S. S. SUBRAMANI J.

The second defendant in C. S. No. 1453 of 1993 on the file of this court is the appellant before us. Respondents Nos. 1 and 2 herein, as plaintiffs, filed the above suit, against the two defendants for the following reliefs :

"...to pass a decree and judgment jointly and severally against defendants Nos. 1 and 2--

(a) for the recovery of Rs. 23, 03, 471 (rupees twenty-three lakhs three thousand four hundred and seventy-one) with interest at 24.75 per cent. per annum from the date of plaint till the date of realisation ;

(b) costs of the suit ; and

(c) grant such further or other reliefs..."

It is the case of the plaintiffs that they got acquainted with the first defendant herein some time in the year 1987-88 and were dealing with it for some time. Though they were acquainted during that period, the business transaction was not that much, and it is said that some time during the year 1991, the first defendant company requested the plaintiffs to supply fresh consignments of cut and polished diamonds. Since there has been no transaction between the plaintiff and the first defendant after 1987-88 and there had been lapse of time and considering the precious value of the diamonds to be supplied, they requested their bankers, namely, the Bank of Baroda, to obtain a fresh banker's report with regard to the financial capacity to pay for the first defendant-company. It is said that they wanted to get a report regarding the reputation, average, balance maintained by the first defendant, how it can repay the price, its credit facilities, etc. It is said that on such request, the Bank of Baroda requested the second defendant, appellant herein, to send a banker's report about the first defendant company on the lines requested by it. It is said that on getting the request, the second defendant (appellant) sent a report on September 25, 1991, explaining the financial status and viability of the first defendant-company. In that report, it is said that the first defendant-company was good to the extent of U. S. dollars 1, 00, 000 under 90 days D. A. basis since the appellant was holding a debenture for U. S. dollars 1, 00, 000. It is said that the plaintiff acted on the report made by the second defendant and sent consignments on various dates, the value of which comes to 51, 996.15 U. S. dollars. The said consignments consisted of invoices and airway bills negotiated by the Bank of Baroda and the consignee in all the suit transactions was the second defendant-bank,

"National Westminster Bank, 22, Frederick Street, Birmingham, U. K.--account P. R. Bushell Jewellers Ltd., Michael House, 48, Carver Street, Birmingham, West Midlands, B1 3 AS, ; J. K."

. It is said that after sending the consignments, the second defendant was also informed about the same and in the messages sent to it, it was clearly specified that the second defendant should deliver the suit consignments to the first defendant company on the latter giving an undertaking to deposit the sale proceeds with the second defendant within 90 days from the date of delivery of the consignments. It is said that the plaintiffs relied on the credit report given by the second defendant that the first defendant was good for payment. It is further averred that the first defendant company and the second defendant-bank failed to pay the balance on the respective dates and when the first defendant was contacted, they gave evasive replies. Even a personal visit by one of the directors of the plaintiffs to the United Kingdom was not fruitful. It is alleged by the plaintiffs that on further enquiry, they came to know that the first defendant was in insolvent circumstances and the first defendant itself was a debtor to the second defendant to the tune of pound sterling 351, 000 as on December, 1991. It is said that the first defendant was not in a position to pay the creditors and the entire plant and machinery including fixtures and fittings of the first defendant were being sol