IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.GIRI THURSDAY, THE 13TH NOVEMBER 2008 / 22ND KARTHIKA 1930 WP(C).No. 33547 of 2008(R) -------------------------- PETITIONER(S): --------------- A.C.SANTHAKUMAR, MANAGING DIRECTOR, COIR TUFT INTERNATIONAL PRIVATE LTD., BUILDING NO.271 A/V, C.M.C. -V, NEDUMBARAKKADU, CHERTHALA, ALLEPPEY. BY ADV. SRI.P.K.MADHUSOODANAN SRI.B.S.SIVAJI RESPONDENT(S): --------------- 1. CHIEF MANAGER, INDIAN OVERSEAS BANK, GOVERNMENT OF INDIA UNDERTAKING, ALAPPUZHA BRANCH, ALAPPUZHA. 2. SPAM OVERSEAS LTD., OFFICE NO.5, 3RD FLOOR, AMAR AVINASH CORPORATE CITY, II BUND GARDEN ROAD, PUNE 411 001, 3. ASSISTANT DEVELOPMENT COMMISSIONER, GOVERNMENT OF INDIA, MINISTRY OF COMMERCE & INDUSTRY, OFFICE OF THE DEVELOPMENT COMMISSIONERS COCIN SPECIAL ECONOMIC ZONE, (CSEZ), KAKKANAD COCHIN. 4. TRIGON GULF FZCO, P.O. BOX 61468, JEBELI ALI , DUBAI, UAE. ADV. SRI.P.B.SURESH KUMAR, SC,I.O.BANK FOR R1 SRI.P.PARAMESWARAN NAIR,ASST.SOLICITOR FOR R3 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13/11/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: V.GIRI, J ------------------- W.P.(C).33547/2008 -------------------- Dated this the 13th day of November, 2008 JUDGMENT Petitioner is the managing Director of a Company which is set up for production and export of Coir Tufted products to foreign countries. The Company entered into Ext.P2 contract with the fourth respondent through the second respondent for supply of PVC Resin grades. Petitioner submits that pursuant to Ext.P2, he placed a letter of intent with the fourth respondent for shipment of Raw materials. As per the letter of intent, 198 MTS of PVC Resin grade were supplied by the consignor. It seems that PVC Resin was not of satisfactory quality in so far as the petitioner is concerned. In the circumstances, though payment for the goods imported was made by means of letter of Credit, the petitioner requested the second respondent to take steps to inform the consignor seeking extension of the period of Credit. 2. Counsel for the Bank submits that the consignors W.P.(C).33547/2008 2 might have already retired the shipping documents and they would have collected payment. Petitioner has submitted Ext.P6 before the first respondent, requesting not to make payment under the Letter of Credit until they are in a position to resolve the issue regarding quality of products imported by them. 3. Learned counsel for the Bank submits that payment against the letter of Credit at the instance of the petitioner cannot be interdicted merely because the petitioner later feels that there is a dispute on the quality of the products imported. Documents issued by the Bank are credit worthy and it is not open to the petitioner also to restrain the consignors from retiring the documents. At any rate, any such restraint would be seriously derogatory to healthy international commercial practices. 4. Petitioner is not entitled to seek any restraint on the Letter of Credit to the consignor's Bank. Even if W.P.(C).33547/2008 3 there is a dispute raised by the petitioner, the same does not come within the purview of a dispute that could be resolved by this Court under Article 226 of the Constitution of India. I do not find any merit in the writ petition and accordingly, the same is dismissed. V.GIRI, Judge mrcs