Decided on March 12,1984



K.S.Sidhu, J. - (1.)This petition of revision under Section 115 of the Civil P. C. by the defendant in a suit. pending before the Additional Munsif. Jaipur City, is directed against the appellate order of the Additional Civil Judge. Jaipur city, affirming the order of the Additional Munsif, whereby the latter had granted a temporary injunction in favour of the plaintiff in the suit restraining the defendant from selling the goods pledged by the plaintiff with the defendant to a third party and further mandating the defendant in effect to deliver the goods to the plaintiff at the rate of Rs. 6350/- per metric tonne.
(2.)The suit in which the extraordinary order of temporary injunction as aforementioned, was passed by the trial court and affirmed by the lower appellate court, has been filed by M/s. Bal-labhdas and Sons, hereinafter called the firm, against the State Bank of Bikaner and Jaipur, hereinafter called the Bank, for perpetual injunction restraining the Bank from selling the pledged floods to a third party, and. as the relief clause further proceeds, "from refusing to give delivery of the goods to the plaintiff at the rate of Rs. 6350/- per metric tonne including import duty and miscellaneous charges", and from committing breach of contract in any other manner, Ignoring the diversionary verbiage, snarl words and irrelevant 'facts which constitute the bulk of the 60 pages of the plaint, the material facts, as gathered from the record, are as follows. The firm applied for and obtained from the Bank a letter of credit, dated Feb. 27, 1981, for the purpose of importing prime quality CR 'steel sheets and other similar goods specified in the said letter from M/s. Mercantile Trading Co. of Hong Kong. The letter of credit issued by the Bank authorised M/s. Mercantile Trading Co. to draw on the firm bills for a sum not exceeding 11.95 lacs U. S. dollars, and the Bank undertook to honour the documents on presentation. The goods valuing 11.78,839.96 lacs U. S. dollars were shipped by the suppliers on Feb. 10, 1982. i. e. within the stipulated period of shipment. The goods were expected to be landed in India by the middle of April 1982. It appears that the firm which was originally confident of raising its own funds for retiring the documents, paying import duty and meeting other expenses for getting the delivery of the goods on landing was unable to do so. The firm therefore once again approached the Bank for help. Much against its earlier assurances in writing to the Bank that it would not be needing any cash credit facility for getting the goods cleared and obtaining their delivery, the firm wrote to the Bank on March 3. 1982. requesting for a cash credit pledge limit of Rs. 115 lacs. By its letter, dated. April 1. 1982, the Bank sanctioned an ad hoc cash credit pledge limit of Rs. 115 lacs for a period of three months from the date of the landing of the goods on the terms and conditions as specified in the said letter. The firm signed the said letter accepting ail the terms and conditions therein. The firm pledged the bills of lading and the imported goods as collateral and security for the loans granted. It also undertook to deposit Rs. 12.50 lacs in addition to the earlier deposit of Rs. 7.50 lacs, by way of margin money. The firm also agreed to deposit additional amount, over and above the agreed minimum of Rs. 20 lacs by way of margin, in the event of variation in the exchange rate. Another important condition. accepted by the firm as a part and parcel of the cash credit pledge contract, reads as under: YOU will also be required to deposit in advance with our D. N. Road Bombay branch the custom duty, auxiliary duty, ad valorem charges, warehouse charges, clearing agent's commission and all other miscellaneous charges in connection with taking delivery of the goods from Bonded Warehouse for storage with the Bank's approved clearing Agent. Thereafter the floods will be delivered to you only against full payment for ultimate sale to the actual users.
(3.)The Bank retired the documents, took delivery of the floods and arranged for their storage in the bonded were-house on April 16. 1982. Instead of paying the debt, which the firm was thus owing to the Bank, and redeeming the pledged goods, the firm began to question the very basis of the agreement of cash credit pledge limit. It addressed a letter. dated. July 14, 1982. to the Bank complaining that it could not properly negotiate the terms of the cash credit pledge agreement and that it had been compelled to sign on the dotted line because it was anxious to clear the goods without any further loss. This letter was followed by similar other letters in which the firm accused the Bank of many acts of omission and commission, causing heavy losses to the firm. Finding that these baseless allegations against the Bank were counterproductive, the firm changed its stance and requested the Bank in Oct. 1982 for the accommodation of redeeming the goods in instalments on payment at the rate of Rs. 3605/- per metric tonne. The Bank did not agree and instead, insisted on the firm offering a definite and time bound programme for repayment of the entire amount of debt along with interest due under the cash credit pledge' account. The firm did not come out with any viable proposal, thus compelling the Bank to give notice to the firm of its intention to sell the pledged goods to realise the amount due from the firm. The firm replied that it had customers in view who were willing to purchase the goods at the rate of Rs. 7500/- per metric tonne and that the Bank would be selling the goods at a lower price at its own risk. The Bank wrote back on Nov. 16. 1982. that the firm may cite firm offers in that behalf within a period of one week from the date of receipt of the said letter failing which the Bank would be at liberty to sell the goods at the best available price without any further reference to the firm. This led the firm to file the suit, out of which this revision petition has arisen, in the court of the Additional Munsif and obtain the temporary injunction from him restraining the Bank from selling the goods and mandating the Bank to deliver the goods to the firm at the rate of Rs. 635Q/- per metric tonne.

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