Dismissed

M/S. Asian Engineerig Sales Corpn. v. Bank of Baroda

Bombay HC16 Mar 2005APP/361/2005

Case brief

AI extract

What is this about?

The High Court dismissed the appeal filed by an acceptor of bills of exchange challenging an ex-parte order. The court held that the appellant had no defence as the alleged dispute was between the drawers and the acceptor, and the holder/payee was not privy to such disputes. The earlier Supreme Court ruling was distinguished as facts differed. The appeal was dismissed without interference.

What did the court decide?

The appeal was dismissed. No interference with the impugned order.

M/S. Asian Engineerig Sales Corpn. Vs Bank of Baroda — Cheque Dishonour | Bombay HC (2005)

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 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
 ORDINARY ORIGINAL CIVIL JURISDICTION

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 APPEAL (LODGING) NO.641 OF 2004
 IN
 NOTICE OF MOTION NO.1940 OF 2004
 IN
 SUMMONS FOR JUDGMENT NO.258 OF 2000
 IN

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 SUMMARY SUIT NO.4585 OF 1999

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 M/s.Asian Engg.Sales Corpn. ....Appellant

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 V/s.

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 Bank of Baroda ....Respondent

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 Mr.K.R. Belosey for the Appellant.

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 Mr.M.P. Rege for the Respondent.

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ORAL JUDGMENT (PER S.J. VAZIFDAR, J.) :

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 1. This is an Appeal against the order of the

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 learned single Judge dismissing the Appellant’s above
 Notice of Motion. By the Notice of Motion, the
 Appellant sought to have an ex-parte order passed on
 7th June, 2004 set-aside and for the Summons for

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 Judgment to be restored and heard on merits.

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 2. The order dated 7th June, 2004 was passed on

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 the Summons for Judgment taken out by the Respondent
 in the above suit. The learned Judge recorded the
 fact that neither the Appellant nor his advocate
 remained present when the matter was called out in the
 morning and afternoon sessions ; that prior thereto
 an ex-parte decree had been passed on 30th April, 2002
 as the Appellant had failed to contest the matter ;
 that the Appellant made an application for setting
 aside the decree in which by an order dated 4th June,
 2002, an ex-parte decree was stayed conditional upon
 the Appellant depositing in the Court 50% of the
 decretal amount within eight weeks i.e. on or before
 4th June, 2002. The Appellant challenged the said
 order by filing an Appeal being No.702 of 2002. By an
 order dated 13th August, 2002, the Appeal Court merely
 extended the time to deposit the said amount.
 Thereafter as recorded in the order, the ex-parte
 judgment and decree was stayed on the same terms. By
 an order dated 13th April, 2004 the Court disposed of
 the application by restoring the Summons for Judgment
 in view of the Appellant having deposited 50% of the
 decretal amount. By the order dated 7th June, 2004,
 the learned Judge hearing Summons for Judgement,
 granted to the Appellant leave to defend conditional
 upon their depositing the balance 50% of the decretal
 amount within four weeks. The Appellant has not

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 complied with the said condition.

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 3. By the impugned order the learned Judge
 observed that there was no real defence to the claim
 in suit. The learned Judge refused to set-aside the
 order but gave the Appellant eight weeks time to
 deposit the remaining 50% of the decretal amount as
 per order dated 7th June, 2004.

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 4. The impugned order warrants no interference.
 It is apparent that the Appellant has been avoiding
 appearing before the Court for no justifiable reason.
 Even on merits, the Appellant has no defence. The
 Appellant is the acceptor of the bill of exchange.
 The Respondent/Plaintiff is a payee in respect of the
 bill of exchange. The only defence is that the goods
 supplied by the drawer in consideration whereof the
 Appellant/Defendant accepted the bills of exchange
 were defective. The Respondent as a payee is not
 concerned with any alleged dispute that there may be
 between the Appellant and the drawer of the bills of
 exchange.

