1 Messrs Vinmar Impex Inc., Singapore, the sellers, agreed to sell and supply 100 M.T. of High Density Polythene Powder called HOPE 565 per M.T. CIF, Calcutta on an irrevocable letter of credit being opened by the appellant in favour of respondent No.
9,25,020.80p.
In terms of the said agreement, respondent No.
I instructed them to release the said cargo upon the appellant furnishing bank guarantee for release of the goods in lieu of the original bills of lading and other documents.
Accordingly, the Allahabad Bank, at the instance of the appellant, executed four letters of indemnity, variously described as letters of guarantee or letters of indemnity or both, and each of the documents has been companyntersigned by the appellant in favour of the Shipping Company.
to enable the appellant to take delivery.
17,50,000.
1 to forward, through Bank, the original bills of lading, marine insurance policy, signed invoices etc.
The appellar applied for grant of a temporary injunction under Order XXXIX, Rule 1 of the CPC, 1908 restraining the Allahabad Bank from making any payment to the Shipping Company in terms of the letters of indemnity and also restraining respondent No.
1, the sellers, as to whether the companytract of sale had been performed.
1 were of inferior quality and number the goods companytracts for i.e. number of grade 5202 but of grade 5502, and also because they had failed to forward the original shipping documents.
The said vessel Ganges Pioneer arrived at the Calcutta Port on or about the June 5,1985 and despatched the goods companyered by the said bills of lading.
1, the sellers alleging that they were in breach in that the goods despatched by respondent No.
1 from recover ing the amount due thereunder.
The learned Judges, in the companyrse of their reasoned judgement, referred in detail to the relevant documents as also to various authorities, including the decision of this Court in United Commercial Banks case and held that the obligation of the Allahabad Bank under the letters of indemnity companyntersigned by the appellant was absolute and upon a demand being made by the Shipping Company i.e. the beneficiary, the Bank was liable to honour the same regardless of any companytroversy between the parties i.e. the appellant who is the buyer, and respondent No.
The Shipping Company having made a demand upon the Allahabad Bank to honour the letters of indemnity and the Bank having called upon the appellant to pay the amount due, the appellant brought a suit in the Original Side of the Calcutta High Court seeking to recover Rs.
After taking delivery of the goods, the appellan sold them in the market and realised the proceeds amounting to Rs.
One of the terms of the companytract as per the letter of intent dated April 29,1985 signed by both the parties pertained to the shipping mark and was to the effect Bills of lading should mention shipping mark 5202.
We agree with the reasoning and companyclusions of the learned Judges.
It appears that the parties entered into a companyrespondence due to the failure on the part of respondent No.
Pursuant thereto, at the request of the appellant, the Allahabad Bank opened a letter of credit for 56,500 valid up to June 30,1985 in favour of respondent No.
A Division Bench of the High Court by its judgement dated February 3, 1986 upheld the order of the learned Single Judge.
1 the sellers, as to whether the companytract of sale had been performed.
Since the Shipping Company was refusing to release the cargo for want of the original bills of lading and other documents, respondent No.
1 Messrs Vinmar Impex Inc., Singapore, despatched 100 M.T. HOPE Granules from on board the vessel Ganges Pioneer packed in four companytainers of 25 M.T. each companyered by four bills of lading.
P. Sen, J. The short and narrow point involved in this appeal by special leave is whether upon the principles laid down in United Commercial Bank v. Bank of India and Ors.
as damages from respondent No.
Briefly stated, the facts are that the appellant, the buyer, companyenanted to purchase and respondent No.
the Court should number interfere in a transaction between a banker and a beneficiary of a letter of guarantee or indemnity by grant of an injunction at the instance of the buyer restraining the beneficiary from enforcing the liability under the letter of indemnity executed by the banker which was absolute and upon a demand being made by the beneficiary the bank became liable to honour the same, regardless of any companytroversy between the parties i.e. the appellant who is the buyer, and respondent No.
1, the sellers.
