BANK OF INDIA Vs. STATE BANK OF INDIA
DEBTS RECOVERY APPELLATE TRIBUNAL
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(1.) THIS is an application for recovery of US $ 4,65,932.00 equivalent to Indian Rs. 58,35,090.71 with interest @ 18% p.a. from the date of filing the original application till full realization.
(2.) The facts leading to the case are that on or about 16.6.1979 at the instance of Metro Exports Private Limited (MEPL), the defendant's Overseas Branch in Mumbai established an irrevocable Letter of Credit No. 79/10251 in favour of M/s. Palmex Enterprises, Singapore in the sum of US $ 6,24,000. The letter of credit was advised through the applicant's Singapore Branch with a request to add its confirmation thereto. Accordingly, the applicant's Singapore Branch advised the letter of credit to the beneficiary who in due course presented documents through Hong Kong and Shanghai Bank under the letter of credit. As the documents presented were in accordance with the letter of credit and with stipulations thereon, the applicant's Singapore Branch negotiated the documents on 11.9.1979 and paid the amounts through Hong Kong and Shanghai Bank to the beneficiary. On that date itself, the applicant's branch despatched the documents to the defendant and claimed US $ 6,24,785 from Irving Trust Company (ITC), New York [through the Manufacturers Hanover Trust Company (MHTC), New York], who were reimbursing agent under the letter of credit.
The MHTC, New York by cable dated 12.9.1979 stated that ITC, New York had no authority and that they were reverting to the letter of credit opening Bank. On 13.9.1979, the applicant sent cable to the defendant informing about the reply given by MHTC with a request to immediately advise ITC to pay the amount. On 20.9.1979, the defendant's Overseas Branch sent cable to the applicant's Singapore Branch that on preliminary scrutiny, it found that the documents may not constitute valid tender. The letter also stated that the vessel 'Oh Dai' carrying the goods sank en route on 8.9.1979. By cable dated 22.9.1979, the applicant refuted that there were discrepancies in the documents. This was reiterated by the applicant in reply dated 28.9.1979 and dated 1.10.1979.
(3.) THE ITC ultimately and on 7.1.1980 the amount without any condition. But, the defendant contended that such payment was unauthorised and refused to reimburse ITC, New York who filed suit against the parties to this original application in the District Court, Southern District, New York for recovery of US $ 6,24,000. That suit ultimately came to be disposed of by memorandum of settlement dated 15.8.1983 under which the parties to this original application paid equal amount (US $ 3,12,000 each) to ITC in full and final settlement. In the MOU however it was specifically agreed that the rights of the parties shall be subject to decision in the legal proceedings in India. It is in the above circumstances that the applicant claims to be entitled to recover a sum US $ 3,12,000 with interest from the date of filing the original application till full realization. As the payment was not made despite repeated demands and notice, this original application is filed.;
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