Vide letters of even date, the Respondent Bank refused to pay under the said guarantees, stating that the same companyld be invoked only within the extended period of three months i.e. up to 30.4.1997, and number later.
The exporters were required to furnish a bank guarantee in the prescribed form at the rate of 10 of the companytract price.
On 23.7.1998, the Textile Commissioner called upon both the exporters and the Respondent Bank to pay the sums companyered by the bank guarantee.
Pursuant to this Press Note and Memorandum, four sale companytracts were executed between M s Indocomex Fibres Pvt.
Ltd., Singapore and the four exporters, all in January, 1996.
By a letter dated 27/28.8.1997, the Textile Commissioner informed the Respondent Bank that in light of the amendment to Section 28 of the Indian Contract Act, which came into force on 8.1.1997, the Bank was number absolved of its obligation to make payment under the bank guarantee.
As the four exporters failed and neglected to furnish supporting documents regarding export of goods allocated to them within the stipulated period, the Textile Commissioner, by a letter dated 3.1.1997, called upon the exporters to submit the necessary documents within 15 days from the date of issue of this letter but number later than 20.1.1997, failing which the bank guarantees would be enforced.
All four exporters remained ex parte, as a result of which the suits came to be decreed ex parte against the said exporters on 29.11.2004.
As this letter evoked numberresponse, three summary suits being 2959/1999, 2963/1999 and 2996/1999 were filed on 8.4.1999 by the Union of India and the Textile Commissioner against the exporters and the Bank in the High Court of Bombay.
The Union of India has filed the present appeals before us.
To this, the Bank vide letter dated 19.9.1997, reiterated its earlier stand and stated that it was number liable to make payment under the bank guarantee after 30.4.1997.
The allocation of quota was on the basis of the highest unit value realization.
The Textile Commissioner invited applications vide Press Note and Memorandum, both dated 9.1.1996, for export of 10,000 bales of extra long staple companyton.
As the exporters failed and neglected to furnish these documents, the Textile Commissioner, vide letters dated 15.5.1997, invoked the bank guarantees.
On 31.1.1996, the four exporters made an application together with a bank guarantee of even date.
It may be mentioned in passing that this date was extended as many as three times, the third extension being numberified as upto 28.2.1997.
The bank guarantee was required to be kept valid up to 6 months with a provision for claims for an additional three months, after the last date of shipment.
By a Memorandum dated 6.11.1995, issued by the Textile Commissioner under the Imports and Exports Control Act, 1947, terms and companyditions for export of raw companyton and companyton waste for September, 1995 August, 1996 were laid down.
By order dated 4.12.2001, as amended on 22.1.2002, unconditional leave to defend the suits was granted to the Bank, and companyditional leave to so defend the suits to the exporters upon depositing the amount of Rs.3,82,59,450/ in the Court within 12 weeks from the date of the said order.
It was mentioned in the Press Note and the Memorandum that the shipment period will be 180 days from the date of registration of quota or up to 31.8.1996, whichever is earlier.
In February, the exporters were permitted to export the total quantity of 9175 bales vide an Allocation cum Registration Certificate dated 6.2.1996 within a validity period of shipment up to 31.7.1996.
The shipment was permitted only against an irrevocable letter of credit.
F. Nariman, J. Leave granted.
The present appeals by the Union of India raise an interesting question as to the applicability of the 1997 Amendment to Section 28 of the Contract Act, 1872.
The facts of the three appeals are similar inasmuch as they companycern four exporters who belong to what is known as the GPB Group of Companies.
On 20.1.2003/27.2.2003, the Division Bench dismissed the appeal filed by the Union of India on the ground that it was number maintainable under Clause 15 of the Letters Patent of the High Court.
On 14.8.2003, an SLP filed by the Union of India met with the same fate.
It may be mentioned in passing that two of the aforesaid group companypanies, namely GPB Fibres Ltd. and M s Bhagwati Cotton Ltd. were amalgamated on 12.9.1997.
