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TMI Blog2009 (4) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... : CIRCULAR NO.02/2008 An incident has come to the notice of the undersigned, wherein department had encashed a bank guarantee on account of nonfulfillment of conditions stipulated in the EPCG Notification. However, M/s.HDFC Bank Ltd. the banker who issued the Bank Guarantees, filed Writ Petition in the Hon'ble High Court which was dismissed by the Court. Subsequently they have filed SLP (CIVIL) in the Hon'ble Supreme Court raising objection to the authority of the Customs Department to encash the said bank guarantees given by them. This reveals that M/s. HDFC Bank Ltd. is not honouring Bank Guarantees given by them to the Department on behalf of their clients. The said action on the part of HDFC Bank defeats the very purpose of the Bank Guarantee being taken by the Department. The issue is under further examination. Meanwhile Bank Guarantees issued by M/s.HDFC Bank Ltd. on behalf of any importers/exporters/persons may not be accepted at Air Cargo Complex, Mumbai until further orders. All the officers and staff concerned are advised to take note of this for compliance. Sd/- (P.M.SALEEM) COMMISSIONER OF CUSTOMS (EXPORT) A.C.C.,MUMBAI. 3. It is the case of the petitioner that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rawn, the present petition. 5. At the hearing of this petition on behalf of the petitioner, learned counsel have raised the amongst others the following grounds: a) the said Circular dated 22.11.2008 and the said action is an illegal attempt by the 2nd respondent to coerce the petitioners from withdrawing its said Special Leave Petition pending before the Hon'ble Supreme Court of India. It is highly improper for an officer of the rank of the 2nd respondent to behave in the manner that he has by issuing a Circular, such as the present one, with regard to the very subject matter of the case pending before the Hon'ble Supreme Court of India. b) The observation of the 2nd Respondent in its said Circular dated 22.11.2008 that by filing the proceedings before this Hon'ble Court and pursuing the Special Leave Petition in the Hon'ble Supreme Court of India, the 1st petitioner is not honouring the Bank Guarantees given by its to the department on behalf of its clients and that by pursuing the said remedies the 1st petitioner is defeating the very purpose of the Bank Guarantees, is uncalled for and can never be arrived at, particularly in view of the fact that has also been admitted in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ason. Such a generalisation due to only one such instance that too an instance, where such a conclusion is arrived at by it is unjustified and uncalled for, is perverse. h) The said Circular dated 22.11.2008 has been issued ex-parte, without even putting the 1st petitioner to any kind of notice or hearing the 1st petitioner with regard to black listing it by not accepting any Bank Guarantee issued by it in favour of Customs Department on behalf of its customers. The Petitioners say and submit that by the said Circular the 2nd Respondent has affected the rights of the Petitioners to carry on its business and to issue the Bank Guarantees on behalf of its customers. The said rights of the Petitioners has been taken away by the said Circular without putting the Petitioners to notice and/or without hearing the Petitioners in the matter before issuing of any such Circular. j) The said Circular dated 22.11.2008 not only effects the rights of the petitioners to carry on the business and issue Bank Guarantees in the normal course of its business for its customers but it also affects all its customers, who are part of the general public, for being able to furnish the Bank Guarantees by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner. (h) & (i) I say and submit that the petitioner is making payments and seeking refunds and filing writs against these payments with Respondent No.2 where the importer should agitate. The petitioner is fitting into the shoes of the importer and unnecessarily fighting the case even when the importer/aggrieved parties are silent about the issues. The petitioner is not only causing undue hardship to the Respondent but at the same time the petitioner is wasting their own money and time and hampering their own image and holding Respondent No.2 responsible for his deeds which is highly unwarranted and uncalled for. 8. Additional affidavit has been filed on 26th March, 2009 wherein a reference is made to the petitioner refusing to honour the Bank Guarantee for a sum of Rs.75,000/-. In the further affidavit dated 23rd April, 2009, it is set out, that the present dispute is the purported right claimed by the petitioner-Bank in respect of certain instructions issued by the Bank vis-a-vis the petitioner-bank to its own departments or Cargo Department. Air Cargo department with which the present issues are concerned, has dealing with the petitioner no.1 in respect of bank guaran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r format, it is open to the respondents to accept bank guarantees from the petitioner no.1 or any other commercial bank of a type it insists. That would be a policy decision and this Court ordinarily would not interfere with that policy decision. The Circular as read does not address itself to this issue of a particular type of Bank Guarantee. 10. The Circular has the effect only on the petitioner no.1 and its customers. As per the Circular, respondent no.2 has directed its officers and departments not to accept Bank Guarantees issued by the petitioner no.1 at Air Cargo Complex until further orders. Respondents No.2 while dealing with the public in the instant case Commercial Banks have the duty to act fairly. Their acts should not result in denying to the petitioner no.1 an equal opportunity of furnishing bank guarantee like any other commercial bank which would visit the petitioner no.1 with civil consequences. Circular of the nature issued in its administrative power barring the petitioner no.1 from supplying bank guarantees to exporters, who have the business with Air Cargo Complex would be arbitrary. According to the respondent no.3 itself, the petitioner no.1 has been issuin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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