P. B. Mukharji, J.
1. This is an appeal from the judgment and decree of G.K. Mitter, J. dismissing the plaintiff's suit against the defendant for the recovery of Rs. 36,837-9-3 without costs.
2. The suit was originally instituted by the Comilla Banking Corporation Ltd. to which the present United Bank of India Limited has succeeded. The defendant is Nederlandsche Standard Bank of Amsterdam, Holland. The plaintiff's suit was based on a claim arising out of a commercial letter of credit. The facts may be briefly stated at the outset.
3. According to the plaintiff, the defendant on the 24th November 1947 under the orders of N. Jacobson and Co., of Amsterdam, opened an irrevocable and confirmed credit in terms of Letter of Credit No. 114 dated the 24th November 1947 in favour of one Herbert Joseph Corporation of Calcutta whose sole proprietor was one D.N. Sharma and the defendant advised the opening of such credit to the seller Herbert Joseph Corporation through Messrs Netherlands Trading Society of Calcutta. The Credit was for .3360. The transaction related to a sale of 20 tons of black garbled Malabar pepper sold by Herbert Joseph Corporation to Jacobson and Company. The validity period of this Letter of Credit was expressed to be 'valid December 31st 1947', 75 per cent was payable, against certain documents and 25 per cent was payable after arrival and verification of the goods at Amsterdam/Rotterdam.
The plaintiff's case is that the period of validity was extended from 31st December 1947 to 5th January 1948. On the very last extended date, the 5th January 1948, the plaintiff's predecessor in the usual course of business is said to have negotiated the relative Bill of Exchange for .3360 relating to the said goods and on the faith of the said Letter of Credit advanced the sum of .2520 equivalent to Rs. 33,483/11/6 being 75 per cent of the said Credit to the seller Herbert Joseph Corporation against the shipping documents and Bill of Exchange, which were duly said to have been, transferred and negotiated by the seller to the plaintiff Bank's predecessor It is further pleaded by the plaintiff that the sum of Rs. 33,483/11/0 was paid to the seller on diverse dates commencing from the 5th January 1948 through the seller's Current Account with the plaintiff Bank's predecessor. It appears from the Bank Account that these payments were between the 5th, of January 1948, and the 17th of January 1948.
4. The plaintiff's further case is that the goods reached Rotterdam on the 15th January 1948. The plaintiff in due course of business caused the shipping documents and the Bill of Exchange to be presented for payment to the defendant Bank at Amsterdam on the 19th January 1948. On the 11th February 1948, before the arrival of the goods and before the presentation of the documents as aforesaid, it is alleged by the plaintiff that the defendant through, the Netherlands Trading Society of Calcutta made over to the plaintiff's predecessor a cheque for the sum of Rs. 33,483/11/6 but before that cheque could be cashed, it was taken back from the plaintiff's predecessor on the very same day, the 11th of February 1948. On the faith of these pleadings the plaintiff brought the suit for the recovery of Rs. 36,387/9/3. Additionally the plaintiff also pleads that it is the transferee and/or assignee of the Contract between Jacobson and Company and the defendant relating to the said Letter of Credit. It is needless to add that the defendant refused to pay and the allegation, is that the goods were dust and rubbish and that the seller was a fugitive and untraceable. (See the answers to the interrogatories to the defendant's witness W. Bialoglowski).
5. The plaint mentioned the documents filed with the plaint and relied upon by the plaintiff. Among them is the copy of the Letter of Credit dated the 26th November 1947. That is also annexed to the plaint.
6. The defence is really on the merits and construction of the Letter of Credit. The transactions represented by the Letter of Credit are pleaded in the written statement to be substantially correct but reference is made to the documents for the terms and effects thereof; in particular, the defendant denies that the plaintiff negotiated the Bill of Exchange or advanced any sum on the faith of the said Letter of Credit. The further defence is that the sum was not advanced within the period of validity mentioned in the Letter of Credit. The next ground of defence in paragraph 3 of the written statement is that the Bill of Exchange or proper documents were notdrawn or transferred in terms of the said Letter of Credit and if the plaintiff has advanced any money, it has done so at its own risk and not under the said Letter of Credit. It is expressly taken as a ground of defence that the plantation of the documents at Amsterdam on the 19th January 1948, was outside the period of time stipulated in the Letter of Credit and it is also expressly pleaded in paragraph 4 of the written statement that the presentation should have been made in Calcutta by saying
''that the said Letter of Credit was valid in Calcutta upto 5th January, 1948 and thereafter it expired and all rights and claims thereunder ceased. The plaintiff did not present the said documents at any time in Calcutta to the said Netherlands Trading Society at Calcutta.'
7. With reference to the payment of the cheque it is alleged in the written statement that the said cheque was given to and withdrawn from the plaintiff at the request of and under the instruction from its principal N. Jacobson and Company because the principal directed to stop payment on the ground that the goods were rejected by him as not being of the contract quality. It is expressly taken as a defence that the said cheque did not at all relate to the said Letter of Credit which had expired and it was a different transaction altogether. In any event it is pleaded that the plaintiff by returning the said cheque waived its rights, if any, in respect of such cheque. In those circumstances, the defence was that the plaintiff had no cause of action against the defendant.
8. At the trial a number of documents were admitted and proved and three witnesses on behalf of the plaintiff, Anil Mohan Bhattacharjee, Kalipada Sen and Birendra Mohan Mitra, were examined. On behalf of the defendant no witness was examined except certain interrogatories were delivered to W. Biologlowshi, as mentioned above, and who was a member of the firm of N. Jacobson and Company. His answers to the interrogatories are part of the evidence on record.
9. Four issues were raised at the trial. They were:
1.(a) Did the plaintiff advance Rs. 33,483/11/8 to the seller, under the Letter of Credit?
(b) Was the plaintiff entitled to rely upon the Letter of Credit for making any advance to the seller?
2. Were any documents presented in terms of the Letter of Credit?
3. Has the plaintiff any cause of action against the defendant?
4. What reliefs, if any, is the plaintiff entitled to?
The learned trial Judge answered issues 1 (a) and 1 (b) in the affirmative by holding that the plaintiff had advanced Rs. 33,483/11/6 to the seller under the Letter of Credit and that the plaintiff was entitled to rely upon the said Letter of Credit for making advance to the seller. But the learned trial Judge answered the second issue in the negative and held that the documents were not presented within the time mentioned in the Letter of Credit. Therefore he held on issues 3 and 4that although, the plaintiff had a good cause of action against the defendant the suit tailed merely because of the fact that the documents were not presented to the defendant Bank within the period of credit. On that finding the learned trial Judge dismissed the suit without costs as mentioned above.
