PETITIONER:
INDIAN BANK
Vs.
RESPONDENT:
M/S SATYAM FIBRES (INDIA} PVT.LTD
DATE OF JUDGMENT: 09/08/1996
BENCH:
KULDIP SINGH, S. SAGHIR AHMAD
ACT
HEADNOTE
JUDGMENT
JUDGMENTS. SAGHIR AHMAD. J.
These are two appeals against the judgments of the National Consumer Disputes Redressal Commission, New Delhi. 2. The facts on record indicate that the respondent had entered into Contract No.31/89 with a French Firm M/s STE Kolori (for short, ’Buyer’) for supply of 1 lac metres of cotton grey sheeting of the value of French Francs 4,37,500/-. In due course, the goods were shipped to the Buyer and on 09.06.90, respondent drew two Bills of Exchange on the Buyer for French Franc 3,50,000/- and French Franc 87,500/-. The draft mentioned at the top that the Bills of Exchange had to be co-accepted by the Buyer’s bank. These documents were sent by the appellant to that Bank on 18.6.90 as requested by the respondent but on 9.7.90, the documents were returned unpaid. However, on the instructions of the respondent, the documents were re-presented to Banque Leumi, Paris on 13.7.90. On 9.4.91, on the instructions of the respondent, a telex was sent to Banque Leumi, Paris to transfer the documents to another French Bank, namely, Society Lyonnaise De Banque, Lyon, France, and on the same day, fresh Bills of Exchange dated 6.3.91 were sent to the French Bank at the request of the respondent. In these Bills of Exchange, there was no clause for co-acceptance by the French Bank which, however, returned the documents unpaid on 9.8.91. 3. On 26th August, 1991, respondent forwarded a fresh set of Bills of Exchange for being sent to the French Bank. The Bills of Exchange, on their face, specifically provided for acceptance by the Buyer and co-acceptance by the French Bank. 4. It appears that the Buyer, namely, M/s STE Kolori went under liquidation and an order was passed by the Commercial Court at Lyon, France for winding up the firm. The Court also appointed a Liquidator who wrote to the respondent to file its claim. 5. On 1st January, 1992, Napean Sea Rood Branch of the appellant at Bombay wrote a letter to the French Bank that payment of the Bills of Exchange forwarded to it earlier may be made. The French Bank wrote on 9.1.92 that the Bills of Exchange had not been paid as the Buyer was under liquidation. The Bank also, during course of correspondence, wrote that under French Law, co-acceptance by the Bank, was not permissible nor would it have given the Bank Guarantee, even if a request was made in that regard by the appellant for and on behalf of the respondent. It was, at this stage, that respondent gave a notice dated 26.3.92 to the appellant claiming the entire amounts of the Bills of Exchange and subsequently filed a complaint before the National Consumer Disputes Redressal Commission at New Delhi (for short, ’Commission’) claiming the value of the goods shipped to the Buyer at France, from the appellant. The Commission by its judgment and order dated 16.11.93 allowed the claim with the direction to the appellant to pay to the respondent French Francs 4,10,000/- with interest (in rupees) at the rate of 18% on the rupee equivalent of the above amount with effect from 31st December, 1989 together with a sum of Rs. 10,000/- as costs to the respondent. It was against this judgment that the claimant filed, in this Court, Civil Appeal No.1737 of 1995. The connected Civil Appeal No.1334 of 1995 has been filed against the judgment and order dated 13.12.94 by which the Commission has rejected the Review Petition filed by the appellant. Both the appeals were admitted by this Court on 20.2.95 and are being disposed of by this Judgment. 6. It may be stated that the Commission, while decreeing the claim of the respondent, had relied upon the Uniform Rules for Collection made by the International Chamber of Commerce as also the covering letter of the respondent dated 26th August, 1991 accompanying the two Bills of Exchange, which, according to the Commission, on the face of it, indicated that co-acceptance of the French Bank had to be obtained and since the appellant, while forwarding the Bills of Exchange to the French Bank, had not indicated in its letter that the Bills had also to be co-accepted by the French Bank, it acted negligently. This omission was also treated by the Commission as deficiency in service. 7. Review of this judgment was sought by the appellant on the ground that the respondent’s letter dated 26th August, 1991 accompanying the Bills of Exchange did not mention that co-acceptance of the French Bank had to be obtained. It was pointed out to the Commission that the letter dated 26th August, 1991 which was placed on the record by the respondent and in which a specific mention was made that coacceptance from French Bank had to be obtained, was a letter forged by the respondent to obtain a decree in its favour. The appellant contended that this letter was never issued to the appellant. The letter dated 26.8.91 which was actually issued to them did not contain any direction for obtaining co-acceptance by the French Bank. The Commission in its judgment dated 13.12.94 (disposing of the review application) has considered both the letters and has reproduced the contents thereof but it did not go into the question whether the letter filed by the respondent was a forged letter or not. 8. The relevant portion of the findings recorded by the Commission in its judgment passed on the review application is quoted below :-
" The Opposite Party - Bank - has
alleged that the letter of 26th
August, 1991 from the Complainant
to the Opposite Party - Bank which
was the letter with which the Bills
of Exchange were submitted to the
Opposite Party - Bank - for
collection, did not specifically
direct the Bank to secure co-
acceptance of the Bills of Exchange
by the French Bank. The Opposite
Party - Bank - has alleged that the
letter of 26th August, 1991
submitted as Annexure ’A’ to the
Complaint petition bearing No.2776
was not the true letter sent by
Complainant; it is a forgery &
fabrication. The true letter of the
same date (i.e. 26th August, 1991)
was No.2775 which was the covering
letter of Bills of Exchange and
this letter did not contain the
material instructions regarding co-
acceptance by the French Bank. For
facility the two letters are
reproduced below :
(i) Letter No.2776 of 26th August,
1991 from the Complainant to the
Opposite Party - Bank:
"We refer your letter dated
14.8.1991 informing us about return
of documents Nos. 0005207 (FOBC
17794) and 0005208 (FOBC 17795) for
Rs. 3,50,000 and FF 87,000/
respectively.
