VIRGO STEELS Vs. BANK OF RAJASTHAN LIMITED

JUDGEMENT

(1.) THESE nine Appeals are filed by defendants against orders passed by the learned Single Judge granting conditional leave to defend in the summonses for Judgment in three summary suits.

(2.) (A)SUMMONS for Judgments No. 425 of 1994 in Summary Suit No. 4510 of 1993: the suit is filed by the Bank of Rajasthan Limited against UCO Bank (defendant No. 1), Virgo Steel (defendant No. 2) and Krishna Steel Udyog (defendant No. 3 ). Virgo Steel opened an Irrevocable letter of credit dated 22nd August, 1991. The letter of credit was for the benefit of Krishna Steel Udyog (defendant No. 3) Defendant No. 3 drew a Bill of Exchange dated 22nd August, 1991 for a sum of Rs. 49,50,000/- and presented all the relevant documents to the Bank of Rajasthan Limited (plaintiffs ). The Bank of Rajasthan Limited forwarded the original documents, together with the Letter of Credit, to UCO Bank and sought a confirmation whether the documents were in order. UCO Bank, by their reply dated 27th August, 1991 confirmed that the documents were in order, and that they would make payment on due date. After receiving the said confirmation, the Bank of Rajasthan Limited paid the amount to Krishna Steel Udyog. As the amount was not received by the Bank of Rajasthan Limited, the suit is filed against the UCO Bank on the basis of Letter of Credit, against Virgo Steel, as the Acceptors of the Bill of Exchange and against Krishna Steel Udyog, as the Drawers of the Bill of Exchange. The suit claim is for recovery of Rupees 63,90,257/- with interest on the principal sum of Rs. 49,50,000/- at the rate of 18% per annum from the due date till payment. Leave to defend is granted on depositing Rs. 32 lacs. (b) Summons for Judgment No. 426 of 1997 in Summary Suit No. 4513 of 1993 : the parties in the aforesaid suit are the same, except change of dates with regard to Bills of Exchange and Letters of Credit. Leave to defend is granted on the condition of depositing Rs. one crore by the defendants. The claim in the suit is Rs. 2,57,19,511. 64 with interest on the principal sum of Rs. 1,96,95,000/- at the rate of 17. 5% per annum. (c) Summons for Judgment No. 427 of 1994 in Summary Suit No. 226 of 1994 : the Bank of Rajasthan Limited has filed suit against defendant No. 1, the UCO Bank, defendant No. 2, Virgo Steel, and defendant No. 3, Western Ministeel Limited. It is the contention of the plaintiffs, Bank of Rajasthan Ltd. , that UCO Bank (defendant No. 1) had issued Letters of Credit at the request of defendant No. 2, Virgo Steel. Western Ministeel Limited (defendant No. 3) delivered Letters of Credit and other documents, including Bills of Exchange to the Bank of Rajasthan Limited for negotiation. The Bank of Rajasthan Limited sought a confirmation from the UCO Bank as to whether the documents drawn under the Letters of Credit were in order and whether they were acceptable to the UCO Bank. The UCO Bank, upon physical examination of the documents, by their letter dated 9th August, 1991, confirmed that the documents were in order and that they would release payment on due date by their Pay Order to Bank of Rajasthan Limited. Upon receiving such confirmations, the plaintiff, Bank of Rajasthan Limited, made payment to defendant No. 3, Western Ministeel Limited. Bills of Exchange are drawn by Western Ministeel Limited (defendant No. 3), Drawers, on Virgo Steel (defendant No. 2 ). Virgo Steel (defendant No. 2) had unconditionally accepted the same. This suit is filed by the Bank of Rajasthan Limited against the UCO Bank, Virgo Steel and Western Ministeel Limited, as the plaintiff did not receive the payment from neither the UCO Bank, nor from the acceptors, on the due dates, by contending that all the three parties were jointly and severally liable for payment to the Bank of Rajasthan Limited. The suit claim is Rs. 4,65,31,858. 40 with interest on the principal sum of Rs. 3,63,63, 752. 60 at the rate of 18% per annum from the due date till payment. Leave to defend is granted on the condition of depositing Rs. 2. 43 crores by the defendants.

(3.) AGAINST these three orders dated 22nd January, 1997 passed in summonses for Judgment No. 425 of 1994, 426 of 1994 and 427 of 1994, all the defendants have filed the aforesaid 9 appeals separately. As the contentions raised in all these appeals are similar, these appeals are disposed of by this common judgment and order.