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12. The Swiss Bank also filed a written statement and claimed that the plaintiffs had no cause of action to seek any relief against defendant No. 2. Swiss Bank also claimed that the assertion that the documents tendered by original defendant No. 4 were forged was without substance. Swiss Bank claimed that the documents were tendered through Credit Bank on October 21, 1985, and were scrutinised' and the draft was accepted on October 23, 1985. Swiss Bank denied that the documents, tendered and accepted, suffered from discrepancies and were not in accordance with the terms and conditions of the letter of credit. Swiss Bank then pleaded that though extension of date for payment of the draft was discussed as consent of the beneficiary (original defendant No. 4) was not sought for or obtained for drawing a separate draft, Swiss Bank was bound to pay the amount as demanded by the Credit Bank on the expiry of 120 days from the date of bill of lading. Swiss Bank pleaded that the amount was paid over to the beneficiary and Swiss Bank had agreed with Canara Bank only to delay reimbursement till April 1, 1986, on the assurance that interest would be paid. Swiss Bank also claimed that the documents tendered did not contain any discrepancy, nor the alleged fraud was known to Swiss Bank at the time of acceptance of the documents or on the date of payment. It was further contended that even assuming that there was a fraud on the part of defendant No. 4 in antedating the bill of lading and there were discrepancies in the documents tendered, still the plaintiffs are estopped from making any complaint as the plaintiffs had waived the right to reject the documents by their conduct and claiming that the plaintiffs are the owners of the consignment. It was also pleaded that the suit was not maintainable as the plaintiff firm was not duly registered.

14. The trial judge by the impugned judgment held that the plaintiffs had a cause of action to maintain the suit against Swiss Bank. It was further held that the plaintiff-firm was duly registered. The trial judge also held that the documents were not presented to Swiss Bank on October 21, 1985, and which was a cut-off date and, consequently, the action of the Swiss Bank in accepting documents on a subsequent date was in violation of the terms of the letter of credit. It was further held that even assuming that the documents were presented on October 21, 1985, as Swiss Bank failed to scrutinise the documents and accept the draft before closing hours of the bank on October 21, 1985, subsequent acceptance was invalid' The learned judge further held that the documents tendered to Swiss Bank suffer from discrepancies and Swiss Bank acted negligently in not carrying out proper scrutiny while accepting the documents. On the issue of fraud, it was held that original defendant No. 4 had committed fraud by antedating the bill of lading, but this fraud was to the knowledge of the plaintiffs and, therefore, the plaintiffs cannot seek any relief oh that count. It was further held that Swiss Bank was aware of the fraud and had colluded with original defendant No. 4 in accepting the documents and issuing the draft and making payment. The trial judge held that though the evidence clearly indicated that the plaintiffs had waived discrepancies in the documents and their conduct indicates that they had accepted the documents by claiming to be the owners of the consignment, still the finding on waiver should be recorded against the defendants in view of the collusion between original defendant No. 4 and Swiss Bank and also on the ground of negligence of Canara Bank. On the strength of these findings, the trial judge decreed the plaintiffs' suit in terms of prayers (a)(i), (ii) and (iii) and (b)(i) and (ii) after deleting certain portions. The counter-claim filed by Canara Bank was dismissed. Canara Bank and Swiss Bank have filed separate appeals against the decree passed by the trial court and both appeals are now disposed of by this judgment.

16.Points Answers(1) Whether the plaintiffs had cause Yes. (Para 12)of action to file suitagainst Swiss Bank ?(2) Whether the plaintiff firm was Not registered. Suit notduly registered, and if not, whether maintainable. (Para. 13/the suit was maintainable under section 14,69(2) of the Indian Partnership Act ?(3) Whether the documents were Yes. (Para 15116)presented by Credit Bank toSwiss Bank on October 21, 1985 ?(4) Whether Swiss Bank was required No. Scrutiny and accep-to scrutinise and accept the documents on tance after 21-10-1985October 21, 1985, itself and the scrutiny legal and valid. (Para.and acceptance thereafter is not permissible 17/18)in accordance with terms of letter ofcredit ?(5) Whether the documents accepted No. (Paras. 19/20/21/22/23)by Swiss Bank were discrepant and SwissBank acted negligently in accepting thedocuments and the draft ?(6) Whether fraud was committed in No. (Para. 24/25)antedating the bill of lading andthereby the plaintiffs were defrauded ?(7) Whether Swiss Bank was aware of No. (Para. 26/27)such fraud and colluded with originaldefendant No. 4 in accepting thedocuments and making payment; and(8) Whether the plaintiffs had waived Yes. (Para. 28/29130)the discrepancies and therebydisentitled from claiming any relief ?The findings on thesepoints would determine whether the plaintiffs are entitled to adecree. It is not in dispute that in case the plaintiffs are notentitled to a decree, then the counter-claim made by Canara Bankis required to be decreed. We will examine each of the pointswith reference to the evidence on record and the submissionsurged at the hearing after setting out well-settled principlesin respect of scope of an irrevocable document.Letters of credit are the most frequent method of payment for goods in theexport trade and have been described as the life blood ofinternational commerce. Where payment under a letter of credit isarranged, four stages can normally be distinguished : (a) theexporter and the overseas buyer agree in the contract of salethat payment shall be made under a letter of credit; (b) theoverseas buyer instructs the bank at its place of business(known as the issuing bank) to open a letter of credit on theterms specified by the buyer in its instructions to the issuingbank; (c) the issuing bank arranges wit) -. the bank at thelocality of the exporter to negotiate, accept or pay theexporters' draft upon delivery of the transport documents by theseller; and (d) the advising bank informs the exporter that itwill negotiate, accept or pay the draft upon delivery oftransport documents. The advising bank may do so either withoutits own engagement or it may confirm the credit opened by theissuing bank. The two fundamental principles relating to lettersof credit are :(i) the autonomy of the credit; and(ii) the doctrine of strict performance.The credit is separate from andindependent of the underlying contract of sale or othertransactions and the bank, which operates the credit, is onlyconcerned to ascertain whether the documents tendered by theseller correspond to those specified in the instructions underthe letter)f credit. The principle of autonomy of the credit isset out in articles 3 in 4 of the 'Uniform Customs and Practicefor Documentary Credits' and the principle is well accepted bythe decision of the Supreme Court n United Commercial Bank v.Bank of India, . Inview of the decision of the Supreme Court, which' asexhaustively considered a large number of decisions, both Indianand it is not necessary to refer to those decisionsonce again. It isequally not necessary to refer to several passages fromCommercial Banking Laws by Pennington and Hudson and fromDavis' Law Relating to Commercial Letters of Credit as the saidpassages were also taken into consideration by the SupremeCourt. It is now well-settled that the relationship betweenthe issuing bank and the confirming bank is principal to agentand there is no private between the purchaser or opener of theletter of credit and the confirming bank. Reference can beusefully made in this connection to the decision in EquitableYust Co. of New York v. Dawson Partners Ltd. [1926] 27 LloydsRep 49 (HL). The doctrine of strict compliance in respect ofletters of credit is also well settled and the bank is bound toreject documents which do not strictly conform to the terms ofthe credit. This is conveniently referred to as doctrine ofstrict compliance. The reason underlying the rule is that theadvising bank is a special agent of the issuing bank and thelatter is a special agent of the buyer; if such agent, who hada limited authority, acts outside his authority, the principalis entitled to disown the act of the agent, who cannot recoverfrom him and has to bear the commercial risk of the transaction.The rule was referred to in Bank Melli Irat v. Barclays Bank[1951] 2 KB 367; 2 Lloyds Rep 367. Article 15 of UniformCustoms and Practice sets out that bankers must examine alldocuments with reasonable care to ascertain that they appear ontheir face to be in accordance with the terms and conditions ofthe credit. Though one of the maxims on which the letter ofcredit system is founded is the autonomy of the institution, oneexception is admitted to the rule and that is, the fraudexception. The issuing bank under the irrevocable credit and theadvising bank, if it has added its confirmation, should refuseto honour the absolute undertaking which it has given to thebeneficiary to pay, accept or negotiate according to the termsof the credit, if the documents tendered are found to be forgedor the beneficiary has committed fraud. The bank is not obligedactively to ascertain whether the alleged fraud can be proved.In cases where the fraud exception is pleaded, it is necessaryto establish the fraud clearly and unambiguously. In UnitedTrading Corporation S. A. v. Allied Arab Bank Ltd. [1985] 2Lloyds Rep 554 (CA), it was observed that the court will requirestrong corroborative evidence of. the allegations, usually inthe form of contemporary documents, particularly emanating fromthe beneficiary. It was further observed that if the courtconsiders that on the material before it, the only realisticinference to draw is that of fraud, then the complainant wouldhave made out a sufficient case for fraud. It is not necessaryto burden the judgment with more authorities, save and exceptreference to the decision of the Supreme Court in Uttar PradeshCo-operative Federation Ltd. v. Singh Consultants and Engineers(P.) Ltd. , whichsuccinctly sets out the nature and the ambit of the transactionevidenced by a letter of credit. The Supreme Court pointed outthat the first contract is between the buyer and seller and itis a contract between principal and principal. The secondcontract is between the buyer and the issuing bank and is acontract also between principal and principal for it is a purebank-customer relationship. Under this contract, the issuingbank for a commission agrees(a) to issue the credit;(b) to make payment either itself or through a confirming bank (to payor to accept or to negotiate bills of exchange drawn by theseller) against the presentation of stipulated documents;(c) the buyer agrees to reimburse the issuing bank; and(d) until the issuing bank is reimbursed the bill of lading and otherdocuments become the security of the issuing bank.The third contract is between the issuing bank and the confirming bank andthat is a contract between principal and agent. The issuing bankauthorises its agent, that is the confirming bank, to pay to theseller through one of the four prescribed modes laid down inUniform Credit Policy, upon presentation of all the requisitedocuments under the letter of credit. The fourth contract isbetween the confirming bank and the seller, under which theconfirming bank agrees to pay to the seller against thedocuments presented and is also a contract between principal andprincipal.The first point which requires determination iswhether the plaintiffs have cause of action to institute asuit against defendant No. 2 Swiss Bank. It was contended onbehalf of Swiss Bank that from the nature of the transaction andthe relationship between various parties, it is obvious that noprivate exists between the plaintiffs and Swiss Bank and in theabsence of private of contract the plaintiffs cannot maintain anaction against Swiss Bank. It was contended that even assumingthat there were discrepancies in the documents presented toSwiss Bank, still the liability of Swiss Bank is only to CanaraBank who are the principals and Swiss Bank owes no duty or careto the plaintiffs. It is not possible to accede to thecontention of the Swiss Bank on this count. The plaint sets outthat the cause of action arises against Swiss Bank because thedocuments were tendered after the stipulated date and wereaccepted and negotiated after the expiry date. It was alsoclaimed that Swiss Bank was negligent in not properlyscrutinising the documents, which suffered from severaldiscrepancies. The plaint also alleges that fraud was committed bydefendant No. 4 and Swiss Bank colluded 'with defendant No. 4 inaccepting the documents without scrutiny and, therefore,knowledge of the fraud played can be attributed to Swiss Bank.It is undoubtedly true that there is no privity of contractbetween the plaintiffs and Swiss Bank, but it cannot beoverlooked that in case the plaintiffs established fraud on thepart of defendant No. 4 and the knowledge of the same isattributed to Swiss Bank, then the action of Swiss Bank inaccepting the documents as well as draft and making payment tooriginal defendant No. 4 stands vitiated and is obviously not inaccordance with the terms and conditions of letter of credit. Incase the plaintiffs could establish that the documents were nottendered to Swiss Bank on October 21, 1985, which was a cut-offdate, then the Swiss Bank cannot seek reimbursement from CanaraBank and consequently Canara Bank cannot make any claim againstthe plaintiffs on the strength of the letter of credit. In ourjudgment, though strictly there is no privity of contractbetween the plaintiffs on the one hand and defendant No. 2,Swiss Bank on the other, still it is not possible to accede tothe submission that the plaintiffs had no cause of actionagainst defendant No. 2, because the facts are so interlinkedand/or interconnected that the plaintiffs cannot securesubstantial relief against Canara bank without establishing thefailure of Swiss Bank in taking precautions while acceptingdocuments from original defendant No. 4. In these circumstanceswe are in agreement with the finding of the trial judge that theplaintiffs had cause of action to institute the suit againstdefendant No. 2, Swiss Bank.The defendants claimed that thesuit was not maintainable in view of the bar of provisions ofsub-section (2) of section 69 of the Indian Partnership Act.Sub-section (2) of section 69 reads as follows :"69. (2) Nosuit to enforce a right arising from a contract shall beinstituted in any court by or on behalf of a firm against anythird party unless the firm is registered and the persons suingare or have been shown in the Register of Firms as partners inthe firm.'The plaint sets out that jai Hind 011 Mills are apartnership firm registered under the provisions of the IndianPartnership Act. A partnership firm is not an independentlegal entity and merely represents a trade name of the actualpartners. The appellants claim that under section 69 of thePartnership Act the registration of both, the firm and thepartners suing is a condition precedent to the filing of thesuit. This position is ............section 69 of the Partnership Act. There is considerable meritin the submissions urged on behalf of the defendants, and theconclusion is inescapable that the suit was not maintainablein the absence of proper registration. Shri Kapadia, learnedcounsel appearing on behalf of the plaintiffs, submitted thatthe bar under sub-section (2) of section 69 is not attractedbecause the suit is not filed to enforce a right arising from acontract. It was contended that the suit is purely for aninjunction restraining Canara Bank from demanding any amountfrom the plaintiffs and restraining Swiss Bank from demandingreimbursement from Canara Bank, and the relief of injunction,claims learned counsel, is not one arising from a contract. Itis impossible to accede to the submission. The claim forinjunction is made against Canara Bank on the basis that a contractualrelationship existed between the plaintiffs and Canara Bankand the bank failed to discharge its obligation by not takingproper care in scrutinising the documents and advising theplaintiffs to accept the documents by withholding the factthat initially Canara Bank had raised objections on the basis ofdiscrepancies in the documents. It is futile to suggest that thesuit for pure injunction is dehors the terms of the contract.In our judgment an injunction cannot be sought unless theplaintiffs have a subsisting right and which is alleged to beinfringed by the defendants. The subsisting right of theplaintiffs is on the basis of contractual relationship arisingout of obtaining the letter of credit in pursuance of theapplication. It is, therefore, futile to suggest that the suitis not to enforce a right arising from a contract. It was thencontended by learned counsel that the expression used insub-section (2) of section 69 of the Partnership Act is "toenforce a right arising from a contract" and in the present suitthe plaintiffs are not enforcing only a right arising from acontract but also a right arising out of a tortious actcommitted by the banks. It was contended that the suit being toenforce a right which accrued because of the tortious action, itcannot be suggested that that right arises from a contract. Itis not possible to accede to the submission in view of thedecision of the Supreme Court in Renusagar Power Co. Ltd. v.General Electric Co ., . The question before