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2012 DIGILAW 2665 (DEL)

SEP Industries Ltd. v. Kay Bee & Co.

2012-09-12

VALMIKI J.MEHTA

body2012
JUDGMENT : Valmiki J. Mehta, J. 1. The subject suit has been filed under Order 37 CPC for recovery of Rs. 63,05,500/- against four defendants. The suit has already been decreed against defendant nos. 1 to 3 on account of their having failed to file appearance in terms of Order 37 CPC. Defendant nos. 1 to 3 are the main persons who had taken amounts from the plaintiff or guaranteed the repayment. The present suit is now to be decided only qua the liability of defendant no.4-State Bank of Saurashtra. 2. The facts of the case are that the plaintiff claimed that defendant nos.1 to 3 approached M/s Sunrise Polycon Ltd., an amalgamated company of the plaintiff for financial accommodation for an amount of Rs. 60,00,000/- bearing interest at 18% per annum. Loan was granted for a period of six months. The plaintiff claims that defendant nos. 1 to 3 represented that they had financial limits from the defendant no.4- bank, and which would co-accept the Bill of Exchange. Plaintiff claimed that defendant no.4 co-accepted the Bill of Exchange dated 30.3.1994 as confirmed by the defendant no.4 vide its letter dated 30.3.1994. The plaintiff has further pleaded that the plaintiff granted the financial accommodation and a sum of Rs. 54,60,000/-, by means of a cheque no. 360152 dated 30.3.1994, was paid to the defendant no.1. The plaintiff-company is thereafter said to have presented for payment the Bill of Exchange dated 30.3.1994 to the defendant nos. 2 and 3 who failed to make the payment. The plaintiff thus approached defendant no.4, co-acceptee of the Bill of Exchange, on 5.10.1994 to make the payment. Defendant no.4 is said to have refused the payment. Plaintiff is thereafter said to have formally presented the Bill of Exchange for payment and got the noting of dishonour qua the same. The plaintiff also deposited the cheque given by defendant no.2 (for and on behalf of his sole proprietorship firm the defendant no. 3) numbered as 48074 and dated 30.9.1994, which on being dishonoured, a criminal complaint under Section 138 of the Negotiable Instrument Act was filed. The subject suit has been filed for recovery of Rs. 63,05,500/-, of which 60,00,000/- being the principal amount and Rs. 3,00,000/- being the interest at 18% per annum from 1.10.1994 to 10.1.1995 and Rs. 5,500/- being the legal charges for demand notice dated 11.10.1994. 3. The subject suit has been filed for recovery of Rs. 63,05,500/-, of which 60,00,000/- being the principal amount and Rs. 3,00,000/- being the interest at 18% per annum from 1.10.1994 to 10.1.1995 and Rs. 5,500/- being the legal charges for demand notice dated 11.10.1994. 3. Defendant no.4 has contested the suit and pleaded that it never co-accepted the Bill of Exchange dated 30.3.1994. The bank denied having issued the letter dated 30.3.1994 for payment of amount of Bill of Exchange. Defendant no.4 pleads that the two letters dated 24.3.1994 and 30.3.1994 alleged to have been issued by defendant no.4 were never issued by defendant No.4 and this becomes clear from the fact there are no reference numbers of the bank in these letters, and which were bound to be there if these were authorised letters of the bank. Defendant no.4 has pleaded that there is no record in the bank of the alleged co-acceptance of the Bill of Exchange. Defendant no.4 has further pleaded that the CBI had already taken cognizance of the matter and investigations are going on. The defendant no.4- bank has further pleaded it could not have co-accepted the bill because guarantees, pay orders, drafts, bills of the value more than Rs. 10,000/- are necessarily to be signed by two officers of the bank, whereas the Bill of Exchange dated 30.3.1994 is signed only by one person. In para-6 of the written statement, defendant no.4- bank has pleaded that similar suits have been filed by one M/s. Jain Export Pvt. Ltd. being CS(OS) No.1433/1995 and another by one Mr. Madan Mohal Lal being CS(OS) No. 1845/1997 showing that frauds were perpetrated by defendant nos. 1 to 3. The defendant no.4 has also pleaded that there was no reason why the bank would co-accept the Bill of Exchange inasmuch as if the bank wanted to give loan, the bank would have itself given the loan and earned from this commercial transaction. For the sake of completion of narration I note that for some strange reason, the written submissions which have been filed by defendant no.4- bank, in support of the leave to defend application seem to have been treated as the written statement and there is no formal written statement on record, I have no option, therefore, but to treat this as a written statement. No replication has been filed by the plaintiff as the right of the plaintiff to file replication stood closed. 