In this connection we are enclosing
fresh sets of Bills of Exchange
with a request to kindly represent
the documents immediately to our
buyer through M/s Societe
Lyonnaise De Banque, Lyon, France.
Kindly note that the Bills of
Exchange have to be accepted by our
buyer and co-accepted by the bank
viz; Societe Lyonnaise De Banque
for payment on 31.12.1991."
(ii) The letter No.2775 of 26th
August, 1991 from the Complainant
to the Opposite Party Bank:
"We refer your letter dated
14.8.1991 informing us about return
of documents Nos.0005207 (FOBC
17794) and 0005208 (FOBC 17795) for
Rs.3,50,000 and FF 87,000/-
respectively.
In this connection, we are
enclosing fresh sets of Drafts with
a request to kindly represent the
documents immediately to our buyer
through M/s. Societe Lyonnaise De
Banque, Lyon, France."
It will be noticed from the
letters reproduced above that the
material instruction regarding co-
acceptance of the Bills of Exchange
by the French Bank is absent in the
letter No.2775 whereas it is
specifically recorded in the letter
No.2776. According to the Opposite
Party - Bank - the letter of 26th
August No.2776 is a forgery created
by the Complainant for the purpose
of this case. During the hearing
there was considerable effort on
the part of the Opposite Party-Bank
- to prove that the letter No.2776
was never issued and this has been
forged to support the case of the
Complainant whereas the Complainant
vehemently maintained that this was
a genuine letter and that there was
evidence to support its contention.
We did not think it necessary to go
into this question. We only pointed
out to the Complainant that in the
ordinary course of correspondence,
in its letter of No.2776 the
Complainant should have stated that
this was in continuation of its
previous letter No.2775 and that
the letter No.2776 was necessitated
by the omission in the letter
No.2775 of the vital directions
regarding co-acceptance of the
Bills of Exchange. We did not get a
satisfactory answer to this
question.
We have also once again gone
through the records of the case,
the oral arguments and the written
submission made by the parties at
the rehearing limited to the
question of the letter No.2776
being a forgery and its effect on
the findings corded in the order of
this Commission of 16th November,
1993.
It will be observed from the
order that the Bills of Exchange
clearly specified that the same
were to be co-accepted by the
foreign bank besides being accepted
by the buying French Firm. In these
circumstances it was the duty of
the Opposite Party Bank to ensure
co-acceptance by the foreign Bank.
The responsibility of the Bank to
obtain co-acceptance of the Bills
of Exchange is also manifest from
the Rules of Collection laid down
by the International Chamber of
Commerce. As the collecting bank on
behalf of its customer
(Complainant) who had entrusted the
task of collection of Bills of
Exchange to it the Opposite Party -
Bank, the latter is responsible for
seeing that the form of acceptance
of Bills of Exchange is complete
and correct.
The Rules require that "all
documents sent for collection must
be accompanied by collection order
which is to be made by the Bank in
accordance with the instructions of
the client or the principal.
The instructions for co-
acceptance by the foreign bank on
the Bills of Exchange were clear
and unambiguous and as such even if
we ignore the covering letter
No.2776 of 26th August, 1991 said
to have been sent by the
Complainant to the Bank on the
ground that this is a forged
document, it will not affect the
decision already arrived at in any
manner. 9. As pointed out earlier, the Commission did not decide the question whether the letter dated 26th August, 1991, filed by the respondent was a forged letter as it was of the opinion that even if both the letters, namely, the letter filed by the appellant in Review Petition as also the letter filed by the respondent in the original proceedings, were ignored, the appellant was still under a liability to have mentioned in its lener to the French Bank to whom the Bills of Exchange were forwarded, that the French Bank had also to co-accept the Bills before delivering the documents to the Buyer as the respondent had specifically mentioned this requirement in the Bills of Exchange drawn on and addressed to M/s STE Kolori and their Bankers, namely, Societe Lyonnaise De Banque, Lyon, France. This finding, like the findings recorded by the Commission in its original judgment dated 16.11.93, is based on the interpretation of certain Clauses of the Rules of the International Chamber of Commerce. 10. There are two Banks, namely, the Indian Bank, Bombay (appellant) through whom the Bills of Exchange were forwarded and the French Bank, namely, Societe Lyonnaise De Banque, Foreign Department, Lyon, France for payment. It is not disputed that the Banks had to act in accordance with the Uniform Rules for Collection made by the International Chamber of Commerce (hereinafter referred to as ICC Rules). The extent of liability, default, negligence or deficiency in service, on the part of either or the Banks would, Therefore, depend on a correct reading and interpretation of the ICC Rules which, we unhesitantly say, at the outset, were misread, misunderstood and misinterpreted by the Commission. 11. Clause B of the ICC Rules which came into force with effect from January l, 1979 contains Definitions some of which (which are relevant for this case) are reproduced below :-
"1. (i) "Collection" means the
handling by banks’on instructions
received of documents as defined in
(ii) below, in order to a) obtain
acceptance and/or, as the case may
be, payment, or b) deliver
commercial documents against
acceptance and/or, as the case may
be, against payment, or c) deliver
documents on other terms and
conditions.
(ii) "Documents" means
financial documents and/or
commercial documents:
(a) "financial documents"
means bills of exchange, promissory
notes, cheques, payment receipts or
other similar instruments used for
obtaining the payment of money;
(b) "Commercial documents’
means invoices, shipping documents,
documents of title or other similar
documents, or any other documents,
whatsoever, not being financial
documents.
2. The "parties thereto" are :
(i) the "principal" who is the
customer entrusting the operation
of collection to his bank;
(ii) the "remitting bank" which is
the bank to which the principal has
entrusted the operation of
collection;
(iii) the "collecting bank"
which is any bank, other than the
remitting bank, involved in
processing the collection order;
(iv) the "presenting bank’ which
is the collecting bank making
presentation to the drawee.
3. The "drawee" is the one to
whom presentation is to be made
according to the collection order."
Clause C provides as under :-
"All documents sent for collection
must be accompanied by a collection
order giving complete and precise
instructions. Banks are only
permitted to act upon the
instructions given in such
collection order, and in accordance
with these Rules.
