A bench of Justices A K Mathur and Altmas Kabir said, “We are of the opinion that the view taken by the National Commission cannot be wrong and we completely  agree that there was a deficiency in service by the Citibank N.A, New York and consequently by the State Bank of Mysore also.’’

The court justified the judgement and said  the compensation has been adequately awarded for deficiency in service against both the Banks and it would be open for the State Bank of Mysore to recover the said compensation from the Citibank, N.A.

The National Commission had granted a compensation of Rs 5 lakh to the Geekay and directed Citibank N.A. to pay costs of Rs 50,000 to the appellant.

The court also said for the recovery of the total amount of loss, it is open for the Geekay to pursue the civil suit before the trial Court in Bangalore as the demand is to the tune of Rs 15 lakh.

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

Documents released

For the export of these goods on May 11, 1994, the 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 US-based ASK Ingredients Inc.

Failed to collect

However, both banks failed to collect the sale proceeds from the purchaser and the Geekay filed a complaint before the State Consumer Disputes Redressal Commission, Karnataka at Bangalore for recovering the value of goods with interest and expenses amounting to Rs 14,37,000 from the banks.  In April 1997, the State Commission had dismissed the complaint.