' JAWWAD S. KHAWAJA, J.---This appeal impugns one portion of the decree, dated 1-10-2001 passed by the learned Banking Court-II, Lahore against the appellant-bank and in favour of the respondent-Company.
2. It is not disputed by the Bank that it had established a letter of credit in favour of the respondent- Company, which envisages payment of five instalments to the said Company. The Bank pursuant to the letter of credit made payment of the first four instalments. The fifth instalment of US $ 132,688 was due on 17-7-1999. However, on 12-6-1999 Gulfwood Industries (Pvt.) Ltd. At whose behest the letter of credit had been established, filed a suit before the learned Civil Court at Kasur. The said Court passed an interim order, dated 12-6-1999 restraining the appellant-Bank from making payment of the fifth instalment under the aforesaid letter of credit.
3. The said restraining order was not extended after the expiry of six months as envisaged by Order XXXIX, rule 2(B), C.P.C.
4. This appeal was admitted to regular hearing on the ground that the learned Banking Court could only have passed a decree against the Bank in respect of the amount of the fifth instalment i,e, US $ 132,688 and not for 10% interest thereon as decreed. Today learned counsel for the respondent- Company has pointed out that the interim relief granted to the Culfwood Industries (Pvt.) Ltd. On 12-6-1999 expired six months after that date. He has referred to Order XXXIX, rule (2B), C.P.C. To support his contention. We have considered the said contention and note that it does support the argument advanced by learned counsel for the respondent-Company.
5. Confronted with this situation, learned counsel for the appellant argued that even if the interim relief, dated 12-6-1999, had expired through lapse of time, there should have been a fresh demand by the respondent-Company requiring the appellant-Bank to make payment of the fifth instalment. This contention is wholly without merit. The Bank was obliged to make payment of the instalment due from it to the respondent-Company in accordance with the terms of the letter of credit established by it The only impediment in its way was the interim order, dated 12-6-1999, which lapsed with the efflux of time on 12-12-1999. The Bank as such ought to have made payment of the fifth instalment immediately after 12-10-1999 without any demand being made by the respondent-Company. This is the legal position. It is also supported by the case titled Haral Textiles Mills Limited v. Banque Indosuez Belgium S.A. And others (1999 SCM R 591).
6. In view of the foregoing discussion, we hold that the appellant-Bank could only have withheld payment of the fifth instalment up to 12-12-1999. In the circumstances, we partially allow this appeal and modify the impugned decree to hold that the appellant-Bank would be obliged to make payment of 10% interest on the fifth instalment from 12-12-1999 onwards.
7. In the circumstances, this appeal succeeds partially.