BANK OF INDIA Vs. ANJALI TEXTILES

JUDGEMENT

(1.) THE present First Appeal has been filed by the Appellant ? Bank of India - Original Plaintiff being aggrieved by the impugned judgment and order passed in Summary Suit No.4175 of 1985 by the City Civil and Sessions Court, Ahmedbad dated 30.12.1993, by which the Suit filed by the Appellant - Bank of India - Original Plaintiff was dismissed. THErefore, the present First Appeal has been filed assailing the said impugned judgment and order on the grounds stated in the memo of Appeal inter alia that it is well settled that the bill of exchange is accepted unconditionally, the holder thereof is entitled to receive the payment despite there may be any interse dispute between the parties regarding the quality of the goods. It is therefore contended that non-acceptance of the goods and failure of consideration between the drawer and drawee is of no consequence when the bills have been discounted unconditionally and the Appellant ? Bank of India is the holder in due course. It is therefore contended that the reasoning given by the court below that a person taking the bill or hundi without consideration cannot enforce, it has not appreciated the facts correctly. It is contended that the principle is unexceptionable and therefore the impugned judgment and order is erroneous. It is also contended that the learned City Civil and Sessions Judge has referred to the credit note (exh.39) to come to the conclusion that the goods were supplied and it is also stated that no delivery was given, and therefore, there is infirmity in the findings.

(2.) LEARNED Counsel Mr. J.T.Trivedi for the Appellant has referred to the impugned judgment and order and also other papers. He has submitted that exh.39 is the credit note which has been given by Sarangpur Mills and the said credit note has been given in response of the bills, for which the hundies were drawn. LEARNED Counsel Mr. Trivedi submitted that the present Appellant Bank is the holder in due course of the said bills / hundies and therefore is entitled for the payment as it has been accepted unconditionally. In support of this submission, learned counsel Mr. Trivedi has referred to the provisions of Section 43 of the Negotiable Instruments Act, 1881 (hereinafter referred to as ?the Act?) and submitted that as provided in Section 43 of the Act that a Negotiable Instrument accepted unconditionally would be entitled to recover the amount. He referred to the exceptions also and submitted that it was for the Defendant to check the goods whether it was as per specifications or not. He referred to the impugned judgment, particularly paragraphs 8 and 9. Therefore he submitted that the impugned judgment and order be quashed and set aside and the present First Appeal may be allowed.

(3.) MUCH emphasis is given by learned Counsel Mr. J.T.Trivedi for the Appellant ? Bank of India referring to the provisions of Section 86 of the Act that when it has been accepted unconditionally, the Bank would be entitled for recovery of the same, require a close scrutiny. Infact as it is evident from the record and the facts, the advances were given by the Appellant Bank to the Sarangpur Mills and in order to provide such facility, the bills were discounted by the Appellant ? Bank of India - Original Plaintiff in respect of the transaction which has not taken place as the delivery was not given and there was failure of consideration. It is in this background the submissions made by learned Counsel Mr. Trivedi referring to Section 86, particularly much emphasis on explanation that when the acceptance is not qualified, there is no question of avoiding any liability, is required to be considered. This provision of Section 86 of the Act is required to be read with provision of Section 43 of the Act. Provision of Section 43 provides: