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Judgment
BOTH the fora below have dismissed the complaint filed by the petitioner/complainant. Aggrieved by that order, the petitioner has filed the present revision petition.
DELAY of 15 days in filing the Revision Petition is condoned. We have heard the counsel for the petitioner, at length. The facts germane to this case are these. M/s. Chaman Lal Setia Exports Ltd., the complainant in this case, obtained Whole Turnover Standard Policy from Export Credit Corporation (India) Ltd, OP1 on 03.09.2002. The complainant paid a sum of Rs.10,000/ - and the same was renewed vide fresh agreement dated 22.12.2004. The complainant company shipped 9 containers under the Contract vide its Invoices Nos. 4408, 4409 and 4431. The non -negotiable set of documents was sent to the Buyer vide letter dated 10.04.2005, but before the filing of the complete set of documents with the Punjab National Bank, IBB, Amritsar, the petitioner received a mail dated 11.04.2005, from the Buyer, which reads as under : - ''''Monday, April 11, 2005 4.00PM Sub : Re. Attn. Mr. Setia Dear Rajeev, You should reconsider the way you are handling this matter. We are not going to accept the documents of the 9 containers until you have solved the problem. All the losses will be charged to you and you are concerned about the SGS Charges?!?! I hope we can avoid a heavy court case, so reconsider and then act. Best regards Masoud pajouh ''''.
This is an indisputable fact and its admission comes out from the horse ''s mouth itself (the complainant), that the said mail was sent due to the reason that some rice, shipped earlier, gave an awful smell. That was a dispute between the Buyer and the complainant, in respect of some previous transaction. On receipt of mail dated 11.04.2005, the petitioner itself recalled the consignment of 9 containers back from transit on 12.04.2005 while the said containers were in transit at Singapore. It must be borne in mind that the recall order was given by the petitioner itself. It is clear that the Buyer had refused to accept the second consignment.
THE case of the complainant is that repudiation of contract by the Buyer is between the ''''insured perils '''' under the Factoring Agreement which the OPs failed to pay the same. Consequently, the complaint was filed before the District Forum, with the following prayers: - ''''i) A sum of Rs.18,26,881/ - on account of freight and shipment expenses for dispatch and calling back the shipment from transit at Singapore. ii) A sum of Rs.50,000/ - on account of compensation due to all the mental agony and harassment caused by the OPs to the complainant. iii) Interest @ 18% p.a. on the amounts awarded to the complainant against the OPs. iv) Full costs of the proceedings v) Any other relief to which the complainant is found and entitled under law and equity ''''.
COUNSEL for the petitioner vehemently argued that this case is clearly covered within the insured perils, laid down in the contract. The attention of this Commission was invited towards the Export Factoring Agreement. The emphasis was laid on Clause 1.1 (14) - Factoring Charge, Clause 1.1 (15) Insured Perils, Clause 3.1, Clause 7.1.1, Clause 9, Clause 13.1 and other Clauses. All these arguments are lame of strength. The following observations made by the State Commission are important : - ''''20. . ... ... Receiving a factoring return and cheque does not amount to acceptance of the same. The encashment of the cheque was done in a routine manner since different people are placed for different jobs. However, at the time of adjustment, it was found that since the notification was submitted after the loss had occurred, the factoring charges were returned vide letter dated 03.06.2005. As per principle of Law of Insurance, there cannot be insurance of the risk that has already materialized. Clause 3.1 of the Factoring Agreement provides for immediate notification together with payment of factoring charges as applicability of insurance cover starts from the date of shipment and there cannot be valid insurance without consideration. Under Clause 9.1 of the agreement, only the approved receivables are covered and in the present case, no receivables came into existence ''''.
''''36. From the above, it is clear that the factoring charges are payable in Indian Rupees by the client to ECGC being the percentage of the value of every notified receivable. As per the definition of ''Approved Receivable '', the receivables shall be treated for this period in the order in which they become due for payment. In the present case, the appellant had earlier sent the consignment to the buyer M/s. Basmati GmbH company and the email dated 11.04.2005, received from the said buyer shows that there was some dissatisfaction of the buyer, as the rice shipped earlier had awful smell and the Director of the appellant was asked to come to Stockholm, Sweden and Germany to resolve the problem. Immediately, on receipt of the e -mail on 11.04.2005, the appellant recalled the shipment, of his own, and not on account of any repudiation of the contract by the said buyer and this is not covered under the clause 1.1 (15) i.e., Insured Perils. Under the term ''Insured Perils '', the sub -clause (c ) deals with the Contract Repudiation, which is reproduced as follows: - ''''Contract repudiation means the wrongful refusal by an approved debtor to accept for payment the Bill of Exchange drawn on such debtor by the Client and/or to accept delivery of the goods shipped to him by a client under a currently valid Supply Contract ''''.
As discussed above, the buyer never refused wrongfully to accept the bill of exchange nor refused to accept the delivery of goods shipped to him, but he only cautioned the appellant, who was supplier, that the supply of rice should be of high quality and not like that shipped earlier which was giving awful smell. This email cannot be considered to be Contract Repudiation, but it is only a sort of business talk between the supplier and the buyer and, as such, there was no insured peril and the respondents were not liable. Complete set of documents was not supplied to the bank and the documents were never presented to the buyer for acceptance. The notification was submitted by the appellant after the loss and for that reason, the same was returned after going through the documents ''''.
UNDER these circumstances, the judgment given by the fora below cannot be faulted. The dispute lies between the complainant and its buyer at Germany. The contract stipulates that jurisdiction of their dispute lies in the country of buyer. The ship was called back at the instance of the complainant itself. No deficiency can be attributed on the part of the OPs. The story advanced by the complainant does not just stack up. The complainant has no bone to pluck with the OPs and consequently its revision petition is dismissed. No costs.