USHA MEHRA ( 1 ) M/s Falcon Traders Pvt. Ltd. filed a summary suit for recovery against the defendants under the provisions of Order 37 of the Code of Civil Procedure (in short cpc ) The plaintiff has based his claim primarily on the ground that one Mr. Ashim Raizada approached the plaintiff with a proposal to export the leather garments to U. S. A. The said Ashim Raizada was the Director of defendant No. 3. Defendant No. 3 was the sole agent of defendant No. 1 in India. Defendant No. 1 being a trader in the leather goods in U. S. A. was interested to export the leather goods. Plaintiff agreed to supply the goods against irrevocable letter of credit favouring the plaintiff for an amount equivalent to the amount of the goods. Finally, order for 500 jackets was placed by defendant No. 1 and an irrevocable letter of credit dated 25th January, 1990 for US$ 44,000. 00 representing the value of the goods was issued by defendant No. 7 i. e. Chase Manhattan Bank through their corresponding bank, State Bank of India, Parliament Street Branch, New Delhi, was sent to the plaintiff. Pursuance to the said order, the plaintiff despatched air consignment of 280 jackets valued at US$ 24,900. 00 on 15th May, 1990. Another consignment of 250 jackets valued at US$ 19,580. 00 was also despatched. These consignments were duly inspected by defendants 3 and 4 on behalf of defendant No. 1. The goods supplied by the plaintiff confirmed to the specification and were found to the satisfaction and standard laid down by defendant No. 1. Over a period of 5 to 6 months, plaintiff received as many as nine orders from defendant No. 1. Each order was supported by corresponding enhancement in the amount of letter of credit issued by defendant No. 7 i. e. Chase Manhattan Bank. The 8th order was placed vide order No. 208 dated 20th August,1990 for supply of 975 jackets amounting to US$ 97,500. 00 and the 9th order was placed on 21st August, 1990 amounting to US$ 23,750. 00. ( 2 ) THE goods covered by order No. 208 being 8th in series were despatched in four consignments. Documents of the same were despatched to defendant No. 7 i. e. Chase Manhattan Bank through the plaintiff s bankers M/s Andhra Bank, R. K. Puram, New Delhi. 00. ( 2 ) THE goods covered by order No. 208 being 8th in series were despatched in four consignments. Documents of the same were despatched to defendant No. 7 i. e. Chase Manhattan Bank through the plaintiff s bankers M/s Andhra Bank, R. K. Puram, New Delhi. But the value of the same has not been paid by defendant No. 7 nor by defendants 1,3 and 4. Rather defendant No. 7 has taken the plea that as per instructions from defendant No. 1, they delivered the documents to their Document Collection Department. This was protested by the plaintiff and ultimately documents were returned by the defendant to the plaintiff on the request of defendant No. 1. This action of the bank has been challenged by the plaintiff. Since the defendants have failed to make the payment, hence this suit which is based on the agreement entered into between the parties. ( 3 ) SUMMONS in the prescribed form i. e. Form 4 Schedule B of Order 37 C. P. C. were issued to the defendants. Summons were served on defendants 3, 4, 7 to 9. They entered appearance. Summons for judgment were issued to these served defendants. In response, present application under Order 37 Rule 3 (5) C. P. C. has been filed by defendant No. 7 seeking leave to defend this suit unconditionally. Leave has been sought primarily on the ground that the suit being based on irrevocable letter of credit bearing No. D3351 77 dated 25th January, 1990 and since the plaintiff failed to comply with the conditions stipulated therein, hence a triable issue arises. The said letter of credit was extended from time to time and lastly upto 15th October,1990. The documents were sent on 25th October, 1990 i. e. much after the date of shipment. Thus, defendant No. 7 on account of this discrepency was not liable to make the payment. The date of shipment was the vital term of letter of credit. The relevant clause of the letter of credit reads as follows: "drafts and documents must be presented within 15 days after shipment but within the validity of the credit. " ( 4 ) SINCE in this case, the documents were presented beyond the period of validity of the credit, therefore, vital term of the letter of credit has been violated by the plaintiff. " ( 4 ) SINCE in this case, the documents were presented beyond the period of validity of the credit, therefore, vital term of the letter of credit has been violated by the plaintiff. Hence, defendant No. 7 was not liable to pay any amount. There is violation of this important term of the letter of credit, this can be