Case: United Commercial Bank Vs. Bank of India and Others

Respondent No. 2, M/s. Godrej Soaps Ltd., hereinafter referred to as the " plaintiffs ", by a contract dated February 2, 1978, agreed to supply to the respondent No. 3, the Bihar State Food and Civil Supplies Corporation Ltd., hereinafter referred to as " the Bihar Corporation " one thousand metric tonnes of " Sizola Brand Pure Mustard Oil " the total value of which was approximately Rs. 86 lakhs, packed in brand new leakproof 62, 040 tins of net 16 kg. each at the rate Rs. 137 per tin. The contract provided, inter alia, that the Bihar Corporation were to open a letter of credit with the appellant, the United Commercial Bank, for the said amount, which the Bihar Corporation dulyletter of credit issued by the appellant was in the following termsUnited Commercial BankNariman Point BranchUnited Commercial BankFrazer Road, PatnaJune, 1978.Office :Malbourne RoadCalcutta-1ToM/s. Godrej Soaps Ltd.Eastern Express HighwayVikhroli, Bombay-400 079.DearOF CREDIT No.the request of Bihar State Food & Civil Supplies Corpn. Ltd., Patna, we hereby establish our confirmed irrevocable letter of Credit in favour of your goodself for account of Messrs. Bihar State Food & Civil Supplies Corpn. Ltd., East Boring Road, Patna, for any sum or sums not exceeding, in all, Rs. 86, 00, 000 (say rupees eighty six lakhs only) outstanding at anyone time available by your drafts at sight drawn on Messrs. Bihar State Food & Civil Supplies Corpn. Ltd., without recourse to drawers for full invoice value of merchandise to be described in the invoice as : 62, 040 tins of Sizola Brand Pure Mustard Oil packed in brand new leak proof tins of net 16 kgs. each at Rs. 137 (rupees one hundred thirty-seven only) per tin. Despatched from Bombay accompanied by the following documents :(i) Signed detailed invoices in duplicate.(ii) Railway receipts consigned to or endorsed in favour Of UNITED COMMERCIAL BANK marked FREIGHT/TO PAY evidencing despatch by Railway of the merchandise as stated above.Signed delivery order on your godown at......... fvg. United Commercial Bank covering the delivery of the above-mentioned merchandise.(iii) Insurance policies or certificate covering usual transit risks and rail issued in duplicate and endorsed in blank by transit insurance at the cost of openers not exceeding one per cent. of value of goods to be effected by beneficiary and to be included in the invoice.Railway receipt/delivery order must be dated not later than 13-7-1978.Bills of exchange must be dated and negotiated not later than 20-7-1978.Sd. Accountanthe schedule annexed specified the various destinations to which the goods were to beJune 22, 1978, and June 26, 1978, the plaintiffs from time to time despatched an aggregate of 24, 400 tins of their mustard oil by invoices bearing Nos. 4501 to 4520 of the aggregate value of Rs. 36, 52, 960 to various destinations mentioned in the schedule annexed to the letter of credit. Between June 17, and July 1, 1978, the plaintiffs further despatched an aggregate of 23, 080 tins of the said goods covered by invoices Nos. 4521 to 4539 of the aggregate value of Rs. 34, 70, 312. On July 7, and 8, 1978, the plaintiffs also despatched an aggregate of 10, 560 tins covered by invoices Nos. 4540 to 4547 of the aggregate value of Rs. 14, 61,plaintiffs presented the documents for payment of Rs. 85, 84, 456 in two lots. There were twenty sets of documents in the first lot, the total value of which was Rs. 36, 52, 960, the second lot in 27 sets of the total value of Rs. 49, 31, 496. The first lot consisted of four sets of the value of Rs. 7.30 lakhs, seven sets of Rs. 12.78 lakhs, five sets of Rs. 9.13 lakhs and four sets worth Rs. 7.30 lakhs ; the second of 27 sets consisting of 19 sets of Rs. 34.17 lakhs and 8 sets of Rs, 14.16 lakhs. It is these two lots of documents which are the subject-matter of thethe documents were presented by the plaintiffs for payment of Rs. 36, 52, 960 against the first lot of 20 sets, and Rs. 49, 31, 496 against the second lot in 27 sets, the appellant, United Commercial Bank, refused to make payment " except under reserve " on the ground of " discrepancies ". The main discrepancy was that the goods were described in the railway receipt as " Sizola Brand Pure Mustard Oil Unrefined. " The plaintiffs accordingly instructed their bankers, the Bank of India, to accept payment of Rs. 36, 52, 960 against the first lot of