Law: Banking Companies Ordinance, 1962

Section: 82-A

Banking Companies Ordinance (LVII of 1962)--- ----S. 82-A---Banking Mohtasib---Mal-administration---Contractual liability Bank did not repatriate funds involved in Letter of Credit opened by importer as documents presented by seller Bank abroad were discrepant---Complaint before Banking Mohtasib was decided against petitioner Bank---Validity---Discrepancies in documents were duly noted by petitioner Bank and despite the same the seller authorized Bank to deal further in the matter and make buyer accept the documents---Controversy germinating after tendering documents by seller was spelt out from letter written by Bank to seller---Seller gave consent on email to Bank for release of documents to buyer despite the discrepancies---Such consent and eventual release of documents by issuing Bank to importer/buyer transcended matter beyond the scope of Letter of Credit---Mandate of issuing Bank was to make payment to seller through petitioner Bank upon tendering documents as per the mandate---High Court set aside order passed by Banking Mohtasib as the same suffered from error of law and remanded the matter for decision afresh on the complaint filed against petitioner Bank---Constitutional petition was allowed accordingly. Intraco Limited v. Notis Shipping Corporation of Liberia (1981) 2 Lloyd Report 256; T.D. Bailey Son and Co. v. Ross T. Smyth and Co. Ltd. (1940) 56 T.L.R. 825 and Messrs SAZCO (Pvt.) LTD. v. Askari Commercial Bank Limited 2021 SCMR 558 ref. JUDGMENT AAMER FAROOQ, J.--- This judgment shall decide the instant writ petition as well as Writ Petition No.2012 of 2021 titled Elite Embroideries v. Federation of Pakistan and 2 others as they involve common questions of law and facts. 2. Elite Embroideries (the Seller) and Messrs OMG Trading and Embroidery and Garments Trading LLC Bur Dubai (the Purchaser) entered into a transaction whereby the Seller was to sell certain garments and the Purchaser to purchase the same for consideration. One of the terms of the sale was that the payment was to be made through Letter of Credit. In pursuance of the referred sale transaction the purchaser established a Letter of Credit in favour of the Seller. The Bank issuing the…

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