Usance period under bank credit facility cannot be extended by writ where sanction terms fix the period and leave extension to bank discretion.

The usance period under the import letter of credit was governed by the accepted sanction terms, which capped it at 180 days and left any extension to the bank's discretion. The petitioners could not rely on the foreign exchange trade credit framework to compel an extension to 270 days, because trade credit and the usance period under the bank's facility were distinct concepts. The HC held that it could not rewrite the contractual arrangement or substitute its own view for the terms accepted by the petitioners, and the bank was justified in refusing the request.

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Issues: Whether the writ petitioners were entitled to compel the respondent-bank to extend the usance period of the letter of credit facility from 180 days to 270 days.

Analysis: The petitioners sought to equate trade credit with the usance period under the letter of credit facility, but the two were held to be distinct concepts. The trade credit framework under the foreign exchange regulations was found to govern overseas borrowing and trade credit arrangements, whereas the dispute concerned the usance period fixed by the sanction letters governing an import credit facility granted by an Indian bank. The sanction letters expressly capped the usance period at 180 days and provided that any extension beyond the stated terms was within the bank's discretion. The RBI directions binding on the bank were also relied upon as supporting the 180-day position. The Court further held that it could not substitute its own view for the contractual terms accepted by the petitioners.

Conclusion: The petitioners had no enforceable right to seek extension of the usance period to 270 days, and the bank was justified in refusing the request.

Ratio Decidendi: Where the credit period is fixed by accepted sanction terms and remains subject to the lender-bank's discretion, a writ court will not rewrite the contract or compel extension merely by invoking a different regulatory framework.

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