documents " under reserve ". The appellant accordingly made an aggregate payment of Rs. 36, 52, 960 to the Bank of India, that is, the negotiating bank, by three cheques of Rs. 7, 30, 502, Rs. 12, 78, 636 and Rs. 16, 43, 832. It is significant to note that the Bank of India, in their turn, credited the account of the plaintiffs, who were their constituents, also " under reserve ", with a specific notation that " it was paid under reserve on account of discrepanciesregards the second lot comprising of 27 sets of documents, 19 sets were presented by the plaintiffs on July 3, 1978, with sight drafts of Rs. 1, 82, 648 each along with bills of exchange together with the relevant documents. On July 5, 1978, the appellant addressed a letter to the plaintiffs refusing to make any payment under the letter of credit due to " discrepancies " as well as some of the railway receipts being " stale ". It was clearly stated by the appellant :" We are unable to negotiate the documents and are returning the same to you. However, if you so desire, we shall send the documents on collection basis and shall remit the amount to you on receipt of proceeds."Admittedly, the discrepancies remained till July 12, 1978, as the description of goods in the railway receipts still remained " Sizola Brand Pure Mustard Oil Unrefined  " till the plaintiffs made a request to the Central Railways for the deletion of the word " UnrefinedJuly 12, 1978, the appellant addressed a letter to the Bank of India making a demand for the refund of the amount of Rs. 36, 52, 960 paid under reserve in respect of the first lot of documents stating :" In this connection, we wish to state that we are now advised by our Patna office that the bills are not acceptable to the Corporation due to discrepancies. We shall, therefore, thank you if you kindly remit the amount with interest at 5 per cent. from the date of payment to you by us to the date of payment by you to us."On the same day, the appellant addressed a letter to the plaintiffs in regard to the second lot of 27 documents that the documents were not acceptable due to discrepancies and, therefore, no payment could be made against them under the letter of credit. On the next day, i. e., July 13, 1978, the plaintiffs addressed a letter to the appellant in respect of the first lot of 20 documents " negotiated and paid by you under reserve ", stating that the word " Unrefined " in the railway receipts should not have been treated as a discrepancy, forwarding copies of telegrams sent by the Central Railway to the various destinations deleting the word " Unrefined ", with a request that the appellant may, as regards the 27 documents of the second lot, " negotiate the documents and pay for the same forthwith ". On the same day, the plaintiffs also addressed a letter to the Bihar Corporation stating that the word " Unrefined " had no relation to the quality but was inserted for the purpose of paying a lower freight, and further that the railway authorities had agreed to amend the railway receipts by deleting the word " UnrefinedJuly 13, 1978, the plaintiffs addressed the following letter to their bankers, the Bank of IndiaJuly 13, 1978.Bank of IndiaForeign Exchange Dept.Mahatma Gandhi RoadBombay-400 023.Attn : MR. SIRURDeardocuments for Rs. 1, 92, 648 each drawn under L/C No. 1/78 dated 13-6-1978 of United Commercial Bank, Patna Office.We are enclosing 19 documents, as referred to above, and request you to forward the same to the United Commercial Bank, Nariman Point, Bombay, for negotiations and payment.We request you to collect these funds forthwith and credit our cash-credit account NO. 1 with you.We have complied with all the terms and conditions of the Letter of Credit and feel that United Commercial Bank would make the payment to you without reserve. You may accept the payment under reserve if insisted upon by them.Asst. Financial Controller.Bank of India, accordingly, wrote a letter to the appellant stating " we would accept payment under reserve ". On July 14, 1978, the appellant addressed a letter to the Bank of India returning the 27 documents relating to the second lot signifying their inability to negotiate the documents due to discrepancies in the description of goods in the railway receipts, stating that a mere deletion of the word " unrefined " could not make the railway receipts clean, and, furthermore, because some of the railway receipts were " stale ". It also