respondent Bank only 50% of the principal amount decreed along with proportionate interest and costs thereon. The rest of the amount will be borne by the respondent Bank as compensation to the appellants. There shall be no order as to costs. Copies of this order be furnished to the parties as per law and another copy, along with lower Court records, be sent to the learned DRT.