M/S. MILLENIUM WIRES (P) LTD. versus THE STATE TRADING CORPORATION OF INDIA LTD. AND ORS.

M/S. MILLENIUM WIRES (P) LTD. versus THE STATE TRADING CORPORATION OF INDIA LTD. AND ORS.

There was no cause of action disclosed against the confirming/negotiating bank in the plaint, as only expressions of apprehension and suspicion were raised without justification or explanation. The bank acted in accordance with its obligations under UPC-600 and Letter of Credit rules, and the remedies sought had become infructuous after payments were made. Courts must be slow to interfere in bank guarantees and Letters of Credit except where fraud to the knowledge of the bank or irretrievable harm is established, neither of which applied here.

Parties
Appellant: M/S. Millenium Wires (P) Ltd.; Respondent: The State Trading Corporation of India Ltd.; Confirming Bank/respondent: Malayn Banking BHD, Malaysia; Supplier/respondent: Synergic Material Services PTE Limited, Singapore; Supplier/respondent: Synergic Industrial Material Services, Malaysia
Jurisdiction
India
Judgment Date
23 March 2015
Procedural Posture
Civil Appeal / Final Supreme Court Disposition
Outcome
Appeals dismissed
Legal Topics
Injunctions, Letters of Credit, Order VII Rule 11 CPC, Rejection of Plaint
Civil Procedure Banking Law Injunctions Letters of Credit Order VII Rule 11 CPC Rejection of Plaint

Case Brief

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Parties

M/S. Millenium Wires (P) Ltd.

Appellant

The State Trading Corporation of India Ltd.

Respondent

Malayn Banking BHD, Malaysia

Confirming Bank/respondent

Synergic Material Services PTE Limited, Singapore

Supplier/respondent

Synergic Industrial Material Services, Malaysia

Supplier/respondent

Procedural Posture

Civil Appeal / Final Supreme Court Disposition

Legal Issues

  1. 1 Whether the plaint disclosed a cause of action against the Confirming Bank (Malayn Bank) in relation to injunctions on Letters of Credit.
  2. 2 Whether the High Court was correct in rejecting the plaint under Order VII Rule 11 CPC.

Ratio Decidendi

There was no cause of action disclosed against the confirming/negotiating bank in the plaint, as only expressions of apprehension and suspicion were raised without justification or explanation. The bank acted in accordance with its obligations under UPC-600 and Letter of Credit rules, and the remedies sought had become infructuous after payments were made. Courts must be slow to interfere in bank guarantees and Letters of Credit except where fraud to the knowledge of the bank or irretrievable harm is established, neither of which applied here.

Court Disposition

Appeals dismissed

Orders

  • Appeals are dismissed; appellants are at liberty to pursue remedies against Synergic Companies in an appropriate forum.