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 5. Mr.Belosey, the learned counsel appearing on
 behalf of the Appellant relied upon a judgment of the
 Supreme Court in the case of M/s.Sunil Enterprises v.

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 : 4 :

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SBI Commercial & International Bank Ltd., A.I.R. 1998
S.C. 2317. The judgment has no application to the
 facts of the present case.

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 6. In M/s.Sunil Enterprises, the Appellants /
 Respondents before the Supreme Court had filed the
 suit against the Defendant/Appellant. One M/s.Khanna
 Sales Corporation were the drawees of the bills of
 exchange who had availed of a bill discounting
 facility with the Respondents. The Respondents
 accordingly made payment to M/s.Khanna Sales
 Corporation in respect of the bills that were
 discounted. As the amounts under the bills of
 exchange were not paid the Respondents filed the suit.
 It was contended on behalf of the Appellant that the
 bills of exchange were executed without consideration
 as the goods were neither sold nor supplied in the
 transaction in question. What is important to note
 however is the fact that the Appellants had alleged
 fraud, collusion and connivance between the officers
 of the Respondent and M/s.Khanna Sales Corporation.
 It is further important to note as recorded in the
 judgment that in identical matters involving the
 Appellants leave to defend had been granted by the
 High Court. The Supreme Court held as follows :-

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 "5. In those cases the
 circumstances arising are that the
 Bills of Exchange were accepted by
 the defendants even though they had
 already discharged earlier Bills of
 Exchange as and when they were due
 and the bank had continued to pay
 out such large amounts of Bills of
 Exchange accepted by the party who
 is already a defaulter. It is also
 contended that some of the Bills of
 Exchange were mere secondary
 documents and therefore, these
 matters require examination. It
 cannot be said that the defence
 raised by the appellants is totally
 defenceless or moonshine or illusory
 as noticed earlier in the course of
 this order. Therefore, the view
 taken by the High Court that
 appellants have absolutely no prima
 facie case may not be correct".

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 7. It is clear therefore that in M/s.Sunil
Enterprises the Supreme Court considered the conduct
 of the Respondent Bank in continuing to pay out large
 amounts in respect of the bills of exchange accepted
 by the party who was already a defaulter. The Supreme
 Court held inter-alia that the defence based on these
 facts could not be stated to be moonshine or illusory.
 The other factor was a contention on behalf of the
 Appellants that the said bills of exchange was
 secondary documents and therefore, required
 examination.

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 . We do not read the judgment in M/s.Sunil
Enterprises as having held that merely because it is

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 alleged by the acceptor that there was a failure of
 consideration in the transaction between the drawer
 and himself, the same would furnish a defence to his
 liability as an acceptor. In that case the holder of
 the bill of exchange was alleged to have colluded with
 the other parties to the bill of exchange to the
 prejudice of the acceptor qua the payee/the holder of
 the bill of exchange. No such facts are alleged in
 the case before us. There is nothing in the present
 case to suggest that there was any failure of

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 consideration.

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 . In the circumstances, the Appeal is

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 dismissed.

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 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
 ORDINARY ORIGINAL CIVIL JURISDICTION

¶36

 APPEAL (LODGING) NO.641 OF 2004
 IN
 NOTICE OF MOTION NO.1940 OF 2004
 IN
 SUMMONS FOR JUDGMENT NO.258 OF 2000
 IN
 SUMMARY SUIT NO.4585 OF 1999

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DATE OF DECISION : 16TH MARCH, 2005

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 For Approval and Signature :

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HON’BLE MR.JUSTICE A.P. SHAH

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 HON’BLE MR.JUSTICE S.J. VAZIFDAR.

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 1. Whether Reporters of Local Papers )
 may be allowed to see the judgement ? )
 2. To be referred to be Reporter or )
 not ? )

M/S. Asian Engineerig Sales Corpn. v. Bank of Baroda

Case brief

What is this about?

What did the court decide?

M/S. Asian Engineerig Sales Corpn. v. Bank of Baroda

Case brief

What is this about?

What did the court decide?

What the court decided

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Issues for consideration

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