If any bank cannot. for any
reason. comply with the
instructions given in the
collection order received by it, it
must immediately advise the party
from whom it received the
collection order."
Article 2, 3 as also Article 15
provide as under:-
"Article 2
Banks must verify that the
documents received appear to be as
listed in the collection order and
must immediately advise the party
from whom the collection order was
received of any documents missing.
Banks have no further
obligation to examine the
documents.
Article 3
For the purpose of giving
effect to the Instructions of the
principal, the remitting bank will
utilise as the collecting bank:
(i) the collecting bank nominated
by the principal, or in the
absence of such nomination,
(ii) any bank, of its own or
another bank’s choice in the
country of payment or acceptance,
as the case may be.
The documents and the
collection order may be sent to the
collecting bank directly or through
another bank as intermediary.
Banks utilising the services
of other banks tor the purpose of
giving effect to the instructions
of the principal do so for the
account of and at the risk of the
latter.
The principal shall be bound
by and liable to indemnify the
banks against all obligations and
responsibilities imposed by foreign
laws or usages.
Article 15
The presenting bank is
responsible for seeing that the
form of the acceptance of a bill of
exchange appears to be complete and
correct, but is not responsible for
the genuineness of any signature or
for the authority of any signatory
to sign the acceptance. 12. Clauses 2 and 3 specify the parties to the transaction for purpose of "Collection" as defined in Sub-clause 1(i) of Clause B. These parties are the "Principal" who entrusts the operation of "Collection" to his Bank. This, in the instant case, would be the respondent as the respondent entrusted the operation of "Collection" to the appellant. The other party is the "Remitting Bank", namely, a Bank to whom the operation of "Collection" is entrusted by the "Principal". In the instant case, the "Remitting Bank" would be the appellant as it was this Bank to whom the respondent had entrusted the job of "Collection". Another Bank which is involved in the whole transaction is the "Collecting Bank". According to the definition, this would be a Bank other than the "Remitting Bank". There is, yet, a third Bank, namely, the "Presenting Bank" which, according to the definition, is, in fact, the "Collecting Bank" making presentation to the "Drawee". "Drawee" has been defined in Sub-clause 3 of Clause 8 as the person to whom presentation is made according to the collection order. Although, in the definition, there are three banks, namely, the "Remitting Bank", the "Collecting Bank" and the "Presenting Bank", the identity of "Collecting Bank" and the "Presenting Bank" is the same as the "Collecting Bank" not only collects the documents from the "Remitting Bank", it also presents those documents to the "Drawee" for payment. The "Remitting Bank" cannot be the "Collecting Bank" or the "Presenting Bank" as the "Collecting Bank" has been defined in the ICC Rules as a Bank OTHER THAN THE REMITTING BANK". 13. Clause C which has already been extracted above requires that the documents sent for "Collection" must be accompanied by a collection order. The collection order has to contain complete and precise instructions so as to enable the Bank to act in accordance with the instructions contained in the collection order and in accordance with the ICC Rules. This will also be clear from the definition of "Collection" as set out in Sub-clause 1(i) of Clause B, which means "the handling by Banks, ON INSTRUCTIONS RECEIVED, of documents", which are either "Commercial or Financial" as defined in Sub-clause (ii)(a) and (b). The definition of "Financial Documents" also includes Files of Exchange. The words "for the purpose of giving effect to the INSTRUCTIONS OF THE PRINCIPAL" occurring in Article 3 also make it clear that the Principal has to give instructions separately (in addition to the documents) to the Remitting Bank to . enable it to instruct the Collecting Bank accordingly. 14. "Acceptance" is dealt with in Article 15 which indicates that the responsibility of seeing that the Bill of Exchange is accepted, completely and correctly, is that of the "Presenting Bank". 15. The Commission, while disposing of the complaint of the respondent by its original order dated 16.11.93, had held that not only the Bill of Exchange but the covering note accompanying those Bills clearly indicated that the Bill was to be accepted by the Buyer and co-accepted by the Foreign Bank. It, then, proceeded to say as under:-
"The Rules for Collection laid down
by the International Chamber of
Commerce leave no room for doubt
that as per Article 3 of the said
Rules, for giving effect to the
instructions of the principal,
i.e., the customer entrusting the
operation of collection to his
Bank, the remitting bank (viz. the
Bank to which the principal has
entrusted the operation of
collection) is the collecting Bank.
