Sushil Kumar More vs Sheikh Asadur Rahman & Ors
2022 Latest Caselaw 2817 Cal/2

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                   IN THE HIGH COURT AT CALCUTTA

                   (Ordinary Original Civil Jurisdiction)

                               ORIGINAL SIDE

                        [COMMERCIAL DIVISION]

Present:

The Hon'ble Justice Krishna Rao

                               CS 105 of 2018

                              Sushil Kumar More

                                    Versus

                      Sheikh Asadur Rahman & Ors.



            Mr. Krishnaraj Thaker
            Mr. Asit Kr. De
            Ms. Sormi Dutta
                                                  .....For the Plaintiff


Heard on                : 17.11.2022

Judgment on             : 22.11.2022

Krishna Rao, J.:


      Plaintiff has filed the suit claiming decree for an amount of US $

615,264 against the defendant no. 1 and 2 in the alternatively decree for US

$ 2,50,000 as loss and damages and decree for US $ 36702 against the

defendant no. 1 along with interest @ 18 % per annum till the realization of

the said amount.
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      The plaintiff is engaged in the business of trading and exporting of

edible commodities including rice and wheat. In the month of May, 2015,

the defendant no. 1 and his representatives approached the plaintiff and

offered to purchase at a regular basis substantial quantity of wheat and

non-basmati rice of Indian origin at mutually agreed price. It was also

decided by and between the parties that the payment of the price for export

of the wheat and Indian origin non-basmati rice would be made though

irrevocable Letters of Credit issued by the defendant no. 2 as per the advice

of the defendant no. 3. As per the negotiation between the plaintiff and the

defendant no. 1, the defendant no. 1 caused defendant no. 2 to issue

irrevocable Letters of Credit in favour of the plaintiff for supply of an

aggregate quantity of 1,000 MT of Indian origin non-basmati rice for US $

3,90,000 @ USD 388.00 per MT and freight @ 2.00 per MT. The plaintiff has

raised its proforma invoice dt. 30.06.2015 for the defendant no. 1 to cause a

Letter of Credit to be established in favour of the plaintiff.


      On 02.07.2015, the defendant no. 2 established its irrevocable Letter

of Credit dt. 02.07.2015 in favour of the plaintiff for US $ 3,90,000. The said

Letter of Credit permitted partial shipments and stipulated 08.09.2015 as

the latest date of shipments. The Letter of Credit was governed by the latest

version of Uniform Customs and Practice for Documentary Credits namely,

UCP 600. The plaintiff affected supply of an aggregate quantity of 1000 MT

Indian non-basmati rice under the said Letter of Credit. On 09.07.2015, the

plaintiff dispatched 240 MT of Indian non-basmati rice valued at US $

93,600 for which the plaintiff raised an invoice dt. 05.07.2015. The invoice
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and other documents required under the said Letter of Credit were tendered

by the plaintiff to the defendant no. 4 for presentation to the defendant no.

2. The defendant no. 4 duly presented the documents to the defendant no. 2

and the same was received by the defendant no. 2 on 04.08.2015.


      By a notice dt. 11.08.2015, the defendant no. 2 had wrongly claimed

discrepancies in the documents presented by the defendant no. 4 under the

1st export bill. The documents presented by the plaintiff wherein in

accordance with the terms of conditions of the Letter of Credit, applicable

provisions of UCP 600 and International Standard Banking Practices. None

of the purported discrepancies claimed by the defendant no. 2 in its notice

dt. 11.08.2015 are valid or tenable.


      In any event, the defendant no. 2 was precluded from claiming the

documents did not constitute a complying presentation after five banking

days had lapsed from the date of receipt of the document. On 09.07.2015,

the plaintiff has dispatched 214 MT of Indian non-basmati rice valued at US

$ 83,460 for which the plaintiff has raised an invoice dt. 05.07.2015. The

plaintiff has tendered the invoice and other documents required under the

Letters of Credit to the defendant no. 4 and the defendant no. 4 had

presented the said documents to the defendant no. 2 on 04.08.2015. By a

notice dt. 11.08.2015, the defendant no. 2 wrongfully claimed discrepancies

in the documents presented by the defendant no. 4 in respect of the second

export bill.