seen from the fact that the goods covered under Order No. 208 being 8th in series were despatched after 15th October, 1990 whereas as per the term of the credit, the purchase order was to be shipped not later than 15th October, 1990. Even the inspection certificate shows that inspection of the consignment was carried out on 17th October, 1990 i. e. after the stipulated date of shipment. There was violation of the vital term of the letter of credit, which stipulated that the shipment had to be despatched not later than 15th October,1990. The shipment, however, was despatched on 28th October,1990 as is apparent from the flight details given on the Airway bill. Therefore, in view of this discrepency, the plaintiff is not entitled to any claim against defendant No 7. Other inspection certificates referred by the plaintiff would show that all those inspections were carried out prior to the date of flight. But in this case, the inspection was carried after the date of the Airway bill. Moreover, documents instead of being forwarded before 15th October, 1990, were in fact sent vide covering letter dated 26th October, 1990. These being triable issues require serious consideration. Hence, defendant No. 7 be granted leave to defend without conditions ( 5 ) PLAINTIFF controverted these averments and urged that since the consignment was shipped by 15th October, 1990 hence there was no violation of the term of the letter of credit. ( 6 ) HEARD, the learned counsel for the parties and perused the relevant documents. From the facts on record, it is apparent that from 26th October, 1990 till 1991 defendant No. 7 never pointed out any discrepency as rightly contended by Mr. D. D. Thakur, Senior Advocate of the plaintiff. ( 6 ) HEARD, the learned counsel for the parties and perused the relevant documents. From the facts on record, it is apparent that from 26th October, 1990 till 1991 defendant No. 7 never pointed out any discrepency as rightly contended by Mr. D. D. Thakur, Senior Advocate of the plaintiff. He also drew my attention to a letter written by Andhra Bank i. e. of the plaintiff s bank to defendant No. 7 dated 16th May,1991 in which it was pointed out that without assigning any reason and without seeking any instructions from the Andhra Bank, defendant No. 7 delivered the documents to its Collection Department on the instructions of its customers. This choose to raise the discrepency for the first time in March, 1991 vide its letter dated 20th March, 1991. It was also pointed out that the discrepency in the documents was never pointed out as required under UCPCD Article 16d. That defendant No. 7 intentionally disposed of the documents to its Collection Department without instructions. In fact the consignment before despatch was duly inspected by defendants 3 and 4 on behalf of defendant No. 1 and the inspection certificate was issued to the plaintiff before the consignment was handed over to the airlines for transportation. The vital term of the letter of credit was that the consignment be shipped not later than 15th October, 1990 By handing the consignment over to carrier for shipment on 15th October, 1990 the plaintiff complied with the vital term of the letter of credit. ( 7 ) AFTER hearing counsel for the parties and perusing the clauses and terms of the letter of credit, it is clear that plaintiff was to ship the consignment not latter than 15th October,1990. This being a vital term of the agreement between the parties, therefore, what we have to see from the facts of this case is whether the plaintiff shipped the consignment on or before 15th October, 1990 or not? Reference can be had to the Airway bill No. 026-1190-9446 dated 15th October 1990. As per plaintiff, he shipped the consignment the moment he handed over the consignment to the Airline authorities and the Airway bill was issued. The actual departure of the consignment was not the term of the agreement. The contention of Mr. Reference can be had to the Airway bill No. 026-1190-9446 dated 15th October 1990. As per plaintiff, he shipped the consignment the moment he handed over the consignment to the Airline authorities and the Airway bill was issued. The actual departure of the consignment was not the term of the agreement. The contention of Mr. Ganpathi, counsel for the defendant No. 7 that from the flight details, it is apparent that the consignment actually left on 28th October, 1990, therefore, it does not amount to shipment on 15th October, 1990, to my mind, has no force. What we have to see is what does shipment means. The word "shipment" is defined in the concise Oxford Dictionary as (1) "the amount of goods shipped and consignment, (2) the act or an instance of shipping the goods". The act of