An indorsement in blank on a bill of exchange does not make the indorsee a holder in due course and does not entitle the indorsee to enforce the bill against the drawee.

Soumen Sen, J.

1. This revisional application is directed against an order passed by the Debts Recovery Appellate Tribunal, Kolkata (hereinafter referred to as the "Appellate Tribunal") on 19th September, 2014 in an Appeal No. 11 of 2007 reversing the judgment passed by the Kolkata Debts Recovery Tribunal No. 2 (hereinafter referred to as the "DRT") on 24th January, 2006.

2. The brief facts of the case are stated hereinafter.

3. One Espee Trading Corporation (hereinafter referred to as the "Constituent") having its office at 1359 Broadway, Suite 2210, New York, N.Y. 10018 was a constituent of the opposite party bank's New York Branch and was enjoying various credit facilities from the said New York Branch.

4. The applicant Bank purchased three Bills of Exchange from M/s. Espee Trading Corporation relating to Bill No. 5890 for US $10,797=15, Bill No. 5889 for US $10,587=68 and Bill No. 5886 for US $10,382=93 dated 28th February, 2001, 27th February, 2001 and 20th February, 2001 respectively and the due date was 29th May, 2001, 28th May, 2001 and 21st May, 2001 respectively. These Bills of Exchange were drawn on M/s. Precision Processors (India) Pvt. Ltd. (hereinafter referred to as the "Applicant"). All the aforesaid bills were accepted by the applicant on 3rd May, 2001. The applicant, however, did not pay the amount of the bills on demand after maturity. By reason thereof, the Canara Bank, the banker of the applicant through its Notary, Mr. A.K. Biswas made presentment of the said Bills on 17th November, 2003 and the protest was notarized. The applicant did not make payment.

5. Under such circumstances, the bank filed a proceeding for recovery of an amount of Rs. 17,14,943/- along with interest. In the said proceeding, the applicant filed a written statement in which it was contended on behalf of the applicant that there is no privity of contract between the bank and the applicant. The privity of contract was between the Bank and Espee Trading Corporation. The bank is not the holder in due course of the Bills of Exchange and has no right to claim any amount from the applicant. The applicant is not liable to pay the aforesaid sums by reason of the fact that Espee Trading Corporation by their letter dated 12th December, 2001 had informed the applicant that they are not required to make any payment of the bills.

6. The bank has filed the evidence on affidavit of one Mr. S.P. Reddy and the applicant has also filed the evidence of affidavit of Mr. Ajay Gaggar along with the evidence on affidavit of one Mr. Sanjay Kedia, President of Espee Trading Corporation.

7. The bank also appears to have initiated a proceeding against Espee Trading Corporation at an appropriate forum at USA.

8. In the statement of claim, the bank has stated that three Bills of Exchange are issued by Espee Trading Corporation. The applicant company is a drawee. These bills have been purchased by the bank as holder in due course and, accordingly, the bank is entitled to recover the amounts from the applicant in view of non-payment of the amount under the bills.

9. The question raised before the Tribunal appears to be whether the bank is the holder in due course and can recover the amounts from the applicant company.

10. The Tribunal on the basis of the pleadings recorded that only the question which has been raised is whether these Bills of Exchange are legal and valid, whether the bank is the holder in due course or is the indorsee of M/s. Espee Trading Corporation to recover the amount and also whether on acceptance of the bills of exchange the applicant becomes primarily liable to the bank for payment of the amounts. The Tribunal on consideration of the materials-on-record held that the circumstances under which M/s. Espee Trading Corporation handed over these Bills of Exchange to the bank and if these bills were purchased for consideration could not be decided in absence of Espee Trading Corporation who has not been made a party in this proceeding. The bank h