TaxTMI 
TaxTMI 
TaxTMI 
2015 (10) TMI 2707
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....llant/defendant. The constituent of the respondent is engaged in the business of export of Chick Peas and it shipped a consignment to its Indian clients, namely, M/S Kothari Global Ltd. and M/S Marudhar Edible Oils Ltd., while handing over three sets of relevant documents dated 4.2.1998, 24.2.1998 and 13.7.1998 to the respondent/plaintiff for collecting the payment totaling US $ 8,19,199.35 from its Indian clients. The respondent/plaintiff in turn forwarded those documents to the appellant/defendant on the condition of releasing them to the Indian clients of its constituent against payment. It appears that the appellant/defendant did not receive payment from the clients of the respondent and hence did not release the documents to them. 5. While the things stood so, on 9th September, 1998 the respondent/plaintiff sent a fax message to the appellant Bank enquiring whether they would accept Bills of Exchange (Drafts) payable after 170 days, to which the appellant Bank conveyed its acceptance. Accordingly, the respondent sent four Bills of Exchange, all dated 9th September, 1998 in favour of the appellant Bank for an amount of US $ 8,19,198.75. Again on 21st September, 1998, the respo....
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....xing the liability upon the appellant Bank. In the absence of an opportunity to the appellant Bank to defend its case and file written statement in such a case where a huge amount of US $ 19,31,627.89 is involved, the decision of the High Court cannot be appreciated to be a correct one. While assailing the judgment of the High Court, learned Attorney General submitted that the respondent/plaintiff has no valid legal reason to institute the Suit under Order 37, CPC. The Suit does not qualify the test of Order 37 1(ii)(b)(i) as there was no specific averment with respect to a "written contract" and the averment so pleaded by the plaintiff/respondent is with respect to "an agreement". There was no consideration to the appellant Bank and merely the telex/fax messages do not constitute a written contract between the parties. The instruments in question (Bills of Exchange) did not bear the "acceptance" on behalf of the appellant Bank. The provisions of Negotiable Instruments Act mandate that the "acceptance" shall be given by the drawee/acceptor by signing his assent on the face of the Bill of Exchange. However, in the present case, no such endorsement of acceptance is present on behalf ....
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....henticity and leads to the presumption that the message was sent under the authority of the Bank. The appellant Bank, in fact, had obtained letters of indemnity on stamp paper duly signed by the authorized signatory of the Indian clients of the respondent's constituent, thereby indemnifying the appellant Bank in respect of co- acceptance for the tested telex messages. Learned senior counsel finally submitted that there is no error apparent in the judgments of the Courts below and the appeal deserves to be dismissed. 10. Having heard learned counsel for the parties, the short question that falls for our consideration is whether the Courts below were right in decreeing the Summary Suit without granting the relief of leave to defend to the defendant/appellant as envisaged under Order 37 Rule 3 C.P.C.? 11. We think that for the adjudication of the said question, it is appropriate first to examine the affidavit filed by the appellant Bank seeking leave to defend, after receiving Summons for Judgment. In the said affidavit, it is categorically mentioned that the Suit in question is not maintainable to be a Summary Suit as per law. Paras 5 to 8 of the affidavit filed by the Branch Manag....
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....etween the parties was not a concluded contract and the Suit in question is barred by limitation. Prior to the present Suit, the plaintiff/respondent had earlier in the year 2001 filed another Suit preferring Summons for Judgment, but withdrew the same in the year 2003. Only after taking out the Chamber Summons seeking various amendments after a lapse of four years in the year 2007 the plaintiff/respondent preferred the Summons for Judgment in the Suit in question, with an intention of deliberately delaying the process of law. Such a vast delay of about four years clearly indicates the negligence on the part of the plaintiff in prosecuting its rights and again initiating the proceedings after a lapse of four years time is clear abuse of law. Further plea taken by the defendant/appellant is that the Suit is not at all maintainable merely for the reason that there is no signature giving assent by the drawee on the face of Bills nor there the signature of the defendant giving co-acceptance. In addition, the stamping on the Bills was also not done as per the requirements of law. A clear stand has been taken by the defendant/appellant in the affidavit that the signature of the drawee gi....
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....o judgment and the defendant is entitled to leave to defend but in such a case the court may in its discretion impose conditions as to the time or mode of trial but not as to payment into court or furnishing security. If the defendant has no defence or the defence set up is illusory or sham or practically moonshine then ordinarily the plaintiff is entitled to leave to sign judgment and the defendant is not entitled to leave to defend. If the defendant has no defence or the defence is illusory or sham or practically moonshine then although ordinarily the plaintiff is entitled to leave to sign judgment, the court may protect the plaintiff by only allowing the defence to proceed if the amount claimed is paid into court or otherwise secured and give leave to the defendant on such condition, and thereby show mercy to the defendant by enabling him to try to prove a defence. 16. It is also noticed that the law as enunciated above, has been followed by the Courts in several cases [See also : Santosh Kumar Vs. Bhai Mool Singh, AIR 1958 SC 321, Milkhiram (India) (P) Ltd. Vs. Chamanlal Bros, AIR 1965 SC 1698, Mechelec Engineers & Manufacturers Vs. Basic Equipment Corpn., (1976) 4 SCC 687 a....
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....t with the view taken by this Court in Raj Duggal Vs. Ramesh Kumar Bansal, 1991 Suppl.(1) SCC 191 that leave to defend the Summons for Judgment shall always be granted to the defendant when there is a triable issue as to the meaning or correctness of the documents on which the claim is based or the alleged facts are of such nature which entitle the defendant to interrogate or cross-examine the plaintiff or his witnesses. 21. In the case on hand, we have perused the material on record including the FIR dated 9th August, 1999 registered by the CBI at the instance of Chief Vigilance Officer, SBH and also the Charge Sheet filed by the CBI. The charge sheet indicated the involvement of Mr. Sudhir Behra, Chief Manager of the appellant Bank at Burra Bazar Branch, Calcutta. Acting at the requests of representatives from the Indian clients of the respondent's constituent, the Chief Manager had induced some officers of the appellant Bank who were In-charge of Foreign Exchange Department to issue tested telex messages of co-acceptance. The charge sheet further alleges that these officers were not authorized to issue such co-acceptances and the motive behind their illegal and unauthorized act....