Waiting too long for grievance redress can be counter-productive

CONSUMER IS KING
JEHANGIR GAI
As litigation is tedious, costly and
time-consuming, people try to resolve
a grievance amicably. However, the
wait for a resolution should not
stretch too long. Otherwise, the claim
would be time-barred.
M Sivarajs Belgique Fashions had
exported garments to an Italian buyer in Milano in January 2001. There
were four separate bills for this shipment. The export documents were
negotiated through Indian Overseas
Bank (IOB). These were to be released
to the buyer within 120 days from

the date on the bill of lading.

IOB sent the documents to Bank
Credito Italiano for collecting payment from the buyer. The buyer was
entitled to a 10 per cent discount if the
bill was paid within 120 days. Since
the buyer failed to make the payment
by the due date, the discount was cancelled. The buyer later paid the value
of three bills for which the Italian
bank wrongly allowed a 10 per cent
discount, while the amount of the
fourth bill was not paid at all. Yet, IOB
permitted the Italian bank to hand
over all the documents to the buyer.
Belgique Fashions held IOB negligent for the loss caused of
~3,74,64,930. A complaint was filed
before the National Consumer
Disputes Redressal Commission on
December 30, 2006, for claiming this
amount, along with interest, compensation and costs. The national
commission summarily dismissed
the complaint as time-barred. The
order was challenged before the
Supreme Court, which observed that
such dismissal without considering
the delay condonation application

was not justified. The Supreme Court

remanded the complaint to the
national commission, to consider the
delay condonation application after
issuing a notice to the bank and considering its submissions.
Belgique explained the disputed
transaction arose in 2001. Since the
relationship with IOB had been ongoing since 1992, attempts were made
to resolve the issue with the bank. In
response to various letters written by
Belgique, the bank gave verbal assurances that the issue would be sorted.
The bank thus prolonged the matter
without putting anything in writing.
Ultimately, Belgique had a legal
notice issued, after which the bank
replied on August 27, 2005, disowned
its liability.
Belgique contended that refusal
to resolve the issue gave rise to a
complaint. Filed on October 30,
2006, it would be within limitation.
Belgique argued that even if the
commission concluded there was a
delay in filing the complaint, it
should be condoned in view of the
ongoing correspondence.

IOB opposed the application.

In its judgment on March 16, 2015,
delivered by V K Jain for the Bench
with B C Gupta, the commission noted Belgique sent a letter to IOB on
September 18, 2001, in which legal
action for compensation had been
threatened, and this was followed
with reminders. The commission
observed that cause of action for deficiency in service arises when deficiency occurs or when it comes to the
knowledge of the consumer, whichever is later. Here, Belgique was aware of
the deficiency and had threatened
legal action as early as in 2001. The
two-year limitation period expired on
August 18, 2003. There is no plausible
explanation why legal action, though
threatened, was not initiated till 2006.
The commission did not agree
that limitation would run from the
date of denial of liability by the bank.
A complaint cannot be considered
to be within limitation merely
because liability is not denied, as
such an interpretation would extend
the limitation indefinitely when a
party remains silent. Once the period

of limitation has started to run, a subsequent reply that the matter is

under scrutiny would not extend it.
Only an admission of liability would
extend the limitation period.
The commission observed this
interpretation was in consonance
with the Supreme Courts judgment
in State Bank of India v/s BS
Agriculture Industries, where the
apex court had set aside concurrent
judgment of the district consumer
forum, state commission and the
national commission, and had ruled
that correspondence does not extend
the period of limitation.
The commission concluded there
was no justification in simply corresponding with the bank, awaiting
rejection. It refused to condone the
delay. The complaint was accordingly dismissed as being time-barred.
Consumers must, therefore, be
vigilant about exercising their rights.
Waiting for a long time for a response
from the other side could prove disastrous to litigation.
The author is a consumer activist