can anyone please answer this question?? ( gcl case law)

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priyanka

108 Points Joined June 2010

(a) Ram agrees to sell and deliver a ship to Shyam, to be paid for byShyam's acceptance of four bills of exchange, for sum amounting toRs.50,000 to be drawn by Ram on Shyam. The bills are drawn and accepted, but the ship is not delivered according to the agreement. Ramsues Shyam on one of the bills. State with reasons whether Shyam canobtain cancellation against all bills?

Replies (4)

Guest

Since delivery of ship is not done..Ram cannot sue on the shyam for payment..and further shyam can obtain cancellation on the bills accepted by him..

CA AMANPREET SINGH

Chartered Accountant

284 Points Joined October 2009

One of the condition for a Valid Bill of Exchange is that IT MUST BE ACCEPTED AGAINST GOOD CONSIDERATION

and by default it is assumed that Consideration Exists.

Now Shyam has to prove that there is No consideration(as ships not delivered) and then all Bills will stand VOID.

Guest

CS Inter Group I : General and Commercial Laws - June 2007

The facts in the given problem are based on the case of Anglo Danubian Co. v. Rogerson (1867) L R 4 Eg. 3.

Relief of cancellation under Section 31 of the Specific Relief Act, 1963, would be available when (i) an instrument is void or voidable against the plaintiff; (ii) where the plaintiff may apprehend serious injury if the instrument is left outstanding; and (iii) where it is proper under the circumstances of the case to grant the relief.

The party is relieved upon the principle, as it is technically called quia timetle., forfear that such agreement, securities deeds or other instruments may be vexatiously and injuriously used against him when the evidence to impeach them may be lost, or that they may throw a cloud of suspicion over his title or interest.

In the light of the provisions of Section 31 of the specific Relief Act, Ram may obtain cancellation of all the bills.