' In this suit for declaration, injunction and damages to the tune of $.1,87,1111- by this CMA plaintiff- company seeks an order to restrain the encashment of the Letters of Credit bearing Nos. IFIC/KAR 0249/U/96, IFIC/KAR/0291/U/96, IFIC/KAR/0250/U/96 and IFIC/KAR/0300/U/96 by prohibiting the defendant No,1, its agents, etc. From seeking to encash the Letters of Credit or recovering the amount mentioned therein directly or indireclty from the plaintiff and to restrain defendant No,2 from making any payment under the abovementioned Letters of Credit to the defendant No,1 directly or indirectly. Alternatively plaintiff seeks an order for attachment before judgment in respect of the aforementioned Letters of Credit.
2. Briefly stated plaintiff's case is that it is engaged in the import, sale and distribution of various electrical appliances including T.V. Sets of Chinese origin and they sell these goods under the Brand name "Electra". Defendant No,1 is a Chinese company incorporated in People's Republic of China and carrying on business of sale and marketing of electrical goods including T.V. Sets. The plaintiffs on the basis of past experience and trust acting in good faith and bona fide belief placed an order with defendant No,1 for the supply of 2,450 sets of black and White 14" T.V. Sets of different models. The agreements were entered into between the parties whereupon plaintiff arranged payment by opening two Letters of Credit on the Bank of China through defendant No,2 as establishing Bank. The date of maturity in respect of first two L/Cs. Is 25-1-1997, in respect of third L/C it is 25-2-1997 while in respect of the last L/C it is 27-2-1997. On arrival of consignments of T.V.
Sets in Pakistan, plaintiff transported such sets to various parts of country which on opening were found to be highly defective and not in working order. Many sets were either short of necessary components and a large number of sets contained defective parts whereupon plaintiff made several complaints in writing to defendant No,1 to ensure that products should be of very good quality and components must conform to A' quality. In reply to such complaints, defendant No,1 apologized for the trouble and agreed to replace the defective parts on being re-exported to China. This defendant also agreed to compensate the plaintiff by way of labour charges and transport which in the estimation of the plaintiff is too ridiculous and not proportionate with the cost of labour, replacement and transport. It is grievance of the plaintiff that by supplying defective goods, the defendant No,1 committed a patent fraud and mischief and caused not only monetary loss to the plaintiff-company but also loss of reputation, goodwill and honour in the Pakistan market for which it is entitled to compensation with interest at 18% per annum. Plaintiff has claimed US $.19,611 as compensation for cost, expenditure and financial charges incurred on defective consignment, US $.1,17,500 as loss of profit, bad debts and loss of market' and US $.50,000 for mental agony, torture, loss of goodwill and reputation.
3. Aforesaid C.M.A. Came up for hearing before my learned brother Syed Deedar Hussain Shah, J.
26-1-1997 when he ordered notice to the defendants but in the meantime restrained the defendant No,2 from making payment to the Foreign Bank under the Letters of Credit.
4. Both the defendants have filed separate counter-affidavits. Precisely it is the case of defendant No,1 through its representative in Pakistan that there was neither any binding agreement between the parties as alleged nor there was any agreement that the defendant No,1 would only sell and supply standard quality products free from all defects which would meet the recognised marketing standard. Defendant No'.1 is not a manufacturer of the said Television sets and therefore agreed to supply the same in the condition as they are received from the manufacturer and produced according to Chinese standard. While this defendant admitted the supply of Television sets, the agreement to supply is qualified by agitating that the defendant No,1 had never agreed that such sets will be free of defects. According to this defendant there was neither any guarantee from the manufacturer of the Television sets nor from the defendant No,1 for the said defects and for replacing the defects in Television sets. It is normal practice of importers including the plaintiff to ensure that the Television sets supplied in the market are in marketable condition and for this purpose pre-sale test is carried out by importeRs, The plaintiff is following this practice since 1989 and this exercise is mainly done to eliminate the chance of .Any poor quality assembly or misbehaving of the electronic component or guarantees from the serial number of the sets are marked during pre-sale test. Defendant No,1 however admitted certain defects in 350 sets of Model ED-1405 and 400 sets of Model ED-1403. All other allegations including the right of the plaintiff to restrain encashment of L/Cs is seriously disputed.
