This case be considered as an admitted case.
2. The brief facts in the instant Civil Revision are that the petitioner filed a civil suit for declaration against the respondent to the effect that One Lac K.Gs. Of unwashed raw wool of Uzebekistan origin was exported by the respondent/defendant No,3 to Pakistan in the name of the petitioner/plaintiff.
Although in the terms and conditions of the L/C the respondent No,3 was to send only 40 thousand K.Gs. Out of total quantity of One Lac K.Gs. To be shipped without inspection of the buyer. The balance 60 thousand K.Gs. Are only allowed after the inspection certificate issued by the representative of Shaheen Woollen Mills on their letter-head. He also prayed for issuance of injunction restraining the respondent/defendants Nos. 1 and 2 from making payment of any amount against the aforesaid goods/L.C. To defendant/respondent No,3 under Order 39, rules 1 and 2, C.P.C. The suit was contested by the defendants. Even the application under Order 39, rules 1 and 2, C.P.C. Was also contested. The learned trial Court vide judgment dated 3-12-1995 rejected the application for the grant of temporary injunction. An appeal was preferred against that judgment which was also dismissed by the learned Additional District Judge vide his judgment dated 22-5-1996. Both the orders passed by the learned Subordinate Courts are under challenge of the instant revision petition.
3. Learned counsel for the petitioner submits that the impugned orders are contrary to the law and facts of the case and also against the principles of justice, equity and good conscious and the impugned judgments have been passed arbitrarily and mechanically without judicious application of mind as the learned Courts below have failed to appreciate that prima facie irreparable loss and balance of convenience were available to the petitioner and the grant of temporary injunction could not be declined by the learned Courts below. The respondent No,3 has wilfully and with ulterior motive committed breach of contract, therefore, he was not entitled for any benefit arising out of the said contract. The learned Courts below also did not apply their mind that the petitioner/plaintiff will face an irreparable loss if the. Amount in the shape of 66 thousand U.S. $ is paid to the respondent No,3 firm. In fact according to the L/C para. 7 the respondent was to send only 40 thousand k.Gs. Out of total quantity of one lac k.Gs without inspection and - the balance 60 thousand K.Gs. Was allowed after the inspection certificate issued by the representative of Shaheen Woollen Mills on their letterhead and there is a violation of the L/C opened by the petitioner with the respondent Allied Bank of Pakistan. The defendant/respondent No,3 sent the total quantity when the shipment was received at the port the plaintiff had to face the demurrage and he was constrained to release the complete item, therefore, the balance of convenience or inconvenience lies to the petitioner.
4. The accumulative arguments advanced by both the learned counsel for the respondents are that the learned Civil Court had no jurisdiction to deal with the matter. According to the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 a Banking Court means
(i) in respect of a case in which the outstanding amount of claim based on a loan or finances does not exceed 30 Million rupees or the trial of offences under this Act, the Court established under section 4 and under section 7 it will exercise the civil jurisdiction and all the powers are vested in the Civil Court under the Code of Civil Procedure and shall have all the powers vested in it as vested in the Civil Court under the Code of Civil Procedure. In terms of section 7(6) of the aforesaid Act the suits pending before any other Courts had to be transferred and it had deemed to have been transferred to the Banking Court concerned. Relies on Muhammad Nadeem Butt v. U.B.L.
Through Manager and others 2000 CLC 1436. If it is considered that the suit filed in the Civil Court had deemed to have been transferred to the Banking Court then this Court lacks jurisdiction to hear the revision petition. Relies on M/s. Middle East Bank Ltd. v. Zubair Ahmad Khan Afghani 1990 M LD 909. He further submitted that the petitioner received the total shipment and according to the terms and conditions of the contract the Rule 5.2 the acceptance of the goods on the quality will be held by the representative of the buyer at the point of loading of the goods. The buyers representative will issue certificate to the seller on the Shaheen Woollen Mills' letter-head. The paragraph 8 (8.1) of the contract itself expresses that any dispute which may arise under or in connection with this contract will be discussed by means of negotiation between the parties if possible and (8.2) relationship between the parties under or in connection with the contract are to be regulated by existing laws and rules of legislation of U.S.A., therefore, the Courts at Pakistan have no jurisdiction to deal with the matter. He has produced: "(1) Amended L/C No,95/031/MCBM/0248 vide Letter dated 4-6-1995, where the amendment dated 2-6-1995, regarding the pre-shipment inspection by M/s. Cotecna Inspection S.A. Is hereby deleted.