theSupreme Court was whether a dispute inclusive of thearbitrator's jurisdiction comes within the scope or purview ofan arbitration clause or not, and it was held that the answerprimarily depends upon the terms of the clause itself. TheSupreme Court after referring to various decisions recorded itsconclusion in paragraph 25 by setting out four propositions, andproposition (2) reads as follows (page 1170):"Expressions suchas 'arising out of' or 'in respect of' or 'in connection with'or 'in relation to' or 'in consequence of' or 'concerning' or$relating to' the contract are of the widest amplitude andcontent and include even questions as to the existence, validityand effect (scope) of the arbitration agreement".It is obviousthat even assuming that the claim made by the plaintiffsarises out of the tortious actions of the defendants, still thealleged tortious liability of the defendants also arises from acontract between the parties. The tort alleged against thedefendants is failure to take the requisite care expected of thebanker. The occasion to take care arises only in view of thecontract between the parties and independent of the contract thesuit could not have been maintained on the alleged failure ornegligence of the bank to take requisite care. In ourjudgment, the contention that the suit is one for injunction andin any event liability arises out of the tort and, therefore, isnot one to enforce a right arising from the contract cannot beaccepted. The learned trial judge accepted the contention ofthe plaintiffs on this count and we are afraid, we cannot sharethe view that the suit was not one to enforce a right arisingfrom the contract.Shri Kapadia then submitted that the barunder sub-section (2) of section 69 of the Partnership Act isnot attracted because the sub-section demands that (a) the firmshould be registered and (b) the person suing should be shown inthe Register of Firms as partner. It was contended that it isnot in dispute that the firm is registered and the expressionpersons suing" should be construed as one who has declared theplaint. The plaint was declared by Shamlal, who is admittedlythe partner, and whose name is shown in the Register of Firms,and therefore, the requirements of sub-section (2) arecomplied with. It is not possible to accede to the submissionthat the expression "person suing" means that the person whodeclares the plaint should be shown in the register as apartner. The expression "person suing' came up for considerationbefore the Division Bench of this court and in the judgment inGandhi and Co. v. Krishna Glass Pvt. Ltd., AIR 1987 Bom 348, theDivision Bench held 'that if the name of one of the partners isnot shown in the Register of Firms on the date of filing of thesuit, then the suit is not maintainable. The Division Benchapproved the identical view taken by the Punjab High Court inButa Mal Dev Raj v. Chanan Mal, AIR 1964 Punj 270, and theGujarat High Court in Bharat Sarvodaya Mills Co. Ltd. v. MohattaBrothers, . We are in respectful agreement withthe decision of the Division Bench. The contention of ShriKapadia that the person suing should be shown as partner in theregister is complied with because Sharnlal is a partner has noforce. A plaint can be declared by any person familiar with,.the contents of the plaint and that would include even aperson who is not a partner. The expression "person suing"cannot be limited to the person who declares the plaint. In ourjudgment the requirement of sub-section (2) of section 69 ofthe Partnership Act is not complied with as all the partners ofthe firm on the date of institution of the suit were not shownas partners in the Register of Firms.Rajesh Kishnani wasadmitted to the benefits of partnership on August 13, 1982, andbecame a major on November 9, 1985. Rajesh Kishnani was a]however registered as partner only on August 11, 1988. Shamlaldeposed at the trial that Rajesh Kishnani was shown as a partnerin the Gibraltar suit and, therefore, it is obvious that Rajeshwas a partner on the date of presentation of the suit filed onMarch 20, 1986, in this court. As Rajesh was not shown aspartner on the date of institution of the suit in the Registerof Firms, the bar of sub-section (2) of section 69 is clearlyattracted. The trial judge tried to overcome the objectionraised on behalf of the defendants as regards non-registrationof the name of Rajesh as partner in the Register of Firms byholding that the defendants should not be permitted on highlytechnical grounds to defeat a just claim. We are afraid, wecannot bypass the clear cut statutory provisions by holding thatthe objection is highly technical. The objection goes to theroot of maintainability of the suit. The learned judge alsoobserved that Rajesh may have been shown as a partner in theGibraltar suit without his knowledge. The observation is clearlyincorrect. Rajesh never entered the witness box and raised anysuch claim. As regards failure to show the name of minor AnilRamehand as partner on his attaining majority, the learned judgeheld that there seems to be some mistake made in the registerand the Registrar seems to have made a wrong entry. The trialjudge, with respect, overlooked provisions of section 69 of thePartnership Act, which, inter alia, provide that the statementnoted in the Register of Firms to be conclusive proof of thefacts stated therein. The extract of the Register of Firms showsthat Devandas Kodumal joined the firm in his capacity as kartaof the Hindu undivided family. In the suit instituted in theGibraltar court Devandas Kodumal was shown as partner in hispersonal capacity and as mentioned hereinabove Shamlal deposedthat every person shown as plaintiff in the Gibraltar suit was apartner. As initially Devandas Kodumal had joined as karta ofthe Hindu undivided family, his subsequent continuation in adifferent character was also required to be duly registered withthe Registrar of Firms. The trial judge observed that the courtsoutside India cannot be expected to understand the concept ofHindu undivided family and, therefore, Devandas Kodurnal mighthave been shown in his individual capacity in the Gibraltarsuit. It is not possible to accede to this line of reasoning,and more so, when even Shamlal did not depose to such state ofaffairs. In our judgment, it is obvious that all those who werepartners of the firm on the date of institution of the suit werenot shown as registered in the Register of Firms andconsequently the suit filed on behalf of the firm was notmaintainable. In spite of our finding about maintainability ofthe suit, we do not propose to rest our judgment on this pointand will examine the merits of the claim.The next point forconsideration is whether the documents were presented by CreditBank to Swiss Bank on October 21, 1985. It is not in disputethat if the documents were not presented on October 21, 1985,then Swiss Bank could not have entertained the documents,accepted the same and accepted the draft for payment in favourof original defendant No. 4. The presentation of documents onOctober 21, 1985 was mandatory in view of condition (c) of theletter of credit, which provided that the documents must bepresented for negotiation within 21 days from the date ofshipment. The last date of shipment under the letter of creditwas September 30, 1985, and, therefore, it was incumbent topresent the documents latest by October 20, 1985. The letterof credit was issued in accordance with Uniform Customs andPractice for Documentary Credit and article 48(a), inter alia,provides that if the expiry date of the credit or the last dateof the period of time after the date of issuance of thetransport documents for presentation of documents stipulated bythe credit falls on a day on which the bank, to whichpresentation has to be made, is closed, then the stipulatedexpiry date shall be extended to the first following businessday on which such bank is open. It is not in dispute thatOctober 20, 1985, was a Sunday, and, therefore, it waspermissible to present the documents on October 21, 1985.Initially the plaintiffs did not dispute that the documents werepresented on October 21, 1985. Indeed at the time ofconsideration of grant of interim relief the complaint of theplaintiffs was that the documents were presented on October 21,1985, but were not accepted till October 23, 1985, and,therefore, the condition of the letter of credit was notsatisfied. In the plaint the complaint was that the documentswere presented/negotiated later than 21 days from the date ofbill of lading and, therefore, Swiss Bank should have refused toaccept the documents and the draft. Subsequently, the plaint wasamended just prior to the commencement of the trial and then itwas claimed that the documents were not presented until late inthe afternoon on October 21,but were scrutinised and accepted on that day itself. This claimof Swiss Bank at the interim stage, felt the learned judge, wasa suspicious circumstance, but it is possible that at theinterim' stage the entire record was not available and thearguments were advanced to prima facle establish that Swiss Bankwas not in the wrong. It is necessary to state that as soon asthe trial opened it was made clear on behalf of Swiss Bank thatthe documents were accepted only on October 23, 1985. ShriKapadia submitted that from the tenor of the affidavits filedat the stage of grant of interim relief, an impression iscreated that the documents were accepted on October 21, 1985,itself. On perusal of the affidavits, it is not possible toreach such a conclusion. Nowhere in the affidavits it is claimedthat the documents were accepted on October 21, 1985. We arealso unable to find how the fact that Swiss Bank appealed in thesuit in December, 1986, can be treated as a suspiciouscircumstance. The suit was instituted on March 24, 1986, and adinterim injunction granted was against Canara Bank restrainingfrom reimbursement of Swiss Bank. The legal advice tendered toSwiss Bank was that ad interim injunction will be vacatedbecause in respect of international transactions based onletters of credit injunctions are not granted. In any event,Swiss Bank had already paid the amount to original defendant No.4 and Canara Bank had assured Swiss Bank of reimbursement. SwissBank in these circumstances waited for over seven months andappeared in this court only when the question of grant ofinterim relief remained pending. We are also unable to blameSwiss Bank for not adopting third party proceedings againstoriginal defendant No. 4. It was wholly unnecessary for SwissBank to do so as payment was made to defendant No. 4 inpursuance of the letter of credit and Swiss Bank was entitled toreimbursement from Canara Bank and which claim was neverdisputed. The trial judge was not right in criticising SwissBank and Canara Bank for not submitting to the orders of thecourt on the ground that fraud was alleged and the financialinstitutions should not resist such claims. The banks wereperfectly justified in resisting the claim when it was realisedthat the plaintiffs had lodged the claim by suppressing a largenumber of facts and fraud was alleged only on realisation thatthe goods could not be secured. The banks cannot be faulted fordefending the suit and it is uncharitable to observe that thebanks were preventing the court from establishing the fraud topossibly assist defendant No. 4 in disproving the same. Thecircumstance that Swiss Bank does not maintain inward registercannot lead to the conclusion that the transactions of the bankswere suspicious. In the age of computers and automation, andwhich systems are practised in Swiss Bank, it is impossible toexpect maintenance of manual registers. It is futile to suggestthat even though there was no dispute whatsoever that October20, 1985, was a Sunday, a fact known to everyone, still theconduct of the Swiss Bank issuing the certificate that thedocuments were presented within the stipulated period ought tohave mentioned the fact that October 20, 1985, was Sunday andfailure to do so amounts to deliberately misleading theplaintiffs. The trial judge also felt that Franz Oehen tried tointroduce documents which were not disclosed and that showssuspicious conduct on the part of Swiss Bank to establish thatdocuments were presented on October 21, 1985. The conclusion ofthe trial judge on this count is clearly erroneous. Shri Oehenwhile under cross-examination was asked whether any receipt wasissued to the messenger who brought the documents from CreditBank. The witness replied that he had not looked, whether anydocument is in existence in that respect. The witness was toldto ascertain. The witness then went back to Switzerland andafter his return was further cross-examined. The witness wasasked the question whether he had found out the document andwhen the answer was in the affirmative, no further questionswere asked. When a copy of the receipt issued to the messengerwas then tried to be tendered on behalf of the banks, the trialjudge declined to take it on record on the ground that thedocument was not disclosed earlier in the affidavit ofdocuments. The trial judge thus denied permission to producethe receipt, but made observations in the judgment that theattempt to produce the document indicates fabrication ofreceipt. We are unable to appreciate the conclusion on thisaspect. Without production of documents on record it is notpermissible to term the documents as fabricated and more so,when it was at the behest of the plaintiffs that the witnessfound out the documents and was desirous of producing it onrecord.The trial judge relied upon two more circumstances inrespect of extension of the date for payment under letter ofcredit and the effort of Swiss Bank to seek reimbursement beforethe due date from Bankers Trust Company, original defendant No.3, and from these circumstances the learned judge inferred thatthere must be collusion between Swiss Bank and originaldefendant No. 4. This aspect will be considered at a later stagewhile examining whether Swiss Bank was aware of the fraud andwas in collusion with original defendant No. 4.On a carefulscrutiny, of the evidence led by Sharnlal, partner of theplaintiffs and of Franz Oehen on behalf of defendant No. 2, andalso the oral evidence led on behalf of Canara Bank and thedocumentary evidence produced in support of the claim, wehave no hesitation in concluding that the trial judge was inerror in holding that the documents were not presented onOctober 21, 1985.The next point for determination is whetherSwiss Bank, which received the documents on October 21, 1985,was required to scrutinise and accept the documents on that dateitself and whether the acceptance on October 23, 1985, violatesthe terms and conditions of the letter of credit. The tworelevant conditions of the letter of credit on, this aspect areconditions (c) and (f). Condition (c) reads :"(c) Documents must be presented for negotiation within 21 days fromshipment";Condition (f) reads"(f) Latest date for negotiation September 28, 1985."It is not in dispute that the letter of credit issubject to Uniform Customs and Practice for Documentary Credits,except or otherwise expressly stated. The latest date fornegotiation under condition (f) was extended up to October 21,1985. It is not in dispute that the letter of credit providesfor part shipment of consignment. In other words, the contractfor supply of 2,800 metric tons of chick peas need not be sentby one vessel but by different vessels, but in respect of eachpart shipment all the conditions of the letter of credit mustbe adhered to. In the present case, the entire consignmentcovered by three confirmation notes is sent by one vessel. Theplain reading of condition (c) establishes that the documentsmust be presented within 21 days from the date of shipment andpresentation of documents beyond that date could not be valid.Condition (f) provides for an outside date or which is popularlyknown as "expiry date". In other words, documents cannot bepresented after October 21, 1985, which is the expiry date. Theseller or beneficiary of the letter of credit, therefore, mustcomply with both the conditions to secure the benefit of credit.In the present case, the bills of lading were issued onSeptember 30, 1985, and, therefore, the documents were requiredto be presented under condition (c) on or before October 20,1985, and that day being Sunday, it was open to present thedocuments on the next working day, that is, October 21, 1985,and, therefore, condition (c) is satisfied. It was claimed onbehalf of the plaintiffs, and which contention was accepted bythe trial judge that condition (f) provides that not only thepresentation of the documents must be before the expiry date,that is, October 21, 1985, but the documents should bescrutinised and accepted and the draft payable to originaldefendant No. 4 also accepted by Swiss Bank before October 21,1985. As mentioned hereinabove, it is not in dispute that thedocuments were scrutinised and accepted along with the draftpayable to original defendant No. 4 on October 23, 1985. Thequestion for determination is whether acceptance of documentsafter scrutiny on October 23, 1985, was in violation of theterms of credit. To determine the question, it is necessary toascertain the exact ambit of the two conditions (c) and (f).As the letter of credit issued by Canara Bank is subject toUniform Customs and Practice for Documentary Credit, it would beappropriate to refer to articles 46 and 47 of this document.Article 46(a) reads as follows:"46. (a) All credits muststipulate an expiry date for presentation of documents forpayment, acceptance or negotiation. 