Judgment :- 1. CS.No.1846/1993 is filed for a Judgement and Decree, (a) directing the Defendants 1 to 3 to jointly and severally pay the second Plaintiff (Transferee/Assignee of the first Plaintiff) 29,713.75 US Dollars (or its equivalent in Indian Currency at the time of payment) being the value of 47.542 Cu.M (214 M.T.) of cut and dressed granite dimensional stones of colour "GANGA" by accepting the sale documents sent by the first Plaintiff and honouring the transferable and irrevocable Letter of Credit given by the 4th Defendant Bank No.BRE 1006 34493 dated 15.7.1993 by crediting 29713.75 US Dollars to the credit of the second Plaintiff with the 5th Defendant Bank, (b) for permanent injunction restraining the Defendants 1 to 3 from in any way taking delivery of the cut and dressed granite dimensional stones of colour "GANGA" covered by Invoice No.006 dated 9.11.1993 without accepting the sale documents sent by the first Plaintiff and without paying the amount covered under the transferable and irrevocable Letter of Credit given by the 4th Defendant Bank No.BRE 1006 34493 dated 15.7.1993 viz. 29713.75 US Dollars (or its equivalent in Indian Currency at the time of payment) by crediting the said amount to the 2nd Plaintiff with the 5th Defendant Bank viz. Central Bank of India, Madras-6, (c) for permanent injunction restraining the shipping agent viz. the 6th Defendant herein from in any way delivering the cut and dressed granite dimensional stones of colour "GANGA" covered by Invoice No.006 dated 9.11.1993 without getting clearance from the Plaintiffs to the effect that the Defendants 1 to 3 have honoured the documents and paid the sum of 29713.75 US Dollars through Commerz Bank, Bremen, the 4th Defendant, payable to the Plaintiffs bankers viz. Central Bank of India, Mount Road, Madras-6 the 5th Defendant and (d) for directing the Defendants to pay the costs of the suit. CS.No.726/1995 is filed for a Judgment and Decree in favour of the Plaintiff against the Defendant for recovery of a sum of Rs.33,27,914.15/-together with interest at 15% p.a from the date of the plaint till the date of realization. 2. The plaint averments in CS.No.1846/93 are as follows:- a. The Plaintiffs are dealing in the sale of granite stones in different colours to foreign buyers. 2. The plaint averments in CS.No.1846/93 are as follows:- a. The Plaintiffs are dealing in the sale of granite stones in different colours to foreign buyers. The practice is that the foreign buyer will come to the Plaintiffs and give their requirements and the Plaintiffs will take them to their quarry site and the buyers will tell their requirements regarding the dimension and colour of the said goods. Thereafter, the Plaintiffs will settle the terms like consideration, delivery schedule, mode of delivery and the terms regarding opening of irrevocable Letter of Credit towards payment of sale consideration etc. b. In one of such dealings, after mutual discussions, the 1st Defendant placed orders on the first Plaintiff for the supply of 47.542 cubic meters equivalent of 214 metric tonnes of granite stones at the rate of USD625 per cubic meter (Rs.31.38/- per cubic meter) amounting to the sale consideration of 29713.75 US Dollars equivalent to Rs.9,32,417. The 1st Defendant was represented by its Managing Partner, the 2nd Defendant herein, who placed orders at Madras with the 1st Plaintiff. It was agreed that the 1st Defendant will open a transferable and irrevocable Letter of Credit for the consideration of the granites, viz. the value of 29713.75 US Dollars in favour of the 1st Plaintiff. Accordingly, the 1st Defendant has opened a transferable and irrevocable Letter of Credit No.BRE.1006 34493 dated 15.07.1993 with their bankers, viz. Commerz Bank, Bremen, the 4th Defendant herein, stating that they have communicated the same to the bankers of the 1st Plaintiff, viz. Central Bank of India, Mount Road, Madras-6, the 5th Defendant herein. c. Based on the said transferable and irrevocable Letter of Credit, the 1st petitioner has made arrangements for exporting blue granite of the description of "Cut and Dressed Granite Dimensional Stones of Colour -GANGA. ABT 65 cubic meters at US Dollars 625 per cubic meter." The 1st Plaintiff exported the cut and dressed granite dimensional stones of color "Ganga" by Ship M.V.PAL DISKI from Visakapatnam Port to Antwerp. The port of shipment is Visakapatnam and the Port of Destination is Antwerp. The 1st Plaintiff has raised Invoice No.006 dated 9.11.1993 for the sale of the said granite stones as per the specification. The port of shipment is Visakapatnam and the Port of Destination is Antwerp. The 1st Plaintiff has raised Invoice No.006 dated 9.11.1993 for the sale of the said granite stones as per the specification. The first Letter of Credit was for the purchase of 25 cubic meters of granite stones and it was, later, amended for the purchase of 65 cubic meters and the transferable and irrevocable Letter of Credit was also consequently amended and the invoice was drawn for the sale of 47.542 cubic meters of granite stones for a total consideration of 29713.75 US Dollars equivalent to Rs.9,32,417/-. The invoice makes it clear that the goods have been sold and the goods are transported at the risk of the purchaser, the 1st Defendant herein. d. The amended Letter of Credit sent by the 1st Defendant through their bankers, Commerz Bank, Bremen, the 4th Defendant herein makes it clear that if any set of documents contain discrepancy and presented to the Bankers, that will be charged with a fee of DEM 100.00 to cover the extra work involved and this charge is for the account of the beneficiary and the same will be deducted from the amount to be paid and this credit is said to be subject to ICC 400. On 26.10.93, the second Defendant, who was present in Visakapatnam, has confirmed that the document concerning the last shipment of "Ganga" and the documents of the present shipment of "Ganga" will be accepted as soon as the documents of the present shipment reached their Bank. Thus, the 1st Plaintiff has admittedly transported granite stones of the specification "Ganga" under two consignments. The 1st Plaintiff has sent three sets of documents, one set to the 1st Defendant and the other two sets to their Bankers viz. Commerz Bank, Bremen, the 4th Defendant herein, as per the terms of the Letter of Credit. The said goods exported have reached the destination viz. Antwerp through the port Antwerp and the 1st Defendant should honour the documents with their Banks and their bankers, Commerz Bank, Bremen have to credit in the account of the 1st Plaintiff through their bankers, Central Bank of India, Mount Road, Madras-6. The said goods exported have reached the destination viz. Antwerp through the port Antwerp and the 1st Defendant should honour the documents with their Banks and their bankers, Commerz Bank, Bremen have to credit in the account of the 1st Plaintiff through their bankers, Central Bank of India, Mount Road, Madras-6. e. Since a transferable and irrevocable Letter of Credit was opened by the 1st Defendant in terms of the aforesaid sale transaction between the first Plaintiff and the first Defendant, the 1st Plaintiff has transferred the said Letter of Credit in favour of the 2nd Plaintiff and this has been duly intimated to their bankers viz. Central Bank of India, Mount Road, Madras-6 and the transfer has been accepted by the said bankers. Thus, as a transferee, the 2nd Plaintiff is entitled to have the credit of the amount as per the terms covered by the Letter of Credit. The 1st Defendant has committed breach and has not cleared the documents from their bankers, viz. Commerz Bank, Bremen raising some frivolous objections. They have raised a plea that there are some discrepancies in the documents and the so-called discrepancies are not discrepancies at all and the bankers of the 1st Defendant has been sending telex stating that there are discrepancies and that the 1st Defendant has not honoured the documents because of the discrepancies. Immediately, the