1. The plaintiff, National Oils and Chemical Industries Ltd., filed suit No.244 of 1978, seeking perpetual injunction against defendant No.1, Punjab and Sind Bank Ltd. (herein called 'the Bank') restraining it from Paying any amount on the basis of the three Letters of Credit No. Ndho 9541 to 9543 dated 2nd Dec., 1977, to defendant No.2, B.S. Aujla Company Pt. Ltd., (herein called 'the company') alleging that no amount was and is payable by defendant No.1, or the plaintiff to defendant No.2 on the basis of the aforesaid letters of credits. The Plaintiff further seeks perpetual injunction against defendant No.2 restraining it from drawing upon the aforesaid letters of credit or receiving any amount there under.
2. The case of the plaintiff is that the company through its agents (M/s. Tri-Une Produce Brokers) entered into an agreement at Delhi with them for the supply of 1100 metric tons of raw palm oil (of the specification detailed in the contract) at the rate of U.S.$511 per metric ton C.I.F. Madras and that pursuant to the said agreement, three contracts were executed between the parties, photo copies whereof are Annexures A to C to the plaint. In terms of the aforesaid contracts, the plaintiff submitted three irrevocable letters of credit, noted above by the Bank to the Company for a total sum of U. S. $5,76,206.70 stipulating, among other terms, that a full set of clean 'on board' ocean shipping company's Bill of Lading was to be submitted by the Company to the order of the Bank, besides the report by a recognised independent surveyor. In pursuance of the aforesaid contracts and the issue of Letter of Credit by the Bank, the Company claimed to have shipped a total quantity of 1100.80 metric tons of Taw oil on ship 'Katrina' from Singapore The Company is alleged to have prepared three invoices dated 24th Dec. 1977, along with two bills of lading dated 24th Dec. 1977, and a third bill of lading dated 28th Dec. 1977, in respect of the above-mentioned supply. The said bills of lading are alleged to be not valid and acceptable documents in law being against the terms of the letters of credit, inter alia, on the following grounds, namely, (1) bills of lading in question purport to be by 'M/s. Straits Chartering & Agencies Pte. Ltd.' who are not an 'ocean shipping Co.,' or even a shipping Co whereas it was specifically provided in the letters of credit that it had to be from the 'Ocean shipping Co.'; (2) The alleged bills of lading were got issued from Straits Chartering and Agencies Pte Ltd. without any authority and at a point of time when the palm oil had not been placed on board The plaintiff alleged that the ship 'Katrina' on which the palm oil was alleged to have been leaded was on high seas on 24/28th Dec.1977, and reached Singapore on 14th Jan. 1978, the question of the palm oil having been loaded on the ship 'Katrina' at Singapore on 24/28th Dec. 1977, does not arise. The bills of lading are not valid bills. The same were to, be issued by the Master of the SM13 only when the goods were loaded on board a named ship; (3) and that according to the contract between the plaintiff and the company the weights and quality certificates were to be issued be the recognised idependent surveyors, at the port of loading but this was not done by the company. It is alleged that the plaintiffs in good faith and basing themselves on the representations of the company accepted the documents in respect of the letters of credit. It was thereafter that the plaintiffs discovered the true state of affairs regarding the documents, their validity in law and the fraud perpetrated on them. Consequently, and in any case in law as well, it is alleged, the acceptance of the plaintiffs is meaningless, The plaintiffs accordingly contend that there having been no compliance with the terms of the letters of credit, the company is not entitled to recover any amount on their basis from the bank from them, and that the company has no right to claim any money from the batik on the basis of the said letters of credit
3. The plaintiffs along with the suit filed the present application under O.39, Rr.1 and 2, and S. 151 of the Civil P.C, among others, on the grounds noted above, praying that pending the decision of the suit an interim injunction be issued against the Bank not to pay any amount on the basis of the Letters of Credit in question to the company as there was and is no amount payable by the Bank or the plaintiffs to the company on the basis of the Letters of Credits. It is further prayed that the Company be also restrained by an injunction from drawing upon the aforesaid Letters of Credit or receiving any amount there under.
4. F.S. Gill, J. by his order dated 3rd March, 1978, issued notice in the application to the Bank and the Company for 10th April, 1978. In the meantime, the Bank was restrained from paying any amount under the three Letters of Credit while the Company was restrained from drawing upon the aforesaid Letters of Credit.
