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TMI Blog1988 (10) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... onvenience). 3. The plaintiff succeeded in the trial Court by getting a decree as prayed for. Against the judgment and decree of the trial Court, the 1st defendant as well as the second defendant preferred two appeals, and the lower appellate Court, while allowing the appeal filed by the 1st defendant in part, dismissed the appeal filed by the 2nd defendant. The 2nd defendant has not, however, preferred any further appeal. The 1st defendant has filed S. A. No. 1089 of 1984 against the portion of the judgment which went against it, while the plaintiff has filed S.A. No. 1510 of 1984 against that portion of the judgment allowing in part the appeal filed by the 1st defendant. 4. The relevant facts leading to the filing of the suit may now be noted. The plaintiff placed an order on the 1st defendant for the supply of one number of Model T. 650W truck mounted water well drilling rig (hereinafter called 'the rig') with complete standard accessories. The 1st defendant supplied the rig after receiving an advance of 10% of the value and delivered the same lo the plaintiff on 26-12-1981. For the balance of sale consideration, the 1st defendant raised as many as ten Bills of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the contract. The plaintiff after satisfaction only took delivery of the rig in perfect condition. The defects, if any, would have occurred only after the Certificate of Commissioning was duly signed and handed over by the plaintiff to the 1st defendant. The further stand taken by the 1st defendant was that under the Negotiable Instruments Act, the liability of the acceptor and co-acceptor of Bills of Exchange is absolute and unconditional and, therefore, under no circumstances any payment due under such Bills of Exchange could be stopped. Assuming for the sake of arguments, according to the 1st defendant, if there was any breach of contract, the remedy open to the plaintiff was to proceed against the 1st defendant for damages and not to approach the Civil Court for injunction. 6. The 2nd defendant has agreed to abide by the orders of the Court and further contended that it was not a necessary party. 7. The trial Court framed three issues for its decision, and on appreciation of pleadings, evidence both oral and documentary and the arguments advanced on both sides, has held that though the general rule is that the vendor of a motor vehicle is not responsible for the reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have its impact on the right of defendant 1 to collect the amount covered by the Bills of Exchange accepted by the plaintiff and co-accepted by the 2nd defendant'. On the basis of the above conclusion, the learned Appellate Judge further held, 'I am of the view that both in equity and on the principles of natural justice and under the terms of the contract of sale between the parties the plaintiff will be entitled to have protection and should be relieved of the obligations to pay the entire amount under the Bills of Exchange accepted by the plaintiffs and co-accepted by the second defendant'. 9. However, the lower appellate Court, taking note of the fact that the plaintiff has used the rig and earned certain amounts, held that the 1st defendant must be allowed or permitted to draw that amount covered by those Bills of Exchange which have already matured and for the balance only, the injunction as prayed for will be granted in favour of the plaintiff. Accordingly, the lower appellate Court-partly allowed the appeal of defendant 1. 10. So far as the appeal filed by the 2nd defendant is concerned, the lower appellate Court, taking note of the stand take by it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law set out above. 15. After carefully considering the rival submissions and after a careful perusal of the pleadings, evidence and the judgments of the Courts below, I am of the view that only in the event of the plaintiff getting a favourable answer to the first substantial question of law in Second Appeal No. 1089 of 1984, the necessity for considering all the other substantial questions of law will arise. Therefore, let me at the outset consider the first substantial question of law as framed in Second Appeal No. 1089 of 1984. Incidentally, it may be mentioned that it will also cover the second substantial question of law as framed in Second Appeal No. 1510 of 1984. 16. Before doing so, at the risk of repetition, I consider it necessary to set out the findings of the lower appellate Court. The lower appellate Court negatived the contention raised on behalf of the plaintiff that in the absence of the registration of the vehicle in question as required under the provisions of the Motor Vehicles Act, the sale was not complete. On the other hand, the clear finding given by the lower appellate Court was to the effect that the sale of the rig in favour of the plaintiff by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for damages if there was scope for the same. On the other hand, the lower appellate Court went wrong in introducing a clause which factually, admittedly, did not exist in the terms of contract entered into between the parties. The learned Counsel further submitted that the lower appellate Court went wrong in giving a finding that defendant 1 played a fraud upon the plaintiff in pushing through the sale in question when there is no pleading at all nor any evidence much less any suggestion in the correspondence between the parties. Dr. Chitaley further contended that the lower appellate Court failed to bear in mind a very important aspect, namely, that the sale of the rig is separate and independent of the Bills of Exchange and both cannot' be clubbed together. In other words, according to the learned Counsel, the remedy available for the plaintiff, if a tall, on the basis of the pleadings, 'is only to sue for damages for violation of the terms of contract, if any. In support of this, the learned Counsel relied on a number of decided authorities, and the latest one cited is U.P. Co-operative Federation Ltd. v. Singh Consultants Engineers(P) Ltd., repotted in (1987) 5 