SAMPARK INDUSTRIES LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) ON this Writ Petition under Article 226 of the Constitution of India, which sought a restraint against Respondent Nos. 2 and 3 from invoking and encashing bank guarantees/pay orders submitted by the Petitioner and also to withdraw a communication Annexure 'O' dated 5th August, 2014, this Court, after hearing both sides, had passed an order on 1st September, 2014 not to encash the bank guarantees/pay orders, if not already encashed. That order was continued by the Division Bench by a further order dated 11th September, 2014. The Writ Petition was posted for admission and on 15th September, 2014, the Division Bench continued the ad interim order till 18th September, 2014. On 18th September, 2014, this Court passed the following order :

(2.) MR . Jetty appearing for the Respondents does not dispute that a certificate in the above nature has been received by the Petitioner, but the concerned officials are scrutinising it and since everything is without prejudice to the rights and contentions of the parties, the contesting Respondents be given an opportunity to adopt such legal proceedings as are permissible in law and until then, the bank guarantees/pay orders be allowed to be retained. After hearing both sides and since the controversy in the Writ Petition is now rendered completely academic and after the subsequent development, we do not see how we can accede to the request of Mr. Jetly. Once the Director General of Foreign Trade, in terms of the statements and directions of this Court has examined the issue and issued the certificate, then, nothing survives in the Writ Petition. If the contesting Respondents are still inclined to adopt such legal proceedings as are permissible in law, they are free to do so. However, they cannot retain the bank guarantees/pay orders, as is now sought. The bank guarantees/pay orders were retained because the Petitioner having failed to discharge the export obligation and no certificate having been obtained in that behalf, there was a default in complying with the requisite provisions of the Customs Act, 1962 and the Rules made thereunder. It is for that purpose and to secure the revenue that this without prejudice arrangement was made. If the Revenue has any powers in terms of the rules and regulations to initiate legal proceedings, they are free to do so. They are equally free to pass such orders as are permissible in law. However, we cannot allow the retention of the bank guarantees/pay orders, as sought by the Respondents. The bank guarantees/pay orders be returned, duly cancelled, within a period of four weeks from today on receipt of copy of this order, if not already returned, duly cancelled.