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TMI Blog1997 (8) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... Indian Overseas Bank have given bank guarantee. 3.In the Writ Petition filed by Bhavani Enterprises, i.e., the concern run by the wife, the husband Babulal has filed an affidavit, stating that the petitioner is an export-oriented firm carrying on business in the manufacture of brass artware mainly meant for export. It is said that the main business of the firm consists of importation of raw materials and exportation of the end-product manufactured out of those raw materials, popularly called as the inputs under Duty Exemption Scheme. In both the Writ Petitions, it is averred that the objective of the Duty Exemption Scheme is to make available to registered exporters the necessary inputs for export production at competitive prices without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioners, and so as a punitive nature, they informed their (Petitioners') bankers to honour the guarantees, which they have given. It is said that the Bank did receive a registered letter from the Assistant Commissioner of Exports and also the Commissioner of Customs of remit a sum of Rs. 4,25,000/-. The Bank has informed the petitioners that they have to deposit certain amounts to honour the same, and they are pressing for payment, and it is further said that the Bank also informed the petitioners that unless necessary preventive orders are obtained from Court, they may not be in a position to withhold the enforcement of the Guarantee, and they will have to pay the same. Both the writ petitions have been filed for the same relief. 4.Petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced, nor can the beneficiary be compelled to release the bank guarantee, for, that is a matter which the beneficiary has to decide. Regarding Court's interference, in a guarantee case, recently, the Supreme Court has held in (1997) 1 SCC 568 (U.P. State Sugar Corporation v. Sumac International Ltd.), after considering all the previous cases, that unless fraud is pleaded and irreparable injury is also prima facie proved, neither an interim order could be granted, nor the suit could be entertained by Court. In the said decision, their Lordships have held thus :- "When in the course of commercial dealings an unconditional bank guarantee is given or accepted, the beneficiary is entitled to realise such a bank guarantee in terms thereof irresp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision at (1988) 1 SCC 174 at P. 197 : "The wholly exceptional case where an injunction may be granted is where it is proved that the bank knows that any demand for payment already made or which may thereafter be and made will clearly be fraudulent. But the evidence must be clear both as to the fact of fraud and as to the bank's knowledge. It would certainly not normally be sufficient that this rests on the uncorroborated statement of the customer, for irreparable damage can be done to a bank's credit in the relatively brief time which must elapse between the granting of such an injunction and an application by the bank to have it charged." [Para 12] Irretrievable injury, which is the second exception to the rule against granting of inj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pute between the petitioners and the Customs Authorities. The Bank is bound to honour the guarantee and that too without any demur when demand is made. If there is any dispute between petitioners and Customs Authorities, that is a matter which they have to agitate separately. 8.I have already said that in both these cases, they have no case of fraud. There cannot be any question of irretrievable injury since the person honouring the Bank Guarantee is the Government of India. Petitioners have no case that they will not be in a position to realise the amount if ultimately it is found that the petitioners were not liable to pay the amount. 9.Learned Counsel for the petitioner brought to my notice Chapter VII of the Export and Import Policy ..... X X X X Extracts X X X X X X X X Extracts X X X X
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