10. It is necessary to keep clear in the mind the different persons and institutions involved in this transaction. To recapitulate them briefly it will be useful to state (1) N. Jacobson and Company of Amsterdam is the buyer of the pepper; (2) Herbert Joseph Corporation of Calcutta is the seller; (3) Nederlandsche Standard Bank of Amsterdam, Holland, is the Bank which ordered the opening or issue the Letter of Credit to finance the transaction; (4) Netherlands Trading Society of Calcutta is the Bank upon whom the order or direction was made to open the Letter of Credit by the Nederlandsche Standard Bank of Amsterdam; (5) United Bank of India Limited of Calcutta, successor to the Comilla Banking Corporation Ltd., who acted on the Letter of Credit, Bill of Exchange and draft and advanced the money involved in the suit to the seller Herbert Joseph Corporation and (6) Westminster Bank Limited, of London, who acted as the correspondent of the plaintiff United Bank of India Limited of Calcutta.
11. The main question in this appeal turns on the construction, terms and effect of the Letter of Credit dated the 24th November 1947. The original Letter of Credit is not on the record but the copy is admitted as indicated above. It may also be stated here incidentally that the original contract between the buyer and the seller is not Also on the record. Now the terms of the letter of Credit annexed to the plaint itself reads as follows :
'Please open Irrevocable Credit Favour Herbert Joseph Corporation, 373 Upper Chitpur Road, Calcutta Order Jacobson and Co., Amsterdam, for about 3360/-/- (Pounds Sterling Three Thousand Three Hundred Sixty Only) valid December 31st 1947 75% payable Against Delivery on Board Bill of Lading Invoice Weight List Insurance Policy Covering About 20 Tons Black Garbled Malabar Pepper Faq Shipped to Rotterdam/ Amsterdam at Sh. 1/6 per Lb. Net Weight Cif Rotterdam Amsterdam payment Remaining 25% after Arrival and verification Here.'
12. This was the text of a cable sent by the defendant Bank to the Netherlands Trading Society of Calcutta. The next part of this document Ex. 'A' is a printed clause right at the foot of the Letter of Credit on which this message was conveyed by the Netherlands Trading Society to Herbert Joseph Corporation. Before setting out this printed clause it will be necessary to add that the above cable was sent with the following text of the letter written as follows :
We have the pleasure to inform you having received Cable advice dated 24-11-47 from Nederlandsche Standard Bank, N. V. Amsterdam, reading (the cable as above set out).'
In other words this Ex. A is written on the letter-head of the Netherlands Trading Society of Calcutta under date 26th November 1947 addressed to Herber Joseph Corporation of Calcutta. It plainly intimates the seller Herbert Joseph Corporation that Netherlands Trading Society has the pleasure of informing the cable from the above Bank on the above terms. If the Netherlands Trading Society of Calcutta was not prepared to open the irrevocable Credit as directed by the cable, then it was for the Netherlands Trading Society to were back to the Nederlandsche Bank of Amsterdam that they were unable to do so. But instead of saying that what they do is that they send this message to the seller informing him of the contests of the cable for the Letter of Credit. It is here that the Printed clause at the foot of the letter becomes important. The printed clause reads as follows :
'The above message is continued by us on behalf of the opening Bank for your information but without any responsibility on our part except for the correctness of this copy o the cablegram as received by us.'
Now this printed portion in the letter occurs at the extreme left-hand bottom of the paper. This portion not only occurs at the extreme left-hand bottom of the letter but is also separated and enclosed within a printed rectangle. It does not form prima facie a part of the body of the letter. Indeed this portion is not specially signed or initialled by the Netherlands Trading Society to indicate or imply that it wag intended to be a part of this letter conveying the information about the Letter of Credit. Indeed the letter itself or the body of the letter, signed by the Netherlands Trading Society, does not include this portion at all so far as the juxtaposition of this rectangularly separated and enclosed printed clause is concerned. It is, therefore, doubtful whether this printed clause can at all be regarded as part of this letter. I am inclined to think, it is not.
13. If it is a part of the letter then the question is what meaning could possibly be attached to this printed clause having regard to the particular text of the cable which the letter itself conveyed. The letter plainly recites the cable. The cable plainly and unequivocally request or directs the Netherlands Trading Society of Calcutta to open Irrevocable Credit in favour of Herbert Joseph Corporation of Calcutta. Now that is an arrangement between the Nederlandsche Standard Bank of Amsterdam and the Netherlands Trading Society of Calcutta, The fact that according to the printed clause it is said that 'the above massage is continued by us on behalf of the opening bank for your information' can only mean this that so fur as Netherlands Trading Society is concerned, it implies acceptance of the request to open irrevocable credit in favour of Herbert Joseph Corporation. But then it is contended on behalf of the appellant that the other portion of the printed clause 'but without any responsibility on our part except for the correctness of this copy of the cablegram as received by us1' shows that Netherlands Trading Society was disowning any responsibility except for sending a correct copy of the cable. In other words,what is being said is that the Netherlands Trading Society is not confirming the credit but only conveying the information as a post office. This argument is put forward by the appellant for the purpose of showing that the Netherlands Trading Society accepted no liability, opened no letter of credit but that the letter of credit was opened by what is called the issuing bank, namely, the Standard Bank of Amsterdam.
14. Now this argument suffers from a number of fallacies having regard to the precise terms of the letter of credit in this particular case. They may be stated as follows: The direction here by the Amsterdam bank was clear and unequivocal that if was the Netherlands Trading Society of Calcutta which was called upon to open irrevocable credit in favour of Herbert Joseph Corporation. That language excludes the idea of signifying or implying that credit was opened by the Netherlandsche Standard Bank of Amsterdam. No doubt Netherlandsche Standard, Bank of Amsterdam was the bank who ultimately held the credit against which the transaction was to be financed, but the actual credit was to be opened by the Netherlands Trading Society of Calcutta from where the seller would get his facilities. Dr. A.G. Davis on the Law relating to Commercial Letters of Credit, 2nd Ed. at page 87, points Out:
'A correspondent banker may not, however, have been nominated as the person through whom the credit is Jo be opened, but the buyer's banker may make use of his services for the purpose of advising the seller of the opening of the credit so as to ensure for example, that the letter of credit reaches the person for whom it is intended. There is thus coupled with the name of the issuing banker, the name of a banker presumably well known Ho the seller, the effect of which is to relieve the seller from any doubts he may have as to the validity of the credit But when the correspondent banker is used solely for the purpose of advising the credit he expressly negatives any personal liability by stating that he has merely been asked to advise the opening of the credit and that no engagement on his part is conveyed. In these circumstances, the seller has no rights against the correspondent banker.''
It is therefore, clear that each case must be examined and determined on the exact terms and conditions of the letter of credit in a particular case. They alone can determine Whether a correspondent was merely acting as an adviser or doing something more. Here it appears that by the express terms the Netherlands Trading Society was doing something more because the direction upon it was :
'Please open irrevocable credit in favour of Herbert Joseph Corporation.'