intimated the plaintiffs by their letter of even date that they could not lift the " reserve " without obtaining the prior permission of their constituents, i. e., the Biharplaintiffs, being apprehensive that their bankers, the Bank of India, would be bound to refund Rs. 36.52 lakhs pursuant to the notice of demand served by the appellant inasmuch as the payment was made under reserve, kept a plaint ready on July 17, 1978, for the grant of a perpetual injunction against the appellant, and on the same day addressed a letter to the appellant asking for payment of Rs. 49, 31, 496 against the second lot of documents, enclosing a letter of guarantee or indemnity executed by their bankers, which readsDate July 17, 1978.United Commercial BankNariman PointBombay-400 021.Attn : Mr. P. K. SharmaDearof Credit No. 1/78 of your Patna office dated 13-6-78 Two sets, each containing 19 & 8 negotiable documents.We are in receipt of your letters, bearing No. Fex/Exp/78, dated 12-7-78 and 14-7-78 on the above subject.We refer to our submission of 19 documents through our bankers, Bank of India and 8 documents submitted directly by us to you for negotiation and payment. We learnt from you that you have returned the set of 19 documents to the Bank of India pointing out certain discrepancies in the documents to them. The set of 8 documents has been returned to us by you stating certain discrepancies under cover of your letter, Fex/Exp/ GSR/78, dated 12-7-78.One of the discrepancies pointed out by you in both the sets of documents (19 & 8) is regarding the appearance of the word unrefined in the railway receipts, as the same word does not appear in the Letter of Credit along with the words Sizola Brand Pure Mustard Oil. Out of abundant precaution, we then obtained and gave you copies of telegrams issued by the Central Railway to the Station Masters of the various destination stations, to which the goods were booked, to the effect that the word unrefined is superfluous and, therefore, deleted. You have taken the stand that by this action of the Central Railway also, the documents still do not continue to be in accordance with the Letter of Credit.Out of abundant precaution, we are now submitting herewith the railway receipts returned by you wherein the word unrefined has been physically deleted by the railway authorities.We are also enclosing a letter of undertaking which is the letter of undertaking issued by our bankers, the Bank of India, in your name indemnifying you against demurrage, wharfage and such other charges which you may have to pay at various destinations, where the goods have been consigned. This action of ours is without prejudice to any of our rights and contentions.We now request you to pay for these documents forthwith.Director.Bank of India executed a letter of indemnity or guarantee to the effectBank of India70/80, M.G. RoadBombay-400 023.18th July, 1978.United Commercial BankMafatlal Centre,Nariman Point BranchBombay.Dear SirsIn consideration of your having negotiated documentary bills of exchange drawn by Godrej Soaps Ltd., drawn on Bihar State Food & Civil Supplies Corpn. dated (various dates) under the commercial letter of credit No. LIC 1/78 dt. 13-6-78 issued by United Commercial Bank, Frazer Road Branch for account of Bihar State Food and Civil Supplies Corpn., we hereby unconditionally agree to hold you harmless and indemnified, for all consequences of non-acceptance and/or non-payment of this/these bill(s) of exchange by reason of the following discrepancies claimed by you......... We have made arrangements for due payment of this/these bill(s).We further unconditionally agree that in the event of the bills being dishonoured on due presentation on account of the above discrepancies claimed by you to reimburse and on demand the equivalent of the above mentioned bill(s) together with all other expenses, demurrage and all such other charges incurred by you in connection with dishonoured bill(s).Notwithstanding anything contained hereinbefore our liability under this bond is restricted to Rs. 86, 00, 000 (rupees eighty-six lakhs only) apart from charges enumerated above and it will remain in force till 17-8-1978. Unless a claim under the guarantee is made against us in writing and received by us before that date all your rights under the said guarantee shall be forfeited and we shall be relieved and discharged from all liability thereunder.for BANK OF INDIASd.P. Accountant