first Plaintiff contacted the 1st Defendant and informed that the so-called discrepancies are not discrepancies at all and asked the 1st Defendant to honour the documents as promised. The 1st Defendant is dragging on the matter and deliberately not honouring the documents with ulterior motive. f. The 1st Defendant is liable to pay certain amount by way of service charges/commission to the 1st Plaintiff. Now, the 1st Defendant has been asking for concession. The 1st Defendant is bound to honour the documents. While so, the 1st Defendant is trying to clear the consignment from the shipping Agent viz. Puy Vast Chartering, the 6th Defendant herein by misrepresenting to them and by showing only one original Bill of Lading and without honouring the documents. The 1st Defendant cannot take delivery of the goods without honouring the documents and without the entire consideration being credited to the account of the Plaintiffs as covered by the transferable and irrevocable Letter of Credit. The 1st Defendant cannot take delivery of the goods without honouring the documents and without the entire consideration being credited to the account of the Plaintiffs as covered by the transferable and irrevocable Letter of Credit. g. The 1st Defendant Defendant is misleading the Shipping Agent, as if the 1st Defendant is entitled to take delivery of the consignment by simply producing only one Original Bill of Lading without honouring the documents, which is nothing but a fraud. The 1st Defendant is taking advantage of the fact that they are in a foreign country and knowing fully well that it will be difficult for the Plaintiffs to go to the country of the 1st Defendant and recover the money. The 6th Defendant is pleading helplessness and is stating that it may be compelled to give delivery of the goods. If the Defendants 1 to 3 succeed in their attempt in taking illegally delivery of the goods without honouring the documents and without paying 29713.75 US Dollars, the Plaintiffs will put to irreparable loss, damage and injury. Even though the 1st Plaintiff has a filed a suit in OS.No.9556/93, since this comprehensive suit has been filed for recovery of money, the 1st Plaintiff is taking steps to withdraw that suit. Since, the 1st Defendant has agreed to pay the money covered by the invoice at Madras, the contract was entered at Madras, the money is payable at Madras and the order was placed at Madras, a part of the cause of action has arisen within the jurisdiction of this court. In such circumstances, this suit has been filed. 3. In the Written Statement filed in CS.No.1846/93, it is averred as follows:- a. The 1st Defendant is a Partnership Firm dealing in granites export and import. According to the specification of the 1st Defendant, the Plaintiff offered to export granite blocks and offered to act as the agent of the 1st Defendant in transactions entered into by the 1st Defendant with the Government and other suppliers by receiving commission. The 1st Defendant appointed R.Vijayaraghavan, the Proprietor of the 1st Plaintiff Company as their representative in certain transactions and also entered into a contract with him for the supply of granite blocks. The 1st Defendant appointed R.Vijayaraghavan, the Proprietor of the 1st Plaintiff Company as their representative in certain transactions and also entered into a contract with him for the supply of granite blocks. While supplying consignments, R.Vijayaraghavan supplied block of granites of inferior quality, which are not according to the description and the samples seen by the representative of the 1st Defendant and not fit for the purpose, for which they were intended and this resulted in a huge loss and the 1st Defendant is entitled to be indemnified by the Plaintiffs. The 1st Defendant had sustained heavy loss in the transaction with M/s.Western Rock Granite Pvt Limited at Salem through R.Vijayaraghavan. The 1st Defendant had sustained huge loss of 127,500 US Dollars, because the 1st Defendant opened red clause Letter of Credit at the instance of R.Vijayaraghavan. On 28.7.92, the entire dealings between R.Vijayaraghavan and the 1st Defendant were analysed and R.Vijayaraghavan acknowledged the liability and signed a letter in evidence of the same, which was co-signed by the 3rd Defendant herein. b. In the course of the dealings, the 1st Defendant placed an order on 15.7.93 for the supply of cut and dressed granite of colour "Ganga" of 47.542 cubic meters at the rate of US Dollars 625 per cubic meter. The 1st Defendant opened a transferable and irrevocable Letter of Credit with the 4th Defendant in BRE.1006 34493 and the terms of the same have to be strictly complied with. The 1st Defendant received one set of documents relating to the granite blocks shipped by the shippers from Vizagapattinam to Antwerp by Ship "M.V.PAL DISKI". Upon presentation of the bill of lading, the cargo was handed over to the 1st Defendant and on 30.11.93, the agent of the shipping Company acknowledged the receipt of the original bill of lading and placed the blocks irrevocably at the disposal of the 1st Defendant. In the mean while, the 4th Defendant, who had received the documents, had refused to honour the same, since they were not in accordance with the terms and conditions of the Letter of Credit nor in compliance with USPCDC and due to major discrepancies, the 4th Defendant rejected the documents and the 1st Defendant is in possession of the goods sent by the Plaintiffs. As stated above, the Plaintiffs owe a sum of US Dollars 107,874.04 in the course of the various dealings and in addition to the same, the Plaintiffs are liable to pay compensation for the breach of the contract and the 1st Defendant has exercised its charge over the goods and held the same against the Plaintiffs as security for the due repayment of the monies owing to them and the title in the goods have not passed to the 1st Defendant. c. On 10.12.93, the Plaintiffs sent blocks to the 1st Defendant stating that the documents have to be accepted with minor discrepancies, but these discrepancies are major discrepancies, which resulted in rejecting of the documents by the Bank. It was the Bank, which refused to accept the documents on account of the major discrepancies. R.Vijayaraghavan also agreed to ship granite blocks to cover the amount of US Dollars 107,874.04 on or before 31.1.94 and he assured that this would be sent as replacement for the defective materials and the 1st Defendant is entitled to seize and hold the present shipment and adjust it towards the liability. Out of the granite blocks for the aforesaid value, 60% should be in 240(-280) cm x 90(-120) cm x 70(-120) cm and 40% should be in 160 (-240) cm x 90(-120) cm x 100 (-140) cm. The Plaintiff assured that if the blocks in this size are not available, but block of different size, he would sell them to the other customers and send the sale proceeds to the 1st Defendant and there is no question of asking concession, which will be evident from the letter of the Plaintiffs signed on 20.7.92, where he accepts his liability and offers to settle this liability through supply of blocks with bulk allowance or reduced price provided that the 1st Defendant continues to buy blocks from him. The 1st Defendant legally and rightly presented the original bill of lading and took possession of the goods. d. The shipping agent has acted according to the customs and there is no fraud. It is the Plaintiffs who have to uphold the integrity of the Countries and show their bona fides by offering to settle the amounts due to the 1st Defendant. There is no question of payment at all. d. The shipping agent has acted according to the customs and there is no fraud. It is the Plaintiffs who have to uphold the integrity of the Countries and show their bona fides by offering to settle the amounts due to the 1st Defendant. There is no question of payment at all. In the course of the dealings, the dues payable to the 1st Defendant are very huge and therefore, they exercised the charge over the granite blocks. In such facts and circumstances, this suit is liable to be dismissed. 