9911796707
TMI Blog2015 (3) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 shall also stand vacated. The impugned Order goes further to state that the decreetal amount shall be satisfied from out of the funds lying with the American Express Bank Limited, Defendant No.2. To this extent the decreetal amount also stands satisfied. It also transpires that the Defendant No.4, M/s. Sarumeah & Sons, a proprietorship concern, has, consequent on the death of the sole proprietor, been struck off from the array of parties. In any event, since claims are posited on a Letter of Credit furnished by the Appellant, albeit, on the instructions of its now non-existent constituent, namely, M/s. Sarumeah & Sons, (hereinafter nomenclatured as the 'Importer') the latter is really a proforma or at best, a proper party, to the extent that the claim pertains to the subject Letter of Credit (L.C.). The decreetal amount stands satisfied and the Plaintiff/Exporter should be pragmatic enough not to expect any further recovery owing to the legal dissolution of the sole proprietorship concern, i.e., the Importer. In essence, therefore, the question raised by the Appellant is reduced to an academic one, which Courts normally abjure from answering. However, since Leave has been granted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t informed Bank of India that the documents had not been accepted by the Importer. The Appellant has admitted in its Written Statement that the documentation was received by it on 19th May, 1999 and returned to the Bank of India as late as 10th October, 1999. It has also been admitted by the Appellant that in the interregnum, without prior information to the Negotiating Bank or to the Exporter, it had certified photocopies of the shipping documents to its constituent, i.e., the Importer, ostensibly for customs purposes. These documents have not been returned to the Appellant and, obviously on their strength, the Importer has managed to clear the entire consignment from the Darshana Railway Authority. The say of the Appellant is that this was achieved through the C&F Agent of the Importer by producing a forged NOC and endorsement on the reverse of the photocopies of the shipping documents, certified by the Appellant. Any reasonably diligent Banker would be alive to the possibility of the misuse of documents certified by it, even if we are to assume that it was not privy to the fraud. We have earlier noted and we emphasise that the Appellant had evaded mentioning that without the per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against liability and that too, comes about only through the prompt intervention and interdiction of a Court of law. This Court has consistently adhered to this position of law even through the passage of several decades. The LC has the effect of creating a bargain between the banker and the vendor of goods, a deemed nexus between the Seller and the Issuing Bank, rendering the latter liable to the Seller to pay the purchase price or to accept a Bill of Exchange upon tender of the documents envisaged and stipulated in the LC (See Tarapore and Co. vs. V.O. Tractors Export, AIR 1970 SC 891 where Halsbury's Law of England have been relied upon). These observations have been repeated in United Commercial Bank vs. Bank of India [1981 (2) SCC 766], U.P. Coop. Federation Ltd. vs. Singh Consultants & Engineers (P)Ltd. [1988 (1) SCC 174], Federal Bank Ltd. vs. V.M. Jog Engineering Ltd. [2001 (1) SCC 663, Himadri Chemicals Industries Ltd. vs. Coal Tar Refining Co. [2007 (8) SCC 110]. The Opening Bank must only look to assure itself that the invocation is in terms of the LC, and the completion of this exercise has consistently been circumscribed to a short period, which in the case in hand is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same alongwith customs purpose copy of LCAF without NOC to the Plaintiff for customs assessment purpose. But the Plaintiff never returned the said documents to the Defendant No. 2 Bank. But the Plaintiff cleared the entire consignment from the Daranana railway Authority through its C & F Agent M/s Anwar Hossian by producing forged NOC and endorsement on the back side of the photocopy of the shipping documents. ..... 17. That the statements made in paragraph No. 11 of the plaint are matters of record and as such the Defendant Nos. 1 and 2 do not offer any comments with regard to them. However, it is mentioned here that the Defendant No. 2 received the discrepant shipping documents on 19.05.99 and communicated with the negotiating bank i.e. Defendant No. 4 as well as the Defendant No. 5 Importer for rectification of the discrepancies. But on 10.10.99 the Defendant No. 5 returned the entire sets of shipping documents to the negotiating bank i.e. Defendant No. 4 and mentioned here that the importer i.e. Plaintiff had taken delivery of the imported goods against the said shipping documents of letter of Credit No. 02-133-99 from Railway Station, Darshana during the period from 16.05. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.3. So the application filed by the Plaintiff for temporary injunction is liable to be dismissed." A perusal of paragraph 18 of the Written Statement filed by the Appellant in the Dhaka litigation discloses that its position was that it was "under obligation to reimburse the payments to the supplier's corresponding bank i.e., Defendant No.3" (Bank of America Ltd. therein). This admission of fact is clear, and in consonance with the law pertaining to legal obligations concerning Letters of Credit, obliges it to remit payments contemplated therein. Assuming that the Appellant did not take any mala fide action so as to enable the Importer to have the consignment released without authority, it was in clear violation of its fiduciary responsibility as the Opener of a Letter of Credit. Therefore, insofar as the factual matrix is concerned, the Appellant had correctly made the statement pertaining to its liability in the Dhaka Suit, which can legitimately be taken as an admission in the Calcutta Suit. 6 The interim Order, it may be recalled, did not restrain or interdict the operation of the impugned Judgment and has in actuality, rendered the Appeal infructuous, since the LC amounts ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
