The liability of a bank in handling documents and the liability of a foreign buyer for non-payment are contingent upon the proper receipt of goods, as per the Uniform Rules for Collection of International Chamber of Commerce.

VALMIKI J. MEHTA, J.

1. This Regular First Appeal is filed under Section 96 of the Code of Civil Procedure, 1908 (CPC) by the plaintiff in the suit impugning the judgment of the trial court dated 7.10.2017 by which the trial court has dismissed the suit filed by the appellant/plaintiff for recovery of Rs.27,22,124.50 from two defendants. Defendant no. 1/respondent no. 1 is the State Bank of India which was the banker of the appellant/plaintiff at New Delhi. Defendant no. 2 in the suit is the foreign buyer.

2. The facts of the case are that appellant/plaintiff pleads that it had a contract to export elastic clips to the respondent no.2/defendant no. 2 in Brazil and these materials were dispatched to the respondent no.2/defendant no. 2 by sea on 15.9.1998, 25.9.1998 and 7.10.1998. The documents with respect to the goods in question being bill of lading and other connected documents were handed over to the respondent no. 1/defendant no.1/bank for delivery to the Bank of the importer at Rio de Janeiro in Brazil against collection of the price of the goods. The documents were to be presented to the foreign buyer at Rio de Janeiro in Brazil, sixty days after shipment of the goods. In case of failure of the foreign buyer to make payment within sixty days then appellant/plaintiff also claims to be entitled to interest at 15.5% per annum from the respondent no.2/defendant no. 2/foreign buyer. In the plaint it is further pleaded that the respondent no.1/defendant no. 1/bank is guilty of negligence because the respondent no.1/defendant no. 1/bank did not take requisite steps to obtain the acknowledgement slips from the courier company showing delivery of the documents to Bank of the respondent no.2/defendant no.2 in Brazil. No steps, it is pleaded, were taken by the respondent no.1/defendant no. 1/bank to find out the whereabouts of the documents as the documents are pleaded not to have reached the Bank in Brazil. It is noted that admittedly the Bank in Brazil was nominated by the appellant/plaintiff. Accordingly, against the respondent no.1/defendant no.1 decree was claimed on account of negligence in handling and forwarding the documents to the nominated bank in Brazil by respondent no.1/defendant no.1 not getting proof of delivery of documents. As against the respondent no.2/defendant no. 2 the appellant/plaintiff pleads its entitlement on account of the fact that the goods have been received by the respondent no.2/defendant no. 2 but the respondent no.2/defendant no. 2 has not made payment of the goods inspite of receipt of the goods.

3. Respondent no.2/defendant no. 2/foreign buyer did not appear in the suit inspite of service and was therefore proceeded ex-parte. It was only the respondent no.1/defendant no. 1/bank which contested the suit. The respondent no.1/defendant no. 1/bank pleaded that it is not as if the Bank in Brazil to whom documents were sent for collection by the respondent no.1/defendant no. 1/bank was the nominated or corresponding or contractual bank of the respondent no.1/defendant no.1/bank, but this Brazilian bank was the bank directly nominated by the appellant/plaintiff for the respondent no.1/defendant no.1 to send documents of the goods. The respondent no.1/defendant no.1/bank denies any liability on the ground that there is no negligence committed by it. Respondent no.1/defendant no.1/bank pleaded that by sending the documents for collection the respondent no.1/defendant no.1/bank assumes no responsibility or liability for payment because it only acts as an agent of the appellant/plaintiff to receive the payment and that if payment is not received then the appellant/plaintiff has necessarily to sue the foreign buyer or the foreign bank in Brazil. It was also pleaded by the respondent no.1/defendant no.1/bank that as per the information received by it from the Brazilian bank the appellant/plaintiff had settled the matter with the respondent no.2/defendant no. 2. The respondent no.1/defendant no.1/bank