5. Shri Manmohan Singh, Manager of the Company, filed affidavit in reply to the application stating that the application in question for the reasons urged in the reply-affidavit, deserved to be rejected. According to the company M/s. Tri Une Produce Brokers, Bombay, are produce brokers and are not their agents. As Brokers, M/s. Tri Une Produce Brokers, bring the purchasers and sellers together which, it is alleged, they did in the instant case. The case of the company is that sometime in Nov. 1977, they were informed on telephone by M/s. Tri Une that the plaintiffs wanted to purchase 1100 metric tons of palm oil and whether the Company would be willing to sell the same. The Company agreed to sell the said quantity of palm oil, the price of which was fixed at U.S.$511 per mertic ton. The Company also agreed, to the other terms of the contract. Thereafter M/s Tri Une issued confirmation note. As brokers M/s. Tri Une were entitled to receive half percent commission from both the parties. It is averred that pursuant to the aforesaid agreement, the plaintiffs requested the Bank to issue irrevocable and confirmed letters of credit in favor of the company. According to the said letters of credit money was not payable to the Company by the Bank as it does not have a branch at Singapore. However the letters of credit initially specified that the money could be realised from M/s. Algemene Bank, Netherland, N.V. of Singapore. Further, the said letters of credit provided that the same were subject to the Uniform Customs and Practice for Documentary Credit (1974 Edition) International Chamber of Commerce Brochure No.290. It is further alleged that as per the letter of credit No.9541 the shipment was required to be made not later than 31st Dec. 1977 while in respect of the other two letters of credit the shipment was not to be made later then 31st Jan. 19,78. The Company was to submit an ocean shipping company bills of lading. The other document which was required to be submitted included the recognised surveyor's report for quality and net weight from M/s. General Superintendence Co. Pvt Ltd., Singapore, which was subsequently amended on 14th Dec. 1977. According to the said amendment, the said certificate could be of any independent surveyor.
6. It is further alleged that the goods in question were loaded on the Vessel 'M.V. Katrina' which was carrying the Panamanian flag. The owner of the said vessel Katrina is M/s. Eastern and Oriental Navigation Limited, Panama, who had vide their letter dated 20th Nov. 1977, appointed a company known as 'Straits Chartering and Agencies Pte. Ltd.' as their handling agents in respect of the said ship. The handling agents, it is submitted, loaded the said goods (palm oil) on the Vessel M.V. Katrina and thereafter issued the bills of Lading. It is also alleged that the aforesaid Vessel was in Singapore for the whole of the month of Dec. 1977, and departed on 21st Jan. 1978.
7. Further, the case of the Company is that after the receipt of the bills of lading, they towards the end of Dec. 1977, and beginning of Jan. 1978, requested M/s. Banque National De Paris, Singapore (herein called the 'Singapore Bank') to negotiate the three letters of credit issued by the Bank. It is alleged that although the said three letters of credit stipulated that they could be negotiated only through Algemere Bank, Netherland, the Bank subsequently confirmed to the Singapore Bank on 27th Dec. 1977, that the said restriction had been removed by it, which permitted the Singapore Bank to negotiate the documents under the letters of credit. Pursuant to this arrangement, the Company submits, that on 24th Dec.1977, 26th Dec. 1977 and 5th January, 1978 they submitted to the Singapore Bank the relevant drafts and shipping documents called for under the relevant letters of credit for negotiations. Further, the Singapore Bank on 27th Dec. 1977, 31st Dec. 1977 and 20th Jan. 1978, respectively after examining the said documents in the ordinary and the usual course of its business, and after finding them to be in accordance with the terms of the relevant letters of credit, negotiated the same and paid to the company U.S.$ 217175, U.S.$ 128158.80 and U.S.$ 217175.
8. The Company further contends that the plaintiff had never made any allegation about fraud or forgery or discrepancies in the documents earlier and that the same are being made now after the ship carrying cargo had sunk in the Bay of Bengal on 6th Feb. 1978, information regarding which had been sent by the Company to the plaintiff by cable on 6th February, 1978. The case of the Company is that earlier on 3rd Feb. 1978, the Bank had written to the Singapore Bank that the plaintiff had accepted the documents but on receipt of the information regarding sinking of the ship from the plaintiff the Bank on 11th February, 1978, sent the cable to the Company purporting to reject the document. It is accordingly stated that assuming, though not admitting, that there was any defect in the bills of lading, the plaintiff having accepted the bills of lading is estopped from challenging the validity or correctness of the same. The Company contends that it had already realised the money on the basis of the letters of credit and the said fact is to the knowledge of the plaintiff. The grant of injunction is also opposed on the ground that there is no prima facie evidence that the bills of lading were forgeries or that they were otherwise fraudulent; that the allegations that the shipping documents did not comply with the terms of the letters of credit are false and misleading and that the plaintiff is colluding with the Bank and thus is effectively depriving the Singapore Bank of its rights.
