1991 (2) TMI 417 - HC - Indian Laws

Summary

Issues Involved:
1. Setting aside the ex parte decree.
2. Condonation of delay in filing the application for setting aside the ex parte decree.
3. Compliance with the terms and conditions of the Letter of Credit.
4. Wrongful failure to retire documents by defendants 1 to 5.
5. Claim of unjust enrichment against defendant No. 6.
6. Reimbursement claim by defendant No. 6 in contravention of Uniform Customs and Practice for Documentary Credit.
7. Entitlement to interest and the applicable rate.
8. Alternative claims against defendants.
9. Installment payments by defendants 1 to 5.
10. Final relief sought.

Detailed Analysis:

1. Setting Aside the Ex Parte Decree:
The court considered whether there was sufficient cause for setting aside the ex parte decree passed on 10-3-1987 against defendant No. 6. The defendant argued that their non-appearance was due to negligence by their counsel, J.B. Dadachanji & Co. The court acknowledged the gross negligence but emphasized that the party should not suffer due to the lawyer's fault, citing the Supreme Court's stance in Rafiq v. Munshilal. The court concluded that there was sufficient cause to set aside the ex parte decree.

2. Condonation of Delay:
The application under Section 5 of the Limitation Act was considered to determine if there was sufficient cause for the delay in filing the application to set aside the ex parte decree. The court noted that defendant No. 6 took immediate steps upon learning of the decree and found sufficient cause for condoning the delay, emphasizing the principles of substantial justice over technical considerations.

3. Compliance with the Terms and Conditions of the Letter of Credit:
The court held that defendant No. 6 did not comply with the terms and conditions of the Letter of Credit, acting in breach by claiming reimbursement without furnishing the necessary certificate. This issue was decided in favor of the plaintiff.

4. Wrongful Failure to Retire Documents by Defendants 1 to 5:
The court found that defendants 1 to 5 were justified in refusing to retire the documents due to discrepancies, thus deciding this issue in their favor.

5. Claim of Unjust Enrichment Against Defendant No. 6:
No decision was given on this issue as it was not deemed necessary by the court.

6. Reimbursement Claim by Defendant No. 6:
The court held that defendant No. 6 claimed reimbursement in contravention of the terms of the Uniform Customs and Practice for Documentary Credit, deciding this issue in favor of the plaintiff.

7. Entitlement to Interest:
The plaintiff was awarded interest at the rate of 18% per annum from 5-9-1979, as covered by issue No. 6.

8. Alternative Claims Against Defendants:
The court held that the suit in the alternative was maintainable, meaning the plaintiff could claim against defendant No. 6 and, in the alternative, against defendants 1 to 5.

9. Installment Payments by Defendants 1 to 5:
No decision was given on this issue as it was not deemed necessary by the court.

10. Final Relief Sought:
The court set aside the ex parte decree in its entirety, including against defendants 1 to 5, to avoid prejudice to the plaintiff and ensure a fair trial. Costs of Rs. 25,000 were imposed on defendant No. 6, with Rs. 15,000 payable to the plaintiff and Rs. 10,000 to defendants 1 to 5. The trial would proceed from the stage of framing issues, with no new preliminary objections allowed.

Order:
The applications were allowed, setting aside the judgment and decree dated 10-3-1987 and the ex parte proceedings against defendant No. 6. The trial was directed to proceed with utmost expedition.