5. Defendant No,2 which is a negotiating Investment Bank in Pakistan, in its counter-affidavit explained that there was discrepancy in the Letters of Credit with regard to the alleged defects in the T.V. Sets and this defendant as a bank which established the L/Cs is not concerned with the allegations of defects. At any rate, plaintiff is not entitled to any relief against this defendant and payments under the L/Cs cannot be legally stopped. According to this defendant Reimbursement Bank was American Express, New York and earlier they had sent a "pre-debit advice" to this defendant that the debiting will be carried out. According to the defendant all Letters of Credit by their nature are irrevocable which have to be honoured as per International practice failing which confidence in the Banks will be shattered for the Banks establishing L/Cs are not concerned with the dispute between the buyers and sellers or exporters and importeRs, It is pointed out that interim injunction order was served on this defendant on 26-1-1997 and the same afternoon they sent a Fax message to M/s. American Express, New York stopping payment but the payment had already been made in respect of one L/C whereas payment in respect of remaining three L/Cs was stopped as a mark of respect to this Court.
6. At the hearing counsel for the plaintiff vehemently contended that in concluded contract where the exporter, i,e, defendant No,1 committed acts of fraud and injustice notwithstanding the circumstance that the L/Cs are established between two. Banks and the proceeds thereof are payable on production of shipping documents, the plaintiff is entitled to an injunction at least against the defendant No,1 not to seek encashment thereof. Learned counsel referred to Joint Inspection Report carried out by the parties at Multan on 9th and 10th December, 1996 at pages 87 to 91 in the second part of the file placed on record by defendant No,1 itself which reflects the defects in the T.V. Sets in respect of various components ranging from 2-1/2 % to 100 % to show that defendant No,1 acted dishonestly and mala fide in exporting defective quality, electrical goods to Pakistan in complete disregard of the business practice and violation of the contract of sale.
Learned counsel also made a mention of the compensation offered by defendant No,1 at the rates mentioned in two sheets which according to the plaintiffs are just an eye-wash and ridiculously on lower side.
7. Adverting to the contention advanced on behalf of the plaintiff that there was a concluded contract between the parties for the sale of goods within the meaning of section 5 of the Sale of Goods Act which even recognizes an oral contract or a contract partly written and partly oral and which may even be implied from the conduct of the parties, it may be observed section 16-A of the aforesaid Act postulates an obligation on the part of the vendor to inform the vendee of any defect in the goods sold. The fact of the matter is that in law Letters of Credit are invariably irrevocable in nature and established in order to ensure the payment of the goods sold to a vendor without any reference to the buyer. In effect and essentially it is a contract between two banks one of them issuing the Letters of Credit on the other Bank authorising the release of payment on production of appropriate documents evidencing to shipment of goods by the seller without any reference to the buyer. Such contracts in most of the cases are of International character and in the absence of any violation of the terms of Letters of Credit or for the breach of the contract on the part of a vendor if the encashment of such negotiable instruments is restrained it may create serious complications, hardships and anomalies in the International trade. Besides an injunction to restrain the encashment of a Letter of Credit may possibly shatter the confidence of the traders in the International Banking System and practice which might collapse if such transactions are too frequently interfered with by process of law through the intervention of the Courts. Needless to observe the only exception to the rule that I have been able to discern is an act of fraud, mischief or injustice in relation to the documents of shipment evidencing the shipment of goods to the knowledge of the Bank. In the circumstances of the present case, it would appear that the fraud, mischief and breach of contract is purportedly attributed to the act of the vendor rather than the Bank at the opening end or the Bank at the receiving end. There is no gainsaying that the Letter of Credit is primarily a contract between two Banks and the encashment of the sale proceeds has hardly any nexus with the dispute between an exporter and an importer or for that matter between a vendor and a endee. To my mind, obligations arising under a Letter of Credit lay down an absolute and unconditional obligation on the Bank to pay irrespective of any dispute between the parties on the question whether they had performed their part of the contract or there was a breach in the discharge of their respective obligations. It is well settled that the Bank guarantees, performance bonds and Letter' of Credits are the species of bankers' commercial credit variously described as a new type of commercial credit" or a "new business transaction" or a "new creatures".
8. In Edward Owen Engineering Company Ltd. v. Barclays Banks International Ltd. (1978 QB 159; (1978) 1 All England Report 976) Lord Denning MR referring to a case from New York Supreme Court decided in 1941 observed as follows: "It is well-established that a letter of credit is independent of the primary contract of sale between the buyer and the seller. The issuing oank agrees to pay upon presentation of documents, not goods. This rule is necessary to preserve the efficiency of the letter of credit as an instrument for the financing of trade."
