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NON-REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.7552 OF 2002

Britannia Industries Limited … Appellant

Versus

Punjab National Bank & Ors. … Respondents

J U D G M E N T

Aftab Alam,J.

1. This appeal,  by special  leave,  is  directed against  the judgment and  

decree dated April 3, 2001 passed by a Division Bench of the Calcutta High  

Court  in  Appeal  No.114/1991.  By  the  impugned  judgment,  the  Division  

Bench allowed the appeal preferred by Punjab National Bank (respondent  

no. 1 before this Court), set aside the judgment and decree dated December  

12, 1990, passed by a learned single judge of the High Court in Suit No.  

780/1983 filed by the appellant-plaintiff under Order XXXVII of the Code  

of Civil Procedure.

2. The claim of the appellant-plaintiff  is  based on a purported bill  of  

exchange dated February 15, 1983 for a sum of Rs. 1 crore only. The bill of  

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exchange was drawn by two persons namely, Raghunath Dutta and Amit  

Dutta  (respondent  nos.  3  &  4  respectively)  as  partners  in  the  firm  

Metropolitan  Construction  (respondent  no.  2).  The  bill  of  exchange  was  

accepted by M/s Lgee Enterprises (not made a party to the suit) and was  

further shown to be accepted by Punjab National Bank (respondent no. 1). It  

was  then  shown  to  be  endorsed  by  respondent  no.  2  in  favour  of  the  

appellant-plaintiff and was delivered to it, who, thus, claims to have become  

the endorsee and the holder of the bill of exchange in question. The bill of  

exchange was presented for payment, but respondent no. 1 refused to make  

payment, thereby dishonoring the bill.

3. The appellant-plaintiff  filed  the  suit,  being Suit  No.  780/1983,  for  

recovery of the amount of the bill of exchange along with statutory interest.

4. From the  averments  made  in  the  plaint  it  is  clear  that  the  bill  of  

exchange is drawn by respondent nos. 3 & 4 (defendant nos. 3 & 4 in the  

suit) as partners of the firm, respondent no. 2 (defendant no. 2 in the suit).  

Admittedly, suit summons were not served on defendant nos. 2, 3 & 4 and  

they  never  contested  the  suit  at  any  stage.  The  acceptor  of  the  bill  of  

exchange is M/s Lgee Enterprise which was not impleaded in the suit on the  

facile  plea  that,  based  in  Mumbai,  it  was  beyond the  jurisdiction  of  the  

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Calcutta High Court. The contest was, therefore, directly with PNB which  

was described in the plaint as the “acceptor” of the bill.

5. PNB (respondent no.1) completely denied the case of the appellant-

plaintiff made out in the plaint and was granted leave to defend the suit in  

terms of rule 3(5) of Order XXXVII.

6. In the written statement it was stated on behalf of PNB that the bill of  

exchange was never accepted by it;  that  A.B.  Das,  who was the Branch  

Manager of PNB’s Zakaria Street Branch, Calcutta and who was shown to  

have “accepted” the bill of exchange was not authorized to accept any bill of  

exchange on behalf of the Bank. In any event, the “co-acceptance” of the bill  

of exchange by A.B. Das in Bombay was not in discharge of his official duty  

as Branch Manager of a branch in Calcutta. The co-acceptance of the bill of  

exchange shown to have been made by A.B. Das was fraudulent and not  

binding on the Bank.

7. It was also stated in paragraph 10(f) of the written statement that A.B.  

Das was arrested by the West Bengal Bureau of Investigation relating to his  

involvement  in  connection  with  M/s  Sanchita  Investment  and  then  on  

November  8,  1983,  A.B.  Das  was  again  arrested  by  C.B.I.  and  various  

investigations were pending against A.B. Das.

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8. It  was  also  stated  in  the  written  statement  that  the  Metropolitan  

Construction was a non-existent firm and never had any place of business at  

A-18  Kings  Acres  Plot  No.  75,  Saraswati  Road,  Santacruz  (West)  at  

Bombay – 400054 or at 29, Creek Lane, Calcutta – 700014 (the addresses  

given  in  the  bill  of  exchange).  The  telephone  number  given  in  the  said  

purported bill was in the name of M/s Jayadas and Co., whose proprietress is  

Mrs.  Jayashree  Das,  the wife  of  A.B.  Das’s  brother.  The acceptor,  Lgee  

Enterprise, is also a non-existing firm and has no office at Plot No. 154,  

Juhu  Tara  Road,  Bombay 400049,  which is  the  address  of  one  Sunlight  

Firm, an associate of Sanchita Investments.