4. The plaint averments in CS.No.726/95 are as follows:- a. The Plaintiff is validly constituted in Germany as a Partnership Firm and it deals mainly in granite. The Defendant, who is dealing in the sale of granite stones in his individual capacity and as Proprietor of Nippon Impex Corporation and other firms met, the Plaintiffs representative at Madras and offered to export granite blocks according to the specifications of the Plaintiffs agent and the Defendant has also offered to act as the agent of the Plaintiff in transactions with TAMIN and in transactions with the other suppliers by receiving commission. The practice of the Plaintiff was that they would specify to their suppliers the size, colour, quality and rate of the supply of granite. The Defendant in any one of the capacities of agent, partner or the sole proprietor agreed to supply the required granite blocks in accordance with the description and specification of the Plaintiff and also in conformity with the samples/blocks selected by the Plaintiff or the representative of the Plaintiff at the quarry. b. When the blocks supplied to the importers are found to be defective during processing, the suppliers would, on intimation by the importers of the defects, replace the defective blocks. The Defendant is aware of this practice and promised the Plaintiff to act according to the same. While so, the Defendant supplied several consignments of granites, which were found to be defective and did not match the quality shown by the Defendant to the representative of the Plaintiff for approval and the goods were not fit for the purpose for which they were intended. The Defendant is aware of the requirements of market in Germany and Italy. While so, the Defendant supplied several consignments of granites, which were found to be defective and did not match the quality shown by the Defendant to the representative of the Plaintiff for approval and the goods were not fit for the purpose for which they were intended. The Defendant is aware of the requirements of market in Germany and Italy. The Defendant has been responsible for the supply of inferior blocks which necessitated the Plaintiff to effect sale of those goods and there was a risk of the goods being not sold and this resulted in a big loss to the Plaintiff, which the Defendant has to indemnify. c. There were other transactions entered into by the Plaintiff where the Defendant acted as the agent of the Plaintiff receiving huge commission, wherein also the Plaintiff had sustained a very heavy loss. The Plaintiff entered into a transaction through the Defendant with the firm M/s.Western Rock Granite Pvt. Limited. The Defendant has also offered to indemnify the Plaintiff from any loss that might be sustained by the Plaintiff by opening a Red Clause Letter of Credit. A suit in OS.No.673/94 has been filed by the Plaintiff against M/s.Western Rock Granite as well as the Defendant before the Sub Court, Salem regarding the said transaction. After taking stock of the various transactions between the Plaintiff and the Defendant and keeping in mind the running account between them, the Plaintiff sent a letter to the Defendant reiterating the difficulties of the Plaintiff with regard to the unsold stocks and informing the Defendant that his outstanding were mounting. On 20.7.1992, all the dealings between the Plaintiff and the Defendant were analysed and the Defendant after negotiations admitted and acknowledged his liability to the Plaintiff and signed a letter in acknowledgment of the same and the said letter has also been co-signed by an erstwhile employee of the Plaintiff. The said letter dated 20.7.92 contains a statement of the claims under five heads totaling to a sum of US Dollars 262,291.87. The amounts referred to as claims 4 and 5 is the subject matter of the suit in OS.No.673/94. d. A proposal was also given by the Plaintiff to reduce the outstandings, but the Defendant has not come forward to reduce the same. The amounts referred to as claims 4 and 5 is the subject matter of the suit in OS.No.673/94. d. A proposal was also given by the Plaintiff to reduce the outstandings, but the Defendant has not come forward to reduce the same. On 1.12.93, the Plaintiff has sent a letter to the Defendant stating that the Plaintiff has right to replace the defective goods and the outstandings had mounted up to more than hundred thousands of US Dollars. The running account between the Plaintiff and the Defendant would show that the Defendant had to pay 107,874.04 US Dollars as on 30.9.93. It was further proposed that the shipment had to take place on or before 31.1.93 and should cover the amounts of 107,874.04 US Dollars as replacement to the Plaintiff. The Plaintiff has also proposed to the Defendant that in case he is not able to produce enough blocks of the requisite size, he may sell the blocks to the other customers and transfer the sale proceeds to the Plaintiff on or before 31.1.94. The said amounts of 107,874.04 US Dollars is exclusive of the amount claimed in the suit filed referred to above. As per the statement of account filed along with the plaint, the outstanding in the defendants account is 340,000.56 US Dollars and the amount claimed in this suit is only 107,874.04 US Dollars. In respect of the items 1 and 3 of the said statement of account, a suit has been filed in Salem and as regards the amounts under item 2, no claim is made. Hence, the suit is filed for recovery of 107,874.04 US Dollars. Though the Plaintiff is entitled to interest on the outstanding at 15% p.a. from 30.9.93 till the date of filing of the suit, the Plaintiff is claiming interest from the date of the plaint till the date of realization. e. The Defendant sent a shipment under a Letter of Credit BRE.1006 34493, which was the subject matter of CS.No.1846/93. Pursuant to the order of this court in A.No.2761/94, the Plaintiff had deposited the suit claim of CS.Nos.1846/93 with the Commerz Bank, Bremen. e. The Defendant sent a shipment under a Letter of Credit BRE.1006 34493, which was the subject matter of CS.No.1846/93. Pursuant to the order of this court in A.No.2761/94, the Plaintiff had deposited the suit claim of CS.Nos.1846/93 with the Commerz Bank, Bremen. The Defendant is liable to make good the claim of the Plaintiff to the tune of 107,874.04 US Dollars and therefore, the Plaintiff is entitled to have a charge over the blocks and hold the same against the Defendant as security for the due repayment of the monies owing to them. The Defendant has till date not supplied blocks to cover the amount of 107,874.04 US Dollars as replacement to the Plaintiff and therefore, the Plaintiff is constrained to file this suit. 5. In the Written Statement filed in CS.No.726/95, it is averred as follows:- a. The suit is nothing but a counter to the civil suit in OS.No.1846/93 filed by the Defendant herein. In the said suit, an interim order was passed for the sale of the granites exported by Nippon Impex Corporation and Granite Export Corporation and the sale proceeds have been directed to be deposited with the Commerz Bank, Bremen, which was subsequently directed to be deposited to the credit of CS.No.1846/93 pursuant to the order of this court and for further investment or for payment out to the Defendant after such investment. The Plaintiff has deliberately suppressed the reliefs claimed by the Defendant and the orders passed in the said suit. The Defendant has been acting as the agent of the Plaintiff and procuring goods for the Plaintiff according to the specifications specified by the Plaintiff. The Plaintiff opened a Letter of Credit for the shipment of granites "Ganga" two consignments and failed to clear the documents at the destination point namely Antwerp Port, but raised certain frivolous objections and failed to clear through their bankers Commerz Bank, Bremen. Hence, the Defendant had to file the said suit. The Plaintiff has filed a suit in OS.No.673/94 on the file of the Subordinate Court at