1989 PLP 1361 (SCMR)

(2) Was it necessary for the plaintiff to get forward booking of the letters of credit Nos.l to 4? (3) If Issue No.2 is proved in the affirmative, did the plaintiff get the forward booking of the letters of credit Nos.] to .1:' (4) Was not the plaintiff bound to make payment immediately on receipt of defendant's notice in July, 1955 and to meet the documents released? (5) If the above issue is proved against the plaintiff, did he release the documents? If so, when? (6) Was the plaintiff justified in not making tie payment in accordance with the defendant's demand notice of July, 1955, on the ground that the goods had not arrived: (7) Was the defendant bound to issue demand notice only on arrival of goods in the port? (8) Did the plaintiff offer to make payment in the last week of July, 1955? (9) If the above issue is proved in the affirmative, did the defendant refuse to accept payment? If so, when and with what effect? (10) If the above issue is proved in the affirmative, was the refusal to accept payment dishonest? (11) Was it the duty of the defendant to get the goods cleared. (12) If the above issue is proved in the affirmative is the defendant liable for non‑clearance or late clearance of goods so, on what ground and with what effects:',~.` (13) Was it the duty of the plaintiff to get the goods cleared? (14) If the above issue is proved in the affirmative, is the plaintiff liable for non‑clearance or late clearance of the goods. If so on what ground and with what effect? (15) Was the defendant entitled to demand payment in accordance with the rates prevalent at the time of payment? (16) Had the payment in respect of letters of credit Nos.2, 3 and 4 been made by the plaintiff under‑ protest? If so with what effect? (17) Was the plaintiff entitled to get open delivery? If so on what ground and with what effect? (18) Was the defendant entitled to adjust Rs.3800/9/6 towards other account of the plaintiff? (19) If the above issue is proved in the negative, had the adjustment of Rs.3800/9/6 been made by the defendant with the consent of the plaintiff? (20) Was the defendant entitled to auction the goods? (21) If the above issue is proved in the affirmative, was the auction void or illegal? If so, on what ground and with what effect? (22) Is the plaintiff entitled to refund of any amount? If so, how much? (23) If the above issue is proved in favour of the plaintiff, is the plaintiff entitled to claim interest? If so, at what rate and on what ground? (24) Is the suit vexatious and is the defendant entitled to special costs? If so, how much? (25) Had the defendant made payment in respect of letters of credit to its foreign banks in accordance with the rate of exchange in force at the time of the opening of letters of credit? (26) If the above issue is proved in the affirmative, is the defendant bound to accept payment from the plaintiff in accordance with the rate of exchange prevalent at the time of the opening of the letters of credit?

7. The learned trial Court (Administrative Civil Judge, Gujranwala) vide its judgment, dated 30‑9‑1960, decided almost all the issues against the respondent and claim of the respondent was dismissed except in respect of the balance of Rs.1,953/12/3, which was admitted by the appellant‑Bank to be due to the respondent as excess of the auction sale proceeds after adjustment of the debit in respect of Letter of Credit at No.(i). The rest of the claim of the respondent was dismissed holding the action of the appellant‑Bank in disposing of the goods covered by the Letters of Credit at Nos.(i), (ii) and (iv) fully justified. It was also held by the, learned trial Court that respondent was liable to make payment at the post‑devaluation rate for the Letters of Credit at Serial Nos. (i) to (iv) because he had not booked forward exchange for the said Letters of Credit as he had done in the case of Letter of Credit at No.(v).

8. The appeal by the respondent to the learned District Judge, Gujranwala failed, who, by his judgment, dated 12‑7‑1962, affirmed the findings of the learned trial Court and dismissed the appeal. The respondent then carried a Civil Revision (subsequently treated as and converted into a Regular Second Appeal No.41 of 1963) before the then High Court of West Pakistan, Lahore. This appeal was heard and disposed of by a learned Single Judge of the Lahore High Court vide judgment, dated 19‑2‑1975. The learned Single Judge of the High Court set aside the judgments and the decrees of both the Lower Courts and accepting the appeal of the respondent decreed his suit with costs. The learned Single Judge of the High Court relying on the decision in Australasia Bank Ltd. v. MAbdullah and others (P L D 1966 Lah. 67) and on the judgment, dated 23‑6‑1972 delivered in Mian Abdul Hamid etc. v. The Australasia Bank Ltd. (P L D 1973 Note 46) came to the conclusion that the appellant‑Bank was entitled to charge the respondent at the pre‑devaluation rate and not at the post‑devaluation rate of the Pakistani Currency.

