Delhi High Court
Corporation Bank vs Montana International And Ors. on 12 January, 1995
Equivalent citations: 1995IAD(DELHI)629, 1995(32)DRJ458, 1995 A I H C 4307, (1996) 2 CURCC 139, (1995) 2 BANKCAS 122, (1995) 32 DRJ 458, (1996) 1 BANKLJ 207
JUDGMENT Usha Mehra, J.
(1) The plaintiff Corporation Bank filed this suit for recovery of Rs. 9,53,653.66 paise based on written contract under the provisions of Order xxxvii of the Code of Civil Procedure (in short Civil Procedure Code .). The suit has been filed on the basis of the bills amount due but not paid by .the defendants. The case of the plaintiff bank as set out in the plaint is that defendant No.1 M/s Montana International in the course of business dealing with the bank requested it to open Import letter of Credit for having the import of the desired merchandise from M/s Tejis International Pte.Ltd.On the basis of Said request of defendant No.1 through defendants 2 and 4, plaintiff bank opened an Import Letter of Credit favoring M/s Tejis International Pte.Ltd. to cover the import of "five metric tonnes of Colombo Cloves". Letter of Credit was opened through their correspondent M./S Marine; , Bank, Singapore, for negotiations. Last date of shipment of goods was 28th February,1984. The Letter of Credit was irrevocably valid until 10th March,1984 inclusive, of the negotiation period. Subsequently, by an amendment in the Letter of Credit, requirement of Fumigation Certificate was deleted. The defendants agreed to in dignify the plaintiff bank against all losses, costs, expenses,claims and demands. The defendant firm also agreed to accept upon presentation the bills to be received under the Letter of Credit and to pay the amounts under the bills at or before maturity day with interest and other charges. Bank received bills Along with set of documents raised by M/s Tejis International Pte.Ltd. The said bills were due for payment by the defendants on 29th March,1984. The merchandise against the said documents were shipped under the Airway Bills of defendant Airlines. The defendant No.5 effected carriage of the consignment and the plaintiff was to receive Cargo Arrival Notice through office of the Air India on behalf of defendant No.5. The consignment was to be delivered to the plaintiff in the account of defendant No.1. Plaintiff presented- duplicate set of documents relating to the bills upon defendant firm at Delhi. The defendant firm accepted the documents and agreed to pay the amount but did not do so inspite of repeated reminders. On enquiry, it was transpired that defendant No. I had already taken delivery of the consignment covered by the Airway Bills under the Cargo Notice sent by them. Under the Airway Bills, delivery could only be effected by the plaintiff alone, but defendant No.5 due to its negligence delivered the same to defendant No.1 who had forged, and fabricated the documents in the name of the plaintiff. Defendants 1 and 5 in collusion with each other deprived the plaintiff of the goods and the consequent amounts hence this suit. Summons in form Iv of the Schedule B of Order 37 Civil Procedure Code . were issued to the defendants. After service of summons, defendants put in appearance. Thereafter summons for judgment were taken out and served on the defendants. In response there too, the defendants filed this application, by which the defendant M/s Montana International through defendant No.4 Shri Sudhir Anand have sought leave to defend this suit unconditionally. The leave has been sought inter alia, on the ground that the plaintiff bank has already lodged criminal complaint with the police against the defendant, hence the matter being sub-judice,the. suit on the same cause of action is not maintainable. That Air India is a necessary party to the suit whereas defendant No.5 M/s seroflot Soviet Airlines was not a necessary, party. Therefore, the suit is not only bad for non-joinder of necessary party but also bad for mis-joinder of parties. Even otherwise defendant No.5 being a foreign company and agent of Soviet Socialist Republic, without the consent of the Central Government no suit against defendant No.5 is maintainable. That the goods in question never passed to defendant 1. According to defendant, the Colombo Cloves i.e. the consignment in question, was never delivered to him. In fact, the goods were pledged with the bank, therefore, possession of the same remained with the bank. The plaintiff bank paid the customs duties through M/s Air Wings, who got the clearance of the goods for the plaintiff bank. Air Wings' agent of plaintiff took delivery of goods for and on behalf of the plaintiff bank. The consignment was delivered to the plaintiff bank alone in the account of defendant No. 1. There was no connivance of the defendants 1 & 4 with defendant No.5. The plaintiff bank colluded within defendants 2 and 3, and thus falsely implicated defendant No.1. There was no contract to pay the interest. Since the suit amount includes interest amount which was never agreed hence suit is not maintainable. For this reason also, defendant is entitled to the leave to defend.
(2) The application was contested by the plaintiff bank thereby repudiate the averments made in this application.
