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2004 DIGILAW 768 (GUJ)

HDFC BANK LIMITED v. COMMISSIONER OF CUSTOMS

2004-11-05

ANIL R.DAVE, K.A.PUJ

body2004
K. A. PUJ, J. ( 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 :-2. 1 at the request of the respondent No. 6, namely, Core Healthcare Limited, the petitioner No. 1 had issued four Bank Guarantees in favour of the President of India through the Assistant Commissioner of Customs, Ahmedabad to guarantee payment of amounts to the respondents in the event of respondent No. 6 failing to abide by the terms and conditions of the relevant notification and licence as set out in the said guarantees, on the terms and conditions as set out in the said guarantees. The particulars of the said four bank guarantees are as follows : - B. G. No. Amount period Adv. Lic. and Date and Date validity -- 5960664588/ 18,83,937/- 02. 08. 2003 P/l/1532728/ 06. 03. 1996 5. 12. 95 5960664587/ 51,72,185/- 02. 08. 2003 P/l/1532509/ 06. 03. 1996 31. 10. 95 5960664584/ 18,11,059/- 02. 08. 2003 P/l/1532571/ 06. 03. 1996 08. 11. 95 5960664589/ 17,63,972/- 02. 08. 2003 P/l/3037910/ 06. 03. 1996 19. 12. 95 --2. 2 as per the clauses set out in the said Bank Guarantees, the petitioner No. 1 had undertaken to pay the amount of the respective guarantees against any loss or damage caused to or suffered by the Government by reason of the respondent No. 6 failing to comply with the terms of its license and the said notification. Further, the manner in which a demand was to be made for invocation and encashment of the said guarantee was also specifically and explicitly set out in Clause 2 of the said Guarantee. Further, the manner in which a demand was to be made for invocation and encashment of the said guarantee was also specifically and explicitly set out in Clause 2 of the said Guarantee. The petitioner No. 1 was required to pay the amount under the said guarantee without protest or demur only on a demand from the Government "stating the amount claimed is due by way of loss or damage caused or suffered by the Government by reason of breach by the Importers/exporters of any of the terms or conditions of the said licence and notification. " Only a demand containing such a statement would be conclusive and binding upon the petitioner No. 1 Bank. The undertaking to pay monies to the Government as contemplated by Clause 3 of the guarantee was with respect to monies "so demanded" i. e. containing the said statement with respect to loss and damage caused to or suffered by the Government. The said guarantee, under Clause 5 thereof, was to remain valid upto 3rd February, 1998 and unless a claim in writing as required thereunder was lodged by that date, all the Governments right under the guarantee would stand forfeited and the petitioner No. 1 would be released and discharged from all liabilities thereunder. All these guarantees were thereafter extended from time to time and finally stood extended upto 02. 08. 2003. 2. 3 the petitioner No. 1 has received a letter dated 10. 07. 2003 from the respondent authorities purporting to invoke the said guarantees and demanding the payment to be made to the Government of India thereunder. However, according to petitioner No. 1, the said demand was not in terms of the Bank guarantees and was, therefore, illegal, null and void and was of no effect whatsoever. The petitioner No. 1, therefore, wrote a letter dated 01. 08. 2003 to the respondent authorities intimating that the said purported invocation was not in terms of the said bank guarantees and was not a valid invocation and that no payment would be made thereunder on the basis thereof by the petitioner No. 1. The respondent authorities, therefore, issued another letter dated 12. 08. 08. 2003 to the respondent authorities intimating that the said purported invocation was not in terms of the said bank guarantees and was not a valid invocation and that no payment would be made thereunder on the basis thereof by the petitioner No. 1. The respondent authorities, therefore, issued another letter dated 12. 08. 2003 to the Chairman of the petitioner No. 1 inter alia alleging that the petitioner No. 1 had misquoted the guarantee clause and requiring the petitioner No. 1 to remit the amounts under the said guarantees to the Government within 10 days from the receipt of the said letter failing which the respondent authorities would take action for recovery under Section 142 of the Customs Act, 1962. In response to the said letter, the petitioner No. 1 gave reply vide its letter dated 03. 09. 2003 reiterating that since the original demand made on the Bank was not strictly in terms of the bank guarantees, no payment would be made. 2. 4 the respondent authorities, thereafter, issued another letter dated 12. 09. 2003 to the Chairman of the petitioner No. 1 once again setting out some of the facts and referring to the previous purported invocations of the said guarantees and demanded for payments to be made thereunder. It was also stated in the said letter that if the amount was not paid by the petitioner No. 1, recovery action would be initiated without further notice and the petitioner No. 1 would be liable for all damages. The respondent authorities have also informed the petitioner No. 1 that if the payment was not made, they would refer the matter to the Reserve Bank of India and advise the field formations not to accept any bank guarantee of the petitioner No. 1 Bank in future. It was also stated that all bank guarantees already executed by the petitioner No. 1 Bank would be returned and the Importers/exporters would be advised to execute fresh bank guarantees of other Banks. The petitioner No. 1 gave reply to the said letter of the respondent authorities on 26. 