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Judgment
Sathish Ninan, J
The plaintiff in a suit for money challenges the dismissal of the suit.
Plaintiff is engaged in processing, exporting and sale of cashew nuts and allied products. Ext.A1 agreement dated 24.11.1989 was entered into between the plaintiff and the first defendant. As per the agreement, in consideration of the plaintiff exporting cashew kernels on behalf of the first defendant, the plaintiff will be paid an incentive of 4.75% on the FOB value of the exported materials. The second defendant is the clearing and forwarding agent of the plaintiff. It is the plaintiff's case that, cashew kernels worth ₹ 1,96,49,665/- were exported by the plaintiff in the account of the first defendant for which the plaintiff is entitled to ₹ 9,33,359/-. However, the defendant paid only an amount of ₹ 8,14,821/-. Balance amount of ₹ 1,18,537-94 is still payable. Though the first defendant got all the Registered Exporter (REP) benefits from the exports made by the plaintiff, the first defendant is refusing to pay the balance amount due as incentive. The second defendant caused delay in forwarding the shipping bill and hence the second defendant is also to be made liable for the damages. It is accordingly that the suit was filed.
The first defendant contended that, the plaintiff failed to furnish within time the necessary documents to enable the defendant to claim the export benefits. Since in spite of repeated demands the documents were not forwarded, the first defendant was unable to claim the REP benefits. Therefore, the plaintiff is not entitled for the amount claimed. It was also contended that the suit is barred by limitation.
The second defendant contended that all the documents were forwarded to the plaintiff without any delay and that there is no cause of action as against the said defendant.
The trial court held that the plaintiff failed to prove that the necessary documents as were required to be forwarded to the first defendant were forwarded within the stipulated time, thus disabling the first defendant from claiming the REP benefits in full. Thus, it was held that the plaintiff is not entitled to claim the incentive amount. It was also held that the plaint claim is barred by limitation.
Heard learned counsel on either sides.
Ext.A1 is the agreement between the parties. Clause-3 of Ext.A1 agreement reads thus :-
“The Processors further agree to submit to the Exporter after each shipment, the relevant letter/letters of credit and all relevant documents pertaining to the said shipment including Inter alia, valid bills of lading duly endorsed, photostat copy of GR Form, Packing Lists, Weight Certificates, Export Inspection Agency Certificates and all other necessary documents in accordance with the requirements of the letter/s of credit. The above mentioned documents are to be made available to the Exporter within such period as well enable the Exporter to negotiate the documents within 15 days of the bills of lading.”
As per the clause the plaintiff is to make available the relevant documents to the first defendant within 15 days of the bills of lading.
In terms of Clause 5 of Ext.A1, the plaintiff is entitled to an incentive of 4.75% on the FOB value of the cashew kernels exported. Clause 5 reads thus:-
“In consideration of the processors exporting Cashew Kernels on behalf of the Exporter, the Exporter hereby agrees to pay to the processors an incentive of 4.75% on the F.O.B. Value of the said Cashew Kernels, so exported, within 15 days after submission of full set of clean documents.”
Ext.A4 letter dated 27.11.1990 issued by the first defendant to the plaintiff reveals that, though the export was in March 1990, it is in November 1990 that the entire documents were made available by the plaintiff. Clause-3 of Ext.A1 required the plaintiff to make available the relevant documents within 15 days of bill of lading. However, the consequence of delay if any, has not been stipulated in Ext.A1. It is not in dispute that all the relevant documents were forwarded subsequent to Ext.A4. In terms of Clause-5 of Ext.A1 referred to earlier, the plaintiff is entitled to the incentive on submission of the relevant documents.
It is the contention of the first defendant that, consequent on the delay on the part of the plaintiff in forwarding the documents, the first defendant was not able to secure the REP benefits and therefore, the plaintiff is not entitled for the amount claimed as incentive.
As noticed earlier, Clause-5 of Ext.A1 stipulates for incentive of 4.75% to the plaintiff in consideration of they making exports on behalf of the first defendant. The receipt of REP benefits by the first defendant is not made as a condition for the grant of such incentive.
It is the argument of the first defendant that the grant of incentive is conditional upon the first defendant receiving the REP benefits and that it is clear from a reading of clauses 5 and 6 of Ext.A1 together. Clause 6 of Ext.A1 reads thus:-
“In respect of the exports made by the Processors under the terms of this agreement, the Exporter, will be entitled to claim all the benefits accruing to eligible Registered Exporter/Registered Export House/Registered Trading House under the terms of the present Import Trade Control Policy, or under the Income Tax Act and Rules.”
Assuming it to be so, apart from the bare contention that, consequent on the delay on the part of the plaintiff in forwarding the relevant documents the first defendant did not get the REP benefits, there is total absence of any material in the said regard. There is not even a communication from the first defendant to the plaintiff in the above regard. No document evidencing the rejection of the claim is produced. Therefore, there is no material to find that the first defendant did not receive the benefits consequent on the delay in forwarding the documents by the plaintiff.
The trial court has relied on a handbook of procedures wherein it is said that, “Claims against loss of original bank certificate shall be preferred within a period of six months from the date of export. Applications received after the said period of six months will be rejected”. The said handbook was not produced or marked in the suit. It was not put to any witness. The binding nature of such handbook of procedures was also not established. At any rate, there is no evidence that the claim for REP benefits made by the first defendant was rejected on the ground of delay. Therefore, the plaintiff could not be denied the benefits payable in terms of Ext.A1 agreement. The finding of the trial court to the contrary is liable to be set aside and I do so.
As per clause 5 of Ext.A1, incentive is due after submission of the relevant documents. From Ext.A4 communication referred supra it is obvious that the documents were made available only after the date of Ext.A4 viz. 27.11.1990. For recovery of the incentive, the plaintiff has three years from the date of submission of the documents to institute the suit. Therefore, the suit filed on 27.11.1992 is within the period of limitation. The finding to the contrary by the trial court is not correct.
On the discussions as above, the plaintiff is entitled to the balance amount of incentive claimed viz. ₹ 1,18,537-94. Though the plaintiff has claimed interest at the rate of 18% from the date on which the amount was withheld by the first defendant viz. the date of Ext.A4 (27.11.1990), since admittedly the documents were submitted only after the issuance of Ext.A4, the plaintiff is not entitled for interest from the said date. The exact date on which the documents were made available is not on record. Therefore, the claim for interest up to the date of suit is only to be declined and I do so. With regard to the claim for interest from the date of suit, considering the prevailing rate of interest in Banking transactions, grant of interest at 6% per annum is deemed just and reasonable.
In the result, this appeal is allowed. The decree and judgment of the trial court is set aside. The suit is decreed allowing the plaintiff to recover an amount of ₹ 1,18,537-94 with interest at the rate of 6% per annum from the date of suit till date of decree, and thereafter also at the same rate till realisation, from the first defendant and its assets. The plaintiff shall be entitled for proportionate costs throughout.