JAI BALAJI INDUSTRIES LTD. versus PEC LTD. & ORS.

JAI BALAJI INDUSTRIES LTD. versus PEC LTD. & ORS.

The Calcutta High Court's Division Bench order rightly allowed encashment of security cheques by respondent upon furnishing bank guarantee, protected appellant through order for sale proceeds to be handed over, and maintained balance of equities pending suit. Responsibility for quality and quantity of cargo lies with the appellant-buyer; nothing established prevented respondent from encashing security cheques given as security.

Parties
Appellant: Jai Balaji Industries Ltd.; Respondent No.1: PEC Ltd.
Jurisdiction
India
Judgment Date
27 October 2009
Procedural Posture
Civil Appeal / Interim Order on Appeal From Calcutta High Court
Outcome
Appeals dismissed
Legal Topics
High Seas Sale Agreement, Interim Injunction, Deed of Pledge, Encashment of Security Cheques
Contract Law Commercial Law Export Import Law High Seas Sale Agreement Interim Injunction Deed of Pledge Encashment of Security Cheques

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Parties

Jai Balaji Industries Ltd.

Appellant

PEC Ltd.

Respondent No.1

Procedural Posture

Civil Appeal / Interim Order on Appeal From Calcutta High Court

Legal Issues

  1. 1 Whether the respondent-seller was entitled to encash security cheques before delivery of goods.
  2. 2 Whether the endorsement of Bill of Lading was effected in favour of the appellant-buyer.
  3. 3 Who is responsible for the quality and quantity of imported goods under the agreement.

Ratio Decidendi

The Calcutta High Court's Division Bench order rightly allowed encashment of security cheques by respondent upon furnishing bank guarantee, protected appellant through order for sale proceeds to be handed over, and maintained balance of equities pending suit. Responsibility for quality and quantity of cargo lies with the appellant-buyer; nothing established prevented respondent from encashing security cheques given as security.

Court Disposition

Appeals dismissed

Orders

  • Liberty to respondent to encash cheques upon furnishing bank guarantee of like amount to Registrar, Original Side.
  • Receiver to sell goods and hand over sale proceeds to appellant after confirmation.