Sabyasachi Mukharji, J. - (1.) This appeal arises out of an order passed and judgment delivered by Mrs. Justice Padma Khastgir on the 7th April, 1980. Before we refer to the judgment and points involved in the appeal, it would be necessary to refer to certain facts. On or about 1st December, 1978, there was a contract of sale, being contract No. BSA 297/-298/78 between the plaintiff, as the buyer and the defendant No. 1, the seller, which is the appellant. The suit was filed by the plaintiff, the buyer. There were four defendants in this suit. The defendant No. 1 is the seller, the defendant No. 2 is the United Commercial Bank, Calcutta, which is the paying Bank. The defendant No. 3 is the Insurance Company and defendant No. 4 is the European Asian Bank, which was the banker of the defendant No. 1, the seller. As mentioned hereinbefore, the contract was for sale. The clause of the contract gives requirements as to certificates. The date of delivery, from time to time, was extended and the final extended date of delivery was July/August, 1978. The contract was in respect of sale of certain refined bleached Deodorised Palm Oil. The terms and conditions of the sale are set out in para 6 of the plaint. Letters of Credit, being Nos. 162764 and 162765 were opened with the United Commercial Bank, Calcutta on the 24th August, 1978 and thereafter, the seller, the first defendant was advised of the same. At pages 28-29 of the Paper Book, there was a document, which was an internal correspondence being the telex between the United Commercial Bank, Calcutta and its branch at Singapore. We shall presently refer to the said document. It is the plaintiff's version of the letter of credit. It will be material, in view of the controversy raised between the parties, to set out the relevant portion of the said document. The said document contains, inter alia, the following statements : "Please telex to telex TS 21682 A/B UCO Bank Singapore Message relayed on behalf of UCO Bank Calcutta we repeal our cable of date with same message and test please avoid duplication. ..... Refer to our Telex 22nd instant advising you opening credit 162764 and 162765 for U.S. Dollers 161449.86 CIF Calcutta each wherein we advised air mailing details. AIR mail copy not despatched. Stop Full Text cable now being called. Please avoid duplication. Advice beneficiary B. S. Aujla Co. Pvt. Ltd., 8 Lorong Malayu, Singapore 14 opened credits 162764 and 162765 U. S. $ 161449.86 each available by drafts drawn on 90 days from B/Lading date on Kaluram Mahadeo Prosad 1-A, Burman Street. Calcutta-7 without recourse to drawer for 100 % invoice value of Approx. 200 tonnes each of refined bleached Deodorised Palm Oil at the rate U. S. Dollar 825 per metric tonne per contract No. BSA/197/78 and BSA/298/78 both date 1-12-1978 in one or more shipment from Singapore to Calcutta import is being covered under import Licenses No. P/F2028484/C/XY and P/F/ 2028485/C/XX both dated 20-8-1979 shipment by Pakistani Flag vessel not allowed Stop Following documents are to be submitted to negotiating bank within 15 days from B/Lading date 6 copies invoices certifying that goods are Singapore origin Stop Full Set of clean shipped on board bill of Lading signed by Master or S. S. Agent Market Freight prepaid unto order of United Commercial Bank 10, Brabourne Road, Calcutta-1, B/Lading notify Kaluram Mahadeo Prosad, 1-A, Burman Street, Calcutta-7 Stop Forwarding Agent receipt not acceptable policies or certificate covering marine and war risks in the currency of the credit in negotiable form covering the full C. I. F. Invoice amount plus a margin of not less than 10% W. A. including customary institute warehouse to warehouse clause war risk to be covered in conformity with current institute clause claims payable at port of destination Stop Bill must be marked drawn under United Commercial Bank 10, Bra-bourne Road, Calcutta credits 162764 and 162765 and should be enforced payable at current selling rate of exchange on USA with charges and interest at current rate from the date hereof to approximate arrival to date of return remittance documents to include certificate of quality with following description in colour while 100% solid with grains FFA O.25 % MAX. M & I O.I% melting point capillary slip method between 36 and 37 Centigrade Max. packing list to describe as follows: Packed in best quality tins new in uniform weight contg. 16.5 Kg. net each New Tin duly wrapped in a Carton and 60 tins in Cartons duly palletised in wooden pallets suitable to face transit hazards Stop Certificate of origin to be counter-signed by any recognised Chamber of Commerce in Singapore in specific form Stop from any independent Surveyor/B/Lading must be dated net later than 16-9-79 and negotiation within 14-12-79. Documents should show amount of freight paid payment will be made to negotiating bank on 90 days from B/Lading free of interest against submission of drafts by shippers as stated above. For payment effected under these credits the negotiating bank is to reimburse themselves on our account with Bankers Trust Company. New York. These are operative credits. No Air Mail confirmation will follow". It will appear, as mentioned hereinbefore, the requirement of the quality mentioned was F. F. A. O. 25% Max. This requirement, according to the present appellant, was not communicated to the first defendant. On the other hand, the requirement advised by Singapore Branch of United Commercial Bank in the letter of credit which appears at pages 127-129 of the Paper Book indicated that the requirement was "F. A. O. O. 25 Max". It may be instructive to refer to the relevant portion of the said communication, which reads as follows : "Without responsibility or obligation on our part we beg to advise having received a cable dated 28-8-1979 from United Commercial Bank, Calcutta reading in substance as follows: ...... 