KN Enterprise vs. Respondent: Eastern Bank Ltd and Others

Jun 28, 2022

IN THE SUPREME COURT OF BANGLADESH
(HIGH COURT DIVISION)

First Appeal No. 210 of 2005

Decided On: 23.02.2011

Appellants: KN Enterprise
Vs.
Respondent: Eastern Bank Ltd and others

**Hon’ble Judges:**Nozrul Islam Chowdhury and Mohammad Anwarul Haque, JJ.

Counsels:
For Appellant/Petitioner/Plaintiff: Kari Nazrul Islam, Advocate (In person)

For Respondents/Defendant: Mahbubey Alam, Senior Advocate with Sk Reajul Hoque, Advocate - For the Respondent No. 1-3

Subject: Banking

Catch Words

Mentioned IN

Citing Reference:

Distinguished

 

 4

Case Note:
Civil - Money suit - Dismissal of - Present appeal directed against judgment and decree passed dismissing subject money suit - Whether subject money suit rightly dismissed - Held, plaintiff-appellant did not export goods in question to buyer - Not entitled to claim amount claimed or any amount from defendant-respondent No. 1 - Money suit filed by plaintiff liable to be dismissed - Appeal dismissed. [36]

Disposition:
Appeal Dismissed

JUDGMENT

Mohammad Anwarul Haque, J.

  1. This appeal at the instance of plaintiff-appellant, is directed against the judgment and decree dated 27-7-2005 passed by the learned Joint District Judge, arbitration Court, Dhaka in Money Suit No. 8 of 2005 dismissing the suit. Short facts leading to the filing of this appeal are that on 18-3-1999 the appellant as plaintiff filed a money suit being Money Suit No. 22 of 1999 in the Court of the then Subordinate Judge, 5th Court, Dhaka for realization of Taka 53,03,500 as converted from original claim of US $ 1,11,000 along with 18% interest thereon. Subsequently on 31-5-2005 the suit was transferred to the Joint District Judge, arbitration Court, Dhaka for disposal and the suit was re-numbered as Money Suit No. 8 of 2005 and eventually the suit was disposed of therein.

  2. The plaintiff’s case, in short, is that defendant No. 6 Agrani Bank received two documentary credits (LCs) being Documentary Credit No. A8A9-501089 dated 21-3-1995 worth US $ 1,31,500 (Exh-ibit-Gha), and Documentary Credit No. A8A9-500667 dated 27-2-1995 worth US $ 33,250 (Exhi-bit-Cha) and both the documentary credits were issued by ABN-AMRO Bank, Rotterdam, Netherlands in favour of the plaintiff Messrs KN Enterprise, represented by its proprietor, Kazi Nazrul Islam for buying jute goods. The plaintiff obtained the authenticated copies of the said documentary credits from the advising Agrani Bank under Advice No. PB/EXP/LC 1146/95 dated 26-7-1995 and No. PB/EXP/LC 325/95 dated 27-2-1995. So, altogether in the aforesaid two L/Cs come to US $ 1,64,750. Subsequently price of both the L/Cs were amended by the buyer, and after amendment, the total amount stands to US $ 1,85,000.

  3. As the plaintiff Messrs KN Enterprise is the beneficiary of said two documentary credits, submitted directly to defendant No. 1, Eastern Bank Ltd. (hereinafter referred to as “EBL”) 4 sets of export bills (Exhibits 1,1(Ka), 2(Kha) and 2(Ga) drawn on collection basis. Detailed particulars of those bills are as follows:-

Export bill No. KNE-1/95 for an amount of US $ 55,500 and Export bill No. KNE 4/95 for an amount of US $ 18,500 against documentary credit No. A8A9501089 dated 21-3-1995 and Export bill No. KNE 2/95 for an amount of US $ 18,500 and Export bill No. KNE 3/95 for an amount of US $ 18,500 against documentary credit No. A8A9500667 dated 17-2-1995, total amount to the tune of US $ 1,11,000.

