ALLIANCE BIOTECH Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) The Petitioner M/s. Alliance Biotech is a duly registered partnership firm engaged in the manufacture of pharmaceutical products. Respondent No. 3-Rajat Pharmaceutical Chemicals Limited is a merchant exporter and exports various pharmaceutical products in the international market. An agreement was entered into between the Petitioner and Respondent No. 3 whereby Respondent No. 3 had exclusive right to market the products manufactured by the Petitioner. In terms of this agreement, the Petitioner was supplying goods to Respondent No. 3 and irrevocable letter of credit was issued at the instance of Respondent No. 3 by Respondent No. 2-Punjab National Bank in favour of the Petitioner for an amount not exceeding Rs. 82,30,000/-. This letter of credit was initially valid till 12.9.2008 which date admittedly was extended to 15.9.2008. Various other conditions shall be referred to in the later part of the judgment. Admittedly Respondent No. 1 which was the advising Bank informed the Petitioner on 24.6.2008 that all bills drawn in conformity with the terms of letter of credit shall be honoured.

(2.) According to the Petitioner-, it during the course of this agreement from time to time supplied pharmaceutical goods to Respondent No. 3 and received payment for the same. Goods worth Rs. 81,74,190/- were dispatched and the relevant documents were lodged with the advising bank, i.e., Respondent No. 1 (State Bank of India) on 13.9.2008. The communication, in question, is attached as Annexure P/5 and a copy of the same was addressed to the Punjab National Bank-Respondent No. 2.

(3.) On the Petitioner lodging this claim, the Respondent No. 1-SBI negotiated the bills and credited to the account of the Petitioner after the deducting interest and negotiation commission an amount of Rs. 79,90,383/-. The Respondent No. 2-PNB vide letter dated 27.8.2008 (which the PNB alleges was issued on 27.9.2008 but wrongly shown to be 27.8.2008) sent to the State Bank of India expressed its inability to negotiate the documents in view of the discrepancies which it observed. Relevant portion of this letter reads as under: