Consumer Education and Research Society vs EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LTD

MR. Justice K.S. Gupta, Presiding Member-Complaint was filed, inter alia, alleging that complainant No. 1 is a society registered under the Societies Registration Act, 1860. Complainant No. 2 who is a member of complainant No. l, is the sole proprietor of M/s. Mahavir Exports which is engaged in the business of manufacturing and exporting of readymade garments. Export Credit Guarantee Corporation of India Ltd.-opposite party is 100% owned company by the Government of India. It was alleged that complainant No. 2 approached the opposite party for a policy with a limit of Rs. 30 lakh in 1991 to cover the risk of exports made by M/s. Mahavir Exports to M/s. Shahi Textile Import GmbH, Germany. Opposite party issued a policy vide reference No. ST/472/1-106804/0108337/91 dated 4.9.1991 of Rs. 30 lakh which was valid for the shipments made on or after 26.7.1991. Complainant No. 2 received another policy vide reference No. ST/472/1-106804/0108337/92 on 17.7.1992 from the opposite party unilaterally reducing the amount of limit from Rs. 30 lakh to Rs. 10 lakh. It was stated that having accepted the premium and issued policy for Rs. 30 lakh, the opposite party had no right to reduce the limit without the consent of complainant No. 2. By the letter dated 27.7.1992, the complainant No. 2 objected to the reduction of the policy amount and asked the opposite party to increase the amount of policy to Rs. 50 lakh and premium therefor was also sent. It was further alleged that complainant No. 2 received a letter dated 11.1.1994 from his banker-Corporation Bank informing that said M/s. Shahi Textile Import GmbH had gone bankrupt. On receipt of this information on 22.2.1994 the complainant No. 2 filed claim with the opposite party for a sum of Rs. 53,21,333 and enclosed therewith duly filled form No. 205 in duplicate supplied by the opposite party. In October 1994, Ahmedabad branch of the opposite party again issued form No. 205 which the complainant No. 2 filled and filed with the said branch on 3.10.1994. It was pleaded that on 18.4.1994, complainant No. 2 lodged claim with the Judicial Administrator, Office of the District Court, Wuppertal, Germany for DM 988954.83 being the amount owed by the said buyer. By the letter dated 12.9.1995, the complainant No. 2 was informed by the German Court that he would not get any payment on the claim as the proceedings were closed because it was short of money. After a delay of 31/2 years, opposite party by the letter dated 30.12.1997 repudiated the claim of complainant No. 2. It was alleged that repudiation is bad in law. It was denied that complainant No. 2 was related to Dinesh Shah or M/s. Mahavir Exports had any association with said M/s. Shahi Textile Import GmbH, Germany. It was stated that complainant No. 2 wrote a letter dated 14.4.2001 to the new Chairman and Managing Director of the opposite party giving reference to the earlier correspondence. By the letter dated 25.8.2001, the opposite party conveyed sanction of an amount of 9 lakh to complainant No. 2 who signed the opposite party''s letter dated 25.8.2001 on 27.8.2001 reserving his right to claim the balance amount and interest on the entire amount. Complainant No. 2 filed O.P. No. 380 of 2001 before this Commission against the opposite party. Complaint was listed for hearing on 11.12.2001. The Commission observed that amount of Rs. interest @ 18% p.a. with quarterly rests till date of payment, pay quarterly interest @ 18% p.a. with quarterly rests on the sum of Rs. 9 lakh from 1.1.1995 to 26.8.2001, pay Rs. 30 lakh on account of closure of business and loss of profits, pay Rs. 2 lakh towards expenses incurred by complainant No. 2 for making several visits to the Head Office of the opposite party, pay Rs. 5 lakh towards mental agony and cost of Rs. 25,000.

COMPLAINT was contested by filing written version by the opposite party. It was stated that answering opposite party is a company registered under the Indian Companies Act, 1956 and is wholly owned by the Government of India and is under the administrative control of Ministry of Commerce. Object of the opposite party is to promote exports from India by extending Credit Risks Insurance Cover to Indian exporters and banks. Complainant No. 2 on 12.1.1982 applied for export credit insurance cover in respect of exports to M/s. Shahi Textile Import GmbH, West Germany of Rs. 10 lakh on DP (Document against Payment) terms. The opposite party approved the cover but with a limit of Rs. 3 lakh on DP terms w.e.f. 12.1.1982. This limit was enhanced to Rs. 8 lakh and again to Rs. 14 lakh. On learning later on that complainant No. 2 and the persons running the said firm were closely related, the opposite party took a business decision to cancel the limit and that decision was communicated by the letter dated 12.5.1983. Complainant No. 2 made a representation against this decision but the same was rejected. Complainant No. 2 did not have any dealings with the opposite party for about 8 years thereafter. In the year 1991 the complainant No. 2 without disclosing the cancellation of limit in 1983, applied for insurance cover. Opposite party approved the limit of Rs. 10 lakh on DA 90 days terms on 17.7.1992 in respect of exports made by M/s. Shahi Textile Import GmbH, Germany and this limit was suspended on 18.1.1994. It was pleaded that complainant No. 2 made 19 shipments during the period from 19.10.1992 to 6.9.1993 having a total GIV of DEM: 3,10,373.56 equivalent to Rs. 53,21,332 to the said buyer on DA 90 days terms. Due to insolvency of the buyer, the payment could not be realized. Complainant No. 2 filed the claim on 17.4.1997 which was repudiated by the answering opposite party on 30.12.1997 on the following grounds: (a) The delay of 11 months in reporting default in respect of shipments under claim adversely affected our liability as two claims aggregating to Rs. 34.88 lakh were paid on account of M/s. Overseas Textile Corpn. and M/s. ATE Enterprises, Mumbai. (b) The policy holder had made further shipments when payments for earlier shipment was overdue. (c) The terms of the policy require that the policy holder must file claim within 24 months from the due date of payment, however, the claim was preferred after 31/2 years.