Clause 06 of Annexure 'A' of the original L/C is deleted. Date of shipment is extended uptil 25-6- 1995 and negotiation uptil 10-7-1995.
(2) Vide Letter dated 20-7-1995 on the letter pad of the Shaheen Woollen Mills, the petitioner has accepted documents valuing US $ 29001-88 against L/C No,95/031/MCBM/0248, dated 13-4-1995 for payment in Pak rupees on maturity date i,e, 17-11-1995. They shall make payment from their own sources and no finance will be required from the Bank.
(3) Vide Letter dated 17-7-1995 addressed to the Manager Allied Bank Ltd. The petitioner has accepted documents valuing US $ 34310.18 against L/C No,95/031/MCBM/0248, dated 13-4-1995 for payment in Pak rupees on maturity date i,e, 10-11-1995. They shall make payment from their own cash sources and no finance will be required from the Bank."
Learned counsel for the respondent further submitted that international monitory fund is involved and bank guarantee can never be stayed. Since the interim relief is part of main relief, therefore, it cannot be overlooked keeping in view all the circumstances of the case.
5. I have heard the learned counsel for the parties and have carefully perused the record.
6. The petitioner and the respondent No,3 M/s. Abtex International (U.S.A.) INC entered into a contract for the shipment of raw unwashed carpet wool on the quantity of 240 Tons + 3% as per the specification mentioned in Annexure 1. The duration and terms of the delivery disclose that the acceptance of the goods on the quality will be made by the representative of the buyer at the point of loading of the goods and the buyer's representative will issue certificate to the seller on Shaheen Woollen Mills' letter-head. It is an admitted fact that the petitioner has received all the goods and that is too without any objection to the quality of goods being inferior. The petitioner had a remedy available to him to refuse if the goods were substandard at the time of loading. The subsequent letters as reproduced above show that the petitioner from time to time had been accepting L/C and itself waiving the conditions of the L/C through their own transactions through letters. Section 16 of the Sales of Goods Act postulates an obligation on the part of the vendor to inform the vendee of any defect in. The goods sold. It is a settled proposition of law that the letters of credit are invariably irrevocable in nature and are made to ensure the payment of goods to the vendor without any reference to the buyer. It is essentially a contract between two banks, one of them issuing a Letter of Credit on the other Bank authorising release of payment on production of appropriate documents evidencing the shipment of goods by the seller without any reference to the buyer. These contracts are of international character. Any restraint upon the encashment of negotiable instrument would create serious complications, hardship and anomalies in the international trades and shatter the confidence of the traders in the international banking system.
The only exception is an act of fraud, mischief or injustice in relation to document of shipment evidencing the shipment of goods to the knowledge of Bank. Consequently the Letter of Credit lays down an absolute unconditional obligation on the bank irrespective of any disputes between the parties whether they have perused their part of contract or there was some breach in the discharge of their respective obligation. Reliance is placed on Central Textile Mills Ltd. v. Industrial Development Bank of Pakistan 1989 CLC 1194 (Karachi), Ajaz Anis v. Tariq Isa and 6 others 1999 CLC 259 and Svenska Handels Banken v. M/s. Indian Charge Chrome and others 1995 PSC 1276 (Supreme Court of India) where it is held that the confirmed bank guarantee irrevocable Letter of Credit, cannot be interfered with unless there is established fraud, and irretrievable injustice involved in the case. Otherwise through a restraint the irretrievable injury would be caused to the guarantor which may cause irretrievable damage to the interest of country in the international market as opposed to the loss of money to the plaintiff.
7. So far as the balance of convenience or inconvenience is concerned, from the perusal of the documents it is established that the petitioner did accept the delivery of the goods which were one lac k.Gs. And that is too without objecting the quality of the goods and also without inspection by their representative at the time of the loading of the goods.
8. Unless there is a strong case of fraud, forgery, irretrievable injury, injustice or attaining wrongful advantage from contract with regard to establishment of Letter of Credit, no restraint order can be passed on an obligation arising under a Letter of Credit which lays down an absolute unconditional obligation on the bank irrespective of any dispute between the parties, for performance or non- performance of the contract in the discharge of their respective obligation. If the petitioner has found the goods to be of substandard quality, he can always sue the seller for damages. Therefore, finding no substance to interfere in the concurrent judgments of both the learned Courts below, the instant civil revision is dismissed, with no order as to costs.