Soumen Sen, Ravi Krishan Kapur, J. - (1.) This appeal is directed against an order dated 19th April 2016 by which the suit filed by the plaintiff was dismissed. Since it is a deemed decree, an appeal has been preferred against the said decree. The plaintiff instituted the suit against three parties. The defendant Nos. 2 and 3 are financial institutions.
(2.) The case in short in the plaint is that the defendant No. 1 placed certain orders on the plaintiff for supply of High Carbon Ferro Manganese Lumps to the defendant No. 1. There was a specific understanding between the plaintiff and the defendant No. 1 that the defendant No. 1 would furnish an Inland Irrevocable Documentary Credit (IDC). The plaintiff duly instructed the defendant No. 3 to negotiate the domestic bill under Inland Irrevocable Documentary Credit issued by the defendant No. 2. The defendant No. 3 duly negotiated the documents and sent them to the defendant No. 2 for payment. The defendant No. 2 however objected to make such payment in view of certain discrepancies and refused to negotiate the said documents. The defendant No. 1 however duly accepted the discrepancies and issued a letter dated 23rd August 2007 instructing the defendant No. 2 to accept all the discrepancies in all the documents and to honour the IDC on due date. On 2nd January 2008, the defendant No. 3 was instructed by the plaintiff that in view of discussion taking place in between the defendant nos.1 and 2 and the plaintiff, it was decided that the documents would once again be sent after acceptance of the discrepancies by the defendant no.1 to the defendant no.2 bank for payment. on 4th January, 2008 the defendant no.3 forwarded all the bills in view of acceptance of all the discrepancies by the defendant no.1 to the defendant no.2 bank for payment. On 14th February, 2008 the plaintiff called upon the defendant no.2 to honour the said IDC by its letter. In reply, the defendant no.2 by its letter dated 12th March, 2008 refused to comply with the request made on an erroneous pretext. Subsequently, the defendant no.1 admitted the dues of the plaintiff and paid a sum of Rs.36,46,290/- leaving a sum of Rs.44,52,317/-. The plaintiff claimed that by reason of the issuance of the irrevocable letter of credit, the defendant no.2 is, in effect, a guarantor and is equally liable to pay the dues on account of the defendant no.1 which the said defendant bank refused to accept. It is alleged that the defendant nos.1 and 2 are interested to deny the lawful demands of the plaintiff and, as such, the plaintiff is entitled to claim decree for a sum of Rs.54,71,105/- together with interest at the rate of 18% per annum as on 4th May, 2011 as against the defendant nos.1 and 2 jointly and severally.
(3.) The suit apparently was filed by the plaintiff against the defendants presumably without the knowledge of the defendant no.1 being referred to BIFR. In view of the judgment in Real Value Suppliers Ltd. v. Canara Bank and Ors., (1998)5 SCC 554 of the Hon'ble Supreme Court, the suit could not have been proceeded with since admittedly the reference before the BIFR was existing at the time when the suit was instituted. This fact, however, not within the knowledge of the plaintiff. The learned Single Judge at the instance of the defendant no.2 and not at the instance of the defendant no.1 dismissed the suit on the ground that under Section 22 of SICA, "a suit shall not lie" against the defendant no.1 without adverting to the facts of the matter which clearly show that the plaintiff has an independent cause of action against the defendant no.2. It is elementary that the statements made in the plaint are taken to be correct for the purpose of deciding a demurrer application. There is no finding by the learned Single Judge that Section 22 of SICA would apply squarely with regard to the claim made by the plaintiff against the defendant no.2 which appears distinct and separate. Whether the plaintiff would ultimately succeed in establishing that the defendant no.2 should be treated as a guarantor and its liabilities co-existed with the defendant no.1 is not an issue which was required to be gone into at that stage nor was the said issue decided by the learned Single Judge. However, as on date the bar against the defendant no.1 is no more there.;