'The expression "negotiation" in article 46(a) refers to "discounting". Article47(a), inter alia, provides that in addition to stipulating anexpiry date for presentation of documents, every credit whichcalls for a transport document should also stipulate aspecified period of time after the date of issuance of thetransport documents during which presentation of documents forpayment, acceptance or negotiation must be made. It furtherprovides that if no such period of time is stipulated, bankswill refuse documents presented to them later than 21 days afterthe date of issuance of the transport documents. Article47(b)(iii) provides that in the case of transport documentsevidencing loading on board a named vessel, the date of issuanceof the transport document is a date of such notation. In otherwords, the date is one on which the bills of lading were issued.Article 11 prescribes that all credits must clearly indicatewhether they are available by sight payment, by deferredpayment, by acceptance or by negotiation. The letter of credit,therefore, must indicate in what manner the credit will behonoured so as to entitle the beneficiary to receive paymentupon presentation of documents. The usual four modes of paymentare(a) payment in cash on scrutiny of documents(b) deferred payment by the bank on presentation of documents(c) the acceptance of draft drawn by the beneficiary upon the acceptingbank; and(d) negotiation or discounting of a draft drawn bythe beneficiary on bank, other than the accepting or confirmingbank.It is not in dispute that the mode of payment under thesuit letter of credit is under category (c). The expression"negotiation" in article 11 clearly refers to the mode ofpayment under category (d), where a draft drawn by thebeneficiary of a bank other than accepting bank is negotiatedor discounted. It is not in dispute between the parties, andthat fact is established by oral evidence of Shri M. S. V.Shenoy, an officer of Canara Bank, that the letter of credit wasissued as per the printed form of Canara Bank and several banksuse an identical format, including conditions (c) and (f). Thetestimony of Franz Oehen of Swiss Bank also establishes thatsimilar words, as used in conditions (c) and (f), are used notonly by Indian banks but most of the Arab and Korean banks.The plaintiffs claim that condition (c) uses the expression"presented for negotiation", while condition (f) 'latest datefor negotiation". According to the plaintiffs when thedocuments are presented for negotiation within 21 days from thedate of shipment, then condition (c) is satisfied, but condition(f) provides for the latest date for negotiation and theexpression "negotiation" in condition (D means acceptance andsuch acceptance cannot be postponed beyond October 21, 1985.It is not in dispute that the accepting or confirming bank couldnot accept the documents without proper scrutiny. Detailedarguments were advanced how to interpret the expression"presentation for negotiation" and "latest date for negotiation"in conditions (c) and (f). The plaintiffs claimed that theexpression "latest date for negotiation" means latest date foracceptance of documents after scrutiny, while the banks claimedthat the "latest date for negotiation" merely refers to the dateof expiry of the credit and before which date the documents mustbe presented, and it is not necessary that documents must beaccepted before the expiry date. The interpretation which couldhe accepted must be one in accordance with the Uniform Customsand Practice and which is also in accordance with banking andcommercial practice throughout the world and whichinterpretation would give commercial efficacy and consistencyand workability to the letter of credit. It would not be properto give grammatical and technical interpretation to thecommercial documents, because the anxiety of the courts shouldbe to ensure that the commercial documents are so interpreted asto enable the international trade to run smoothly. It isundoubtedly true that the banks dealing in commercial documentsare required to follow the principle of strict compliance whileacting on the credits, but the courts while interpreting thecommercial documents must bear in mind the intention of theparties as well as how the commercial work understands theexpression used in the documents. The intention of the partiescould well be gathered from the surrounding circumstances andthe exercise of determining the meaning of the terms used in thedocuments should he with an object to give commercial efficacyand to sustain the transaction between the parties. A referencecan be usefully made to the decision of the Supreme Court inDhanrWarnal Gobindram v. Shamji Kalidas and Co., , where Mr. justice Hidayatullah, as he then was, afterexamining the English decisions, approved the principle laiddown by the House of Lords in Adamastos Shipping Co. Lid. v.Anglo Saxon Petroleum Co. Ltd. [1959] AC 133 (HL) and theobservations of Viscount Simonds to the effect that effortsshould always he made to construe commercial agreements broadlyand one must not be astute to find defects in them or rejectthem as meaningless. Bearing this principle in mind, it isnecessary to find out the exact import of the expressionnegotiation" in clause (f) of the letter of credit. The word"negotiation" as deposed by Mr. Modeira and Mr. Wheble, theexpert witnesses examined on behalf of Canara Bank and SwissBank respectively, have varied meanings and used in differentcontexts in the banking transactions. It is undoubtedly true, asurged by Shri Kapadia on behalf of the plaintiffs, that theofficers of Canara Bank, like Mangaonkar and Mr. K. P. K. Shenoyand Mr. Oehen of Swiss Bank have deposed that in somecircumstances the expression "negotiation" may include scrutinyof documents and acceptance. The letter of credit issued byCanara Bank is in accordance with the Uniform Customs andPractice and it could not be seriously debated that the letterof credit must stipulate an expiry date for presentation - ofdocuments. Indeed the oral evidence indicates that a letter ofcredit which does not prescribe such an expiry date is unknown.In this background, it is necessary to examine whether theexpression "negotiation" in clause (f) refers only to theexpiry date, and in our judgment, it would be appropriate tohold that condition (f) of the letter of credit refers to theexpiry date. The interpretation suggested by the plaintiffs thatthe expression "negotiation" should be treated as scrutiny ofdocuments and acceptance would make the credit unworkable. It isnot in dispute that it was open for the beneficiary to presentthe documents on October. 21,1985, and that would have clearlysatisfied the requirements of condition (c). Now, condition(c) makes the beneficiary liable to present the documents fornegotiation and the duty of the beneficiary comes to an end if(a) the document is presented within 21 days from the date oflading, and (b) such presentation is before the expiry date. Tohold that not only the presentation should be before October 21,1985, but the beneficiary can get advantage of the letter ofcredit only if the bank scrutinises the documents and acceptsthe same before October 21, 1985, would amount to imposingadditional condition on the beneficiary. The beneficiary is notresponsible or cannot control as to how long the bank shouldtake to scrutinise the documents. The evidence led by theparties indicates that the normal period required forscrutinising documents is two or three days in foreign countrieswhile in Asian countries it may require five days and any periodbeyond five days would be treated as unreasonable. The UniformCustoms and Practice demands that the bank must scrutinise thedocuments expeditiously and such scrutiny must he with utmostcare. The period of scrutiny and the time will depend upon thenumber of documents presented and staff available with the bank.Oehen deposed that the documents presented were scrutinised fora duration of about seven hours before acceptance and thatprocess could be completed only on October 23, 1985, because thedocuments were presented at 15.40 hours on October 21, 1985. Asthe beneficiary was entitled to present the documents any timebefore expiry of banking hours on October 21, 1985, theinterpretation suggested by the plaintiffs would lead to defeatthe credit available to the beneficiary. It is impossible toexpect the bank to complete the exercise of scrutiny within acouple of minutes after presentation of documents, and,therefore, even though the presentation was perfectly legal andvalid, the beneficiary would not be entitled to secure theadvantage of the credit for no fault of his. Such aninterpretation would make a mockery of the intention of theparties to make payment by issuance of a letter of credit. Thetrial judge realising the impossibility of performing thescrutiny within a few minutes or hours, felt that thebeneficiary ought not to present the documents on the last datebut should present them long before expiry date or beforecompletion of 21 days from the date of bill of lading so as toleave enough margin for the bank to scrutinise the documents andaccept the same. To put such a condition on the beneficiary isto propane the date of presentation and that is notpermissible. As the letter of credit prescribes an expiry dateof the credit, it is always open for the beneficiary to presentthe documents on the last date. On presentation of suchdocuments on the last date, the bank was left with two options(i) to reject it forthwith on the ground that there is notenough time to scrutinise the same; or (ii) accept itforthwith, and either of the options are totally incorrect. Adocument cannot be rejected without scrutiny and unless found tobe discrepant with the letter of credit. The documents alsocannot be accepted without scrutiny and unless found to be inconformity with the letter of credit. It is possible that thebank on scrutiny on the next day after the date of expiry mayfind that the documents are perfectly in order and still will bedeprived from honouring the documents. In our judgment, it isnot possible to hold that the beneficiary should present thedocuments sufficiently in advance to enable the bank toscrutinise the same, if the beneficiary is desirous to seekadvantage of the letter of credit. Such interpretation would bein violation of the specific terms of the letter of credit andwould cause untold difficulties to the parties. The beneficiarywill have to ascertain in every case as to how long the bankwould require to scrutinise the documents and it is impossibleto leave the parties to such nebulous uncertainties in respectof commercial transactions. In our judgment, the expression"negotiation" in both clauses (c) and (f) contemplates anaction on the part of the beneficiary in presenting the relevantdocuments for acceptance and does not comprehend any action tobe taken by the bank thereafter.Reliance placed in this regardon two decisions in Forestal Mimosa Ltd. v. Oriental Credit Ltd.(19861 2 All ER 400 (CA) and Discount Records L&T v. BarclaysBank Ltd. [1975] 1 All ER 1071, on behalf of the defendantsbanks is appropriate. justice Megarry in Discount Record's case[1975) 1 All ER 1071 where the document recited that the creditis available for negotiation or payment until June 7, 1974,observed that the expression &%negotiation" means that June 7,1974, was the last date on which a draft 1 could be presentedfor acceptance. It was contended that the observations ofjustice Megarry were made while issuing an interim order, and,therefore, much importance should not be attached. In theForestal Mimosa Ltd. v. Oriental Credit Ltd. [1986] 2 All ER400, the Court of Appeal was concerned with the document wherethe relevant expression was "the 1 beneficiaries are permittedto negotiate the documents within 30 days from the date of billof lading". The Court of Appeal observed that the word"negotiate" is an unfortunate word, but as it is the plaintiffswho have to negotiate the documents and as under the terms ofcontract the only thing that they can do with the documents isto hand them over to 1 the confirming bank, and that having beendone the conditions must be held to have been fulfilled. TheHouse of Lords upheld the decision of the Court of Appeal byrefusing leave to the defendants. In our judgment, taking intoconsideration the provisions contained in Uniform Customs andPractice regarding letters of credit and the practice followedby several C. banks in various countries, the conclusion isinescapable that the expression "negotiation" in condition (f)means only the date of expiry of the credit and the expression"negotiation' does not demand that the documents presented bythe beneficiary must be scrutinised and accepted before theexpiry date.The trial judge observed that the letter of creditwas issued subject to the Uniform Customs and Practice, butspecifically provided that "depot as otherwise expresslystated". The trial judge felt that condition (f) wasinconsistent with the Uniform Customs and Practice, and,therefore, the intention of the parties was to depart from theprovisions of the Uniform Customs and Practice and theexpression "negotiation" in clause (f) was intended to mean thatnot only documents should be presented before the expiry date,but the documents should be scrutinised and accepted by theconfirming bank before that date. To support the conclusion ofthe trial judge Shri Kapadia submitted that the oral evidencenot only of the officers of the Canara Bank and the Swiss Bankbut also of Mr. Modeira and Mr. Wheble, the experts examined toestablish the banking practice and the understanding ofdifferent expressions, indicates that the expression'negotiation' can mean process of scrutiny and acceptance ofdocuments and draft. Learned counsel also urged that even theSwiss Bank understood at the stage of consideration of grant ofinterim relief that the expression "negotiation" meansacceptance after scrutiny, and, therefore, claimed that thepresentation as well as acceptance was on October 21, 1985.Reference was also made to the grounds at paragraphs (c), (d)and (h) of the appeal memo filed by the Swiss Bank against grantof interim relief by the learned single judge, to urge that theSwiss Bank at an earlier stage was claiming that acceptance wasalso on October 21, 1985, because of the understanding that theexpression "negotiation" includes acceptance. Reference wasalso made to the brochure issued by the Swiss Bank and which wasmarked as exhibit "AAW". The brochure sets out a "glossary oftechnical terms" and the expression "negotiation" has beendefined as "action" by which the advising bank buys thedocuments. See pages 38139. Turning to page 38139, the brochuresets out what the bank does upon receipt of the documents, andsets out that it is open for the bank to make a provisionalpayment on the usual reserve and on condition that if thedocuments are not accepted the bank can demand repayment of thecredit. Shri Kapadia also referred to exhibit "M-2", the telexdated November 18, 1985. The telex was sent by the Swiss Bank tothe Canara Bank to reject the objection about the discrepanciesof the documents with the letter of credit and the words usedare "your objection not acceptable considering the long timelapsed since negotiation October 23, 1985". It was contendedthat the Swiss Bank also felt that negotiation means scrutinyand acceptance of documents and in that context the expression"negotiation" is referred to in the telex. From this material itwas contended that the Swiss Bank all along understood that theexpression negotiation means not only presentation but scrutinyand acceptance of documents. It is not possible to accede to thesubmission of learned counsel for the reasons indicatedhereinabove. It would not he appropriate to refer to theexpression used in the telex when the parties were not at issueas to what exactly is the connotation of the expression"negotiation". As mentioned hereinabove the expression'negotiation" is used in various senses and connotes severalmeanings. It is, therefore, safer to interpret the expressionwith reference to the object which was to be achieved byissuance of the letter of credit. The construction which wouldmake the document workable and would advance the object theparties intended should always be preferred instead of thestrict construction which would defeat not only the object butwould raise several complications in reference to commercialtransactions in which international banks are involved. It isnot appropriate to interpret the word with reference to thefacts of a particular case because the wording of conditions (c)and (f) is used by a large number of banks in every letter ofcredit and the interpretation canvassed by the plaintiffs andaccepted by the trial judge would defeat the object of issuingthe letter of credit and would put the beneficiary in jeopardy.We specifically enquired from Shri Kapadia as to how theinterpretation suggested by the defendants would cause anyprejudice to the plaintiffs, and learned counsel had noeffective answer save and except claiming that whether prejudiceor not the strict interpretation suggested by the plaintiffsmust be accepted. In the present case, the beneficiary presentedthe documents on October 21, 1985, and the beneficiary hadcarried out his duties strictly in terms of the letter ofcredit. The issuing bank-the Canara Bank-had no objectionwhatsoever to the acceptance of the documents on October 23,1985, and that acceptance does not suffer from any infirmity.Even the plaintiffs, at whose behest the letter of credit wasissued, could not have complained in case the goods had reachedthe Bombay Port. The acceptance of the interpretation of theplaintiffs would destroy the entire transaction and for no faultof the seller and the buyer the transaction would fall through.This was not contemplated by any of the parties, and, therefore,it is impossible to accept the claim that the Swiss Bank oughtto have rejected the documents as the process of scrutiny andacceptance was not completed on October 21, 1985. In ourjudgment, the trial judge was in error in holding that.condition (f) of the letter of credit was a departure from thegeneral rule provided under the Uniform Customs and Practice.Condition (f) was in accordance with article 46(a) of theUniform Customs