INDERMEET KAUR, J.

1. This application has been filed by the applicant namely the Citi Bank A.S. Turkey who has prayed for impleadment in the present suit.

2. Present suit is suit for permanent injunction. The prayer made in the application is that the defendant no.1 Bank i.e. the State Bank of Saurashtra, now known as the State Bank of India be restrained from making any payment in pursuance of letter of credit dated 7.12.2005.

3. Plaintiff was a company engaged in the business of trading of food-grains. A supply order of chickpeas had been placed upon defendant no.2 whereby defendant no.2 was required to make this supply to the plaintiff. In pursuance of this agreement plaintiff asked its banker defendant no.1 to issue a letter of credit in favour of the banker of defendant no.2. Accordingly, the aforementioned letter of credit dated 7.12.2005 was issued by defendant no.1 in favour of the banker of defendant no.2. Defendant no.2 was indicated as the beneficiary. On inspection of the consignment the plaintiff found the goods to be defective. He has accordingly prayed that this letter of credit issued by defendant no.1 be not enforced in view of this fraud played by defendant no.2 upon the plaintiff.

4. The applicant before this court i.e. the Citi Bank A.S. Turkey was the advisory bank/negotiating bank for this letter of credit. On affidavit, it is stated that the amount payable on this letter of credit has already been released by the applicant to the beneficiary namely to defendant no.2. The applicant had approached defendant no.1 for release of payment in its favour but the applicant has been informed that an ad-interim injunction has been granted in favour of the plaintiff and against defendant no.1 not to release this amount on this letter of credit. It is further stated that a settlement has been proposed between the plaintiff and the defendants which would be behind the back and against the interest and to the prejudice of the applicant as it is the applicant who has to receive this amount on this letter of credit from defendant no.1. Applicant is the ultimate effected party in the present proceedings and as such he would be a necessary and a proper party for adjudication of the dispute between the parties. Accordingly, impleadment has been prayed for.

5. The application has been opposed. It is submitted that there is no privity of contract between the applicant bank and the plaintiff who is neither a proper and nor a necessary party. It is stated that the applicant has wrongly concealed that on 25.4.2006 the applicant had sent a swift message to defendant no.1 wherein the applicant had agreed to get the said letter of credit cancelled and the applicant and the beneficiary had agreed to acquit each other irrevocably. It is further stated that in fact a settlement had been arrived at between the plaintiff and defendant no.2 on 20.4.2006. It is stated that the plaintiff had on 25.4.2006 submitted the original documents including the commercial invoice, packing list, bill of lading with the defendant no.1 bank. On 18.9.2006, the plaintiff came to understand that vide a swift message of even date defendant no.1 bank had called the Citi bank Mumbai to confirm the cancellation of this letter of credit. It is, thus, manifest an understanding had been arrived at between the parties and defendant no.2 had agreed to settle its disputes with the plaintiff and in view thereof the Citi bank Turkey would not claim any amount against the said letter of credit and once this fact was confirmed by Citi Bank, defendant no.1 would release the margin money held by it to the plaintiff whereupon the plaintiff would withdraw the suit. It is stated that the present application is misconceived and is liable to be dismissed.

6. In the rejoinder filed by the plaintiff it is stated that the admissions made in the reply clearly show that there is connivance between the plaintiff and the defendants i.e. defendant no.1 and 2