09. 2003 through its advocate and lodged its protest against the purported action of recovery as well as putting the petitioner No. 1 under black list. Despite the said reply from the advocate of the petitioner No. 1, the respondent authorities have issued a detention notice dated 10. 10. 09. 2003 through its advocate and lodged its protest against the purported action of recovery as well as putting the petitioner No. 1 under black list. Despite the said reply from the advocate of the petitioner No. 1, the respondent authorities have issued a detention notice dated 10. 10. 2003 under Section 142 (1) of the Customs Act, 1962 purportedly for recovery of Government dues. The respondent authorities have also issued a public notice dated 15. 10. 2003 for the information of all Importers/exporters, Customs house Agents, RAC Members, Chambers of Commerce and/or other concerned persons, stating, interalia, that the petitioner No. 1 had failed to pay an amount of Rs. 1,06,31,153/under Bank Guarantees executed by the petitioner No. 1. It was also stated in the said public notice that on such failure, the respondents have issued such detention notice and since the petitioner No. 1 had not abide by the conditions of the bank guarantees, it was decided that the field formations falling under the jurisdiction of the said Commissionarate would henceforth not accept any bank guarantee executed by the petitioner No. 1 and hence, the bank guarantees executed was required to be returned to the Importers/exporters and would be replaced by guarantees of other banks, as the department of Customs had no trust in petitioner No. 1 Bank. 2. 5 it is in the above background of the matter, the petitioners have approached this Court challenging the action of the respondent authorities requiring the petitioner No. 1 to make payment under the said bank guarantees pursuant to the purported letter of invocation thereof dated 10. 07. 2003 and subsequently letters dated 10. 08. 2003 and 12. 09. 2003, and issuing detention notice dated 10. 10. 2003 under Section 142 (1) of the Customs Act, 1962 against the petitioner No. 1 and threatening to take action thereunder, and issuing public notice dated 15. 10. 2003 and wrongfully taking action against the petitioner No. 1 as set out in the said public notice. ( 3 ) MR. 09. 2003, and issuing detention notice dated 10. 10. 2003 under Section 142 (1) of the Customs Act, 1962 against the petitioner No. 1 and threatening to take action thereunder, and issuing public notice dated 15. 10. 2003 and wrongfully taking action against the petitioner No. 1 as set out in the said public notice. ( 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. ( 4 ) MR. The said invocation could not be acted upon by the petitioner No. 1. ( 4 ) MR. Vakil has further submitted that the position in law that an invocation which is not in terms of the bank guarantees is illegal, null and void, is settled. In this connection, he relied on the decision of the Honble Supreme Court in the case of UNITED COMMERCIAL BANK V/s. BANK OF INDIA AND OTHERS, AIR 1981 S. C. 1426 wherein it is held that the opening of a confirmed letter of credit constitutes a bargain between the bankers and the seller of the goods which imposes on the banker an absolute obligation to pay. However, the banker is not bound or entitled to honour the bills of exchange drawn by the seller unless they, as such accompanying documents as may be required thereunder, are in exact compliance with the terms of the credit. Such documents must be scrutinised with meticulous care. ( 5 ) MR. Vakil has further relied on the decision of the Honble Supreme Court in the case of HINDUSTAN CONSTRUCTION COMPANY LIMITED V/s. STATE OF BIHAR AND OTHERS, AIR 1999 S. C. 3710 wherein it is held that what is important, in the matter of grant of injunction restraining invocation of Bank guarantee is that the bank guarantee should be in unequivocal terms, unconditional and recite that the amount would be paid without demur or objection and irrespective of any dispute that might have cropped up or might have been pending between the beneficiary under the Bank guarantee or the person on whose behalf the guarantee was furnished. The terms of the Bank Guarantee are, therefore, extremely material. Since the bank guarantee represents an independent contract between the Bank and the beneficiary, both the parties would be bound by the terms thereof. The invocation, therefore, will have to be in accordance with the terms of the Bank guarantee; or else, the invocation itself would be bad. ( 6 ) BASED on the aforesaid judgments, Mr. Vakil has submitted that the invocation being bad, there is no question of the petitioner No. 1 being required to make any payment to the respondent authorities. He has further submitted that the amount claimed by the custom authorities from the petitioner No. 1 is much greater than the actual loss suffered by them. The said bank guarantees expired on 02. 08. He has further submitted that the amount claimed by the custom authorities from the petitioner No. 1 is much greater than the actual loss suffered by them. The said bank guarantees expired on 02. 08. 2003 on which date all the rights of the respondent thereunder stood extinguished and forfeited and the petitioner No. 1 stood released and discharged from all liabilities under the said guarantees. The letters of demand for payment received by the petitioner No. 1 after 02. 