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2016 DIGILAW 717 (ALL)

Tin Manufacturing Co. of India v. Union of India

2016-02-29

BHARATI SAPRU

body2016
JUDGMENT Bharati Sapru, J. Heard Sri Krishna Agrawal, learned Counsel for the Union of India, Sri Amrish Sahai, for the Bank of Maharashtra and Mrs. Manju Rani Chauhan for the Writ Petitioner. 2. This matter has come on remand from Hon'ble Apex Court by way of an order dated 17.02.2015, which reads as hereunder: - "Heard Mr. P.S. Patwalia, learned Additional Solicitor General for the Union of India and Ms. Meenakshi Arora, learned Senior Counsel for the respondent. Leave granted. The present appeal, by special leave, is directed against the orders dated 27th July, 1998, 24th April, 2002 and 3rd January, 2014. The singular grievance is that the Union of India had really not received the amount under the bank guarantee that was furnished by the respondent-Company, the writ petitioner before the High Court, from the bank, namely, the Maharashtra Bank, the impleaded respondent before the High Court and, therefore, the direction to refund the amount is absolutely unwarranted. Learned Additional Solicitor General has taken us through the impugned order where the High Court has cryptically stated that the respondents having encashed the bond of Rs.12 lacs executed by the writ petitioner, they are bound to refund the amount along with the interest at the rate of 15% per annum from 28th February, 1995, till the date of payment. It is submitted by Mr. Patwalia that though the bank guarantee was sent to the bank for encashment, yet the bank, because of insufficient amount in the account of the respondent, did not pay the amount to the Union of India and, therefore, the question of refund does not arise. Learned Additional Solicitor General would submit that in law, the bank may be bound to honour the bank guarantee when it is an unconditional one, but when the amount has not really been transferred to the accounts of the Union of India, the question of refund would not arise and if the refund is directed by a Court on a hypothetical assumption, it would amount to unjust enrichment by the respondent-Company. Ms. Meenakshi Arora, learned Senior Counsel appearing for the respondent, per contra, has submitted that once the bank guarantee has been encashed and the bank has failed to remit the amount despite taking it from the respondent, either Union of India or the bank would be liable to refund the amount and the respondent cannot be allowed to suffer. Ms. Meenakshi Arora, learned Senior Counsel appearing for the respondent, per contra, has submitted that once the bank guarantee has been encashed and the bank has failed to remit the amount despite taking it from the respondent, either Union of India or the bank would be liable to refund the amount and the respondent cannot be allowed to suffer. Regard being had to the rivalized submissions, we are inclined to set aside the impugned order and remit the matter to the High Court, only for determination of a singular issue, whether the Union of India had received the money from the bank and, if not, whether the bank had received the money from the writ petitioner and still holding it back and we so direct. Needless to say, if the Union of India has not received the amount from the bank, it will not be liable for the refund. The High Court shall, thereafter, proceed with the lis qua the bank and the writ petitioner. The High Court is requested to dispose of the writ petition within a period of six months. The appeals are allowed to the extent indicated above. There shall be no order as to costs." 3. Pleadings have been exchanged between the parties over here. A counter affidavit has been filed by the bank and paragraphs no.3, 5, 14 and 16, which have been accepted on record are quoted herein below: - "3. That before giving parawise comments to the affidavit filed in support of Civil Misc. Application on behalf of Union of India-respondent No.3 (hereinafter referred to as the 'affidavit'), it is submitted that the claim made by the beneficiary of the Bank Guarantee had not been paid by the Bank. No amount had been recovered/received by the Bank from the exporter and no amount was paid to the beneficiary of the Bank Guarantee. 5. That it is also submitted that the respondent Bank again reiterate that the Bank has not made any payment to the Director General of Foreign Trade (respondent no.1) under the claim nor received or recovered any amount from the petitioner. Hence, the petitioner's prayer in the writ petition to the Hon'ble Court namely that the Director General of Foreign Trade should repay to the petitioner the amount, which the Director General of Foreign Trade has not actually received from the Bank in prima facie not reasonable. Hence, the petitioner's prayer in the writ petition to the Hon'ble Court namely that the Director General of Foreign Trade should repay to the petitioner the amount, which the Director General of Foreign Trade has not actually received from the Bank in prima facie not reasonable. It is again reiterated that the Bank has not received or recover any amount from the petitioner i.e. M/s Tin Manufacturing Company of India, nor any Bank Guarantee has been encashed. 14. That contents of paragraph no2. 14 and 15 of the affidavit are denied as stated and in reply thereto, it is submitted that factual position is that the Bank has not made any payment to the respondent no.1 under the claim, or received or recovered any amounts from the petitioner, hence the petitioner's prayer in the writ petition to this Hon'ble Court namely that the respondent no.1 should repay to the petitioner the amount which the respondent no.1 has not actually received from the bank, is prima facie not reasonable. 16. That the contents of paragraph Nos.19,20,21,24,25 & 30 of the affidavit are denied as stated and in reply thereto, it is submitted that no bank guarantee has ever been encahsed and it is again reiterated that the Bank has not made any payment to the Director General of Foreign Trade (respondent NO.1) under the claim nor received or recovered any amount from the petitioner. Hence, the petitioner's prayer in the writ petition to the Hon'ble Court namely that the Director General of Foreign Trade should replay to the petitioner the amount, which the Director General of Foreign Trade has not actually received from the Bank in prima facie not reasonable." 4. Such being the position, it becomes clear that no money has ever been passed on to the Union of India from the Bank, therefore, it is clear that no refunds are to be made by the Union of India. 5. Insofar as the lis between the writ petitioner and the bank is concerned, Maharashtra Bank had not even been made a party in this writ petition. 6. It is open to the petitioner to make such amendments or corrections as may be necessary in its writ petition, if it seeks to have any relief against the bank. The application filed by the Union of India, thus, stands disposed of.