9. Shri Gurcharan Singh Khurana on behalf of the plaintiff filed rejoinder affidavit to the above noted affidavit filed by the Company, contending that M/s. Tri Une negotiated with the plaintiff on behalf of the Company and that if they were not their agents then in that event no binding and conclusive contract had come into being between the plaintiff and the Company and as such there was no basis for the letters of credit and that the surveyors' certificate as agreed to could be of any recognised independent surveyor and not from any Independent surveyor. It is further alleged that the plaintiff caused to be made enquiries from the shipping department of Llyods of London which revealed that the vessel 'Katrina', formerly known as 'Gunung Merbabu' was sold by the previous owners and delivered to the new owners i.e. M/s. Eastern and Oriental Navigation Limitada, Panama, only on the 7th of Jan., 1978. The said information, It is claimed, had been obtained by Lloyds of London from the owners' agents M/s. Robin Shipy and (Pvt.) Ltd., Singapore Further, it is alleged that the enquiries made by the High Commission of India In Singapore from the Port of Singapore authority reveal that 'Katrina' in which the subject goods are alleged to have been loaded on 24th and 28th of Dec., 1977, did not berth at any of the Wharves of the Port till 23rd of Jan., 1978, although it came to Singapore waters on 21st April, 1976 and remained laid up in Singapore waters. It is also alleged that the said enquiries further reveal that for the first time during the said period, some cargo was allegedly loaded into the said vessel, using the services of a lighter, commencing from 7th Jan., 1978, and ending on 19th Jan., 1978, during which period five consignments totalling only 790 drums of Palm oil were alleged to have been loaded into the lighter to be loaded on to the said 'Katrina' and that out of those 790 drums, only 20 drums, i.e., 3.94 tons were alleged to be meant for the plaintiff. The information to the Singapore Bank to negotiate the documents is not denied. It is, however, alleged that the Singapore Bank had on its own sought for and obtained the said confirmation from the Bank end, that the seeking of the suo motu information makes it apparent that the Singapore Bank is a party to the conspiracy to perpetrate a fraud on the plaintiff as the Singapore Bank could not have reasonably, acting in the ordinary and usual course of its business, come to the finding that the alleged documents furnished by the Company to the said Bank were in accordance with the terms of the relevant letters of credit and negotiate the same or make the alleged payments to the Company.
10. Shri B.N. Kirpal, appearing for the Company, strenuously contended that a confirmed Letter of credit constitutes bargain between the banker and the vendor of the goods, which imposes on the Bank an absolute obligation to pay, irrespective of any dispute which there may be between the parties and it would be wrong for the Court to interfere with that established practice by granting and in confirming the injunction, because an elaborate commercial system has been built upon on the that the Banker's confirmed credit raises an assurance that nothing will prevent the vendor from receiving the price. The learned counsel accordingly submitted that the characteristic feature of the irrevocable credit in its independence or the contract for sale and of the contract between the banker and the buyer and that another important feature is the duty of strict compliance being a mechanism of great importance in international trade, interference with which is bound to have various repercussions on the International trade in this country. Shri Kirpal, thereforee, submitted that the autonomy of irrevocable letter of credit is entitled to protection and that except under very exceptional circumstances, the courts as a rule refrain from interfering with that autonomy as the system of financing international trade on the basis of letter of credit would break down completely if a dispute as between the vendor and the purchaser was to have the effect of 'freezing' the sum in respect of which the letter of credit was opened. The letter of credit, it was urged, being the life blood of international commerce and except possibly in clear cases of fraud of which the banks have notice, the courts ought to leave the merchants to settle their disputes under the contract by litigation or arbitration available to them or stipulated in the contracts, the courts being not concerned with the difficulties of the merchants to enforce their claim because these are the risks which the merchants take. The above submissions were sought to be reinforced on the basis of cases Malas (Hamzeh) and Sons v. British Imex Industries Ltd., (1958) 1 All Er 262; Tarapore and Company Madras v. V/O Tractoroexport Moscow and V/O Tractoroexport Moscow v. M/s. Tarapore and Co., : 2SCR920 and R.D. Harbottle (Mercantile) Ltd. v. National Westminster Bank Ltd., (1977) 2 All Er 862.
