RUMA PAL, J. - (1.) This appeal has been filed by the appellant against order dated 11-06-98 inter alia restraining the appellant Bank from enforcing two Bills of Exchange. The order is noted in detail subsequently.
(2.) The appellant is a nationalised Bank. It had sanctioned credit facilities to the respondent No. 2, Ganapati Export Ltd. (hereinafter referred to as Ganapati) from its office at Nariman Point, Bombay subject to a limit of Rs. 40 Crores. The facility granted was a packing credit facility to enable Ganapati to export rice to the respondent No. 1 (referred to as Euro) in Singapore. Several documents were executed by Ganapathi on 8th July, 1994 in connection with this advance including deeds of hypothecation of moveable property and stocks, and a promissory note. An agreement for bills purchased was also executed by Ganapati.
(3.) The terms of the bills purchased agreement which are relevant for the purposes of this appeal provided as follows : "In consideration of your collecting and/or discounting and/or purchasing or agreeing to collect, discount and/or purchase all cheques, bills, hundies and other instruments.........I/We beg to tender herewith my/our joint and several pro-note for Rs. 45,00,00,000/- (Rupees Forty Five Crores only) as cover for the arrangement.11.I/We further agree that -i) in consideration of your making a provisional advance of Rs. 45,00,00,000/- against the foreign bills for collection expressed to be made payable in foreign currency tendered from time to time the bills will be drawn by me/us in favour of yourself naming yourself as payee for the due and valid consideration and such advances shall be at the sole discretion of yourself;ii) in respect of money lent and advanced or agreed to be lent and advanced, it is agreed that you being a holder for value will be entitled to appropriate the proceeds of the bills towards the provisional advances made by you to me/us as hereinabove mentioned;iii) you, on converting foreign currency amount to Indian Rupees either on realisation or at any point of time, will pay over to or recover from me/us the difference in the rupee amount i.e. the difference between the rupee amount advanced and the rupee equivalent arrived at, while converting foreign currency into Indian Rupee currency after deducting the costs and expenses incurred by the Bank in respect thereof and the moneys which shall then be owing on the securities of these presents.".;