Point of Law : Notice was not given within the stipulated time, therefore, in terms of Clause (f), the PNB is precluded from claiming that documents did not constitute complying presentation.

ORDER :

Tarlok Singh Chauhan, J.

Aggrieved by the order of the learned Writ Court whereby it has directed the appellant to credit a sum of Rs.81,74,190/- alongwith interest @ 12% per annum w.e.f. 15.09.2008 till the amount is paid to the State Bank of India, Baddi and further to pay costs of Rs. 1 lac to the State Bank of India, the appellant-PNB has filed the instant appeal.

2. The parties shall be referred to as the 'writ petitioner' and the 'writ respondents'.

3. Brief facts of the case are that the writ petitioner-M/s Alliance Biotech, a partnership firm engaged in the manufacturing of pharmaceutical products entered into an agreement with respondent No. 3 – Rajat Pharmaceutical Chemicals Limited, under which respondent No. 3 had exclusive right to market the products manufactured by the petitioner.

4. In terms of this agreement, the petitioner was supplying goods to respondent No. 3 and irrevocable Letter of Credit was issued at the instance of respondent No. 3 by respondent No. 2-Punjab National Bank (for short 'PNB') in favour of the writ petitioner for an amount not exceeding to Rs. 82,30,000/-.

5. The letter of credit was initially valid till 12.09.2008 which date admittedly was extended to 15.09.2008. Respondent No. 1 i.e. State Bank of India (for short 'SBI'), which was the advising Bank informed the writ petitioner on 24.06.2008 that all bills drawn in conformity with the terms of letter of credit shall be honoured.

6. During the course of agreement, the writ petitioner supplied pharmaceutical goods from time to time and also received the payment for the same. The goods worth Rs. 81,74,190/- were dispatched by the petitioner and the relevant documents were lodged with the advising bank i.e. respondent No. 1 -SBI on 13.09.2008 as is evident from Annexure P-5 appended with the writ petition. The copy of the same was also addressed to respondent No. 2-PNB.

7. The writ petitioner lodged its claim with respondent No.1-SBI, who negotiated the bills and credited an amount of Rs.79,90,383/- after deducting interest and negotiation commission to the account of the petitioner.

8. On the other hand, writ respondent No. 2-PNB vide its letter dated 27.08.2008 (which the PNB alleges was issued on 27.09.2008 but wrongly shown to be 27.08.2008) sent to the SBI expressed its inability to negotiate the documents in view of the discrepancies it observed and the same are enumerated below:-

“We are in receipt of documents under our L/C No. 025608 while scrutinizing the documents, we observed the following discrepancies:

1. Photocopy of certificate of Analises submitted of original.

2. MRT is not approved by IBA

3. Delivery challan not accepted by opener.

In view of the above, we are unable to negotiate the documents. You are requested to take up the matter with the beneficiary to remove the discrepancies. Meanwhile, we are holding the said documents at your risk and responsibility and treating the documents on collection basis.”

9. Writ respondent No. 3-Rajat Pharmaceuticals Chemicals Ltd., which received the goods, sent a letter on 11.10.2008 to the PNB asking it to accept the letter of credit as it is i.e. with all discrepancies, however, the PNB did not accede to the request and on 15.10.2008 wrote a letter to the SBI that it would only make payment if funds are available in the account of respondent No. 3.

10. The SBI, in turn, sent a letter dated 21.10.2008 to the petitioner whereby it was informed that even though it had discounted the documents on 18.09.2008 but since the PNB had not accepted these documents, they were debiting the amount to the account of the petitioner.

11. This constrained the writ petitioner to send a legal notice to the respondents. Thereafter, certain negotiations also took place between the parties but the same did not yield any result, constraining the petitioner to file a writ petition being CWP No. 3007 of 2009, for grant of the following reliefs :-

i. Respondent No. 1 and 2 may be directed to enforce and honour the