and Practice. The finding, therefore, is thatthe Swiss Bank was not required to scrutinise and accept thedocuments on October 21, 1985, itself and the scrutiny andacceptance thereof on October 23, 1985, was perfectly inaccordance with the terms of the letter of credit.The next question for determination is whether the documents presented byCredit Bank on behalf of original defendant No. 4 werediscrepant in accordance with the terms and conditions requiredby the letter of credit and, therefore, the Swiss Bank was dutybound to reject the same ? The discrepancies alleged by theplaintiffs are set out in paragraph 9 of the plaint and thediscrepancies are eight in number. There is one more discrepancyreferred to in paragraph 7 after the plaint was amended, but thesaid discrepancy was given up by the plaintiffs at the trial.Out of the eight discrepancies set out in paragraph 9 of theplaint, discrepancies at serial Nos. 2, 4 and 8 were given up.Shri Kapadia made it clear during arguments that the plaintiffsare not relying upon discrepancies which were given up beforethe trial court. The first discrepancy was in respect ofpresentation and negotiation of documents later than 21 daysfrom the date of bill of lading. In respect of this discrepancyit was claimed that the documents were presented on October 21,1985, and that was beyond 21 days as the 21st day had fallen onOctober 20, 1985. The discrepancy was not persisted with in viewof the fact that October 20, 1985, was a Sunday and a bankholiday and consequently it was permissible to present thedocuments on October 21, 1985. As regards the contention thatthe documents ought to have been scrutinised and accepted onOctober 21, 1985, the contention has already been examinedearlier and rejected. That leaves for considerationdiscrepancies Nos. 3, 5, 6 and 7. Out of these discrepancies,the trial judge accepted only the discrepancy at serial No. 3and the grievance of the appellants in respect of acceptance ofthis discrepancy will be examined later.It would be convenientto examine the grievance of the plaintiffs in respect ofdiscrepancies at serial Nos. 5, 6 and 7 in paragraph 9 of theplaint as the claim of the plaintiffs in respect of thesediscrepancies was not accepted by the trial court, but thegrievance was reiterated during arguments by Shri Kapadia.Before examining these discrepancies it would be appropriate torefer to two decisions of the Supreme Court which deal with theprinciple of the tests to be applied for determination ofdiscrepancies. Though several other decisions were cited, itis not necessary to refer to these decisions as the same wereconsidered by the Supreme Court in the two decisions. The firstdecision is in Tarapore and Co. v. Vlo Tractoroexport, Moscow; . The Supreme Courtsounded a warning that an irrevocable letter of credit has adefinite implication and it is a mechanism of great importancein international trade and any interference with that mechanismis bound to have serious repercussions on the internationaltrade, and, therefore, unless exceptional circumstances exist,the court should not interfere with that mechanism. In thedecision in United Commercial Bank v. Bank of India , it was observed that the bankissuing or confirming a letter of credit is not concerned withthe underlying contract between the buyer and seller and theduties of the bank are created under the letter of credit. TheSupreme Court referred with approval to a passage in Halsbury'sLaws of England, 4th edition, volume 3, para 141, at page 106,and which reads as under :"Unless documents tendered under acredit are in accordance with those for which the credit callsand which are embodied in the promise of the paying ornegotiating banker, the beneficiary cannot claim against thepaying banker, and it is the paying banker's duty to refusepayment. The documents must be those called for, and notdocuments which are almost the same or which will do just aswell. The banker is not called upon to know or interpret tradecustoms and terms. It has been held that where a mandate isambiguous and a paying banker acts in a reasonable way inpursuance of it, he may be protected. But this general rulecannot be stretched so far as to protect a banker who paysagainst documents describing goods in terms which are similarto, but not exactly the same as those stipulated in the credit.The description of the goods in the relative bill of lading mustbe the same as the description in the letter of credit, that is,the goods themselves must in each case be described in identicalterms, even though the goods differently described in the twodocuments are, in fact, the same. It is the description of thegoods that is all important. The reason for this requirementis stated in Davis' Law Relating to Commercial Letters ofCredit, 2nd edition, page 76 :It is notonly the buyer who facesthe risk of dishonesty or sharp practice on the part of theseller. For, in many instances, the banker looks to the goodsfor reimbursement of the, whole or part of the amount he paysunder the letter of credit. It is equally in his interest toensure that such documents are called for by the letter ofcredit as will result. in goods of the contract descriptionbeing ultimately delivered. The buyer is not compelled to enterinto the sales contract nor is the banker compelled to issue theletter of credit. If either of these contracts is entered intothen it is for the buyer and the banker respectively tosafeguard themselves by the terms of the contract. Otherwise,they must be prepared to bear any ensuing loss.But the liability thus imposed on the issuing banker carries with it acorresponding relief that the seller shall, on his part, complywith the terms of the letter of credit and the seller'sobligations have been construed as strictly as those of thebanker. We have already referred to the statement of law inHalsbury's Laws of England, which found a place in. Paget's Lawof Bathing, 8th edition, at page 648, and we may at the risk ofrepetition reproduce the same, to the effect :Unless documentstendered under a credit are in accordance with those for whichthe credit calls and which are embodied in the promise of theintermediary or issuing banker, the beneficiary cannot claimagainst him; and it is the banker's duty to refuse payment. Thedocuments must be those called for and not documents which arealmost the same or .which seem to do just as well."The discrepancy referred to at serial No. 5 in paragraph 9 of theplaint is with regard to "combined fumigation and phytosanitarycertificate". The complaint made by the plaintiffs was thatthe certificate refers to the fumigation done by the firm andthe name of the firm has not been mentioned. It was claimed thatthe fumigation should be done by a particular agency and thenonly the certificate can be valid. There is absolutely no meritin this contention as rightly held by the trial judge. Theletter of credit merely calls for combined certificate ofphytosanitary and fumigation. The certificate tendered beforethe Swiss Bank was the one issued by the Ministry ofAgriculture, Forest and Rural Affairs in Turkey and is issued ina printed standard form. The certificate reflects that bothphytosanitary as well as fumigation was carried out. The letterof credit does not require fumigation to be carried out by anyparticular authorised institution or agency, and consequentlythe grievance that the name of the agency which carried out thefumigation was not mentioned is wholly without any merit. Thediscrepancy at serial No. 6 in paragraph 9 of the plaint is thatthe bills of lading are not signed by the approved agents or theowners or master of the vessel as required by the letter ofcredit. The complaint was that the original letter of creditrequired bills of lading of shipping companies, but the creditwas amended and the bill of lading was permitted to be signed bythe authorised shipping agent/ owner of vessellmaster of ship.The certificate produced before the Swiss Bank was issued byAtake as the authorised shipping company's agents. In the secondcertificate Atake was described as 'authorised shippingcompany's agents of the owners' and in the third certificate as"authorised agents of the owners". The plaintiffs claimed thatthe requirement of the letter of credit is not satisfied. Thereis no merit in the contention. Shamlai, a partner of theplaintiffs, in the witness box deposed that what is meantby discrepancy at serial No. 6 is that the bills of lading arenot signed by the approved agents and the bills of lading onlystated "agents" when what was required was "approved agents".The plaintiffs tried to confuse the issue by claiming that Atakewere agents and not necessarily approved agents. The trial judgevery rightly turned down the contention by observing that theperson who is an agent is necessarily an approved agent. Thebills of lading are issued on a printed form and are not onlysigned by the agents but also by the master of the ship. We areunable to find any discrepancy which warranted Swiss Bank toreject the documents. The discrepancy set out at serial No. 7in paragraph 9 of the plaint is that the letter of creditdemanded that the bills of lading should be marked "freight" and"freight prepaid", whereas contradictory notations regardingpayment of freight are noticed on the bills of lading. Curiouslyenough Shamlal while in the witness box did not even refer tothis discrepancy. A perusal of the bills of lading (exhibits"G-1 8 to G-2 1 ") clearly establishes that the requirement of"freight prepaid" was entirely complied with. At the top of thebills there is an endorsement "freight prepaid". Shri Kapadiasubmitted that at the bottom of the first page of the bill oflading there is a column in which the words printed are "freightpayable at" and what is typed in the bill is "Obernau/Prepaid'.Learned counsel urged that this endorsement does not establishthat the freight was prepaid. The contention is only requiredto be stated to be rejected. The endorsement makes it extremelyclear that freight was payable at Obernau, which is possibly theplace of payment and the word "prepaid" is in conformity withthe endorsement on the top that freight was prepaid. The trialjudge very rightly rejected the claim of the plaintiffs inrespect of this discrepancy, by reference to article 31(b) ofthe Uniform Customs and Practice, which, inter alia, providesthat if the transport documents indicate that freight has beenpaid or prepaid, then the banks will accept the documents onwhich words clearly indicating prepayment of freight appear.The only discrepancy which appealed to the trial judge was thediscrepancy referred to at serial No. 3 in paragraph 9 of theplaint. The complaint was that the description in the invoicediffers from that given in the SGS certificate of survey,quality, weight and packing. A two fold contention was raisedbefore the trial court. The first is that out of the threecertificates issued by SGS in respect of the three differentconsignments an endorsement is made only on one that the goodsare "free from live and dead insects". The endorsement does notappear on all the three certificates but only on one certificateand the grievance was that any C-90-36 reasonable banker onperusing the three certificates would have noticed thediscrepancy. The trial judge did not find any merit in thecomplaint as the letter of credit does not require thecertificate to certify that the goods are free from live anddead insects, and therefore, no fault could be found if suchendorsement is not noticed on the two certificates out of thethree. The fact that such an endorsement is made in onecertificate does not in any manner deviate from the requirementof the letter of credit. The principal grievance urged beforethe trial court, and which p found favour, was that thecertificate contained description of the consignment, that ischick peas and additional words "crop 1985". The grievance wasthat the additional words in relation to the description of thegoods may change the complexion of the goods to the extent thatthey may not even refer to the same goods. Article 41(c) of theUniform Customs and Practice provides that the description ofthe goods in the commercial invoice must correspond with thedescription in the credit and in all other documents the goodsmay be described in general terms not inconsistent with thedescription of the goods in the credit. It is not in disputethat the goods described in the invoice are in accordance withthe letter of credit and the same description is also set out inthe SGS certificates. The complaint is that the certificateswhile setting out the description used the additional words"crop 1985". It is not in dispute that the consignment loadedon the vessel was chick peas and the words "crop 1985" refer tothe crop of chick peas grown in the year 1985. The question fordetermination, therefore, is whether the addition of words "crop 1985" in the description of the goods on the certificate is adiscrepancy which would warrant rejection of the documents. Inour judgment, it is impossible to accept the claim of theplaintiffs that in the first instance there is a discrepancy andsecondly the discrepancy is fatal to the acceptance of thedocuments. One thing which is immediately required to be statedis that the confirmation note issued by the broker of thesuppliers and on the strength of which the letter of credit wasissued by the Canara Bank at the behest of the plaintiffs inclear terms describes the goods with the words "crop 1985". Itis true that the said words do not find place in the letter ofcredit and consequently in the invoice. The words added whiledescribing the goods in the SGS certificate do not, in ourjudgment, deviate from the requirement of the letter of creditnor create a discrepancy which would entitle the bank toreject the documents. It is not possible to accede to thesubmission that the use of the words "crop 1985" may change thecomplexion of the goods to the extent that they may not evenrefer to the same goods. It is not possible for the acceptingbank to be familiar with the various sorts of goods which aretraded with reference to the letter of credit. What the bankis required to ascertain is whether the description of the goodsin the documents accompanying the invoice is inconsistent withthe description of the goods in the credit. Commercial invoicesand all other documents which describe the goods cannot beequated and in the case of commercial invoices the goods mustexactly correspond with the description of the credit, but thesame strict rule is not required in respect of other documents.In respect of other documents the banks have to ensure that thegoods described are not inconsistent with the description in thecredit. Mere addition of some words should not necessarily leadthe bank to reject the documents and defeat the commercialtransactions. The additional description cannot be considered tobe discrepant in each and every case. The trial judge felt thatin certain cases like sale of car of a particular year's modelor tennis racket of a particular brand, it may make a differenceif additional words are inserted in the accompanying documents.It is not necessary to imagine cases where the problems mayarise because on the facts of the present case there cannot betwo opinions that the addition of the words "crop 1985" wouldnot alter the description of the goods or create even asuspicion in the mind of any reasonable person that the goodsdescribed in the invoices and in the certificate are not thesame. Reference was made to the decision in Gian Singh and Co.Ltd. v. Banque de Indochine [1974] 2 Lloyd's Rep 1, where thePrivy Council held that the additions of the words were merelyadditionally descriptive and the words should be understood aswords of description only which did not in any way affect thevalidity of the certificate. The I.C.C. Banking Commissionconsidered the question of additional information furnished inthe document accompanying the invoices and observed that theadditional words describing the consignment which did notderogate from the description in the credit can be wellaccepted. A more complete description in the invoice is notnecessarily an irregularity and the banks should not act likerobots but use their judgment or common sense and in case theadditional information is not inconsistent with the descriptionof the credit, then the documents should not be rejected. Whatis obvious, in our judgment, is that if the documents producedbear a link to each other, then it is not necessary that theaccompanying documents should be exactly consistent in theirwording of the description of the goods in the commercialinvoices. The reliance on the decision of the Court of Appeal inBanque de Indochine v. J. H. Rayner (Mincing Lane) Ltd. [1983]1 Lloyd's Rep 228, in this respect is appropriate. Shri Kapadiaplaced strong reliance upon the decision in Bank Melli Iran v.Barclays Bank (1951] 2 KB 367 to urge that the bank must acceptdocuments as called for by the credit and there is no room fordocuments which are almost as good. There cannot be any quarrelwith the proposition, but the question as to whether theadditional words in the documents accompanying the invoice leadto the discrepancy would depend upon the facts of each case andthere cannot be a general rule that as soon as some additionalwords are noticed in one of the accompanying documents, thenthe bank should straightaway proceed to reject the documents. Inour judgment, the proper approach would be that if thedescription of the goods in the accompanying document is inaccordance with the letter of credit, but also indicates someadditional words, then the bank should ascertain whether suchadditional words are likely to change the nature of the goodsdescribed in the invoice or the goods may be different fromthose described in the invoice. In case the bank finds that thegoods are not different, then the bank need not reject thedocuments merely because of some additional