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2012 DIGILAW 240 (BOM)

Zoom Developers Pvt. Limited v. Yes Bank Limited

2012-02-02

A.V.NIRGUDE

body2012
Judgment : All these writ petitions can be disposed off by this common judgment and order. By consent, the writ petitions are taken up for final hearing. 2. Rule. 3. Rule made returnable forthwith. 4. These writ petitions are filed for seeking quashing of complaints filed against the petitioners by the respondents alleging offence punishable under Section 138 of Negotiable Instruments Act. It is common ground that the petitioner company approached the respondent no.1/complainant bank for sanction of letter of credit facility and the same was sanctioned. But it so happened that the letter of credit facility was not acceptable in the proposed transaction because the respondent no.1 is a private bank. So, the parties approached UCO bank (a nationalised bank) and it agreed to issue required letter of credit on condition that the respondent no.1 bank would open a "standby letter of credit" in their favour in a sum of Rs.45 Crores. It was agreed between the petitioner company and the respondent no.1 bank that for this transaction, the petitioner company would deposit a sum of Rs.42 Crores with the respondent no.1 bank. In order to discharge this liability, the cheques in question were issued by the petitioner company. For sometime the cheques were not encashed and subsequently, the set of cheques was replaced by another set of cheques. It appears from the documents produced before me that UCO bank ultimately was required to pay the third party the sum assured through letter of credit. UCO bank thus incurred a liability and apparently, they demanded from the respondent no.1 bank, the sum assured through the standby letter of credit. In view of this predicament suffered by the respondent no.1 bank, they demanded the amount and ultimately sent the cheques in question for encashment. The cheques failed. They sent a demand notice. The petitioner company sent a reply admitting that they owed the amount to the respondent no.1 bank and that due to financial difficulty, they were unable to honour the commitment in time. They even requested the respondent no.1 bank, not to initiate proceedings under Section 138. In view of this, the complaints were filed and against the issuance of process and filing of the complaints, the present writ petitions are filed seeking this court's intervention for quashing of the complaints. 5. The learned Sr. They even requested the respondent no.1 bank, not to initiate proceedings under Section 138. In view of this, the complaints were filed and against the issuance of process and filing of the complaints, the present writ petitions are filed seeking this court's intervention for quashing of the complaints. 5. The learned Sr. Counsel appearing for the petitioner company made two submissions and I will deal with them one after the other. First, he invited my attention to the contents of the complaints and suggested that the complaints did not clearly mention as to how much and what loss the respondent no.1 bank had suffered due to the encashment of the letter of credit by UCO bank. He stated that unless a specific pleading is made to that effect, the court cannot take cognizance of the case because the liability arising from the cheques in question, would not be visible. In other words, he stated that unless the respondent no.1 bank mentioned in the complaints that they paid certain amount to UCO bank, there is no question of encashment of the cheques in question. 6. Indeed, the complaints are not drafted happily. What is stated above as facts of the case, are not properly narrated. The complaints simply said that after sanction of facility to the tune of Rs.60 Crores in favour of the petitioner company, they were under admitted and undisputed liability of keeping margin amount of 50% in the first year and 100% in the second year with the respondent no.1 bank. The complaints further state that in order to deposit this margin amount, the cheques in question were given. The complainant further mentioned that the cheques were sent for collection of funds, but bounced. The complaints indeed did not give details as to how the respondent no.1 bank became entitled to the amount of margin amount. Had the UCO bank been not forced to pay the amount to the third party, pursuant to the letter of credit, the facility given by the respondent no.1 bank would not have been used and UCO bank could not have enforced the standby letter of credit against the respondent no.1 bank. The respondent no.1 bank thus was under obligation to mention in the complaints, that because letter of credit was enforced against the UCO bank, the liability had arisen against them and so they were entitled to recover the margin amount. The respondent no.1 bank thus was under obligation to mention in the complaints, that because letter of credit was enforced against the UCO bank, the liability had arisen against them and so they were entitled to recover the margin amount. However, though this is not specifically mentioned, these facts are clear from the correspondence annexed to the complaints. So the cheques apparently give rise to a legal liability against the petitioner company. The cheques in question gave rise to legal liability. 7. The second submission of the learned Sr. Counsel for the petitioner company is that elsewhere, the respondent no.1 bank took a stand that the petitioner company did not owe any amount to them. He took me through certain documents in which the respondent no.1 bank had taken such a stand. However, the stand so taken could be a strategy of the respondent no.1 bank in order to escape some other liability. As mentioned above, UCO bank was exposed to pay the amount pursuant to the letter of credit and therefore, prima facie entitled to recover the said amount from the respondent no.1 bank. 8. I am told that the UCO bank has even filed a suit or proceeding for recovery of amount against the respondent no.1 bank. In defence the respondent no.1 bank, I am told, is taking up a stand that they did not owe any amount to UCO bank for breach of contract etc. In other words, it is seen that the respondent no.1 bank is trying to avoid the liability arising from the transaction of standby letter of credit. Still, apparently, they are unable to avoid this liability and so, they are entitled to recover the amount from the petitioner company through the cheques in question. 9. The petitions therefore fail. The petitions are dismissed.