Salem against M/s.Western Books Granite Private Limited, M/s.Yercaud Granites, R.Vijayaraghavan and T.Socrates for recovery of a sum of 45,85,000 US Dollars inclusive of interest. Apprehending that the Defendant may realise the suit claim in CS.No.1846/93 deposited, the Plaintiff filed this suit as a counter to the said suit. Apprehending that the Defendant may realise the suit claim in CS.No.1846/93 deposited, the Plaintiff filed this suit as a counter to the said suit. The Plaintiff herein has based the suit claim on the basis of two documents, namely, letter of acknowledgment said to have been executed by the Defendant on 20.7.92 and the statement of account dated 30.9.93. There was no communication indicating the alleged claim as against the Defendant in favour of the Plaintiff and there was no pre-suit notice prior to the institution of the suit. b. The Plaintiff is not entitled to maintain the suit, since the Plaintiff has already filed a suit in OS.No.673/94 on the file of the Subordinate Judge, Salem. What all the Defendant has said in the said letter dated 20.7.92 was that the Defendant has assured that he would procure granites from the same supplier with whom the Plaintiff has raised certain disputes for recovery of the money and has promised to get certain material at a concessional rate so that the loss said to have been caused to the Plaintiff could be mitigated and the business relationship could be resumed. The Defendant is not liable to pay the alleged suit claim as per the statement of account filed along with the plaint and the Defendant is not having any running account with the Plaintiff and hence, the suit claim is devoid of merits. 6. On the side of the Plaintiffs in CS.No.1846/1993, the Plaintiffs examined the Proprietor of the 1st Plaintiff Company R.Vijayaraghavan as PW.1 and marked Exs.A1 to A13. On the side of the Defendants in CS.No.1846/1993, the Defendants examined the Manager of the 1st Defendant Company by name Ehler Klaproth as DW.1 and marked Ex.B1 to B3. 7. In CS.No.1846/1993, the following issues were framed for determination:- 1. Whether the Plaintiff is entitled for a decree as against the Defendants 1 to 3 jointly and severally for Rs.29,713.75 equivalent to Indian currency at the time of passing of decree being the value of 47.542 Cu.M? 2.Whether the Plaintiff is entitled for the money that has been realised by sale of the cut and dust granites covered by Invoice NO.006 dated 9.11.1993? 3.Whether the Plaintiff is entitled to claim interest at the commercial rate at 24% p.a. from the date of the supply till the date of actual payment? 4.To what relief the Plaintiff is entitled to? 8. 3.Whether the Plaintiff is entitled to claim interest at the commercial rate at 24% p.a. from the date of the supply till the date of actual payment? 4.To what relief the Plaintiff is entitled to? 8. In CS.No.726/1995, the following issues were framed for determination:- 5.Whether the defective supply of blocks by the Defendant has resulted in a loss to the Plaintiff? 6.Whether the Defendant is bound to indemnify the loss sustained by the Plaintiff in respect of supply of granite made by the Defendant either as agent or partner or the sole proprietor? 7.Whether the Plaintiff is entitled to the amount claimed as per the statement of account? 8.Whether the Plaintiff is entitled to interest on the outstanding at 15% p.a. from the date of the plaint till the date of realization? 9.Whether the Plaintiff is entitled to hold the amount deposited to the credit of CS.No.1846/93 against the Defendants liability to the Plaintiff? 10.Whether the Plaintiff is entitled to suit claim as prayed for? 11.To what other reliefs the Plaintiff is entitled to? 9. This court heard the learned counsel on either side and also perused materials on record. 10. For the sake of convenience the Plaintiffs in CS.No.1846/93 herein after will be referred to as the Plaintiffs and the Defendants in CS.No.1846/95 will be referred to as the Defendants, in accordance with their ranks in the plaint in CS.No.1846/95. 11. Issue Nos.1 & 2 in CS.No.1846/93 and Issue Nos.1 to 3 in CS.No.726/95:- The suit in CS.No.1846/93 has been filed by the Plaintiffs for recovery of the amount representing the value of the goods sold and delivered to the 1st Defendant pursuant to the transferable and irrevocable Letter of Credit opened by the 1st Defendant in the 4th Defendant Bank (Commerz Bank) in favour of the 5th Defendant Bank (Central Bank of India). The 1st Plaintiff has transported granite stones of the specification "Ganga" under two consignments and sent three sets of documents, one set to the 1st Defendant and the others sets to their Banker, viz. Commerz Bank, Bremen, the 4th Defendant herein as per the terms of the Letter of Credit. The 1st Plaintiff has transported granite stones of the specification "Ganga" under two consignments and sent three sets of documents, one set to the 1st Defendant and the others sets to their Banker, viz. Commerz Bank, Bremen, the 4th Defendant herein as per the terms of the Letter of Credit. The first Letter of Credit Ex.A1 was for the purchase of 25 cubic meters of granite stones and it was later amended for the purchase of 65 cubic meters and the transferable and irrevocable Letter of Credit was also consequently amended in Ex.A2 and Ex.A4. An invoice Ex.A7 was drawn for the sale of 47.542 cubic meters of granite stones for a total consideration of 29713.75 US Dollars equivalent to Rs.9,32,417/-(Indian Rupees). The 1st Plaintiff has transferred the said Letter of Credit in favour of the 2nd Plaintiff after intimating the same to their Bankers, namely, the Central Bank of India, 5th Defendant herein by letter dated 5.11.1993 marked as Ex.A5. The said transfer has been accepted by the 5th Defendant Bank in their letter dated 9.11.93 marked as Ex.A6. 12. It appears that the 1st Plaintiff had been informed by their bankers that the 4th Defendant/Commerz Bank, Bremen was holding the documents in view of certain discrepancies and the 1st Plaintiff in their letter addressed to the 1st Defendant in Ex.A8 had replied that those discrepancies pointed out were not discrepancies at all and requested the 1st Defendant to instruct their Bankers to honour the documents. Though the goods had reached the port of destination, the 4th Defendant did not honour the Letter of Credit and the goods were sought to be taken for delivery by the 1st Defendant from the shipping agent, the 6th Defendant herein. In the said circumstances, the 1st Plaintiff has filed the suit in OS.No.9556/93 only against the 6th Defendant and later withdrawn the suit. Thereafter, they have filed the comprehensive suit in CS.No.1846/93 for recovery of money making all the Defendants concerned as parties. 13. In the meanwhile, the 1st Defendant filed the suit in CS.No.726/95 against R.Vijayaraghavan claiming a sum of Rs.33,27,914.15/-with future interest at 15% p.a. on the basis of a letter of undertaking dated 20.7.2002 Ex.B1 executed by R.Vijayaraghavan, the Proprietor of the 1st Plaintiff Company, accepting the responsibility for paying the amounts as stated in Ex.B1. 13. In the meanwhile, the 1st Defendant filed the suit in CS.No.726/95 against R.Vijayaraghavan claiming a sum of Rs.33,27,914.15/-with future interest at 15% p.a. on the basis of a letter of undertaking dated 20.7.2002 Ex.B1 executed by R.Vijayaraghavan, the Proprietor of the 1st Plaintiff Company, accepting the responsibility for paying the amounts as stated in Ex.B1. It is the case of the 1st Defendant that R.Vijayaraghavan acted as an agent in the transaction with TAMIN and other suppliers receiving commission and also supplied granite blocks through firms where he is directly involved as the sole proprietor or partner receiving payments for the value of the blocks supplied. It is stated that several consignments of granites supplied were found defective and did not match the quality shown by the 1st Plaintiff to the 1st Defendants representative for approval, which resulted in a big loss to the 1st Defendant. It is further stated that after a lengthy discussion and after taking stock of various transaction, R.Vijayaraghavan admitted and acknowledged his liability to the 1st Defendant and also accepted his responsibility to pay to the 1st Defendant in Ex.B1 letter indicating the liability in five heads. The amounts referred to as item Nos.