08. 2003, therefore, even assuming while denying that the same or any of them were letters of invocation, would not entitle the respondent authorities to receive any payment from the petitioner No. 1 under the said guarantees. Mr. Vakil has further submitted that since no loss was payable by the petitioner No. 1, there was no question of the respondent authorities issuing a detention notice or initiating any action under Section 142 (1) of the Customs Act, 1962 or taking any action as set out in public notice dated 15. 10. 2003. ( 7 ) MR. Vakil has further submitted that the impugned detention notice and public notice and the action of the respondent authorities proceeded on the erroneous basis that the respondent authorities are entitled to take action against the petitioner No. 1 under Section 142 (1) of the Customs Act, for alleged non-payment of amount under the said Bank guarantees. As a matter of fact, there is no provision in any of the said Bank Guarantees permitting the respondent authorities to take action under Section 142 (1) of the Act for recovery of the amounts due thereunder. Section 142 (2) of the Act provides for the powers of the respondents to recover the amounts due under any bond or other instrument executed under the said Act or rules or regulations framed thereunder, such as the present guarantees. As regards such instruments, sub-Section (2) provides that amounts due under such bond or instrument can be recovered under the powers and procedures in sub-section (1) of Section 142 only if such bond specifically provides that such amounts may be recovered under Section 142 (1 ). Since there is no such provision in the present guarantees, there is no question of the respondent authorities resorting to Section 142 (1) for recovery of any alleged dues at all. Since there is no such provision in the present guarantees, there is no question of the respondent authorities resorting to Section 142 (1) for recovery of any alleged dues at all. He has, therefore, submitted that the actions of the respondent authorities are, therefore, illegal, malafide, without or in excess of the powers conferred upon them and the same are required to be quashed and set aside. ( 8 ) MR. Vakil has further submitted that issuance of public notice is virtually amounting to putting the petitioner No. 1 in black list and the said action is violative of the principles of natural justice as no notice has been issued by the respondent authorities. ( 9 ) MR. Jitendra Malkan, learned Standing Counsel appearing for the respondent authorities has submitted that respondent No. 6, namely, M/s. Core Healthcare Limited has admitted the duty liability against the Advance licences of Mumbai and Ahmedabad Custom together for Rs. 1636. 19 Lakhs before the Settlement Commission. The Commission allowed the respondent No. 6 to pay this amount in 36 installments each of Rs. 45. 45 Lakhs. The respondent No. 6 has further admitted the liabilities of Rs. 97. 35 Lakhs vide its Misc. Application dated 28. 10. 2000 and Rs. 10 Lakhs vide its letter dated 12. 03. 2001. As such total liability of Rs. 1743. 54 Lakhs have been admitted by the respondent No. 6 before the Settlement Commission. Out of this liability, the respondent No. 6 has paid 16 installments of Rs. 45. 45 Lakhs each totaling Rs. 727. 20 Lakhs upto 21. 09. 2001 and the balance liability of Rs. 1,016. 34 Lakhs and interest thereon are still recoverable from the respondent No. 6. ( 10 ) MR. Malkan has further submitted that during the proceedings before the Settlement Commission, the office of the Commissioner of Customs, Ahmedabad had sent a report dated 04. 04. 2001 wherein duty liability and interest thereon upto 31. 03. 2001 was communicated to the Settlement Commission. Since the respondent No. 6 has not paid the amount as per its commitment before the Settlement Commission, the Settlement Commission vide its order dated 12. 03. 2004 remitted the case back to the adjudicating authority as if no application under Section 127 B of the Act was made. He has further submitted that against the total liability of Rs. 1016. 03. 2004 remitted the case back to the adjudicating authority as if no application under Section 127 B of the Act was made. He has further submitted that against the total liability of Rs. 1016. 34 Lakhs, the bank guarantees were invoked for Rs. 1,06,31,153/ -. ( 11 ) MR. Malkan has further submitted that respondent No. 6 had been issued 15 Advance Licences, out of which in 5 Advance Licences, no import had been made. In remaining 10 licences, raw-material has been imported by the petitioners through Release Advise issued by them in favour of Mumbai Custom House and Public Bonded Warehouse, Gandhinagar. In case of these 10 licences, export obligation was required to be fulfilled by them, as per Notification Nos. 79/95 and 80/95 dated 31. 03. 1995. The respondent No. 6 was expected to submit its Export Obligation Discharge Certificate issued by the Licensing Authorities and DEEC Book duly lodged by Custom House from where export have been effected. The respondent No. 6 was not able to produce any such required documents till this date. The respondent No. 6 has approached the Settlement Commission against 9 such licences where it has not fulfilled the export obligation. Since export obligation period had already lapsed and Importer had not submitted the evidence of export obligation and as the Importer had not fulfilled the condition of Bond/bank guarantee, the petitioner No. 1 was asked to remit the amount of bank guarantee by letter dated 10. 