'GULZAR AHMED, J.---This petition assails the judgment dated 3-7-2014 of the learned Division Bench of Islamabad High Court, Islamabad by which intra-court appeal filed by the petitioner was dismissed and judgment dated 7-4-2014 passed by learned Single Judge, dismissing the writ petition filed by the petitioner was maintained.
2. Short facts of the matter are that the petitioner claims to have entered into an agreement dated 9-1-2013 with Messrs Al-Waris Auto Spare Parts TR. LLC, Dubai for import of 2000 used sprinkle lorries in the sum of US$ 12 million to be paid by the confirmed irrevocable letters of credit opened by the importer in favour of the exporter. This agreement is said to have been registered on 15-1-2013 with Meezan Bank Ltd. Cloth Market Branch, Karachi. Pro forma invoice dated 11-1-2013 was also issued by the exporter for a total amount of US$ 12 million. On 18-1-2013 the petitioner made an application to Meezan Bank Ltd. For opening of sight LC of US$ 200,000 for import of sprinkle lorries. On 23-1- 2013 the LC for an amount of US$ 200,000 against 110% cash margin was opened in favour of the exporter for import of sprinkle lorries as per pro forma invoice dated 11-1-2013 and agreement dated 9-1-2013. Number of consignments of sprinkle lorries were received but subsequently the Customs Authorities stopped their clearance for the reason that the import of these sprinkle lorries was being made in contravention of Import Policy Order, 2013 (IPO-2013) by which the import of sprinkle lorries more than five years old were banned but proviso to Para 4 of said IPO-2013 made exception that the amendment brought in this order from time to time shall not be applicable to such imports where bills of lading or letters of credit were issued or established prior to issuance of amending order. The Customs Authorities referred the matter to Federal Board of Revenue, who in turn referred the matter to the Commerce Division, Government of Pakistan, where it was noted that the petitioner is not entitled to the benefit of proviso to Para 4 of said IPO-2013.
3. It was contended by learned Advocate Supreme Court for the petitioner that the petitioner by entering into an agreement dated 9-1-2013 and obtaining of pro forma invoice dated 11-1-2013 and opening of LC dated 23-1-2013 has acquired a vested right for import of whole lot of 2000 sprinkle lorries as per the proviso to para 4 of IPO-2013 and that action of Customs Authorities of not releasing the imported consignment was against the mandate of law.
4. On the other hand the learned Advocate Supreme Court appearing for the, respondents Nos. 2 to 4 has vehemently contended that no vested right has accrued to the petitioner inasmuch as there was no LC opened by the petitioner in the sum of US$ 12 million for the import of 2000 sprinkle lorries as per agreement and pro forma invoice, rather the letters of credit opened by the petitioner were of different amounts and of different dates including dates after the IPO-2013 has come into effect.
5. The submissions of learned counsel for the parties have been considered and record has been perused by us.
6. The facts of the matter are not in dispute between the parties and it is also admitted that import of sprinkler lorries more than five years old were banned by the IPO-2013. The only question that is posed before us is as to what meaning is to be given to proviso to Para 4 of the IPO-2013. Para 4 of IPO-2013 is reproduced as follows:- "4. Import of Goods.---Import of all goods is allowed from worldwide sources unless otherwise elsewhere specified to be banned, prohibited or restricted in this Order: Provided that the amendments brought in this Order from time to time shall not be applicable to such imports where Bill of Lading (B/L) or Letters of Credit (L/C) were issued or established prior to the issuance of amending Order."
7. The perusal of above provision, more particularly its proviso, which is in contention between the parties;, makes exception to the application of this IPO-2013 in respect of imports where Bill of Lading or Letters of Credit were issued or established prior to issuance of amending order. Bill of lading is not in contention. The question is about issuance or establishment of letters of credit by the petitioner prior to issuance of amending order.
8. Before we dilate upon the question of LC, it may be worthwhile and rather essential to mention here that the exception provision does not mention the document like agreement between the importer and exporter nor does it refer to pro forma invoice of goods to be imported. For interpretation of this provision these two documents apparently have no relevance. Article 4 of the Uniform Customs and Practice for Documentary Credits, 2007 specifically provides that a credit by its nature is a separate transaction from the sale or other contract on which it may be based.
Banks are in no way concerned with or bound by such contract, even if any reference whatsoever to it is included in the credit. It is also emphasized that issuing bank should discourage any attempt by the applicant to include as an integral part of credit, copies of the underlying contract, pro forma invoice and the like. It is also provided in the Article .5 that the bank deals with documents and not with goods, services or performance to which documents may relate. Having said so, we would still delve in to understand the facts more clearly and mention clauses 6 and 6(c) of the agreement between the parties, which are as follows:--
(6) Price and payment: The price for each individual transaction shall be fixed as per price schedule given below, through negotiations between Party B and the buyer, and subject to Party A's final confirmation. Payment shall be made by confirmed, irrevocable L/C opened by the buyer in favour of Party A, which shall reach Party A fifteen days before the date of shipment.
6C. Mode and Schedule of Payment: The payment shall be made to. Party A in US$ through banking channel for each B/L and invoice of shipment through Meezan Bank, Al-Hilal Society (Old Sabzi Mandi), University Road, Karachi Pakistan to LLC Emirates NBD account No.1014013371301 on the following terms:-
(i) - (vi) .................................................................