Sd. P. Manager.is significant to note that it was represented by the Bank of India acting on behalf of the plaintiffs, " we have made arrangements for the payment of these bills ", meaning thereby that the Bihar Corporation had agreed to retire the bills ofJuly 19, 1978, the representative of the plaintiffs, M/s. Godrej Soaps Ltd., met the representatives of the appellant, the United Commercial Bank at Bombay. It was pointed out to him that the first set of 20 documents had not been accepted by the Bihar Corporation due to discrepancies and that the appellant had, therefore, by their letter dated July 12, 1978, made a demand for the refund of Rs. 36, 52, 960. As regards the second lot of 27 documents towards which the balance amount of Rs. 49, 31, 496 was payable to the Bank of India, in terms of the letter of indemnity or guarantee executed by it, he was informed that the instructions were awaited from the head office and was asked to come in the evening on the same day. The plaintiffs on the same day, i. e., on July 19, 1978, brought the suit in the original side of the Bombay High Court along with an application for the grant of a temporary injunction to restrain the appellant from recalling the amount of Rs. 36, 52, 960 but the learned single judge, Bharucha J., declined to grant an ex parte ad interim injunction, while allowing liberty to the plaintiffs to take out notice of motion returnable on August 4, 1978, but it appears that no such notice was ever takenthe appellant came to know of the suit, the plaintiffs representative made an endorsement at the foot of the letter dated July 17, 1978per Mr. Sharmas talk with Mr. K. R. Gokulam we hereby undertake not to proceed with this suit.Sd. R. V. Shekar19-7-1978.the faith of the undertaking the appellant made a payment of Rs. 49, 31, 496 to the Bank of India in terms of the letter ofis a controversy between the parties as to what transpired before the payment of Rs. 49, 31, 496 and as to the meaning of the aforesaid endorsement. We refrain from making any observations as they would tend to prejudice the rights of the parties. But one thing is clear that R. V. Shekar, Assistant Financial Controller, Godrej Soaps, was acting on behalf of the plaintiffs, and the word " we " meant " M/s. Godrej Soaps, Ltd." Further, the payment was secured by making theBank of India addressed two letters dated July 20, 1978, to the plaintiffs, that their account had been credited with Rs. 34, 70, 312 and Rs. 14, 61, 184, i. e., Rs. 49, 31, 496, representing the value of the second lot of 27 documents, " under reservethe narration of these facts, prima facie it appears that the payment of Rs. 36, 52, 960 against the first lot of 20 documents made by the appellant to the Bank of India, was a payment made " under reserve " and that of Rs. 49, 31, 496 was also made " under reserve " as well as against the letter of guarantee or indemnity executed byAugust 2, 1978, the appellant served a letter of demand on the Bank of India, for the refund of Rs. 85, 84, 456 together with interest thereon at 15% per annum from the date of payment by it to the date of refund, stating that the bills of exchange had not been retired by the Bihar Corporation, that is the buyers, due to discrepancies. The letter readsFex/Exp/1110/78 2nd August, 1978Bank of India70/80, M. G. RoadBombay-400 023.Attn : Mr. PUDVAL, Manager (Advance)Dear SirsRe : Your Guarantee Re. C/72/943 dated 18th July, 1978, in our favour for Rs. 86, 00, 000 --Document drawn by M/s. Godrej Soaps Ltd., under our Fraser Road, Patna Branch, L/C/1/78 dated 13-6-1978--Negotiated by us under reserve.Please refer to our letter No. 646/78 dated 1st August, 1978.In this connection we are now advised by our Patna office that the bills have not been accepted by the drawees, Bihar State Food & Civil Supplies Corporation Limited, due to the discrepancies. Our Patna office is, therefore, arranging to return the documents to us which we hereby undertake to forward to you when received.In terms of your Guarantee No. 8/72/943 dated 18th July, 1978, for Rs. 86, 00, 000 and in terms of our letters dated 24-6-1978, 27-6-1978 and 28-6-1978 and two letters of 19-7-1978, under cover of which we had made payment of the bills to you, we hereby call upon you to refund to us the amount of bills, viz., Rs. 85, 84, 456 (Rupees eighty-five lakhs eighty-four thousand four hundred and fifty-six) together with interest from the date of