(4) and (5) is the subject matter of the suit in OS.No.673/94 on the file of the Sub Court, Salem later transferred to District Judge, Salem. It is stated that a proposal was also given by the 1st Defendant in October 1992 for reducing the outstandings and by letter dated 1.12.93 requested the first Plaintiff herein to replace the defective blocks, but the 1st Plaintiff failed to comply with the said demands. According to the 1st Defendant, the 1st Plaintiff was due and liable to pay 107,874.04 US Dollars as on 30.9.93. It is their case that in terms of the proposal given by them to the Plaintiffs in October 1992, the Plaintiffs herein should supply granite blocks of "Ganga medium" and "Ganga Dark" and should cover the amount of 107,874.04 US Dollars as replacement. Since the Plaintiffs herein had failed to pay the amount, the suit in CS.No.726/95 has been filed claiming a sum of Rs.33,27,914.15/- being Indian Rupees equivalent of 107,874.04 US Dollars. 14. The Plaintiffs herein as the Defendants in the above suit resisted the claim on two grounds. Since the Plaintiffs herein had failed to pay the amount, the suit in CS.No.726/95 has been filed claiming a sum of Rs.33,27,914.15/- being Indian Rupees equivalent of 107,874.04 US Dollars. 14. The Plaintiffs herein as the Defendants in the above suit resisted the claim on two grounds. Firstly, under Ex.B1 letter of undertaking the amounts could be adjusted on further purchase provided that the 1st Defendant Company continues to buy further granites from the 1st Plaintiff Company. The 1st Defendant having not purchased any granite stones, they cannot make a claim and secondly, the 1st Defendant having filed the suit in OS.No.673/94 on the file of the District Judge, Salem for recovery of a sum of Rs.45.85 lakhs on the strength of the documents that are relied upon in the said suit ought to have preferred all the claims that are available to him and the claim in CS.No.726/95 is barred by the Principle under Order 2 Rule 2 of Code of Civil Procedure. 15. The Plaintiffs are the dealers in granite stones and the Defendants 1 to 3 are the foreign buyers. The normal practice indisputably is that the foreign buyers are taken to the quarry site, they mark the stones and specify their requirements regarding dimension and colour and accordingly, the granite stones will be exported after settling the terms like consideration, delivery Schedule, mode of delivery and terms regarding opening of irrevocable Letter of Credit towards payment of consideration, etc. In the present case, the Plaintiffs agreed to export 47.542 cubic meters equivalent to 214 metric tonnes at 625 US Dollars and the 1st Defendant had opened Ex.A1 transferable and irrevocable Letter of Credit BRE.No.1006 34493 dated 15.7.93 for 29713.75 US Dollars. The 1st Plaintiff had made arrangements for exporting granite "Ganga" ABT 65 Cu.m USD 625 per cu.m through M.V.PAL DISRI-Vizag Port to Antwerp under Ex.A7 Invoice NO.006 dated 9.11.93. The first Letter of Credit was for the purchase of 25 cubic meters of granite stones and it was later amended for the purchase of 65 cubic meters and the Letter of Credit was consequently amended and the invoice also drawn for the sale of 47.542 cubic meters for a total consideration of 29713.75 US Dollars equivalent to Rs.9,32,417/-. From the Invoice Ex.A7, it could be inferred that the goods are to be transported at the risk of the purchaser namely the 1st Defendant herein. From the Invoice Ex.A7, it could be inferred that the goods are to be transported at the risk of the purchaser namely the 1st Defendant herein. Further, the Letter of Credit, which remain unchanged in amended Letter of Credit, stipulates that if any set of documents contain discrepancies and presented to the Bankers, that will be charged with a fee of DEM 100.00 to cover the extra work involved. This charge is for the account of the beneficiary and the same is liable to be deducted from the amount to be paid. This credit is said to be subject to ICC 400. The 2nd Defendant, who was present at Vizag, had confirmed in Ex.A3 letter that the document concerning last shipment of Ganga and the document of the present shipment of Ganga would be accepted as soon as the documents of the present shipment reached their bank. Admittedly, the goods exported have reached the destination viz. Antwerp through the Port Antwerp. It appears that the 1st Defendant has not honoured the documents with their bankers viz. Commerz Bank, Bremen, resultantly, the amounts have not been credited to the account of the 1st Plaintiff through their Bankers, Central Bank of India, Mount Road, Chennai, the 5th Defendant herein. 16. In the Written Statement filed by the 1st Defendant, in paragraph 8, it has been alleged that the 4th Defendant, who had received the documents, refused to honour the same, since they were not in accordance with the terms and conditions of the Letter of Credit nor in compliance with USPCDC. According to the 1st Defendant, the discrepancies were many and they were major discrepancies, which could not be ignored and hence, the 4th Defendant rejected the documents. There is no evidence forthcoming from the Defendants as to what were the discrepancies pointed out by the 4th Defendant Bank and on what grounds or reasons the documents were allegedly rejected by them. In the Written Statement, in paragraph 8, the 1st Defendant has set out certain discrepancies, but that are not supported by any document. The Defendants 4 and 5 are not represented through counsel and they have not filed any Written Statement. 17. The only document available is Ex.A8, a letter addressed to the 1st Defendant by the Plaintiffs requesting them to advice their bankers for acceptance of the documents as per the terms in the Letter of Credit. The Defendants 4 and 5 are not represented through counsel and they have not filed any Written Statement. 17. The only document available is Ex.A8, a letter addressed to the 1st Defendant by the Plaintiffs requesting them to advice their bankers for acceptance of the documents as per the terms in the Letter of Credit. In the said letter, the discrepancies are noted along with their explanation for each of the discrepancies, which is given below:- "1. Invoice Stating FOB Madras as Term of Delivery:- This is shipped from Vishakapatnam Port to Antwerp on FOB Visakhapatnam Basis as usual. The Invoice has been raised in usual format which we had been doing earlier also. We will amend the entry in invoice suitably in future. 2. Charter Partys Bill of Lading:- We have shipped in vsl "M.V.Paldiski as per your instruction only. As such, it is not a discrepancy. 3. Beneficiary confirmation certificate has been enclosed therewith. Hence, there is no discrepancy. 4. The delay in sending documents:- The Bill of lading dated 7.11.93 according to L.C. Terms. The documents must be presented within 15 days after on Board date of Bill of Lading. As such the Document must be presented within 22.11.93. Whereas our Bankers have sent the Document on 11th itself by Courier. Hence, there is no question of delay in sending of documents. Therefore, this is also not a discrepancy." 18. Again in Ex.A9 letter dated 25.11.93, the 1st Plaintiff has reiterated that the terms of delivery are in accordance with the Letter of Credit. In Ex.A10 legal notice dated 15.12.93, the Plaintiffs have stated that the 1st Defendant refused to honour the documents with ulterior motive to harass the Plaintiffs and further, it is stated that they had come to know that the 1st Defendant had instructed their Bankers, namely, the 4th Defendant herein not to pay the amount covered under the Letter of Credit opened by the 1st Defendant. For this letter, there is no reply from the 1st Defendant nor it has been refuted by them in the Written Statement filed in CS.No.1846/93. 