As observed earlier, under Article
15 it is the presenting Bank which
is responsible for seeing that the
form of acceptance of a Bill of
Exchange appears to be complete and
correct. Under Item C "General
Provisions and Divisions" of the
above Rules "All documents sent for
collection must be accompanied by a
collection order which has to be
made by the Bank in accordance with
the instructions of the client or
the principal". The opposite party
Bank failed to do so. We reject its
plea that it was not responsible to
obtain the co-acceptance of the
Bank and there was no deficiency of
service on its part." 16. A mere perusal of the above passage of the Commission’s judgment indicates that the Commission fell into a serious error in treating the "Remitting Bank" as the "Collecting Bank" and, then, fastening liability on the appellant by observing that the appellant had not acted in accordance with Article 15 of the ICC Rules under which it was the responsibility of the "Presenting Bank" to see that the "Documents" were accepted in accordance with the instructions of the "Principal". The Commission thus treated appellant not only as the "Remitting Bank" but also as the "Collecting Bank" and ’Presenting Bank" which is not permissible as the identity of "Remitting Bank" is different and distinct from that of the "Collecting Bank" and/or the "Presenting Bank". 17. As pointed out earlier, the main judgment of the Commission is based on the ground that there was letter dated 26.8.91 which contained specific instruction that there had to be co-acceptance by the Foreign Bank. 18. As against this. there is, admittedly, another letter of 26th August, 1991 from the respondent to the appellant which does not contain this instruction. When this letter was filed before the Commission and a review of the judgment was sought on the ground that the letter containing the instruction for obtaining co-acceptance of the French Bank was never issued to the appellant and that the only letter issued on that date was the letter in which this instruction was not mentioned, the Commission, instead of deciding the controversy as to whether the other letter relied upon by the respondent was, at all, sent or issued to the appellant, proceeded to decide the controversy on the ground that even if no such letter was issued, the recital in the Bill of Exchange about co-acceptance by the French Bank was enough and the appellant having not acted in terms of the Bill of Exchange and having not obtained the co-acceptance of the French Bank, was liable to pay to the respondent the entire price of the goods supplied to the Buyer to whom the documents would not have been delivered had it been mentioned that before delivering the documents to the Buyer, co-acceptance by the French Bank was necessary, as in that event, the documents would have been either returned, as was done on previous occasions, or the French Bank would have given co-acceptance and thus made payment of the entire amount to the respondent. 19. In view of the findings recorded by us that under the ICC Rules, it is the responsibility of the "Principal" to give or send specific and precise instructions to the Bank besides sending the "Commercial/Financial Documents", Commission was under a duty to decide as to whether the appellant had issued the letter containing the requirement of co-acceptance by the French Bank. The Commission could not legally avoid to decide this question particularly as the appellant had contended before the Commission that the letter No.2776 of 26th August, 1991 was forged and fabricated by the respondent and that the only letter issued by the respondent was letter No.2775 dated 26th August, 1991. The contents of both the letters have already been reproduced by the Commission in its judgment by which the review application has been disposed of which would indicate that in the letter No.2775, there is no requirement to obtain co-acceptance by the French Bank whereas in the other letter, namely, letter No.2776, this condition has been specifically mentioned. 20. By filing letter No.2775 of 26.8.91 along with the Review Petition and contending that the other letter, namely, letter No.2776 of the even date, was never written or issued by the respondent, the appellant, in fact, raised the plea before the Commission that its judgment dated 16.11.93, which was based on letter No. 2776, was obtained by the respondent by practising fraud not only on the appellant but on the Commission too as letter No.2776 dated 26.8.91 was forged by the respondent for the purpose of this case. This plea could not have been legally ignored by the Commission which needs to be reminded that the Authorities, be they Constitutional, Statutory or Administrative, (and particularly those who have to decide a lis) possess the power to recall their judgments or orders if they are obtained by fraud as Fraud and Justice never dwell together (Fraus et jus nunquam cohabitant). It has been repeatedly said that Fraud and deceit defend or excuse no man (Fraus et dolus nemini patrocinari debent). 21. In Smith v. East Elloe Rural District Council (1956) AC 736, the House of Lords held that the effect of fraud would normally be to vitiate any act or order. order obtained by fraud practised upon that Court. Similarly, where the Court is misled by a party or the Court itself commits a mistake which prejudices a party, the Court has the inherent power to recall its order. (See: Benoy Krishna Mukherjee vs. Mohanlal Goenka AIR 1950 Cal. 287; Gajanand Sha & Ors. vs. Dayanand Thakur AIR 1943 Patna 127; Krishna Kumar vs. Jawand Singh AIR 1947 Nagpur 236; Devendra Nath Sarkar vs. Ram Rachpal Singh ILR (1926) 1 Lucknow 341 = AIR 1926 Oudh 315; Saiyed Muhammad Raza vs. Ram Saroop & Ors. ILR (1929) 4 Lucknow 562 = AIR 1929 Oudh 385 (FB); Bankey Behari Lal & Anr. vs. Abdul Rahman & Ors. ILR (1932) 7 Lucknow 350 = AIR 1932 Oudh 63; Lekshmi Amma Chacki Amma vs. Mammen Mammen, 1955 Kerala Law Times 459.) The Court has also the inherent power to set aside a sale brought about by fraud practised upon the Court (Ishwar Mahton & Anr. vs. Sitaram Kumar & Ors. AIR 1954 Patna 450) or to set aside the order recording compromise obtained by fraud. (Bindeshwari Pd.Chaudhary vs. Debendra Pd. Singh & Ors. AIR 1958 Patna 618; Smt. Tara Bai vs. V.S. Krishnaswamy Rao AIR 1985 Karnataka 270). 24. We may now turn to the next and allied questions; what is forgery, whether forgery is a fraud and whether in the instant case, forgery and fraud are proved? 25. Forgery has its origin in the French word "Forger", which signifies:
"to frame or fashion a thing as the
smith doth his worke upon the
anvill. And it is used in our law
for the fraudulant making and
publishing of false writings to
the prejudice of another mans right
(Termes de la Ley) (Stroud’s
judicial Dictionary, Fifth Edition
Vol. 2). 26. In Webst Comprehensive. Dicitionary, International Edition, "Forgery’ is defined as :
"The act of falsely making or
materially altering. with intent
to defraud; any writing which, if
genuine, might be of legal efficacy
or the foundation of a legal
liability." 27. This Definition was adopted in Rembert vs. State 25 Am. Rep. 639. In another case, namely, State vs. Phelps 34 Am. Dec. 672, it was laid down that forgery is the false making of any written instrument, for the purpose of fraud or deceit. This decision appears to be based on the meaning of forgery as set out in Tomlin’s Law Dictionary. 28. From the above, it would be seen that fraud is an essential ingredient of forgery. 29. Forgery under the Indian Penal Code is an offence which has been defined in Section 463, while Section 464 deals with the making of a false document. Section 465 deals with the making of a false document. Section 465 prescribes punishment for forgery. "Forged document" is defined in Section 470 while Section 471 deals with the crime of using as genuine, the forged document. 30. Forgery and Fraud are essentially matters of evidence which could be proved as a fact by direct evidence or by inferences drawn from proved facts. 31. The Privy Council in Satish Chandra Chatterjee vs. Kumar Satish Kantha Roy & Ors. Air 1923 PC 73, laid down as under:
"Charges of fraud and collusion
like those contained in the plaint
in this case must, no doubt, be
proved by those who made them--
proved by established facts r
inferences legitimately drawn from
those facts taken together as a
whole. Suspicions and surmises and
conjecture are not permissible
substitutes for those facts or
those inferences, but that by no
means requires that every puzzling
artifice or contrivance resorted to
by one accused or fraud must
necessarily be completely
unravelled and cleared up and made
plain before a verdict can be
properly found against him. If this
were not so many a clever and
dexterous knave would escape. 32. The above principle will apply not only to court of law but also to statutory tribunals which, like the Commission, are conferred power to record evidence by applying certain provisions of the Code of Civil Procedure including the power to enforce attendance of the witnesses and are also given the power to receive evidence on affidavits. The Commission under the Consumer Protection Act, 1986 decides the dispute by following the procedure indicated in Section 22 read with Section 13(iv) and (v) of the Act. 33. Sub-section (iv) of Section 13 which has been made applicable to the proceeding before the Commission lay down to the proceeding before the Commission lay down that it shall have the same powers as are vested in a Civil Court under the Code Civil Procedure, 1908 while trying a suit in respect of the following matters, namely:-
(i) the summoning and enforcing
the attendance of any defendant or
witness and examining the witness
on oath;
(ii) the discovery and production
of any document and production of
any document of other material
object producible as evidence:
(iii) the reception of evidence on
affidavits.