9. Dealing with the act of fraud on the part of the seller in the reported case, it was held that: ..On the present motion, it must be assumed that the seller has intentionally failed to ship any goods ordered by the buyer. In such a situation where the seller's fraud has been called to the Bank's attention before the drafts and documents have been presented for payment, the principle of the independence of the Bank's obligation under the Letter of Credit should not be extended to protect the unscrupulous seller."
' That case shows that there is an exception to the strict rule; that the Bank ought not to pay under credit if it knows that the documents are forged or that the request for payment is made fraudulently in circumstances when there is no right to payment.
' Lord Justice Browne, LJ. At page 984 held as under: "That exception is that where the documents under the credit are presented by the beneficiary himself and the Bank knows when the documents are presented that they are forged or fraudulent, the Bank is entitled to refuse payment."
' Lord Justice Geofrey Lane expressed his view at page 986 as under: "The only circumstances which would justify the Bank not complying with a demand made under that agreement would be those which would exonerate them under similar circumstances if they had entered into a letter of credit, and that is this, if it had been clear and obvious to the Bank that the buyers had been guilty of fraud.''
10. In Discount Records Ltd. v. Barclays Bank Ltd. (1975) 1 WLR 315, the purchasers of the goods instructed Bankers to provide irrevocable confirmed Letter of Credit for vendoRs, The goods supplied were defective. There were allegations that vendors were guilty of fraud. Megarry, J. Held that the present case falls short of establishing any ground upon which it would be right for the Court to intervene by granting the interlocutory injunctions claimed, even in its revised form.
11. The case referred by Lord Denning MR in Edward Owen Engineering Company Ltd. Case is reported as SZTEJN v. J. Henry Chroder Banking Corporation (1941) 31 NYj 2d 631. The US Supreme Court on assessm ent of the facts ruled that no hardship will be caused by permitting the Bank to refuse payment where fraud is claimed, where the merchandise is not merely inferior in quality but consists of worthless rubbish, where the drafts and the accompanying documents are in the hands of one who stands in the same position as the fraudulent seller, where the Bank has been given notice of the fraud before being presented that the draft and documents for payment, and where the Bank itself does not wish to pay pending adjudication of the rights and obligations of the other parties.
12. In Banerjee & Banerjee v. Hindusthan Steel Works Construction Limited (AIR 1986 Calcutta 374), the facts were that Bank guarantees were given pursuant to express terms of the contract entered into between the petitioner principal debtor and the respondent No,1, a beneficiary for construction works on the Super Power Thermal Project. Out of the seven Bank guarantees two were in lieu of security deposit and five were for securing mobilisation advance made by respondent No,1 to the petitioner. Under the terms of the guarantees, for enforcement of the guarantees, respondent No,1 had to make a written demand stating that the petitioner has committed breach of any terms of the contract and the extent of loss of damages suffered or to be suffered by the said respondent as a result thereof which was not to be questioned by the Banks. On fulfilment of these two conditions, the Bank was bound to release the guaranteed amount but respondent No,1 while seeking the encashment of Bank guarantees failed to discharge its duty as the sole Judge to quantify the damages and to mention the extent of recoveries made by it which was within its special knowledge. Although large amount was recovered by the respondent No,1 there was no whisper about the same in the demand letter. The Court held that the Bank guarantees and the Letters of Credit are given by the Bankers at the instance of one of the parties to the main contract and pursuant to the express terms thereof. Therefore the contractor at whose request the Bank guarantee is given or L.C. Is opened cannot be said to be a total stranger to the contract of guarantee or L.C. A wrongful and fraudulent enforcement of the Bank guarantee will vitally affect the contractor. Hence if the guarantee is enforced by fraud, misrepresentation, deliberate suppression of material facts, or the like, that will give rise to a special equity in favour of the contractor who will then have right to stop its enforcement by obtaining an order from Court. But for obtaining an order from Court, a very strong prima facie arguable case in support of the contention that there is a fraud or special equity, must be made out. The Court will not interfere with the enforcement of unconditional or conditional Bank guarantees or Letter of Credit on the mere allegation of fraud or special equity. If the guarantee is a conditional one, it becomes enforceable upon fulfillment of the condition stipulated and the beneficiary must have alleged in the demand letter that the conditions have been fulfilled otherwise the Bank will not be liable to pay but if the conditions are not fulfilled, it is the duty of the Bank to refuse payment.
13. In Pakistan Engineering Consultants v. PIAC (1993 CLC 1926) the appellants were given a contract of extension and modernization of flight kitchen at Karachi Airport. They were given 10% of the contract amount as mobilisation advance against a Bank guarantee in the sum of Rs,43.9 million.
