STATE BANK OF INDIA Vs. GENERAL MERCANTILE OVERSEAS

JUDGEMENT

(1.) THE appellant bank before this Court was the defendant before the trial court against whom both the courts below have decreed the suit filed by the plaintiff/respondent herein for a sum of Rs.1,26,650.65/- with interest at the rate of 6% along with costs on the ground that the irrevocable letter of credit was opened in his favour by the Bank of Baroda, London only after negotiating the documents called for in the credit with the defendant State Bank of India and the defendant bank also accepted the documents and thereupon credited the value of bill of exchange to their current account with a sum of Rs.80,664.40 on 27.11.1980. This was also on yet another basis that once the negotiation was completed the matter comes to an end so far as the plaintiff is concerned.

(2.) BRIEF facts leading to the filing of the present Second Appeal are given as under:

(3.) IN view of the abovesaid documents, the trial court decreed the suit as prayed for disagreeing with the defendant that the indemnity bond sought to be relied upon by the defendant was incomplete and above all, the original was not produced and the reason for non-production of the original was also not explained. Secondly, the trial court was of the view that the documents produced by the plaintiff including the letter of credit were perfectly in order. Further, the credit facility was extended to the plaintiff based upon the letter of credit hence it concluded that the negotiations having been made without obtaining an indemnity cannot be specifically brought into the transaction.