(iv) ------------------------------
------
(v) issuing of any commission for
the examination of any witness; and
(vi) ------------------------------
--
The commission has, thus, jurisdiction not only to examine a witness on oath but also to receive evidence in the form of affidavits. 34. The parties, in the instant case, have filed their affidavits annexing therewith a host of documents. These affidavits and documents were treated as evidence in the case. It was on the basis of this evidence that the main case, as also the Review Petition, were decided by the Commission. 35. Since the evidence of the parties is already on record and all vital facts either stand admitted or proved, we proceed now to consider whether forgery and fraud are established. This we are doing in view of the facts and circumstances of this case otherwise we would have either remanded the case to the Commission or directed the respondent toe approach the Civil Court. 36. Paragraphs 2, 3, 4, 5, and 6 of the Review Application filed by the appellant before the Commission are as under:
"2. In brief, the case of the
complainant before this Hon’ble
Commission was that it had by its
letter of the 26th August, 1991,
which letter enclosed the bills of
exchange in question, gave specific
instruction to the Opposite Party -
-- the Bank -- for securing a co-
acceptance by Societe Lyonnaise de
Banque (the French Bank) before
handing over the documents of title
to the goods. Based upon this
letter, the veracity of which was
not questioned y the Opposite Party
at that stage in the circumstances
indicated hereinafter, this Hon’ble
Commission was pleased to hold that
the Opposite Party was responsible
for not carrying out the
instructions contained in the
letter dated 26th August, 1991,
(Exhibit A to the Complaint) and
thereby liable in damages caused to
the Complainant. It is correct that
the complainant had annexed a copy
of the letter dated 26th August,
1991 with this Complainant.
However, the Opposite Partythe
bank failed to notice that this
letter so annexed was not the same
as the letter on 26.8.1991 as a
covering, however with a vital
difference that the body of the
letter did not contain the material
instruction regarding co-acceptance
by the French Bank.
3. The letter produced before
this Hon’ble commission bears the
same date as the letter actually
given to the Bank purports to be a
covering latter (as also was the
letter given to the Bank) and bears
a reference No. 2776 the Bank is
2775. Due to these apparent
similarities, whilst drawing up the
pleadings of the material
alterations made to the contents of
the letter were over looked. The
Opposite Party states that the
letter as produced before this
Hon’ble Commission was not a true
copy of the letter given to the
Bank.
4. One of the reasons why this
lapse occurred is because the true
significance and import of the
letter was not understood and
appreciated. After receiving a copy
of the order of this Hon’ble
Commission, it was found that the
whole case had turned against the
bank based upon the letter of the
Complainant produced before the
Commission. It is thereafter when
the copy of the letter which is
with the Bank was perused, it was
found that there is a material
variation between that copy which
was given to the Bank and its
purported true copy which was
produced by the Complainant before
this Hon’ble Commission. However,
to eliminate the possibility as to
whether, in addition to the letter
given to the Bank bearing reference
No. 2775, another letter having
reference No. 2776 of a same dated
was also given to the Bank, a
through search was made of the
records of the Bank at the Napean
Sea Road and other connected
Branches including the head office.
The search has revealed that the
Bank has not received the letter
bearing reference No. 2776 of 26th
August, 1991 the contents of which
are as the purported copy produced
by the Complainant before this
Hon’ble Commission. What was given
by the complaint to the Bank as a
covering letter was a letter being
reference No. 2775, a copy of which
is annexed hereto and marked as
Annexure I and the original of
which shall be produced at the time
of hearing. Affidavit of the then
manager of the said branch
confirming that the said letter
dated 26th August, 1991 annexed as
Exhibit "A" to the Complaint was
not received by the Bank is annexed
hereto and market Annexure "II".
5. A perusal of this letter shows
that the material instructions in
relation to co-acceptance by the
French Bank are absent in this
letter. The Opposite Party is
advised to stated that considering
the fact that a letter dated 26th
August, 1991, bearing REF:SF:E:2775
was given as a covering letter to
the Bank, it is inconceivable that
a second letter also as a covering
letter would be given to the Bank.
The letter of 26th August, 1991
stated that it is "....enclosing
fresh set of drafts....". There are
some other discrepancies between
this letter and the letter produced
by the Complainant, as hereafter
set out.
6. The Opposite Party further
submit that the xerox copy of the
purported letter produced before
this Hon’ble Commission by the
Complainant purports to bear and
initial on the right-hand side of
the letter. The Opposite Party
submits that this initial is not of
any of the officials of the Napean
Sea Road Branch of the bank at the
relevant time. The Opposite Party
is, therefore, advised to submit
that this letter is a forgery
created by the Complainant for the
purpose of the present case."
37. The respondent filed a reply to
the Review Application in paragraph
4 by which he stated as under:
(a) The Complainant by its letter
dated 26th August 1991 bearing
reference No.SF: E: 2775 forwarded
to the Opponent fresh set of Drafts
with a request to present the aid
documents to the huyer (vis. M/s
STE Kolori) through M/s. Societe
Lyonnaise De Banque, lyon, France.