19. In Cutaeridge and Megrahs Law Of Bankers Commercial Credits, Sixth Edition at Page 21, the nature of obligation created by a bankers commercial credit is succinctly stated. For this letter, there is no reply from the 1st Defendant nor it has been refuted by them in the Written Statement filed in CS.No.1846/93. 19. In Cutaeridge and Megrahs Law Of Bankers Commercial Credits, Sixth Edition at Page 21, the nature of obligation created by a bankers commercial credit is succinctly stated. "A seller of goods relying on such an instrument believes that he has the direct obligation of the issuing bank running in his favour, enforceable by him against that bank, that it will pay his drafts if drawn in compliance with the terms of the Letter of Credit. Banks are not concerned with the sales contract or the goods; if it were otherwise, credit business would be impossible." 20. A Letter of Credit is a contract. The issuing authority, usually a Bank, promises to pay the beneficiary, traditionally a seller of goods, on demand if the beneficiary presents whatever the documents may be required by the letter. The bank, which issues a letter of credit, acts as a Principal not as an agent for its customer and engages its own credit. A Letter of Credit, thus, evidences an irrevocable obligation to honour the draft presented by the beneficiary upon compliance with the terms of the credit. 21. The Honourable Supreme Court has observed in the decision rendered in the case of M/s.Tarapore and Co., Madras Vs. V.O.Tractors Export, Moscow and another [1969-1-SCC-233] that opening of a confirmed Letter of Credit constitutes a bargain between the bank and the vendor of goods, which imposes the bankers an absolute obligation to pay, irrespective of any dispute which may be between the parties as to whether the goods are upto the contract or not. A vendor of the goods selling against a Letter of Credit is selling under the assurance that nothing will prevent him from receiving the price. If the buyer has an enforceable claim that adjustment must be made by way of refund by the seller, but not by way of reduction by the buyer, then the Letter of Credit is independent of and unqualified by the contract of sale or underlying transaction. It observed that the authority of a Letter of Credit is entitled to protection. 22. In the case of United Commercial Bank Vs. It observed that the authority of a Letter of Credit is entitled to protection. 22. In the case of United Commercial Bank Vs. Bank of India and others [1981-2-SCC-766], the Honourable Supreme Court held that the rule was well established that a bank issuing or confirming a Letter of Credit was not concerned with the underlying contract between a buyer and a seller and the duties of a bank under a Letter of Credit were created by a document itself. 23. In the case of Food Corporation of India Vs. Arosan Enterprises Limited [AIR-1996-Delhi-126], it was observed that the only obligation of the bank is to examine with reasonable care all the documents presented in order to ascertain that they appear on their face to be in accordance with the terms and conditions of the credit and if so, to pay to the seller/beneficiary by whom the documents have been presented the sum stipulated by the credit or to accept or to negotiate without recourse to drawers draft drawn by the seller/beneficiary if the credit so provides. 24. In view of the observations made by the Honourable Supreme Court as stated supra, the bankers obligation under the irrevocable Letter of Credit was to pay and the buyer/customer was not entitled to instruct his banker not to honour his obligation to pay. It followed that the contractual duty owed by an issuing or confirming bank to the buyer is to honour the credit notified by him on presentation of apparently conforming documents by the seller and there is a corresponding contractual liability on the part of the bank to the seller to pay him the amount of the credit on presentation of the documents. The banks duty will be vitiated only if there was fraud on the part of the seller. The bank cannot refuse to honour the Letter of Credit, merely because there is a statement of material fact that was not accurate, although the documents presented were in conformity on their face with the terms of the Letter of Credit. 25. It appears from the documents filed in this case, the issuing bank, namely the 4th Defendant herein has pointed out certain discrepancies, which had been duly explained by the Plaintiff in their letter Ex.A8 and Ex.A9 addressed to the 1st Defendant to advice their bankers to accept the documents. 25. It appears from the documents filed in this case, the issuing bank, namely the 4th Defendant herein has pointed out certain discrepancies, which had been duly explained by the Plaintiff in their letter Ex.A8 and Ex.A9 addressed to the 1st Defendant to advice their bankers to accept the documents. In fact, there is a clause in the Letter of Credit itself that if any set of documents contain any discrepancy, it will be charged with a fee of DEM 100.00 to cover the extra work involved and the same will be deducted from the amount to be paid to the Plaintiffs. 26. Even as per the clauses contained in Uniform Customs and Practice for Documentary Credits (1974), the issuing bank must without any delay issue a notice to the bank from which the documents have been received, stating the reasons that the documents are being held at the disposal of such bank or being returned thereto. In the present case, there is no such material to indicate that such steps has been taken by the 4th Defendant Bank drawing the attention of the 5th Defendant Bank pointing out to any discrepancies and the documents are not in conformity with the terms in Letter of Credit. The discrepancies as pointed out in the letters Ex.A8 and Ex.A9 appear to be small discrepancies and it does not lead to a conclusion that the documents tendered by the Plaintiffs were not in accordance with the Letter of Credit. Therefore, the contention of the Defendants that the 1st Defendant has not committed any breach and the 4th Defendant did not honour the Letter of Credit as the documents were not in conformity with the terms and conditions of the Letter of Credit cannot be appreciated. 27. It is the categoric case of the 1st Defendant that R.Vijayaraghavan agreed to discharge his liability by supplying granites in his letter of undertaking Ex.B1, but did not take any steps for many months to supply granite stones and only in 1993 the granite blocks as ganga, which is the subject matter of CS.No.1846/93, were supplied. According to them, it was supplied in pursuance of the arrangement as agreed upon by R.Vijayaraghavan in Ex.B1. So, it is their case that the said supply was made in terms of Ex.B1. According to them, it was supplied in pursuance of the arrangement as agreed upon by R.Vijayaraghavan in Ex.B1. So, it is their case that the said supply was made in terms of Ex.B1. But, in the Written Statement filed in CS.No.1846/93, in paragraph 6, it is stated in clear terms that the 1st Defendant, as he used to place orders for supply, placed one such a purchase order on 15.7.93 for the supply of cut and dressed granite ganga as per the requirements of the 1st Defendant, who opened an irrevocable Letter of Credit. The above said statement clearly indicated that this was an independent transaction and the said supply was made not in terms of Ex.B1 letter of undertaking. If it was supplied in terms of Ex.B1, there was no necessity for the 1st Defendant to open a Letter of Credit as security of the goods supplied by the Plaintiffs. Neither it is stated that the goods received by them was as part of liability of the Plaintiffs to supply granites under Ex.B1 arrangement. In fact, the 1st Defendant has in an unequivocal terms has stated that they have exercised its charge over the blocks and held the same against the Plaintiffs as security for the due repayment of the monies owing to them which has been reiterated in the subsequent paragraphs also. Hence, I am of the view that the contention of the 1st Defendant that the supply of granites under purchase order dated 15.7.1993 was made in terms of arrangement made in Ex.B1 as discharge of part of the liability of the Plaintiffs cannot be appreciated. 