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2006 DIGILAW 439 (CAL)

NAGREEKA EXPORTS LTD. v. CITY BANK LTD.

2006-07-20

GIRISH CHANDRA GUPTA, MANIK MOHAN SARKAR

body2006
Girish Chandra Gupta And Manik Mohan Sarkar, JJ. ( 1 ) THIS appeal is directed against an order dated 3rd April, 2006 by which an application for attachment before judgment was disposed of attaching US $ 15,078. 26 from out of the moneys lying to the credit of the defendant No. 1 with : 1]. American Express Bank, 21, Old Court House Street, Calcutta-700001, 2]. The Bank of Tokyo Mitsubishi Ltd. ,2, Brabourne Road, Calcutta-700001, 3]. Sonali Bank, 15, Park Street , Calcutta-700016, and 4]. Arab Bangladesh Bank Ltd. , Mumbai Branch, Liberty Building, New marine Lines, 41-42, Sir Vithaldas Thakersey Marg, Mumbai-400020. ( 2 ) US $ 4,717. 73 to the credit of the defendant No. 1 are lying in each of those four banks. ( 3 ) CHALLENGING the aforesaid order the plaintiff has come up before this court. The grievance of the plaintiff is that the learned Trial Court came to a finding that US $ 814. 51 was payable towards the principal. US $ 6,830. 77 and US $ 64,671. 16 were also payable. While adding up the figures, the learned Trial Court fell into an error and came to an erroneous finding that the total works out to US $ 15,078. 26 and, accordingly, US $ 15,078. 26 were attached, whereas the entire money lying with all the four banks to the credit of the defendant No. 1 should have been attached because the aggregate of the quantum of money lying with those banks is far less than the figure found to be due to the plaintiff by the learned Trial Court even prima facie. It was, therefore, submitted by Mr. Bose, learned Advocate, that the order should be corrected and the entire eighteen thousand dollars approximately lying to the credit of the defendant No. 1 should be attached before judgement. He added that learned Trial Court has erroneously put the plaintiff on terms that in the event the plaintiff fails at the final hearing of the suit, the plaintiff shall be liable to pay interest on the attached amount at the rate of 25% per annum because that is not the permissible rate of interest. He, therefore, submitted that this part of the order is also bad. ( 4 ) MR. He, therefore, submitted that this part of the order is also bad. ( 4 ) MR. Sen, learned Advocate appearing for the defendant No. 1, who has preferred as cross-objection, submitted that the claim of the plaintiff is for damages. Admittedly the bill value was US $ 7,61,235. 14 whereas the amount paid by the defendant No. 1 was US $ 7,74,684. 88 as would appear from an annexure relied upon by the plaintiff itself. There was thus no question of the defendant No. 1 being held liable for any amount. He submitted that the entire order is bad and should be set aside. ( 5 ) WE have in the circumstances called upon Mr. Bose, learned Counsel to satisfy us that the claim made in the suit as against the defendant No. 1 likely to succeed at the trial so that his application for attachment before judgment could at all have been entertained. ( 6 ) MR. Bose submitted that the defendant No. 1 admittedly issued the letters of credit. The letters of credit were issued on terms and conditions which were set out in a separate sheet in the case of each of the 14 several letters of credit issued by the defendant No. 1. The condition upon which he relied is condition No. 1 which reads as follows : "1. Payment within 120 days from the date of forwarding of the shipping documents and interest will be paid at "libor' upto the date of payment from the date of negotiation. " ( 7 ) HE submitted that the usance period is 120 days. If the payment is made within the aforesaid period the rate of interest indicated in the terms and condition is applicable. But if the payment is made beyond 120 days, the rate of interest of penal rate charged by the banker of the plaintiff is payable by the defendants. It is on this basis that the claim is made as against the defendant No. 1. His alternative case was that the defendant No. 1 is liable in tort because the said defendant was negligent in making payment on time and, therefore, the defendant No. 1 is liable to the plaintiff in the entire sum claimed in the suit. In support of his submission he relied on a judgement in the case of Allen and Ors. vs. Jambo Holdings Ltd. and Ors. In support of his submission he relied on a judgement in the case of Allen and Ors. vs. Jambo Holdings Ltd. and Ors. reported in 1980 (2) All ER 502. He submitted that Mareva injunction can be granted not only in the case when the claim arises out of a contract, but also in the cases arising out of tort. He developed his argument by referring to the following passage from Fourth Edition of Halsbury's Laws of England : "the scope of what has come to be known as the "mareva injunction" has been authoritatively formulated on the basis that it is an established feature of English law which should be granted where it appears likely that the plaintiff would recover judgment against the defendant for a certain or approximate sum and there is reason to believe that the defendant has assets within the jurisdiction to meet the judgment, wholly or in part, but might deal with them so that they would not be available or traceable when judgement is given against him. The jurisdiction to grant a Mareva injunction extends not only to a debt or liquidated demand, and not only to commercial actions, but to any actions and claims for damages for breach of contract or for tort. There