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By these applications Defendant Nos. 1 and 2 seek leave to defend the suit filed by the Plaintiff under Order XXXVII CPC for recovery of USD 180921.35 equivalent to Rs. 83,26,000/- along with pendent lite and future interest till actual realization.

2. The Plaintiff is a company incorporated under the laws of China and is having one of its office at Shenzhen, China. Defendant No. 1 is State Bank of Patiala having its Head Office at Patiala with various branches including the branch at Darya Ganj, New Delhi. Defendant No. 2 is a Company registered under the Companies Act, 1956 having its registered office at 37, Netaji Subhash Marg, Darya Ganj, New Delhi-110002 and is carrying on the business of manufacturing and sale of copper tube made from copper cathode which is the raw material. Defendant No. 3 Company in Hongkong entered into an agreement with Defendant No. 2 Company for supply of copper cathodes. At the instance of Defendant No. 2, Defendant No. 1 issued irrevocable Standby Letter of Credit (in short „SBLC‟) in favour of Plaintiff bank, the beneficiary in order to extend General Banking Facility to Defendant No. 3 at Shenzhen, China. Thereafter, the SBLC was extended twice at the instance of Defendant No. 2 on the same terms and conditions as mentioned in the principal SBLC dated 23rd December, 2006 vide swift code messages dated 5th September, 2006 and 4th December, 2006 thus extending the validity of the SBLC till 7th February, 2007. Since Defendant No. 3 did not repay for the banking facility extended by the Plaintiff, the Plaintiff vide its swift message dated 26th January, 2007 invoked the SBLC and submitted the drafts drawn at sight, that is, the Bills of Exchange. Pursuant thereto Defendant No. 1 vide its swift message dated 15 th February, 2007 acknowledged the invocation and agreed to pay to the Plaintiff under the SBLC by 19th February, 2007. However, on 20th February, 2007 the Plaintiff received another swift message from Defendant No. 1 wherein the Defendant No. 1 intimated to the Plaintiff that it had received the Bill of Exchange at sight dated 26th February, 2007 for USD 133032.35; had not received swift message from the Plaintiff and that the claim of the Plaintiff was incomplete as per the SBLC terms. The fact that the claim was incomplete was never intimated by Defendant No. 1 in its earlier message dated 15 th February, 2007. Further in its message dated 20th February, 2007 Defendant No. 1 did not specify the discrepancy in the documents submitted. Since Defendant No. 1 failed to make the payment, the Plaintiff sent further swift message on 3rd March, 2007 demanding payment however, Defendant No. 1 did not honour the same. Defendant No. 3 is stated to have admitted the breach of terms of the contract entered into between Defendant Nos. 2 and 3 and in view thereof Defendant No. 1 had stopped the payment to be made pursuant to the SBLC. Defendant No. 2 also instituted a suit before this Court being CS (OS) No. 448/2007 seeking mandatory injunction against Defendant No. 1 herein. On the statement of Defendant No. 1 herein that they were not making the payments to the Plaintiff, this Court dismissed the suit being based on no cause of action with liberty to file the same as and when the cause of action arises. Hence the present suit.

3. Learned counsel for Defendant No. 2 states that since number of tribable issues arise, the Defendants are entitled to be granted leave to defend. It is contended that the suit has been filed by the wrong Plaintiff. The Plaintiff is a separate legal entity. The beneficiary of the SBLC dated 24th June, 2006 is a branch of Standard Chartered (U.K.) Ltd. and an independent legal entity. Reliance is placed on Vodafone International Holding vs. Union of India, 2012 (6) SCC 613. It is the case of Defendant No. 2 that Defendant No. 3 failed to fulfill the contract and did not supply the copper cathodes as agreed and thus the Plaintiff is not entitled to encash the SBLC from Defendant No. 1. It is further contended that the present suit is barred by limitation. The suit was filed on 16 th February, 2010 and refiled on 22nd February, 2010, the Letter of Credit on which the suit was based was issued on 24th June, 2006 and was valid till 7th February, 2007. Further the suit is also filed on the basis of an alleged Bill of Exchange dated 26th January, 2007 which was issued by Standard Chartered Bank and not signed/accepted by Defendant No. 2. Fraud has been played on Defendant Nos. 1 and 2 by Standard Chartered Bank and Defendant No. 3 as the SBLC was opened by Defendant No. 1 at the request of Defendant No. 2 for the purchase of goods from Defendant No. 3. Under the contract between Defendant Nos. 2 and 1, Defendant No. 3 provided a prescribed format of Letter of Credit and accordingly the SBLC was opened. Defendant No. 3 has failed to supply the goods. Therefore, the question of payment does not arise. Further the SBLC has been invoked at the wrong address. The swift address code of Defendant No. 1 in the SBLC is „STBPINBB902‟ however, the Plaintiff did not send the swift messages directly to the issuing bank but had sent the same at a different destination. Hence the SBLC was never validly invoked. The communication dated 15th February, 2007 sent by Defendant No. 1 is not relevant as the Plaintiff failed to send the swift message directly to the issuing bank on the swift code „STBPINBB902‟ as required under the SBLC. Further the communication dated 15 th February, 2007 was sent after the expiry of the Letter of Credit, that is, on 7th February, 2007. There are various discrepancies in the documents sent by the Standard Chartered Bank such as the SBLC amount that could be demanded, that is, USD 135,188 whereas the amount of Bill of Exchange was USD 133,032.35. There is no provision for sending the alleged Bill of Exchange in the SBLC but the Plaintiff sent two Bills of Exchange. The two Bills of Exchange have been issued for the same amount which shows that one of the Bills of Exchange ceases to exist. Further the Bill of Exchange was not stamped under the Stamp Act and thus could not be acted upon being not a valid Bill of Exchange. The Bill of Exchange had to be compulsorily noted and protested however, the same was neither noted nor protested in violation of Section 104 of Negotiable Instruments Act. A suit for recovery of the amount on the basis of SBLC is not covered under the provisions of Order XXXVII CPC. Reliance is placed on Radnik vs. Janta Bank and others, ILR 1995 Delhi 538. The invocation of the SBLC is contrary to FEMA and RBI guidelines. Further the claim of interest is not covered by the SBLC. The dispute, if any, arises between the Plaintiff and Defendant No. 3. Defendant No. 3 has failed to appear and has been proceeded ex-parte. It is between the Plaintiff and Defendant No. 3 that the disputes are required to be decided. Since no relief which falls within the ambit of Order XXXVII CPC can be granted, triable issues are raised and hence leave to defend is required to be granted. Reference is made to Hindustan Zinc Ltd. vs. Punjab National Bank, AIR 2002 Delhi 398.

