BHANUMATHY AGENCIES Vs. KARUR VYSYA BANK LIMITED

JUDGEMENT

(1.) THE second defendant is the appellant. THE first respondent filed a suit in O.S. No. 61 of 1985 on the file of the District judge, Nilgiris, Ootacamund, against the appellant and the second respondent herein. THE brief facts are that, in a scheme called employment scheme for educated unemployed youth, the second respondent herein applied vide his application dated April 20, 1984, based on a recommendation of the District Industrial Centre, Uthagamandalam, for the sanction of a loan of Rs. 25, 000 to set up a tyre retreading industry. THE second respondent obtained a proforma invoice from the appellant for supplying a tyre retreading machinery, that under exhibit A-4, the first respondent issued a pay order in favour of the appellant on April 30, 1984, for a sum of Rs. 26, 174. 75 which sum included a sum of Rs. 1, 174. 75 deposited by the second respondent with the first respondent, that the pay order specifically stated that the said payment was being made on account of supply of machinery as per the appellant's proforma invoice No. SRM/1/83-84, dated February 6, 1984, which has been marked as exhibit A-3 in the suit, that contrary to the understanding between the parties, the appellant failed to supply the machinery as per the proforma invoice though the appellant claimed to have supplied the same in its letter dated July 9, 1984, exhibit A-5, that subsequently the appellant admitted under exhibit A-6 that the machinery were not really supplied and the statement made under exhibit A-5 was a mistake, that the appellant issued a post-dated cheque dated August 16, 1984, for the entire sum of Rs. 26, 174. 75 under exhibit A-7, in favour of the first respondent agreeing to arrange for necessary funds to honour the cheque, that subsequently the appellant failed to honour the said cheque by advising its bankers to stop payment under exhibit A-8, that the purpose for which the loan was sanctioned was defeated and that necessary complaint against the appellant and the second respondent was also preferred by the first respondent for cheating.

(2.) IN the above-stated circumstances, the first respondent claimed a sum of Rs. 27, 548. 20 as the amount due as on April 30, 1985, against the appellant and the second respondent herein. IN the said suit, the second respondent did not file any written statement.The appellant in its written statement contended that the appellant was neither a co-obligant, nor a guarantor nor a surety to the loan sanctioned in favour of the second respondent, that there was no contract between the appellant and the first respondent-bank, that the appellant did not have any transaction with the first respondent, that the proforma was issued at the instance of the second respondent agreeing to supply the machinery and that the manager of the first respondent-bank prevented the appellant from supplying the machinery. The appellant contended that he did not receive any amounts from the first respondent. The appellant threw the blame on the manager of the first respondent-bank. Here and now, I want to point out that no particular person was named as manager who is said to have attempted to make money from the appellant and prevented the appellant from supplying the machinery as per the proforma. It was also contended that subsequently the second respondent purchased the machinery and started the works as per the directions of the first respondent-bank and that the appellant was having a delivery note and a receipt for the payments made to the second respondent, at the instance of the then manager, of the respondent-bank.

(3.) IN the said communication the appellant while regretting its conduct enclosed a cheque for Rs. 26, 174. 75, and there was also a note stating that the contents of the letter dated July 9, 1984, to the effect that materials were supplied to the second respondent be treated as cancelled.Learned counsel also pointed out certain statements made by DW-1 in the deposition, which were to the effect : Learned counsel also contended that at every stage of the proceedings, the appellant was attempting to develop a new case and that the whole attempt of the appellant was only to defraud the first respondent-bank in collusion with the second respondent.