The scope and ambit of exercise of power and jurisdiction by a High Court under Article 227 of the Constitution of India is examined and explained in a number of decisions of this Court. The exercise of power under this article involves a duty on the High Court to keep inferior courts and tribunals within the bounds of their authority and to see that they do the duty expected or required of them in a legal manner.

JUDGMENT :

J.C. DOSHI, J.

1. Rule returnable forthwith. Learned advocate Mr. Vishwas K. Shah waives service of notice of rule for the respondent No. 2 and learned advocate Mr. Siddharth Sinha waives service of notice of rule for the respondent No. 3. Though served, none appeared for the respondent No. 1.

2. This petition filed under Article 227 of the Constitution of India assails the judgment and order dated 16.3.2023 passed by the learned Commercial Court (“appellate Court” for short) allowing the Commercial Appeal No. 1 of 2023 filed by the DBS Bank Limited-respondent No. 3, whereby the Learned Appellate Court by vacating injunction has quashed and set aside order below Exh.5 dated 7.5.2022 passed by the learned Commercial Court in Commercial Civil Suit No. 10 of 2021.

2.1 The petitioners are the original plaintiffs, whereas the respondents are the original defendants in the Commercial Civil Suit No. 10 of 2021. For the sake of bravity and convenience, they are referred to as their status before the learned Commercial Court.

FACTS:

3. Tersely stated facts leading to filing of this petition are that the plaintiffs have filed Commercial Civil Suit No. 1 of 2020 before the learned Commercial Court against the defendants for declaration, permanent injunction and other reliefs. The case of the plaintiffs was that M/s Hussain Sheth Ispat is the partnership firm registered under the Partnership Act and the plaintiffs Nos.2 and 3 are its partners. It is further the case of the plaintiffs that they are engaged in the business of ship breaking, trading and manufacturing of iron and steel products having its principal place of business is at Alang, Dist: Bhavnagar. Further, as per the case of the plaintiffs, the defendant No. 1-Capital Corp Asia Private Limited, who claimed to be the owner of the ship namely MV-SENIHA-S (“vessel” for short). The plaintiffs entered into Memorandum of Agreement (“MOA” for short) with the defendant No. 1 on 21.4.2021 for purchase of the said vessel for the consideration of US $ 31,58,540/-. As per the terms and conditions of the MOA dated 21.4.2021, the sale was required to be placed and the mode of payment was provided in clause 2 of the said MOA. The payment was to be made through Letter of Credit to be opened from the Punjab National Bank.

4. It is further the case of the plaintiffs that the MOA executed between the plaintiffs and the defendant No. 1 underwent many changes from time to time. The first amongst was made on 23.4.2021 and in view of said amendment, opening of the Letter of Credit has been changed from the Punjab National Bank to Canara Bank-defendant No. 2. It was further agreed that out of total consideration, US $ 24,58,540/- shall be paid by the Letter of Credit and US $ 7 lakh by way of telegraphic transfer. Subsequent thereto, the Letter of Credit was opened on 26.4.2021 by the defendant No. 2 in favour of the defendant No. 3. As such, the defendant No. 3 acted as a banker of the defendant No. 1 which was required to negotiate the Letter of Credit. One of the conditions of the Letter of Credit regarding the payment was that it was to be made after 150 days from the date of physical delivery of the vessel.

5. The MOA again underwent change and as per the first amendment made on 4.5.2021, certain conditions of the Letter of Credit were changed which were duly reflected in the delivery report issued by the defendant No. 2. The change was provided in this delivery report that except for the change made in the delivery report, all other terms and conditions to remain the same. The MOA again underwent change on 13.5.2021 . As per the change in the MOA, the entire consideration of US $ 31,58,540/- was to be paid by the Letter of Credit. No payment was to be made through telegraphic transfer as it was provided earlier. Because of the change in the MOA, the value of the Letter of Credit was incre