  1. The receipt of the aforesaid export bills were acknowledged by the EBL, Principal Branch on 27-9-1995 and 1-10-1995 respectively for collection of the said export bill proceeds and after collection, the total amount is credited to the account No. CD 11002113 of the beneficiary, plaintiff Messrs KN Enterprise. The plaintiff came to know that against the said export bills, the EBL had received the export proceeds on or before 15-10-1995, and requested the EBL, Principal Office vide their letter dated 27-11-1995 (Exhibit-5) for crediting the amount to the account of the plaintiff Messrs KN Enterprise with the equivalent amount of Taka of US $ 1,11,000 to which they were legally entitled, but the EBL remained silent till 27-11-1995. On the other hand, the EBL wrote letters to Messrs Victory Jute Products Ltd, Ispahani Building, Agrabad Commercial Area, Chittagong and Messrs Chittagong Jute Manufacturing Company Ltd to release export bill proceeds of their collection Bill No. FDBC/PB 1168 (corresponding to KNE 2/95 for US $ 18,500) and No. 169/95 (corresponding to KNE 3/ 95 for US $ 18,500), and collection Bill No. FDBC /PB/167 (corresponding to KNE 1/95 for US $ 55,500) and No. FDBC/PB/170/95(corresponding to KNE 4/95 for US $ 18,500) which come altogether plaintiffs claimed amount to US $ 1,11,000. The EBL finally issued a letter bearing No. EXP/ JUA/ 55/96 dated 21-3-1996 informing the plaintiff that their file in respect of the said export bills has been closed (Exhibit-10).

  2. The further case of the plaintiff is that defendant No. 1, Eastern Bank Ltd being an authorized dealer in Foreign Exchange performing under the authority of Bangladesh Bank acted most illegally and malafide in not crediting to the account of the beneficiary (plaintiff) with the proceeds of the export bills against the aforesaid documentary credits as the amount of the export bills in the name of the plaintiff Messrs KN Enterprise has been realized by the EBL from ABN-AMRO Bank, Rotterdam, Netherlands and, as such, Messrs KN Enterprise acquired the title over the amount. Hence, the suit.

  3. The defendant Nos. 1-3 contested the suit by filing a joint written statement denying all the material allegations in the plaint. Their case, in short, is that these defendants (defendant No. 1 is the Eastern Bank Ltd and defendant Nos. 2-3 are the officials of the said bank) issued a letter dated 17-1-1996 to the plaintiff as there had been discussions between the EBL and Kazi Nazrul Islam, proprietor of the plaintiff Messrs KN Enterprise and that Kazi Nazrul Islam had agreed and confessed gross irregularities, committed by him in the export documents; that the export contract being the back to back L/C, Messrs KB Enterprise had received original shipping documents directly from Sonali Bank, Foreign Exchange Branch, Agrabad, Chittagong as consignee on account of Messrs Chittagong Jute Manufacturing Company Ltd. and Messrs Victory Jute Products Ltd who had advised the EBL to make the payment of the bill proceeds directly vide their letters dated 28-12-1995 (Exhibit-Da).

  4. The further case of the contesting defendants is that plaintiff Messrs KN Enterprise, represented by its proprietor Kazi Nazrul Islam is also the Manager of Messrs Enterprise; that both Messrs KN Enterprise and Messrs KB Enterprise are owned by same family members and both the accounts are maintained with the EBL and operated by said Kazi Nazrul Islam; that Messrs KN Enterprise wrote a letter dated 1-8-1995 (Exhibit-Ka) to the Manager, EBL signed by its proprietor Kazi Nazrul Islam requesting the EBL to issue a L/C in favour of Messrs KB Enterprise for US $ 65,960 for 200 bales of jute products against the Master L/C No. A8A9-501089; that on 1-8-1995 Kazi Nazrul Islam as Manager of Messrs KB Enterprise wrote a letter (Exhibit-Kha) to the EBL requesting to issue a L/C in favour of Messrs Chittagong Jute Manufacturing Company Ltd for US $ 65,960.

