Endorsed gate pass credit remains available where only a minor procedural lapse occurred in transfer documentation.

Credit was allowed on the strength of an endorsed gate pass, because the only defect was a consignor-consignee procedural irregularity in the form of endorsement instead of issue of a fresh gate pass. The original credit had been reversed when the goods were rejected, and the endorsed document was used to avail credit thereafter. The lapse was treated as a minor procedural requirement, with no substantive difference in effect if a new gate pass had been issued. Denial of credit solely for that procedural defect was therefore not justified.

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Issues: Whether the respondent was entitled to take credit on the strength of the endorsed gate pass despite the consignor-consignee procedural irregularity.

Analysis: The credit had originally been taken by the consignee and was later reversed when the goods were rejected. The endorsed gate pass was used by the respondent to avail credit. The irregularity complained of was only that another gate pass ought to have been issued by the consignee instead of endorsement of the original gate pass. The defect was treated as a minor procedural lapse, and it was found that the substantive effect would have been the same had a fresh gate pass been issued.

Conclusion: The respondent was entitled to the credit, and denial of credit merely on account of the procedural lapse was not justified.

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