Decided on February 20,2006



K.J. Paratwar, Presiding Officer - (1.) THIS is an application for recovery of following amounts being outstandings in respect of two devolved letter of credits (L/Cs); Rs. 7,91,946.10 with interest on Rs. 4,94,901.80 @ 19.5% p.a. from the date of filing the original application till full realization. Rs. 7,11,610.80 with interest on Rs. 4,24,755.60 as above.
(2.) The defendant No. 1 is borrower company. The defendant No. 2 is sued as guarantor. The applicant's case is that the defendant No. 2 has represented and acted for and on behalf of the defendant No. 1 in the O.A. transaction in question. The defendant No. 1 through defendant No. 2, had requested the applicant's Thane Branch (in which the defendant No. 1 had current account) for letter of credit facility. Since Thane Branch was not dealing with the foreign exchange, the proposal was transferred to its Byculla Branch. On 26.3.1983 the defendant requested for opening two L/Cs on behalf of defendant No. 1 for Japanese Yen equivalent to Rs. 5 lakh each to cover price of goods being imported from the above said Japanese suppliers. Accordingly, the applicant opened on 13.4.1983 both the L/Cs for Japanese Yen 11,785.00 each. The first L/C was favouring Nissho Iwai Corporation, Japan while the second L/C favoured Itoman and Company Limited, Japan. The defendant No. 1 has furnished the applicant copy of import licence in its favour granted by Indian Import Trade Control Authorities. The defendant No. 2 had stood as guarantor. The last date for shipment in both the L/Cs 30.9.1983 and for the negotiations of document was 15.10.1983. By letters dated 13.4.1983, the applicant informed advising Bank about the same.
(3.) UNDER the L/Cs the beneficiaries negotiated the documents. The documents for 11,784.63 Japanese Yen and 11459.32 Japanese Yen complied with terms and conditions of the L/Cs. The applicant received the documents under the first L/C on 22.8.1983 and under the second L/C on or about 31.10.1983. The applicant in turn caused documents to be presented to the defendant No. 1 and asked for payments. But, the applicant being bound and liable to make payment and honour the documents did make the payment which is sought to be recovered through this application.;

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