UBS AG Vs. STATE BANK OF PATIALA

JUDGEMENT

(1.) THE present three suits are filed under various Letter of Credit in u. S. Dollar. The terms and conditions of the said Letter of Credit covered by all three suits are identical and the defences raised in the present Summons for Judgment are also identical. All these three summons for Judgment are therefore disposed off by this common order.

(2.) FOR the purpose of the present judgment the facts of one of the suit being Summary Suit No. 897 of 2000 is taken into consideration. The suit is filed for the recovery of U. S. Dollar 1,320,900 equivalent to Rs. 5,67,700/ -. The claim arises on the basis of Letter of Credit. The few facts of the present case are briefly set out as under :

(3.) ON 27. 3. 98 the defendant issued an irrevocable Letter of Credit for the sum of U. S. Dollar 1,320,900 in favour of the plaintiff bank. The said Letter of Credit was issued at the instance of company known as m/s. Hamco Mining and Smeltings Ltd and the beneficiaries were M/s. Forbevia S. A. The said Letter of Credit is supposed to have been issued for import of 255 tin ingots by M/s. Hamco Mining and Smeltings Ltd. On 30. 3. 98 the plaintiff confirmed the said Letter of Credit as issued by the defendant. The said Letter of Credit was originally valid till 23. 9. 98. On 6. 4. 98 the plaintiff bank made the payment under the said Letter of Credit to their constituent namely M/s. Forbevia S. A. who were the beneficiaries thereunder. On 22. 7. 98 the defendant issued a letter to the plaintiff accepting that they will make payment on the maturity date of the said Letter of Credit being 23. 9. 98. On 21. 8. 98 at the instance of M/s. Hamco Mining and Smeltings Ltd the defendant issued an extension of the maturity date of the said Letter of credit from 23. 9. 98 to 21. 3. 99. On 31. 8. 98 the plaintiff confirmed the said extension of maturity date. On 3. 2. 99 the advocate for the defendants informed the plaintiff about the fraud perpetuated by the applicant M/s. Hamco Mining Smeltings Ltd and beneficiaries M/s. Forbevia S. A. and put the plaintiffs on caution that there is a difficulty in honouring the said Letter of Credit and therefore the plaintiff should not negotiate the said export bills presented by the beneficiary. On 23. 3. 99 the plaintiffs called upon the defendant to remit the payment under the said Letter of credit and claimed that they will raise interest claim also. On 27. 3. 99 the defendants through their advocate stated that they will not be honouring the said Letter of Credit as the contract of Letter of Credit has been vitiated by fraud played by M/s. Hamco mining and Smeltings Ltd and beneficiaries M/s. Forbevia S. A. On 7. 4. 99 the plaintiff rejected the contention of the defendant and demanded the payment of the amount. Ultimately on 30. 6. 99 the plaintiff addressed an advocate's notice and since the payment was not made has consequently filed the present suit. In the present suit the Summons for Judgment is taken out for entering the judgment inrespect of the aforesaid claim amounts.