BANK OF INDIA Vs. NIRLON LTD

JUDGEMENT

(1.) LEARNED counsel for the parties do not dispute that an application under Order 37 Rule 4 of the Code of Civil Procedure requires not only sufficient cause to be shown for not defending a summary suit but also requires it to be shown that the applicant has a prima facie triable issue, requiring leave to defend to be granted.

(2.) RESPONDENT No.1 Nirlon Ltd. had filed a suit under Order 37 of the Code pleading that Hilton Rubber Ltd. (defendant No.3) had desired to purchase goods from it and had opened a letter of credit through Bank of India in its favour. That Nirlon Ltd. dispatched the goods and drew up a bill of exchange and along therewith enclosed all documents stipulated in the letter of credit and submitted the same to its banker i.e. Union Bank of India which sent the documents to the issuing bank i.e. Bank of India and that rather to remit the money under the letter of credit, Bank of India returned the documents and the bill of exchange beyond seven days of receipt thereof and by that time the letter of credit had expired. It was pleaded that Hilton Rubber Ltd. took delivery of the goods and for which no payment was received.

(3.) ANOTHER reason given by the learned Single Judge is that there was no sufficient cause shown not to have filed the leave to defend application within 15 days of summons for judgment being received. The learned Single Judge has held that an officer of the Bank had received the summons for judgment and since the Bank had fought and defended commercial banking litigation, it was expected to know the procedures of the law.