162765 and should be enforced payable at current selling rate of exchange on USA with charges and interest at current rate from the date hereof to approximate arrival to date of return remittance documents to include certificate of quality with following description in colour while 100-0/0 solid with grains F. A. O. 25-0/0 Max M and 1 : 0.1-0/0 Melting point: Capillary slip method between 36 degree and 37 degree centigrade Max Packing list to describe as follows : Packed in best quality Tins New in uniform weight contg. 16.5 Kg. net each New Tin duly wrapped in a Carton and 60 tins in Cartons duly palletised in wooden pallets suitable to face transit hazards Stop. Certificate of Origin to be counter-signed by any recognised Chamber of Commerce in Singapore in specific form Stop From any independent Surveyor B/Lading must be dated not later than 15-9-79 and Negotiation within 14-12-79 documents should show amount of freight paid payment will be made to negotiation Bank on 90 days from B/Lading free of interest against submission of drafts by shippers as stated above for payment effected under these credits the negotiating bank is to reimburse themselves on our account with Bankers Trust Company, New York. These are operative credits. No Air Mail confirmation will follow UCO Bank. Calcutta." The said advice, according to the appellant, is admitted by the United Commercial Bank as would be evident from its letter dated 6th April, 1980. This letter was addressed by the United Commercial Bank to the plaintiff with enclosures being the letter of credit as advised by United Commercial Bank to defendant No. 1. This letter appears at page 84 of the Paper Book. It would be necessary also, in view of the controversy, to refer to the relevant portion of the said letter. The said letter, as we have mentioned before, is addressed to the plaintiff and reads as follows : "Letter of Credit No. 162764 for US $161.449.86 opened by United Commercial Bank, Calcutta. Without responsibility or obligation on our part, we beg to advise having received a cable dated 24-8-1979 from United Commrcial Bank, Calcutta reading in substance as follows : 162765 and should be enforced payable at current selling rate of exchange on USA with charges and interest current date from the date hereof to approximate arrival to date of return remittance documents to include certificate of quality with following description in colour while 100-0 solid with grains - F. A. O. 25-0/0 Max M and 1 : 0.1-0/0 Melting Point : Capillary slip method between 36 degree and 37 degree centigrade Max Packing list to describe as follows : Packed in best quality tins new in uniform weight contg. 16 Kg. net each new tin duly wrapped in a carton. And 60 tins in cartons duly palletised in wooden pallets suitable to face transit hazards Stop Certificate of Origin to he counter-signed by any recognised Chamber of Commerce in Singapore in specific form Stop From any independent Surveyor B/ Lading must be dated not latter than 15-9-79 and Negotiation within 14-12-79 Documents should show amount of freight paid payment of interest against submission of draft by Shipper as stated above for payment effected under these credits the negotiating Bank is to reimburse themselves on our account with Bankers Trust Company New York. These are operative credits. No Air Mail confirmation will follow. UCO Bank, Calcutta," The document, according to the appellant, at page 84 is relevant. "According to the said letter, according to the appellant, the requirement was F. A. O. O.25% Max. and not I . F. A. O.25. On the 29th Aug. 1979. the letters of credit were amended and their value was reduced to 1,60,153,56 dollars. We are not concerned with this aspect of the matter. On the 3rd Aug., 1979, there was a further amendment specifying that the certificate of quality should be given by an independent Surveyor. It has been emphasised on behalf of the appellant and it is important to note that originally the letter of credit provided that the quality certificate should be issued by 'named agency'. The said letters arc in the Paper Book. On the 31st Aug., 1979, certain quality certificate was alleged to have been given. On the 4th Sept., 1979 the advice was received of the United Commercial Bank. Singapore by the first defendant regarding the amendment of letter of credit. On the 5th Sept., 1979, the documents were negotiated by the European-Asian Bank. Singapore, which is defendant No. 4 herein. On the 6th Sept., 1979 it is stated that there were certain reports published in the Economic Times about the sinking of certain vessels which were supposed to carry the goods covered under the said letter of credit. There were also certain news item on the 19th Sept., 1979 published in the Weekly Blitz in this regard. On the 25th Sept., 1979, a letter was written on behalf of the