Either Netherlands Trading Society could refuse to open that credit if it was disinclined to so or it could open it as directed in favour of the person. But Netherlands Trading Society could not vary the terms of the letter of credit. Therefore, when it passes on the message to Herbert Joseph Corporation with the expression that it accepted no responsibility except for the correctness of the cable that by itself--this statement alone--would not absolve it from the order made in the cable inso far as it did not expressly say that it was not prepared to open the irrevocable credit. The intimation to Herbert Joseph Corporation can have only one significance and that is to convey the contents and the tenor of the cable received. That content and tenor clearly indicated that Netherlands Trading Society was to open irrevocable credit, if the Netherlands Trading Society was not going to do so, there wilt be no point in such Trading Society conveying the information to Herbert Joseph Corporation because on the basis and terms of this particular letter of credit no credit was opened by the Netherlandsche Standard Bank at Amsterdam. If it did, then in that case according to the statement of the law by Dr. Davis quoted above the Netherlands Trading Society of Calcutta would merely be a correspondent advising bank with no responsibility.
15. Therefore, the printed clause in this case even if it was to be included as part of this letter, would mean, a conflict with the actual text of the letter and the cable. If there is a conflict between the text of a letter and 3 printed clause, then certainly the text of the letter must prevail over the ordinary printed clause as being the special variation where the printed clause would be inapplicable. This principle, is well recognised in the Canada and Dominion Sugar Co. Ltd. v. Canadian National Steamships Ltd., 1947 AC 46 at p. 57, where Lord Wright delivering the judgment of the Privy Council observed:
'If there is any discrepancy between this printed clause and the stamped clause in the margin, the latter, on ordinary principles of construction, will prevail.'
See also 10 Halsbury (Hailsham Edition), page E79 where it is said :
'Where an instrument is in a printed form With written additions or alterations, the written words (subject always to be governed in point of construction by the language and terms with which they are accompanied) are entitled, in ease of reasonable doubt as to the meaning of the whole, to have a greater effect attributed to them than the printed words';
and Glynn v. Margetson, 1893 AC 351 where Lord Herschell, L.C. at page 355 observed :
'Where general words are used in a printed form which are obviously intended to apply so far as they are applicable, to the circumstances of a particular contract, which particular contract is to be embodied in or introduced into the printed form, I think you are justified in looking at the main object and intent of the contract and in limiting the general words used, having in view the object and the intent.'
To the same effect are the observations of Lord Halsbury at pages 357-58 of that report.
16. This letter of credit WHS extended. This extension is proved by Ex. B, a letter dated the 2nd January, 1948 written again by Netherlands Trading Society to Herbert Joseph Corporation. It reads as follows :
'We have the pleasure to inform you having received cable advice dated 31-12-47 from Netherlandsche Standard Bank, N. V. Amsterdam, reading:
'Refer our November 24th Re: Credit NR. 114 Please Extend Validity Until January 5th 1949 Inclusive.''
This letter again contains the usual printed clause right at the bottom after the signature on the letter in the same terms as in Ex. A. nOW THE effect of this is that the Netherlands Trading Society of Calcutta is again, informing the seller that it had received a cable from the Standard Bank of Amsterdam, What is the purport of that cable from the Standard Bank of Amsterdam to the Netherlands Trading Society of Calcutta? It again is a clear order asking them the Trading Society to extend the validity until January 5th 1948. Who is, therefore, actually extending the validity? It is the Netherlands Trading Society. It is true that it is done under the direction of the Standard Bank of Amsterdam, as it should be, because the ultimate credit is there. If the Netherlands Trading Society had, nothing to do with the letter of credit here, then why should they be asked to extend the validity till January 5th 1948?
17. Mr. Roy has assailed the learned trial Judge's decision that this letter of credit requires presentation of documents within the 5th January, 1948. His main contention is that the terms of the particular letter of credit before us not only indicate that the documents could be negotiated within the 5th but the actual presentation of the documents could be within any reasonable time thereafter.
18. It is well settled law in connection with letter of credit that a person seeking to rely on a credit must act strictly within the terms and limitations of such letter of credit. The authority for that proposition may be found in the House of Lords' decision in Equitable Trust Company of New York v. Pawson Partners, Ltd., (1927) 27 Lloyd's List LR 49, laying down the proposition, that a person who seeks to rely on a letter of credit must do so in exact compliance with its terms and it is also elementary that a Bank is not bound or indeed entitled to honour drafts presented to it under a letter of credit unless those drafts with the accompanying documents are in strict accordance with the credit as opened. Viscount Sumner at page 52 of this report said in that case:
'It is both common ground and common seme that in such a transaction the accepting bank can only claim indemnity if the conditions on which it is authorised to accept are in the matter of the accompanying documents strictly observed. There is no room for documents which are almost the same or which, will do just as well.'
Again Denning L. J. emphasised the same principle in Pavia and Co. v. Thurmann-Nielson, (1952) 2 QB 84 in these, terms :
'The conditions of the credit must be strictly fulfilled, otherwise the seller would not be entitled to draw on it.'
19. That being the well-settled principle, the question now is of the construction of the exact terms of this particular letter of credit regarding its period of validity. The words are 'valid December 31, 1947' to be substituted by the expression 'valid January 5, 1948'. The plaintiff contends that these words mean that so long as the documents are negotiated within the 5th January 1948, the credit could be availed of under this letter of credit The great difficulty in accepting that argument is that the language of this particular letter of credit does not permit it. This is not that kind of letter of credit, commonly used in commercial transactions, where! express provision is made for negotiation of bill of exchange and drafts.
No mention of drawing or negotiation of any document is mentioned in this particular letter of credit. In fact, there is an implied exclusion of such drawing and negotiation of documents on this letter of credit. This implied exclusion seems all the more significant when we find that it is a very usual term of a letter of credit to expressly mention drawing or negotiation of bills and drafts thereunder. We have examined a large number of forms of letters of credit discussed in Gutteridge's The Law of Bankers Commercial Credits, 1955 Edn., in Dr. A. G. Davis on law relating to Commercial Law of Credits, 2nd Edition and as Well, as those appearing in many decided cases, and we find that this significant exclusion of all mention of drawing or negotiation of bills of exchange or drafts from this particular letter of credit can only suggest one conclusion and that is neither drawing nor negotiation of documents is permitted by the terms of this letter of credit, Gutteridge points out at pages 58-59 of the book that this matter can be considered from three aspects, namely, (1) where the negotiating Bank is named in the credit, (2) where the credit is an open invitation to a Bank to negotiate, and (3) where there is no invitation in the sense that the actual negotiating Bank is other than the Bank named in the credit. This conclusion is further confirmed by the express language of the letter of credit saying that 75 per cent is payable against specific documents. Now the specific documents expressly mentioned there are only bills Of lading, invoice. Weight list and insurance Policy, but they do not include bills of exchange or drafts. In this appeal the plaintiff Bank's whole case proceeds on the, fact that it negotiated the bills of exchange and also even the letter of credit. The letter of credit here does not permit negotiation of bills of exchange. Now a letter of credit is also not a negotiable instrument at all. In 2 Halsbury (Simond's 3rd Edition) Article 397 at pages 213-14 the law is briefly stated in these terms:
'Letters of credit are not negotiable and are available to the beneficiary only. If a person, on the faith of the letter of credit, pays or advances money to a person other than the grantee, the banker who granted the letter of credit will not he liable to the person who advanced or paid the money.'