  5. The EBL did not credit the export bill proceeds to the account of the plaintiff, KN Enterprise; that Messrs Chittagong Jute Manufacturing Company Ltd and Messrs Victory Product Ltd wrote a letter to Messrs KB Enterprise on 2-12-1995 informing that they did not receive any payment against their Invoice Nos. G/1223, G/1234, G/8800 and G/8812; that the consigner Messrs Chittagong Jute Manufacturing Company Ltd vide BL/MTD No. CTG RTM0001 and BL/MTD No. CTG RTM /0004 shipped the consignments on 16-9-1995 and 27-9-1995 respectively wherein the account being Messrs KB Enterprise and consignee was the Sonali Bank, Agrabad, Chittagong; that Messrs Victory Jute Products Ltd being the consigner vide BL/MTD No. CTG RTM 0002 and BL/MTD No. CTG RTM 0003 shipped the consignments on 16-9-1995 and 27-9-1995 respectively wherein the account being the Messrs KB Enterprise and the consignee was the Sonali Bank Agrabad, Chittagong.

  6. The further case of the contesting defendants is that Kazi Nazrul Islam as Manager of Messrs KB Enterprise wrote a letter dated 18-9-1995 (Exhibit-chha) to the EBL requesting the EBL to issue a Pay Order for Taka 2,90,640 in favour of James Finlay, Dhaka being the shipping agent and also to issue a Pay Order for Taka 68,692 in favour of Rupali Insurance Company Ltd, Dhaka wherein it was stated that the payment would be adjusted at the time of negotiation of export bills/documents; that these defendants rightly issued Memo No. EXP/ JUA/55/96 dated 21-3-1996 served upon the plaintiff that their file in respect of the said export bills had been closed (Exhibit-10). The suit having no merit, is liable to be dismissed.

  7. On the pleading following issues were settled:

(a) Whether the suit was maintainable in the present form?

(b) Whether the suit was barred by limitation?

(c) Whether the suit was bad for defect of parties?

(d) Whether the plaintiff was entitled to get a decree as prayed for?

  1. In support of his case, the plaintiff, represented by Kazi Nazrul Islam examined him along as PW 1 while the contesting defendants examined 3 witnesses. The documents of the plaintiff were marked as Exhibits 1-1(Ka), 2(Kha)-2(Uma), 3-3(Ka), 4-4(Uma), 5, 6-6(Ka), 7, 8, 9-9(Kha), 10, 11, 12-12(Ka) while the documents of the defendants were marked as Exhibits Ka-Ga, Gha-Gha (1), Uma-Uma(1), Cha, Chha, Ja-Ja(1), Jha-Jha(3), Neo, Ta-Ta(2), Da, Dha-Dha(1), Na, Tta, Tha-Tha(1).

  2. The learned Joint District Judge after considering the issues, depositions and the materials on record concluded the trial and dismissed the suit.

  3. Being aggrieved by and dissatisfied with the impugned judgment and decree of the trial Court the plaintiff-appellant preferred the instant appeal.

  4. Kazi Nazrul Islam, the proprietor of the plaintiff-appellant Messrs KN Enterprise, appearing in person on behalf of the plaintiff-appellant supports the appeal and submits that defendant respondent No. 6 Agrani Bank received two documentary credits which were issued by ABN-AMRO Bank, Rotterdam, Netherlands in favour of the plaintiff-appellant Messrs KN Enterprise for buying jute good; that as Messrs KN Enterprise was the beneficiary of the said documentary credits, they submitted directly to the EBL 4 sets of export bills of an amount of US $ 1,11,000 for crediting the same to their account, but the EBL without crediting the same issued a letter on 12-3-1996 to Messrs KN Enterprise informing that their file in respect of the said export bill has been closed.

  5. Kazi Nazrul Islam further submits that they procured the export goods locally and exported the same to the buyer; that they never transferred the aforesaid two documentary credits to any other person or entity; that the buyer remitted the export proceeds in due course to the EBL, but the later did not credit the same to the account of the plaintiff, Messrs KN Enterprise: that the plaintiff-appellant filed money suit for realization of the said export bills of Taka 53,03,500 equivalent to US $ 1,11,000, but the learned Joint District Judge without considering the facts and circumstances and evidence on record, most illegally dismissed the suit, and, as such, impugned judgment and decree are liable to be set aside.

