IMPORTANT POINT
Where under a discounting agreement with a bank, exporter entrusted documents and bills relating to export to negotiate the documents through a foreign Bank named in the agreement and the bank realised export proceeds in local currency of the foreign country but not in U.S. Dollars as stated in document due to restrictions in the foreign country, no deficiency in service could be imputed to the Bank for not realising export proceeds in U.S. Dollars and for the delay in collecting the export proceeds.

Headnote:(i) Banking Law-Discounting an instrument after purchasing from customer and accepting documents for collection-Distinction between.
       When a bank, after purchasing or discounting an instrument from a customer, credits the customer with the amount of the instrument and allows the customer to draw against the amount as credited before the bill or instrument is cleared, then the bank would be collecting the money not for the customer but chiefly for itself. If the bills and the relevant documents presented by its drawer are accepted by a banker with endorsement in its favour and the same are immediately discounted by the banker without waiting for its collection, by giving full credit for the entire amount of the document, so presented, the banker itself becomes a purchaser and the holder thereof for full value. A banker discounts a bill as opposed to taking it for collection or as security for advances, when he takes it definitely and at once as transferee for value and that it does not matter that the amount of the bill, less discount, is carried to current account as in the case of a customer that is the usual course and where the transaction is really one of discounting, the banker is of course at liberty to deal with the bill as he pleases rediscounting or transferring it. (Para 9)
       (ii) Consumer Protection Act, 1986-Section 2(g)-Deficiency in Service-Respondent exporter under discounting agreement entrusted documents relating to export and bills of exchange with appellant Bank to negotiate same through a named foreign Bank-Allegation that Bank had failed to collect money in foreign currency indicated in documents but collected in local currency-Claim for damages-Held : No deficiency in service-Appellant bank negotiated documents as provided under agreement-So did foreign bank-Conversion of local currency in U.S. $ became difficult on account of policy of Sudan Government-Appellant Bank was acting for and on behalf of respondent-All that was required to be done under terms of agreement and under contract had been done by the two Banks.
       While it is the contention of the appellants that the exporter had entrusted the bank to negotiate certain documents through a certain bank mentioned therein when in fact that bank had failed to collect the money in foreign exchange but collected only in local currency in the foreign country and not in the currency indicated in the documents and thus there was no liability at all on the part of the appellants, the respondent would submit that the appellants having purchased the documents in question were in fact collecting the monies for their own benefit and not for the benefit of the respondent when the documents had clearly indicated the manner in which the consignee get the goods except after payment of cash no delivery could have been made, the appellant bank had acted with negligence and, therefore, is liable to make good the loss suffered by it. (Para 10)
       The documents in question were furnished to the appellant bank with the bills of exchange to negotiate the same through the foreign bank on arrival of the goods at Port Sudan in exchange for a sum mentioned therein in U.S. Dollars in cash agains documents at site of the bills of exchange and pay to the order of the Corporation Bank fort the value against the tea shipped from Cochin to Port Sudan. These bills stood purchased by the Corporation Bank with advice thereof with several conditions and the most important thereto being the following:
       "We shall exercise due diligence in the selection of our agents. However, in the event you designate a correspondent other than the one of our own selection, we shall follow your instructions upon the explicit understanding that you assume and confirm all the acts of such correspondent of your own choosing and agree to hold us harmless from all consequences thereof." (Para 8)
       The consignee and the consignor have clearly indicated that the documents had to be negotiated through the foreign bank and the mode of payment was through the foreign bank. If that is so, the appellants were acting for and on behalf of the respondent when they sent the documents to the named bank for negotiations and collection of the money due under the agreement the appellants could not have sent the documents to any other agent inasmuch as payments had to be made only through that foreign bank and that foreign bank as was the usual practice realise the documents against payment in local currency which was hitherto convertible in foreign exchange in U.S. Dollars could not be done on account of policy of the Sudan Government. If that is so, it is very difficult to perceive of a situation regarding the deficiency in the service rendered by the appellant bank. The appellant bank negotiated the documents as provided under the agreement; so did the foreign bank but the conversion of the local currency to U.S. Dollars became difficult on account of policy of the Sudan Government. When the realisation of the money in U.S. Dollars was frustrated by reason of the governmental action, we fail to understand as to how the appellants could be held to be responsible for the same. The Commission totally failed to appreciate this aspect. Whatever may be the position with regard to the collection procedure that by discount or purchase of the bills or otherwise, one thing is clear that all that was required to be done under the terms of the agreement and under the contract had been done by the two banks. Therefore, we do not think that the Commission was justified in having reached the conclusion the appellants services were deficient so as to attract the provisions of the Consumer Protection Act. (Para 10)
       (iii) Consumer Protection Act, 1985-Claim petition/complaint-Time limit for filing-Position prior to insertion of Section 24A-Claim petition must have been filed within reasonable time-Reasonableness of time depends upon facts of each case-In case of claim for indemnifying losses suffered three years period prescribed in Limitation Act should be reasonable claim. (Para 11)