payment by us to you to the date of refund by you to us @ 15% per annum.In the meantime, please note that the documents are held by us at your sole risk and responsibility. You may, if you so desire, protect the merchandise including keeping the insurance cover note valid.........Please treat this as MOST URGENT(Sd.) Manager.47 Notarys Protest Certificates shows that when the bills of exchange were represented for payment to the Bihar Corporation, on August 2, 1978, the drawees dishonoured the bills of exchange on August 3, 1978, for the reason that, (1) the railway receipts accompanying the bills were " state ", (2) the goods had not been supplied as per the terms of agreement, and (3) the chemical analysis showed that the oil required refinement before being fit for humanBank of India accordingly addressed a letter to the plaintiffs on the next day, i. e., August 4, 1978, giving intimation that the appellant by its letter dated August 2, 1978, had made a demand for refund of the amount of Rs. 85, 84, 456 paid under reserve and in terms of its letter of guarantee or indemnity, seeking their " instructions " in the matter. On August 6, 1978, which was a Sunday, the plaintiffs moved the learned single judge, at his residence, along with an affidavit of their sales manager stating that unless an injunction was granted, the Bank of India, according to the banking practice, would make payment of Rs. 85, 84, 456 to the appellant, on the commencement of the banking hours on August 7, 1978. The learned single judge granted an ex parte ad interim injunction restraining the appellant from recalling or receiving the amount due from the Bank ofDecember 17, 1978, the learned single judge appointed the court receiver to be the ad interim receiver with power to sell the goods in question either in one lot or separate lots, on " as is where is " basis without any obligation or liability to purchasers thereof as to quality, quantity or edibility of the said goods. On March 27, 1979, the court receiver accepted the offer of the plaintiffs to buy the goods for Rs. 18, 53, 000 and the sale was confirmed by the High Court on April 4,learned single judge by his order dated August 24, 1979, made the temporary injunction absolute till the disposal of the suit on the view that the appellant was not entitled under the terms of the letter of credit, to unilaterally impose the condition of payment " under reserve " or refuse to pay against the documents tendered by the plaintiffs merely because of the alleged discrepancies, nor was it open to it to reject the documents as stale, for, in his view, there were indeed no stale documents. Upon these grounds, he held that the plaintiffs had a prima facie case. He, however, added a rider that, (1) the Bank of India was left free to decide whether or not the conditions for payment under the letter of indemnity had been satisfied so as to justify the making of payment thereunder to the appellant, and (2) the appellant was not restrained from making a claim upon the Bank of India or from receiving from it the amount payable in terms of the letter of indemnity nor was the Bank of India restrained from making paymentappellant being aggrieved by the order of the learned single judge dated August 24, 1979, preferred an appeal but a Division Bench of the High Court summarily dismissed the appeal on October 17, 1979.

Reasoning:
The relevant authorities uniformly lay down in dealing with commercial letters of credit that the documents tendered by the seller must comply with the terms of the letter of credit, and that the banker owes a duty to the buyer to ensure that the buyers instructions relative to the documents against which the letter of credit is to be honoured are compliedrelevant authorities uniformly lay down in dealing with commercial letters of credit that the documents tendered by the seller must comply with the terms of the letter of credit, and that the banker owes a duty to the buyer to ensure that the buyers instructions relative to the documents against which the letter of credit is to be honoured are compliedthe light of these principles, the rule is well established that a bank issuing or confirming a letter of credit is not concerned with the underlying contract between the buyer and seller. Duties of a bank under a letter of credit are created by the document itself, but in any case it has the power and is subject to the limitations which are given