(1.) The appellant - Bank of India, a body corporate constituted under the Banking Companies [Acquisition and Transfer of Undertakings] Act, 1970 filed a suit for recovery of Rs.91,58,480.09 against the defendants - respondents on 30th of August, 1982, inter alia, alleging that on the request of defendant nos. 1 to 5, namely, M/s Mehta Brothers and Ors. on 26th of June, 1979, the appellant Bank issued an irrevocable Letter of Credit for US $ 6,10,900, equivalent to Indian currency about Rs.50,00,000/-, in favour of M/s Bentrex and Co., Singapore. The said Letter of Credit was expressly made subject to the terms and conditions of Uniform Customs and Practice for Documentary Credits [1974] Revision, International Chamber of Commerce Publication No.290. On 1st of September, 1979, the beneficiary drew a site draft for an amount of US $ 6,10,740 and presented the same along with other documents to Deutsche Bank Asia [formerly known as European Asian Bank], a body corporate incorporated in West Germany being a foreign company under the Companies Act, 1956 - defendant No.6 - respondent no. 6 (in short 'the respondent No.6') for negotiations. On 4th of September, 1979, respondent no.6 after negotiating the documents dispatched the original and duplicate set of the documents from Singapore directly to the Chandni Chowk Branch of the appellant Bank and called upon the New York Branch of the appellant Bank for reimbursement under the Letter of Credit. The appellant Bank further alleged that this was done without furnishing the necessary certificate of compliance which was required under the terms of letters of credit. On 5th of September, 1979, the New York Branch of the appellant Bank on receipt of the aforesaid claim, in good faith, paid on account, without prejudice, the said amount of US $ 6,10,740. On 13th of September, 1979 the appellant Bank received the documents from respondent no.6 and found that there were many discrepancies in the documents and they were not as per the Uniform Customs and Practice of Documentary Credits [1974 Revision]. On 14th of September, 1979, by a telex the appellant Bank pointed out to respondent no.6 some of the discrepancies in the documents and stated that the documents were being held at its risk and responsibility. Respondent no.6 was requested to reverse the reimbursement already claimed by it from the New York Branch of the appellant Bank. On the same day respondent no.6 by its telex to the appellant Bank rejected the claim of the appellant Bank alleging that these discrepancies were of minor nature and all the terms and conditions of the Letter of Credit were complied with. On 14th of September, 1979, Mehta Brothers- defendant nos. 1 to 5 - respondent nos.1 to 5 (in short 'respondent nos. 1 to 5') also did not honour and return the documents as they were not at all in accordance with the terms of Letter of Credit. The appellant Bank - further alleged that respondent no.6 had failed and neglected to reply and reimburse to the appellant Bank the amount received by it from the New York Branch. Respondent no.6 had failed to furnish to the New York Branch of the appellant Bank the certificates of compliance in terms of the said Letter of Credit, for that reason also respondent no.6 acted in breach of its obligation under the Letter of Credit to do so and, therefore, was not entitled to claim and return the payment received thereunder. Despite repeated requests and reminders, respondent nos. 1 to 5 did not honour and return the said documents and went on contending that there were discrepancies in the documents. Respondent nos. 1 to 5 also stated that their claim with the insurance company was likely to be finalized soon and the amount payable thereunder shall be received by the appellant Bank directly from the insurance company for the adjustment of the amount due and payable by them under the Letter of Credit. Respondent nos. 1 to 5 as also respondent no.6 had denied their respective liability to repay to the appellant Bank the amounts claimed by it and the appellant Bank was in doubt as to the persons from whom it was entitled to redress, accordingly, the appellant Bank joined respondent nos.1 to 5 and respondent no.6 as parties to the suit in order to determine the question as to which of the defendants was liable to the appellant Bank and to what extent. If separate suits were brought against respondent nos. 1 to 5 and respondent no.6, common question of law and fact would arise, therefore, the appellant Bank had a right to relief against respondent nos. 1 to 5 or respondent no. 6.
(2.) Upon the aforesaid allegations, the appellant Bank had filed the aforesaid suit for recovery of Rs.91,58,480.08, being the amount of Letter of Credit and interest. Decree was claimed primarily against respondent no.6 and alternatively, against respondent nos. 1 to 5 in case, the court would come to the conclusion that respondent no.6 was not liable to pay any amount to the appellant Bank. It would be appropriate at this stage to reproduce the reliefs claimed in the suit itself which read as under:
(3.) On 24th of July, 1984 a written statement on behalf of respondent no.6 was filed. Although, respondent no.6 filed the written statement but finally no body appeared on its behalf and accordingly the suit had proceeded against it ex parte. The suit was decreed on 10th of March, 1987 ex parte against respondent no.6 with costs. However, the suit against respondent nos. 1 to 5 was dismissed on contest and they were left to bear their own costs. However, the appellant Bank did not file any appeal in so far as that part of the decree by which the suit against respondent nos. 1 to 5 had been dismissed. Accepting this position, on 4th of April, 1988, two applications were filed by respondent no.6 under Order 9 Rule 13 of the Code of Civil Procedure (in short the 'Code') for setting aside the ex parte decree and under Section 5 of the Limitation Act for condonation of delay in filing the application under Order 9 Rule 13 of the Code. By an order dated 28th of February, 1991, the learned single judge of the High Court allowed both the applications filed by respondent no.6. Accordingly, the ex parte decree passed against respondent no.6 was set aside subject to payment of Rs.25,000/- as costs out of which Rs.15,000/- was payable to the appellant Bank and Rs.10,000/- to respondent nos. 1 to 5. While setting aside the ex parte decree against respondent no.6, by the same order, the learned Single Judge also set aside that portion of the decree whereby the suit against respondent nos. 1 to 5 was dismissed. To set aside that part of the decree, the learned single judge had relied on the proviso to Order 9 Rule 13 of the Code. Feeling aggrieved by the said judgment of the learned single judge, respondent nos. 1 to 5 filed first appeal being FAO [OS] No.78 of 1991 before the High Court of Delhi. The appellant Bank also filed FAO [OS] No.100 of 1991.