It is also further stated there as follows:-
'Although a letter of credit is not a negotiable instrument, it can be assigned or otherwise transferred; but in the case of a commercial letter of credit, it may not be assigned without the consent of the buyer. Kemp v. Baerselman,(1906) 2 KB 604 and Tolhurst v. Associated Portland Cement Manufacturers, 1903 AC 414.'
This is, of course, a commercial letter of credit. There is no consent of the buyer for its assignment or transfer. It follows from the law relating to letter of credit that if any negotiation or drawing of documents was only to be made within the period of validity in this case, then either (1) such power to negotiate or draw should have been given by the actual terms of the letter of credit or (2) necessarily implied which in this case by specific mention of other documents, such as bill of lading, invoice, weight list and insurance Policy and not bills of exchange or drafts, such necessary implication is excluded. In plain construction of this particular letter of credit it appears that the validity was till 5-1-1948 and 75 per cent of the credit was payable against the delivery of the specific documents mentioned there. No other rights can be added under this letter of credit ether of drawing or negotiating any document and specially documents other than those mentioned in this letter of credit.
20. Mr. Roy realised the force of this objection and contended that some kind of negotiation might be implied in this case because bills of lading were negotiable documents and they were mentioned in the letter of credit. This argument is really more against him than in his favour. If bills of lading only are mentioned, then the fact that the power to negotiate bills of exchange is withheld goes against his contention. Indeed, it is expressly said that 75 per cent of this credit was payable against 'delivery' of the bill of lading and not its negotiation, nor against bills of exchange or their negotiation.
21. The real inspiration of Mr. Roy's argument for construing the validity period with reference only to negotiation and not presentation Was taken from the following passage of Dr. Davis's bonk on the Law relating to Commercial Letters of Credit (Second Edition) at page 81:
'The time within which the banker's promise must be availed of depends, in roost cases, on the construction of the terms of the letter of credit- The forms commonly used in the United States leave no room for question. They stipulate for the honouring of drafts if presented at this office on or before .... (date), 19....'
But in certain English banking forms, the only reference to an expiry date is a marginal note: 'This credit expires on the .....' This note can be interpreted in various ways. It may mean that drafts must be presented to the issuing banker on or before the expiry date, or that drafts must be negotiated on or before that date. Again, it is open to the interpretation that drafts must be drawn on or before the date of expiry, or, finally, that the goods must be shipped before the expiry date. The question must for the present, remain an open one.
22. Now, because in that statement of the law it is said that the question is an open one, Mr. Roy argued that here the expiry of the validity period of the Letter of Credit must be confined to the negotiation and not presentation of documents. As I have indicated above and asalso pointed out by Dr. Davis in the above passage, each letter of credit must be construed on its own terms and conditions. The letters of credit in commercial transaction are of a large variety and no uniform principle can be laid down for all types of letters of credit. Naturally, however, the letters of credit must speak on the terms in which they are couched. They are the most important and significant consideration for the Court to determine the effect of a particular letter of credit In this case, for reasons already indicated, we are of opinion that negotiation is not permitted under the Letter of Credit. Where letters of credit expressly mention or by necessary implication imply that drafts and Bills of Exchange could be drawn and negotiated, naturally there the question would be whether the validity is limited to the negotiation or to the presentation. But where negotiation is excluded by construction of the particular letter of credit, as in this case, and where no other question of shipping the goods arise, presentation alone can be related to the expiry of the validity period.
23. It is, therefore, clear on the construction of the terms of this particular Letter of Credit that the validity period in this case cannot bemade to depend on negotiation of documents atall. Negotiation being excluded by the terms ofthis particular Letter of Credit, the only otheralternative in this case would be presentation ofthe documents mentioned there. Admittedly,such presentation was not made On the 5th ofJanuary, 1948, but on the 19th of January, 1948.
24. Mr. Roy's last attempt on this point to extend the date 5th January, 1948, by introducing notions of reasonable time thereafter also cannot succeed, first, because the time which he was seeking was only for the purpose of presenting documents. Mr. Roy argues that from Calcutta to Amsterdam the documents will naturally take some time to go and therefore, presentation of the documents within a fortnight from the 5th, that is, on the 19th of January, 1948, should be allowed under this Letter of Credit. In support of this argument he contends that the extension from 31st December 1947 to 5th January, 1948, would be useless because that would be too short a time for the documents to go from Calcutta to Amsterdam. This argument, I am afraid, suffers from a wrong assumption. It assumes that the documents are to be presented at Amsterdam. On the other hand, the extension for only four days or five days from the 31st December, 1947 to 5th January, 1948, rather appears to indicate that under this Letter of Credit the documents were to be presented in Calcutta at the Netherlands Trading Society and not at the Nederlandsche Standard Bank at Amsterdam.
25. What strikes me as the more important consideration on this point is the clause in the Letter of Credit that 25 per cent of this Credit would be payable after arrival and verification at Rotterdam, Amsterdam. nOW that would seem to imply necessarily that the Credit must remain open until the arrival and verification at Amsterdam which, being dates not within the control of the seller, may be beyond the 5th January, 1948.The answer to this argument, however, appears to be that the validity of the Credit expired on the 5th January, 1948, when 75 per cent of the Credit was payable against delivery of documents mentioned in the Letter of Credit. The remaining balance of 25 per cent is made contingent upon the arrival and verification of the goods. But the Credit for all practical purposes closed on the 5th January, 1948, but the utilisation of the Credit was made to depend on two independent facts of arrival of the goods and for verification thereof. In other words, even the right to this balance qua balance of 25 per cent must be earned by the presentation of documents by the 5th January, 1948, and when that contingent event is satisfied, the residue of 25 per cent becomes payable after arrival of goods and their verification which have nothing to do with the presentation of documents. At any rate, this could apply only to 25 per cent as a balance but no question of balance of 25 per cent arises here because the condition of 75 per cent which is first payable against particular documents has not been satisfied. Therefore on the terms and en the facts there can be no question of extension in this case beyond the 5th January, 1948.
