Twitter
Advertisement

SC holds Citi, SBM guilty of deficient service

The Supreme Court upheld a National Consumer Commission’s ruling that Citibank NA, New York, and State Bank of Mysore were guilty of ‘deficiency in service’

Latest News
article-main
FacebookTwitterWhatsappLinkedin
NEW DELHI: The Supreme Court on Friday upheld a National Consumer Commission’s ruling that Citibank NA, New York, and State Bank of Mysore were guilty of ‘deficiency in service’ thus making them liable to pay Rs 5 lakh compensation to a Bangalore-based exporter of perishable commodities for they didn’t collect the proceeds of the goods exported to New York-based ASK Ingredients Inc in 1994.

The apex court also directed the Citibank to pay Rs 50,000 costs to the aggrieved Indian exporter Geekay Agropack (P) Ltd who had moved the Bangalore state consumer commission that rejected his plea for compensation.

A bench of justices A K Mathur and Altmas Kabir also allowed Geekay to move the civil court for seeking other monetary relief saying the consumer court could only decide whether a service provider had been deficient in service given to a consumer.

The judgment is a fall out of the appeals by Citibank and State Bank of Mysore against the National consumer commission’s order.

On April 21, 1994, ASK Ingredients Inc of the US placed a purchase order with Geekay for supply of 1,110 Kgs. of Oleoresin Capsicum and 925 Kgs of red chillies seed.

For the export of these goods on May 11, 1994, Geekay furnished the necessary documents such as, bill of landing, invoice, bill of exchange, details of the purchaser to the State Bank of Mysore along with a covering letter (Collection Order) facilitating the Citibank N.A. to collect the proceeds from the purchaser ASK Ingredients. However, both the banks failed to collect the sale proceeds from the purchaser

In its detailed order, national commission found that both the banks are jointly and severally responsible for deficiency in service.

“For the reasons best known the Citibank, from the beginning, there was no response from the Citibank despite several letters and reminders with regard to the documents which were handed over to it’’, the national commission said.

“The Citibank was bound to respond to the communications and inform the SBM as well as the complainant whether the amount was realized by it or not.  If not realized, the Bill of Exchange with list of documents, was required to be returned with due diligence and with necessary note,” it added.

“For this deficiency in service, Citibank is liable to pay the damages to the complainant.  Further, it was the duty of the SBM to take appropriate steps at appropriate time against Citibank,” it further said.

“In such cases, there would be joint and several liability of both the banks for the deficiency in service…we hold that the Citibank and SBM are liable for the deficiency in service.”

Refusing to interfere with the national commission’s order, the apex court observed, “the compensation has been adequately awarded for deficiency in service against both the Banks and it would be open for SBM to recover the said compensation from the Citibank, NA.”
Find your daily dose of news & explainers in your WhatsApp. Stay updated, Stay informed-  Follow DNA on WhatsApp.
Advertisement

Live tv

Advertisement
Advertisement