The copy of the said letter which
is on the file of the said letter
which is on the file of the
Complainant is annexed hereto tan
market Exhibit ’A’.
(b) The said letter dated 26th
August 1991 bearing Reference No.
EF:E: 2775 though delivered to the
Opponent, the carbon copy of the
said letter available with the
Complainant, does not bear any
acknowledgement of receipt. The
said letter is also mentioned in
the Outward Register maintained by
the Complainant. Hereto annexed and
market Exhibit ’B’ is a copy of the
relevant page of the Outward
Register of the Complainant. The
Complainant craves leave to refer
to and rely upon the Outward
Register maintained by it for the
relevant period when produced.
(c) After the delivery of the said
letter dated 26th August 1991
bearing Reference No. SF:E: 2775
the Complainant noticed that the
said letter did not request the
Opponent to have the said Bills of
Exchange co-accepted by the Foreign
Bank viz. Societe Lyonnaise De
Banque, Lyon, France. In the
circumstances, the Complainant
immediately addressed another
letter to the Opponent also dated
26th August 1991 bearing Reference
No.SF:E: 2775 wherein they gave
specific instructions to the
Opponent to have to the said Bills
of Exchange accepted by the buyer
viz . M/s STE Klori and co-accepted
by the Foreign Bank viz. Societe
Lyonnaise De Banque. The said
letter has been annexed as Exhibit
’A’ to the plaint and has also been
annexed hereto as Exhibit ’C’. The
said letter was delivered to the
Opponent and the same bears the
initials of the persons who
received the said letter in the
Opponent and the same bears the
intials of the person who received
the initials of the person who
received the said letter also bears
the rubber stamp of the Opponent.
(d) The said letter dated 26th
August 1991 bearing Reference No.
SF:E: 2775 is also mentioned in the
Outward Register maintained by the
Complainant. Exhibit ’B’ hereto
which is the relevant page of the
Outward Register not only shows the
entry of the said letter bearing
Reference No. SF:F: 2775 but also
the entry of the aforesaid letter
bearing SF:E: 2776.
(e) From the aforesaid it is
evident that there were to letters
both dated 26th August, 1991 which
were addressed by the Complainant
to the Opponent.
(f) The Complainant says that
pursuant to the filing of the
original complaint, the
Complainant’s Advocates gave
inspection of the documents,
referred to and relied upon by the
Complainant, to the Opponents
Advocate. The said inspection was
taken on 14th October, 1992 and at
the said time the carbon copy of
the letter dated 26th August, 1991
bearing Reference No.SF:E: 2776 was
inspected by the Opponents Bank.
The fact of the inspection having
been taken has been recorded by the
Opponents Advocated in their letter
by the dated 16th October, 1992
which is annexed hereto and marked
Exhibit ’D’.
(g) The Complainant states that
after the said Review Application
was served upon the Complainant,
the Complainants Advocate addressed
a letter dated 28th December, 1993
to the Opponents Advocates pointing
out that the said Review
Application was totally false and
misconceived inasmuch as the said
letter dated 26th August, 1991
bearing Reference No.SF:E: 2776 was
not a fabricated letter and bore
the rubber stamp of the Opponent as
also the initials of the person who
received the same in the Opponent
Bank. The Complainants Advocates by
the said letter also requested for
inspection of the letter dated 26th
August, 1991 bearing Reference No.
SF:E:2775 and the Inward Register
maintained by the Opponent Bank.
Hereto annexed and marked Exhibit
’E’ is a copy of the said
Complainant’s Advocates letter
dated 28th December, 1993.
(h) The opponent by their
Advocates’ letter dated 20th
December, 1993 appointed time for
inspection of the said letter. The
Opponent Advocates by the said
letter also stated that their
client had not entered the said
letter bearing Reference
No.SF:E:2775 in their Inward
Register as as the Inward Register
was formerly only maintained in
respect of registered letters which
were entered therein. Hereto
annexed and market Exhibit ’F’ is a
copy of the said dated 29th
December, 1993.
(i) Pursuant to the appointment
fixed in that regard the
Complainant and their Advocates
attended the Office of the
Opponents Advocates on 3rd January,
1994 and took inspection of the
said letter dated SF:E; 2775. The
Complainant at the said time also
gave inspection of the carbon
copies of the letter bearing
Reference No. SF:E:2775 and
SF:E:2776 available on the file of
the Complainant. Inspection of the
Outward Register of the Complainant
was also given to the Opponent and
its Advocates. The given and taking
of the said inspection was recorded
by the Opponent Advocates in their
letter dated 4th January, 1994
(Exh. ’D’ hereto) and also by the
Complainant in their Advocates
letter also dated 4th January,
1994. Hereto annexed and marked
Exhibit ’G’ is a copy of the
aforesaid letter dated 4th January,
1994. 38. Other relevant paras of the respondent’s reply are paragraph 7 to 15. 39. The Respondent’s denial that it had fabricated the letter No. 2776 is also contained in various other paras of its reply. 40. The appellant filed a rejoinder affidavit before Commission. Paras 3,7,12,21 are quoted below-
"3. It is only after having
perused the Reply of the
Complainant that the Opposite Party
has further realised that the
Complainant has played a calculated
fraud with an intention to secure
an order from this Hon’ble
Commission. the Complainant has all
along played a fraud on this
Hon’ble Commission in making it
believe that the Bills of Exchange
have been forwarded by the alleged
letter dated 26th August, 1991
bearing No. 2776 annexed as Exhibit
"A" to the Complaint. Having now
read the tenor of the Reply of
Complainant, the Opposite party has
realised that the Complainant has
with mischievous and malafide
intent in its pleadings before this
Hon’ble Commission cleverly avoided
making reference to the different
letters said to have been delivered
to the Opposite Party and the
aforesaid fact is clear and evident
by the language of he pleadings.
The Opposite Party further submits
that after going through the said
reply of the complaint to the
Review Petition it has become very
clear that the Complainant has
deliberately played a fraud and now
put forward a false case in the
said reply to further perpetrate
the said fraud. The Opposite Party
submits the letter bearing No.
