1. The final order entitling the applicant bank to recover the suit claim alongwith interest is challenged by this appeal preferred by Original Defendants No. 1, 2 and 4.

2. The facts in brief are as below:

Import L.C. and two other facilities were sanctioned by the Applicant Bank to Defendant No. 1 Company of which Defendant No. 2 is the Director (both) hereinafter referred to as Defendants) in pursuance of their application dated 19.5.93. On sanction, the Defendants placed an order with M/s. Dutch Research Centre International of Holland (in brief DORC) for the import of surgical equipment. The Original Import L.C. facility was converted into DALC facility (Documents Against acceptance LC) at the instance of the Defendants. The credit of 6 months to defendants was granted by the Dutch International. The consignment was despatched from Holland on 4th October, 1993. On the request of the defendants the applicant bank Instructed the Dutch Air Lines to deliver the goods to the defendants. It is alleged by the bank that the goods were duly delivered accordingly. It is further alleged that the due date for payment was 4th April 1994. The applicant bank had arranged for the forward contract of 1,05,299 Ducth Guilders. The applicant Bank was required to pay Rs. 17,49,016/- in exchange of Dutch guilders. The Bank had already informed the defendants that the due date for payment was 4th April, 1994 and that therefore the defendants should release the necessary documents but the defendants neither made payment nor got the documents released. Thereafter in view of the correspondence between the bank and the defendants and between the defendants and Dutch International, the applicant bank realised that the Defendants had no intention to make the payment. The Defendants had deposited against margin in respect of DALC 25000 US $ with the Bank. The amount in Rupees was equivalent to Rs. 8,33,000/-. On adjusting this amount and on service of notice the applicant bank had filed an application under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 for the recovery of Rs. 13,68,943/- not only from the defendants but from the Defendant No. 3 and 4 who were the guarantors.

3. The defendants No. 1, 2 and 4 by their common reply resisted the claim and denied the execution of hundies. It was also contended that 180 days referred to in the hundies was from the date of acceptance. The due date for payment was accordingly 6th June 1994 and not 4th April 1994 as alleged by the bank. It was also contended that the time for payment was to be computed from 17th September, 1993, the date on which the LC was issued. The period of 180 days therefore expired on 16th March 1994. The applicant bank was not therefore liable to make the payment on 4th April 1994 i.e. after 16th March 1994. The defendants are not therefore responsible to make any payment to the bank. The defendants further contended that the delivery of goods was taken on 15th October, 1993 and 18th October 1993 respectively. In any case therefore 6th October, 1993 is wholly irrelevant for the purposes of calculating 180 days.

The applicant bank in the correspondence as well as in the relevant letters made reference to LC 101 and 102. The Defendants contended that they did not relate to the LCs in question. The Bank had no authority to change L.C. Nos. The goods arrived from Dutch International were defective. There was a dispute to that effect. Applicant Bank though was aware of the dispute had made the payment for which the defendants are not responsible much less liable. The defendants had deposited 2500 $ by way of margin money. When the applicant bank had committed breach of the terms and conditions of the sanctioned loan, it was not entitled to release the $ and adjust them towards the loan.

In short the defendant denied their liability to pay any amount to the applicant bank.

4. Defendant No. 3 also resisted the claim by her separate written stat