28. Mr.R.Thiagarajan, the learned counsel for the Plaintiffs drew the attention of this court to the provision of Rule 6A of Order VIII of CPC, wherein the rights are granted to the Defendants to set up a counter claim in the Written Statement when cross demands arise out of the same transaction or out of transaction which are so connected in their nature and circumstances. The learned counsel would contend that when the Plaintiffs pleaded that the 1st Defendant owed money for the goods sold and delivered on the basis of the Letter of Credit opened by the 1st Defendant, the 1st Defendant ought to have pleaded set off or counter claim as the case may be in their Written Statement, but no such plea is raised which would evently show that the claim made by the Plaintiffs is a separate transaction and it has nothing to do with the arrangement made in Ex.B1 letter of undertaking. 29. There is a considerable force in the submission of the learned counsel for the Plaintiffs. It cannot be disputed that the counter claim is in the nature of a cross action and not merely a defence to the Plaintiffs claim. It enables a Defendant to enforce a claim against the Plaintiff as effectively as an independent action. But, in the present case, the 1st Defendant had never made any counter claim. If Ex.B1, the letter of undertaking is the answer to the claim made by the Plaintiff and it covered even the suit transaction in CS.No.1846/93 and the Plaintiff was liable to pay to the Defendants, then nothing prevented the 1st Defendant from making a counter claim even when he filed the Written Statement in June 1994. The suit in CS.No.726/95 has been filed by the 1st Defendant only in May 1995 on the basis of Ex.B1 dated 20.7.92 and the statement of account dated 30.9.93 marked as Ex.B3. 30. It is the case of the Plaintiffs that Ex.B1 dated 20.7.92 cannot be read in isolation, but has to be considered along with the other correspondences exchanged between the parties in that regard. The learned counsel for the Plaintiffs urged that in Ex.B1, R.Vijayaraghavan has only assured that he would procure granites from the suppliers with whom the 1st Defendant had raised certain disputes for recovery of money and had promised to get certain materials at a concessional rate, so that the loss said to have been sustained by the 1st Defendant would be mitigated. According to him, there is no unqualified admission to pay the suit claim in Ex.B1 letter dated 20.7.92 and the Plaintiffs have never accepted the correctness of the said statement Ex.B3 at any point of time, as it is not supported by any other document. 31. According to him, there is no unqualified admission to pay the suit claim in Ex.B1 letter dated 20.7.92 and the Plaintiffs have never accepted the correctness of the said statement Ex.B3 at any point of time, as it is not supported by any other document. 31. In the plaint filed in CS.No.726/95, in paragraph 11, the 1st Defendant had stated that after Ex.B1 letter was given by R.Vijayaraghavan, a proposal was given by the 1st Defendant in October 1992 for reducing the outstandings and also sent a letter on 1.12.93 to the Plaintiffs requesting them to replace the defective blocks of granites, to which the Plaintiffs failed to respond. According to the 1st Defendant, as per the running account between the Plaintiffs and 1st Defendant, the 1st Plaintiff had to pay 107,874.04 US Dollars as on 30.9.93. It is their case that the terms of the proposal dated 1.12.93, which repeated the proposal made in October 1992 by the 1st Defendant, are that the 1st Plaintiff should supply granite blocks of ganga medium and ganga dark on or before 31.1.93 which should cover the amounts of 207,874.04 US Dollars as replacement to the defective granites blocks supplied. As per the statement of account, the outstanding amount in the Plaintiffs account is 340000.56 US Dollars, but the amount claimed is only 107,874.04 US Dollars. In the statement of account, it is said that the claim 1 and 3 are covered by the suit transaction in OS.No.673/94 on the file of the District Judge, Salem and the 2nd item is referred to as the granite blocks that were supplied defective to the value of 82,477.15 US Dollars. 32. In Ex.B1, there is no reference to replacement of defective blocks, however, R.Vijayaraghavan has accepted his responsibility for getting back the value of the blocks of granite but only through delivery of granite blocks with bigger allowances of measurement and/or reducing prices. That is only subject to the condition that the 1st Defendant continues to buy the granite blocks from any of the companies referred to in Ex.B1. The items 3 to 5 in Ex.B1 admittedly are covered by the transaction in the suit in OS.No.673/94. The items 1 and 2 according to the 1st Defendant relate to the suit transaction. That is only subject to the condition that the 1st Defendant continues to buy the granite blocks from any of the companies referred to in Ex.B1. The items 3 to 5 in Ex.B1 admittedly are covered by the transaction in the suit in OS.No.673/94. The items 1 and 2 according to the 1st Defendant relate to the suit transaction. The correspondence between the Plaintiffs and the 1st Defendant regarding the proposal said to have been given by the 1st Defendant for replacement of defective blocks and also the intimation regarding the outstanding due from the Plaintiffs to the tune of 107,874.04 US Dollars which has been referred to in paragraphs 11 and 12 of the plaint in CS.No.726/95 have not been filed before the court. In the absence of any evidence to substantiate the above said claim made by the 1st Defendant, no inference could be drawn that the items 1 to 3 referred to in Ex.B1 related to the suit transaction. It is not recited in Ex.A1 or Ex.A4 that the goods were supplied in discharge of the liability acknowledged under Ex.B1. 33. That apart, Ex.B1 recitestwo things, the first one is that R.Vijayaraghavan agreed to settle the value through delivery of blocks with bigger allowances of measurement and/or reduces prices and the other one is that the same would be done only if M/s.Nestor Granit continues to buy further granite blocks. PW.1 in his evidence speaks about the tripartite agreement entered into between M/s.Nestor Granit, the 1st Defendant herein on the one hand and M/s.Yercaud Granites through R.Vijayaraghavan and M/s.Western Rocks Granite Pvt Limited through its Chairman V.Rajamanickam on the other hand. He admits that he has undertaken to indemnify the 1st Defendant for the loss caused to the 1st Defendant due to breach of contract by M/s.Western Rock Company. Admittedly, that is the subject matter of the suit in OS.No.673/94 on the file of the District Judge, Salem. PW.1 has stated that his liability arising out of Ex.B1 undertaking is 35,000 US Dollars which he had discharged by supplying equal value of granites to the 1st Defendant. According to him, it was discharged even before November 1993. 34. The evidence of DW.1 the Manager of the 1st Defendant Company shows that pursuant to Ex.B1 letter of undertaking by R.Vijayaraghavan, the latter had supplied granite blocks to the 1st Defendant to the value of 11,000 dollars. According to him, it was discharged even before November 1993. 34. The evidence of DW.1 the Manager of the 1st Defendant Company shows that pursuant to Ex.B1 letter of undertaking by R.Vijayaraghavan, the latter had supplied granite blocks to the 1st Defendant to the value of 11,000 dollars. The relevant portion from his evidence is extracted below:- "At the time when Vijayaraghavan came to Germany his companies still owe us about 80,000 US Dollars. Vijayaraghavan during his visit to Germany gave a statement Ex.B1 undertaking to supply granites by the companies mentioned therein to the value indicated therein. We have agreed to place purchase orders only through PW.1 Vijayaraghavan as our agent. After this PW.1 has supplied granite blocks to us. He supplied granites only to the value of 11,000 US Dollars and DW.1 has not kept the consignment as per Ex.B1." 