1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. SUIT NO.3686 OF 1997 Andhra Bank ..Plaintiff. Vs. M/s.Shubh Weaving Industries and others ..Defendants. .... Mr. Manish Acharya i/b Pandya Gandhi & Co. for the Plaintiff. None for the Defendants. .... CORAM : DR. D.Y. CHANDRACHUD, J. 10th August, 2009. P.C. : 1. The suit has been instituted by the Andhra Bank for the recovery of amounts lent and advanced. On or about 5th May, 1994 the Plaintiff on the request of the Second Defendant granted to the First Defendant an Inland Letter of Credit (ILC) facility in the amount of Rs.5 lacs. In consideration of the said facilities the First and Second Defendants executed and delivered in favour of the Plaintiff an agreement dated 5th May, 1994 by which the First Defendant hypothecated with the Plaintiff 2 all its movable properties. The Second and Third Defendants executed a deed of guarantee dated 5th May, 1994. On the same day the Second Defendant deposited with the Plaintiff the title deeds relating to a shop more particularly described in Exhibit A to the Plaint with an intent to create a mortgage by deposit of title deeds. A memorandum of entry was made on 28th May, 1994. 2. In pursuance of the facility extended to the First Defendant, the Plaintiff on the request of the First Defendant opened irrevocable inland letters of credit in favour of third parties who had sold goods to the First Defendant. Documents were negotiated in respect of the goods sold to the First Defendant and the Plaintiff made payment under the letters of credit to the beneficiaries from time to time. The Plaintiff has maintained an account in respect of the transactions of the First Defendant in the usual course of business. Between 4th July, 1994 and 10th August, 1994 the Plaintiff opened irrevocable letters of credit in favour of M/s. Aapurva Creations in respect of which 8 bills aggregating to Rs.4,99,946/- were paid. According to the Plaintiff, M/s. Aapurva Creations is a sole 3 proprietary concern of the Third Defendant and that the Second Defendant in collusion with the Third Defendant played a systematic fraud on the Plaintiff. As a matter of fact, no goods were supplied by the Third Defendant to Defendant Nos.1 and 2 and bills were issued only with a view to obtain monies from the Plaintiff. 3. The Defendants have been served with the writ of summons. No written statement has been filed. In the circumstances, the averments contained in the Plaint have not been controverted. The Plaintiffs have relied upon an affidavit in lieu of examination in chief of their Senior Branch Manager who has verified the correctness of what is stated therein. A compilation of the original documents has also been relied upon. The facts which have been narrated earlier have been duly proved on the basis of the affidavit of evidence and a compilation of documents. In the circumstances, the suit shall stand decreed in terms of prayer clauses (a) to (d) and (h) with the modification that the Plaintiff will be entitled to interest at the rate of 9% per annum from the date of the suit until payment or realization. 4 4. By an ad interim order dated 31st March, 2000 the Court Receiver came to be appointed as Receiver of the shop more particularly described in Exhibit A to the Plaint. The Court Receiver shall stand appointed as Receiver in execution and pending the execution of the decree, the ad interim order dated 31st March, 2000 shall continue to remain in operation. *****