J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be uncertain. The sum payable may be certain within the meaning of this section and Section 4, although it includes future interest or is payable at an indicated rate of exchange, or is according to the course of exchange, and although the instrument provides that, on default of payment of an instalment, the balance unpaid shall become due. The person to whom it is clear that the direction is given or that payment is to be made may be a certain person within the meaning of this section and Section 4, although he is misnamed or designated by description only. Section 13 defines Negotiable Instrument which reads as follows :-- (1) A negotiable instrument means a Promissory Note, Bill of Exchange or Cheque payable either to order or to bearer. Explanation (i) -- A Promissory Note, Bill of Exchange or Cheque is payable to order which is expressed to be so payable or which is expressed to be payable to a particular person, and does not contain words, prohibiting transfer or indicating an intention that it shall not be transferable. Explanation (ii) -- A Promissory Note, Bill of Exchange or Cheque is payable to bearer which is expressed to be so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny) which he has actually paid or performed. The argument of the learned counsel Mr. G. Subramaniam for the plaintiff that by invoking Section 43 of the Negotiable Instruments Act, the plaintiff is entitled to succeed, cannot be accepted as such a case has not been made out nor pleaded before, the Courts below. Therefore, l am unable to agree with the contention of Mr. G. Subramaniam that the plaintiff is entitled to an injunction on the ground of lack of consideration for all the Bills of Exchange in question. 21. Likewise, the argument that the plaintiff is entitled to succeed in the suit for injunction on the ground of fraud played upon by defendant 1 against the plaintiff also not acceptable. In this connection I am inclined to agree with the argument of the learned counsel for the 1st defendant Dr. Chitaley that there was no plea of fraud taken in the plaint, nor even a suggestion put to the witnesses when they were in the witness box and, therefore, the plea of fraud cannot be invoked. Likewise, the inference of fraud drawn by the lower appellate Court cannot. also be sustained. The argument of Mr J.G. Subramaniam that the rule of technicalities of absence of plead ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ischarge the injunctions against the bank, the fact that the Egyptian defendants had taken no part in the proceedings could not be a good ground for maintaining those injunctions. Further, equity strong considerations applied in favour of 'the' discharge of the injunctions against the Egyptian defendants, and their failure to, participate in the proceedings did not preclude the court from discharging the injunctions against them. On the facts of the case, the learned judge came to the conclusion which reads as follows: -- In the instant case, the learned Judge has proceeded on the basis that this was not an injunction sought against the respondent. But the net effect of the injunction is to restrain the bank from performing the bank guarantee. That cannot be done. One cannot do. indirectly what one is not free to do directly. But a maltreated man in such circumstances is not remediless. The respondent was not to suffer any injustice which was irretrievable. The respondent can sue the appellant for damages. In this case, there cannot be any basis for apprehension that irretrievable damages would be caused if any. I am of the opinion that this is not a case in whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the bank must equally apply to UPCOF Ltd. Therefore, the frame of the suit by hot impleading the bank cannot make any difference in the position of law. Equally it would be futile to contend that the court was justified in granting the injunction since it has found a prima facie cease in favour of the SCE (P) Ltd The question of examining the prima facie case or balance of convenience does not arise if the Court cannot interfere with the unconditional commitment made by the bank in the guarantees in question. 24. Again, in para 9, the learned Judge has observed as follows :-- The letter of credit has been developed over hundreds of years of international trade. It was most commonly used in conjunction with sale of goods between geographically distant parties. It was intended to facilitate the transfer of goods between distant and unfamiliar buyer and seller. It was found difficult for the seller to rely upon the credit of an unknown customer. It was also found difficult for a buyer to pay for goods prior to their delivery. The bank's letter of credit came into existence to bridge this gap. In such transactions, the seller (beneficiary) receives payment from issuing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e bank's knowledge. It would certainly not normally be sufficient that this rests on the uncorroborated statement of the customer, for irreparable damage can be done to a bank's credit in the relatively brief time which must elapse between the granting of such an injunction and an application by the bank to have it discharged. 26. I have made it clear that the plaintiff has miserably failed to bring his case within this rule of exception. 27. Both the Courts below have not correctly appreciated the position in law. The trial Court was not right in lightly overruling the objection that the remedy if at all available to the plaintiff was to sue for damages by stating that it will give room for multiplicity of proceedings. Likewise, the lower appellate court having rightly held that the sale was complete, fell into an error of law in inferring an act of fraud which was not at all pleaded. The view taken by the lower appellate court that the plaintiff is entitled to a decree on the basis of principles of natural justice and equity cannot be sustained in view of the observations of His Lordship Sabyasachi Mukharji, J. set out above while repelling a similar contention ..... X X X X Extracts X X X X X X X X Extracts X X X X
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