MADAN KUKREJA Vs. BANQUET SCALBERT DUPONT S A

JUDGEMENT

(1.) THE undisputed facts of the present case are as follows: (i) The appellant, Madan Kukreja, carries on business under the name and style ,,M/s.Super Fashion being the sole proprietor thereof and exports garments after fabricating the same; (ii) Respondent No.1 is a bank having an office at Delhi with headquarters at France and is fully owned by Credit Industrial et Commercial (CIC), incorporated under the laws of France, having headquarters at Paris; (iii) Respondent No.2 (a proforma party), is the banker of M/s.Super Fashion; (iv) In the second week of January 2003, M/s.Li & Fung (India) Pvt. Ltd. as the agent of its principal Li & Fung, Hong Kong, approached Madan Kukreja and placed three orders No.86302101 dated January 21, 2003, Ex.P -32, No.86302102 dated January 22, 2003, Ex.P -33, and Order No.86305001 dated February 19, 2003, Ex.P -35 for ladies -woven dresses and blouses to be supplied to Li & Fung Hong Kong, requiring payment to be made through an irrevocable letter of credit established by Li & Fung, Hong Kong through HSBC, Hong Kong; (v) In terms of the three orders, Letter of Credit was opened by HSBC Hong Kong, having a term that the goods would be shipped with the respondent No.1 named as consignee and M/s Promod S.A to be notified when the goods would be despatched; (vi) No prior consent of respondent No.1 was obtained for it to be the consignee of the goods.

(2.) IT may be highlighted that the letter of credit opened by HSBC Hong Kong was at the asking of Li & Fung Hong Kong. The LC number is DCLCK 409960 and is dated November 08, 2002.

(3.) THE letter of credit in favour of the appellant, opened by HSBC Hong Kong, expired on May 04, 2003 and admittedly the appellant sent the goods through air naming respondent No.1 as the consignee. It may be highlighted that the goods were sent by air after May 04, 2003. The appellant claims that Li & Fung Hong Kong India assured him that notwithstanding the letter of credit expiring, the documents would be honoured on presentation. Accordingly, the appellant instructed his bankers, Syndicate Bank to negotiate the documents and the said bank, under cover of its letter dated May 29, 2003, forward the documents, on collection basis with instructions that the documents should be released upon payment, to respondent No.1.