07. 2003 and the said letter was to be treated as an enforcement letter. Instead of remittance of the Bank Guarantee amount to Government Account, the petitioner No. 1 has raised doubt about the authority of the respondents to invoke the bank guarantee. Mr. Malkan has further submitted that respondent No. 1 has undertaken to pay the amount due and payable under the Bank Guarantee without any demur or protest merely on a demand from the Government stating the amount claimed is due by way of loss or damage caused or suffered by the Government by reason of breach by the importer/exporter of any of the terms or conditions of the said license and Notification. Since the respondent No. 6 has failed to discharge the obligations as required under Notification Nos. 79/95 and 80/95 dated 31. 03. Since the respondent No. 6 has failed to discharge the obligations as required under Notification Nos. 79/95 and 80/95 dated 31. 03. 1995 and the advance licences issued and has not fulfilled the conditions of the Bank Guarantees, the respondent authorities have rightly invoked the bank guarantees vide their letter dated 10. 07. 2003. ( 12 ) MR. Malkan has further submitted that since the amount of the Bank Guarantees has not been remitted by the petitioner No. 1, a detention notice dated 10. 10. 2003 under Clause (a) of Sub-Section (i) of Section 142 of the Customs Act, 1962 for recovery of Rs. 1,06,31,153/- of the Government dues was issued. Despite repeated requests having been made by the respondent authorities, the petitioner No. 1 Bank has failed to remit the amount, it was decided that henceforth the respondents would not accept any bank guarantee of the petitioner No. 1 Bank. ( 13 ) MR. Malkan has further submitted that as per Condition No. 3 of the Bank Guarantees, the petitioner Bank has no right to ask for any reason for the demand by the Government to the petitioner Bank. The petitioner No. 1 Bank was not required to see or ask which condition of the licence was not followed by the licence holder once the respondent has the powers to invoke the Bank Guarantees and the letter of invocation issued by the respondent is sufficient for the petitioner Bank. ( 14 ) MR. Malkan has further submitted that the detention notice dated 10. 10. 2003 issued by the respondent authorities under Clauses (a) and (b) of Section 142 (1) of the Customs Act, 1962 is legal and in accordance with law in as much as the same was issued after sufficient opportunity and warning given to the Bank to remit the amount of Bank Guarantees. Instead of remitting the amount in Government account, the petitioner No. 1 Bank has raised certain false and frivolous disputes. The action of the petitioner No. 1 Bank, therefore, forced the respondent authorities to take action of detention under Section 142 of the Act. Instead of remitting the amount in Government account, the petitioner No. 1 Bank has raised certain false and frivolous disputes. The action of the petitioner No. 1 Bank, therefore, forced the respondent authorities to take action of detention under Section 142 of the Act. The public notice issued by the respondent authorities is also legal and proper and in accordance with law in as much as the conditions of the Bank Guarantees were breached by the Bank and it has not paid the guaranteed amount to the Government of India inspite of several reminders/letters issued to the Bank. The respondent authorities are, therefore, quite justified in issuing the said public notice and there is no violation of the principles of natural justice as the proper opportunities were given by the respondent authorities to the respondent No. 1. ( 15 ) MR. Malkan has further submitted that there is no substance in the petitioners contention that the Bank Guarantees were not invoked as per the terms of the Bank Guarantees. The authorities relied on by Mr. Vakil are also not applicable to the facts of the present case as the Bank Guarantees are invoked strictly in accordance with the terms of the Bank Guarantees. ( 16 ) IN support of his submission, Mr. Malkan has relied on the decision of the Honble Supreme Court in the case of DAEWOO MOTORS INDIA LTD. , V/s. UNION OF INDIA AND OTHERS, AIR 2003 SUPREME COURT 1786 wherein the appellant obtained various import licenses in respect of which Bank Guarantees were furnished by it from various Banks. Under one of the Bank Guarantees, the bank unconditionally and irrevocably agreed to pay the President of India on Demand without any demur or protest the amount due and payable under the above said bond not exceeding Rs. 4,80,00,000/- only by way of loss or damage caused or suffered by the President of India by reason of non-fulfilment of the export obligation under the above said Notification or by reason of any breach of any of the terms and conditions of the above said bond by the Company. On these facts, the Honble Supreme Court has held that the words by reason of non-fulfilment of the export obligation under the above said Notification cannot be read in isolation by dissociating them from the context in which they have been used. On these facts, the Honble Supreme Court has held that the words by reason of non-fulfilment of the export obligation under the above said Notification cannot be read in isolation by dissociating them from the context in which they have been used. A reading of the bank guarantee as a whole show that those words only qualify the preceding