CITY BANK LIMITED Vs. OSCAR FASHIONWEAR LTD.

JUDGEMENT

(1.) This petition for leave to appeal is directed against the judgment and order dated 24.8.2005 of the High Court Division passed in First Appeal No.849 of 1991 dismissing the said appeal which was filed against the judgment and decree dated 30.10.1991 of the learned Subordinate Judge (now Joint District) and 1st Commercial Court, Chittagong, in Money Suit No.78 of 1989 dismissing the suit.

(2.) The petitioner bank, as plaintiffs, filed the aforesaid Money Suit No.78 of 1989 for recovery of Tk.93,70,413.47 from the defendant respondent Nos. 1-3 on the averments that the plaintiff bank, during the period from 24.1.1984 up to 29.9.1985, opened 48 import L/Cs on behalf of the defendant respondent No.1 for a total amount of US$ 8,96,459.95 for import of fabrics and accessories from abroad and also opened 21 export L/Cs for US$ 14,73,350.70; in order to avail the import L/C facilities the defendant No.1 provided defendant securities and the defendant Nos. 2 and 3, on 24.1.1984 also executed letters of continuing guarantee for repayment of any outstanding that may be found due; meanwhile in terms of the request of the defendant No. 1 the plaintiff, on 24.7.1985, issued a no objection certificate in favour of the defendant No.1 in order to enable them to avail loan facilities from American Express Bank Chittagong; the defendant No. 1 simultaneously continued transaction with the plaintiff bank with a clear understanding that they would properly keep funded the CD Account No. 307 maintained with the plaintiff bank to meet the existing and future import L/C obligations; on receipt of the import bills against 40 import L/Cs the plaintiff bank paid foreign banks from the above CD Account and bills relating to remaining 8 import L/Cs could not be fully paid due to lack of funds in the above CD Account and as a result an amount of US$ 1,91,645.67 remained outstanding against those import 8 import L/Cs; the foreign banks presenting the bills pressed for payment but the defendant No.1 in spite of request of the plaintiff bank did not provide funds raising flimsy pleas and then the defendant No.1, by letter dated 20.4.1986, though assured to settle the outstanding bills but took no positive step; then the foreign banks through their lawyer served legal notice demanding payment from the plaintiff bank and ultimately the Bangladesh Bank also intervened and then on 27.11.1986, 2.12.1986 and 15.12.1986 the plaintiff made payment of US$ 2,01,666.47 which is equivalent to Tk.62,59, 140.97 to the foreign banks on opening a loan account being C.C No. 42 in the name of defendant No.1 and demanded the aforesaid amount from the defendant No.1 whereupon they, by their letters dated 12.4.1999 and 3.5.1988, sought for clarification on five specific points and subsequently also asked for all vouchers of their accounts which the plaintiff complied as is evident from the letter of the defendant No.1 dated 29.10.1988 by which they informed the plaintiff that they have forwarded those vouchers to their auditor M/s. S.K. Das & Co. for reconciliation and to arrive at a figure which is due to the plaintiff and that meanwhile they were preparing a repayment schedule to adjust that outstanding and also requested the plaintiff to open further import L/Cs on behalf of the defendant No.1 so as to enable them to repay the outstanding from the export proceeds; then the plaintiff, for opening import L/Cs, requested the defendant No.1 for additional security by way of creating second charge on the factory building and machinery on which there was a first charge in favour of Bangladesh Shilpa Bank, a objection certificate from American Express Bank and also repayment schedule of the existing outstanding liability against the aforesaid 8 L/Cs but since the defendant No.1 failed to provide additional security, further import L/Cs, as requested, was not opened and that statement of account shows that a sum of Tk.93,70,419.00 is due to the plaintiff from the defendant No.1 as on 31.3.1985.

(3.) The defendant respondent Nos.1-3 contested the suit and filed written statement denying the material allegations and contending that the defendant No.1 received 21 Export L/Cs for U.S.$ 14.73,360.70 from different foreign buyers and as per circular of Bangladesh, Government was entitled to open import L/C to the tune of 75% of the same that is for US$ 11,05,013.00 including USUANCE interests and the defendant No.1 opened 48 import L/C for US$ 8,96,459.95 including USUANCE interests on payment of the requisites commission of the plaintiff as debited against C.D. Account No.307 of the defendant No.1 and exported ready-made garments against those import L/Cs against corresponding export L/C's worth U.S.$ 10,36,012.17 and the said amount being in excess to the tune of US$ 1,39,552.20 of the permissible amount, the claims of the plaintiff against the import L/Cs could be met; it is usual practice that after receipt of the export bill from the foreign corresponding bank the L/C opening bank adjusts the claim against import L/C and deposits the balance in the C.D account of the concerned beneficiary and in the instant case, the balance after the adjustment of the L/C claim of the plaintiff was credited to the C.D. account No.307 of the defendant No. Land the remaining 8 import L/Cs became matured for payment on 30.11.1985, 22.01.1988, 25.03.1986, 01.03.1986, 02.01.1986, 26,02.1986, 23.05.1986 and 30.06.1986 and the defendant No.1 made many exports during this period and so the plaintiff received enough export bills of the defendant No.1 for adjustment of the claim against import L.Cs claim and besides the defendant No.1 had sufficient find in the aforesaid C.D Account No.307 and defendant No.2 also had an F.D.R. of Tk.9,00,000.00 with the plaintiff bank and by his letter dated 20.8.1985 the defendant No.2 gave unfettered discretion to the plaintiff to encash the above FDR in order to adjust any outstanding of the defendant No.1 but not a single amount of the FDR was encashed by the plaintiff; the issuance of no objection certificate by the plaintiff in favour of the defendant No.1 also indicates that the claim of the plaintiff against the defendant No.1 was fully adjusted; further according to the plaintiff the last date of maturity of the import L/Cs was 30.06.1985 and so the limitation had also been running from that date; no letter of guarantee was also executed by the defendant Nos.2 and 3 on 24.11.1984; the Statement of Account of the C.D. Account No.307 filed by the plaintiff Bank will also show that each of the defendants has got no liability as alleged by the plaintiff; the plaintiff also had no authority to open C.C. Account No.42 in the name of the defendant No.1 and as such the defendants are not liable or bound by any entry in that account; the officers of the plaintiff opened the so called C.C. Account No.42 with a view to cover up their misdeeds and to avoid liability; the defendant No.1 by letter dated 29.5.1985 approached the plaintiff for advance limit of Tk. 10,00,000.00 and also L/C facility but the plaintiff declined to grant the same and as such the defendant had to quit the plaintiff bank and start business with the American Express Bank Limited; the Statement of Account of the C.D. A/C No.307 which was supplied by the plaintiff will show that though Tk. 1,50,000.00 was shown thereon in the credit side but the above amount has not been added/aggregated with the total figure on 24.11.1984 and in another case on 14.07.1984 a sum of Tk. 3,05,002.00 was shown debited in the said Account but the same has not been credited in the C.D Account and there are other defects in the said Statement of Account and so the plaintiff is not entitled to get any money from the defendants.