INTERADS ADVERTISING PRIVATE LIMITED Vs. BENTREX AND COMPANY

JUDGEMENT

(1.) This order of mine disposes of application of the plaintiff under Order 39 Rules 1, 2 & 3 read with Section 151, Code of Civil Procedure (hereinafter referred to as the Code), for grant of temporary injunction.

(2.) The facts germane to the decision of this application succinctly are that in July 1979, defendant No. I M/s. Bentrix & Company which is sole proprietary concern of Man Mohan Singh, defendant No. 2 entered into a contract for sale of first grade first quality cloves (Zanzibar quality) of the value of Rs. 25,00,000.00 at the rate of US $ 7.950 per M.T. C&F Bombay, to be shipped from Singapore on or before 30th September, 1979. Pursuant to the said contract of sale the buyer|plaintiff established on irrevocable commercial credit from the New Bank of India Limited (a banking corporation) defendant No. 3, for a sum not exceeding atotal of US $ 60,050 on the basis of which the latter issued a letter of credit bearing No. JNP|FLC|677 dated 17th August, 1979 and the same was advised to defendant No. 1 through Chase Manhatten Bank (advising bank) Singapore. Accordingly, defendant No. 1 shipped a consignment of cloves (Zanzibar quality) contained in 153 bags, gross weight 7.803 M.T. (net weight 7.650 M.T.) onboard the vessel 'OH DAI' on 3rd September, 1979 and the documents of shipping inter alia comprising bill of lading, invoice and a draft for the price of the goods viz. US $ 60,800 and odd were duly seat to the issuing bank viz. defendant No. 3. On 13th September 1979 the plaintiff received non-negotiable copies of some of these documents and on inspecting the same they found that the said documents suffered from serious discrepancies and were contrary to the express conditions embodied in the letter of credit opened by them in favour of defendant No. 1. So they requested defendant No. 3 through a letter of even date to to intimate by means of a telex|cable to the negotiating bank at Singapore to withhold payment against the documents relating to the letter of credit covering the goods in question. Accordingly, defendant No. 3 pointed out the alleged discrepancies to the negotiating bank, namely, European Asian Bank, Singapore, through whom the. said documents had been received and apprised them that the documents were not acceptable to tre drawee (i.e. the plaintiff). The latter explained the correct position vide their letter dated 20th September, 1979 and asked the issuing bank (defendant No. 3) to honour their commitment promptly. Accordingly, defendant No. 3 vide letter dated 22nd September, 1979 called upon the plaintiff to make payment of the bill immediately, inter alia, staling that the discrepancies observed by them in the documents received under the above letter of credit were not justifiable. The plaintiff, however, took exception to the same and eventually instituted this suit fora declaration that the bill of lading dated 3rd September, 1979 as also the quality certificate of even date was defective and was not in conformity with agreement of sale between the parties. They have also prayed for permanent injunction restraining defendant No. 3 and its servants|agents etc. from in any manner making payment against the documents received under the letter of credit in question favouring defendant No. 1 as also restraining defendant No. 3 and its servants|agents etc. from in any manner having resource to the marginal money covered by the said letter of credit or to have recourse to any other monies| deposits lying with defendant No. 3 in relation to the aforesaid letter of credit. The plaintiff has also sought ad-interim injunction on these very lines for safeguarding their interest.

(3.) The application is contested tooth and nail by defendants I & 2 who vehemently assert that they have scrupulously complied with the terms and conditions incorporated in the letter of credit and as such they are entitled to payment of the price of the goods forthwith. Similar stance has been taken by defendant No. 3, according to whom the shipping documents and the draft received by them from defendants 1 & 2 are perfectly in order, being in conformity with the terms and conditions contained in the letter of credit. I shall elaborate the stand. taken by them respectively in relation to each and every contention raised by the plaintiff while dealing with the same.