HDFC BANK LTD Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) The petitioner No.1, namely, HDFC Bank Limited has filed this petition under Article 226 of the Constitution of India, interalia, challenging the action of the respondent authorities under the Customs Act, 1962 in wrongfully and illegally calling upon the petitioner No.1 to make payment under four Bank Guarantees which have been issued by the petitioner No.1 and in wrongfully issuing a detention notice and a public notice against the petitioner No.1 and the petitioner No.1 refusing to make payment as wrongfully required by the respondents.

(2.) The brief facts giving rise to the present petition are as under :-

(3.) Mr. S.B. Vakil, learned Senior advocate appearing for the petitioners has submitted that the impugned action of the respondent authorities are malafide in nature and they are taken only with a view to cover up and/or to avoid the consequences of the illegal and invalid invocation of the said bank guarantees and to coerce the petitioner No.1 into making payment thereunder despite the petitioner No.1 not being required or entitled to do so in law. The invocation of the said guarantees by the letter of the respondent authorities dated 10.07.2003 was not in terms of bank guarantees issued by the petitioner No.1 and no payment could, therefore, be made under the said bank guarantees. The bank guarantees in their terms, required that payment was to be made and could be made to the respondent authorities only on the letter of invocation specifically stating that the amount claimed was due by reason of loss or damage caused or suffered by the Government by reason of breach of the Importers/Exporters of any of the terms or conditions of the said licence and notification. It was only on such specific statements being made that the petitioner No.1 became liable to pay under the said bank guarantees without demur or protest, and that such demand became conclusive as regards the amount due and payable by the bank under the said guarantees. The said guarantees were also issued to cover any loss or damage caused to or suffered by the Government by reason of failure of the respondent No.6 to comply with the conditions contained in the said licence and notification. He has further submitted that in view of the absence of the said specific statement in the purported letter of invocation, the said purported invocation was illegal, invalid, not in terms of the said bank guarantees, null and void and of no effect whatsoever. The said invocation could not be acted upon by the petitioner No.1.