STATE BANK OF INDIA Vs. SIDDHARTHA ENTERPRISES

JUDGEMENT

(1.) The present application has been filed under Order 1 Rule 10 Civil Procedure Code read with Section 151 Civil Procedure Code by the defendant to implead M/s Canara Bank, Foreign Department, New Delhi and Citi Bank, Parliament Street, New Delhi as parties/defendants to the present suit. Reply has been filed opposing the application.

(2.) The plaintiff, M/S. State Bank of India, has filed the above suit for recovery of Rs. 5,99,000.00 against the defendant M/S. Siddarth Enterprises, its proprietor M/s. Manorama Gardner and her husband Mr. Brian Anthony Gardner as the guarantor. A major item of the claim in the suit is an export bill of $32,000 which had been negotiated under the Letter of Credit dated 19-3- 84. The export bill was not honoured on presentation by the Citi Bank, New York on the ground that documents contained discrepancies and the objection as to bifurcation of Letter of Credit.

(3.) Learned counsel for the defendant has argued that there were no grounds for the Citi Bank to refuse to honour the export bill under the Letter of Credit. It is stated that the plaintiff itself was convinced of there being no ground for refusal to honour the export bill and had taken up the matter with the Citi Bank in correspondence. The plaintiff Bank had corresponded with the Canara Bank as well as Citi Bank. This correspondence, it is stated, is in the custody of plaintiff, Canara Bank and Citi Bank. The documents having been negotiated, the responsibility for getting the credit rests with the plaintiff, the Corresponding Bank and the negotiating Bank, which transfer the Letter of credit. In these circumstances, Mr. Singh submits, that the Open ing Bank was obliged to make the payment under the Let Pter of Credit and the liability should not have been foist on the defendant. Learned counsel submits that the plaintiffs contention that the Export Bill was negotiated "under reserve" is an after thought. Accordingly, the presence of the Canara Bank and the Citi Bank is necessary for a proper and effective adjudication of the matter in controversy. Mr. Singh further states that in any case, if for some reason the Court was to come to a conclusion that they are not a necessary party they are definitely a proper party. Counsel for the defendant relies on a Division Bench decision of this Court Gurmauj Saran Baluja Vs. Mrs. Joyce C Salim and Others reported at AIR 1990 Delhi 13 and Mis. The State Trad- ing Corporatioon of India Vs. Chittoor Cooperative Sugar Ltd and Others reported at AIR 1990 Delhi 142.