      On 06.07.2015, the plaintiff has dispatched 246 MT of Indian non-

basmati rice valued at US $ 173,940 for which the plaintiff has raised an
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invoice dt. 05.07.2015. The invoice along with other documents as required

under the Letters of Credit were tendered by the plaintiff to the defendant

no. 4 and the defendant no. 4 had presented the same to the defendant no.

2 which was received on 04.08.2015. On 11.08.2015, the defendant no. 2

wrongly claimed discrepancies in the documents presented by the defendant

no. 4 under the third export bill.


      On 02.07.2015, the plaintiff has dispatched 80 MT of Indian non-

basmati rice valued at US $ 7,800 for which the plaintiff has raised invoice

on 05.07.2015 along with other documents required under the Letters of

Credit and was presented to the defendant no. 4. The defendant no. 4 had

presented the same to the defendant no. 2. On 23.08.2015, the defendant

no. 2 had wrongly claimed discrepancies in the documents presented by the

defendant no. 4 with respect of the fourth export bill.


      On 23.07.2015, the plaintiff has dispatched 20 MT of Indian non-

basmati rice valued at US $ 31,200 for which the plaintiff raised invoices

along with other required documents under the Letters of Credit and were

tendered to the defendant no. 4 and accordingly the defendant no. 4 had

presented the defendant no. 2. On 23.08.2015, the defendant no. 2 had

wrongly claimed discrepancies in the documents presented by the defendant

no. 4 under the fifth export bill.


      By three several letters all dt. 13.12.2015 and one letter dt.

14.12.2015

, the defendant no. 2 had returned the document presented by

the defendant no. 4 for payment under the Letter of Credit in which the

defendant no. 2 had wrongly alleged for non-receipt of goods supplying by

the plaintiff.

As per record, the writ of summons were served upon all the

defendants and the defendant no. 4 had entered appearance and filed

written statement but defendant nos. 1, 2 and 3 have not entered

appearance and the case has proceeded undefended against the defendant

nos. 1, 2 and 3.

The plaintiff has examined one witness in support of his case and

during his examination two documents were exhibited i.e. examination-in-

chief tendered by the plaintiff as Exhibit '1' and Letters of Credit and

invoices as Exhibit '2' collectively.

On 06.07.2015, the plaintiff has dispatched 446 MT of non-basmati

rice of Indian Origin by truck and invoice for USD 1,73,940 was raised. The

defendant no. 4 being the negotiating bank of the plaintiff has placed all the

documents as per Clause 46A of the Letter of Credit under export bill

covering schedule dt. 29.07.2015 before the defendant no. 2. All the

documents were received by the defendant no. 04.08.2015 which appears

from the stamp affixed on the said document. On 11.08.2015, i.e. after the

period of 5 working days of received of the documents which expired on

10.08.2015, the defendant no. 2 refused to release the amount of USD

1,73,940 on the following grounds of discrepancies in the document :

"a. Source of incoterm is not mentioned in the invoice (not a requirement under clause 46A of the LC term) (invoice -Pg. 100 of Judges Brieff forming part of Exhibit 2)

b. Consignee mentioned in the truck receipt is not as per clause no. 3 under field no. 46A of the credit (not a requirement under Clause 46A of the LC term). (Truck receipt - 93 to 96 of Judges Brief forming part of Exhibit 2)

c. Port of loading is not mentioned specified in the truck receipt (not a requirement under Clause 46A of the LC term).

d. Gross weight in certificate of origin conflicts with truck receipt and packing list. (not a requirement under Clause 46A of the LC term.) (certificate of origin - pg 98 of Judges Brief forming part of Exhibit 2) e. Number of bags in the certificate of origin conflict with that of truck receipt and packing list. (not a requirement under Clause 46A of the LC) term).

