COSY (INDIA) LIMITED Vs. VIJAYA BANK AND OTHERS

JUDGEMENT

(1.) The present appeal is directed against the judgment and order dated 12th April, 1989 passed by the court of the first instance dismissing the interlocutory application of the appellant, Cosy (India) Limited, filed in the suit. The suit filed by the appellant relates to a letter of credit dated 10th June, 1988 opened by Vijaya Bank at the instance of the appellant in favour of a foreign seller, namely, BHP Trading (S.E. Asia) Pvt, Ltd. The appellant's interlocutory application was for obtaining an order of injunction restraining the foreign seller from receiving any money under the said letter of credit as also for an order of injunction restraining Vijaya Bank from making any payment thereunder.

(2.) The order sought for by She appellant in its interlocutory application was intended to prevent the parties (o the letter of credit both from exercising and enforcing the right and from performing the obligations under the said letter of credit. The appellant was cot a party to the contract evidenced by the said letter of credit.

(3.) In the instant case, the letter of credit was opened by the respondent, Vijaya Bank at the instance of the appellant, Cosy (India) Limited in favour of the respondent No. 2, BHP Trading (S. E. Asia) Pvt. Ltd. The Chase Manhatton Bank, N. A. was the negotiating banker authorised by the Vijaya Bank to negotiate the documents under the letter of credit. Vijaya Bank undertook to reimburse the negotiating banker in the event of the negotiating banker negotiating the documents under the letter of credit. The negotiating banker has negotiated the documents under the said letter of credit. It has also forwarded the negotiable copies of the documents negotiated under the said letter of credit So the Vijaya Bank claiming reimbursement from the Vijaya Bank. Thus, it will appear that the beneficiary of the letter of credit has received the benefit receivable under the said letter of credit. Only the negotiating banker remains to be reimbursed by the opener banker, namely, Vijaya Bank. Before such reimbursement could be made, the appellant filed the above suit.