CASE STUDY: M/S

TANEJA EXPORTS,
MUMBAI
 SUMMARY
• M/S Taneja Exports is registered as a partnership firm, with Mr.
Gurmeet Taneja and Mr. Rahul Khatri sharing the profits in a ratio of
60:40.
• They have taken the assistance of the Apparel export promotion
council and the marketing agencies in various countries of the
European Union.
• On account of their knowledge of foreign trade, they could assess
Indian exporters quickly.
• They were paying a monthly rent of Rs. 35,000/- for the office
premises
• Rs. 15,000/- pm for godown maintenance.
• For security credit facilities: mortgaged residential house (Rs85lakh) &
stocks(15lakh)
• Sales increased from 7 lakh(2003) to 17 lakh(2005)
• The Importer became bankrupt.
 1. Elaborate the deficiency of service on the part of the bank, pointed
out by the National consumer redressal forum in the light of the
uniform rules of collection ICC publication No.522

• Since the French bank followed the instructions in the cover letter from
the remitting bank
• Which did not contain any instructions regarding the co-acceptance of
the documents by the collecting bank (French Bank)
• We cannot criticize the French bank for its actions. In this instance, the
remitting bank had neglected to scrutinize the collection documents
they had received adequately.
2. Advise the firm about the precautions they should
have taken to avoid such a colossal business loss.
• Without the importer and his bank's prior approval and
concurrence, the exporter should not create and offer unilateral
instructions.
• Both the importer and his banker, Credit Lyonnais, did not agree to
co-accept the documents.
• The exporter ought to have taken advantage of the buyer-specific
credit limit offered by ECGC (Export Credit Guarantee Corporation of
India)
• This would have helped him if the buyer went bankrupt and caused
a default.
3. Discuss the remedial measures the bank in India should take to
avoid such damaging judgments by the consumer forums.

• The trade finance desk at the Bank needs to be staffed by

knowledgeable and experienced individuals.
• The person in charge of the export document can determine the
inconsistency.
• (the clause of co-acceptance by the French bank on the bill of
exchange) and inform the exporter either to amend it or call for the
underlying agreement.
• This simple step would have saved the reputation, monetary loss
and mental agony suffered by the exporter and the bank officials.
4. Elaborate the Supreme Court judgment in the context of
international banking rules and practises, as guided by the ICC
publications.

• Banks will not examine documents to obtain instructions as per

article 4a (2) of URC ICC 522.
• There were no express instructions by the exporter to the bank
regarding the co-acceptance by the importer's bank in France.
• Also, there was no express undertaking by the French bank to co-
accept the documents.
• The International Bank of India (remitting bank) need not consider
the instructions in the document’s body.
 THANKYOU
PRESENTED BY:
• A DIVYA VANI
• NIDHI AWCHAT
• RAJINDER KAUR
• FALGUNI CHAUHAN