  6. Mr. Mahbubey Alam, the learned senior Counsel along with Mr. Sk Reajul Hoque, the learned Advocate for the defendant respondent Nos. 1-3, submits that the plaintiff-appellant Messrs KN Enterprise, represented by its proprietor Kazi Nazrul Islam, who is also the Manager of Messrs KB Enterprise and both Messrs KN Enterprise and KB Enterprise are owned by same family members an both accounts are maintained with the EBL and are operated by him that Messrs KN Enterprise wrote a letter dated 1-8-1995 to the EBL signed its proprietor Kazi Nazrul Islam requesting to issue a L/C in favour of Messrs KB Enterprise for US $ 65,960 against L/C No. A8A9501089 and said Kazi Nazrul Islam as Manager of Messrs KB Enterprise wrote another letter to EBL requesting to issue L/C in favour of Messrs Chittagong Jute Manufacturing Company Ltd for US $ 65,960.

  7. Mr. Alam further submits that the consigner Messrs Chittagong Jute Manufacturing Company Ltd shipped the consignments on 16-9-1995 and 27-9-1995 wherein the account being Messrs KB Enterprise and the consignee was the Sonali Bank, and Messrs Victory Jute Products Ltd being a consigner shipped the consignments on 16-9-1995 and 27-9-1995 wherein the account being Messrs KB Enterprise and consignee was the Sonali Bank; that both the Messrs Chittagong Jute Manufacturing Company Ltd and Messrs Victory Jute Products Ltd by separate letters dated 2-12-1995 claimed that they were the real exporters of the said consignments and requested the EBL to refrain from making any payment to the plaintiff for the said consignments.

  8. Mr. Alam further submits that the bill of lading, packing list, invoice etc. related to export of goods in question were in the name of Messrs KB Enterprise which was converted by forgery/fraud to the name of Messrs KN Enterprise, the plaintiff, and this forgery/fraud was committed by Kazi Nazrul Islam, the proprietor of Messrs KN Enterprise.

  9. Mr. Alam lastly submits that the learned Joint District Judge considering all the facts and circumstances and materials on record rightly dismissed the plaintiff’s money suit, and for the same reason the instant appeal is also liable to be dismissed. It may be mentioned here that at the time of making his submissions, Mr. Alam did not raise any question regarding the issues of maintainability, limitation and defect of parties framed in the money suit.

  10. In order to appreciate the submissions advanced by the appellant in person and the learned Counsel for the respondent Nos. 1-3, let us now weigh and sift the evidence on record adduced by both the parties as well as other materials on record.

  11. Kazi Nazrul Islam is the proprietor of the plaintiff Messrs KN Enterprise. He as PW 1 deposed that the plaintiff was the beneficiary of the letter of credit Nos. A8A9500667 and A8A9501089 and both the letters of credits were issued by ABN-AMRO Bank. Rotterdam; that the plaintiff receiving the said two letters of credits procured the goods locally and executed the export against the said letters of credits and submitted 4 sets of export bills to the EBL for collection and the EBL received the payment of all the export bills from ABN-AMRO Bank, but did not make payment to the plaintiff PW 1 further deposed that the plaintiff by their different letters requested the EBL to credit their aforesaid export bills to their account, but the EBL without crediting the export bills, informed the plaintiff by a letter dated 21-3-1996 that their file in respect of the said export bills has been closed. In cross-examination, the PW 1 stated that he is the proprietor of Messrs KN Enterprise, but he does not know, who is proprietor of the Messrs KB Enterprise. Later on he admitted that his wife Tahera Akter is the proprietor of Messrs KB Enterprise. He further stated in cross-examination that he exported goods as an exporter, but he does not know whether it is required to certify export form for exporting goods. He denied the suggestion that he did not export the goods to the buyer and he did not submit any papers relating to export of goods in question. It was also denied by him that instituted the false case against the defendants.