26. The learned Trial Judge appeared to have thought that the Netherlands Trading Society of Calcutta did not open the Letter of Credit as directed by the Amsterdam Bank but merely advised the Herbert Joseph Corporation of the Cable, a conclusion to which we cannot absent for reasons already indicated above. From to the Trial Judge seems to draw the other conclusion that the Herbert Joseph Corporation could only take advantage of the credit of the opening banker and held that on this particular Letter of Credit there was no limitation on the negotiation of documents, although there was no express mention either that documents could be negotiated. We are unable to accept that statement to be correct law on the construction of the Letter of Credit in this particular case. The learned Judge fell into another error when he came to the conclusion on this point that although the Letter of Credit was addressed to a particular banker, this could be utilised with any other Bank, For this purpose he relied on the observation of Brett, L. J.; in the case of Union Bank of Canada v. Cole, (1877) 47 LT QB 100 where Brett, L. J., observed at page 109:-
'If that which is asserted to be a letter or credit is addressed to all the world, then those who act upon it have in fact the advantage of an actual legal contract with the giver of the letter ............. That establishes a privity betweenthe persons giving the letter and the persons act-ling upon it, and on ordinary principles creates a contract at law. But it does not follow that where the letter is not addressed to the public there may not arise a contract between the person who acts upon and the person who signs the letter.'
This dictum of Brett, L. J., in our view, cannot apply to the facts of this case. Brett, L. J., makes it clear that the letter of credit has to be in substance 'addressed to all the world'. This Letter of Credit is not addressed to all the worldeither in substance or in form. This is a very specific and limited letter of credit to a named banker, namely, the Netherlands Trading Society of Calcutta in favour of a particularly named person. Herbert Joseph Corporation. That being so, it seems to me impossible to apply Brett, L. J.'s, dictum or principle to a letter of credit of this variety and of such specific terms.
27. The financing of exportation and importation of goods by means of bankers' letter of credit is a devise of recent origin. In fact it has been said that the commercial letter of credit in its modern form is a product of the last two Great Wars and many of the legal questions' involved in its issue have not yet been fully worked out. The purpose of such a letter of credit is to facilitate overseas trade by combining the advantage of ready money to the seller and credit to the buyer with security to both parties. But both Mr. Gutteridge and Dr. Davis point out that the types of letters of credit are many and various and their legal consequences and effects naturally vary depending on the particular forms and types used. That was also the view expressed by Mookerjee, J., in Chandanmal Bengany v. National Bank of India : AIR1924Cal552 in the following terms:-
'Letters of Credit are not; construed with technical nicety but are considered as being usually framed with more or less informality and looseness of expression and hence courts have sometimes indulged in considerable freedom of expression in the effect to arrive at what is designated as the true intention of the parties.
The usual classification of the different types of letters of credit is general or open and special credits, the former embodying an offer to any Bank which agrees to accept it and the latter is restricted to a named beneficiary and addressed to a specific bank. See again the observations of Mookerjee, J., in the Division Bench decision of this High Court in : AIR1924Cal552 where the learned Judge at page 47 (of ILR Cal): (at p. 554 of AIR) said:
'It is called a general letter of credit, when it is addressed to all merchants or other persons in general, requesting such advance to a third person; it is called a special letter of credit, when it is addressed to a particular person by name requesting him to make such advance to a third person.'
We have no doubt, on the construction of this particular Letter of Credit, that this is of the second class of a special credit to a named beneficiary Herbert Joseph Corporation of Calcutta and to a specific Bank the Netherlands Trading Society of Calcutta. From this it follows that no other Bank could take a transfer of this Letter of Credit or take an assignment of this Letter of Credit or act on it. Then the other broad classification is irrevocable and revocable credits with a further sub-division of confirmed and unconfirmed credits. If is unnecessary in our view to discuss in detail these general classes because the question in this appea1 is based only on the construction and interpretation of the particular words used in this letter of credit
28. Having regard to the view that we take of the construction and interpretation of this letter of credit, we must hold that the plaintiff has no cause of action against the defendant bank on this letter of credit and that the learned Judge was right in coming to the conclusion that the documents were not presented within the time stipulated by this letter of credit.
29. A reference to the correspondence in connection with the position with regard to this letter of credit may not be relevant, although such reference is unnecessary for the purpose of construction and interpretation of the letter of credit. The correspondence makes the position extremely clear. For instance, the plaintiff bank's London correspondent the Westminster Bank Limited London, in its letter of the 27th February, 1948, to the plaintiff wrote as follows :-
'When communicating with the Nederlandsche Standard Bank here, Operation on behalf of their clients, Messrs N. Jacobson and Co., our city, we were told that according to a copy of a letter the Netherlands Trading Society, Calcutta, sent to the shippers; no L/C has been established by a simple payment order had been received by them. Consequently the Standard Bank are of the opinion that there cannot be question of negotiating the documents under an L/C by the Comilla Banking Corporation. They furthermore told us that according to their clients (who are a reputable firm) the goods not only showed a considerable shortweight but consist for the greater part of dust instead of pepper. They say having received information from Calcutta that the sellers would be fugitive having sold similar parcels of dust to other countries. At any rate the buyers here respectively the Standard Bank, refuse definitely to take up the documents against payment.'
30. Again the same Westminster Bank Ltd., wrote a letter to the Comilla Banking Corporation on the 14th June, 1948, whose annexure reads as follows:-
'Copy of letter received from Amsterdamsche Bank, Amsterdam.
'With reference to our letter of the 7th inst., we hereby inform you that the N. V. Nederlandsche Standard Bank, our City, confirmed to us the receipt of the letter of Mr. S.N. Sen, Calcutta, of May 21st They have replied thereto on May 29th, as per copy enclosed, from which you will see that they reject all responsibility stating that the documents have not been presented to the Netherlands Trading Society. Calcutta within the validity of the credit. In this connection We beg to observe that indeed it seems that no letter of credit valid for negotiation hag been established by Netherlandsche Trading Society but a documentary credit at the counter of their Agency in Calcutta so that no other Bank could negotiate the documents under this credit.'
31. It follows from this very clear communication firstly that the defendants bank was insisting that the documents should have been presented to the Netherlands Trading Society in Calcutta within the validity period and secondly, that no otherbank except the Netherlands Trading Society in Calcutta could negotiate documents under this letter of credit. This position is made abundantly clear again in the defendant back's reply to the plaintiff's solicitors letter of demand dated the 21st May, 1943. The plaintiffs solicitor demanded the money on the allegations more or less now pleaded in the plaint. The reply of the defendant bank on the 29th May 1948, expressly makes the case of the defendant bank clear. It says in the first instance that they had opened the letter of credit only with the Netherlands Trading Society, Calcutta. They assert that the documents were never presented or negotiated during the time of validity and therefore they deny all their obligations. It is strange that although this letter disputing the position on facts was written on the 29th May, 1948, it was not answered by the plaintiff's solicitor. There is no denial of the facts stated in the defendant bank's reply of the 29th May. 1948, although the suit was instituted long after on the 17th March, 1949.
32. A point was also made by Mr. Mitter, learned counsel for the respondent that the express mention of the amount of the letter of credit in pound sterling showed that the presentation of documents and payment were to be in Calcutta whose currency was linked with sterling at that time. The argument was that this showed where the letter of credit was to be opened and where it was to be operated and payable and where the documents were to be delivered or presented. In this connection it was contended that Holland was not within the Sterling area but what was then known as Transferable Account area. (See Law relating to Foreign Exchange by Vakil, 2nd Ed. page 21). We prefer to rest our decision on this point on more substantial grounds which we have indicated than on this.
