JUDGMENT - Dr. D.Y. CHANDRACHUD, J.:---In October 1997, the plaintiff agreed to grant to the second defendant, a Bill Discounting facility to the extent of Rs. 2.50 crores in respect of Bills of Exchange drawn or accepted by or on behalf of the Second defendant. A personal guarantee was executed by the Third defendant. A Bill of Exchange dated 3rd October, 1997 in the amount of Rs. 49,98,480/- was drawn by the First defendant and was duly accepted by the second defendant payable to the plaintiff 90 days after date. The plaintiff is also the holder in due course of another Bill of Exchange dated 14th October, 1997, in the amount of Rs. 61,48,920/- drawn by the First defendant and accepted by the Second defendant which was payable to the plaintiff 90 days after date. Similarly, a third Bill of Exchange dated 22nd October, 1997, in the amount to Rs. 80,24,600/- drawn by the First defendant and accepted by the Second defendant was payable to the plaintiff 90 days after date. The three Bills of Exchange as aforesaid were due for payment on 1st January, 1998, 12th January, 1998 and 25th January, 1998. The plaintiff has averred in para 6 of the plaint that the defendants having agreed to discounting charges at the rate of 28% compounded quarterly, the plaintiff paid to the first defendant, the discounted amount by means of cheques which were drawn in favour of the First defendant in respect of each of the said Bills of Exchange. Upon presentation of the Bills of Exchange on their due dates to the Second defendant, the Bills of Exchange came to be dishonoured by non-payment. The Second defendant in discharge of its liability, issued three cheques dated 1st January, 1998, 12th January, 1998 and 25th January, 1998, which, upon presentation, were dishonoured by the bankers with the remarks, "refer to Drawer".

2.In part payment of the amount due under the Bill of Exchange dated 3rd October, 1997 in the amount of Rs. 49,98,480/- the Second defendant paid an amount of Rs. 25 lakhs on 9th January, 1998. As on 28th January, 1998, the amounts of Rs. 24,98,480, Rs. 61,48,920/- and Rs. 80,24,620/- were payable by the defendants to the plaintiff. The plaintiff addressed a letter dated 28th January, 1998. The Second defendant by a letter dated 31st January, 1998 confirmed that the aforesaid amounts were due and payable to the plaintiff. Thereafter, the Second defendant on 27th February, 1998 paid the balance of the principal amount due in respect of the Bill of Exchange dated 3rd October, 1997, so that the entire principal amount under the said Bill of Exchange has been paid. In October 1997, the 2nd defendant issued to the plaintiff a further cheque for Rs. 25 lakhs in part payment of the amount due under the Bill of Exchange dated 13th October, 1997. But, the said cheque was also returned as dishonoured upon presentation. On 7th March, 1998, the Second defendant paid an amount of Rs. 25 lakhs against the said Bill of Exchange, leaving as balance a sum of Rs. 36,48,920/-. By letters dated 24th March, 1998 and 18th April, 1998, the Second defendant assured that a payment schedule would be worked out to pay the outstanding dues of the plaintiff.

3.In so far as the Second defendant is concerned, it has been stated that on the letter of the plaintiff dated 8th December, 1998, the Second defendant had by an endorsement confirmed that an amount of Rs. 1,51,25,844 was due payable to the plaintiff.

4.In para 24 of the plaint, the claim for interest in so far as the First defendant is concerned, is restricted to interest at the rate of 18% per annum, since for the period subsequent to 8th December, 1998, there has been no confirmation as such of the amount which is due and payable. The claim at the rate of 18% per annum has been made on the basis of section 80 of the Negotiable Instruments Act, 1881.

5.The claim in the Summary Suit is for the payment of an amount of Rs. 1,39,69,099/- comprised of the principal amount of Rs. 1,16,73,540/- with interest the

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