The main legal point established in the judgment is the need for clear evidence of fraud and the bank's knowledge of such fraud to grant injunctions against honoring letter of credit.

Kuldip Singh, J.

Malayan Banking Berhad (Maybank) - defendant No. 6 before the lower Court has filed the present revision against the order dated 16.9.2013, passed by the learned Additional District Judge, Ludhiana, vide which, the order dated 25.2.2012, passed by the learned Civil Judge, Junior Division, Ludhiana, dismissing the application of the plaintiffs was reversed and the injunction application filed by the plaintiffs under Order 39 Rules 1 and 2 read with Section 151 CPC was allowed whereby defendant Nos. 1 and 2 i.e. State Bank of India were restrained from releasing the letter of credit in favour of defendant No. 6 (the present revisionist).

2. Brief facts of the case which are required to be noticed for the purpose of disposal of the present revision are that the plaintiff M/s. Jindal Impex through its sole proprietor Kuldeep Jindal is engaged in import of copper wire/rod. Defendant No. 3 M/s. Sims Copper is engaged in business of supplying of copper wire and rods to the customers throughout the world. Defendant No. 3 has appointed defendant No. 5 i.e. Diffreight Agencies as its shipping agent, who in turn has appointed defendant No. 4 i.e. Expo Freight Pvt. Ltd. as forwarding agent at Ludhiana, who keeps liaison and contact with the importers, who imports copper wire and rods from defendant No. 3. Defendant No. 5 is the shipper of defendant No. 3 who carries the goods from Malaysia to various destinations and issues bill of lading on behalf of defendant No. 3 for the goods handed over to him for export to various customers in India and other places. Defendant No. 6, the present petitioner, is a collecting bank appointed by defendant No. 3 to whom the letter of credit (LC) is sent on the completion of transactions by issuing bank i.e. Defendant Nos. 1 and 2 State Bank of India. According to the plaintiff, he placed order for import of 50 Mts of copper wire with defendant No. 3, who issued provisional sale contract/proforma invoice dated November 21, 2011, quoting rate and other terms and conditions of letter of credit to be got issued by the plaintiff. Accordingly, the plaintiff opened letter of credit from defendant No. 2 in favour of defendant No. 3 through its negotiating bank defendant No. 6 for USD 367150. The various terms and conditions of the letter of credit are mentioned in the said letter. The intimation of opening of letter of credit was given to the consignor/exporter and negotiating bank, after which the goods were to be delivered by the exporters to the shipper and then shipper issues the bill of lading. The bill of lading along with letter of credit is sent by the exporter to the bank where the letter of credit is opened by the consignee importer. The bill of lading is issued only when the goods are sent against the letter of credit and put on board and container No. is written. Defendant No. 2 State Bank of India intimated the receipt of bill of lading along with other documents and call upon the plaintiff to accept the documents to enable the plaintiffs to receive the consignment through defendant No. 4 agent who is representative of defendant No. 5 at Ludhiana. Defendant No. 3 issued invoice dated 29.11.2011 in favour of the plaintiffs. Payment of the said invoice is to be made within 90 days from the bill of lading dated 29.11.2011. It is stated that plaintiffs bona fide and in routine accepted the bill of lading along with the documents received from defendant No. 2 bank. It is further alleged that in the last week of January 2011, when the plaintiffs tracked the movement of the container in which defendant No. 3 exporter alleged to have sent the goods for delivery to the plaintiff, he was shocked to know that the goods were in fact sent to Los Angeles (USA) and Manila (Philippines) and that were accordingly delivered. In this way, according to the plaintiff, defendant No. 3 in connivance with defendant Nos. 4 to 6 have defrauded him and he prays for cancellation/revocation of letter of