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TMI Blog2024 (4) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... .Aiyar&Dolia JUDGMENT R. SUBRAMANIAN, J. This appeal is at the instance of the Bank which figured as the second defendant in C.S.(Comm.Div) No.591 of 2018. 2. For convenience, the parties will be referred to as per their rank in the Suit. 3. The plaintiff sued for recovery of a sum of Rs. 1,15,09,628/- with interest at 18% on the principal amount of Rs. 1,06,33,863/- from the date of plaint till the date of realization. According to the plaintiff, he had supplied Steel (TMT Bars) weighing about 2,55,540 Kgs at Rs. 38.20 per kg to the first defendant under an Invoice dated 22.05.2017. A Bill of Exchange was drawn by the plaintiff and the same was discounted with the plaintiff's Banker, namely the third defendant. The third defendant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he second defendant did not also let in any evidence. Upon consideration of the evidence on record, the Commercial Division came to the conclusion that the transaction is one of bill discounting which would fall within the scope of Section 37 of the Negotiable Instruments Act, 1881 and therefore, as the collecting Banker who had assured payment, the second defendant would also be jointly and severally liable along with the first defendant for the Suit claim. The learned Trial Judge also took note of the fact that there was neither pleading nor evidence on the side of the second defendant Bank. The learned Trial Judge also granted interest at 9% per annum on the Suit claim. The Suit cost was directed to be paid by the first and second defend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 05.2017, the third defendant / the plaintiff's Banker had forwarded a collection schedule to the second defendant requiring the second defendant to send its acceptance through SFMS and requiring the second defendant Bank / appellant herein to pay the bill amount of Rs. 1,02,49,709/- on the maturity date i.e., 22.08.2017. The second defendant Banker had confirmed the same by sending a SFMS message on 29.05.2017. The print out of the said message has been marked as Ex- P.6. 11. A perusal of the document shows that the type of message is 'IFN 754' message and it also indicates the due date as 22.08.2017. It is not in dispute that this message pertains to the suit transaction. The Circular of the Reserve Bank of India, issued regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ERATIVE FEDERATION LTD. VS. SINGHCONSULTANTS & ENGINEERS P. LTD., [1987 (4) S.C. 406] wherein the Hon'ble Supreme Court considered a similar question and had 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 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 (bene ..... X X X X Extracts X X X X X X X X Extracts X X X X
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