  12. DW 1 KAK Azad deposed on behalf of the Eastern Bank Ltd (EBL) that the plaintiff Messrs KN Enterprise wrote a letter on 1-8-1995 to the EBL to transfer the L/C No. A8A9501089 for US $ 65,960 in favour of Messrs KB Enterprise (Exhibit-Ka); that Messrs Chittagong Jute Manufacturing Company Ltd and Messrs Victory Jute Products Ltd exported the goods to the buyer through Messrs KB Enterprise and, as such, the EBL made payments to them. He denied the suggestion that the EBL did not make any payment to Messrs Chittagong Jute Manufacturing Company Ltd and Messrs Victory Jute Products Ltd.

  13. DW 2 Sheikh Nazrul Islam deposed that he is an employee of Ispahani Jute Products; that the Director of Jute black listed plaintiff Messrs KN Enterprise and, as such, the plaintiff converted itself to Messrs KB Enterprise. He further deposed that the plaintiff Messrs KN Enterprise did not export the goods in question, but the Messrs Chittagong Jute Manufacturing Company Ltd. and Messrs Victory Jute Products Ltd. exported the goods and those two companies received payments from the EBL for the said exported goods. In cross-examination, he stated that he deposed on behalf of Messrs Chittagong Jute Manufacturing Company Ltd. and Messrs Victory Jute Products Ltd. and those companies manufacture jute products to export abroad. He denied the suggestion that he made false statement.

  14. DW 3 CS Parial is a sales officer of Messrs Chittagong Jute Manufacturing Company Ltd. he deposed that he knows the plaintiff Kazi Nazrul Islam who did not export the goods in question, rather they (aforesaid two companies) exported the goods on behalf of Messrs KB Enterprise; that on 13-7-1995 and 22-8-1995 they (aforesaid two companies) entered into agreements with Messrs KB Enterprise and he himself put his signatures in the agreements on behalf of those two companies and the plaintiff Kazi Nazrul Islam also put his signatures therein on behalf of Messrs KB Enterprise. He further deposed that they also received payments for the said exported goods. He denied the suggestion that he made false statement.

  15. These are all the evidence adduced by both parties.

  16. It is not disputed that defendant-respondent No. 1 the Eastern Bank Ltd. was entrusted with collection of US $ 1,11,000 being the sale proceeds of the exported goods from AMRO Bank of Rotterdam, Netherlands and the said bank collected the same amount in due course. The plaintiff-appellant Kazi Nazrul Islam himself claims to be the exporter of the jute products in question, while the defendant -respondent Nos. 1-3 deny the same and contend that the Messrs Chittagong Jute Manufacturing Company Ltd and Messrs Victory Jute Products Ltd are that real exporters of the said jute products.

  17. It transpires from the submissions of both sides and materials on record that in the course of hearing of the instant appeal this Court suo motu passed an order on 19-2-2009 directing Bangladesh Bank to cause an investigation into the matter to find out whether any irregularity and/or fraud took place in the execution of exports against the letters of credits, as amended, bearing Nos. (1) A8A9-500667 dated 26-2-1995 for US $ 37,000, and (2) A8A9501089 dated 21-3-1995 for US $ 1,48,000 and in the disbursement of the amounts received against the relevant export bills by the Eastern Bank Ltd. In compliance with the said order dated 19-2-2009 Bangladesh Bank, after holding through investigation, submitted an investigation report dated 31-5-2009 under cover of its letter dated 10-6-2009 under Memo. No. A in/857/2009-846. We have gone through the said investigation report wherein it is stated that during investigation it was found that Agrani Bank Ltd., Principal Branch, Dhaka received two letters of credits bearing Nos. A8A9500667 and A8A9501089 in the name of Messrs KN Enterprise for exporting jute products, and thereafter Messrs KN Enterprise submitted the said two letters of credits to the Eastern Bank Ltd, Principal Branch.