plaintiff to the Union Ocean Shipping Pvt. Ltd. It was emphasised on behalf of the plaintiff, as would be evident from this letter, that the plaintiff had decided to prefer their claim on the Insurance Company and therefore various particulars mentioned in the said letter were sought for. This letter is at page 64 of the Paper Book. It is not necessary for our present controversy to refer to the said letter, in detail. On the 3rd Oct., 1979, the United Commercial Bank wrote to the European Asian Bank, Singapore stating that the quality certificate did not fulfil the requirements of the letter of credit and also pointing out that regarding the packing nothing had been mentioned by the Surveyors in respect of the materials used in packing. It is important to note that on the 3rd Oct., 1979 the United Commercial Bank raised its objection to the shipping documents. It is also important to note from the document at page 90 of the Paper Book that on the 10th Oct., 1979. the United Commercial Bank. Calcutta had regretted its delay in communicating its objection to the shipping documents. On the 9th Oct., 1979 the Insurance Company wrote to the plaintiff stating that several vessels had sunk under suspicious circumstances. This letter is important because certain allegations on account of fraud seem to have been built up on the basis of the allegations made in the said letter. In the said letter dated 9th Oct., 1979, which is at page 34 of the Paper Book, the Divisional Manager of the United India Insurance Co. Ltd. wrote to M/s. Kaluram Mahadeo Prosad. respondent No. 1 as follows : "We are in receipt of your letter No. CA/6478/78-79 of the 25th ultimo in the above connection and note your advices therein. We understand that of late of several vessels on the voyage from Malaysia and Singapore Ports to India have been reported sunk under suspicious circumstances. These casualties have been shrouded in mysteries as to the unseaworthiness of the vessels, cargo not being loaded on the vessels even though bills of lading were issued, cargos being off loaded at some other ports before sinking." On the next date, the plaintiff informed the first defendant of the letter dated 9th Oct., 1979 of the Insurance Company and also about the reply to the said letter. The United Commercial Bank, Calcutta sent a telex message to the European Asian Bank, Singapore, regretting the delay in sending the communication of the discrepancies pointed out by the plaintiff. The European Asian Bank. Singapore, sent a telex message on the 9th Oct., 1979 to United Commercial Bank, Calcutta stating that since one month had elapsed in informing the discrepancies, the objections of the United Commercial Bank, Calcutta to the shipping documents were unacceptable. Reference was made to the relevant provisions of the Uniform Custom & Practice of the Documentary Credits Act, to which we shall have later occasion to refer. On the 18th Oct., 1979, the plaintiff got by registered post the memorandum from the United Commercial Bank together with two sets of the first bill of exchange dated 31st Aug., 1979 under the letters of credit in question. It is important to note that the respondent did not admit the receipt of this first bill of exchange. On the 19th Oct., 1979, the plaintiff wrote to the United Commercial Bank that the Bank did not send and the plaintiff did not receive the Bank's memorandum dated 21st Sept., 1979 together with the relevant documents. The plaintiff contended that the same were received by it only on the 18th Oct., 1979 after the plaintiff's letter dated 17th Oct., 1979 which appears at page 39 of the Paper Book. On the 10th Nov., 1979, a letter was written to the plaintiff by one Prof. M. M. Chakrabarty of the University of Calcutta regarding the meaning of 'F. F. A.' and 'F. A.'. It may be relevant to refer to the relevant portion of the said letter, which appears at page 119 of the Paper Book. Prof. Chakrabarty wrote inter alia, as follows: "(1) The term 'Free Fatty Acidity" according to definition means percentage by weight of fatty acids of specified molecular weight according to the type of oil or fat under investigation. (2) The term 'F. A.' or 'Free acidity' is not clear as it may include any type of acidity either derived from fat i. e. fatty acid or even mineral acids which may be adventitiously present in a fat or oil sample. Under these circumstances the analytical report giving figure as 'F. A.' will not mean the same thing as 'F. F. A.' or free fatty acidity." On the 5th Oct., 1980, a letter was received by the plaintiff from the Central Bureau of Investigation. As some point of fraud was made out, based on certain letter which is at page 110, it may be instructive to refer to the relevant portions of the said letter. The said letter, inter alia, stated as follows: "During the course of investigation of the abovenoted case, it has been learnt that M/s. Kaluram Mahadeo Prosad had entered into an agreement contract with M/s. B. S. Aujla & Co. of Singapore in the middle of 1979, for the import of about 400 MT of Palm Oil. Following documents relating to said transaction may be handed over to me since the same are very urgently required by us for the purposes of investigation. 1. Contract/agreement between KMP and B. S. Aujla & Co.
(2.) Letter of Credit issued by UCO Bank, Calcutta.
(3.) Cover-note and insurance policy.;