33. Reference to some of the cases cited at the Bar may now be made appropriately at this stage.
34. The case of Re, Agra and Masterman's Bank (1887) 2 Ch A 391 was relied upon by the appellant. This was however a case of an open letter of credit. There the letter of credit expressly authorised the drawing at sight and the negotiation of bills. These features distinguish that case from the present appeal. Turner, L J., points out at page 395 of that report that the letter of credit there was written in a double form; the first part containing an authority given to Dickson Tatham and Co., to draw the bills and the second part in substance was addressed to the persons who were to negotiate the bills. Turner, L. J., observed at page 395:-
'It is plain that this letter was given by the bank with a view to its being shown to persons who were to negotiate the bills and to make advances upon the faith of the letter; and the last passage contains these words:
'Parties negotiating bills under it are requested to indorse particulars on the back hereof.'
It is plain that this part of the letter is in truth addressed to the person by whom thebills were to be negotiated. The whole effect of the letter is that the Agra Bank held out to thepersons negotiating the bills a promise that it would pay the bills; and it would be impossible, according to my view of the doctrines of Courts of equity, to allow the bank, after having sent that letter into the world, addressed to the persons who were, to negotiate the bills and so held out to them that it would be answerable for their payment, to say that because there was a debt due to it from the persons to whom it had given the letter of credit, therefore it would not pay the bills.'
These observations show how decisions on letters of credit are to be very carefully applied because they all turn on the special terms and language of the particular letter of credit. The letter of credit in the Agra and Masterman's Bank's case (1867) 2 Ch A 391 is radically different from the letter credit before us in this appeal.
35. The next case cited before us was Guarantees Trust Company of New York v. Harmony and Co., (1918) 2 KB 623. Here again the language of the letter of credit quoted at page 624 of the Report shows how different that letter or credit was from the present one before us. Express mention there is made for presentation of drafts and payment at maturity. Scrutton, L. J. discusses the mechanism of foreign trade through letter of credit as well as the bill of exchange procedure at pages 659-60.
36. Here the warning given by Dr. Davis in his Law relating to Commercial Letters of Credit, 2nd Edition, at p. 23 should be emphasised. He says:-
'Commercial practice, like political thought,is always in advance of the law. x x xX X X X XCommercial practice must be the basis of Commercial law. Thus, it is essential that the law relating to letters of credit in its present undeveloped state should be regarded primarily from the point of view of what the commercial community has done and the course of business adopted by it. One of the most striking illustrations of this fact lies in the various types of letters of credit which have been devised to meet differing circumstances. Labels have been attached to the different species, but not in all cases have those labels received judicial recognition. Regard must therefore be had to the meanings given to these labels, either by the commercial community, or, when they have received judicial recognition, by the judicature.''
37. Dr. Davis at page 25 of the same book expounds the theory of a documentary credit to which reference has been made in the correspondence in this case which I have already cited The learned author says this:-
'A documentary credit is generally understood to be one in which the issuer undertakes to honour bills drawn under the credit only if they have attached to them certain documents e. g. bill of lading, Policy of Insurance, and invoice which the issuer can hold by way of security for advances made by him. This is the normal type.'
Examining this very accurate description of a documentary credit, it would seem that the view we have taken of the position of the negotiating Bank, Netherlands Trading Society of Calcutta is correct. Hart in the Law of Bank, 4th Edn. at page 650 describes a documentary letter of credit in the following terms:-
'Where the undertaking on the part of the Bank is to accept drafts against documents of title to goods, particulars of the merchandise in respect of which the bills are to be drawn being stated, it is a documentary credit.'
But here again Dr. Davis says that the legal position is not yet clear to mean, what type of document must the purchaser supply in order to fulfil the terms of a documentary credit. Here again as pointed out in Mann Taylor and Co., Ltd. v. Royal Bank of Canada (1935) 40 Com. Cas 267 even the words 'documentary credit' as letter of credit must depend on the fact of each case. In that case a documentary credit was taken as a loan of money on the Bank's credit to the borrower or the security of document of title to goods. Any document of title would do unless particular documents were described in the arrangement for the granting of the credit. The plaintiffs in that case were held liable on their guarantee.
38. The other case cited to us was National Bank of India, Ltd. v. Saleh Mahamed Balaxa, ILR 25 Bom 706. The letter of credit there used is quoted at page 707 of the report which clearly states that a letter of credit was opened in London on which drafts at ninety days sight would be presented and honoured against delivery of shipping documents and invoices. The present Letter of Credit before us does not say that any letter of credit is opened at Amsterdam and is in entirely different terms and does not permit drawing or negotiation of drafts.
39. Lastly the case of Cape Asbestos Co., Ltd. v. Lloyds Bank (1921) WN 274, was cited before us. It is unnecessary again to deal with this case in detail for the simple reason that there the letter of credit again was entirely different with the express provision. 'This is merely an advice of the opening of the abovementioned credit, and is not a confirmation of the same' and with the express permission for negotiation of drafts accompanied by invoice. There Bailhache, J., held that as the credit was revocable in form, there was no legal obligation on the bank to give any notice to the company and that therefore the bank was not liable,
40. This exhausts the cases cited to us at the Bar on the terms and interpretation of the Letter of Credit. As we have indicated above they are all distinguishable and the terms and conditions of the letters of credit discussed there were very different from those we are considering in this appeal.
41. One other point remains. Mr. Mitter, learned counsel for the respondent, although his client had not filed any cross-objection, has in fact assailed the finding of the learned Trial Judge that there was any negotiation on the 5th January, 1948. In fact he contended before us that the learned Judge should never have accepted that conclusion on the evidence both documentary and oral. Having regard to the view that we have taken of the interpretation, and construction of this particular Letter of Credit holding that no negotiation was at all permissible, it is no longer material to discuss and decide the point whether there was, in fact, any negotiation at all on the 5th of January, 1948, as held by the learned Trial Judge. In deference, however, to the argument made at the. Bar we would only refer to this aspect of the case briefly to show that there is a good deal of force in the argument that Mr. Mitter advanced on this point. In the first instance, the fact remains that the Bank was accepting and negotiating the documents on the very last day of the credit, that is, the 5th of January, 1948. This itself raises a good deal of suspicion. In fact, this was noticed by the learned Trial judge also. What is worse, this particular negotiation on the 5th of January, 1948, on which the whole case of the plaintiff Bank rests, on the basis that negotiation was made within the period of validity, was admittedly made on the 5th of January, 1948, after the closing hours of banking business. In fact, Sharma the sole proprietor, alternatively described as Manager of Herbert Joseph Corporation, comes to the Bank on the 5th, according to Mr. Bhattacharji, 'just before closing hours of banking business.' (Question 17). He repeals the same evidence to questions from the Court in questions 169 and 170. There was an encashment of cheque on that day which Sharma drew and which is not covered by his account. That cheque in excess of his account came to K. P. Sen, another witness, after 2 o'clock. (K.P. Sen, Question 81). What, therefore was happening was negotiation and acceptance of documents behind closed doors after the Bank had closed its doors to the constituents in general. It is doubtful whether, even on such facts, it could be said that negotiation after banking hours on the 5th of January, 1948, would be negotiation even within the period of the 5th January, 1948. But apart from that, Mr. Mitter urged many other considerations and circumstances to challenge the finding fact that any transaction took place on the 5th January, 1948. He suggests that the whole case that the documents were presented on the 5th was developed by the plaintiff Bank in a strange way. No specific mention that on the particular 5th January, 1948, these documents were negotiated was ever clearly suggested, although veiled suggestions were made that the documents were presented within the 5th of January. 1948. It is, of course, suggested by the solicitor's letter of demand of the 21st May, 1948, that the plaintiff Bank received these documents on the 5th January, 1948, but it is doubtful whether it was 'in due course of business' because certainly it was in a very undue manner when the Bank was closing and after the Bank had closed for the day.