  18. It is also stated in the said investigation report that on 22-8-1995 an agreement (KBL-786) was executed between Messrs KB Enterprise and Messrs Victory jute Products Ltd. for exporting of 300 bales of jute products; that Messrs Victory Jute Products Ltd. Requested the Sonali Bank Ltd., Agrabad Branch, Chittagong to issue EXP, and accordingly said bank issued EXP 318-0794-95 dated 3-9-1995 for US $ 17,790 and Exp 318-0856-95 dated 13-9-1995 for US $ 17,790 for exporting 100 bales (50+50=100) of jute products; that subsequently the amount stated in the EXP was amended from US $ 17,790 to US $ 18,500. Messrs Victory Jute Products Ltd exported the jute products against the said two EXPs and, as such, Sonali Bank requested the EBL to make payments of the two bills of Messrs Victory Jute Products Ltd for an amount of US $ 32,980 that the EBL sent the bills to the L/C opening Bank for collection and subsequently received US $ 36,469.

  19. During investigation it was also found that after having got the other letter of credit bearing No. A8A9501089 Messrs KN Enterprise by a letter dated 1-8-1995 requested the EBL to issue a L/C in favour of Messrs KB Enterprise for US $ 65,960 for 200 bales, and on the same date Messrs KB Enterprise by a letter requested the EBL to issue a L/C in favour of Messrs Chittagong Jute Manufacturing Company Ltd for US $ 65,960 that the EBL, instead of transferring the existing L/C, as per request of Messrs KB Enterprise, on 1-8-1995 issued a local L/C bearing No. 11008607-15-INL-1995 for US $ 65,960 in the name of Messrs Chittagong Jute Manufacturing Company Ltd and subsequently the L/C was amendment from US $ 65,960 to US $ 1,31,920 that on 13-7-1995 an agreement (KBE 785) was executed between Messrs KB Enterprise and Messrs Chittagong Jute Manufacturing Company Ltd for exporting of 700 bales of jute products, and after having got the local L/C said company requested Sonali Bank to issue EXP and accordingly Sonali Bank, for exporting, issued EXP 318-0793-95 dated 3-9-1995 for US $ 53,370 for 150 bales and EXP 318-0852-95 dated 13-9-1995 for US $ 17,790 for 50 bales of jute products; that subsequently the amount stated in the EXP 318-0793-95 dated 3-9-1995 was amended from US $ 53,370 to US $ 55,500 Messrs Chittagong Jute Manufacturing Company Ltd exported the jute products against the said two EXPs, and, as such, Sonali Bank requested the EBL to make payments of the two bills of the said Company for an amount of US $ 65,960 that the EBL sent the bills to the L/C opening Bank for collection and subsequently received US $ 73,038/05.

  20. During investigation it was also found that the conduct of the proprietor of the plaintiff Kazi Nazrul Islam was doubtful and it was found that the bill of lading, packing list, invoice etc, related to export of goods in question were in the name of Messrs KB Enterprise which were subsequently converted by forgery/fraud to the name of Messrs KN Enterprise and that forgery/fraud was committed by the plaintiff Messrs KN Enterprise. At the end of the investigation report an overall opinion is given in respect of the subject matter which runs as follows:

  1. It appears from the record that the plaintiff-appellant filed supplementary affidavit against the said investigation report submitted by Bangladesh Bank.

  2. We have gone through the plaint, written statement, depositions of the witnesses of both sides, impugned judgment and decree, all exhibits submitted by both sides, and have given anxious considerations to the submissions advanced by the appellant Kazi Nazrul Islam in person and the learned senior Counsel Mr. Mahbubey Alam for the respondent Nos. 1-3, wherefrom it transpires that the plaintiff-appellant Messrs KN Enterprise is represented by its proprietor Kazi Nazrul Islam who is also the Manager of Messrs KB Enterprise and both the said Enterprises are owned by the same family members and both the accounts are maintained with the Eastern Bank Ltd, defendant-respondent No. 1 and operated by said Kazi Nazrul Islam. Tahera Akter is the wife of said Kazi Nazrul Islam and she is the owner of Messrs KB Enterprise. Kazi Nazrul Islam introduced his wife Tahera Akter to open the account of Messrs KB Enterprise and all correspondence were made by Kazi Nazrul Islam. It may be mentioned here that the plaintiff Kazi Nazrul Islam as PW 1 in his cross-examination stated that he is the owner of Messrs KN Enterprise, but he does not know who is the owner of Messrs KB Enterprise. But later on he admitted that his wife Tahera Akter is the owner of Messrs KB Enterprise. We have found from the investigation report submitted by Bangladesh Bank that the bill of lading, packing list, invoice etc. related to export of goods in question were in the name of Messrs KB Enterprise which were converted by forgery/fraud to the name of Messrs KN Enterprise and that forgery/fraud was committed by the plaintiff-appellant. The defendant-respondent No. 1 Eastern Bank Ltd (EBL) wrote a letter dated 17-1-1996 (Exhibit-7) to the plaintiff stating that there had been discussions between the EBL and the plaintiff and the plaintiff had agreed and confessed gross irregularities committed by him in the export documents i.e. bill of lading and other documents.