Consultants also executed a performance bond for a sum of Rs,8,78,000. They were to be paid 3% as consultancy fee for the services to be rendered by them in terms of the contract in two instalments. The period for completion of the contract was two years expiring on 26-10-1985 and the documents mentioned in para. 2 of the agreement were to be signed by Mr. Kafeeluddin Ahmed, Managing Partner of the consultants who however expired on 28-11-1985 but after his death surviving partners of the consultants firm executed a formal partnership deed on 30-11-1985 for continuing the partnership and for appointing Mr.Kafeeluddin Ahmed's son as the Managing Partner. Consultants and the PIAC continued to deal with each other even after the death of Mr. Kafeeluddin. The consultants sought extension of the contract period up to 31st December, 1986 for various reasons but the P.I.A. After securing copies of the partnership from the consultants repudiated the contract and invoked the encashment of Bank guarantee as well as the performance bond. In the suit filed by consultants against PIAC for declaration, permanent injunction and recovery of a large amount on account of alleged dues and damages a learned Single Judge of this Court in the first instance granted ad interim injunction restraining encashment of Bank guarantee and the performance bond but this order was subsequently recalled. In appeal from the order before a Division Bench of this Court, the view expressed by Ajmal Mian, C.J. (as his Lordships then was) was that there seems to be preponderance of judicial view that in case of Letter of Credit and an unconditional Bank guarantee, the Court would generally be reluctant to grant an ad interim injunction restraining a Bank from honouring its contractual obligation. However, in exceptional cases, where refusal to grant an ad interim injunction will perpetuate fraud or injustice, which should be apparent from the material on record, the Court may grant an ad interim injunction. The Division Bench took the view that this case did not fall within the category of exceptional cases as the amount of mobilisation advance was to be adjusted against the running bills and the final bill at the rate of 10% which had not been fully adjusted and therefore balance amount of the Bank guarantee in fact belonged to PIA. As the Bank had given undertaking to pay amount on demand by the PIA without questioning it and without making reference to the consultants, it will not be just and proper to grant an ad interim injunction but at the same time the Court observed that it will not be just to allow the encashment of the full amount of the Bank guarantee. Since PIA had withheld two running bills of the consultants amounting to about Rs,2,00,000, the Court allowed the encashment of Bank guarantee to the extent of the balance unadusjted amount minus Rs,2,00,000 on account of running bills but restrained the P.I.A. From encashing the performance bond. The judgment in the above case was assailed before the Supreme Court by plaintiffs but the apex Court refused to interfere with the exercise of discretion as reported in 1989 SCM R 379.
14. However in Balagam Oil Mills v. Shakarchi AG (PLD 1990 Karachi 1) in a different set of facts and circumstances, Division Bench headed by Ajmal Mian, C.J. (as his Lordships then was) took the view that it could not be said as to how much amount of damages, plaintiffs would be entitled in case they succeeded to prove breach on the part of the respondent-supplier. As injunction was sought in respect of money received by the respondent-Bank under a Letter of Credit of some different transaction, the same being a negotiable document, Division Bench referred to grant the injunction and upheld the view taken by learned Single Judge.
15. In Pan Ocean Enterprises (Pvt.) Limited v. Thai Rayon Company (PLD 1990 Karachi 395) the case involved breach of a contract in relation to a Bill of Lading but in view of the discrepancies and the fraud played by the shipper, a learned Single Judge of this Court restrained the beneficiary from claiming payment under the Letter of Credit and restrained the Banks from making any payment until and unless the beneficiary and their agents furnish Bank guarantee equivalent to the amount of Letter of Credit with regard to any decree that may be passed in the suit.
16. In Messrs Kohinoor Trading (Pvt.) Limited v. Magrani Trading Company and 2 others (1987 CLC 1533) Ajmal Mian, J. (as his Lordships then was) after a detailed review and analysis of the case- law on the subject held that generally an irrevocable Letter of Credit cannot be dishonoured by a Bank but there may be exceptions to the general rule, for example, where it is proved that the Bank knows that any demand for payment already made or which may thereafter be made will clearly be fraudulent but the evidence on the question of fraud and as to the bank's knowledge must be clear, or when there is a challenge to the validity of the Letter of Credit. After discussing the facts of the case Hon'ble Judge speaking for the Division Bench observed that under an irrevocable Letter of Credit payment cannot be stopped on the ground that there was some breach on the part of the vendor as to the quality of the goods. An irrevocable Letter of Credit is a negotiable document in the commercial world which is negotiated inter alia inter se between the Banks and, therefore, the Court cannot lightly cause its dishonouring by one Bank to another, unless prima facie a sufficiently grave cause is shown.