11. It is no doubt true that the above noted cases support the contentions sought to be urged on behalf of the company and in a. way on behalf of the Singapore Bank though the latter is not a party to the suit. In case Tarapore & Co. Madras (supra) M/s. V. V/O Tractoroexport. Moscow, (herein to be called 'the Russian Firm') supplied machinery to Tarapore and Co. Madras (herein to be called 'the Indian Firm'). After the machinery was used for sometime, the Indian Firm complained to the Russain Firm that the performance of the machinery supplied by it was not efficient as represented at the time of entering into the contract and consequently it had incurred and continued to incur loss. The Indian Firm filed a suit for injunction and the plea urged was that if the Russian Firm was allowed to take away the money secured to it by the letter of credit, the Indian Firm would not be able to effectively enforce its claim arising from the breach of the contract it complained of as the Russian Firm had no assets in India and thereforee any decree that the Indian Firm may be able to obtain could not be executed. It was on the basis of these allegations that their Lordships observed that the letter of credit is independent of and unqualified by the contract of sale or underlying transaction and that except under very exceptional circumstances the Court should not interfere in the mechanism of the letter of credit as any interference in that mechanism is bound to have serious repercussions on the international trade of the country. It was further observed that the letter of credit bas a definite implication. in. that a vendor of goods selling against a confirmed letter of credit sells under the assurance that nothing will prevent him from receiving the price.
12. It is, however, significant to note that during the course of arguments it was contended that it was a fit case for the grant of injunction in that the Russian Firm had committed fraud on the Indian Firm. The plea of fraud was rejected holding that the facts pleaded in the plaint did not amount to a plea of fraud. It is evident from the above case that though commitments of banks are on a different level, and must be allowed to be honoured, free from interference by the courts, the banks being not concerned with the rights or wrongs of the underlying disputes but only with the performance of the obligations which they themselves have confirmed, fraud if pleaded and proved prima facie would constitute good ground for an ad interim injunction as fraud unravels all. In Malas 1958 1 All Er 262 (supra) Sellers L.J. had observed that there may well be cases where the Court would exercise jurisdiction as, for example where there is a fraudulent transaction. In R.D. Harbottle (Marcantile) Ltd 1977 2 All Er 862 (supra) It was held that cases of fraud we an exception to the general rule that the Courts will not interfere with the machinery of irrevocable obligation assumed by banks.
13. The plaintiff urge fraud on the following grounds, namely.
(1) That the alleged bills of lading are not valid in law having not been issued by an ocean shipping Company;
(2) that the bills of lading were got issued from Straits Chartering and Agencies Pte. Ltd., without any authority and at a point of time when the palm oil had not been placed on board;
(3) that the weight and quality certificates had not been issued by the recognised independent surveyors at the port of loading;
(4) that ship 'Katrina' was sold and delivered to M/s. Eastern and Oriental Navigation Limitada, Panama, on 7th Jan., 1978, as such the question of the said owners having authorised M/s. Strait Chatering and Agencies Pte. Ltd. by their alleged letter dated 20th Nov., 1977, to sign bills of lading on their behalf, for cargo, loaded on Katrina, could not arise;
(5) that though the goods are alleged to have been loaded on 24th and 28th Dec., 1977, on the basis whereof the subject bills of Lading are alleged to have been issued did not berth at any of the wharves of the Port, till 23rd Jan., 1978, and
(6) that for the first time some cargo was allegedly loaded into the said vessel, using the services of a lighter, commencing from 7th Jan., 1978, and ending on 19th Jan., 1978, during which period 5 consignments totalling only 790 drums of palm oil were alleged to have been leaded on to the said 'Katrina' and that out of those 790 drums, only 29 drums i.e., 3.94 tons were alleged to be meant for the plaintiff.