  3. The plaintiff-appellant claims that they are the beneficiary of the documentary credits bearing Nos. A8A9500667 (Exhibit-Cha) and A8A9501089 (Exhibit-Gha) and they exported the jute products in question to the buyer. But there is no evidence on record that the plaintiff exported the same to the buyer against the said documentary credits. Rather DW 2 Sheikh Nazrul Islam and DW 3 CS Parial stated in the depositions that the plaintiff did not export the jute products.

  4. On the other hand it appears from the materials on record that the plaintiff Messrs KN Enterprise wrote a letter dated 1-4-1995 (Exhibit-Ka), signed by its proprietor Kazi Nazrul Islam to the EBL requesting to issue a letter of credit in favour of Messrs KB Enterprise for US$ 65,960 for 200 bales of jute products against the master L/C No. A8A9501089 (Exhibit-Gha) and same Kazi Nazrul Islam as Manager of Messrs KB Enterprise wrote a letter dated 1-8-1995 (Exhibit-Kha) to the EBL requesting to issue a letter of credit in favour of Messrs Chittagong Jute Manufacturing Company Ltd for US $ 65,960. 4 EXP Forms (Exhibits-Jha-Jha (3) show that Messrs Chittagong Jute Manufacturing Company Ltd and Messrs Victory Jute Products Ltd are the real exporters of the jute products in question. According to those 4 EXP Forms, the consigners Messrs Chittagong Jute Manufacturing Company Ltd. and Messrs Victory Jute Products Ltd. shipped the consignments on 16-9-1995 and 27-9-1995 wherein L/C being Messrs KB Enterprise (not Messrs KN Enterprise) and consignee was the Sonali Bank (not Agrani Bank). Messrs KB Enterprise by its letter dated 18-9-1995 (Exhibit-Chha) informed the EBL to the effect that the export goods had been shipped and they were advised to pay the freight to the shipping Company-James Finlay PLC and Insurance Company-Rupali Insurance Company Ltd. and thereby requested the EBL to issue pay orders for Taka 2,90,640 in favour of said shipping company and for Taka 68,692 in favour of said Insurance Company Ltd and those payments would be adjusted at the time of negotiation of export bills/documents.

  5. It also transpires from the materials on record that James Finlay PLC issued two certificates (Exhibits Ja and Ja(1) certifying the ocean freight in respect of shipments of the goods in question. In both the certificates it is stated that Messrs KB Enterprise was the shipper and the shipment was from Chittagong to Rotterdam DW 1 KAK Azad and DW 2 Sheikh Nazrul Islam stated in their depositions that Messrs Chittagong Jute Manufacturing Company Ltd and Messrs Victory Jute Products Ltd exported the goods in question to the buyer through Messrs KB Enterprise and, as such, the EBL made payments to them for the said exported goods.

