SHIVKAR EXPORTS Vs. STATE BANK OF PATIALA

JUDGEMENT

(1.) The plaintiff has sued the defendant for a sum of Rs.4 lakhs together with interest at 22% from the date of institution of the suit till realization. The sum of Rs.4 lakhs claimed in the suit comprises, Rs.2,26,127.00 being the amount claimed to be due in respect of the documents presented under the Letter of Credit by the plaintiff to the defendant bank. A sum of Rs.1,69,000.00 is claimed as interest at 22% P.A.on the amount of Rs.2,26,127.00 from 25th December, 1981 till 21st December, 1984, the date of institution. Another sum of Rs.5,000.00 is claimed towards telex and other miscellaneous expenses.

(2.) The main question that arises for consideration in the suit is whether the defendant had negotiated the Bills of Exchange under the Letter of Credit, as a holder in due course for value and was, therefore, liable to the plaintiff for the amount of the Bill? or whether the defendant had only accepted the Bills of Exchange for collection and/or had negotiated the same as an agent of the plaintiff and, thereforehad no liability to pay the amount to the plaintiff unless proceeds were received?

(3.) The relevant facts giving rise to the filing of the present suit may be noticed:-