9. It is apparent from the reading of clause 6 of this agreement that the whole of agreement comprises of more than one transactions and its payment is to be effected by confirmed irrevocable LC opened by the petitioner in favour of exporter to be received by the importer fifteen days before the shipment. It also transpires from clause 6(c) that petitioner is required to make payment to the importer in US$ through bank channel for each bill of lading and invoice of shipment through petitioner's bank to the bank of exporter. These stipulations in the agreement between the parties, itself shows that though the agreement is for the purchase of 2000 sprinkle lorries for a total consideration of US$12 million but these 2000 sprinkle lorries were not to be shipped in one consignment nor the whole of the consideration amounting to US$ 12 million was to be paid in one go; rather the shipment of sprinkle lorries was to be made in different consignments and each consignment was to be treated as individual transaction for which a separate bill of lading and invoice of shipment was to be made and the irrevocable LC was to be received fifteen days in advance of the shipment. These facts arefurther fortified by the conduct of petitioner himself when for the very first transaction, he through his letter dated 18-1-2013 requested the Meezan Bank to open a sight LC in the sum of US$ 200,000 for import of sprinkle lorries against 110% cash margin. Meezan Bank as it appears from the record per instructions of the petitioner has issued or established the following LCs:-
(i) 23-1-2013 in the sum of US$ 200,000
(ii) 4-2-2013 in the sum of US$ 400,000
(iii) 26-4-2013 in the sum of US$ 638000
(iv) 26-4-2013 in the sum of US$ 238000
(v) 22-5-2013 in the sum of US$ 738000
(vi) 30-5-2013 in the sum of US$ 826000
(vii) 13-6-2013 in the sum of US$ 1,042,000
(viii) 5-7-2013 in the sum of US$ 1,342,000
(ix) 24-7-2013 in the sum of US$ 1,544,000
(x) 26-7-2013 in the sum of US$ 60,000
10. It will be seen that LC dated 23-1-2013 for US$ 200,000 and LC dated 4-2-2013 for US$ 400,000 were issued or established by Meezan Bank Ltd. Prior to coming into effect of IPO-2013 whereas all other LCs were issued or established after IPO-2013 came into effect. Whether petitioner can avail benefit of the proviso to Para 4 of IPO-2013 for the LCs issued or established after IPO-2013 came into effect, the obvious answer to it will be in negative. The reason for this conclusion is that proviso to Para 4 of the IPO-2013 in no uncertain term only excluded those LCs which were issued or established prior to the issuance of amending order. An irrevocable LC by its very nature creates contractual relationship between the issuing bank and the importer as defined in the terms contained in the LC and as between the exporter and the advising bank which renders the advising bank directly liable to the exporter to pay the sum named in the LC on presentation of the documents as specified in the LC itself By issuing or establishing the LC, the issuing bank takes upon itself obligation to remit the sum specified in the LC to the advising bank, therefore LC cannot be assumed to be in the sum which is beyond the amount actually specified in the LC itself.
11. As noted above the LC dated 23-1-2013 was in the sum of US$ 200,000, the required documents for honouring this LC are mentioned in Para 46A. Sub-Para 1 provides that "beneficiary's manually signed commercial invoices in octuplicate not exceeding this documentary credit amount showing HS Code 8705.9000 above documentary credit number and stating goods are of Japan origin."
Thus, from this very express term of this LC, it was for the amount not exceeding US$ 200,000 and this was so agreed between the issuing bank and the importer which in term created contractual obligation between the advising bank and the exporter for honouring the LC on presentation of specified documents mentioned in the LC. Nothing beyond what is mentioned can be read in the LC nor anything could be subtracted from it. All subsequent LCs were also issued and established in the similar mode. Thus, on bare perusal of the record, read with proviso to Para 4 of IPO-2013, it is clear that except for two LCs one dated 23-1-2013 and the other dated 4-2-2013, all other LCs were issued and established after the IPO-2013 has, come into effect, which banned the import of sprinkle lorries more than five years old and these LCs do not qualify to be the LCs issued or established before coming into force of the said order.
12. Meezan Bank Ltd. Through its letter dated 31-5-2013 addressed to the Deputy Collector, Model Customs Collectorate, Hyderabad has tried to explain the nature of dealing between the petitioner and bank but has erroneously mentioned that the LC dated 23-1-2013 in the sum of US$ 200,000 will be amended from time to time in terms of the amount as per pro forma invoice dated 11-1-2013 and the agreement dated 21-1-2013 and that LC will remain that of 23-1-2013 with its expiry on 21-1- 2014. If we read this letter closely, it will only mean that there will be a separate LC issued or established in terms of the amount for which 'It is required to be issued or established as per instructions of the petitioner and that this will keep on going until pro forma invoice and agreement between the parties is exhausted for which terminal date is fixed as 21-1-2014. The amendment in the LC is confined to the terms and conditions of that very LC that is of 23-1-2013 and the new LCs issued or established cannot be considered to be an amendment in the LC dated 23-1-2013.
Nothing more than this can be subscribed from said letter of Meezan Bank. We may also note that the transaction under LC dated 23-1-2013 as specified in its terms and conditions was completed and exhausted and this LC did not remain alive to incorporate amendments to include further transactions in it. The mandate of law does not, in our view, provide for such situation nor any ,law in this respect was shown to us by the learned Advocate Supreme Court of the petitioner.
13. Thus we are of the clear view that the petitioner could not have obtained the benefit of proviso to Para 4 of the IPO-2013 in respect of LCs which were issued or established after coming into force of the said order for the import of sprinkle lorries. We, therefore, find no merit in this petition. The same is therefore, dismissed and leave refused.