JAPSON INTERNATIONAL Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) This judgment shall disclose of Civil Revisions Nos. 663 and 664 of 1987. Both these revision petitions arise out of common order dt. 30th Oct., 1986 passed by the learned District Judge, Ambala. The facts of both the cases are similar and the points of law involved are identical. Therefore, it is convenient to dispose of both the petitions together by this judgment. The reference to the parties and the facts besides documents shall, unless otherwise specifically mentioned, be, however, made from those giving rise to Civil Revision No. 664 of 1987.

(2.) M/s. Japson International, Ambala, defendant 1 in the suit (for short 'the vendor') is constituted of four partners impleaded as defendants 2 to 5 in the suit. They entered into a contract for sale by way of export of scientific goods with Riyadh House Establishment, Riyadh, Saudi Arabia (for short 'the buyers'). The buyers opened a letter of credit dt. 6-8-1980 through the National Commercial Bank, Riyadh (for short 'the Riyadh Bank') in favour of the vendor. It was sent to the Overseas Branch of the State Bank of India at Bombay (for short 'the plaintiff Bank'). The said Branch of the plaintiff Bank sent the letter of credit to its Branch situated at Mall Road, Ambala Cantt for its onwards transmission to the vendor which was the beneficiary under the letter of credit. The vendor opened a current account with the plaintiff Bank at its aforesaid Branch at Ambala Cantt on 5-9-1980. It sent its first consignment of goods vide invoice dt. 12-10-1980 and the bill of lading dt. 31-1-1980 representing C.I.F. value of Rs. 1,63,864.20 and drew a bill of exchange which was treated by the plaintiff Bank as Indian Demand Draft No. 7/109. When these documents were handed over by the vendor along with its letter of request to negotiate them and credit the proceeds to its current account, the plaintiff Bank informed the vendor that there were various discrepancies in the documents handed over to the Bank. Their particulars did not conform to those given in the letter of credit.

(3.) The vendor thereupon made an endorsement on its letter of request for negotiation dt. 13-11-1980 to the following effect :