  6. At the time of hearing of the instant appeal, Kazi Nazrul Islam, the proprietor of the plaintiff Messrs KN Enterprise refers the decisions in the case of Gooryonly (BD) Textile Ltd vs. Chartkar Information Holding Ltd reported in 54 DLR (AD) 70, the case of Uttara Bank vs. Macneill and Kilburn Ltd. reported in 33 DLR (AD) 298 and the case of Janata Bank vs. Messrs Ahmedia Garments reported in 40 DLR 72 and submits that the Court has no jurisdiction to pass any order against export proceeds of the letter of credit payable to a supplier by a commercial bank for any alleged dispute between the buyer and the seller, Which principle have been followed in respect of international transaction under the international banking rules providing and regulating provision for opening of a letter of credit, and, as such, the EBL is bound to credit the export bills to the tune of US $ 1,11,000 to the account of the plaintiff. On the other hand, the learned senior Counsel Mr. Mahbubey Alam, appearing for the respondent Nos. 1-3 submits that the decisions cited by the appellant are not applicable to the facts and circumstances of the instant suit as the plaintiff did not export the goods in question to the buyer, rather he committed forgery/fraud in getting bills from the EBL, and, as such, the EBL did not make payment to the plaintiff. Mr. Alam further submits that Messrs Chittagong Jute Manufacturing Company Ltd and Messrs Victory Jute Products Ltd exported the goods in question to the buyer through Messrs KB Enterprise, and, as such, the EBL made payments to them for the exported goods. It may be mentioned that we have already observed that the plaintiff-appellant Messrs KN Enterprise did not export the goods in question to the buyer, rather Messrs Chittagong Jute manufacturing Company Ltd and Messrs Victory Jute Products Ltd exported the goods in question to the buyer through Messrs KB Enterprise and the EBL has already made payments to the said exporters. It may further be mentioned here that there is an old maxim, “ex turpi causa non oritur actio” i.e. a person cannot found an action on his own fraudulent behavior. There is another old maxim, “fraus omina corrumpit” meaning fraud unfolded, the conduct of Kazi Nazrul Islam, proprietor of the plaintiff which was tainted by his fraudulent activities as discussed above. So, fraud vitiates everything. In this connection, reliance may be placed on the case of Korea Exchange Bank, Seoul, Korea vs. Gemini Garments Limited reported in 56 DLR 392. It that decision, it has been held in paragraph 144:

  1. In summarizing, we are of the view that an irrevocable letter of credit constitutes a definite undertaking of the issuing bank, which it must honour and pay according to the terms and conditions of the credit. It is not concerned in the least with any dispute between the seller and buyer for any breach of the contract underlying the letter of credit. It is however, obliged to refuse payment which there is a clear fraud of which it has notice of knowledge. The Court shall not interfere which such irrevocable/confirmed commitment of such bank except in case of clear or established fraud or in cases of irretrievable injustice or special equities.

We have already observed that the bill of lading, packing list, invoice etc. related to export of the goods in question were in the name of Messrs KB Enterprise which were converted by forgery/fraud to the name of Messrs KN Enterprise and that forgery fraud was committed by the plaintiff Messrs KN Enterprise. As such it appears that the decisions cited by the plaintiff-appellant are not applicable to the instant suit. In view of the discussions made above, as the plaintiff-appellant did not export the goods in question to the buyer, is not entitled to claim an amount of Taka 53,83,500 equivalent to US $ 1,11,000 or any amount from the defendant-respondent No. 1 Eastern Bank Ltd. nor the Eastern Bank is bound to make any payment to the plaintiff for the said goods, and, as such, the money suit filed by the plaintiff against the EBL is liable to be dismissed. It appears from the materials on record that earlier the plaintiff as petitioner filed a Writ Petition being Writ Petition No. 2052 of 1996 before this Court in respect of the selfsame matter against the present respondent No. 1 Eastern Bank Ltd and others wherein a Rule was issued, but eventually after hearing at length from both sides, this Court discharged the Rule by its judgment and order dated 18-8-1997 (Exhibit-Tha).

Having considered the facts and circumstances of the case and foregoing narrative, we are led to the conclusion that the learned Joint District Judge rightly dismissed the money suit which class for no interference by this Court. Thus, the appeal having no merit also fails.

In the result, the appeal is dismissed without any order as to costs. The impugned judgment and decree dated 27-7-2005 passed by the learned Joint District Judge, arbitration Court, Dhaka, in Money Suit No. 8 of 2005 is hereby affirmed.

Send down the lower Court’s record.

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