9. The allegation of fraud, directly against Britannia, was made in sub-

paragraph (h)  of  paragraph 11 of  the  written  statement  which is  set  out  

below:

“The said purported Bill of Exchange was not drawn on Punjab  National  Bank,  this  defendant  and  the  said  Mr.  A.B.  Das  fraudulently  in  collusion  and  conspiracy  with  the  plaintiff  and/or its Authorized Officer and/or officers purportedly put a  remark thereon as “Co-accepted”.  The purported remark “co- accepted” was put on the said Bill of Exchange in collusion and  conspiracy with the plaintiff and/or its duly authorized officers  and is illegal, invalid and not binding on this defendant. There  was  no  acceptances  of  the  said  purported  bill  by  this  defendant.”

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10. Here it needs to be stated that after the filing of the written statement  

of  the respondent-Bank the appellant-plaintiff  sought  to amend the plaint  

and  to  describe  the  respondent  Bank  as  the  “co-acceptor”  of  the  bill  of  

exchange  which,  in  the  plaint,  as  noted  above,  was  described  as  the  

“acceptor” of the bill. The amendment petition was rejected by the trial court  

and the order rejecting the amendment petition was upheld right upto this  

Court.

11. On the basis of the pleadings, the parties went to trial and the trial  

court by judgment and order dated December 12, 1990, decreed the suit.

12. Against  the  judgment  and  decree  passed  by  the  trial  court,  the  

respondent-Bank preferred an intra-court appeal before the Division Bench  

of  the  High Court  and the  Division Bench,  as  noted  above,  allowed the  

appeal, set aside the judgment and decree passed by the single judge and  

dismissed the plaintiff’s suit.

13. The Division Bench has rendered a long and learned judgment that  

deals with practically the entire gamut of the law on bill of exchange.

14. On a careful consideration of the materials on record, the Division  

Bench  found  that  there  was  no  material  to  hold  that  the  alleged  bill  of  

exchange was a validly executed instrument as the appellant-plaintiff failed  

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to  adduce  any  evidence  in  regard  to  its  execution.  The  Division  Bench  

further held that it was incumbent upon the appellant-plaintiff to prove the  

execution  of  the  bill  of  exchange  and  its  validity  as  it  was  repeatedly  

asserted  in  the  written  statement  filed  by  the  respondent-Bank  that  the  

alleged bill of exchange was brought into existence by practicing fraud and  

collusion and it was not a valid instrument and binding on the respondent.

15. The  Division  Bench  further  found  that  by  allegedly  giving  the  

guarantee for payment under the guise of “co-acceptance” of the bill, A.B.  

Das  acted  in  excess  of  his  authority  and  the  so  called  co-acceptance  

endorsed by him could not and did not bind the respondent-Bank.

16. The Division Bench also found that the circumstances in which the  

alleged bill of exchange was said to have been drawn up and accepted by  

M/s Lgee Enterprise and “co-accepted” by the respondent-Bank appeared to  

be  highly  curious  and  unusual  and  lent  credence  to  the  case  of  the  

respondent-Bank that the bill of exchange was fraudulent.

17. The  Division  Bench  also  held  that  the  statutory  requirement  of  

presentment under section 64 of the Negotiable Instruments Act for payment  

is  mandatory  and  the  words  “must  be”  clearly  expressed  the  legislative  

intent. The consequence of failure to present was also made clear that the  

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failure will absolve the liability of any of the “other parties thereto”. It was  

also made clear that in the case of a bill of exchange it must be presented for  

payment to the “acceptor”. In this case, admittedly the bill was not presented  

to M/s Lgee Enterprise, the named acceptor in the bill and as a consequence  

“other parties thereto” were totally absolved of their liability.

18. The Division Bench also rejected the contention made on behalf of the  

appellant-plaintiff  that  co-acceptance  by  the  respondent-Bank  should  be  

treated as acceptance. The Division Bench pointed out that the case of the  

appellant-plaintiff in the plaint is that the respondent-Bank is the “acceptor”.  

After  receiving  the  written  statement  filed  by  the  respondent-Bank,  the  

appellant-plaintiff  wanted  to  introduce  the  case  of  co-acceptance  by  the  

Bank. The attempt to amend the plaint did not succeed right upto this Court.  

Hence, the case of the appellant-plaintiff was liable to fail, as on the face of  

the document the Bank was not the acceptor of the bill of exchange.

19. Each of the findings noted above, have been arrived at by the High  

Court  with great  care  in regard to  the facts  of  the case and the relevant  

provisions of the law. Each of the findings is unimpeachable and each of the  

finding on its own is fatal to the case of the appellant-plaintiff.

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20. On  hearing  Mr.  Shyam  Divan,  senior  advocate  counsel  for  the  

appellant-plaintiff and Mr. Dhruv Mehta, learned senior advocate appearing  

for the Bank, we find ourselves in complete agreement with the view taken  

by the Division Bench of the High Court.

21. We find no merit in this appeal and is, accordingly, dismissed with  

costs.

…..……………………….J. (Aftab Alam)

…..……………………….J. (Ranjana Prakash Desai)

New Delhi; April 17, 2013.  

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