O.A. No. 571 of 2000. Case: Vijaya Bank Vs Vijay Kanodia and Anr.. Mumbai Debt Recovery Tribunals

Case Number:O.A. No. 571 of 2000
Party Name:Vijaya Bank Vs Vijay Kanodia and Anr.
Counsel:For Appellant: Vandana Tiwari, Adv., i/b., M. Dhruv and Co. and For Respondents: Dinesh Pednekar, Adv., i/b., Khaitan and Jayakar, Advs. for the Defendant No. 1
Judges:K.J. Paratwar, Presiding Officer
Issue:Negotiable Instruments Act, 1881 - Section 98
Citation:II (2005) BC 240
Judgement Date:January 03, 2005
Court:Mumbai Debt Recovery Tribunals
 
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Judgment:

K.J. Paratwar, Presiding Officer

  1. This Original Application was filed for recovery of Rs. 26,01,083/- with interest on principal amount of Rs. 13,78,720/- @ 18%p.a. from 1.3.1997. As noted above, a sum of Rs. 20,17,673/- has been received from defendant No. 2 from out of aforesaid amount. The O.A. as against defendant No. 2 has therefore been withdrawn some time before 7.10.1997. In the absence of the applicant clarifying the manner of appropriation of the amount, it can be said that the applicant has appropriated the same in principal amount which means that the O.A is for recovery of interest of Rs. 5,83,450/-.

  2. The defendant No. 1 carrying business of exporting leather goods is the applicant's constituent having Current Account being No. 1155. In February 1994, the defendant No. 1 approached the applicant with irrevocable Letter of Credit (L/C) No. 1AA 83390093 dated 27.10.1993 opened by defendant No. 2 at the instance of Elan Polo INC NASHVILL TN favouring defendant No. 1 for US $ 2,78,716.50. On the defendant No. 1's request, the applicant purchased 5 Bills under the L/C. The applicant forwarded the Bills under L/C to defendant No. 2 for payment for remitting the funds. The defendant No. 2 however raised contention that there were certain discrepancies in the Bills. The defendant No. 2 sent telex message in the name of applicant's Head Office at Bangalore but the same was wrongly delivered to Vysya Bank, Bangalore. As such, the defendant No. 2 ultimately returned the documents to the applicant on 4.8.1993 for the above discrepancies. The applicant took stand that it has not been advised within reasonable period and as such called upon the defendant No. 2 to make payment of the proceeds of the Bills. The defendant No. 2 after protracted negotiations belatedly made payment of the 4, the Bill in controversy being No. feddbp/osb/945145/94. The applicant made payment of Rs. 13,67,333/- to defendant No. 1 on purchase of the Bill at the exchange of Rs. 31.32 per US Dollar. The defendant No. 2 informed the applicant that it has contacted the Overseas Exporters regarding the discrepancies. Ultimately, defendant No. 2 did not make payment though it made payment of remaining 4 Bills in respect of which also same discrepancies were pointed out. The refusal is in violation of the L/C. The applicant therefore Advocate's notice dated 22.2.1997 called upon defendant No. 1 to make payment. Since the payment did not come forward, this...

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