words. In ourjudgment, the trial judge was not right in holding that by theaddition of the words $&crop 1985" in the SGS certificate thebank should have rejected the documents and their failure todo so amounts to gross negligence.The trial judge with reference to the discrepancy in reference to amended paragraph 12 of the plaint, observed that the phytosanitary certificateseems to have been tampered with and that should have put theSwiss Bank on guard. The trial judge felt that the certificatewas tampered with in view of copies of the certificateproduced by the plaintiffs' witness, Mr. Peter Lowe, at thetrial. Copies are marked as exhibit "AO". The trial judge feltthat there are certain corrections in the certificate in respectof the date of issuance and that indicates that the certificateswere not in order and should not have been accepted by the bankat its face value without further enquiry. The appellantscomplained, and in our judgment with considerable merit, thatthe alleged discrepancy or the tampering with the certificatewas not even pleaded and it is not permissible for theplaintiffs to raise fresh contentions by reference to somedocuments which are tendered during the trial. The contention iscorrect and deserves acceptance. Though the trial judge has notrecorded a clear-cut finding that the phytosanitary certificatewas tampered with, he has nevertheless expressed doubt andobserved that such doubt should have put the bank on guard notto accept the documents. We do not share the view of the learnedjudge and in our judgment, the Swiss Bank could not he faultedfor accepting the documents. None of the discrepancies pleadedby the plaintiffs, in our judgment, are real discrepancies ar,,dconsequently the plaintiffs could not claim that the action ofthe Swiss Bank in accepting the documents was invalid.Apart from the discrepancies raised by the plaintiffs, the trial judgeproceeded to find out two more discrepancies in the documents.The trial judge observed that even though the plaintiffs havenot pleaded such. a discrepancy, it is open for the court on itsown to discover the discrepancies not noticed by any party.The appellants complained, and with justification, that such anexercise in respect of commercial documents is not proper. It isnot the function of the court to imagine the discrepancies toreach the conclusion that the acceptance of the commercialdocuments was improper, and more so when neither the plaintiffswho were complaining against the acceptance, nor the issuingbank had at any time suggested that the documents should havebeen rejected on the discrepancies noted by the court. It isundoubtedly true that the court has power to discover thediscrepancies, but it is dangerous to proceed to rest thejudgment on such discoveries because such discoveries deprivethe parties of an opportunity to meet the case. The firstdiscrepancy discovered by the trial judge was that thebeneficiary certificate and certificate of origin wereinconsistent. The letter of credit demanded that the seller wasto forward one set of non-negotiable documents to the plaintiffsalong with a certificate to that effect. In pursuance of thiscondition, the seller submitted certificates, exhibit "G-7". Thetrial judge felt that a perusal of the certificate indicatesthat the documents were airmailed to the plaintiffs by October7, 1985 - as the certificate bears that date. The trial judge heldthat if the certificate of origin (exhibit "G-15") is perused,it is established that the certificate of origin was issued onOctober 10, 1985, and consequently the beneficiary certificatecould not have been airmailed on October 7, 1985. The reason forconcluding that the certificate of origin (exhibit "G-15") isdated October 10, 1985, is on the basis of a rubber stamp, whichreads "10 Ekim 1985". On perusal of the original certificate wefind that the reasoning of the learned judge to reach theconclusion that the certificate of origin was issued on October10, 1985, is not correct. The certificates of origin have gotprinted clauses and the clause at the bottom of the certificaterefers to place and date of issue. Below this clause is thetyped word "Gaziantap" which is a place of issuance and the datetyped. is October 4, 1985". Adjoining the clause is a rubberstamp of the issuing authority and which is duly signed by anofficer. Thereafter, there is a fresh rubber stamp which isaffixed on the original rubber stamp and which reads as "10 Ekim 1985". Nobody knew what the word "Ekim" connotes, but it wasonly during the course of the trial that the plaintiff'switness, Cakurova, who is of Turkish origin deposed that theword "Ekim" means "October". It is not in dispute that thelanguage of the letter of credit is English and the documentsfurnished to Swiss Bank are either in English or translated intoEnglish. The witnesses examined at the trial on behalf of thebanks deposed that the banks examined only the documents whichare in English or the translation of the documents in English.It is impossible for any banker to suspect a document merelybecause a rubber stamp with word "Ekim" is put on thecertificate of origin. On perusal of the original certificate oforigin, we have grave doubts as to when the rubber stamp of "10Ekim 1985" was put. As mentioned hereinabove, it is clear thatthe certificate was prepared on October 4, 1985, and theauthority put the rubber stamp with the signature of theofficer. Now, subsequently, the rubber stamp of "10 Ekim 1985'was placed on the earlier rubber stamp is not known. In thesecircumstances we are unable to agree with the trial judge thatin the first instance this was a discrepancy and secondly ofsuch a nature that the bank should have rejected all thedocuments.The second discrepancy discovered by the trial judgeis that the certificates issued by the Swiss Bank to the effectthat the documents were presented for negotiation on October 21,1985, do not specifically recite that October 20, 1985, wasSunday, and, therefore, presentation on October 21, 1985, wasvalid. We are afraid we cannot share the view of the learnedjudge. The fact that the Swiss Bank did not mention in thecertificate that October 20, 1985, was a Sunday, andtherefore, the beneficiary could have presented the documents onOctober 21, 1985, cannot invalidate the presentation. In ourjudgment, the two discrepancies discovered by the trial judgewere not discrepancies at all, and the conclusion that the SwissBank was acting in an unprofessional manner was unwarranted.That leaves for consideration one more discrepancy which wasraised by the Canara Bank before forwarding documents to theplaintiffs and which was not persisted with, and, therefore,invited the strictures of the trial judge. The documentstendered by the Credit Bank to the Swiss Bank were accepted onOctober 23, 1985, and the testimony of Franz Oehen disclosesthat the documents were airmailed to the Canara Bank by firstairmail. The documents were received by the Canara Bank in itsForeign Exchange Department on October 29, 1985. The documentswere forwarded by the Foreign Department of Canara Bank toMandvi Branch on November 14, 1984. On November 15, 1985,Canara Bank addressed telex message, exhibit "M-1", to theSwiss Bank rejecting the documents on the ground that there is adiscrepancy in the SGS certificate. The discrepancy claimed wasthat the SGS certificate did not describe the merchandisespecifications as per item 3 of the letter of credit. Swiss Bankby reply telex informed the Canara Bank that the allegeddiscrepancy is not accepted for more than one reason. The firstreason was that the alleged discrepancy was pleaded long afterthe documents were received by the Canara Bank and it is notpermissible for the issuing bank to refuse the documents afterconsiderable delay as provided by article 16(d) of the UniformCustoms and Practice. It is not in dispute that the Canara Bankcould not have refused to accept the documents after a longdelay from the date of receipt of the documents in October,1985. It is accepted by all parties that the delay of more than 16 days is fatal. The second reason stated by the Swiss Bank isthat the claim that the SGS certificate did not describe themerchandise specification as per the letter of credit is notcorrect.The Swiss Bank claimed that by amendment dated August23, 1985, exhibit "D-2", the letter of credit provided that theSGS certificate should set out the relevant specifications asstipulated underneath the description of the merchandise andthe relevant packing clause. The Swiss Bank pointed out that theSGS certificates squarely comply with all the requirements ofthe letter of credit and the specifications demanded were setout. Shri Kapadia submitted that the perusal of the SGScertificate (exhibit "G- 16") indicates that all thespecifications required by amendment as regards size, admixtureand undersize of the consignment were duly set out, but thecomplaint of the plaintiffs is that the said specifications wereset out at the wrong place in the certificate. We are unable tofind any merit in the contention. All the requirements of thespecifications are included in the certificate and it is futileto suggest that there is a discrepancy merely because it is notat the exact place as desired by the plaintiffs. The trialjudge held that the alleged discrepancy initially raised by theCanara Bank was not a discrepancy at all. The trial judge thenwent on to examine whether the Swiss Bank and the Canara Bankunderstood the amendment in the sense as was claimed at thetrial. The trial judge then recorded a finding that the CanaraBank was negligent in not scrutinising the documents properlyand in not pursuing the discrepancies raised earlier andactively concealing the same from the plaintiffs. The trialjudge further held that the canara Bank claimed during thehearing of the suit that the discrepancy raised was not amaterial discrepancy and this stand was taken only with a viewto cover up the negligence. From this finding the learned judgeconcluded that both, the Canara Bank and the Swiss bank, havetried to oblige original defendant No. 4. The appellantsseriously challenge this observation by pointing out that oncethe trial judge found that the discrepancy initially raised bythe Canara Bank was not a discrepancy, then it was futile toexpect that the Canara Bank should have persisted with suchdiscrepancy at the trial. Once the Canara Bank was satisfiedthat the alleged discrepancy was not a discrepancy, then nofault can be found with the bank for not informing theplaintiffs that the Canara Bank initially was inclined to rejectthe documents for the alleged discrepancy. It is not indispute that the plaintiffs after being intimated by the CanaraBank about acceptance of the documents raised a number ofcontentions to reject the documents, but not the one whichCanara Bank had initially raised. In our judgment, theconclusion of the trial judge that the Swiss Bank and the CanaraBank acted negligently in accepting the documents and that tooto oblige original defendant No. 4 is erroneous and cannot besustained on the face of the evidence brought on record at thetrial.The next question which requires determination iswhether fraud was committed by original defendant No. 4 inantedating the bills of lading, and, therefore, the plaintiffswere entitled to reject the documents. Paragraph 15 of theplaint recites that in or about the last week of January, 1986,the plaintiffs were trying to settle the matter with the sellersand the ship owners without knowing the fraud committed byoriginal defendant No. 4. It is, thereafter, averred that theplaintiffs discovered the fraud on the part of originaldefendant No. 4 and Swiss Bank only when Shamlal Kishnani,partner of the plaintiffs, went abroad and returned on March 11,1986. The plaintiffs claimed that Shamlal while in Londonobtained in the first week of February, 1986, a certificatedated December 27, 1985, and from the said certificate it wasrevealed that the bills of lading were antedated and weresecured by original defendant No. 4 with the object ofpractising fraud upon the plaintiffs and encashing the letter ofcredit without complying with contractual obligations. Theplaintiffs further claimed that there was complicity betweenSwiss Bank and original defendant No. 4, and, therefore, SwissBank is also a party to the fraud. Original defendant No. 4 wasnot served and was deleted from the array of defendants at thebehest of the plaintiffs, with the result that the party againstwhom fraud was alleged is not before the court. Swiss Bank inthe written statement denied that any fraud was committed whilesecuring bills of lading, and in the alternate submitted thatthe Swiss Bank was not aware at the time of acceptance of thedocuments that the bills of lading were not genuine. Theplaintiffs in support of their case examined their two partners,Shamlal and Prithviraj. The plaintiffs also led the evidence ofPeter Lowe and Cakurova in support of their claim.Before adverting to the oral evidence, it would be relevant tohigh-light certain facts. The plaintiffs admitted that the contractin issue for purchase of 2800 metric tons of chick peas was thelargest contract entered into by the plaintiffs. Shamlaladmitted that Prithviraj was in Turkey and present at PortMersin, from where the goods were loaded on vessel M. V.Dutelimali. Prithviraj in his deposition admitted that he wentto Turkey on August 27, 1985, and was there till October 15,1985. Prithviraj claimed that he had gone to Turkey for exportpromotion and for ascertaining the possibilities of supplyingempty gunny bags. Prithviraj then admitted that he was in MersinPort for about a month and left Mersin only on October 2, 1985.Prithviraj claimed in examination-in-chief that while in Mersin,he was not aware that the chick peas under the contract were tobe transported by M. V. Duteltman. In cross-examinationPrithviraj claimed that he knew little of the suit contractthough he became aware of the contract when he signed theconfirmation notes on August 3, 1985. The witness claimed thathe signed it on instruction's from Shamlal and was fullyconscious that the contract was for a very large amount. Thewitness then claimed that he could not recollect the originaldate of shipment under the contract. The witness admitted thatMersin is a port and is a trading centre for chick-peas.Prithviraj stated that during the period he was in Mersin he wasin contact with parties interested in selling chick peas. Thewitness admitted that one Yogesh, who was representing thebrokers of original defendant No. 4 and through whoseintervention the suit contract was brought about, was alsopresent at Mersin and both Prithviraj and Yogesh were staying inthe same hotel. Prithviraj claimed that while in Mersin he madeno efforts to ascertain whether the shipment under the suitcontract was loaded as per the terms of the contract.Prithviraj had to concede that while in Mersin, Yogesh had madeoffer for a fresh contract for purchase of chick peas and thatwas accepted. The witness admitted that the relationship of theplaintiff firm with Triune Produce Brokers is cordial. Aftermaking all these statements still Prithviraj claimed that he wasnot at all aware of the date of shipment of the suit contract,nor had bothered to enquire as to when the consignment wasloaded on the vessel at Port Mersin. It is impossible to placeany reliance upon the testimony of this witness. The largestcontract of the firm was in respect of the suit contract and apartner was staying at Port Mersin for the duration of one monthand left on October 2, 1985. In addition to the partner, therepresentative of the brokers was also residing in the samehotel and Yogesh, the representative, though available inBombay, was not examined. It is impossible to imagine that thepartner who had gone to Mersin will not care to enquire as towhen the goods were loaded. In normal circumstances any personwould be keen to ensure that the contract for purchase of chickpeas goes through and more so, because the plaintiffs claimedthat the request made by original defendant No. 4 to extend theperiod of shipment was turned down. In these circumstances, inour judgment, it is impossible to place any reliance on thestatement of Prithviraj that he was not aware about the loadingof the consignment at Port Mersin. Shamial claimed in thewitness box that as the goods had not arrived at Bombay Porttill the end of November, 1985, he left for Holland and went toRotterdam. After being aware that some problem had arisenbetween the ship owners and the charter party, Shamlal proceededto make enquiry with one Mr. Kronenberg of original defendantNo. 4. Shamlal claimed that in the second week of February,1986, a document was handed over to him by Pravin Mehta, themanaging director of South Asian Exports, Singapore. From thisdocument Shamlal felt that the bills were antedated. It isrequired to be stated at this juncture that the consignment ofSouth Asian Exports, Singapore, was also loaded on vessel M. VDutchman. The entire case of fraud set up by the plaintiffs isbased on the document secured by Shamlal, and therefore, it isnecessary straightaway to examine the document. Beforeexamining this document marked exhibit "AF", - it is necessaryto reiterate that the bills of lading clearly indicate that thegoods were loaded on vessel M. V. Dutchman on September 30,1985, and loading on this date was in accordance with the termsof the letters of credit. Exhibit "AF" is a letter alleged tohave been addressed by the State Railways Enterprise GeneralManagement on December 27, 1985. Shri Kapadia very fairlyconceded that the document does not indicate to whom the letteris addressed. The letter is addressed in pursuance of a letterdated December 26, 1985, but who had sent this letter is notknown from the evidence. The relevant portion of the letterreads as follows :

"Please kindly be informed that M. V. Dutchman's port records are asfollows. Please be informed accordingly.