9. Leave was granted by this Court vide order dated 8th December, 1975 in the following terms: "The dispute in this case regarding the correct rate of exchange applicable to the letters of credit opened by the respondent with the petitioner‑Bank raises a substantial question of law of public importance. The High Court has relied on a previous decision reported as Australasia Bank Limited v. M.Abdullah (P L D 1966 Lah. 67), Learned counsel submits that there is no authoritative decision by this Court on this point. I We would, accordingly, grant leave to appeal."

10. In the meanwhile, this Court has had an opportunity to deal with question arising herein in the case of Muhammad Iqbal and others v. The Australasia Bank Ltd. (1984 S C M R 919) and has upheld the view taken in the two judgments of the Lahore High Court relied upon in the judgment impugned before us. The facts in Muhammad lqbal's case. briefly stated were. that Muhammad lqbal and others, who were the defendants in the suit filed by Australasia Bank Ltd. had applied to the respondent‑Bank on 6‑9‑1949 to purchase for them Swiss France 1,00,683 for the import of aluminium sheets from Switzerland and Canadian Dollars 18,500 for aluminium ingots from Canada. The respondent‑Bank accordingly opened two confirmed letters of credit bearing Nos.LCG/W/657 and LCG/W/656, respectively, both, dated 8‑9‑1949 for the beneficiaries in the aforesaid two countries, through its intermediary the Midland Bank Ltd., London, as the respondent‑Bank having no direct connection with the countries of origin which were outside the sterling area had to route the letters of credit via the sterling area. The intermediary Bank debited the account of the respondent‑Bank with sterling equivalent to the amount required for the purchase of the foreign currency. Before the shipment of the goods could materialize the starlings was devalued on 17‑9‑1949, with the result that the amount of sterling debited by the Midland Bank for the purchase of the foreign currency in both the cases fell short. The Midland Bank, therefore, debited the respondent‑Bank with extra amount on account of the devaluation. The documents from the suppliers were received on 17‑11‑1949 and 6‑13‑1949, the respondent‑Bank in order to realize the excess amount paid by it to the intermediary‑Bank obtained a promissory note in question on 17‑4‑1950 in the sum of Rs.60 000 in its favour from the defendants, out of which Rs.1,200 were received by them in cash while the balance of Rs.58,800 was adjusted by the respondent‑Bank against their debit. The defendants got release of the goods imported under the said letters of credit but failed to pay the amount due under the promote and finally refused payment on 16‑4‑1953. The respondent‑Bank, thereupon, instituted the suit the next day. The High Court held that the defendants were liable to pay loss on account of the devaluation of the sterling. This view was upheld by this Court and it was observed that as devaluation had already taken place before the shipment of the goods could materialize and that some extra amount had to be paid by the Midlar 3 Bank for the purchase of foreign currency, the said intermediary Bank was entitled to recover the difference from the respondent‑Bank.

11. In the instant case, the respondent was liable to pay only for the foreign exchange purchased by the appellant‑Bank at the pre‑devaluation rate when the Bank acting as a part of the respondent has actually purchased the foreign exchange at the rate of Rs.9/4/‑ per pound. According, the enhancement in the demand made after devaluation was not tenable because' the respondent could, at B best, be burdened with interest at the then prevalent bank rate on the demand raised in the first instance before devaluation of the Pakistani rupee and no more. In short, the Bank was entitled, in the circumstances, to charge the respondent only at the pre‑devaluation rupee rate, having purchased the same at the pre devalued rate, of exchange namely Rs.9/4 per pound.

12. The upshot is that there is no force in this appeal and the same is dismissed with costs. AA./A‑450/S Appeal dismissed.