Dismissed

M/S. K. K. Gupta and Sons v. Union Bank of India

Bombay HC24 Nov 2005WP/1543/2005

Case brief

AI extract

What is this about?

The High Court dismissed a writ petition against the Debt Recovery Appellate Tribunal affirming their rejection of a case where bills of exchange were dishonoured. The court held the bills were valid, payment to the drawer did not extinguish the acceptor's liability, and the alleged understanding was not a contract under the Negotiable Instruments Act.

What did the court decide?

The writ petition was rejected, dismissing the challenge against the orders of the DRT and DRAT.

M/S. K. K. Gupta and Sons Vs Union Bank of… — Contract and Commercial Disputes | Bombay HC (2005)

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HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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WRIT PETITION NO. 1543 OF 2005

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M/s. K. K. Gupta & Sons, Proprietor Kamal Kantilal Gupta. ..Petitioner.

Versus.

Union Bank of India.

..Respondent.

Shri. A. M. Shah i/b Dr. D. R. Talankar for the petitioner. Shri. N. S. Fadia for the respondent.

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CORAM: Smt. Ranjana P. Desai, & Abhay S. Oka, JJ.

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DATE : November 24, 2005.

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P.C.

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1.	The	petitioner is	the orig	inal defe	ndant in
Original	Application N	o.	3054	of	2000 and	the
respondent	- Union Bank	of	India	is	the applicant.	For
convenience	parties are	referred	to	a	s per thei	r status
in	the application.	The	case	of	the applicant	is that
the	bills of exchange	which	are	the	subject matte	r of
the	Original Application	ar	e dra	wn b	y M/s.	Basant
Alloy	Steel Ltd. w	ho are	the	draw	ers. The	said bills
of	exchange were	drawn	on	the	petitioner /	defendant
for	valuable conside	ration	in	favour	of the	applicant.
According	to the	applicant,	whe	n th	e said bills	were
presented	to the	defendant	for	encas	hment, the	same

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were	disho	noured.		Hence	the O	riginal Appl	ication	was
filed	for	amount	due	and	payable	under the	said	bills
of	exchange.		The	Debt	Recovery	Tribunal	("DRT"	for
short),	all	wed	the	applicatio	n and	appeal w	as	carried
before	the	Debt	Reco	very	Appellate	Tribunal	("DRAT"	for

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short), which also came to be dismissed. Hence the

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present Writ Petition.

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2.				One of the contentions raised by	the
petitioner		was	th	at the bills of exc	hange were	not
drawn	b	y	the	authorised signatory of	the drawer	of the
hundies	an	d	there	fore they were	inadmissible	in
evidence		and	the	applicant - bank w	as, therefore,	not
the hol	der	in	due	course. We find	no substance	in this
contention.			The	bills of exchange ha	ve been	accepted
by	the	de	fendants	and they have been	discounted	by the
bank	relyi	ng	on	the acceptance. It	is well	settled
that	the		negoti	able instrument must on	its face	show
that	it	has	been	drawn, made, accepted	or endorsed	by
the	compan	y	before	it could be bound	by it.	These

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conditions are fulfilled in this case. The DRT & DRAT

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have therefore rightly rejected this submission.

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3.			It was	conten	ded that a	s per the	practice
the	amounts	were	paid	to	the	drawer	and	the	refore	the
applicant	is	not	liable.		This	submis	sion	also	has	no

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merit because there is no clear indication that there
was any such agreement. Admittedly there is no written
contract. In any case in the facts of this case the
alleged arrangement does not constitute a contract to
the contrary within the meaning of sections 32 and 37
of the Negotiable Instruments Act. Besides, even
assuming the payment was made directly to the drawer
that does not extinguish the acceptor’s liability. In
view of this, we find no reason to interfere with the

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concurrent view taken by the DRT and DRAT. There is no

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merit in the petition. The petition is rejected.

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(SMT. RANJANA P. DESAI, J.)

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(ABHAY S. OKA, J.)

M/S. K. K. Gupta and Sons v. Union Bank of India

Case brief

What is this about?

What did the court decide?

M/S. K. K. Gupta and Sons v. Union Bank of India

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

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