M/S. Rahee Industries Ltd vs Export Credit Guarantee ...

4. On 8.10.85 M/s. Ramchander Heeralal (predecessor of the present appellant) entered into an agreement with the Egyptian National Railways (foreign buyer) for supply of 20 lakhs clips bolts for a total value of US$.6,15,200, FOB Calcutta. Under the said contract 20% of the total value of the contract was payable as advance against presentation of a letter of guarantee covering the same amount and 80% of the total contract value had to be financed for 3 years, to be paid in six equal semi-annual consecutive instalments with fixed interest at 9% p.a., the first instalment to be paid after six months from the date of each shipment. Initially the Exporter got 20% of the invoice value as advance. The goods were exported on credit for the balance price of 80% which was covered to the extent of 90% by Specific Shipments Policy No.14499/1987 (`Policy', for short). The consignee duly received the goods and paid the entire 3 consideration price by depositing the same with its banker(s) at Egypt who was supposed to transfer the same to respondent no.2- HSBC Bank in India. However, because of embargo imposed by the Egyptian Government the banker(s) of the consignee could not transfer the moneys to HSBC Bank. Since the Exporter did not get the balance price within time from its consignee they applied to the Export Credit Guarantee Corporation ("Corporation", for short) under the said Policy to pay for the risk (cause) covered being 90% of the balance price which was duly paid by the Corporation. Subsequently, after the embargo came to be lifted, the Egyptian Bank transferred the money to HSBC in India. Disputes then started as to who would be entitled to the said sum and to what extent. Disputes arose because of fluctuation in the exchange value. The price was received in US Dollar by HSBC. By the time it reached India the same got appreciated. The exchange rate of US Dollar resulted in increased recovery. The Exporter filed the suit. During the pendency of the suit HSBC disbursed whatever sum recovered after converting the same in Indian Rupee to the concerned parties in the ratio of 90:10 between Corporation and Exporter. The Exporter contended that the Corporation should pay the full increased recovery to it whereas Corporation contended that the same should be apportioned in the ratio of 90:10 in terms of Clause 16 of the said policy. The learned Single Judge decreed the suit in favour of the Exporter against which the Corporation 4 went in appeal by filing APD No.302 of 2003. By the impugned judgment dated 17.8.07, the Division Bench held that the Corporation was entitled to 90% of the increased recovery against which this civil appeal is filed by the Exporter. ISSUE

7. Percentage of loss payable: The percentage of the amount of any loss which the Corporation hereby agrees to pay shall be 90.

The exporter shall pay all sums so recovered to the Corporation forthwith upon their being received by him or any person on his behalf, the Exporter hereby acknowledging and declaring that until such payment is made to the Corporation he receives and holds such sums in trust for the Corporation."

19. For the aforestated reasons, this civil appeal filed by the Exporter stands accordingly dismissed with no order as to costs.

October 17, 2008.