2775 dated 26th August, 1991 and
the said letter bearing No. 2776
dated 26th August, 1991, both
purport to enclose therewith set
of Bills of Exchange. It is an
admitted position that only one set
of Bills were forwarded for the
purpose of forwarding the same to
the foreign party for its
acceptance. The fact that both
letters set out that Bills of
Exchanges are forwarded therewith
itself indicates that they were not
meant for substitution. Even the
language of both letters belies the
false case of substitution now put
up by the complainant. It is thus
clear that the Complainant has
misguided this Hon’ble Commission
by relying upon a letter bearing
ref. No. 2776 dated 26th August,
1991 purporting to suggest that by
the said letter, the said Bills of
Exchange were forwarded for the
purpose of acceptance, whereas in
fact the said letter bearing No.
2776 dated 26th August, 1991 was
never received by the Opposite
party.
7. With reference to paragraph
4(c) of the said Reply, the
Opposite Party denies that after
delivery of the said letter dated
26th August delivery of the said
letter dated 26th August, 1991
bearing No. 2775 the Complainant
noticed that the said letter did
not contain a request to the
Opposite party to have the said
Bills of Exchange co-accepted by
the foreign Bank and therefore
addressed another letter to the
Opposite Party also dated 26th
August, 1991 bearing NO. 2776
wherein the complainant give
specific instructions to the
Opposite party to have the said
Bills of Exchange accepted by the
Buyer and co-accepted by the
foreign Bank. The Opposite Party
says and submits that the alleged
letter dated 26th August, 1991
bearing No. 2776 is not genuine
letter. The Opposite Party craves
leave to refer to the Outward
Register allegedly maintained by
the complainant, when produced. The
Opposite party submits that the
Outward Register maintained by the
Complainant does not appear to be
genuine Outward Register as the
same has entries containing
references to letters of a later
date bearing outward number of an
earlier date. The Opposite Party
says and commits that no reliance
can be placed upon the said alleged
Outward Register alleged to have
been maintained by the Complainant.
The opposite party says and submits
that the alleged initials of the
person who received he said letter
is not initial led by any
officer/staff member of Indian Bank
working in its Nepean Seas Road
Branch at the relevant time. The
Opposite Party says that prior to
the filling of the Review
Application the Opposite Party
obtained verification from the
officers and staff members attached
to the Nepean Sea Road Branch of
the Opposite Party who certified
and stated that the alleged initial
on the alleged office copy of the
Complainant is not their initial.
The Opposite Party states and
submits that the mere fact that a
rubber stamp appears on the alleged
letter cannot be itself confer any
authenticity. It is pertinent to
note that the Complainant has
obtained and alleged acknowledgment
on the officer copy of the alleged
letter 26th Aug. 1991 bearing
reference No. 2776 when, in fact no
such letter was delivered by the
Complainant to the Opposite Party.
It is further pertinent to note
that the Complainant did not think
it fit or necessary to obtain any
acknowledgement on office copy of
letter dated 26th August, 1991
bearing No. 2775 when the original
documents i.e. the Bills of
Exchange were delivered to the
Opposite Party therewith but the
complainant has allegedly obtained
and acknowledgement on the alleged
letter dated 26th August, 1991
bearing No. 2776. Copy of Statement
signed by the Officers and staff
members at the Nepean Sea Road
Branch of the Opposite Party
certifying that the alleged
initials on the on alleged
acknowledgement does not belong to
any of them in hereto annexed and
marked Annex "I".
12. With reference to paragraph 7
of the said Reply, the Opposite
Party denies the contention of the
Complainant that the letter dated
26th August, 1991 bearing No. 2775
was not disclosed by the
Complainant before this Hon’ble
Commission as the said letter was
substituted by the alleged or at
all. The Opposite Party submits
that it is for the first time that
the Complainant has pleaded
substitution. This plea of
substitution has been pleaded only
after the fraud has been detected
by the Opposite Party and brought
to the notice of this Hon’ble
Commission. If the plea of
substitution is to be believed, the
Complainant would have withdrawn
the letter dated 26th August, 1991
bearing No. 2775 at that point of
time itself since the Complainant
had taken no acknowledgement for
the same. The Opposite Party denies
the contention of the Complainant
that the nondisclosure was not with
a view to suppressing information,
as alleged or otherwise. The
Opposite Party further denies the
contention of the Complainant that
the nondisclosure was inadvertent
as alleged at all. The Opposite
Party states that the second letter
dated 26th August, 1991 bearing No.
2776 was never delivered by the
Complainant to the Opposite Party.
15. With reference to paragraph 10
of the said Reply, the opposite
party states that it is pertinent
to note that despite Complainant
having accepted the fact that
letter dated 26th August, 1991
bearing No. 2775 was addressed to
the Opposite Party and the Opposite
Party would act on the instructions
contained therein. The Complainant
ought to have drawn refernce to the
letter No. 2775, if assuming with
out admitting that the alleged
letter No. 2776 was in fact
delivered. The Opposite Party
states that, it is admitted by the
Complainant that the two letters
both dated 26th August, 1991
bearing Nos. 2775 and 2776 are
materially different from each
other. The Opposite Party states
that the Complainant has not
explained in any part of the replay
as to what warranted the submission
of the alleged letter dated 26th
August, 1991 bearing No. 2776 on
the same dated after submission of
a letter on the same subject, also
dated 26th August, 1991 bearing No.
2775 without providing for any
reference to the earlier letter or
without making any mention about
the submission of the earlier
letter to the Opposite Party. The
Opposite Party submits that the
absence of continuity of reference
to the earlier letter cannot be
termed as an omission, as alleged,
by the Complainant, particularly
who, according to the Complainant
itself the second letter is
intended to be substitution of the
contents of the earlier letter.
21. With reference to paragraph 21
to 24 of the said Reply, it is
pertinent to note that the
Complainant says tat the
Complainant was willing to have the
goods delivered to the Buyer not
only letter acceptance of the Bills
of Exchange by the Buyer but also
co-acceptance by the foreign bank.