42. Next Mr. Mitter comments bitterly on the manner in which this entry had been disclosed by the plaintiff's solicitor in the affidavit of documents. It is described as item 31 'Copy of relevant entries in the Overdraft Cheque Passing Register of the plaintiff'. This is obviously baddisclosure according to all law relating to discovery. It does not specify even the date of the entry, the 5th January, 1948. This affidavit was affirmed on the 29th August, 1949. The document which ultimately came to be produced in Court under item 31 of the affidavit of documents is marked Ex. 'S' and is said to be 'Certified as true copy''. It is signed by K.P. Sen, the plaintiff's witness. This document was prepared under the advice of the plaintiff's solicitor Sri S.N. Sen of 10, Old Post Office Street, Calcutta. The letter dated 25th August, 1949, and the answer to question 22 of K.P. Sen show that the plaintiff Bank was asked by its solicitor to give a certified copy. In fact, to quote the language of the answer of K.P. Sen the witness, his evidence is, 'We were asked by our Solicitor to give a certified copy.'' This is criticised by Mr. Mitter because this is not certified according to the Bankers' Books Evidence Act for the good reason that under that Statute a certified copy means a copy of any entry in the books of a bank together with a certificate written at the foot of such copy
'that it is a true copy of such entry, that such entry is contained in one of the ordinary books of the bank and was made in the usual and Ordinary course of business, and that such book is still in the custody of the Bank, such certificate being dated and subscribed by the principal accountant or manager of the bank with his name and official title.'
This certificate which is appended to the document Ex, 'S' does not observe most of these restrictions. It docs not give the date; it does not say that the book from which the copy is being made is in the custody of the bank. It was therefore, perhaps realised that this will not go in under the Bankers' Books Evidence Act. It is good to remember that it was not disclosed even as a certified copy in the affidavit of documents. Therefore the witness K.P Sen came to prove this document by showing his signature at the end of the certificate, Mr. Mitter, therefore, contends that if on the 25th August 1949, according to the Bank's letter to its solicitor this document was being prepared and set to him, then, at and rate, with its date and proper description it should have been disclosed in the affidavit of documents which was affirmed almost contemporaneously on the 29th August, 1949,within a period of four days from the preparation of the document.
43. Still more cogent circumstances exist to discredit this document Ex. 'S' because of the fact that the original book has disappeared, that is the register called 'Overdraft Cheque Passing Register'. Amazing evidence is given by witness K.P. Sen on this point. According to him, in answers to question 15 to 26, he searched for it personally but could not get it. But he admits that his Bank keeps no record of the books missing. (See his answers to questions 182-183). But whatever may have happened, at thedate of the trial in 1958 when K.P. Sen was giving evidence, this much to clear beyond doubt from Bhattacharji's evidence that this book was in existence when the certified copy was being made.But before dealing with Bhattachrjee's evidence on this point the evidence of Kalipada Sen himself in answer to Q. 22 is:-
'We were asked by our solicitor to give a certified copy and when we got the original book, not it typed, got it checked and then signed and rent under cover of Our letter, here is the letter.'
'23. Q.--Who checked it from the original book?
A. -- Myself.'
It, therefore, is clear that the overdraft cheque passing register was in existence at the time. If it wag there at the time, then it is difficult to imagine why the original book was not disclosed in the affidavit of documents and why a certified copy was being introduced in anticipation that the book would he lost seven years thereafter when evidence will have to be given. nOW Bhattacharjee's evidence makes the situation still more incredible. In answer to questions from Court Bhattacharjee in answer to Q. 63 said this:-
'I cannot tell exactly the date when it was copied out but it was copied out by Mr. K. P, Sen, Superintendent of Foreign Exchange. This is certified by Mr. Sen, I think, there is photostatic copy of this book also, photostatic copy of the original book, I saw it somewhere.'
That shows that there was even a photostatic copy of this register. Witness K.P. Sen did not deny the existence of the photostatic copy either. The photostatic copy also has not been disclosed. The learned trial Judge himself was perhaps quite puzzled at this evidence and rightly so because he himself put Q. 259 which shows that such an important document as Ex. 8 on which the plaintiff's whole case of negotiation of documents on the 5th rests is being created and produced in such strange circumstances. Q. 259 may he set Out here;
259 Q. Excepting that entry in the overdraft cheque passing register is there any mention in any document that the bills were negotiated on the 5th?
That shows the importance of this document for the plaintiff. Bhattacharjee was naturally cross-examined severely on the point why this original book was not disclosed and the original entry was not disclosed at the time or the affidavit of documents. Most unsatisfactory answersare given by witness Bhattacharjee on this point. They are as follows:-
'433. Q--Can you explain to my Lord why the original of this entry was not disclosed by the plaintiff hank?
A.--That book was required also for business in the bank in connection with other affairs.' Surely, that is no reason why the entry in the original books should not be disclosed. He tried to repeat this answer in Order 436 as follows:-
'436. Q.--Kindly explain why the original entry was not disclosed?
A.--The original entry was in the book itself but as the book was required at that time in the bank in connection with other affairs the book was not produced.'
The Court thereupon realised how Bhattacharjee was fencing and put this question in Q. 437:-Q.-- By disclosing an entry you do nothave to put in Court, you merely, offer inspection to the other side--there should have been no difficulty in your disclosing the original entry?
A.--Of course I do not remember exactly under what other circumstances it was not.'
Finally, in answer to Q. 441 witness Bhattacharjee said as follows:-
'Q.--Can you explain to my Lord why within such a short time of the institution of the suit the bank was not in a position to disclose the original entry on which you are relying?