shipping the goods in this case would mean when the plaintiff handed over the consignment to the Airlines that was on 15th October, 1990, therefore, so far as the shipment is concerned that to my mind stood completed on 15th October, 1990, when the consignment was handed over. Shipment does not mean the acrual date of flight. If that had been the intention, it would have been so mentioned in the letter of credit. But the condition stipulated in the letter of credit is only that the consignment be shipped not later than 15th October, 1990. ( 8 ) THE Airway bill when issued would be prima facie evidence of the conclusiveness of the contract, of the receipt of cargo and of the conditions of carriage. The Airway bill in this case is dated 15th October, 1990. Therefore, presumption can be drawn that a concluded contract of carriage came into existence between the carrier and the consignor, when he deliver the cargo on 15th October,1990. So far as defence on this account is concerned, to my mind, it does not raise triable issue. ( 9 ) HOWEVER, turning to the other terms of the letter of credit on which reliance has been placed by Mr. Ganpathi, counsel for defendant No. 7, a trial be issue has been made out. The said term of the letter of credit requires that the documents were to be presented within 15 days after shipment but within the validity of the credit. Ganpathi, counsel for defendant No. 7, a trial be issue has been made out. The said term of the letter of credit requires that the documents were to be presented within 15 days after shipment but within the validity of the credit. The expiration that the documents were to be sent within the validity date, made it obligatory on the plaintiff to present the documents not later than 15th October, 1990, whereas the documents in fact were sent on 26th October,1990. Since these documents were not presented within the validity period i. e. 15th October, 1990 that amounts to discrepancy. The effect of non-presentation of documents within the validity period of credit, to my mind, raises triable issue. It requires adjudication. Mr. Thakur s contention that documents were presented within 15 days after the shipment, cannot brush aside the other requirement of this term in the Letter of Credit. It required that these documents should be presented within the validity of the credit. First part of the term will not override the second part nor would make it redundant in any way. The term has to be read as a whole. It not only requires interpretation but also evidence. Hence, I am in agreement with the contention of Mr. Ganpathi that this plea of his raises triable issue. The contention of Mr. Thakur that first part of the term was vital or an important term as is also admitted by defendant No. 7 in its written submissions. Admittedly, according to defendant No. 7 s own showing, the vital term was "shipment". But the presentation of the documents according to the defendant was equally important term of the letter of credit. Whether the presentation of documents within the validity period was a vital term or not and whether non compliance of this condition exonerate the defendant No. 7 from its liability are the questions to be tried. ( 10 ) FOR the reasons stated above, I hold that defendant No. 7 has raised a triable issue, but keeping in view that the violation is only of the term of non presentation of the documents within the validity period though presented within 15 days of the shipment, thus one part of the term stood complied. ( 10 ) FOR the reasons stated above, I hold that defendant No. 7 has raised a triable issue, but keeping in view that the violation is only of the term of non presentation of the documents within the validity period though presented within 15 days of the shipment, thus one part of the term stood complied. Therefore, under these circumstances, even though as per defendant No. 7 s own showing as is apparent from the written submissions made by him, the presentation of documents was not a vital term of the letter of credit. Still having regard to the facts of this case, I allow defendant No. 7 to contest the case, but subject to terms. I accordingly allow the application of the defendant No. 7 for leave to defend subject to depositing 75% of the suit amount in this court in the name of the Registrar of this Court or alternatively on furnishing the bank guarantee of the suit amount to the satisfaction of the Registrar of this Court. This be done within two weeks. Thereafter, the written statement be filed within four weeks with a copy to counsel for the plaintiff, who may file replication within four weeks thereafter. ( 11 ) TO be listed before the Joint Registrar for completing the pleadings on.