1996 (8) TMI 518 - SC - Indian Laws

Summary

Issues Involved:
1. Negligence and Deficiency in Service by the Bank
2. Forgery and Fraud Allegations
3. Interpretation of ICC Rules

Summary:

Negligence and Deficiency in Service by the Bank:
The respondent entered into a contract with a French firm for the supply of cotton grey sheeting. The goods were shipped, and Bills of Exchange were drawn on the Buyer. These documents were sent to the appellant bank, which forwarded them to the French Bank. The documents were returned unpaid multiple times. The respondent claimed the entire amount of the Bills of Exchange from the appellant, alleging negligence and deficiency in service for not obtaining co-acceptance by the French Bank. The National Consumer Disputes Redressal Commission (Commission) held the appellant liable, directing it to pay the respondent French Francs 4,10,000/- with interest and costs.

Forgery and Fraud Allegations:
The appellant sought a review of the Commission's judgment, alleging that the respondent had forged a letter dated 26th August 1991 (No. 2776) to include instructions for co-acceptance by the French Bank, which was not present in the original letter (No. 2775). The Commission did not decide on the forgery allegation, stating that even without the disputed letter, the appellant was still liable under the ICC Rules. The Supreme Court, however, found overwhelming evidence that the letter No. 2776 was forged by the respondent to obtain a favorable judgment. The Court emphasized that authorities have the power to recall judgments obtained by fraud.

Interpretation of ICC Rules:
The Supreme Court analyzed the ICC Rules, particularly Articles 2, 3, and 15, which outline the responsibilities of the remitting bank, collecting bank, and presenting bank. The Commission had misinterpreted these rules by treating the appellant as both the remitting and collecting bank. The Court clarified that the responsibility for obtaining co-acceptance lies with the presenting bank, not the remitting bank. The Court found that the appellant had no obligation to obtain co-acceptance since the original letter (No. 2775) did not include such instructions.

Conclusion:
The Supreme Court allowed the appeals, set aside the Commission's judgments dated 16.11.1993 and 13.12.1994, and dismissed the respondent's original complaint with costs of Rs. 25,000/-.