words, loss or damage, caused or suffered by the President of India, and do not constitute a condition precedent for the respondent Govt. of India to invoke the bank guarantee, much less they give any cause of action to the bank to contest the encashment of the bank guarantee on the ground of there being no non-fulfilment of the export obligation. The Court has further observed that the bank guarantee furnished by the bank being unconditional and absolute bank guarantee, the bank has rendered itself liable to pay the cash on demand by the President of India "notwithstanding any dispute raised by the company in any proceeding before any Court or Tribunal". The clause in the bank guarantee specifically provides that the demand made by the President of India shall be conclusive as regards amount due and payable by the bank under this guarantee and the liability under the guarantee is absolute and unequivocal. Therefore, the bank has no case to resist the encashment of the bank guarantee. The Court has further held that it is true that the bank guarantee has to be read in conjunction with the terms of the contract but when the bank guarantee itself is in absolute terms, the agreement between the company and the Govt. of India would be of no avail to the bank. ( 17 ) BASED on the aforesaid judgment, Mr. Malkan has submitted that the terms of the bank guarantee in the case before the Honble Supreme Court and the terms of the bank guarantees in the present case are almost same and similarly worded. The bank in question in both the cases is also same. In the case before the Honble Supreme Court, the company failed to discharge its export obligation and the invocation of bank guarantee was held to be just and proper. The bank in question in both the cases is also same. In the case before the Honble Supreme Court, the company failed to discharge its export obligation and the invocation of bank guarantee was held to be just and proper. Similarly, in the present case also, respondent No. 6 Company has failed to discharge its export obligation and as a result thereof, the bank guarantee was invoked by the respondent authorities which cannot be resisted on the ground that it was not invoked as per the terms and conditions of the bank guarantee. He has, therefore, submitted that the petitioner has no case and the petition is required to be dismissed with cost. ( 18 ) THE respondent No. 6 i. e. Core Healthcare Limited has not filed any appearance before this Court. An affidavit-in-reply is, however, filed by one Mr. Kamlesh J. Shah, Company Secretary of the respondent No. 6 on 07. 05. 2004 wherein it is stated that the Commissioner of Customs, Ahmedabad in its report dated 04. 04. 2001 has admitted before the Settlement Commission about the duty forgone and recoverable from the Company is Rs. 9,63,913/ -. It is also stated that the Company vide its letter dated 15. 07. 2003 has informed the HDFC Bank Limited, the petitioner herein, that the liability of the Company in respect of the four licences in question comes to Rs. 9,63,713/- only. The Company has, therefore, stated in the said affidavit that the question of invoking the four bank guarantees aggregating to Rs. 1,06,31,153/- by Custom Department did not arise and even if the HDFC Bank Limited makes the payment, the Company would not be responsible to indemnify the Bank, especially when the duty liability of the Company is Rs. 9,63,713/- only. The affidavit further states that the Company has made reference to BIFR and the same has been registered as Case No. 30/2004, 31/2004 and 32/2004 for the financial years ended on 2000-01, 2001-02 and 2002-03 respectively. ( 19 ) WE have heard at length learned Senior counsel Mr. S. B. Vakil appearing for the petitioners and Mr. Jitendra Malkan, learned Standing Counsel for the Customs Department. We have also perused the affidavit filed on behalf of respondent No. 6, contents of the petition and affidavit-in-reply as well as affidavit-in-rejonder and sur-rejoinder were also taken into consideration. ( 19 ) WE have heard at length learned Senior counsel Mr. S. B. Vakil appearing for the petitioners and Mr. Jitendra Malkan, learned Standing Counsel for the Customs Department. We have also perused the affidavit filed on behalf of respondent No. 6, contents of the petition and affidavit-in-reply as well as affidavit-in-rejonder and sur-rejoinder were also taken into consideration. We have also perused bank guarantees in questions and the relevant letters invoking the bank guarantee by the Customs Department and the replies given by the petitioner No. 1 Bank. ( 20 ) THE whole controversy centres round the interpretation of the terms of the Bank guarantees. It is, therefore, necessary to minutely examine the relevant terms of the bank guarantees. Since all the four bank guarantees issued by the petitioner No. 1 Bank in respect of four different licenses are on identical terms and except the amount of bank guarantee as well as the license number, there is no material change in any of these four bank guarantees, the same are considered together. It is stated in the bank guarantees that the President of India, acting through the Assistant Commissioner of Customs, Bombay has agreed to grant the Core Healthcare Limited exemption in terms of Notification No. 79/95 and 80/95 both dated 31. 03. 