(1) Arrival date to port - 27-9-1985 (2) Berthing date - 28-9-1985 (3) Start loading date - 1-10-1985 (4) Sailing date - 16-10-1985".

17. The gravamen of the complaint of theplaintiffs is that this document' establishes that the loadingcommenced on M. V. Dutchman on October 1, 1985, and, therefore,the bills of lading indicating that the consignment was loadedon September 30, 1985, is obviously false and must lead to theconclusion that the bills of lading were antedated to enableoriginal defendant No. 4 to claim that the shipment was carriedout in accordance with the terms of the credit. The plaintiffsclaimed that if the shipment was on October 1, 1985, then theplaintiffs were not bound to accept the documents and theconsignment. It is not possible to place any reliance on thisdocument even assuming that the document was properly admittedin evidence. The trial judge by order dated August 9, 1988,proceeded to admit the document on record to the extent that itpurports to be the certificate relating to movement of the ship,and therefore, falls under item 7, Part 11 of the Schedule tothe Commercial Documents Evidence Act No. XXX of 1939. Thelearned judge observed that the document to the extent that itpurports to give the loading date of the ship cannot be admittedin evidence at that stage. The Commercial Documents Evidence Actconsists of four sections, and section 3, inter alia, providesthat notwithstanding anything contained in the Indian EvidenceAct, a court may presume within the meaning of that Act, inrelation to documents included in Part 11 of the Schedule thatthey have been duly made by or under appropriate authority andthe statements contained therein are accurate. Clause 7 of Part 11 of the Schedule refers to reports and publications issued bythe Port Authority showing the movement of vessels andcertificates issued by such authority relating to suchmovement. It is difficult to imagine how a letter addressed by somemanagement can be treated to be a report or publication orcertificate issued by such authority. In our judgment, thedocument tendered by the plaintiffs does not attract theprovisions of section 3 of the Act as it is not a documentcontemplated under item 7 of Part 11 of the Schedule, and,therefore, could not have been admitted in evidence. But evenassuming that the document was duly admitted, we are unable tofind any evidentiary value of this document. The plaintiffs havenot cared to produce on record letter dated December 26, 1985,addressed to the management. It is not possible to ascertainwhich party made the enquiry and what was the nature of theenquiry. It is possible that the document, exhibit "AF', refersto the loading date of the consignment of the party making theenquiry and such loading date need not necessarily be theloading date of other consignments on the vessel. In ourjudgment, the evidentiary value of this document is nil todetermine the alleged fraud in antedating the bills.Shri Kapadia realising the weakness of document, exhibit "AF', tosupport the claim of fraud tried to be made out by theplaintiffs, placed strong reliance upon testimony of Mr. LuffiCan Cakurova, an advocate practising at Mersin City, Turkey. Thewitness deposed that Prithviraj contacted him on August 15,1988, that is during the conduct of the trial, and advised thewitness to collect documents for the purpose of the presentsuit. The witness claimed that letter dated August 16, 1986, wasaddressed to Turkish Republic State Railway Administration toseek information in respect of the arrival date of the vessel M.V Dutchman, the date of the vessel approaching the quay, thestarting date of the loading of the vessel and if the vesselmade any loading before October 1, 1985. Cukurova deposed thatin answer to the query, reply was received on August 18, 1988,and the same was produced at exhibit "AT". The reply recitesthat the loading of the vessel started on October 1, 1985, andbefore that date the vessel had made no loading in Mersin Port.The witness also produced the ship's manifest and the documentproduced is a photostat copy of which an English translation wastendered. The photo copy indicates that ..30,000 kilograms ofchick peas of 26128 size was loaded on the vessel M. V Dutchmanon October 1, 1985. Relying on these three documents, exhibits"AS", "AT" and "AV", Shri Kapadia submitted that it should beconcluded that the bills of lading dated September 30, 1985,were antedated. We are not prepared to accede to the submissionof learned counsel. The fact that Cukurova had addressed letteron August 18, 1988, cannot be disputed and so also the replyreceived by him. The principal question is whether any reliancecan be placed on the reply received by Mr. Cukurova and indeedwhether the document is admissible in evidence. Shri Kapadiasubmitted that as the reply is received in answer to the letterwritten by Cukurova, the plaintiffs are entitled to rely uponthe same and the document is admissible. We have grave doubtsabout the admissibility of the document but as the trial judgehas proceeded to exhibit it, we will examine the evidentiaryvalue of the said document. Shri Kapadia submitted that exhibit"AT" clearly recites that no loading was made on vessel M. V.Dutchman before October 1, 1985, and the loading started only onOctober 1, 1985. We are not prepared to attach any importance tothis reply because in the first instance it is not clear fromwhat source the information was gathered by the authoritywriting the letter. The reply does not set out that theinformation was based upon entries in the register maintained inthe ordinary course of business. It is possible that the replywas sent by some officer on the basis of his memory or on theinformation gathered from some other source. Such an informationcannot be treated as of such evidentiary value as to establishfraud alleged by the plaintiffs. Secondly, there is no evidencewhatsoever on record to indicate whether the authorityforwarding the reply is a public authority or a privatemanagement. Thirdly. no effort whatsoever is made to produceany person connected with the authority which addressed thereply. Fourthly, the document was tendered, without any priordisclosure or without any prior notice to the banks, during theoral evidence of Cukurova, with the result that the banks couldnot ascertain the genuineness or correctness of theinformation contained therein. Shri Kapadia very fairly submittedthat it is not possible to claim that the reply received is apublic document and which can go in evidence as a matter ofcourse. The document is secured by Cukurova during the pendencyof the suit at the behest of Prithviraj and in thesecircumstances we are not prepared to attach any evidentiaryvalue to the reply, exhibit "AT", received by Cukurova. ShriKapadia then submitted that the photostat copy of the ship'smanifest establishes that certain quantity of chick peas of size 26128 was loaded on the vessel on October 1, 1985. The learnedcounsel urged that this is a part of the consignment of theplaintiffs, but it is not possible to accept the claim. Theconsignments loaded on M. V. Dutchman were not exclusively thoseof the plaintiffs but several consignments of other parties wereloaded on tie vessel. It is possible that the consignment, towhich the ship's manifest exhibit "AV" makes reference, is theconsignment booked by another party. The evidence does indicatethat South Asian Exports, Singapore, had also their consignmenton the said vessel in addition to some consignment which was toreach a port in China. In the absence of any evidence from theshipping agency or the agents of the charter party or thebrokers of original defendant No. 4 and who was stationed inBombay, it is impossible to rely upon the documents producedby Cukurova to reach a conclusion that the bills of ladingtendered by original defendant No. 4 to the Swiss Bank werefraudulent. Shri Kapadia submitted that the letter of credit byamendment had provided that the consignment to be loaded on theship should be marked with the code word "Hira Moti" and theship's manifest exhibit 'AV" indicates the word "HM", and,therefore, it must be inferred that the word "HM' means 'HiraMoti" and the consignment referred to in the shipment exhibit'AV' is one for the benefit of the plaintiffs, and in accordancewith the letter of credit. It is impossible to draw any suchinference and more so, when the court is called upon to decide aserious claim of fraud in antedating the bills. One morecircumstance referred to by Shri Kapadia is the claim of Shamlal thathe had received a copy of the charter party from Mr. Kronenbergby the end of January, 1986, and this copy indicates by clause 38 that the owners had agreed to issuing predated bills oflading "September 30, 1985" unless otherwise required for whichthe chartered has to inform the owners in due time. It wascontended that clause 38 clearly establishes that the bills oflading could have been predated. We are unable to find any meritin the submission. The alleged copy is not authenticated copyand the plaintiffs made no efforts whatsoever to produce thecertified copy of the original charter party agreement orexamine any witness to indicate that such a clause existed in theoriginal agreement. It is impossible toeven imagine as to how any charter party agreement can providethat bills of lading can be antedated.There is one more aspectwhich cannot be overlooked. In addition to the bills of ladingoriginal defendant No. 4 had tendered several other documentsbefore the Swiss Bank and the contents of those documentssupports the assertion that the goods were loaded on the vesselon September 30, 1985. The bills of lading were endorsed bythe Turkish Bank and stamped by that bank on September 30, 1985.Secondly, the SGS certificate is not only dated September 30,1985, but certifies that the goods were inspected at the time ofloading. Thirdly, the phytosanitary certificate was alsoissued prior to September 30, 1985. Fourthly, the marineinsurance policy was issued on September 30, 1985, and theissuance of the draft after loading and issuance of bills oflading. To accept the claim of the plaintiffs that originaldefendant No. 4 had played a fraud in securing antedated billsof lading, it will have to be held that the shipping company'sagents Atake who issued the bills of lading, the insurers whoissued the marine insurance policies, the Turkish Bank IktisatBank who endorsed the bills of lading, the SGS organisationwhich is a reputed organisation who issued the certificate, theofficers of the Ministry of Agriculture of Turkey who issued thephytosanitary and fumigation certificates, were all parties tothe fraud alleged to have been perpetuated by originaldefendant No. 4. In our judgment, it is almost impossible even toconceive that all these authorities had interest in originaldefendant No. 4 to prepare false records only with a view toensure that the bills of lading reflect the date of September30, 1985, to suit the terms and conditions of letters of credit.In this connection, it is also necessary to note that though theplaintiffs denied it, the evidence unmistakably indicates thatthe plaintiffs had granted extension up to November 15, 1985,for shipment of the goods. What was not extended was merely theletters of credit and in view of the agreement between theplaintiffs and original defendant No. 4 it was easy to obtainextension of the letters of credit. The claim of the plaintiffsin these circumstances that the bills were antedated and therebyoriginal defendant No. 4 was guilty of fraud cannot be accepted.The trial judge held that the plaintiffs established the fraudas the bills of lading were antedated, but as the plaintiffswere aware right from the beginning that goods were not loadedon September 30, 1985, but on subsequent date, it is notpermissible for the plaintiffs to plead fraud and avoid thetransaction. The trial judge held that Prithviraj was in Mersinat the relevant time and it is unbelievable that Prithvirajwould not have made any enquiries. The trial judge further heldthat the date of shipment was extended up to October 15, 1985,and that was done by the plaintiffs' partner OmprakashHemrajani. The trial judge held that the claim of Shamlal thatOmprakash had signed document extending the period of shipmentby mistake could not be accepted. The trial judge then observedthat the letters of credit were not amended, and, therefore, itis possible that there may be a mistake in extending the date ofshipment. While making this observation the learned judgeoverlooked one important aspect of the matter, and that is, theplaintiffs registered the contract with NAFED (NationalAgricultural Co-operative Marketing Federation of IndiaLimited), which is a canalising agency. It is not in disputethat the import of chick peas is a canalised item and thecontracts are required to be registered with NAFED. Theguidelines (exhibit "30") issued by NAFED provide that thecontracts can be registered provided they are still valid andoperative. It is not in dispute that the plaintiffs proceededto register the contract with NAFED after extending the date ofshipment up to October 15, 1985. The fact that the applicationfor registration was made after September 30, 1985, clearlyestablishes that the date of shipment was extended by theplaintiffs up to October 15, 1985. This fact is relevant only toascertain whether original defendant No. 4 had any occasion toplay fraud by antedating the bills of lading. The trial judgeheld that the conduct of the plaintiffs in not serving originaldefendant No. 4, and thereby inviting the court to record afinding on the issue of fraud in the absence of the party, whois guilty of fraud, has made it impossible to come to a findingof fraud. The trial judge felt that as original defendant No. 4was not a party to the suit, any finding on the issue of fraudwould not be binding on that defendant and in the proceedingsinstituted by original defendant No. 4 against the plaintiffs,the court may record a contrary finding. In these circumstances,the trial judge held that the plaintiffs are not entitled to anyrelief on the ground of fraud. After recording this finding, thetrial judge proceeded to observe that the fraud alleged is not anormal one and though it is not alleged that the Swiss Bank wasparty to the fraud of antedating the bills of lading, still itis necessary to ascertain whether the Swiss Bank - knowinglyassisted original defendant No. 4. The trial judge realised thatthe plaintiffs had not even averred in the plaint that the SwissBank had colluded with original defendant No. 4 in perpetuatingthe fraud, but observed that in the peculiar facts of the casewhen the facts necessary to establish the fraud are within theexclusive knowledge of the Swiss Bank, then such facts' can beestablished only during evidence. We are afraid, we cannotshare the view of the learned judge. We will proceed to examinehereafter why the learned judge held that the Swiss Bank wasaware of the fraud and colluded with original defendant No. 4,and whether the observations in that respect are accurate.Once it is found that the plaintiffs had failed to establish that thebills of lading were antedated, then the question of fraud beingplayed by original defendant No. 4 and the Swiss Bank colludingto favour defendant No. 4 loses all its merit. We are examiningthe observations made in that respect by the learned judge onlywith a view to ascertain whether the trial judge was justifiedin finding fault with the banks.It is not the case of theplaintiffs, nor the finding of the trial judge that the SwissBank was aware that the bills of lading were antedated at thetime of presentation of the documents. The learned judgeproceeded to draw the inference of collusion between originaldefendant No. 4 and the Swiss Bank from some circumstances. Thefirst circumstance relied upon by the trial judge is that theSwiss Bank did not carry out proper scrutiny and failed tonotice the discrepancy in documents produced along with thecommercial documents. The trial judge felt that the Swiss Bankshould have realised that the phytosanitary certificates,exhibits "G-17, "C-T-37" and "G-49", had corrections and thecorrections were oncrucial aspects and should have put theSwiss Bank on guard that there was something amiss. The originalcertificate indicates that it was certified that the consignmentwas thoroughly examined on September 28, 1985. The dateinitially typed was crossed out and the date "September 28,1985" was typed. This correction at one place in each of thecertificates was duly stamped and signed to indicate that thecorrection was authorised and genuine. The date "September 28,1985' also appears at the foot of the certificate and where theofficer had put the rubber stamp and signature in all the threecertificates. The suspicion of the learned judge aroused in viewof the carbon copies, exhibits "A0-1", "A0-2" and "A0-3",produced by the plaintiffs' witness Peter Lowe. The witnessclaimed that on instructions of the plaintiffs' partnerforwarded through Capt. Mukundan, a colleague of the witness,enquiries were made with the manager of Caton Maritime Bureau.After enquiries the three carbon copies of the phytosanitarycertificates secured by original defendant