Legal Question in Civil Litigation in India

A L/C was drawn on IDBI Bank in 2007, was effective till 2009. Initialy 4 payments were cleared thro' L/C. Thereafter bank has not honored the l/c and did not make payment, court litigation was going on, buyer prayed for stay on payment. Local district crt and finally High court have dismissed their pray and vacated the stay after 25/08/2010. Meanwhile seller was asked not to submit any bill for payment to bank and accordingly did not submit. When stay was vacated, immediately submitted all the pending bills for the entire l/c contract period, but again IDBI bank is refusing to make payment on the ground the said L/C is expired. So when court litigation was going on and when seller was asked not to submit the bills, then as to how L/C bank can ask said L/C is expired. Even at the time of its expiry date, bank did not make any intimation for its expiry to the seller. Pl suggest us whether it is possible, justified to the eyes of law and finally can the said L/C be extended or accepted by the said bank without going to court, any law, any provision, pl suggest us sir.


Asked on 9/07/10, 8:39 pm

1 Answer from Attorneys
Vishwa Arya Arya & Co.

The objection is technical but sound. You should have cautious and taken the precaution by getting the LC extended by an order of the court. You may try now, though late

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Answered on 9/08/10, 12:36 am


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