1995 against the Import License in question for the import of the goods mentioned therein on the terms and conditions specified in the said notification and licence. It is further stated that M/s. Core Healthcare Limited has undertaken to produce evidence in respect of export obligation to be discharged against the said licence and notification within 30 days from the expiry of the export obligation period. It is also stated that M/s. Core Healthcare Limited has further unconditionally and irrevocably undertaken to pay an amount equal to the duty leviable on the goods cleared in terms of said notification and licence in the event of its failure to comply with the conditions of the said notification and licence in respect of the consignments mentioned therein. It is also stated that M/s. Core Healthcare Limited has further unconditionally and irrevocably undertaken to pay an amount equal to the duty leviable on the goods cleared in terms of said notification and licence in the event of its failure to comply with the conditions of the said notification and licence in respect of the consignments mentioned therein. Since one of the conditions of the said notification being furnishing of surety or security by the importer for such sum as may be prescribed, binding himself to pay on demand an amount equal to the duty leviable on the imported material but for the exemption, the petitioner No. 1 Bank in the said bank guarantees, at the request of respondent No. 6 has unconditionally and irrevocably undertaken to pay the Government an amount mentioned in the bank guarantees against any loss or damage caused to or suffered by the Government by reason of failure on the part of the respondent No. 6 of the terms and conditions contained in the said licence and notification including export obligation mentioned therein. The petitioner No. 1 Bank has also undertaken to pay the amount due and payable under the said guarantees without any demur or protest merely on a demand from the Government stating the amount claimed was due by way of loss or damage caused or suffered by the Government by reason of breach by the respondent No. 6 of any of the terms and conditions of the said licence and notification. Any such demand made on the Bank shall be conclusive as regards the amount due and payable by the Bank under the said bank guarantees. The petitioner No. 1 Bank has also undertaken to pay to the Government any money so demanded notwithstanding any dispute or disputes raised by the respondent No. 6 in any suit or proceeding, pending before any Court or Tribunal relating thereto and the petitioner No. 1 Banks liability under the said Bank Guarantees being absolute and unequivocal. The petitioner No. 1 Bank has also undertaken to pay to the Government any money so demanded notwithstanding any dispute or disputes raised by the respondent No. 6 in any suit or proceeding, pending before any Court or Tribunal relating thereto and the petitioner No. 1 Banks liability under the said Bank Guarantees being absolute and unequivocal. The Bank Guarantees also contain the provisions that the same shall remain in force from two years from the date of issue and the petitioner No. 1 Bank has undertaken to renew the Bank Guarantee from time to time on demand on its option till the matter for which the Bank Guarantee was being furnished was finally decided and till the export obligations specified in the Advance Licence was discharged by the respondent No. 6 and all the conditions of the Customs Notifications were fulfilled to the satisfaction of the Government. It was also made clear in the Bank Guarantees that if the Bank Guarantees were not renewed for any reason whatsoever, 30 days prior to the expiry of the guarantees, the entire amount guaranteed would become forthwith due and payable to the Government and the Bank shall pay the amount to the Government without any demur on their first demand. ( 21 ) THE four bank guarantees in question were renewed upto 02. 08. 2003, since the matter was pending for Settlement Commission. However, the Settlement Commission vide final order dated 24. 03. 2003 has disposed of the cases in accordance with the provisions of the Customs Act, 1962 as if no application under Section 127 B of the Act was ever made and returned the cases to the proper Officer. The petitioner No. 1 Bank was, therefore, requested vide letter dated 10. 07. 2003 to invoke the Bank Guarantees and remit the Government account as per the condition laid down in para 4 of the Guarantees while invoking the Bank Guarantees. It was specifically stated that since export obligation period has already elapsed and the respondent No. 6 has not submitted the evidence of export obligations, in respect of the four Advance Licences, the conditions of the notification and Licences have not been fulfilled by the respondent No. 6. ( 22 ) THE main dispute raised by Mr. It was specifically stated that since export obligation period has already elapsed and the respondent No. 6 has not submitted the evidence of export obligations, in respect of the four Advance Licences, the conditions of the notification and Licences have not been fulfilled by the respondent No. 6. ( 22 ) THE main dispute raised by Mr. Vakil is that the respondent authorities have not invoked the Bank Guarantees as per the terms and conditions laid down in the Bank Guarantees. The manner and method is specifically provided as to how the said Bank Guarantees are to be invoked. As per the submission of Mr. Vakil, Clause 2 of the Bank Guarantees specifically contains the provision that while invoking the Bank Guarantees, the respondent authorities will have to state that the amount claimed was due by way of loss or damage caused or suffered by the Government by reason of breach by the respondent No. 6 of any of the terms and conditions of the said licence and notification. The letter dated 10. 