COMMON WEALTH PHARMACEUTICAL vs Divisional Manager, Canara Bank

THE appellant has appealed against the order of the 7th October, 1992 of the State Commission of Tamil Nadu in Original Petition No. 92 of 1992 on the file of the State Commission. By this order, the State Commission has dismissed the complaint.

THE facts briefly are that the complainant is a proprietorship concern engaged in pharmaceutical industry. He has been availing of various credit facilities from the respondent-Bank such as O.C.C., S.D.R., bill discounting on the security of fixed assets, life insurance policy, fixed deposit receipts, cash deposits etc. Through the facility of bill discounting, the appellant/ complainant could realise immediately the sale proceeds of the goods supplied to any party leaving it to the Bank to realize the amount of the discounted bills. During the relevant period, the appellant/complainant supplied certain stocks of pharmaceuticals worth Rs.8 lakhs to its superstockiest at Vijaya Wada and got the bills for supply of goods discounted with the respondentBank. THE consignee at the Vijaya Wada end, however, cleared the goods only to the value of Rs. 4 lakhs and did not retire the remaining bills and take delivery of the remaining goods. THE respondent/complainant carrier issued notice for the clearance of the goods, within 10 days, on 27th July, 1990 failing which it threatened to send the goods to the lost property department. Eventually, the respondent-Bank recalled the bills from its branch office at Vijaya Wada and insisted upon the appellant/complainant for payment of the balance amount which had been received by it from the Bank when the bills were discounted. THE Bank was also willing to hand over the bills and the lorry receipts for the clearance of the undelivered goods to the appellant/complainant provided he furnished tangible and acceptable security to the Bank. According to the appellant/complainant, the respondent-Bank recalled the discounted bills hurriedly and arbitrarily and there was delay in releasing the lorry receipts with the result that the medicines sent to Vijay Wada and which remained undelivered became time expired. The appellant/complainant filed a complaint before the State Commission alleging deficiency of service on the part of the respondent-Bank for recalling the discounted bills arbitrarily and hurriedly and for delay in delivering the lorry receipts resulting in the consignment become obsolete causing huge loss to the appellant/complainant.

The State Commission has rightly observed that the super-stockiest of the appellant/ complainant at Vijay Wada did not clear the entire consignment and the appellant/complainant also did not take any diligent steps to clear the remaining bills in respect of the undelivered part of the consignment. The respondent-Bank was justified in recalling the remaining uncleared bills and insisting upon the refund of the balance amount of the discounted bills which had remained unreturned by the consignee. In fact, in our opinion, the Bank was within its rights to recall the unreturned bills immediately and insist upon refund of the amount of such discounted bills. Further, the Bank was also within its rights to insist upon adequate security so long as the amount of the unreturned discounted bills was not refunded to it. The State Commission was quite right in its finding that "after having received the full amount from the opposite party-Bank for the bills, the complainant has not cared to see that the Ban.'' realised the entire proceeds of those bills". Again "the delay in releasing the bills was only due to default of the complainant in not furnishing sufficient securities". The State Commission has also quite rightly observed that "the appellant/ complainant has not taken any action against the super-stockist who failed to retire the bills and take delivery of all the goods and which was the primary cause of all the troubles which have arisen in this case.

THE State Commission has also noticed that the complainant has been running into debts heavily and could not discharge its obligations to the Tamil Nadu Industrial Development Corporation in respect of amount received from them and also to discharge the sale-tax arrears. Thus, it appears, has been mentioned to explain why the complainant defaulted its obligations under the contract in time. The record and the arguments advanced before this Commission at the hearing leave no room for doubt that the order of the State Commission is perfectly in accordance with law and has only to be confirmed. The appeal is accordingly dismissed. The appellant shall pay a sum of Rs. 3,000/- as costs to the respondent-Bank. Appeal dismissed with costs.