None of the said grounds of discrepancies in documents are tenable and valid. Moreover rejection of payment on the alleged above- mentioned discrepancies cannot be considered as the same was raised beyond 5 days of receipt of the documents which is in contravention of Article 14 (b) and 16 (d) and 16 (f) of the UCP 600."

The defendant no. 2 thereafter on 13.12.2015 had returned all the

documents on the grounds that the concern custom authority has confirmed

non receipt of goods against the Letters of Credit. The ground raised by the

defendant no. 2 is contrary to the documents i.e. invoice cum packing list

which appears at page 116 of judge's brief of documents which is exhibited

as part of Exhibit '2' which bears the signature and stamp of Bangladesh

Customs Authority confirming the entry of goods to Bangladesh.

As regard the dispatch of 240 MT of non-basmati rice of India origin

on 09.07.2015 by truck, the plaintiff has raised invoice for USD 93,120 to

the defendant no. 4 and the defendant no. 4 being the negotiating bank of

the plaintiff placed all the documents as per Clause 46A of the Letter of

Credit under the export bill covering schedule dt. 09.07.2015 which is

marked as part of Exhibit '2' before the defendant no. 2 for release of the

amount of the Rs. 93,600/-. All the documents under the export bill

covering schedule dt. 29.07.2015 was received by the defendant no. 2 on

04.08.2015 as it appears from stamp affixed on the said document. The

defendant no. 2 on 11.08.2015 being part of Exhibit '2' after the period of

five working days from the receipt of the documents which expired on

10.08.2015 refused to release the amount of USD 93600 on the following

discrepancies in the documents:

"a. Description of the goods mentioned in the invoice does not correspond to credit. (ground not valid as invoice mentioned country of origin - Invoice pg. 14 of Judges Brief forming part of Exhibit 2)

b. Source of incorterm not mentioned in the invoice (not a requirement under clause 46A of the LC term) c. Truck receipts made out the order of the issuing bank I/O Straight Consignment. (not a requirement under clause 46A of the LC term, Truck receipt - Pg. 9 to 12 of judges Brief forming part of Exhibit 2)

d. Consignment information in the Truck receipt omits the business identification no. (not a requirement under clause 46A of the LC term)

e. Carrier and Capacity of signatory in the truck receipt is not identified. (not a requirement under clause 46A of the LC term)."

The grounds of discrepancies in the documents is not tenable as the

same was raised after the period of five days of receipt of the documents

which is in contravention of Article 14 (b) and 16 (d) and (f) UCP 600. The

defendant no. 2 vide message dt. 13.12.2015 returned all the documents on

the allegation that the concern customs authority has confirmed non-receipt

of goods against the Letter of Credit but in the invoice cum packing list

which is exhibited as part of Exhibit '2' bears the signature and stamp of

Bangladesh Customs Authority confirming the entry of goods to Bangladesh.

As regard dispatch of 240 MT of non-basmati rice of Indian origin by

truck on 11.12.2015, the plaintiff has raised invoice of USD 83460 to the

defendant no. 4 and the defendant no. 4 has placed the documents as per

Clause 46A of the Letters of Credit under export bill covering schedule dt.

29.07.2015 which is part of Exhibit '2' to the defendant no. 2 for release of

the said amount. All the documents under the export bill was received by

the defendant no. 2 on 04.08.2015 as per the stamp affixed on the said

document. On 11.08.2015, the defendant no. 2 has sent message being part

of the Exhibit '2' after the period of five working days of receipt of document

which expired on 10.08.2015 and refused the release the amount of USD

83460 on the same grounds as stated above. Vide message dt. 13.12.2015,

the defendant had also returned all the documents on the ground that the

concern customs authority has confirmed non-receipt of goods against the

Letter of Credit which is marked as exhibit being part of Exhibit '2' but as

per the said document, the ground raised by the defendant no. 2 is not

correct as the signature and stamp of the Bangladesh appearing on the

invoice cum packing list confirming the entry of goods at Bangladesh.

