Research › Search › Judgment

Delhi High Court · body

2020 DIGILAW 1361 (DEL)

Zilingo Pte Ltd v. Union of India

2020-10-14

PRATHIBA M.SINGH

body2020
JUDGMENT Prathiba M. Singh, J. - This hearing has been held through video conferencing. 2. The present writ petition has been listed in the typed supplementary list on special marking, and has been taken up at 4:00 P.M today. The urgency expressed is that a bank guarantee, for a sum of USD 6.75 million, is sought to be encashed by the Respondent No. 1/Union of India, through the Ministry of External Affairs. The encashment demand has been raised by the High Commission of India in Singapore, for invoking the said bank guarantee dated 9th April 2020, vide its letter dated 8th October, 2020. The issuing bank, of the bank guarantee, is Respondent No. 3/ DBS Bank Singapore, has sent an e-mail to the Petitioner, stating that the amount is likely to be credited to the beneficiary''s account by 10:00 A.M on 15th October, 2020. 3. The brief background of this matter is that a contract was entered into between High Commission of India, Singapore and the Petitioner, through the channelising company HLL Lifecare Ltd., Thiruvananthapuram, for the procurement and supply of masks. As per the contract, the Petitioner was to supply 10 million KN-95 Respiratory Masks, for a value of USD 22.5 million. 30 percent of the total value of the invoice was to be secured through a bank guarantee by the Petitioner, which is the subject matter of this present writ petition. 4. Between April 2020 till September 2020, there has been continuous correspondence between the parties, in respect of the designation/name to be given to the masks and as to whether they are medical or non-medical devices. The said issue is stated to have been resolved. Thereafter, according to the Petitioner, the Respondent No. 1 has insisted on testing of all the consignments of the said masks, from different laboratories, to ensure that these adhere to the Bureau of Indian Standards protocol. 5. Mr. Dayan Krishnan, ld. Senior counsel for the Petitioners, submits that 6.8 million masks have already been delivered, out of the 10 million as per the contract, and only 3.2 million masks are left to be supplied, the samples of which are being tested in the laboratory, as directed by the Respondent No. 1. 6. 5. Mr. Dayan Krishnan, ld. Senior counsel for the Petitioners, submits that 6.8 million masks have already been delivered, out of the 10 million as per the contract, and only 3.2 million masks are left to be supplied, the samples of which are being tested in the laboratory, as directed by the Respondent No. 1. 6. However, surprisingly the subject bank guarantee for a sum of USD 6.75 million has been invoked on 8th October, 2020, and the intimation of the same was received by the Petitioner on 9th October, 2020. A further email has been received by the Petitioners from Respondent No. 3 Bank on 14th October, 2020 i.e., today, stating that if the claim of the High Commission of India, Singapore, is not withdrawn by 10 A.M. on 15th October, 2020, the Bank would be obliged to honour the claim. 7. The matter relates to procurement of KN-95 masks which are essential items especially during the pandemic. The stand of the Petitioner is that they are ready and willing to effect supplies immediately and it is only due to the testing protocol that the supply has been stopped. The reasons for encashment not being clear at this stage and further keeping in mind the fact that 68% of the supply has also already been made, the following directions are issued: i. Advance copy of this petition is stated to have been served on the marking agency in the office of Union of India, Delhi High Court. However, none appears for the Respondents. Accordingly, let a copy of this petition be served to Mr. Kirtiman Singh, ld. CGSC, who shall obtain instructions by tomorrow i.e., 15th October, 2020. ii. Respondent No. 3 Bank is directed not to make any payment pursuant to the invocation of the bank guarantee, until further orders of this Court. iii. The bank guarantee shall be renewed by the Petitioner for a further period of 30 days, and the confirmation of renewal shall be placed on record in the form of a letter from Respondent No. 3 Bank by tomorrow i.e., 15th October, 2020, through an e-mail to the Court Master. 8. List on 15th October, 2020. 9. In view of the urgency in this matter, the present order be e-mailed to the ld. counsel for the Petitioner and also be uploaded on the High Court website on an urgent basis.