Vimal Services Limited vs Capsugel Healthcare Limited and Another

A.L. Dave, J.—By this application, the applicant - original Respondent No. 1 in the First Appeal No. 481 of 2010 seeks following directions.

(A). During the pendency of the First Appeal No. 481 of 2010, direct the Respondent No. 2 to make entire payment towards the Letter of Credit No. 200611 ILCU 0033 to the applicant with interest at 20% forthwith as per the terms of letter of credit.

(B). Award cost of this application to the Applicant (C) Such other and further orders as the Hon''ble Court deems just and expedient be passed in favour of the applicant.

The case has peculiar facts and therefore need a brief recital:

The Appellant and Respondent No. 1 had entered into a contract in respect of supply of Diesel Generator Sets, in respect of which Respondent No. 2 - Bank had accepted liability of honouring revolving Letter of Credit issued by it for an amount of Rs. 15,85,000/- with a maximum limit of Rs. 4.70 Crores. Respondent No. 1 - present applicant invoked the Letter of Credit on 24/04/2007, 07/06/2007, 07/06/2007 and 20/08/2007 which were honoured by the Bank. Thereafter, four Letter of Credits were invoked on 14/11/2007 and fifth was invoked on 01/12/2007.

3.1. On 01/02/2007, the Appellant filed Civil Application No. 333 of 2007 u/s 9 of the Arbitration Act in the District Court at Vadodara and sought injunction against the Bank from honouring the Letter of Credit and against Respondent No. 1 from invoking further Letter of Credits. That relief was granted ex-parte and was continued from time to time. Ultimately, after by parte hearing, the application was rejected by the District Court and, therefore First Appeal No. 481 of 2010 is preferred. The protection that was granted by the District Court during pendency of that application, was initially granted by this Court by way of ex-parte relief and then after by parte hearing, it was turned down. Civil Application was dismissed and the appeal is pending.

Now, Respondent No. 1 has approached this Court with this Civil Application seeking the reliefs as stated herein above.

We have heard learned Senior Counsel, Mr. Saurabh Soparkar, appearing with Mr. Amar Bhatt, for applicant, learned Advocate Mr. Abhijat and Mr. Nikunt Raval, for opponent No. 1 - original Appellant and learned Advocate Mr. Baiju Bhagat, for Respondent No. 2.

5.1. Both the sides have canvassed their respective cases on merits and have relied on certain pronouncements of the Apex Court.

We are afraid we will not be able to go into the merits of the case, because applicant - Respondent No. 1 in the Appeal is asserting its right on basis of Letter of Credit, an independent contract with the Bank, which the Bank is not prepared to honour, the reasons are irrelevant for our purpose. If the applicant is aggrieved he has to approach appropriate forum for asserting that civil right rather than approaching this Court in an appeal preferred by Appellant - original Plaintiff who had filed the application before the District Court u/s 9 of the Arbitration Act, which is based on an independent transaction though connected with the transaction with the Bank on basis of Letter of Credit.

We are, therefore, of the view that this application cannot be entertained, as it would call for an adjudication of a substantive dispute between the parties based on Letter of Credit. The application is, therefore, rejected with no order as to costs. Rule is discharged.