The plaintiff had against dispatched 80 MT and 20 MT of non-basmati

rice under two consignments notes dt. 22.07.2015 and 23.07.2015 and the

plaintiff has raised invoice for a sum of USD 31200 and USD 7800

respectively total amounting to USD 39000. The defendant no. 4 had raised

all the required documents which is exhibited as part of the Exhibit '2' to the

defendant no. 2 for releasing of USD 39000 and the same was received by

the defendant no. 2 on 18.08.2015 as the same confirmed from the stamp of

defendant no. 2. On 23.08.2015, the defendant no. 2 through a message

being part of Exhibit '2' had refused to release the said payment on the

following discrepancies :

"a. Carrier is not identified in truck receipt. (not a requirement under Clause 46A of the LC term.) (Truck receipts - pg. 179 to 180 and 135 to 139 of Judges Brief of document forming part of exhibit 2)

b. Capacity of the signatory is not identified in the truck receipt. (not a requirement under Clause 46A of the LC term.)

c. Consignment mentioned in the truck receipt "to the order of" instead of "Straight consignment" (not a requirement under Clause 46A of the LC term.)

d. Country of origin not mentioned in the phytosanitary certificate. (Phytosanitary Certificate - pg. 172 & 173 of Judges Brief forming part of Exhibit 2).

Although the purported discrepancies in these documents were raised within 5 working days of receipt of the document, none of the discrepancies are tenable."

On 14.12.2015, the defendant no. 2 had returned all the documents

on the ground that the concerned customs authority had confirmed non-

receipt of goods against Letter of Credit which is part of the Exhibit '2' but

from record, it reveals that the ground on which the defendant no. 2 has

returned the document is not correct as from the invoice cum packing list of

80 MT rice and 20 MT rice which is part of the Exhibit '2' bears the

signature and stamp of Bangladesh Customs Authority confirming the entry

of the said goods at Bangladesh.

As per DOS Circular letter no. 12 dt. 15.09.2005 issued by the

Bangladesh Bank being the regulatory bank of Bangladesh with respect of

authorized dealer (AD) Bank which is exhibited as part of Exhibit '2' for the

purpose of calculating five working days from receipt of documents,

Saturday has been considered as working day and Khulna Branch of

defendant no. 2 has been recognized as Authorized Dealer (AD) Bank which

is exhibited as part of Exhibit '2'.

As per part of the Exhibit '2', the defendant no. 2 even on previous

occasions also despite of raising similar discrepancies in the documents had

released the payments.

The plaintiff has also delivered and sold 100 MT of wheat on

16.08.2015 and raised invoice of USD 24000 against the defendant no. 1

which is also marked as part of Exhibit '2' but the defendant no. 1 inspite of

receipt of the invoice did not make any payment to the plaintiff.

After going through the plaint, evidence of PW -1 and the documents

exhibited in the instant case, it is found that the grounds which have been

raised by the defendant no. 2 and has not released the payment are contrary

to the documents as the discrepancies which are mentioned by the

defendant no. 2 are not in consonance with the UCP 600 and from the

documents it also prove that all the goods have been received at

Bangladesh.

In view of the above, this Court finds that the plaintiff has transported

the Indian non-basmati rice and wheat and the same have been received at

Bangladesh and thus the defendant no. 1 and 2 are liable to pay USD

615624 along with interest @ 18% per annum from the date of the invoices

raised by the plaintiff till the realization of the said amount.

The plaintiff is entitled to get a decree for the sum of USD 615624

along with interest @ 18% per annum from the date of respective invoices till

the realization of the said amount from the defendant nos. 1 and 2.

CS 105 of 2018 is disposed of. Decree be drawn accordingly.

(Krishna Rao, J.)