17. Supreme Court of India in the case reported as United Commercial Bank v. Bank of India (AIR 1981 SC 1426) expressed the view that a Bank issuing or confirming Letter of Credit is not concerned with the underlying contract between the buyer and seller. Duties of a Bank under a L/C are created by the document itself, but in any case it has the power and is subject to the limitations which are given or imposed by it in the absence of appropriate provisions in the Letter of Credit. In the words of the Indian Supreme Court the opening of 'a confirmed Letter of Credit constitutes a bargain between the Banks and the seller of the goods which imposes on the Banker an absolute obligation to pay. However, the Banker is not bound or entitled to honour the bills of exchange granted by the seller unless they and such accompanying documents as may be required thereunder, are in exact compliance with the terms of the credit.
18. Referring to various American, English and Indian cases on the subject Supreme Court adopted the following passage from the judgment reported as R.D. Harbottle (Mercantile) Ltd. v. National Westminster Bank Limited (1977) 3 WLR 752: "It is only in exceptional cases that the Courts will interfere with the machinery of irrevocable obligation assumed by Banks. They are the life blood of international commerce. The machinery and commitments of Banks are on a different level. They must be allowed to be honoured, free from interference by the Courts. Otherwise trust in international commerce could be irreparably damaged."
19. Needless to emphasise aforesaid observations of Kerr, J., were cited with approval by Lord Denning in Edward Owen Engineering Ltd. v. Barclays Bank International Limited (supra).
20. On an overall review and scrutiny of the case-law on the subject I think that prima facie an exceptional case of fraud, forgery, mischief and injustice touching the violation of the terms of Letter of Credit is required to be made out by a plaintiff seeking interim injunction to restrain the encashment of a Letter of Credit and to my mind such acts must have some nexus with the documents of transaction and to the notice of either of the banks in order to create an exception.
In the case in hand no doubt there are serious allegations of fraud and dishonesty against defendant No,1 who exported TV sets on the request of the plaintiff to Pakistan, there is hardly any material on record to justify an inference that the negotiating Bank in China has the knowledge of such acts of omission and commission on the part of the beneficiary. Likewise it is difficult to say whether the Pakistani Bank was informed by the plaintiffs about the questionable conduct and acts of fraud and breach of contract on the part of the defendant No,1 justifying refusal to remit the amount on account of Letter of Credit to the foreign Bank. Indeed the question involved on this score is not free from difficultly. It would, therefore, be neither just nor convenient to grant any injunction against Negotiating Bank in China but the defendant No,2 is in full knowledge of the alleged fraud at least after the institution of this suit and I am clear in my mind in this regard.
21. In a most recent case decided on May 22, 1997 in a. Civil petition for leave to appeal filed by M/s. Harel Textile of Pakistan v. M/s. Piccannol of 'Belgium, while granting leave to appeal from an order passed by the Lahore High Court vacating the order passed by Civil Court, Supreme Court restored an order passed by Lahore Civil Court pending the hearing of the appeal. The facts were that M/s. Harel Textile of Pakistan placed an order for supply of 46 looms worth Rs,110 million on M/s. Piccannol of Belgium for their Rs,800 million project. A sum of Rs, 65 million was to be paid in advance while the balance was to remain at the supplier's credit. The looms were supplied but the appellant-buyers found them below the.Projected production capacity and moved the Civil Court for the grant of injunction with a prayer for freezing of foreign supplier company's funds pending the suit or furnishing of a Bank guarantee for The suit amount. While the Civil Court passed an interim order of injunction, in appeal Lahore High Court vacated the same. The question involved in appeal before the Supreme Court is whether the assets of non-resident company can be frozen to ensure its attendance in legal proceedings and to satisfy a decree of a Pakistani Court against it. In my humble view, the principle of law and the question for consideration sub judice before the Supreme Court is on all fours with the facts of the case in hand and it appears that in fit cases an order of injunction in such transactions can always be made to secure the ends of justice and in order to safeguard the interest of a plaintiff against a foreign supplier for breach of contract by reason of fraud, forgery, mischief and injustice.