No. 4 were obtained.The witness claimed that the carbon copies indicated thatoriginally the date typed was October 8, 1985, and which wassubsequently struck off and the fresh date of September 28,1985, was substituted. The trial judge felt that a close look atthe original certificate does indicate that the earlier datetyped which was struck off was some time in October, 1985. Weare afraid the inference drawn by the trial judge that thephytosanitary certificates were tampered with is entirelyerroneous. The reliance on the carbon copies is whollyinappropriate. The copies which are claimed to be carbon copiesdo not tally with the original certificates in respect of othercontents. The carbon copy, exhibit "A0-1", is alleged to be copyof original certificate bearing No. 70392, exhibit "G-17". Theoriginal is duly signed by the officer at the place of signatureand date typed is September 28, 1985. The carbon copy, exhibit"A0-1", does not show this date at all. The date of thefumigation or disinfection treatment shown in the originalcertificate is September 25, 1985, while in exhibit "A0-1" it isSeptember 23, 1985. It is obvious that the claim made by PeterLowe that exhibits "A0-1" to "A0-3" are carbon copies is totallyfalse and a mere perusal is enough to warrant a conclusion thatfalse copies are tried to be introduced with a view to create asuspicion that the original certificates were tampered with.The second circumstance relied upon by the trial judge is thesuspicious circumstances surrounding the payment made by theSwiss Bank to the Credit Bank under draft exhibit "H". The draftwas accepted by the Swiss Bank on September 23, 1985, and theamount covered by the draft was payable on January 28, 1986, inaccordance with the terms of the letter of credit. The letter ofcredit provided that the amount should be paid 120 days afterthe date of shipment. It is not in dispute that the amount waspayable on January 28, 1986. The Credit Bank addressed letter,exhibit "24", on January 21, 1986, demanding payment due onJanuary 28, 1986. The Swiss Bank issued credit advice, exhibit"25", on January 24, 1986. Exhibit "26" is the copy of the telexfrom the Swiss Bank to the counter part in New York to creditthe amount i n favour of the Credit Bank, and this telex isdated January 27, 1986. The debit advice from New York, exhibit"27", was received. These documents clearly establish that thepayment was made by the Swiss Bank to the Credit Bank as per thedraft, exhibit "H", which was accepted on tender of documents.The trial judge felt that as the goods had not been received atBombay Port and as Canara Bank at one stage had raiseddiscrepancy complaining about acceptance of documents and theplaintiffs had specifically rejected the documents in November,19 85, the Swiss Bank was not justified in making payment inJanuary, 1986,' and the action of the Swiss Bank is very.suspicious. We are unable to find any suspicion aboutthe manner of payment by the Swiss Bank. It must be rememberedthat the international credits and international transactionsproceed on the strength of documents. Once the documents areaccepted by Swiss Bank and the draft is also accepted, then theliability of the Swiss Bank to the beneficiary of letter ofcredit becomes complete and the Swiss Bank could not havedeclined to make payment unless fraud was noticed and the SwissBank was prima facle satisfied of such fraud. There was nocomplaint of fraud in January, 1986, and, therefore, it is notfair to take into consideration what transpired subsequently orwhat the plaintiffs felt at a later stage.The next circumstance heavily relied upon by the trial court is theattempt made by the Swiss Bank to secure reimbursement from theCanara Bank in spite of the knowledge of ex parte ad interiminjunction passed in the present suit restraining the CanaraBank from reimbursing Swiss Bank. The Swiss Bank had agreed topostpone reimbursement till April 1, 1986, on the promise of theCanara Bank to pay interest for the postponed period. Thepayment was due to Swiss Bank on April 1, 1986, and the SwissBank was entitled to be credited with the amount by making,demand with original defendant No. 3-Bankers Trust Company. Thesuit was instituted on March 24, 1986, and ad interim injunctionwas secured. The trial judge felt that in spite of theknowledge of grant of ad interim injunction the Swiss Bankproceeded to secure reimbursement and that too even prior toApril 1, 1986. This conduct of the Swiss Bank according to thelearned judge indicates complicity between the Swiss Bank andoriginal defendant No. 4. This is one of the circumstance whichwas considered by the trial judge while determining whether toaccept the claim of the Swiss Bank that the documents werepresented on October 21, 1985. While examining the question asto whether the documents were presented on October 21, 1985,consideration of this aspect was deferred. It is necessary tobear in mind that the Canara Bank at all times was prepared toreimburse the Swiss Bank in accordance with the assurance underthe letter of credit. The Swiss Bank prior to institution of thesuit and at all stages in the suit, took a consistent stand thatto maintain the honesty and reliability in dealings with thebanks, Canara Bank is bound to reimburse Swiss Bank. Theplaintiffs were fully conscious of this fact and even though thegoods had not reached Bombay Port and according to the witness,Shamlal, discrepancies in the documents were found out inNovember, 1985, and fraud some time in February, 1986, still noaction was taken to file any suit against the Canara Bank, butthe present suit was instituted only on March 24, 1986,apprehending that the Canara Bank would reimburse Swiss Bank byApril 1, 1986. It is the case of Swiss Bank, and we do not findany reason to discard the same, that it is the usual bankingpractice that the demand for reimbursement in respect ofdocumentary credit is made a couple of days before the due datefor payment. Swiss Bank claimed that payment was due on April 1,1986, and although the bank was conscious of the proceedingsinstituted in this court, the bank felt that as the trial courthad declined to grant any ad interim injunction restrainingSwiss Bank from demanding reimbursement, there was no obstaclein securing payment. The Swiss Bank also felt that it is not thepractice to grant injunction in respect of internationaltransactions evidenced by documentary credits as held by severaldecisions of the Supreme Court. The Swiss Bank accordinglysought payment on legal advice and the amount was credited' bymaking book entries by original defendant No. 3. Entries werereversed when the Canara Bank subsequently raised an objectionthat in view of the injunction granted by this court payment wasnot permissible. The trial judge felt that the conduct of SwissBank in securing payment was suspicious, but we are unable toaccept the conclusion of the trial court. It must be borne inmind that once the litigation starts every party tries toprotect its interest and in case the Swiss Bank was advised tosecure reimbursement a couple of days before April 1, 1986, thataction cannot have any reflection on the dealing carried out bythe Swiss Bank on April 21, 1985, while accepting documents fromthe Credit. Bank. The knowledge of fraud or collusion cannot beattributed to the Swiss Bank on October 21, 1985, withreference to the circumstances which transpired several daysthereafter. It is always dangerous to infer fraud and collusionby taking into consideration the events which are farseparated from the time when the alleged fraud is committed. Inour judgment, the trial judge was not right in holding that theSwiss Bank was guilty of collusion with original defendant No.4, and, therefore, knowledge of fraud can be attributed to theSwiss Bank.We are not prepared to uphold the finding of thetrial judge that Swiss Bank had actively participated inattempting to secure payment to original defendant No. 4 withfull knowledge that defendant No. 4 was not entitled to thesame. We are also unable to accept the finding that even ifthere was no discrepancy in any of the documents and even if thecomplaint of fraud is not proved, still Swiss Bank is notentitled to claim reimbursement. The finding, in our judgment,is entirely erroneous and cannot be sustained. Swiss Bank isentitled to reimbursement once it is found that the documentswere presented on October 21, 1985, and there was no discrepancyin any of the documents so as to warrant rejection.Reimbursement from Canara Bank to Swiss Bank cannot be deniedonce it is held that the plaintiffs have miserably failed toestablish alleged fraud of antedating bills and Swiss Bank wasneither aware of the fraud nor was guilty of any collusion withoriginal defendant No. 4.The last point for consideration andwhich has been seriously pressed by the appellants is whetherthe plaintiffs had waived the right to complain about allegedfraud and the alleged discrepancies by the consistent conductfrom the date of knowledge of the alleged discrepancies oralleged fraud till the date of the suit. In support of the claimthat the plaintiffs had waived their rights arising from allegeddiscrepancies or alleged fraud, reliance is placed by the bankson three circumstances. The first circumstance is that theplaintiffs lodged a claim for the insurance amount with theinsurance company on the basis that the title to the consignmentvests in the plaintiffs. The second circumstance is that theplaintiffs instituted a suit in the Supreme Court of Gibraltaragainst the ship-owners specifically claiming that the titleto the consignment vests in the plaintiffs. The thirdcircumstance is that the plaintiffs had applied for extension offorward sales contract. The trial judge found that the threecircumstances referred to by the banks are quite substantial andnormally there could not be any hesitation in concluding thatthe plaintiffs had waived their right of rejection of thedocuments. After recording this finding, the trial judgeproceeded to hold that the plaintiffs cannot be shut out on thiscount because the Plaintiffs were forced to take action due tothe threats of Canara Bank of debiting the account of theplaintiffs and the plaintiffs did not have full knowledge ofrejection of all the documents by Canara Bank on an earlieroccasion, and, therefore, waiver was not intentional and thefact that the documents were not presented by Credit Bank toSwiss Bank on October 21, 1985, was established only after theevidence, and, therefore, the action taken earlier by theplaintiffs can be ignored. In our judgment, the reasons given bythe trial judge for holding against the banks on the issue ofwaiver are clearly unsustainable. The trial judge proceeded toobserve, and Shri Kapadia reiterated the contention, that thewaiver cannot be unilateral and there must he a meeting of mindsbetween the party who claims waiver and the party against whomthe waiver is claimed. The submission is clearly untenable.Before examining the grounds urged by the banks in support ofthe plea of waiver, it would be appropriate to refer to threedecisions of the Supreme Court. In P. Dasa Muni Reddy v. P. AppaBao, , it was observed (page 2091) :-"Abandonment of right is much more than mere waiver,acquiescence or laches. The decision of the High Court in the presentcase is that the appellant has waived the right to evict therespondent. Waiver is an intentional relinquishment of a knownright or advantage, benefit, claim or privilege which except forsuch waiver the party would have enjoyed. Waiver can also be avoluntary surrender of a right. The doctrine of waiver has beenapplied in cases where landlords claimed forfeiture of lease ortenancy because of breach of some condition in the contract oftenancy. The doctrine which the courts of law will recognise isa rule of judicial policy that a person will not be allowed totake inconsistent position to gain advantage through the aid ofcourts. Waiver sometimes partakes of the nature of an election.Waiver is consensual in nature. It implies a meeting of theminds. It is a matter of mutual intention. The doctrine does notdepend on misrepresentation. Waiver actually requires twoparties, one party waiving and another receiving the benefit ofwaiver. There can be waiver so intended by one party and sounderstood by the other. The essential element of waiver is thatthere must be a voluntary and intentional relinquishment of aright. The voluntary choice is the essence of waiver. Thereshould exist an opportunity for choice between therelinquishment and an enforcement of the right in question. Itcannot be held that there has been a waiver of valuable rightswhere the circumstances show that what was done wasinvoluntary. There can be no waiver of a non-existent right.Similarly, one cannot waive that which is not one's as a rightat the time of waiver. Some mistake or misapprehension as tosome facts which constitute the underlying assumption withoutwhich parties would not have made the contract may be sufficientto justify the court in saying that there was no consent."Strong reliance was placed by Shri Kapadia on the observationsthat waiver implies a meeting of minds and is a matter of mutualintention. It was urged that waiver cannot be unilateral. It isnot possible to accede to the submission of learned counsel, andthe observations of the Supreme Court must be read in theirproper perspective. The issue was squarely considered earlier bythe Supreme Court in the decision in lagad Banditu Chatterjee v.Nilima Rani . The Supreme Court observed that inIndia the general principle with regard to the waiver ofcontractual obligation is to' be found in section 63 of theIndian Contract Act and under that section it is open to thepromisee to dispense with or remit the performance of thepromise. Under the Indian law neither consideration nor anagreement would be necessary to constitute waiver and asobserved by the Supreme Court earlier in Waman Shriniwas Kini v.Ratilal Bhagivandas and Co. , that waiver is the abandonment of a right which normallyeverybody is at liberty to waive. Waiver signifies nothing morethan an intention not to insist upon the right. In the laterdecision in Dr. Jiwan Lal v. Bry Mohan Mehra, , the Supreme Court observed :"... where a stipulation is for theexclusive benefit of one contracting party and does not createliabilities against him, he can waive it unilaterally. (See alsoHawkesley v. Outram [1892] 3 Ch. 359 at page 376 and Morrell v.Studd and Millington [1913] 2 Ch. 648, at page 660)".It is, therefore, obvious that to attract the doctrine of waiver it isnot necessary that there should be a meeting of minds or thatthere must be an agreement or contract between the two parties.The first circumstance strongly relied upon by the banks toindicate that the plaintiffs had waived their right and hadaccepted the documents in spite of the knowledge of allegedfraud or of alleged discrepancies is demonstrated by thelodgment of the insurance claim. The letter of credit demandedthat the consignment should be duly insured by a marineinsurance policy. The marine insurance policy, exhibit "6', isdated September 30, 1985, and it is a bearer policy. The policywas presented to Swiss Bank on October 21, 1985, and the policywas forwarded by Swiss Bank to Canara Bank. The plaintiffs didnot disclose in the plaint that on the basis of the insurancepolicy the claim was lodged with the insurance company some timein the first week of January, 1986. The claim was rejected bythe insurance company, and thereafter, correspondence ensuedbetween the plaintiffs' solicitors in London and the solicitorsof the insurance company in Holland. Shamlal admitted in hisdeposition that the claim for the insurance amount was lodged bythe company but suggested that the claim was made both by theplaintiffs and the original defendant No. 4. Shamlal wasspecifically asked in cross-examination to produce documents inrespect of lodgment of the claim, but Shamlal in spite of theassurance to do so, ultimately failed to produce anydocuments. The claim of Shamlal that the insurance claim was lodgedon behalf of defendant No. 4 also is not supported by anydocuments. Indeed all the documents in respect, of the lodgmentof the claim are in the custody of the plaintiffs and still thedocuments were deliberately kept back and consequently anirrestible inference arises that the production would haveestablished that the claim was lodged only on behalf of theplaintiffs. Lodgment of the insurance claim could be only onthe basis that title to the goods vests in the plaintiffs and asthe goods were lost the plaintiffs are entitled to the insuranceamount. Shamlal had to concede that the fact of lodgment of theinsurance claim was neither disclosed to Canara Bank nor in theplaint. Faced with pointed questions on this aspect in thecross-examination, Shamial claimed that the insurance claim waslodged merely as a protective action and without prejudle tothe rights of the plaintiffs. The explanation appealed to thetrial judge, but we are unable to find any merit in the same.Shri Kapadia was at pains to explain as to whose interest theplaintiffs were protecting by lodgment of the claim save andexcept the plaintiffs themselves. Original defendant No. 