Guarantee to the tune of Rs.75,000/- during the month of August 1995. Prior to August 1995, the plaintiff was having cash dealings, the plaintiff was allowed to buy the raw silks on credit basis i.e., on 3 occasions within the bank guarantee limit. During the month of July 1996, due to various reasons, he had stopped the credit transactions and informed the defendant to invoke the bank guarantee offered by him to the exchange and to close the account on the same day. The plaintiff had purchased raw silks for nearly Rs.80,000/- by paying cash. The defendant exchange had not taken any steps to get a sum of Rs.75,000/- from the Bank in time. The defendant had intimated the plaintiff and directed him to pay a sum of Rs.1,03,859/- on 26.08.1997 by his letter Na.Ka.No.630/A/95, after receiving the said intimation letter, the plaintiff requested the defendant to invoke the bank guarantee and adjust the said Rs.75,000/towards due. The plaintiff had paid a sum of Rs.75,000/- to the defendant by adjusting the Bank guarantee amount on 07.10.1997 and the same amount had been credited on 14.10.1997. Hence, as on 14.10.1997, he had paid the entire amount to the defendant. On 09.10.1997, the defendant sent a letter to the plaintiff stating that the plaintiff will have to pay only a sum of Rs.95,484/- (principal Rs.94,773/- + Levy Rs.711/-).
