- (1.) This appeal by Special Leave arises from the judgment of the Division Bench of the Bombay High Court made on October 30-31, 1979 in Appeal No. 163/71.
(2.) The first respondent-Manganese Ore (India) Ltd. laid the suit against the appellant and M/s. Emmenor Export Traders, the first defendant to recover the suit amount in the sum of Rs. 1,69,000/- and odd. The trail Court in Special Suit No. 91/69 by judgment and decree dated April 30, 1971 decree a sum of Rs. 1,66, 191.10 as against the first defendant. On appeal by the first respondent, the High Court reversed the decree as against the appellant and made the appellant liable to pay over the same. When the leave was granted by this Court, the appellant was directed to deposit the decretal amount and the first respondent was given liberty to withdraw the amount on furnishing adequate security to the satisfaction of the Registrar of the High Court.
(3.) The question in this case is:whether the appellant is liable to honour the letters of credit entered into between the appellant and M/s. Emmenor Export Traders The admitted position is that under the letters of credit a conditional contract was entered into between the appellant and the first defendant. The most important clause relating thereto are as under: "Clauses 1(i) and 1(iii)(b), Clause 1(i) provides in respect of the documents for negotiations. Firstly, it is the sellers signed commercial invoice in quadruplicate based on the weight, sampling, analysis and moisture determined at the time of shipment, valuing the one at the ratio of 17 U.S. dollars converted into @ Rs. 4.75 to one U.S. dollar per dry metric tonne of 1,000/- Kg. net dry weight, F.O.B. Vishakhapattanam, on the basis of 40 per cent. Manganese with the pro rata scale for each unit of Manganese content above or below 40 per cent down to the minimum of 39 percent. The clause 1(iii)(b) speaks about the certificate in triplicate from M/s. R. G. Briggs and Co. Private Ltd. of sampling, assaying and moisture, determined at the port of shipment showing the material to conform to the following contracted qualities. (B) hard lumpy, Indian Low grade Manganese Ore having the following chemical analysis at 105 degrees C. minimum 39 per cent (F.E.) Iron maximum 8.25 per cent SIO-2 maximum 23.00 per cent. Phosphorus minimum 0.23 per cent. (All approximately)." ;