Gian Singh & Co Ltd v Banque de L`Indochine

JudgeLord Cross of Chelsea
Judgment Date06 May 1974
Neutral Citation[1974] SGPC 1
Citation[1974] SGPC 1
Defendant CounselM Mustill QC and AP Godwin (Parker Garrett & Co)
Published date19 September 2003
Plaintiff CounselRJ Parker QC and AGS Pollock (Linklaters & Paines)
Date06 May 1974
Docket NumberAppeal No 26 of 1972
CourtPrivy Council
Subject MatterLetters of credit,Duty of bank on presentation of documents by beneficiary,Whether presentation of forged document prevents issuing bank from recovering from customer monies paid under credit,Whether forged document conforming to terms of the documentary credit,Banking

The question in this appeal from the Court of Appeal in Singapore is whether the respondent (the issuing bank) was entitled to debit the appellant (the customer) with the sum of $139,496.43 paid by the Bank of Taiwan (the notifying bank) to Messrs Thai Lung Ship Machine Manufactory (the beneficiary) under an irrevocable documentary credit opened by the issuing bank on the instructions of the customer. The credit was expressed to be subject to the Uniform Customs and Practice for Documentary Credits (1962 Revision).

The customer is a company carrying on business in Singapore.
Its managing director was Balwant Singh. The credit was opened on the application of the customer to finance the purchase by a third party, at a price of US$45,000, of a fishing vessel built in Taiwan. Payment under the documentary credit was to be made against presentation of a draft at sight, drawn on the customer and accompanied by signed commercial invoices in duplicate, and a certificate of origin, together with a document referred to under the heading `Special Notes` upon the back of the application for the credit.

This read as follows:

A specific condition of this L/C is that a Certificate signed by Balwant Singh, holder of Malaysian Passport E-13276, certifying that the vessel has been built according to specifications and is in fit and proper condition to sail. In the absence of such a certificate, the L/C is not to be allowed `negotiation`.

In June 1968 documents were presented to the notifying bank in Taipeh under the credit and payment of a sight draft for US$45,000 made to the beneficiary.
The only question which arises is as to whether the issuing bank were entitled to accept as conforming with the requirements of the letter of credit the certificate purporting to be signed by Balwant Singh which was presented. It was on paper bearing the letter-head of the customer and in the following terms:


Reference to the letter of credit No 2693, US$45,000, issued by the Bank of BANQUE DE L`INDOCHINE Singapore, covering shipment of one fishing boat `M/V Wei Ching No 6` Gross tonnage 80 tons, main engine five cylinders diesel engine, horsepower 220, built in wood. I, Balwant Singh, Holding the Malaysian passport No E-13276, certify that, the fishing boat had been inspected and built according to the specification and in the fit and proper conditions to sail.

I, agreed Messrs Thai Lung Ship Machine Manufactory, no 51 Third Chung Cheng Road, Keelung, Taiwan, to Negotiate the letter of credit No 2693 without any objection.

Yours faithfully,

1, Balwant Singh,

Passport No E-13276

issued at 11 November 1964


Sd Balwant Singh


The customer brought an action against the issuing bank in which it claimed that it had been wrongly debited with the equivalent in Singapore currency of the US$45,000 paid to the beneficiary by the notifying bank.
It contended

(1) that the signature `Balwant Singh` on the certificate was a forgery, and

(2) that whether or not the signature was a forgery, the certificate did not conform with the terms of the documentary credit.

The Issue of Forgery

It is not disputed that when the certificate was presented to the notifying bank there was also shown to that bank a Malaysian passport E-13276 in the name of Balwant Singh and purporting to bear his signature.
Nor is it disputed that the notifying bank checked the signature on the certificate with the signature on the passport and found them to correspond. The passport, together with the certificate, had been produced by a Mr Chew, who himself held a Singapore passport no 16746. Mr Chew was subsequently identified as a man with an unsatisfactory record who was no longer in Singapore.

At the trial in the High Court before Chua J, Balwant Singh gave evidence that he had not signed the certificate and that what purported to be his signature was a forgery.
His own passport was produced. Its authenticity was not in doubt. It showed that he had not left Singapore at any time after 26 April 1967. More important, it bore the date of issue, 18 September 1964 whereas on the certificate the date of issue of passport no E-13276 is stated by the signatory to be 11 November 1964. The evidence of the Assistant Controller of Immigration was that `it is not possible for another passport issued on another day to bear the same number`. The inference is therefore that the passport no E-13276 handed to the beneficiary by Mr Chew was itself a forgery.

Chua J, however, found Balwant Singh to be an unsatisfactory witness.
On a number of matters his evidence conflicted with that of the manager of the issuing bank, and where this was so the judge preferred the evidence of the latter. He also disbelieved Balwant Singh`s story that he had not signed the certificate, though here there was no direct evidence to the contrary. His reasons for rejecting this part of Balwant Singh`s evidence were:

(1) that no handwriting expert had been called to say that the signature on the certificate was a forgery;

(2) that the certificate was on the customer`s letter-head and Balwant Singh was not able to explain how this came about, and

(3) that he, the judge, himself thought the signature on the certificate was `much like` Balwant Singh`s signature on his genuine passport and on the application for the documentary credit.

The Court of Appeal (Wee Chong Jin CJ, Tan Ah Tah J and Choor Singh J) unanimously reversed the finding of fact of FA Chua

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