(3) I have heard the learned counsel for the parties and perused the record. It has been the case of the plaintiff bank that defendant No.1 had forged and fabricated the documents. The alleged letter dated 6th March,1984 was never issued by plaintiff bank. The letter purported to have been written by the bank to the Air India on 6th March,1984 could not have been issued as it was a weekly close day of this branch of the Bank. The question whether these documents were forged or not is admite dly a matter sub-judice before the criminal court where criminal proceedings have already been initiated by the bank. The air consignment note was drawn in the name of the plaintiff bank. Bill of Exchange had first to be presented to the firm for acceptance, then only liability could be fastened on defendant. The documents had to be negotiated. But this fact has neither been averred nor prima facie established by the bank. The fact that documents were not presented for acceptance nor negotiated requires proof. These are friable issues. It cannot be said that this is a sham defense. The other question for consideration is letter dated 6th March,1984 was forged if so by whom? And whether goods were delivered on the basis of a forged document. If this fact is proved that goods were taken delivery of on the basis of the forged letter, the consequences would follow. However, if it is not established that the goods were taken delivery by defendant No.1 or that the documents were forged by the defendant No.1 then the suit against defendant No.1 cannot be decreed. It has also come on record that the bank official paid customs duty charges. From this action on the part of the bank, an inference can be drawn that the bank had the knowledge that the goods have arrived and are to be removed. Therefore, in order to obtain the goods the bank paid customs duty charges. The original bill negotiated under the Letter of Credit has also not been produced. In the absence of the same, prima facie case of liability cannot be established. This fact is in the realm of evidence which requires proof. Even otherwise serious doubts have been raised by the defendants as to who took delivery and whether delivery was taken against forged documents. These are disputed questions of facts and require trial. The defense cannot be called a noon shine defense or a sham defense.
(4) It is also the ease of the defendants I and 4 that Shri Anoop Sarin, defendant No.2 partner of defendant No. I was in collusion with the bank officials that is why he offered Rs.l,50,000.00 to the bank. Defendant no.1 never negotiated any document with the plaintiff bank. It was only Mr.Anoop Sarin, defendant No.2 who entered into these transactions. The bank has admitted that the goods were removed in connivance by the bank official and defendant No.2. Who committed forgery and with whose connivance the goods were taken delivery are the defenses raised not for the sake of defense, but require evidence and proof.
(5) MR.B. Mohan, appearing for the defendant contended that on the bill acceptance by defendant No.1 ought to have been there. Having not got the same, no liability can be fixed on defendant No.1. These are friable issues required to be established on the record and if these are proved against the plaintiff, the bank may loss the case. Reference in this regard can be had to the decision of Mysore High Court reported in Air 1952 Mysore page 116 as well as on the provisions of Section 32, 37 and 61 of the Negotiable Instruments Act. Relying on these provisions, it can be said that the bill unless negotiated and endorsement in this regard appears, no liability can be presumed. He also placed reliance on the provisions of Section 99 and 104 of the Negotiable Instruments Act. From the reading of these provisions one can say that presentation of foreign bill is necessary. But the record produced does not show that foreign bill was presented to the defendant firm. These are the questions which require trial. These cannot be decided in the absence of evidence. Reference can be made to some of the paras of the plaint, namely, paras 5, 6 and 7. The alleged bills mentioned in para No.6, according to Mr.B.Mohan, were not bills but invoices. The original bill of exchange has not been produced. In the absence of the same, the defendant deserves leave to contest the case.
(6) There is according to the defendant, no agreement to pay interest. In fact, claim of interest is not based on any agreement. Since the question of payment of interest is a dispute initself, therefore, to my mind, it is also a friable issue. The plaintiff has not based his claim of interest on any written agreement. In the absence of the same, prima facie, it can not be said that the claim for interest is covered under Order xxxvii Civil Procedure Code .
(7) So far as the question that there was a forgery of documents, this is yet to be established. Was it the bank official alone or was it in connivance with the defenants? If so, which of the defebdant? This again is a question Which requires evidence, and therefore, to my mind, a friable issue. The averment of the plaint depicts the facts which are in the realm of facts needing proof. These defenses cannot toe called non shine or sham defenses.
(8) Contention of Mr.Singhla that in paraNo.7 of the plaint, it has been specifically pleaded that duplicate set of documents relating to both the bills were presented to the defendant firm. These documents were received by the defendant. This fact hag not been denied, therefore, the defendant No: I cannot dispute its liability. I am afraid this argument has no force. In para 7 of the plaint, the mention is of duplicate set of documents. It is no where pleaded that original documents were presented, nor the originals have been produced on record. Therefore, specific denial of the receipt of duplicate documents will not dies-entitle the defendant the leave to defend.
(9) For the reasons stated above, I find it a fit case where defendants 1 & 4 should be granted the leave to defend unconditionally.
(10) With these observations, the application stands, disposed of.