or imposed by it, in the absence of the appropriate provisions in the letter ofis somewhat unfortunate that the High Court should have granted a temporary injunction as it has done in this case, to restrain the appellant from making a recall of the amount of Rs. 85, 84, 456 from the Bank of India in terms of the letter of guarantee or indemnity executed by it. The courts usually refrain from granting injunction to restrain the performance of the contractual obligations arising out of a letter of credit or a bank guarantee between one bank and another. If such temporary injunctions were to be granted in a transaction between a banker and a banker, restraining a bank from recalling the amount due when payment is made under reserve to another bank or in terms of the letter of guarantee or credit executed by it, the whole banking system in the country wouldview of the bankers obligation under an irrevocable letter of credit to pay, his buyer-customer cannot instruct him not tois only in exceptional cases that the courts will interfere with the machinery of irrevocable obligations assumed by banks. They are the life blood of international commerce. Such obligations are regarded as collateral to the underlying rights and obligations between the merchants at either end of the banking chain. Except possibly in clear cases of fraud of which the banks have notice, the courts will leave the merchants to settle their disputes under the contracts by litigation or arbitration as available to them or as stipulated in the contracts. The courts are not concerned with their difficulties to enforce such claims ; these are risks which the merchants take. In this case the plaintiffs took the risk of the unconditional wording of the guarantees. The machinery and commitments of banks are on a different level. They must be allowed to be honoured, free from interference by the courts. Otherwise, trust in international commerce could be irreparablyis clear from the letters addressed by the appellant to the Bank of India on June 23, 27 and 28, 1978, that the payment of Rs. 36, 52, 960 by three cheques for Rs. 7, 29, 872, Rs. 12, 78, 536 and Rs. 16, 43, 833 were payments made under reserve. Admittedly, when these amounts were paid by the appellant to the Bank of India, the railway receipts were not clean because they contained the description " Sizola Brand Pure Mustard Oil Unrefined ". The appellant had taken the precaution of saying " Please note that the payment is made to you  under reserve  owing to the following discrepancies ". There was a foot-note added :" Please note that this payment is made to you subject to repayment on demand of the bill amount, without loss of exchange to ourselves plus interest and other charges incurred by us, and/or by our principals, if the documents are not acceptable to the openers or buyers in view of the discrepancies whatsoever ".It was also added :" Please also note that this reserve will remain in force until released by us in writing ".Acceptance of these amounts by the Bank of India on behalf of the plaintiffs was upon these terms. The Bank of India and the plaintiffs were thus fully aware that the appellant was not prepared to pay except " under reserve ". The plaintiffs in their letters addressed to the appellant dated June 22 and 23, 1978, had added in ink the post-script :" In case of discrepancies, pay to our bankers, Bank of India ". These letters were in respect of 11 out of 20 documents ; it is not suggested that others stand on a different footing. The letters conveyed a request to " negotiate the sight drafts for payment ".Thus, the payment of Rs. 36, 52, 960 against the first lot of 20 documents was " under reserve " and was also covered by the letter of guarantee orregards the second lot of 27 documents, the payment of Rs. 49, 31, 496 the appellant was not prepared to pay even " under reserve " because the Bihar Corporation had refused to accept the consignments on the ground not only of discrepancies but also because the mustard oil was not fit for human consumption. There was no question of the appellant paying this large sum of money except against the letter of guarantee or indemnity executed by the Bank of India. It was represented by the Bank of India that it had made arrangements for the due payment of the bills of exchange. When the bills of exchange were dishonoured on being presented on August 3, 1978, the amount of Rs. 49, 31, 496 became