14. To the above averments, the company's contention is that the Bank kept the documents for more than 40 days in respect of two sets of documents and about 21 days for the remaining sets of documents and that the documents were rejected only on learning that the ship with cargo had sunk in sea with a view to, avoid liability. The rejection of documents after such an inordinate delay, it was submitted, was contrary to the requirement of law in that the duty of the issuing bank in business transactions financed by documentary credits, is to act promptly on presentation of the documents. Support for this submission was drawn from case Gian Singh and Co. Ltd. v. Banque de L'Indochine, (19741) 2 All Er 754, wherein it was observed that the duty of the issuing bank, which it was to perform, either by itself, or by its agents, the notifying bank, is to examine documents with reasonable care to ascertain that they appear an their face to be in accordance with the terms and conditions of the credit and that in business transactions financed by documentary credits, banks must be able to act promptly on presentation of the documents. Further, in the ordinary case visual inspection of the actual documents presented is all that is called for and that the fact that a document presented by the beneficiary under a documentary credit which otherwise conforms to the requirements of the credit, is in fact a forgery does not, of itself, prevent the issue bank from recovering from its customer moneys paid under the credit. In the above noted case the plaintiff desired one 'T' to build for them a new fishing boat and instructed the defendant bank to open a banker's commercial credit in favor of the builder under which payment was to be made to the builder on production of a certificate signed by Balwant Singh, their managing director, holder of Malaysian Passport E.13276 certifying that the vessel had been built according to specifications and was in fit and Proper condition to sail. In the absence of such a certificate the letter of credit was not to be allowed negotiations. It was contended on behalf of the plaintiff that the signature which purported to be of Balwant Singh on the certificate produced was a forgery. Accordingly the main question was whether the certificate tendered was in accord with the terms of the letter of credit. On appreciation of evidence it was held that there was no reason discernible upon a mere reading of the terms of the credit for construing the requirement that the certificate should be signed by Balwant Singh otherwise than literally, and that the notifying bank did as it was told, and so the issuing bank was safe. It was in that context that it was observed that in such cases visual inspection of the actual documents presented was all that was Called for and that the bank was under no duty to take any further steps to investigate the genuineness of a signature which, on the face of it purported to be the signature of the person named or described in the letter of credit.
15. The above noted case proceeded on its own facts and had no bearing on the instant case before me because of the allegations of fraud enumerated above.
16. There is no doubt that the principle is well-established that a letter of credit is independent of the primary contract of sale between the buyer and the seller and that it must be allowed to be honoured free from interference by the court the banks being concerned only with the performance of the obligations which they themselves have confirmed but this principle is not to be extended to protect an unscrupulous seller when there is a fraudulent transaction.
17. It is trite saying that banks must, examine all documents with reasonable care to ascertain that they appear on their face to be in accordance with the terms and conditions of the credit. The banker's right of re-imbursement depends an its accepting from the seller a fault law tender. The accepting bank can only claim indemnity if the conditions on which it is authorised to accept are in matter of the accompanying documents strictly observed, otherwise it acts at own risk. It is, however true that onus of proving lack of reasonable c in failing to detect the forgery of the certificate lies on the customer.
18. The question accordingly is whether the documents presented in the instant case were evidently in order.
19. Now the case of the plaintiff is that in the Letters of credit apart from other stipulations it was stipulated that a 'full set of clean' on board 'ocean shipping company's Bill of Lading' was to be submitted by the Company to the order of the Bank. The bills of lading having bow issued by 'Straits Chartering and Agencies Pvt. Ltd.' being not an 'ocean shipping company' or even a shipping company the documents are alleged to be invalid and illegal and having force in fact or in law. To this specific averment the reply of the company is that the term 'Ocean Shipping Company's bill of lading' means the bill of lading issued by the company which owns the ship. The ease of the company is that the bills of lad were prepared by the handling agent (Straits Chartering and Agencies Pte Ltd.) of the ocean shipping company M/s Eastern Oriental Navigation Limitada, Panama, the owners of the vessel 'Katrina'. The company has shied away from meeting the allegation that the bill of lading had to be clean 'on board' ocean shipping company's Bill of Lading. In Sheldon's Practice and Law of Banking (Tenth Edition) at p.442, the learned author has observed that if the banker is operating under a credit which calls for 'on board' or 'shipped' bills of lading (the Proper and normal kind) it is essential that the document be endorsed 'Received on board' and dated with the actual date of receipt and the name of carrying steamer.