A. -- I cannot answer exactly.''
44. If the original book was being required, then it should have been kept with care and it the original book was being required and was at the bank for other affairs, it is difficult to appreciate why the original entry was not disclosed and why a specially certified copy which was not even a legally certified copy under the Bankers' Books Evidence Act had to be created, produced and disclosed. Mr. Mitter also points to the fact that even the entry made there bears the impress of an ad hoc manufacture of the document. There is a false figure of Rs. 26000/- in the letter of credit The figure Rs. 26000/- there is clearly wrong and should have been Rs. 33,483/11/6. Bhattacharjee had a rough time in cross-examination in answer to Q. 168 over this point and to get Out of this situation Bhattacharjee introduced one Bisweswar Dutt who was supposed to have made the mistake in the calculation although this Bisweswar Dutt had never come to the box.
45. On these facts and circumstances Mr. Mitter naturally contends that this Ex. S which is the only document connecting She bank's transaction on the 5th relating to this letter of credit should not be really believed or accepted. He relied also on the observation in Budden v. Wilkinson, (1893) 2 QB 432 at p. 436 where Lindley, L. J., quoted and cited the observations in the case of Taylor v. Batten (1878) 4 QBD 85 that the object of the affidavit should be to enable the Court to make an order for the production of the documents mentioned in it if the Court thought fit so to do, and that a description of the documents which enabled the production, if ordered, to be enforced was sufficient. Mr. Mitter, therefore, argued that there was no sufficient description of this document in the affidavit of documents. He also relied on the observations made in Woods v. Martins Bank Ltd., (1959) 1 QB where the learned Judge Salmon, J. at page 60 observed:-
'No doubt the defendants' solicitors explained to their clients that they must disclose all relevant documents which were or had been in their possession. The solicitors' duty however, does not stop there. It cannot be too clearly understood that solicitors owe a duty to the Court, as officers of the Court carefully to go through the documents disclosed by their clients to make sure as far as possible, that no relevant documents have been omitted from their clients' affidavit. In this case I am regretfully driven to the conclusion that this duty was not performed by the defendants' solicitors.'
It is plain here in this case that if the solicitor had seen this document as he must have seen as the evidence on record proves, he could never have passed this in the affidavit of documents and would have seen that the original be kept for inspection and disclosed and certainly produced at the proper time.
46. In fact except this document marked Ex. S there is no other entry to connect negotiation with the 5th January, 1948. The letter of credit bears a strange endorsement at the end, but that is of 6-1-48. It only says this:
Then there is a seal of the Comilla Banking Corporation. It is not even an endorsement; it states nothing; it does not say that so much was advanced. It is strange that the person who is receiving the money, namely, D. R. Sharma, Manager, Herbert Joseph Corporation does not even give a receipt to show that he is receiving the money against this transaction. It is an extraordinary banking transaction. The endorsement on the bill of exchange by Herbert Joseph Corporation in favour of Comilla Banking Corporation bears no date. It, therefore, does not connect the negotiation with the 5th January, 1948-The letter of credit as indicated, shows that it was on the 6th a date by which the validity had expired even on the basis of negotiation. The banking account marked Ex. E of Herbert Joseph Corporation with Sharma as the sole proprietor does not give any indication that negotiation of documents took place on the 5th January, 1948. In fact it only shows a cheque for Rs. 4300/- but no indication whatever that it was this cheque for Rs. 4300/- which was attempted to be explained by that other document Ex. S. In fact , on the current account it has again the date 6th January, which speaks of sending the original bill and mentions the 'amount advanced' against the bill as Rs. 33,483/11/8. But all these documents prove that the date was 6th and not the 5th January, 1948. The only document connected with the 5th was this suspicious document marked Ex. S. Worse than all this is the admission by the plaintiff bank's Deputy Agent B.N. Mitra in his letter dated the 10th February, 1948 addressed to the Nether, lands Trading Society, Calcutta, where he solemnly says:-
'We negotiated a bill for 3360 on 6-1-48 against the above credit ......''
Now, if that is a correct statement of fact and there is no reason to doubt its accuracy, then even on that admission negotiation also was done after the 5th January, 1948. Naturally Mr. Mitter was very bitter on this whole episode and he characterised the plaintiff bank's case as not only fraudulent but also deliberate to create a document of the 5th January, 1948. If Mr. Mitter is right that there was no negotiation on the 5th January, 1948, then of course the plaintiff bank has no case whatever.
47. Mr. Mitter has also commented on some other features of the plaintiff bank's case. In the first instance, he has said that the plaintiff bank should never have entered into a transaction on the last date behind the banking hours in the manner it has done. In the second instance, Mr. Mitter commented that the plaintiff bank should have presented the documents to the Netherlands Trading Society, Calcutta, and should never have kept them in the dark in fact, he has said that the plaintiff bank apparently from this behaviour and conduct knew that the time had expired and in order to avail of a little longer time he approached the defendant bank at Amsterdam instead of its agent in Calcutta. Mr. Mitter obtained the admission. from Bhattacharjee in answer to Q. 362 that the plain tiff bank could have got the payment from Netherlands Trading Society and the only explanation which Mr. Bhattacharjee gave for not doing so was the earning of some foreign exchange, The next comment of Mr. Mitter was the readiness and willingness of the plaintiff bank to return the cheque paid by the Netherlands Trading Society and that without even a record. As will be recalled, the Netherlands Trading Society wrote a letter on the 11th February, 1948, recording the telephone conversation and asking for the return of the cheque drawn by the Netherlands Trading Society in favour of the plaintiffbank for the sum of Rs. 33,483/11/6. Strangely enough this was returned by the plaintiff bank without writing a letter and without putting it on record in what circumstances and why ithad been done. It is strange indeed that if Netherlands Trading Society had issued a cheque and had admitted the liability, then why the plaintiff bank did not sue the Netherlands Trading Society.
48. The next comment of Mr. Mitter on the plaintiffs' case is that a bank like the plaintiff as endorsee of the bills of exchange never even gave any notice of dishonour to the drawer Herbert Joseph Corporation and took no steps whatever to recover the amount from the drawer. In fact, nothing appears on record to show that the plaintiff bank gave any notice of dishonour to the sole proprietor Herbert Joseph Corporation in respect of the bills of exchange. It is strange conduct on the part of the plaintiff bank who advanced the full value of the bills of exchange by endorsement in its favour. All these considerations show that the plaintiff bank to say the least has been very badly advised throughout in respect of this transaction. As between the plaintiff bank and the defendant bank there could be no question of what the disputes over the contract was between the buyer and the seller; see Gutteridge, 2nd Edition, pages 35-36.
49. On the view we have taken it is unnecessary to deal with the English decision in J.H. Rayner and Co. Ltd. v. Hambros Bank Ltd. (1942) 2 All ER 694.
50. For these reasons we are satisfied that the suit rnust be dismissed. The appeal, therefore, must fail and is dismissed with costs. The trial Judge's order for costs is not disturbed. Although probably this cost is denied to the defendant on the ground of what the learned trial Judge thought to be un-necessary cross-examination, yet on a closer scrutiny of that cross-examination it would be possible to take a different view. But costs are a matter of discretion and we are not inclined to disturb the trial Judge's order for costs. The appeal is certified for Counsel.
51. I agree.