Aggrieved over the judgment and decree of the trial Court decreeing the suit for recovery of money, the present appeal came to be filed by the 1st defendant, namely, the State Bank of India.

2. For the sake of convenience, the parties are referred to, as per their ranking before the trial Court.

3. Facts and circumstances giving rise to this appeal are:

(i) The plaintiff a registered Firm, has account with the 1st defendant Bank and had bill discount facility. The defendants 2 to 4 are the dealers in handloom and textile goods having business transaction with the plaintiff while the defendants 5 and 6 are the public carrier. The 7th defendant is the Bank in Nepal, negotiated by the 1st defendant bank for collection in respect of Letter of Credit (L/C) amount due from the customer of the plaintiff. The plaintiff supplies goods to defendants 2 to 4 against irrevocable L/C issued by 7th defendant. The plaintiff negotiated with the 1st defendant bank for collection of bill under various invoices raised against the defendants 2 to 4. The plaintiff despatched goods through public career, the 6th defendant and entrusted the goods at Coimbatore for transport via Madras to Kathmandu, Nepal, under various invoices. The documents were sent through 1st defendant for collection and in turn, the 1st defendant negotiated the bills through the 7th defendant and Letter of Credit for realisation of the amount while the defendants 2 to 4 have to realise the bills on payments, the 7th defendant has to deliver the invoices against payments.

(ii) Though the 1st defendant realised the amount and credited to the account of plaintiff, the part of amount due under invoice No.2/95-96 and the full amounts under invoices 10/95-96 and 14/95-96 were not credited by 1st defendant in the account of plaintiff. But as the bills are discounted the 1st defendant bank adjusted the sum collected under invoice No.12/96-97 towards bill discounted amount due under other invoices without authorisation. The 1st defendant collected a sum of Rs.1,33,649/- from the plaintiff towards interest for delayed realisation of LC amount. Since, the plaintiff kept his account with 1st defendant bank, the defendants under letter dated 17-10-1996, directed the plaintiff to pay the interest amount and keep the account in good outstanding for bank for proceeding against the 7th defendant by exercising coercion. It is stated that the plaintiff, hoping that the 1st defendant will file a suit, agreed to adjust interest out of current account. According to the plaintiff, the 1st defendant has to realise the account from the 7th defendant and credit account of the plaintiff for the invoice amount with interest.

(iii) The 1st defendant, admitting his liability to collect the amount and to credit the account of the plaintiff, also took steps to realise the amount by causing lawyer's notice to the 7th defendant. According to the plaintiff, a total sum of Rs.6,04,480/- is due under invoice Nos.12/95-96, 14/95-96 along with interest for delayed payment and in spite of several demands made, the 1st defendant has not paid the amount.

(iv) The case of the plaintiff is that since he was deprived of money for business, the 1st defendant is liable to pay the amount with interest at 21% per annum. Finally, the plaintiff issued a legal notice to the defendants on 02.4.1999 for which the 1st defendant caused a reply notice dated 28.5.1999 admitting the claim but advised the plaintiff to seek remedy from the importer. The 1st defendant also stated that the third defendant had delivered the documents to defendants 2 to 4 without collecting the payment. Since the consignees are stated to have taken delivery of goods and as the fraud committed by the 7th defendant was brought to light in the reply notice dated 28.5.1999, the defendants are estopped from denying the liability from the plaintiff and hence, the plaintiff has impleaded all the parties. As the 1st defendant has admitted the liability and since