Reliance is placed on Bhaurao Dagdu Paralkar vs. State of Maharashtra and others, 2005 (5) SLR 595.

5. Learned counsel for the Plaintiff contends that the plea of Defendants Nos. 1&2 that the swift message was sent at wrong address is absolutely incorrect. Defendant No. 1 is State Bank of Patiala, Darya Ganj Branch with its head office at Nariman Point and the Letter of Credit itself was issued from the Head Office at Nariman Point with the address „STBPINBB‟ and thus the swift message was sent to the correct address. Defendant No. 1 in its swift message dated 15th February, 2007 admitted its liability and assured the payments by 19th February, 2007. No claim of incomplete documents was made and thus Defendant No. 1 is deemed to have accepted the claim. Further Articles 14 and 15 of the Uniform Customers and Practice for Documentary Credit Rules, 600 (in short „UCP 600‟) guarantee declaration in the broadest sense. If there was a discrepancy in the documents, the same ought to have been informed within five days and even as per UCP 500 within seven days failing which the documents are deemed to have been accepted and Defendant No.1 is precluded from claiming that the documents were not in compliance with the terms of credit. The Plaintiff‟s claim was received by Defendant No. 1 on 26th January, 2007 and no objection whatsoever was raised till 20th February, 2007. The Bill of Exchange was duly accepted by the acceptor and since the same was payable at sight in terms of Section 21 of Negotiable Instruments Act, the same was not required to be stamped. The difference of amount in the SBLC and the claim has no relevance as the SBLC only prescribed the maximum liability of Defendant No. 1 to the extend of USD 135,188 whereas the Plaintiff claimed a lesser amount of USD 133,032.35. The contention that there was no contract between the Plaintiff and Defendant No. 1 and hence Order XXXVII CPC was not applicable is wholly incorrect. The suit under Order XXXVII CPC can be based on a Letter of Credit as well. Relying on Article 4 of UCP 600 it is stated that the issuing bank and the negotiating bank are in no way concerned with the underlying transaction. The Letter of Credit by its nature itself is a separate transaction and an independent contract. Reliance is placed on United Commercial Bank vs. Bank of India and others, AIR 1981 SC 1426; Federal Bank Ltd. vs. V.M. Jog Engineering Ltd. and others, AIR 2000 SC 3166; Himadri Chemicals Industries Ltd. vs. Coal Tar Refining Company, 2007 (8) SCC 110; UBG AG vs. State Bank of Patiala, AIR 2006 SC 2250 and Mechelec Engineers and Manufacturers vs. Basic Equipments Corporation, AIR 1977 SC 577.

6. I have heard learned counsel for the parties.

7. The facts have already been noted above. One of the issues raised by the defendants is of limitation. The present suit was instituted on 16 th February, 2010 and refiled on 22nd February, 2010. The SBLC was valid till 7th February, 2007 and thus the Defendants claim that this suit is instituted beyond the period of limitation. Learned counsel for the Plaintiff on the other hand has contended that the acknowledgment of the claim was made by Defendant No. 1 on 15th February, 2007, to be payable upto 19th February, 2007, thus the cause of action accrued to the Plaintiff on and after 19th when the claim of the Plaintiff was not granted to it. A perusal of the documents show that by swift message dated 20th February, 2007 Defendant No. 1 for the first time stated that the claim was incomplete as per the SBLC and thus rejected the same, giving cause of action to the Plaintiff to file the present suit. The present suit is based on SBLC which was valid till 7th February, 2007 which is a contract between the Plaintiff and Defendant No. 1 and the Bill of Exchange dated 26th January, 2007 drawn by the Plaintiff on Defendant No. 1. The actual cause of action arose to the Plaintiff only when Defendant No.1 failed to acknowledge its liability and refused the claim of the Plaintiff vide its message dated 20th February, 2007. The present suit was instituted on 16th February, 2010 thus within the period of limitation of three years and hence is not barred by limitation.