The Complainant has, till date no
brought to the notice of the
Opposite Party and/or this Hon’ble
Commission the basis of the
aforesaid statement, as to whether
there is any agreement between the
complainant and the foreign Buyer,
or the Complainant and the foreign
bank for co-acceptance. There is no
documentary or any evidence brought
in by the Complainant to show any
alleged contract for co-acceptance.
In the absence of the foreign bank
being party to the present
proceedings, the statement of the
Complainant that the Complainant
was willing to sell the goods only
if there was co-acceptance, is not
sustainable and cannot be believed.
The Opposite Party says and submits
that the history of the present
transaction between the complainant
and the foreign buyer indicates
that the goods were already shipped
in June, 1990 prior to the
forwarding of the said Bills of the
Exchange for acceptance in August,
1991. The Opposite Party denies
that the Opposite Party has been
negligent in that the Bills of
Exchange are to be accepted as per
tenor of the instrument. The
Opposite Party denies that the
Complainant in entitled to sue the
Opposite Party and recover from the
Opposite Party the amount of Bills
of Exchange with interest, as
alleged or otherwise. The Opposite
Party says that the only claim
which the Complainant has is
against the foreign Buyer and / or
foreign bank and not against the
Opposite Party. It is foreign
pertinent to note that the
Complainant states that there in no
privity of contract between the
foreign bank and the Complainant.
If the aforesaid statement is to be
believed, then the question of the
foreign bank being required to co-
accept the Bills of Exchange cannot
and does arise." 41. We have also gone through other affidavits and documents, filed either in this Court or before the Commission, which have been brought on record here. 42. We must say immediately that the circumstance, in the instant case, are glaring and the intrinsic evidence available on the record is clinching, so much so, that no other inference is possible except to hold that the letter No. 2776 of 26th August, 1991 was forged by the respondent in order to obtain a decree from the Commission for a huge amount of French Francs 4,10,000/- It will appear that -
(i) The respondent does not deny
that it had sent and issued letter
No. 2775 dated 26th August, 1991 to
appellant:
(ii) The respondent does not deny
that this letter does not contain
any direction to the appellant to
obtain co-acceptance from the
French Bank:
(iii) The respondent says that it
had issued letter NO. 2776 dated
26th August, 1991 in substitution
of the earlier no. 2775 of the
event dated;
(iv) the fact that this letter was
sent in substitution of letter No.
2775 dated 26th August, 1991 is not
mentioned in the letter itself:
(v) The respondent does to say that
the letter NO. 2775 dated 26th
August, 1991 should be treated as
cancelled;
(vi) The respondent had
corresponded with the appellant and
had even given a notice dated
26.3.92 through its counsel to the
appellant claiming the amounts due
under the Bill of Exchange on the
ground of negligence but nowhere
does the respondent says that the
letter No. 2776 dated 26th August,
1991 was substitution of letter No.
2775 of that date:
(vii) Even the original complaint
filed before the Commission , the
respondent does not say anywhere
that they had issued letter No.
2776 of 26th August, 1991 in
substitution of the letter NO. 2775
of that date.
(viii) The plea that letter NO.
2776 was issued in substitution of
letter no. 2775 was asserted by
respondent for the first time in
review proceedings when the
appellant filed this letter before
the commission. The respondent’s
silence still the stage, therefore,
becomes eloquent indicating that
this letter was no in existence
till then:
(ix) What was the mode of payment
agreed upon between the respondent
and the buyer in France has not
been indicated. Nor has any
correspondence, or for that matter,
any agreement in writing between
the respondent and the buyer, been
filed or brought on record to
indicate the terms of contract or
agreement or, at least, to
indicated the mode of payment, was
specifically mentioned by it in its
"Collection Order" to the
appellant.
(x) The respondent and already come
to the know that the buyer was
under liquidation as the liquidator
himself had written to the
respondent to file its claim in
respect of the goods supplied by it
to the Buyer.
(xi) There was some correspondence
with French Bank and the French
Bank wrote to the appellant, which
was also brought to the notice of
the respondent, that co-acceptance
by a French Bank was not permitted
under French Law and that, if
insistence for co-acceptance by the
French Bank meant furnishing of
bank guarantee, the French Bank
would have refused to furnish that
guarantee even if it was required
of it in the letter accompanying
the Bills of Exchange. (this
assertion by the French Bank is in
consonance with the Preamble of ICC
Rules which says that "these
provisions apply to all
Collections... Unless contrary to
the provisions of a national state
or local now and/or regulation
which cannot be departed from.")
It was, thus, apparent to the
respondent that there was little
hope the entire amount covering
the goods supplied by it to the
French Buyer would be paid and
therefore, it acted in a dexterous
and sophisticated manner to fasten
the liability on the appellant by
branding it as negligent is not
writing specifically to the French
Buyer for co-acceptance in spite of
its letter NO. 2776 of 26.8.91 and
to support this plea by evidence,
it forged the letter in question
forgetting that there existed
another letter NO. 2775 of that
date in which the requirement of
co-acceptance by French Bank was
indicated. Indeed, the Persian
saying that "DAROGH GO RA HAFIZA NA
BASHAD" (A LIAR HAS NO MEMORY ) is
the still the time tested truth.
In the face of overwhelming evidence, the entry in the respondent’s record indicating that letter NO. 2776 was issued cannot be accepted. Significantly, the copy of the disputed letter bears and endorsement of "Receipt and Rubber Stamp" allegedly of the appellant but the copy of the admitted letter No. 2775 does not bear any endorsement of receipt which the respondent had acted. 43. In view of the above, and if the letter No. 2776 (forged by the respondent) is excluded from the evidence, there remains only the letter No. 2775 of 26.8.1991 in which is was not indicated by the respondent to the appellant to write to the French Bank to deliver the documents only on co-acceptance by it. The appellant, in the circumstances, was justified in not mentioning co-acceptance by the French Bank. The case of the respondent being false and based on fabricated evidence has to be dismissed.
The appeals are consequently allowed, and both the judgments of the Commission, namely judgments dated 16.11.1993 and 13.12.1994 are set aside and the Original Complaint of the respondent is dismissed with costs quantified at Rs. 25,000/-.