ALLAHABAD BANK Vs. MALAYAN BANKING LIMITED

JUDGEMENT

(1.) This is an appeal under Section 96 read with Order XLI of the Code of Civil Procedure, 1908 read with Section 10 of the Delhi High Court Act, 1966 filed by the appellant impugning the judgment dated 20.01.2017 by which a Single Judge of this Court has dismissed the application seeking leave to defend and has decreed the suit in favour of the respondent.

(2.) The brief facts which are required to be noticed for the disposal of this appeal are that M/s. Millennium Wires Pvt. Ltd (hereinafter referred to as 'buyer') is dealing in the manufacturing and trade of Continuous Cast Copper Wire Rod and 'EC Grade, Hard Drawn Copper' for manufacturing of copper wire. The buyer was willing to import Continuous Cast Copper Wire Rod for trading purposes and accordingly, it entered into an Association Agreement on 02.12.2011 with State Trading Corporation ('STC'). The said agreement envisaged the import of the goods from Synergic Industrial Materials and Services Pvt. Ltd. and Synergic Industrial Material Services Malaysia ('Synergy'/'seller'). The aforesaid transaction was based on the opening of Letters of Credit (LCs) in favour of the seller through Malayan Banking Berhad, the respondent bank herein, on the request of the buyer. Four LCs were issued by the appellant at the instance of STC. As per the terms and conditions of the LCs, after shipment of the goods from the port at Malaysia, the seller was to send across the shipment documents to STC via appellant through the banking channel and thereafter, the said shipment documents were to be sent by the seller through the respondent to the appellant, which had opened the LCs on behalf of the STC. The said documents then were to be sent to STC by the appellant for acceptance, which were to be sent to the buyer for verification and their acceptance. After receiving acceptance from the buyer, STC was to convey the same to the appellants who would send the acceptance to the respondent. It is the case of the appellant that payment as per the terms of the LCs had to be made after 90 days from the date of bill of lading.

(3.) As per the appeal, on 17.12.2011, STC received the documents of the first shipment for acceptance of goods which, as per the shipment documents presented by the seller to the respondent for payment and thereafter received by the appellant, were allegedly shipped on 08.12.2011. The documents, prima facie, were in order and showed that the goods were shipped and STC, after receiving acceptance from the buyer, in good faith gave its acceptance to the appellant who forwarded the same to the respondent.