KALINGA CABLE INDUSTRIES vs UNITED COMMERCIAL BANK

BY this complaint, the complainant has sought directions that the respondent be directed to deliver all the documents which they have received from M/s. Bharat Aluminium Industry Ltd., Korba in the State of Madhya Pradesh and M/s. Hindustan Aluminium Company Ltd., Renukoot in the State of Uttar Pradesh, and other relief(s) of compensation of Rs. 1,50,000/ etc.

THE brief relevant facts set out in the complaint are that the complainant established a small scale industry at Parwanoo for the manufacture of electrical P.V.C. wire cables and that the factory came into existence somewhere in the year 1981. He has spent about Rs. 60,00,000/ for setting up the industry, installation of machinery etc. During the course of business, the complain ant placed orders for the supply of raw material with M/s. Bharat Aluminium Industry Ltd., Korba in the State of Madhya Pradesh and M/s. Hindustan Aluminium Company Ltd., Renukoot in the State of Uttar Pradesh. THE said firms accordingly despatched the material and the documents were drawn on the complainant through their banker i.e. respondent Bank, namely the UCO Bank Branch, Parwanoo, District Solan (hereinafter to be referred to as the respondent Bank). THE complainant is having a Cash Credit Account with the respondent Bank and all the documents are received from various suppliers through the Bank. According to the complainant, the respondent Bank on 12.8.1993 intimated to the complainant that the amount of the aforesaid documents amounting to Rs. 18,46,257.08 has been debited to the Cash Credit Account and the amount has been remitted to the Companies from where the material was received. However, the respondent Bank failed to deliver the documents to the complainant i.e. Goods Receipt (G.R.) for taking delivery of the goods and bills etc. inspite of the fact that the respondent Bank has debited the amount of Rs. 18,46,257.08 to the Cash Credit Account of the complainant. Since the respondent Bank has failed to deliver the documents aforesaid, the complainant has suffered a loss of Rs.1,50,000/ which the respondent Bank is liable to pay to the complainant and that the respondent Bank is also liable to deliver the documents of Goods Receipts etc. in respect of the goods despatched to the complainant by the aforesaid firms or in the alternative they are liable to pay the amount of Rs. 18,46,257.08 to the complainant. The complaint has been resisted by the respondents. There is, however, no dipute that the complainant has got his Cash Credit Account with the respondent Bank and the respondent Bank had also given to the complainant credit facilities. However, according to the respondent Bank, the complainant has not honoured the credit facilities. According to the respondent Bank, the complainant had opened six L.Cs. on different dates to get the material purchased from M/s. Bharat Aluminium Company Ltd., Korba and Hindalco Industries Ltd., Renukoot, (U.P.). The respondent Bank gave this facility of lending its credit to the complainant so that he could get the material from the suppliers at 45 days credit from the suppliers. The details of L.Cs. opened by the complainant through the respondent Bank have been given in para 3 of the reply. According to the Bank, the complain ant had to operate his Cash Credit Account within the limits sanctioned by the Bank. The L.Cs. are opened by the respondent Bank on the request of the complainant and the Bank was obliged to receive all the documents including L.Rs. from the Negotiating Bank. The Negotiat ing Bank in this case is the two Branches of the respondent UCO Bank at Korba and Renukoot respectively. Since the goods were purchased on the basis of Letters of Credit, the Brandies of the respondent Bank at Korba and Renukoot for warded the said documents of consignments, which included the L.Rs. also to the respondent Bank and in which the name of the respondent Bank has been mentioned as consignee. Further more, according to the respondent Bank that the amount of L.Cs. was paid by the respondent Bank to the Negotiating Bank in discharge of its obligation to the Negotiating Bank and there is nothing wrong in debiting the amount to the account of the complainant as per the terms of the L.Cs. and since the complainant failed to honour its commitment under the L.Cs., the respondent Bank was obliged to remit the amount to the Negotiating Bank and debit the same to the account of the complainant till the complainant places sufficient funds with the Bank. Unless the entire payment is made to the Bank as per obligation contained in Annexures H to N - the L.Rs. - the respondent Bank is entitled to delivery of the goods, and not the complainant.

Mr. Devinder Ghose, learned Counsel for the complainant has very strenuously con tended that the goods have been purchased no doubt on letters of credit by the complainant, but the respondent Bank has no right to retain the documents relating to the goods which they have received from M/s. Bharat Aluminium Company Ltd., Korba and Hindalco Industries Ltd., Renukoot (U.P.).

AT this stage, it may be noticed that the goods have been purchased from the aforementioned Companies on the Letters of Credit issued by the Bank at Parwanoo to the Negotiating Bank i.e. two Branches of respondent Bank at Korba in Madhya Pradesh and Renukoot in Uttar Pradesh and that the respondent Bank was obliged to receive all the documents including the L.Rs. from the Negotiating Bank which accordingly were forwarded by the respondent Bank branches at Korba in Madhya Pradesh and Renukoot in Uttar Pradesh to the respondent Bank at Parwanoo. It may further be noticed that in these documents (Annexures ''H'' to ''N''), the name of the respondent Bank has been mentioned as consignee. The name of the complain ant does not find mention therein. However, the Counsel for the complainant has relied upon Annexures P9, P10 and P11. The documents relied upon by the complainant are only Gate Passes for removal of excisable goods and do not show that he was a consignee. We have considered the submissions of the Counsel for the complainant, but we do not find any force in such submissions. No doubt, the complainant''s Counsel has reiterated time and again that the respondent Bank is legally bound to deliver the documents to the complain ant, but nothing has been shown as to how the complainant was entitled to such documents. The right to receive these documents from the respondent Bank can arise either under the terms of the agreement or the law. Since the complain ant has failed to show any agreement or law under which he could have claimed the documents in question, his contention must necessarily, therefore, have to be rejected. On the other hand, there seems to be substance in the stand of the respondent Bank that the complainant has failed to honour his commitment in the Letters of Credit and the respondent Bank is obliged to remit the amount to the Negotiating Bank and debit the same to the account of the complainant and is entitled to retain the documents till the complainant places sufficient funds with the respondent Bank.

VIEWED from another angle, in the documents L.Rs. (Annexures ''H'' to ''N'') issued by the Transport Companies, the respondent bank has been shown as consignee. The complainant does not figure anywhere in such documents and accordingly it is the respondent Bank being consignee, has a right to retain the documents in dispute and not the complainant, until the complainant satisfies the respondent Bank by placing sufficient funds with them for retiring those documents. There is no dispute that no money has been paid by the complainant so far for the purchase of goods to the respondent Bank which has given Letters of Credit. We have also been informed that the complainant has also taken possession of the goods in respect of L.Cs. Nos. 17/92, 18/92, 19/ 92 and 21/92 93 and the goods on L.Cs. Nos. 16/ 92 and 20/92 93 as referred to in para 3 of the reply have not been received as yet by the complainant. Despite this, no money has been paid by the complainant to the respondent Bank. In these circumstances, the complainant is not en titled to such documents.

IN view of what is discussed above, there is no force in the complaint and the complainant is not entitled to any relief(s). The complaint is dismissed with no orders as to costs. Complaint dismissed.