20. Benjamin in his book 'Sale of Goods', 1974 Edition while dealing with 'shipped' bill of lading at page 1364 absorbs that a 'shipped' bill of lading is one which states that the goods had been shipped and is prima facie evidence that the goods were shipped and of the date of shipment. Further the master of a ship has no actual or apparent authority to sign a bill of lading for goods which have not been put on board. A perusal of para. 2 of Letters of credit, copies Annexures D, E and F, without doubt shows that the bills of lading had to be 'on board' ocean shipping company's bill of lading that were to be submitted by the Company to the order of the Bank. The bills of lading Annexures 'G' and 'H' dated 24th Dec. 1977, and bill of lading dated 28th Dec., 1977, Annexure I, are signed by 'Straits Chartering and Agencies Pte. Ltd.' as agents for the Master. A prima facie examination of the bills of lading shows that it was not 'on board' ocean shipping company's bill of lading, besides, the alleged agents 'Straits Chartering and Agencies Pte. Ltd.' have signed the bills not as agents of the Shipping Company but as agents for the 'Master' of the ship. Could this be said to be in conformity with the requirements of the letters of credit which a bank with expertise in discharge of its obligations prescribed in 'uniform customs and practice for documentary credits' would have passed on a visual observation of the document as was sought to be urged on the ratio of the case Gian Singh and Co. 1974 2 All Er 754 (supra), is a question which needs examination. Further, the letters of credit provide recognised surveyor's certificate. Singapore Bank with its expertise and international working should have known the significance of the said term. The Company contends that the certificate of surveyor furnished by it is by an independent surveyor. Does the commercial world make any distinction between the two terms 'recognised surveyor' and 'independent surveyor'. This is a question which again needs examination more particularly to determine as to what was the duty of the Singapore Bank in accepting the documents on their visual examination.
21. The other allegations, namely that ship Katrina was sold and delivered to M/s. Eastern and Oriental Navigation Limitada Panama, on 7th Jan., 1978, the question of the said owners having authoritised M/s. Straits Chartering and Agencies Pte. Ltd. by their letter dated 20th Nov., 1977, to sign bills of lading on their behalf for cargo loaded on Katrina could not arise and that though the goods could not be loaded on 24th and 28th of Dec., 1977, as alleged as the said ship did not berth at any of the wharves of the port, till 23rd Jan. 1978, or that for the first time some cargo was allegedly loaded into the vessel 'Katrina' using the services of a lighter, commencing from 7th Jan., 1978, and ending on 19th Jan., 1V78, during which period consignments totalling only 790 drums of palm oil were alleged to have been loaded on to the said ship and that out of those 790 drums, only 20 drums i.e. 3.94 tons were alleged to be meant for the plaintiff have been, raised in the rejoinder affidavit of Shri Gurcharan Singh Khurana dated 11th April, 1978. A copy of the said affidavit was supplied to the learned counsel for the company who submitted that the arguments may continue and that in the meantime he will seek instruction from his clients and give a suitable reply. The averments raised in the rejoinder affidavit of Shri Gurcharan Singh Khurana have not been controverter. There is prima facie evidence In support of the allegations now sought to be raised in the rejoinder affidavit. No, doubt the said allegations have been raised for the first time in Court. However, because of the gravity of the allegations and the plea of the plaintiff that the Singapore Bank suo motu sought the amendment for negotiating the letters of credit which as earlier stipulated could be done through Algemene Bank, Netherland makes it apparent that the, Singapore Bank, appears to be a party to the conspiracy to perpetrate a fraud on the plaintiff, the said allegations deserve to be examined. While proposing to examine the allegations of fraud alleged by the plaintiff I am fully conscious of the stand of the company that the Bank in its letter dated 3rd Feb., 1978, had informed the Singapore Bank in reply to their letter dated 31st Dec 1977, that the documents had been accepted by the drawee; that the bill was due for payment on 28th March, 1978; and that they' as such reimburse themselves on the Bank's account with Bank of America, New York. Despite the above letter because of the serious allegations of fraud on prima facie examination of the said allegations in the light of the averments of the parties, the matter cannot be allowed to rest at that and deserves to be fully probed and determined. In the case of the type that is under my consideration, the principle of the independence of the Bank's obligation under the letter of credit is not to be extended to protect the unscrupulous seller. This dicta finds support from case M/s Tarapore and Co. : 2SCR920 (supra), and case Malas 1958 1 All Er 262 (supra), as also from case Discount Records Ltd. v. Barclays Bank Ltd., (1975) 1 All Er 1071, In the latter case injunction was refused as it fell far short of establishing any ground on which it is open to the Court to intervene. On a prima facie appreciation of the respective allegations of the parties that is not the position in the instant case. The stand of the Company that it had received payment from the Singapore Bank on the basis of the documents is hardly determinative of the allegations of the plaintiff and cannot be made the basis to non-suit them.
22. In view of my discussion, noted above, the application (I.A.No.935 of 1978) is accepted, the injunction already granted by F.S. Gill, J. by his order dated 3rd March, 1978, is confirmed. The application stands disposed of accordingly leaving the parties to bear their respective costs of the same.
23. Application allowed.