BANKERS TRUST COMPANY Vs. GARWARE WALL ROPES LTD

JUDGEMENT

(1.) THIS appeal takes exception to the order dated 27th March 1997 passed by the Civil Judge, Senior Division, Pune below application Exh.5 in Special Civil Suit No.319 of 1994. That civil suit was filed by the present respondent No.1 - Garware Wall Ropes Ltd. and Bank of Baroda, Arora Corporation, Omni Polymers Co. and the present appellant i.e. Bankers Trust Company were joined as defendants. According to the allegations in the plaint, the plaintiff requires for manufacturing its products the material described as Polypropylene Wise Specs Lynodell, MF1:2-4. According to the plaintiff, the said product is not easily available in India and therefore the plaintiff is required to import the said material from abroad. According to the plaintiff, the defendant No.2 Arora Corporation, who are doing business as indenting agent, sent their indent on 28th June 1993 to the plaintiff. It was represented to the plaintiff that they are agents and suppliers of the requisite material and doing business in the name and style as M/s Omni Polymers Co., the defendant No. 3 through the defendant No. 2. The plaintiff therefore placed an order with the defendant No.3 for supply of 250 MT of Polypropylene Wise Specs Lynodell from their principal in U.S.A. According to the plaintiff, it was clearly understood between the parties that the defendant No.3 will provide manufacturer's certificate for wide specs quality. According to the plaintiff, the plaintiff approached the defendant No.1- Bank of Baroda for getting the facility of letter of credit. The letter of credit dated 10th August 1993 was then issued by the Bank of Baroda to the defendant No.1 on behalf of the plaintiff wherein the defendant No.3 was the beneficiary while the defendant No.4, the present appellant - Bankers Trust Company, 16, Wall Street, New York, Ny 10005, U.S.A. was the advising bank.According to the plaintiff, as per the normal practice, original letter of credit was sent to the advising bank, the present appellant. It further appears that pursuant to the contract between the parties, the goods ordered by the plaintiff were shipped by the defendant No.3 and thereafter payment was made to the defendant No.3 by the defendant No.4 pursuant to the letter of credit issued by the Bank of Baroda. When the defendant No.4-present appellant, approached the Bank of Baroda for being reimbursed, and at that juncture, the present suit was filed restraining the defendant No.1 Bank from making payment pursuant to the letter of credit, to the defendant No.4. In the suit, a money decree has also been claimed. The plaintiff filed application for temporary injunction in the suit claiming a temporary injunction restraining the defendant No. 1 Bank from making payment pursuant to the letter of credit, to the defendant No.4. By the order impugned in this appeal, that injunction has been granted. It is this order of the Trial Court which is impugned in this appeal.

(2.) THE learned counsel appearing for the appellant Shri Abhyankar submits that the appellant has made payment to the defendant No.3 in terms of the letter of credit and because the appellant has acted perfectly in accordance with the terms and conditions of the letter of credit, it is entitled to the payment from the defendant No.1. The learned counsel further submitted that after the documents reached the defendant No.1, the documents were taken possession of by the plaintiff and the plaintiff also took possession of the goods. In the submission of the learned counsel therefore, there is no question of there being any temporary injunction against the defendant No.1 restraining it from making payment to the appellant. The learned counsel submitted that the appellant Bank has already made payment to the defendant No.3 and therefore it is only the appellant Bank which is suffering. The learned counsel submits that even if it is assumed that the goods that were supplied by the defendant No.3 to the plaintiff were not as per their order and therefore, the plaintiff has suffered any loss, the plaintiff is capable of being compensated in terms of money and in fact the plaintiff has also claimed money decree in its suit and therefore, under the provision of Order 39 Rules 1 and 2 of the Code of Civil Procedure, there is no scope of granting any temporary injunction when the plaintiff is capable of being compensated in terms of money.

(3.) THE learned counsel then submitted that in the letter of credit, the product that was ordered by the plaintiff has been described thus "Approximately 250 MT Polypropylene Wide Specs Lynodell MF1:2-4". However, in the invoice, on the basis of which payment has been made to the defendant No.3 by the defendant No.4 the product has been described thus- "20 containers said to contain 6660 bags Synthetic Resin 166.502 MT polypropylene Wide Specs Lynodell MF1: 2-4" in the submission of the learned counsel, there is clear discrepancy in the description of the product in the letter of credit and the invoice and therefore, the defendant No.4 appellant should have declined to make payment in the face of this discrepancy. In support of this submission, the learned counsel relied on a judgment of the King's Bench Division, in the case of J.H. Rayner and Company Ltd. v/s Hambro's Bank Ltd., reported in 1943 (1) K.B.37, a judgment of the King's Bench Division is the case of Bank Melli Iran V/s Barclays Bank (Dominion, Colonial and Overseas), reported in 1951 (2) K.B. 367 and also a judgment of the House of Lords in the case of Equitable Trust Company of New York v/s Dawson Partners Ltd., reported in 1927 (27) Lloyd's List law Reports 49. In submission of the learned counsel if there is a slightest discrepancy in the description of the goods, it is the duty of the bank not to make payment, whether the misdescription or non-description of the goods is material or not is not for the bank to decide. If the bank finds any discrepancy, it is the duty of the bank to stop the payment.