UNITED COMMERCIAL BANK Vs. HANUMAN SYNTHETICS LTD

JUDGEMENT

(1.) Hanuman Synthetics Ltd., the Respondent No. 1, entered into an agreement to purchase from the Respondent No. 3, J. B. International, Singapore, 75 Metric Tonnes of Viscose Staple Fibre having semi dull normal tenacity, of Japanese or South Korean origin of the specification 1.5 Deniar x 51 MM. The Central Bank of India opened a Letter of Credit dated February 21, 1983 at the request of Hanuman Synthetics Ltd. The Letter of Credit was opened in favour of J. B. International, the Respondent No. 3, herein. The Letter of Credit was an irrevocable and transferable Letter of Credit. Under the Letter of Credit, it was stipulated that J. B. International would be entitled to avail and/or operate the same by drafts drawn at 120 days from the date of the Bill of Lading which was 17th March, 1983 and by presentation of the following documents:- 1985 Cal./7 III G-18

(2.) On or about March 17, 1983 the goods were shipped and the United Commercial Bank, Singapore duly paid the amount against the documents mentioned in the Letter of Credit and forwarded the negotiated documents to the Central Bank of India, Bombay. On or about March 24, 1983 the shipping documents were presented to Hanuman Synthetics Ltd the respondent No. 1 by the Central Bank of India and the respondent No. 1 accepted the Bill of Exchange drawn by respondent No. 3, J. B. International, the exporter upon the respondent No. 1 Hanuman Synthetics Ltd. and in favour of United Commercial Bank, Singapore Branch. It has been alleged that by inadvertence the amount was actually paid even before the due date. On March 30, 1983 the United Commercial Bank refunded the said amount. On April 2, 1983 the Central Bank of India acknowledged the receipt of the documents under the Letter of Credit and confirmed that the Bill of Exchange would be due for payment on April 15, 1983. On April 4, 1983 the vessel carrying the imported consignment arrived at the Port of Calcutta and on April 16, 1983 the Bill of Entry was submitted by the respondent No. 1. The Customs Authorities were of the view that the goods that were imported were not VISCOSE Staple Fibre but were Polyester Fibre and proceedings were started by the Customs Authorities under the Customs Act. The stand taken by the respondent No. 1 before the Customs Authorities has not been disclosed. However, On July 6, 1983 M/s.Khaitan and Co. on behalf of respondent No. 1 asked the Central Bank of India to repudiate the liability under the said Letter of Credit. On or about July 9, 1983 a suit was filed in this Court by Hanuman Synthetics Ltd. against the Central Bank of India and .J. B. International praying for, inter alia, a perpetual injunction restraining the defendant No. 1 (Central Bank of India) from making any payment or giving any credit to the account of the defendant No. 2 (J. B. International) in respect of the said Letter of Credit. The appellant, United Commercial Bank, was not made a party to that suit.

(3.) In that suit, an application for interim order was made and on that application, on July 9, 1983, an order of temporary injunction was issued restraining the Central Bank of India from giving any effect to or making any payment to any person in respect of the said Letter of Credit dated February 21, 1983. The order was not of any fixed duration. It also does not appear that the order was made returnable on any particular date. Liberty was, however, given to the petitioner to serve the Central Bank of India by telex or by special messenger and to serve J. B. International, Singapore, by registered post with acknowledgment due.