GULF AIR Vs. CANARA BANK

JUDGEMENT

(1.) This appeal is directed against the judgment and order dated 1 st March, 2000 passed by the learned Single Judge of this Court transferring Motion No. 2838 of 1999 in Suit No. 4751 of 1994 filed by respondent No. 1 to the Debt Recovery Tribunal.

(2.) The appellant (original defendant No. 5) is an Airline Company to whom the goods in question were given for transportation. Respondent No. 1 is a nationalised bank and the original plaintiff. It filed a suit, bearing Suit No. 4751 of 1999, for recovery of money on the original side of this Court. The respondent no. 2 is the original defendant No. 1. It is a partnership firm of which respondent nos. 3 to 5 (original defendant Nos. 2 to 4) are partners. Respondent Nos. 6 and 7 (original defendant Nos. 5 and 6) are the agents of the appellant. For the sake of convenience, the parties are hereinafter referred with reference to their original status (plaintiff or defendants) in the suit.

(3.) The relevant facts are that the defendant No. 1 firm was granted a foreign bill discounting facility by the plaintiff bank. The defendant No. 1, inter alia, executed in favour of the plaintiff a counter indemnity letter whereby it undertook to indemnify the plaintiff in case the foreign bills of exchange drawn and discounted by it with the plaintiff were dishonoured by the foreign purchaser by non-acceptance or non-payment. The defendant No. 1 agreed to sell printed polyester fabric (for short "goods") to one M/s. Surin Fashion Ltd. , London. The defendant No. 1 dispatched the goods to the purchaser under an Airway bill No. 072 2360 8922 issued by the defendant No. 5 Airline. The goods were booked through the defendant Nos. 6 and 7 who were the agents/business associates of defendant No. 5. The Airway bill showed the name of the defendant No. 1 as the shipper and the Barclays Bank a/c Surin Fashion Ltd. as the consignee. The barclays Bank was acting as a collecting agent of the plaintiff bank. The defendant No. 1 drew two foreign bills of exchanges in the sum of pounds 30,842 and pounds 15,319 on the purchaser M/s. Surin Fashion Ltd. for the price of the goods dispatched. The two foreign bills of exchange were discounted before their acceptance by the drawer (purchaser) by the defendant No. 1 with the plaintiff bank. The drawee did not accept the two foreign bills of exchange and a communication to that effect being sent by the Barclays Bank to the plaintiff bank who decided to rebook the goods to India. In the meanwhile, according to the plaintiff, the defendants, on the basis of a forged letter of the plaintiff bank, delivered the goods to the purchaser. According to the plaintiff, the defendants were acting in collusion and had wrongfully delivered the goods to purchaser which act amounts to criminal breach of trust and fraud. The plaintiff therefore filed a suit (Suit No. 4751 of 1994) against the defendants for recovery reserving itself the right to take criminal action for criminal breach of trust and fraud. In the suit, the plaintiff bank claimed from defendant Nos. 1 to 4 the money lent to it by discounting two foreign bills of exchanges. The plaintiff also claimed from defendant Nos. 5 to 7 the equivalent sum of money of the bills of exchange. The suit was filed on the Original Side of this Court on 23rd November, 1994.