- (1.) This appeal is directed against an order dated 7th March, 2006 passed by the Hon'ble First Court refusing an order of injunction restraining the bank from making any payment under Letters of Credit dated 23rd November, 2004 and 29th November, 2004 and also was pleased to refuse the restraint order against the respondent Nos. 1 to 3 from demanding payment under the said Letters of Credit. The suit was filed against the defendants for a decree for perpetual injunction restraining the defendants and each of them, their servants, men, agents and assigns from making any payment under the said Letters of Credit; the suit was filed against the defendants for a decree for perpetual injunction restraining the defendants and each of them, their servants from in any way or the manner obtaining and/or seeking to obtain payment under the said Letters of Credit; a decree for perpetual injunction restraining the defendants from debiting the plaintiffs account for any amount in excess of Rs. 23.40 lakhs; declaration that the defendants are not entitled to demand any payment under the said Letters of Credit.
(2.) An ad-interim order was passed by the Court on March 23, 2005 restraining the payment under the said Letters of Credit. Subsequently, the said order was modified on 4th May, 2005 and after exchange of the affidavits the matter was finally disposed of by the Hon'ble First Court. When His Lordship was pleased to permit the respondent to obtain payment of the full amount upon furnishing a Bank Guarantee for the equivalent amount.
(3.) Facts of the case briefly are as follows:- It was agreed between the parties that the respondent No. 1 agreed to sell to the petitioner/appellant and the petitioner agreed to purchase from the respondent No. 1, 340 MT [iron and steel scrap) and 85 MT of re- rollable rail, scrap on the terms and conditions agreed upon between the parties. Admittedly, on 23rd November, 2004 and 29th November, 2004 respondent No. 29, being the banker of the petitioner issued two Letters of Credit covering the" price of the said goods. Under the said Letters of Credit, respondent No. 1 is the beneficiary and the respondent No. 3 is the advising bank. The said Letters of Credit are subject to UCP 500.;