must be assets located within the jurisdiction to confer jurisdiction on the Court to grant a Mareva injunction, and it will be refused where there is no evidence that the defendant possesses any removable assets within the jurisdiction or that he is likely to remove them or would attempt to avoid his liability if judgment were entered against him nor will it be granted in respect of assets out of the jurisdiction. The Court has power to order the discovery of documents or interrogatories designed to ascertain the whereabouts of property, but not to make such an order which could have far-reaching and undesirable consequences and which could be unnecessary for the proper operation of the Mareva injunction. The essential character of a Mareva injunction, although it is related to assets, is relief in personam against the defendant, and it should not be regarded as operating to attach goods, money or other assets. " ( 8 ) MR. The essential character of a Mareva injunction, although it is related to assets, is relief in personam against the defendant, and it should not be regarded as operating to attach goods, money or other assets. " ( 8 ) MR. Sen in reply submitted that the particulars furnished in paragraph 5 of the plaint would go to show that the claim against the defendant No. 1 is based on an allegation that the defendant No. 1 failed to make full payment within the specified time and the second ground made out in paragraph 5 is that the defendant No. 1 released the documents to the defendant No. 4 in order to enable the said defendant to take delivery of the goods. He submitted that insofar as the second ground for claiming damages is concerned, that, according to him, is wholly without any merit because when the defendant no. 4 executed the bill of exchange, he was entitled to the documents of title with regard to the goods and, therefore, the bank did not commit any mistake in giving the documents to the defendant No. 4 for the purpose of taking delivery. With regard to the first contention he submitted that the entire money, according to the plaintiff, has been paid and nothing is outstanding. He, therefore, submitted that the defendant No. 1 is not liable to the plaintiff for any sum whatsover. ( 9 ) WE have considered the rival submissions made by the learned advocates for the parties. It is apparent from the terms and conditions attached in a separate sheet to the letters of credit that 'nterest at "libor" rate was payable for the days of credit actually enjoyed by the defendant no. 4. We are also prima facie of the view, on that basis, that some interest was in fact paid by the defendant No. 1. Mr. Bose submitted that his claim on account of interest at "libor" rates works out to US $ 6830. 77 and a claim for US $ 64,671. 16 is on account of overdue interest. His claim towards principal is US $ 814. 51. ( 10 ) WE are prima facie of the view that the claim against the defendant no. 1 for interest at "libor" rate amounting to a sum of US $ 6830 may have some substance. 77 and a claim for US $ 64,671. 16 is on account of overdue interest. His claim towards principal is US $ 814. 51. ( 10 ) WE are prima facie of the view that the claim against the defendant no. 1 for interest at "libor" rate amounting to a sum of US $ 6830 may have some substance. We are also prima facie of the view that the claim for outstanding principal being US $ 814. 51 also has some substance. The balance claim of the plaintiff as against the defendant No. 1 does not appear to have any basis. This is, however, prima facie finding and shall not be binding on either of the parties at trial of the suit. ( 11 ) THE judgement relied upon by Mr. Bose has no manner of application because in that case liability of the defendant arising out of negligence could be presumed because it was a case of a fatal accident. In the present case the facts are wholly dissimilar. In order to lay foundation for a cause of action in negligence the plaintiff is obliged to allege and prove that the defendant owed a duty to take care and committed breach thereof in consequence whereof damage was suffered. No. such thing was even shown to have been alleged far less proved. ( 12 ) THE passage from Halsbury does not assist ths appellant either. Security in any event cannot be insisted upon for a sum greater than that part of the claim against the defendant which is likely to succeed. The plaintiff has failed to discharge this onus except as indicated above. ( 13 ) THE order granting attachment in favour of the plaintiff for US $ 15078. 26, according to us, is erroneous and is, therefore, set aside. This appeal is disposed of by granting attachment before judgment against the defendant No. 1 in favour of the plaintiff for the aforesaid sum of US $ 7644. The bankers namely City Bank and Canara Bank are prohibited from, allowing the defendant No. 1 to withdraw any amount from the bank account of the defendant No. 1 without retaining the aforesaid sum of US $ 7644. The bankers namely City Bank and Canara Bank are prohibited from, allowing the defendant No. 1 to withdraw any amount from the bank account of the defendant No. 1 without retaining the aforesaid sum of US $ 7644. In the event the plaintiff fails to establish its claim against the defendant No. 1, the plaintifff shall be liable to compensate the loss suffered or to be suffered by the defendant No. 1 by this order and the order under challenge. ( 14 ) THIS disposes of the appeal as well as the cross-objection. ( 15 ) THERE shall be no order as to costs. Appeal disposed of. .