ANIL MOTIHAR Vs. PUNJAB AND SIND BANK

JUDGEMENT

(1.) THE challenge by means of this Regular First Appeal filed under Section 96 of the Code of Civil Procedure, 1908 (CPC) is to the impugned judgment of the Trial Court dated 18.9.2003 decreeing the suit of the respondent no.1/plaintiff-bank for recovery of Rs.4,94,308/- jointly and severally against all the defendants in the suit. The defendants no. 1 and 2 are the appellants in this Court.

(2.) THE facts of the case are that the defendants no. 1 and 2/appellants had a Letter of Credit (LC) in their favour from a German Bank, and on the representation that the LC would be paid on the due date, they applied for a packing credit limit with the respondent no.1/plaintiff- bank. The case of the respondent no.1/plaintiff-bank was that without actually obtaining sanction, the defendants no. 5 and 6, who were the employees of the respondent no.1/plaintiff-bank, in collusion with the defendants no. 1 to 4 got issued a manager's cheque dated 6.12.1985 for a sum of Rs.3,00,000/-, and which manager's cheque was credited in the account of the defendants no.3 and 4. The defendant no.3 is the sole proprietary concern of the defendant no.4. The respondent no.1/plaintiff- bank alleged fraud and collusion, and, besides taking action under the criminal law, filed the subject suit for recovery based on Section 70 of the Indian Contract Act, 1872. Para 5 of the plaint showing benefit derived by the defendants no. 1 and 2/appellants for payment made by the respondent no.1/plaintiff-bank to the defendants no. 3 and 4 reads as under:-

(3.) THE suit was contested by the appellants/defendants no.1 and 2 stating that there was no collusion between them and the officers of the respondent no.1/plaintiff-bank for drawing up of the banker's cheque. It was pleaded that since the payment was made to the defendants no. 3 and 4 by the respondent no.1/plaintiff-bank without packing credit limit being sanctioned in favour of the appellants/defendants no. 1 and 2, the respondent no.1/plaintiff-bank acted illegally and therefore was not entitled to recover the suit amount from the defendant Nos. 1 and 2.