immediately repayable onstill remains the question whether the court should interfere with an order of this nature. The courts powers under art. 136 of the Constitution are untrammelled, but they are subject to self-ordained restrictions. The court does not, as a matter of rule, interfere with inter-locutory orders, save under very exceptionalgrant of a temporary injunction by the High Court under O.39, rr. 1 and 2,CPC, appears to be wholly unwarranted. For reasons already stated, the appellant was well within its rights in making a recall of the amount of Rs. 85, 84, 456 paid " under reserve " and/or in terms of the letter of guarantee or indemnity. We fail to appreciate any justification for the grant of a temporary injunction to the plaintiffs, the effect of which virtually is to restrain a transaction between a banker and a banker. The courts view with disfavour the grant of such temporarythe instant case, the High Court has assumed that the plaintiffs had a prima facie case. It has not touched upon the question where the balance of convenience lay, nor has it dealt with the question whether or not the plaintiffs would be put to irreparable loss if there was no injunction granted. In dealing with the prima facie case, the High Court assumes that the appellant was in breach. There is no basis for this assumption at all. The High Court in this case has pre-judged the whole issue by holding that the appellant could not unilaterally impose the condition of payment " under reserve ", nor was it justified in holding that the documents were " clean ". The question whether the appellant was in breach is an issue to be tried in the suit. The question whether the documents were " clean " or " unclean " is a vexed question on which no opinion could be expressed at this stage. It is also premature at this stage to assume that there was no " due presentation " of the bills of exchange and theirinjunction could be granted under O. 39, rr. 1 and 2 of the Code unless the plaintiffs establish that they had a prima facie case, meaning thereby that there was a bona fide contention between the parties or a serious question to be tried. The question that must necessarily arise is whether, in the facts and circumstances of the case, there is a prima facie case and, if so, as between whom ? In view of the legal principles applicable, it is difficult for us to say on the material on record that the plaintiffs have a prima facie case. It cannot be disputed that if the suit were to be brought by the Bank of India, the High Court would not have granted any injunction as it was bound by the terms of the contract. What could not be done directly cannot be achieved indirectly in a suit brought by theif there was a serious question to be tried, the High Court had to consider the balance of convenience. We have no doubt that there is no reason to prevent the appellant from recalling the amount of Rs. 85, 84, 456. The fact remains that the payment of Rs. 36, 52, 960 against the first lot of 20 documents made by the appellant to the Bank of India was a payment under reserve while that of Rs. 49, 31, 496 was also made under reserve as well as against the letter of guarantee or indemnity executed by it (the Bank of India). A payment " under reserve " is understood in banking transactions to mean that the recipient of money may not deem it as his own but must be prepared to return it on demand. The balance of convenience clearly lies in allowing the normal banking transactions to go forward. Furthermore, the plaintiffs have failed to establish that they would be put to an irreparable loss unless an interim injunction waswas, however, tried to be impressed upon us that the balance of convenience lay in granting the injunction since the appellant would not be put to any loss because it had furnished the letter of guarantee against 100 per cent. margin, i.e., on deposit being made by the Bihar Corporation of Rs. 85, 84, 456 for meeting the payment to be made under the credit. It was also said that the effect of recalling Rs. 85, 84, 456 from the Bank of India will result in the plaintiffs facing a serious credit-freeze, as the Bank of India will, on its turn, recall the amount from the plaintiffs. We are afraid, these considerations cannot prevail. For all these reasons, we are constrained to hold that there was no justification for the High Court to grant a temporary injunction under O.39, rr. 1 and 2 of the