07. 2003 did not contain this sort of averment stating that howmuch loss or damage was caused or suffered by the Government by reason of breach of the respondent No. 6 of any of the terms and conditions of the said licence and notification. It is the submission of Mr. Vakil that the Bank is liable to make the payment of the amount stated in the Bank Guarantees in the event that the terms and conditions of the Bank Guarantee have been violated by the respondent No. 6 and as a result of that, any loss or damage was caused or suffered by the Government and that was required to be specifically mentioned in the letter invoking the Bank Guarantees. In absence of these, the invocation of bank guarantees is bad in law, illegal and inoperative and as per the decisions relied on by Mr. Vakil in the case of UNITED COMMERCIAL BANK V/s. BANK OF INDIA AND OTHERS, AIR 1981 S. C. 1426 and in the case of HINDUSTAN CONSTRUCTION COMPANY LIMITED V/s. STATE OF BIHAR AND OTHERS, AIR 1999 S. C. 3710, (SUPRA), the petitioner No. 1 Bank is not liable to remit any amount of the Bank Guarantee to the respondent authorities. ( 23 ) THE submissions of Mr. ( 23 ) THE submissions of Mr. Vakil are not found to be acceptable and it is not open for the petitioner No. 1 Bank to raise such disputes at the time when the Bank Guarantees are invoked on violation of the terms and conditions of the notification and the Advance Licences and more particularly, on the failure of the respondent No. 6 to discharge its export obligation. In the letter dated 10. 07. 2003, it is specifically stated that since the export obligation period had already elapsed and the respondent No. 6 has not submitted the evidence of export obligations, it has violated the terms of the notification as well as Advance Licence. In absence of any evidence of export obligations produced by the respondent No. 6 till the Bank Guarantees were invoked, it is difficult to believe that the respondent No. 6 has discharged its export obligation and if the export obligation is not discharged, in that case, the respondent No. 6 is liable to pay duty on the goods cleared under exemption in terms of notification and the Advance Licence and since the Bank has unconditionally and irrevocably undertaken to pay the Government against any loss or damage caused to or suffered by the Government by reason of failure on the part of the respondent No. 6 of any of the terms and conditions contained in the said Licence and notification including export obligation mentioned therein, the petitioner No. 1 Bank is not justified in raising the dispute that the Bank Guarantee is not invoked in a manner laid down in the Bank Guarantee. Even otherwise, the Honble Supreme Court has made it clear in the case of DAEWOO MOTORS INDIA LTD. , V/s. UNION OF INDIA AND OTHERS reported in AIR 2003 SUPREME COURT 1786 (SUPRA) that the words by reason of non-fulfilment of the export obligation under the above said Notification cannot be read in isolation by dissociating them from the context in which they have been used. A reading of the bank guarantee as a whole shows that those words only qualify the preceding words, loss or damage, caused or suffered by the President of India, and do not constitute a condition precedent for the respondent Govt. A reading of the bank guarantee as a whole shows that those words only qualify the preceding words, loss or damage, caused or suffered by the President of India, and do not constitute a condition precedent for the respondent Govt. of India to invoke the bank guarantee, much less they give any cause of action to the bank to contest the encashment of the bank guarantee on the ground of there being no non-fulfilment of the export obligation. Similarly, the words "stating the amount claimed is due by way of loss or damage caused or suffered. . . . . . . . . . " cannot be read in isolation by dissociating them from the context in which they have been used. A reading of the Bank Guarantees as a whole shows that these words do not constitute a condition precedent for the Respondent authorities to invoke the Bank Guarantees, much less they give any cause of action to the petitioner No. 1 Bank to contest the invocation of the Bank Guarantees on the ground of there being no demand of the amount of loss or damage caused or suffered. In view of the overall reading of the Bank Guarantees and in view of the law laid down by the Honble Supreme Court in the case of DAEWOO MOTORS INDIA LTD. , V/s. UNION OF INDIA AND OTHERS reported in AIR 2003 SUPREME COURT 1786 (SUPRA), we are of the view that the Bank Guarantees are invoked in terms laid down in the Bank Guarantees in question and we are not accepting the submissions of Mr. Vakil that the same were not invoked in the manner laid down in the said Bank Guarantees. Since the Bank Guarantees were invoked in accordance with the terms of the Bank Guarantees, the authorities relied upon by Mr. Vakil would not render any assistance to the case of the petitioner No. 1 Bank. ( 24 ) WE are at pains to observe that the Respondent No. 6 on whose behalf the Bank Guarantees were given by the petitioner No. 1 Bank, has not chosen to challenge the action of the Respondent authorities by taking any legal recourse nor it had filed its appearance in the present proceedings. A faint attempt was made by filing a very vague and evasive reply which does not inspire any confidence of