THIS letter was followed by the letter dated 12.8.1999. It was further alleged that despite breaches of policy conditions, the opposite party proposed to pay Rs. 9,00,000 in full and final settlement to complainant No. 2. This offer was accepted unconditionally by signing the letter on 27.8.2001 by complainant No. 2. Complainant No. 2 is, therefore, estopped from claiming further amount. It was also alleged that the order dated 4.1.2002 in O.P. No. 398 of 2001 operates as res judicata and the present complaint is not maintainable. Order of Gujarat High Court did not grant liberty to re-file the original petition. It granted complainant No. 2 the permission to file only a civil suit and the present complaint on that ground is not maintainable.

NEEDLESS to repeat that one of the pleas taken in written version by the opposite party is that the present complaint is not maintainable in view of the order dated 4.1.2002 passed in O.P. No. 398 of 2001 by this Commission and order dated 12.9.2002 passed by the High Court of Gujarat, Ahmedabad in Special Civil Application No. 4307 of 2002. Order dated 4.1.2002 (copy at page No. 106) being material, is reproduced below: "For the complainant: Mr. Vikas Mehta, Advocate Dated, the 4th January, 2002 ORDER After some hearing, Counsel for the complainant wishes to withdraw his complaint. The Original Petition is dismissed as withdrawn". At this juncture, provision contained in Order 23 Rule 1, CPC need be referred to and the same read as under: "[1. Withdrawal of suit or abandonment of part of claim-(1) At any time after the institution of a suit, the plaintiff may as against all or any of the defendants abandon his suit or abandon a part of his claim: Provided that where the plaintiff is a minor or other person to whom the provisions contained in Rules 1 to 14 of Order 32 extend, neither the suit nor any part of the claim shall be abandoned without the leave of the Court. (2) An Application for leave under the proviso to Sub-rule (1) shall be accompanied by an affidavit of the next friend and also, if the minor or such other person is represented by a pleader, by a certificate of the pleader to the effect that the abandonment proposed is, in his opinion, for the benefit of the minor or such other, person. (3) Where the Court is satisfied- (a) that a suit must fail by reason of some formal defect, or (b) that there are sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject-matter of a suit or part of a claim, it may, on such terms as it thinks fit, grant the plaintiff permission to withdraw from such suit or such part of the claim with liberty to institute a fresh suit in respect of the subject-matter of such suit or such part of the claim, (4) Where the plaintiff, (a) abandons any suit or part of claim under Sub-rule (1) or (b) withdraws from a suit or part of a claim without the permission referred to in Sub-rule (3), he shall be liable for such costs as the Court may award and shall be precluded from instituting any fresh suit in respect of such subject-matter or such part of the claim, (Emphasis supplied) (5) Nothing in this rule shall be deemed to authorise the Court to permit one of several plaintiffs to abandon a suit or part of a claim under Sub-rule (1), or to withdraw, under Sub-rule (3), any suit or part of a claim, without the consent of the other plaintiffs. ]."

COMPLAINANTS have not filed the copy of Special Civil Application No. 4307 of 2002 which came to be disposed of by the Order dated 12.9.2002 on the lines indicated in aforesaid para 28 of the complaint by the High Court of Gujarat. It seems that this Special Civil Application was referable to the said Order dated 4.1.2002 passed in O.P. No. 398 of 2001. As is manifest from the order dated 4.1.2002, the withdrawal of O.P. No. 398 of 2001 by the Counsel of complainants was unconditional. It is true that the provisions contained in CPC do not apply to Consumer Fora, still the provisions contained in said order 23 Rule I should be made applicable on ground of public policy to the Fora. Obviously, in view of the order dated 4.1.2002, the complainants are precluded from filing the present complaint. Order dated 12.9.2002 further debar the complainants from filing this complaint. Remedy open to the complainants was to file suit, if so advised, for the reliefs claimed. We are unable to agree with the submission advanced by Mr. Vikas Mehta for the complainants that the said two orders would not come in the way of the complainants in filing this complaint and the pleadings and evidence being complete, the complaint is to be decided on merits. If this submission is accepted it would render nugatory the said two orders dated 4.1.2002 and 12.9.2002 as also the provisions contained in Order 23 Rule 1(4)(b), CPC.

COMPLAINT, thus, deserves to be dismissed being not legally maintainable. Dismissed as such. No order as to cost. Complaint dismissed.