4. The following issues were framed in this case on 18.2.2005 which read as under:- “1. Whether the defendant No.4 is not liable to pay the suit amount to the plaintiff on the grounds raised in the written statement? OPD4 2. To what amount the plaintiff is entitled from defendant No.4 as principal and interest ? OPP 3. Relief.” Issues no. 1 and 2 5. Issues no. 1 and 2 can be dealt with together and are accordingly disposed of together. 6. In my opinion, plaintiff has failed to prove its case and discharge onus of proof upon it. The plaintiff has failed to file the original documents and nor have the photocopies filed been exhibited. Though, the plaintiff’s witness PW-1 had in his affidavit exhibited the documents however, objections were raised right at the commencement of cross-examination. Therefore, simply marking the photocopies of the documents as Ex.PW1/1 to Ex.PW1/9 is of no avail to the plaintiff. 7. Let me for the sake of arguments assume that Ex.PW1/1 to Ex.PW1/9 have been proved on behalf of the plaintiff. However, even if, we look at the documents, the case of the plaintiff is not proved. The letters dated 24.3.1994 and 30.3.1994 alleged to be issued by the defendant no.4-bank do not contain reference numbers and serial numbers and which aspects are found normally on the authorised letters of the banks. The plaintiff should have immediately been put to caution when these letters dated 24.3.1994 and 30.3.1994 were given to it. In fact, the plaintiff has been a victim of its own lack of prudence inasmuch as once the defendant nos.1 to 3 are said to have financial limits with the defendant no.4-bank, the plaintiff ought to have taken the letter showing the sanction of the financial limits by the defendant no.4-bank to the defendant nos. 2 and 3. Plaintiff however failed to do the needful. The defendant no.4-bank has led the evidence of its witnesses, Mr. Praveen Jain and who has deposed to the aspects on behalf of the bank that the letters dated 24.3.1994 and 30.3.1994 have not been issued by the bank and nor the bank had granted any such co-acceptance facility to the defendant nos. 2 and 3. The defendant no.4-bank has led the evidence of its witnesses, Mr. Praveen Jain and who has deposed to the aspects on behalf of the bank that the letters dated 24.3.1994 and 30.3.1994 have not been issued by the bank and nor the bank had granted any such co-acceptance facility to the defendant nos. 2 and 3. This witness also deposed that co-acceptance of a Bill of Exchange is not a normal/routine bank transaction, and if there is such a facility, the limit had to be sanctioned by the competent authority of the bank. I may note that in the cross-examination of the plaintiff’s witness PW-1 Sh. S.L. Maloo it is admitted by the said witness that he had never visited the bank or met any bank officer. 8. I would like to put on record that there is even a possibility that the suit is a collusive action by the plaintiff with defendant nos.1 to 3 and Mr. Krishan Kumar to defraud the defendant no.4- bank. In the records of this Court there are many litigations where Sh. M.L. Maloo is involved and there are various criminal cases also pending against Sh. S.L. Maloo. Alternatively, the plaintiff is a victim of its lack of prudent action as per facts detailed above. 9. A civil case is decided on balance of probabilities. The preponderance of probabilities in the present case shows that one Mr. Kishan Kumar acting as the Chief Manager of the defendant no.4-bank issued letters, which the defendant no.4-bank never had authorised. Mere issuance of authorised letters however cannot mean that the defendant no.4-bank would be liable. As already stated above, plaintiff ought to have taken proof with regard to the alleged sanctioned limit given by the defendant no.4- bank to the defendant nos. 2 and 3. In view of the above, plaintiff has failed to prove its case against the defendant no.4. Issue Nos. 1 and 2 are accordingly decided against the plaintiffs and in favour of defendant no.4. 10. The suit of the plaintiff is therefore dismissed against the defendant no.4- bank, leaving the parties to bear their own costs. Decree sheet be prepared.