4, theseller of the goods had already received the payment from SwissBank. Swiss Bank was entitled to he reimbursed by Canara Bankand Canara Bank in its turn was entitled to the amount from theplaintiffs. It is, therefore, obvious that the allegedprotective action was only for the benefit of protection c f theplaintiffs. It is not in dispute that neither Swiss Bank norCanara Bank are at all interested in the goods and once thedocuments are accepted by the plaintiffs, then the title to thegoods vests in the plaintiffs and the plaintiffs would beentitled to demand the amount covered by the insurance policyif the goods are not available. It is undoubtedly true that inNovember, 1985, the plaintiffs had rejected the documents on theground that the documents suffered from several discrepancies.The conduct of the plaintiffs, thereafter in January, 1986, inlodging the insurance claim clearly establishes that theplaintiffs had subsequently accepted the documents and. on thebasis that the title to the consignment vests in the plaintiffs,the demand was made for the insurance claim. The acceptance ofthe documents includes acceptance of the insurance policy whichis a bearer policy. The plaintiffs could not have secured theinsurance amount while still claiming that the documents arerejected. In our judgment, the contention that the insuranceclaim was lodged only as a protective action and withoutprejudice is nothing but a false explanation to wriggle out ofthe stand taken by the plaintiffs that the title to the goodsvests in the plaintiffs. It is interesting in this connection tonote that the plaintiffs rejected the documents in November,1985, on the ground of discrepancies, and thereafter, Shamlalwent abroad and claims to have discovered the alleged fraud.The claim for the insurance amount was lodged in February, 1986,and Shri Kapadia had to concede that lodgment of the claim wasafter full knowledge of the alleged discrepancies and the fraud.In our judgment, the fact of lodgment of the insurance claim bythe plaintiffs disentitles the plaintiffs from claimingrejection of the documents on the ground of allegeddiscrepancies and fraud.The second action taken by theplaintiffs on the basis that the title in the consignment vestsin the plaintiffs is filing of the suit in the Supreme Court ofGibraltar. The suit was filed on March 7, 1986, againstBelvedere Investment Limited, who were the owners of the ship.Paragraph 4 of the plaint recites 'the plaintiffs are at allmaterial times the owners of the said cargo". The plaintiffsclaimed that the owners of the ship had failed to deliver thecargo, and, therefore, the plaintiffs had suffered loss anddamage. The reliefs sought were (a) injunction restraining thedefendants from causing the vessel to deviate from the voyagefrom Mersin to Bombay 1 began on September 30, 1985; (b)restraining the vessel from discharging the cargo shipped underbills of lading dated September 30, 1985; and (c) restrainingthe defendants from assigning or disposing of the interest inthe vessel. The plaintiffs then claimed that liberty should begranted to arrest the vessel, without prejudice to any legalrights of the plaintiffs. Shri Kapadia submitted that theexpression "without prejudice" indicates that the suit was filedwithout prejudice to any other rights. The submission ismisconceived. What the plaintiffs claimed was that the relief toarrest the vessel should be granted without prejudice to anyother remedies. Shri Kapadia submitted that the suit was filedand the specific averment was made that the plaintiffs are atall material times owners of the goods merely to protect theinterest and that interest was not necessarily only of theplaintiffs. The submission has no merit. In case as claimed bythe plaintiffs the ownership of the goods vests in theplaintiffs, then only the plaintiffs had interest in securingorders for protection of the goods. It must be noted that theplaintiffs instituted the proceedings in the Gibraltar court onthe advice of their attorneys in Bombay and which is reflectedin the correspondence on record. The plaintiffs had spent largeamounts in engaging attorneys in London to institute the suit aswell as lodgment of the insurance claim. The plaintiffs wouldcertainly not spent substantial amounts only with a view toprotect the interest of Canara Bank as now tried to be suggestedby Shri Kapadia. In case the plaintiffs were so generous tospend money to protect the interest of Canara Bank, then theplaintiffs would not have failed to intimate to Canara Bankabout lodgment of the insurance claim and institution of thesuit in the Gibraltar court. In our judgment, the plaintiffsdeliberately suppressed the fact of filing of the suit as thedisclosure would have destroyed the claim made in the suit thatthe plaintiffs had rejected the documents on the ground ofalleged discrepancies and on the ground of alleged fraud. It isrequired to be stated that according to the testimony of Shamlalthe suit filed in the Gibraltar court was still pending when thepresent suit was instituted and in spite of that fact thependency of the suit was not disclosed.The third circumstancewhich requires to be noticed is the action of the plaintiffs inseeking extension of the forward sales contract. The plaintiffshad initially applied for a forward sales contract for purchaseof foreign exchange through Canara Bank on October 29, 1985(exhibit "K-2"). The payment of the amount was to be made onJanuary 28, 1986. On January 28, 1986, the plaintiffs appliedfor an extension of purchase of 'foreign exchange till April 1,1986 (exhibit "R-7"). On April 1, 1986, the plaintiffs put anapplication for cancellation of the forward sales contract andset out the reasons for cancellation (exhibit "W-1"). In casethe plaintiffs had rejected the documents in November, 1985,on realisation of the alleged discrepancy, and thereafter, inJanuary, 1986, were aware of the alleged fraud committed byoriginal defendant No. 4, then it is impossible to imagine whythe plaintiffs should seek extension on January 28, 1986. Theplaintiffs claimed that the documents were rejected on November20, 1985, and if the claim is accurate, then there was nooccasion to make any payment, and, therefore, it was whollyimmaterial to seek extension on January 28, 1986. Once thedocuments are rejected, then the plaintiffs have no right, titleor interest in the documents and could never claim by anystretch of imagination title to the goods covered by thedocuments. The fact that the plaintiffs sought extension onJanuary 28, 1986, is a telltale circumstance to establish thatthe plaintiffs had not only not rejected the documents but onthe other hand had accepted them and proceeded to claim title tothe goods covered by the documents. The learned trial judge wastherefore, right in observing that the three circumstancesrelied upon by the banks clearly establish the intention on thepart of the plaintiffs to accept the documents and the goodscovered by the said documents.After recording the clear-cutfinding that the clear intention of the plaintiffs isdemonstrated by the three circumstances noted above, the trialjudge proceeded to ignore the fact of waiver by reference tothree circumstances. The first circumstance which impressed thetrial judge was that the plaintiffs were forced to take actionof seeking extension, the lodgment of the insurance claim andinstitution of the suit in the Gibraltar court in view of thethreats Oven out by Canara Bank. Shri Kapadia urged that thecorrespondence establishes that Canara Bank was repeatedlythreatening the plaintiffs to debit the account in respect ofthe amount due under the letter of credit, and the plaintiffswere forced to adopt proceedings to prevent Canara Bank fromdoing so. There is no merit whatsoever in the submission oflearned counsel. In case the plaintiffs were apprehensive ofthe alleged threats Oven by Canara Bank to debit the account,then nothing prevented the plaintiffs from instituting suitsimpliciter for injunction restraining Canara Bank from doing soon the ground that the plaintiffs had rejected the documents onNovember 20, 1985. Not only the plaintiffs did not do so, but onthe other hand lodged an insurance claim, filed a suit in theGibraltar court and did not even disclose these facts to CanaraBank. Is this a conduct of a party who is claiming thatprotective action was taken because Canara Bank forced the party totake action under threats ? In our judgment, the claim that theinsurance claim was made and the suit was instituted in theGibraltar court due to the threats of the account being debitedis nothing but a piece of fertile imagination. The secondcircumstance referred to by the trial judge and contended byShri Kapadi'a is that the plaintiffs did not have full knowledgeof rejection of the documents on an earlier occasion bydefendant No. 1, and, there L.M. fore, the waiver could not betreated as intentional. We are unable to find any substance inthe contention. It is undoubtedly true that Canara Bank hadinitially informed Swiss Bank that the documents were rejectedon the ground of alleged discrepancies. It is established aspointed out by Swiss Bank that the alleged discrepancies werenot discrepancies at all and that the claim of Swiss Bank isupheld by the trial court and could not be seriously debated inthis appeal. It was not incumbent upon' Canara Bank to pursue anunsustainable claim. The fact that objection was raised to theacceptance of the documents though not conveyed by Canara Bankto the plaintiffs, we are unable to appreciate how that fact canlead to the conclusion that the institution of the suit in theGibraltar court and lodgment of the insurance claim were notacts of intentional waiver. The plaintiffs on their own hadrejected the documents on November 20, 1985, on the ground ofseveral discrepancies and if that was so, then it was whollyimmaterial whether Canara Bank had on an earlier occasionrejected the documents being discrepant and on being satisfiedthat the discrepancies did not exist did not communicate thefact of raising objection to the plaintiffs. In our judgment,the second circumstance relied upon by Shri Kapadia is withoutany substance.The third ground referred to by the trial judgeis that the plaintiffs were not aware that the documents are notpresented by Credit Bank to Swiss Bank on October 21, 1985, thatis before the cut-off date and that fact was established onlyafter recording of the evidence and consequently whatever hasbeen done by the plaintiffs prior to the suit should be ignored.We are unable to find how the action of waiver on the part ofthe plaintiffs could be ignored merely because the trial judgefound at the hearing of the suit that the documents were notpresented on October 21, 1985. It is indeed interesting to notethat the trial judge had discarded the contention of thedefendants that challenge to the presentation of documents onOctober 21, 1985, was not raised in the plaint and recorded apositive finding that such a challenge was indeed raised. Incase the finding is accurate then the plaintiffs were fullyconscious even prior to commencement of the evidence that thedocuments were not presented on October 21, 1985, and,therefore, Swiss Bank was not entitled to accept thedocuments. It is, therefore, impossible to hold that the acts ofwaiver on the part of the plaintiffs were not intentional andthe plaintiffs could escape the consequences of their acts byreference to these circumstances. In our judgment, the trialjudge was in error in holding that the plaintiffs had not waivedtheir right to reject the documents on the ground of allegeddiscrepancies and on the ground of alleged fraud by the actionof lodgment of the insurance claim, institution of the suit inthe Gibraltar court and seeking extension of the forward salescontract. In our judgment, the plaintiffs were clearly estoppedby their own conduct and action from denying that the documentswere not accepted and the title to the goods covered by theconsignment did not vest in the plaintiffs.Some arguments wereadvanced as to whether the time for payment under the letter ofcredit was extended to April 1, 1986, and in spite of that SwissBank made payment on January 28, 1986, and, therefore, theiraction was contrary to the terms of the credit. The trial judgeheld that payment was made by Swiss Bank to Credit Bank underprivate arrangement and the liability under the draft acceptedby Swiss Bank was terminated by means other than payment. Itis not necessary to examine this aspect in view of the findingsrecorded on the relevant points for determination set out inthe earlier part of the judgment.In view of the finding thatthe plaintiff firm was not registered, the documents wereproperly presented by Credit Bank to Swiss Bank on October 21,1985, that the Swiss Bank was entitled to scrutinise and acceptthe same on October 23, 1985, the documents accepted by SwissBank did not suffer from any discrepancies and Swiss Bank hadnot acted negligently, the complaint of alleged fraud inantedating bills of lading is entirely frivolous and Swiss Bankwas neither aware of such alleged fraud at the time ofacceptance of the documents or payment, the Swiss Bank as wellas Canara Bank had not colluded with original defendant No. 4with a view to confer undue favour and the finding that theplaintiffs had waived the right of rejection of the documentsand were estopped from claiming that the documents were notaccepted and the title in the goods covered by the documents didnot vest in the plaintiffs, the plaintiffs are not entitled toany relief in the suit and the suit is liable to be dismissed.Canara Bank had filed a counter-claim on the basis that thedocuments were duly accepted by Swiss Bank, and, therefore,Canara Bank is entitled to be reimbursed by the plaintiffs inrespect of the amount covered by the letter of credit. CanaraBank sought a decree for a sum of Rs. 2,59,95,897 along withfurther interest at the rate of 16Y2 per cent. per annum on Rs.1,76,33,000 from the date of the suit till realisation. CanaraBank also sought consequential reliefs in respect ofhypothecated goods as well as properties mortgaged with CanaraBank in respect of the transaction. Shri Kapadia with hisusual fairness submitted that in case the plaintiff 's suitstands dismissed, then the counter-claim is required to bedecreed. On specific enquiries as to' whether the plaintiffs hadany complaint about the quantum of the amount claimed or the con'sequential reliefs sought in respect of the hypothecated goodsand mortgaged properties, learned counsel stated that there isno complaint and the claim isaccurate. Canara Bank in view of the findings recorded earlieris entitled to the decree as claimed and, accordingly, decreewill be passed.Before parting with the judgment, it is necessary to refer to thecomplaint made by counsel for the appellants that the learnedtrial judge has passed serious strictures against the banks andtheir officers as well as the expert witnesses examined. It wascontended that the Supreme Court has repeatedly observed thatthhe court should be slow in passing uncalled for remarks andcondemnation of the authorities and the witnesses. Learnedcounsel pointed out several observations made in the judgment.The judgment of the trial judge does not refer to the paragraphs,but the observations complained are found at pages15, 17, 18, 44,49, 53, 57, 159, 168 to 170, 179, 181, 182, 185, 186, 189 and 197of the judgment in the paper book. In addition to thestricturespassed to the effect that the conduct of the banks was suspiciousand the banks have deliberately set up a false claim, the trialjudge also directed the Reserve Bank to issue notice to CanaraBank for investigating the affairs. Counsel pointed out thatCanaraa Bank is nationalised bank and the observations made bythe trial judge as well as issuance of the notice was uncalledfor. Counsel for Swiss Bank submitted that the recordunmistakably establishes that Swiss Bank is a reputed bank inSwitzerland and is graded AAA. The condemnation of the bank aswell as the officers of the bank destroys the reputation of thebanks and would have serious repercusions on their functioning.We are unable to sharee the comments made by the trial courtagainst the banks, their officers and the expert witnesses andespecially Mr. Wheble, who is aged 84 years, and was holdingseveral important positions as disclosed in the testimony. Inour judgment, on the strength of the findings recorded, thestrictures were uncalled for. It is also necessary to strikedown the order directing the Reserve Bank to hold investingationinto the affairs of Canara Bank.Accordingly, both appeals are allowed with costs, and judgmentand decree dated April 17, 1989, passed by the trial court is setaside and the following decree is substituted :"The suit is dismissed with costs. The counter-claim filed byCanara Bank is decreed in terms of prayers (a) to (f). CanaraBank is also entitled to the costs of the counter-claiim.The directions to the Reserve Bank to hold enquiry into theaffiars of Canara Bank are quashed."Two advocates certified.At this stage, Shri Kapadia applies for continuation of injuctionissued by the trial judge for three weeks. Shri Cooper and ShriDoctor opose the application.