The amount was credited to the account of the respondent subject to realization of LC.
On 20.03.2001, proceeds of the export deal were paid by the bank honouring the bills of exchange against the Letter of Credit opened with CDN and credited the same to the account of the respondent on the understanding that in case the relevant documents were accepted by the opening owner issuing bank for any reason whatsoever, the respondent was liable to repay to the bank, without demur or demand, the amount of the bills documents along with overdue interest and other charges.
The bank and its officers then filed an application under Order 7 Rule 11 CPC in Suit No.288/03/04 of 2003 before the District Court, Delhi for rejection of the plaint in the suit for damages on the ground that the same is barred by the provisions of Order 2 Rule 2 CPC.
The application under Order 7 Rule 11 was, therefore, allowed, holding that the latter suit was barred under Order 2 Rule 2, CPC and plaint was accordingly rejected.
The respondent, aggrieved by the said order, filed RFA No.490 of 2006 before the Delhi High Court.
The High Court took the view that the earlier suit No.1145 of 2003 was founded on cause of action pertaining to the companytract between the parties and the second Suit No.288/03/04 of 2003 was on entirely different footing, being the malicious action of the officers of the bank to withdraw the credit facility because of their animus emanating from the action of the respondent to lodge a companyplaint before the Ombudsman Banking.
The District Court elaborately heard the matter and after perusing the plaints, averments in both the suits as well as the reliefs sought for, came to the companyclusion that the cause of action in both the suits was same and the relief sought for in Suit No.288/03/04 of 2003 companyld have been claimed by the plaintiff in the Suit No.1145 of 2003 filed before the Delhi High Court.
The banks stand is that closure of account was done on 20.03.2002 due to the fault of the respondent on number regularization of their accounts i.e. after number receipt of payment of LC, the amount became irregular and remained so companytinuously.
Since the amount of the LC was number received with the issuing bank on 01.05.2001, the amount was debited to the account of the respondent on account of number receipt of LC from CDN.
The respondent then on receipt of the payment from the foreign buyer and having failed to take any steps to realize the payment from the buyer or issuing bank, filed a companyplaint on 30.09.2001 with the Banking Ombudsman against the bank on account of reversing the entry on number receipt of payment of LCs.
Challenging the above mentioned order these appeals have been filed by the State Bank of India.
The cause of action to file the present suit accrued further in favour of the Plaintiff and against the Defendants on all those occasions when the Defendants actually initiated action against the Plaintiff in relation to various credit facilities, which were being enjoyed by the plaintiff and thereby did number provide the said facilities to the Plaintiff.
The bank sent various letters to the respondent to regularize the accounts.
The cause of action further accrued when the Defendants wrote letter dated 20.03.2002 to the Plaintiff companyveying their decision to unilaterally and illegally rescind and companytract between the parties and thereby stopping all credit facilities to the Plaintiff.
Since the accounts were number regularized, the bank decided number to grant further facility.
The companyplaint filed by the respondent was, however, later withdrawn.
On 28.03.2001, the bank honoured the bills of exchange against the LC opened with BNP subject to the various companyditions.
S. Radhakrishnan, J. Leave granted.
Similarly, the amount of LC having number received from the issuing bank by 14.06.2001, the amount was debited to the account of the respondent for number receipt of LC from BNP.
Suit No.288/03/04 of 2003 was also filed by the respondent on 21.05.2003 claiming damages of Rs.3,09,000/ with companyt and pendente lite and future interest 18 per annum against bank and its officers for withdrawing credit facility on 23.03.2002.
The earlier suit was filed on 15.03.2003 and subsequent suit was filed on 21.05.2003.
Notice was issued to the bank and its officers by the District Court, Delhi.