35. Though he has further stated in his evidence that they have documents to show the total quantity of granite blocks received from the Plaintiffs Company and the corresponding invoices, but they have not chosen to file them before the court. The non production of material documents available with the 1st Defendant would only lead to an adverse inference to be drawn against the 1st Defendant. The evidence placed on record both oral and documentary clearly establishes that the transaction in CS.No.1846/93 is a separate transaction arising on the basis of irrevocable Letter of Credit for the goods delivered by the Plaintiffs. There is no evidence to show that there was defective supply of block by the Plaintiffs as claimed in CS.No.726/95. As the transaction and supply of goods in CS.No.1846/93 is a separate transaction, the Letter of Credit opened by the 1st Defendant cannot be indemnified to any amount due by the Plaintiffs. Therefore, the 1st Defendant is not entitled to the amounts claimed by it as per the statement of accounts. 36. A contention is put forth by the Plaintiffs that the relief of recovery of money on the basis of Ex.B1 letter of undertaking was available to the 1st Defendant even, when they filed the suit in OS.NO.673/94 and since the claim in CS.No.726/95 is founded on the same cause of action, the latter suit is barred by Order 2 Rule 2 of CPC. In so far as the said contention is concerned, I am of the opinion that it does not merit any serious consideration. The provision in Order 2 Rule 2 of CPC has no application to cases where the Plaintiff bases its suit on separate and distinct cause of action. What the rule requires is the unity of all claims based on the same cause of action in one suit and it does not contemplate unity of distinct and separate cause of action and therefore, if the subsequent suit is based on a different cause of action, the rule will not operate as a bar. 37. In the present case, the suit in OS.No.673/94 is based on the claim made by the 1st Defendant (Plaintiff in the said suit) against M/s.Western Rocks Granite Pvt. Limited, Yercaud Granites, R.Vijayaraghavan and T.Socrates due under the red clause letter of credit opened by the 1st Defendant pursuant to the agreement Ex.B2 dated 1.2.91, wherein the Defendants in the said suit agreed to supply granite blocks as indicated in Ex.B2 agreement. However, in CS.No.726/95, the claim is based on the letter of acknowledgment and undertaking given by R.Vijayaraghavan under Ex.B2. Hence, the essential requirement for the applicability of Order 2 Rule 2 of CPC, namely the identity of causes of action is not established. Therefore, I am of the view that there is no scope for the application of the bar contemplated under Order 2 Rule 2 of CPC in this suit. 38. Before adverting to the reliefs sought for by the parties, series of orders passed by this court have to be referred to. The Plaintiffs have sought for an order of interim injunction against the Defendants from taking delivery of the goods in OA.No.1098/93 and 1099/93 and the same was granted by an order dated 28.12.1993 and was extended until further orders. By an order dated 25.4.1994 in A.No.2761/94, the Defendants 1 and 2 were permitted to sell the granites exported by the Plaintiffs and were directed to deposit the amounts in the 4th Defendant Bank by order dated 10.11.94. At the instance of the learned counsel for the Defendants, further time was granted to sell the materials and deposit the amount in the 4th Defendant Bank. At the instance of the learned counsel for the Defendants, further time was granted to sell the materials and deposit the amount in the 4th Defendant Bank. Subsequently, by order dated 27.1.95, the Defendants were directed to deposit the suit claim within four weeks from 27.1.95, in default, the Plaintiffs were given liberty to sell the granites to the intending buyers of applicants choice. As per the directions of this court, the Defendants 1 to 3 had sold the materials and deposited the amount into the 4th Defendant Bank. In the meanwhile, the 1st Defendant had filed application in A.No.1743 and 1744 to review the order dated 28.2.96 and the supplemental order dated 12.3.96 passed in OA.No.573/95 in A.No.2779/95 and this court directed the monies to be kept in Central Bank of India in foreign currency and directed the 4th Defendant Commerz Bank, Bremen to furnish a bank guarantee to the 5th Defendant Central Bank of India, Mount Road, Chennai. But, the 1st Defendant unilaterally without any permission from this court furnished a Bank Guarantee for a period of three months which had expired long back. Since the goods have been sold pursuant to the orders of this court, the Plaintiff has claimed the value of the goods. 39. In the light of the discussions made above, I hold that the transaction in CS.No.1846/93 is a separate transaction arising out the Letter of Credit opened by the 1st Defendant with the 4th Defendant Bank for the goods sold and delivered and further, since the goods have been sold pursuant to the orders of this court made in the interim applications and the amount is lying with the 4th Defendant Bank, the Plaintiffs in CS.No.1846/93 are entitled to the said amount. Therefore, the Plaintiffs in CS.No.1846/93 are entitled to a decree as against the Defendants 1 to 3 jointly and severally for 29713.75 US Dollars equivalent to Indian Currency being the value of 47.542 Cu.M. as on the date of claim. The 1st Defendant has failed to establish that there was any defective supply of blocks, which has resulted in a loss to the 1st Defendant, in so far as the suit transaction is concerned. Accordingly, the Plaintiffs are not bound to indemnify the loss sustained by the 1st Defendant in respect of the suit transaction and consequently, the 1st Defendant is not entitled to any amount. Accordingly, the Plaintiffs are not bound to indemnify the loss sustained by the 1st Defendant in respect of the suit transaction and consequently, the 1st Defendant is not entitled to any amount. Accordingly, Issue Nos.1 & 2 in CS.No.1846/93 and Issue Nos.1 to 3 in CS.No.726/95 are answered. 40. Issue Nos.3 & 4 in CS.No.1846/93 and Issue Nos.4 to 7 in CS.No.726/95 In view of the findings given for the Issue Nos.1 & 2 in CS.No.1846/93 and Issue Nos.1 to 3 in CS.No.726/95, the 1st Defendant is not entitled to hold the amount lying with the 4th Defendant Bank. Since, it is a commercial transaction and as it is held that the Plaintiffs in CS.No.1846/1993 are entitled for a decree as stated above, the Plaintiffs are entitled to claim interest at 24% p.a. from the date of supply till the date of actual payment. As it is held that the 1st Defendant is not entitled to any amount, the claim of interest by the 1st Defendant does not arise. Accordingly, the Issue Nos.3 & 4 in CS.No.1846/93 and Issue Nos.4 to 7 in CS.No.726/95 are answered. 41. Since the amounts are available in Commerz Bank, Bremen, the 4th Defendant herein, the said amount have to be repatriated to the funds of the 5th Defendant, Central Bank of India. Accordingly, the amounts available in Commerz Bank, Bremen, the 4th Defendant herein are directed to be repatriated to the funds of the 5th Defendant herein, Central Bank of India. In view of the interim orders passed by this court, reliefs (b) and (c) have become redundant. The Plaintiffs shall work out with the 5th Defendant Bank to claim the amount together with interest subject to the rights of Central Bank of India. 42. In the result, the suit in CS.No.1846/1993 is decreed to the extent mentioned above and the suit in CS.No.726/1995 is dismissed. However, in the circumstances of the case, there will be no order as to costs.