the Court. A faint attempt was made by filing a very vague and evasive reply which does not inspire any confidence of the Court. Export obligations were not discharged in time. Cases were filed before the Settlement Commission and term of the Bank Guarantees were sought to be extended and commitments made before the Settlement Commission were not fulfilled. It is, therefore, not just and proper for the Respondent No. 6 to contend that the loss or damage caused or suffered by the respondent authorities is much less than the amount demanded by invoking the Bank Guarantees. Reference made to the registration of cases by BIFR is also wholly irrelevant and uncalled for as far as invocation of Bank Guarantees are concerned. ( 25 ) AS far as the issuance of notice under Section 142 (1) of the Customs Act and the public notice which according to Mr. Vakil amounts to black listing of the petitioner No. 1 Bank are concerned, we are of the view that since the petitioner No. 1 Bank has not obliged the respondent authorities by remitting the amount of the Bank Guarantees when they were invoked as per the terms of the Bank Guarantees, the respondent authorities are quite justified in enforcing the recovery by resorting to the provisions contained in Section 142 (1) of the Customs Act. Before issuance of the public notice, the respondent authorities have made it clear vide their letter dated 12. 09. 2003 wherein it is specifically stated that if the due amount is not received within stipulated time, the department will initiate recovery action without further notice to the Bank and the Bank will be liable for all the damages. It was also made clear that in addition to the recovery proceedings, the department will also refer the matter to Reserve Bank of India and advise the field formations for not accepting any Bank Guarantee of the HDFC Bank Limited in future and all the Bank Guarantees already executed by the said Bank would be returned and the Importers/exporters would be advised to execute fresh Bank Guarantees in lieu of the Bank Guarantees issued by the petitioner No. 1 Bank. It is only after giving this specific notice in writing the public notice dated 15. 10. 2003 was issued. It is only after giving this specific notice in writing the public notice dated 15. 10. 2003 was issued. Thus, it cannot be said that the said public notice was issued without giving any opportunity to the petitioner and that it was violative of the principles of natural justice. We are, therefore, of the view that this action of the respondent authorities in issuance of the notice under Section 142 (1) of the Act as well as issuance of public notice are also justified and no interference is called for. ( 26 ) APART from the above discussion, we are of the view that the issues raised by the petitioner No. 1 Bank as to whether Bank Guarantees invoked by the respondent authorities are in terms of the Bank Guarantee or whether the respondent No. 6 has discharged its export obligation or whether any loss or damage is suffered by the respondent authorities or whether liability under the Bank Guarantees are not to the extent of the amount stated in the Bank Guarantees but much less than the said amount, are all disputed questions of facts and those questions cannot be decided by this Court while exercising extra ordinary writ jurisdiction under Article 226 and 227 of the Constitution of India. The grievance on this score, if any, can be redressed only by way of filing suit before the competent Civil Court. In this connection, it is worthwhile to mention that the writ petition filed by Daewoo Motors before the Delhi High Court was dismissed only on the ground that as the writ petition involved disputed questions of facts and as the subject matter related to encashment of Bank Guarantee, it would not be proper to exercise extra ordinary jurisdiction of the High Court under Article 226 of the Constitution of India. This decision of the Delhi High Court was challenged before the Honble Supreme Court and while confirming the said decision, the Honble Supreme Court has given its decision even on merits also. Since the above finding of the Delhi High Court has not been upturned by the Honble Supreme Court, we are also in agreement with the said finding of the Delhi High Court and are of the view that the present petition is liable to be dismissed even on the ground that it involves disputed questions of facts. Since the above finding of the Delhi High Court has not been upturned by the Honble Supreme Court, we are also in agreement with the said finding of the Delhi High Court and are of the view that the present petition is liable to be dismissed even on the ground that it involves disputed questions of facts. Even otherwise, the law regarding invocation of Bank Guarantee is very settled and unless there is fraud or irretrievable injustice, the Court should not grant any injunction against invocation of Bank Guarantees. No such allegation is made in the present case. ( 27 ) BEFORE concluding this judgment, we observe that the decision of the respondent authorities not to accept the Bank Guarantees which are issued or to be issued by the petitioner No. 1 Bank shall remain in operation till the amounts claimed by them under the Bank Guarantees in question are not paid by the petitioner No. 1 Bank. Once the said amounts will be paid, the ban imposed by the respondent authorities would automatically be lifted. ( 28 ) WITH these observations and directions, the petition is dismissed without any order as to costs. .