The Appellant Company made exports to Iraq of an aggregate value of Rs.2,01,25,000/- under GR Nos GK 530946, GR Nos. GK 530949 and GR Nos.148919 respectively. The items exported were food stuff (tea). These shipments were made in May/June 1989 on 365 days L/C terms under the Export Promotion Guarantee Scheme. The payment of a part of thisamounting to $ 6,25,000/- fell due on 18.5.1990 and the balance amount of $ 5,25,000 fell due on 27.6.1990. Both the Appellant Company and its Authorised Dealers maintained continuous follow up with the Customer, namely, the State Company for Food Stuff Trading and their bankers, namely, Rasheed, Bank, to make the payment as per the L/C Terms. Both the company and the bankers continued to maintain that the payments are under process. However, the U.N. imposed an embargo on all exports as well as imports to Iraq and froze all the assets and the bank accounts of Iraq. The customer, finally informed on 1.11.1990 that their assets have been frozen and they are unable to make the payment. The bankers, namely, Rasheed Bank formally communicated on 15.12.1990 that due to sanctions imposed, payments are pending till further notice and that they are not liable for any interest. Copies of the correspondences between the Appellant Company and the Authorised Dealer, Iraq Customer and their Bankers are annexed and marked herein as Annexure 14 (Collectively) .
