INDIA EXPORTS HOUSE PRIVATE LIMITED Vs. ORIENT ENTERPRISES

JUDGEMENT

(1.) This is an appeal against the order dated 10th September 1996 passed by the learned Single Judge in IA No. 7725/93 in Suit No. 1237/82 filed by the original plaintiffs/appellants, M/s. Indian Export House Pvt. Ltd. (now Ltd.) herein disallowing an application for amendment of the plaint moved by the plaintiff.

(2.) The brief facts of the case stated by the appellant are that respondent No. 1, a partnership firm of Shri K.L. Suri (impleaded as defendant No. 2 in the Suit, since deceased and represented by respondents No. 2A, 2B, 2C, 3 and 4 as his legal heir) and respondents 3 and 4, through its partner, Shri K.L. Suri, represented to be an agent of respondent No. 10 (a firm of respondents No. 11 and 12) and induced the appellant to enter into contract dated 11th June 1979 with respondent No. 10 for the import of PVC Resin, arranged a contract with respondent No. 9 in absentia, arranged advance payment on behalf of respondent No. 9 towards margin money for opening the Letter of credit and further entered into contract with the appellant undertaking to open inland Letter of Credit on arrival of shipping documents and to indemnity the appellant towards loss. It is further stated that at the instance of the appellant a letter of Credit No. 1BD/101/8512 dated 15th June 1979 was issued by -respondent No. 6, Punjab and Sind Bank in favour of M/s Bentrex & Co. of Singapore, respondent No. 10, a firm of respondents No. 11 and 12. The negotiation of the Letter of Credit was restricted to Alegemene Bank Netherlands (ABN), respondent No. 7. It is further stated that insurance cover and policy was arranged by respondents 1 to 4 and 9 with respondent No. 5 and premium was paid by the appellant in pursuance to the agreement, Vide cable dated 8th August 1979, M/s Bentrex & Co., respondent No. 10, informed the appellant that the vessel 'AVERILLA' carrying the goods had sunk. M/s Llyod's Intelligence Services vide their letter dated 27th June 1980, confirmed that the said .vessel "AVERILLA" alongwith the cargo sank on 5th September, 1979. It is further stated that the appellant being totally ignorant of any fraud, asked respondents 1 to 4 to perform their obligations under the contract, but they did not respond. It is stated that the appellant who had full faith and trust in its Banker, believing all the representations made by PSB (respondent No. 6) to be true and having no reason to suspect any conspiracy or fraud, or Bank's involvement their in made a payment of Rs. 39 lakhs to PSB during the period 21st February, 1980 to 2nd September, 1983, in relation to L.C. and under the dictates of the Bank, admitted the liability to pay and even signed the pronotes. It is further stated that the appellant being ignorant of fraud asked the Insurance Company Respondent No. 5 to meet the liability under insurance policies but with no result. It is stated that under the aforesaid circumstances, the appellant instituted Suit No. 1237/82 originally against respondents 1 to 3 and subsequently vide order of amendment dated 30th September, 1985 also against respondents 4 & 5. It is further stated that the applicant received letter dated 6th November, 1986 from the CBI to the effect that the Export Houses of India including the appellant are victims of fraud of the conspirators. In March 1987, the appellant received copy of the plaint in Suit No. 2554/86 filed by PSB (respondent No. 6) against the appellant and others for recovery of the alleged balance amount pertaining to the same L.C. (Letter of Credit) transaction, with averments in para 3 of its plaint that the documents under the L.C. were presented by ABN (respondent No. 7) and further averment in para 11 of the plaint that it (PSB) bad released payment to the foreign bank under the L.C. detailed in para 3. On receipt of the copy of the plaint in the said suit, the appellant scrutinised its records and found that the documents under the L.C. had been negotiated and presented not by ABN which was alone authorised to negotiate as per terms of L.C. but by European Asian Bank - respondent No. 8. Vide letter dated 13th March, 1987 and 27th March, 1987 addressed to ABN, dated 1st April, 1987 and 15th April, 1987 addressed to EAB, dated 14th September, 1987 and 24th October, 1987 addressed to PSB, the plaintiff sought information with respect to aforesaid matter, but with no response. The deliberate withholding of the requisite information by respondents 6 to 8 caused the appellant to suspect some sort of their involvement in the fraud; and all the respondents appeared to be in league and conspiracy to commit fraud. As such, the appellant moved an application being IA No. 8451/87 under Order 1 Rule 10, Order 6 Rule 17: seeking impleadment of respondents 6 to 14 and amendment to the plaint which was allowed on 20th July, 1988. In the amended plaint, allegations of fraud against the said Banks were made in general terms which were based on suspicion, speculation and surmises, and particulars of fraud were neither available nor could be incorporated and such general allegations did not amount to a plea of fraud in the eyes of law. In the said situation the plaintiff was advised that the claim for the recovery of Rs. 39 lakhs paid by the appellant to PSB shall not be maintainable, and as such the right to claim Rs. 39 lakhs afterwards, was reserved vide para 22-G of the plaint.

(3.) The fraud played by respondent Banks and co-conspirators was quite secret in its origin and execution. The appellant had no means of its own to discover such a big fraud. The details of the efforts of the appellant for the discovery of fraud have been set outunder item W of para 10 of the amendment application in 16 page's running from page No. 42 to 57. The appellant could discover the fraud only during March 1991 to May 1991 through inspection of the records of the CBI and obtaining copies of some of the documents in pursuance to the order dated 5th July, 1990 of the High Court of Delhi in Criminal Revision No. 53/81.