22. The contention advanced on behalf of the defendant-seller that it had only agreed to supply T.V. Sets to the plaintiff in accordance with the Chinese standard and that it had never agreed that the said Televisions will be free of defects is unique and unprecedented in its nature as every transaction by its nature must conform to specifications of the goods to be supplied in perfect working condition and supplier cannot be permitted to agitate that there was no agreement that the goods supplied shall be error free. A reference can be made to sections 15 and 16-A of the Sale of Goods Act.
23. I am not impressed by the argument advanced on behalf of the defendants that in the course of correspondence defendants had assured the plaintiff to replace the detective parts if exported to China by the plaintiff-and to compensate for labour and transport charges. Be that as it may, joint inspection report conducted at Multan by parties' representatives very clearly suggests that the TV sets were thund to be defective ranging from 2.5% to 100% and in the circumstances it can hardly be argued that the plaintiffs could be in a position to re-export such imported goods to the supplier for replacement of defective parts as it would involve cumbersome procedure for obtaining an import licence and to face various proceedings before the Custom Authorities. On defendants' own showing T.V. Sets consist of 250 components which circumstance by itself suggests that the proposal made by the defendants is not only cumbersome but also not practicable. At any rate, plaintiffs have expressed serious reservations to this suggestion as well as amount offered by way of compensation which according to the defendant's assessment comes to ony US $.706.075 whereas the amount of Letter of Credit established by the plaintiffs comes to US $.1,50,816.50.
24. It was lastly contended that defendant No,1 is a holder in due course of a negotiable instrument and entitled to encashment within the meaning of section 53-A of the Negotiable Instruments Act, 1881. This section reads as follows: "53-A. Rights of holder in due course.--- A holder in due course holds the negotiable instrument free from any defect of title of prior parties, and free from defences available to prior parties among themselves, and may enforce payment of the instrument for the full amount thereof against all parties liable thereon."
' Negotiable instrument has been defined in section 13 of the Act to mean a promissory note, bill of exchange or cheque payable either to order or to bearer. This definition is supplemented by explanations (i) to (iii) and section 13(2) lays down that a negotiable instrument may he made payable to two or more payable jointly or it may be payable in the alternative to one or two or one or some of several payees. Strictly speaking Letter of Credit is not included within the definition of negotiable instrument but on parity of reasoning it may be construed as a bill of exchange which requires endorsement by the negotiating Bank and the defendant has yet to establish that he is holder thereof for value and that he obtained before it became payable and without having cause to suspect endorser's title. It is pertinent to observe that the title of the defendant No,1 to hold Letter of Credit and its entitlement to their encashment is under heavy clouds requiring further inquiry and investigation with regard to consideration for such instruments.
25. Lastly a reference was made to Articles 1 to 4 and 9 of Uniform Customs and Practice for Documentary Credits, 1993 Revision as Letters of Credit are issued subject to such provisions. There can be no cavil with the provisions governing the issuance of Letters of Credit but such provisions have already been discussed in sufficient details while dilating upon decided cases on the subject.
26. For the aforesaid facts and reasons, I am of the considered view that the case made out by the plaintiffs falls within the exceptions to the rule laid down by the Courts. In fact the whole transaction, prima facie appears to be vitiated by fraud on the part of the seller which cannot be lightly ignored. Accordingly a strong prima facie arguable case is made out for the grant of an interim order of injunction. Needless to say, plaintiffs are likely to suffer irreparable injury in case its rights are not protected at this stage of the suit particularly when defendant No,1 has no ostensible assets in Pakistan for satisfaction of the decree that may be passed. Even the balance of convenience lay in favour of the grant of interim injunction rather than withholding it for strictly technical reasons because in the event of refusal of injunction, plaintiffs would be hardly left with any remedy.
27. Alternatively even if the case may not fall within four corners of Order XXXIX, Rules 1 and 2, C.P.C., it is seemingly covered by clause (c) of section 94, C.P.C. Which empowers this Court to pass an interlocutory order to prevent the ends of justice from being defeated in case it appears to the Court to be just and convenient. In this regard, I am benefited by the view expressed by Nasir Aslam Zahid (as his Lordship then was) in the case Mst. Salma Jawaid v. S.M. Arshad (PLD 1983 Karachi 303). In the said case learned Judge who subsequently rose to the office of Chief Justice of this Court and presently a Judge of the Supreme Court referred to the observations by the Supreme Court in the case reported as PLD 1962 SC 119 and PLD 1969 SC 65. Accordingly I am of the view that it is just, fair, proper and convenient to allow the encashment of Letter of Credit subject to furnishing of a Bank guarantees by defendant No,1 in the sum of US $ 1,00,000 to the satisfaction of the Nazir. It is ordered accordingly.