JUDGMENT

Rajendra Babu, J.-The respondent before us filed a petition before the National Consumer Disputes Redressal Commission (hereinafter referred to as the Commission ) to claim that the respondent has been exporting tea to Sudan from 1970 till 1982. The respondent had effected exports of 13 consignments of tea to M/s. Sudan Tea Company, Khartoum, Sudan during the period between December 11, 1980 and March 2, 1981. The respondent who had credit facilities with the appellants entrusted the documents relating to export of tea for the purpose of realising the proceeds thereof from the consignee. The appellants issued advice of purchase of bills to the respondent in respect of the goods covered by several invoices. The appellants negotiated the documents relating to the exports effected by the respondent through M/s. EL Nilein Bank, Khartoum, Sudan (hereinafter referred to as the foreign bank ). The respondent claimed that he did not ask the appellants to negotiate the export documents through any particular bank in Sudan but the appellants on their own appointed the foreign bank for realising the export proceeds from the consignee; that the appellants had not at any time consulted or even obtained the respondent s opinion in the matter of appointing the foreign bank; that the appellants had to release the export documents to the cosignee only on payment of the export value in U.S. Dollars and the instructions to release the shipping documents to the consignee to enable him to take delivery of the consignment as denoted by the expression cash against documents . It is further claimed that the appellants should not have realised the export documents without receiving the export value from the consignee in U.S. Dollars. It is contended that the invoices were realised in U.S. Dollars and the appellants could not have realised the export documents before ensuring that the export proceeds could be repatriated to India in U.S. Dollars. In accordance with the directions of the Reserve Bank of India in the matter of exports, the proceeds had to be realised and repatriated to India only in U.S. Dollars and not in any other currency. The appellants did not inform the respondent of any difficulties experienced by them in the matter of negotiations of the aforesaid export documents at any time prior to the completion of the exports covered by the invoices in question. Moreover, the appellants did not approach the respondent in effecting any changes in the authority given by it in the matter of negotiating the said documents. The respondent had taken insurance coverage for the exports effected by them from the Export Credit Guarantee Corporation of India Limited (hereinafter referred to as the Corporation ) to cover the risks involved in the export business. After the respondent was advised by the appellants that they could not realise the export proceeds in U.S. Dollars due to certain restrictions imposed by the Sudan Government requested the respondent to approach the Corporation to settle the claim using the insurance policy taken by the respondent in respect of the goods covered by the documents in question. The Corporation finally paid ninety per cent of the export proceeds covered by the documents. The appellants illegally recovered the balance from the respondent by adopting the balance of ten per cent of the export value to the account of the respondent with them. The respondent also claimed a sum of Rs. 52,816.76 p. towards interest for the period until the insurance claim was settled by the Corporation. These amounts were debited to the account of the respondent. The appellants also recovered a sum of Rs. 97,482.19 p. towards foreign exchange fluctuations charges from the respondent. It was claimed by the respondent that the appellants had totally failed to execute the specific instructions of the respondent to realise the export documents to the consignee only after accepting in cash in U.S. Dollars but were negligent in hand

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