Law: Civil Procedure Code (V of 1908)

Section: O.VI,R.4

Law: Arbitration Act, 1940

Section: 41(b)

(a) Banker and Customer--- ----Allegation of fraud---Letter of credit---Obligation of Bank---Principle---Law relating to letters of credit was founded on two principles: (i) autonomy of credit; and (ii) doctrine of strict performance---According to first principle, credit was separate and independent from underline contract of sale or other transaction; second principle was that Bank was entitled to reject documents which did not strictly conform with terms of credit--- Only case in which Bank could refuse to pay under letter of credit was where it was proved to its satisfaction that documents were fraudulent and beneficiary/seller was involved in fraud---Bank issuing or confirming letter of credit was not concerned with underline contract between buyer and seller---Obligations of Bank under a letter of credit were created by document itself---Bank was subject to limitations which were given or imposed by provisions in letter of credit---High Court declined to interfere in order passed by Trial Court, as documents on record did not make a prima facie view that fraud was committed by respondent. U.D.L. Industries Limited v. Hongguang Electron Tube Plant PLD 1997 Kar. 553 distinguished. Haral Textiles Limited v. Banque Indosuez Belgium, S.A. 1999 SCMR 591; Abdul Kadir Jangda v. My Bank Ltd. 2007 CLD 349; Haroon Rashid Chaudhry v. Muslim Commercial Bank 2006 CLD 1140; Hamzeh Malas and Sons v. British Imex Industries Ltd. 1958 (2) Q.B. 127; Messrs Kohinoor Trading (Pvt.) Ltd. v. Mangrani Trading Co. 1987 CLC 1533; Banque Indosuez Belgium v. Haral Textile Ltd. 1998 CLC 582 and Progressive Fibres Ltd. v. Hyusung Corporation 1999 YLR 478 rel. (b) Civil Procedure Code (V of 1908)--- ----O. VI, R. 4---Fraud---Essentials---Full particulars of fraud have to be spelt out with clarity in pleadings so as to meet requirement of law---General allegations in such regard are not sufficient. Lanvin Traders, Karachi v. Presiding Officer, Banking Court No. 2, Karachi 2013 SCMR 1419; Government of Sindh v. Messrs Engineering Enterprises PLD 2015 Sindh 457; Ghulam Sabir v. Mst. Nur Begum and others PLD 1977 SC 75; Sahib Noor v. Ahmad 1988 SCMR 1703 and Messrs Dadabhoy Cement…

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