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2024 (4) TMI 309 - BOMBAY HIGH COURTWrit Petition - Invoking and encashing a bank guarantee - Demerger of business - bank guarantee for fulfillment of the duty amount - whether there is any obligation/liability of the petitioner to extend the Bank Guarantee which was furnished by the petitioner in regard to the imports - HELD THAT:- In our opinion, the jurisdiction of this Court under Article 226 of the Constitution is limited. We cannot delve on any issue in regard to the terms and conditions of the demerger and the inter se liability between the petitioner and respondent no. 2-KLL on the demerged business, including on the issues of the inter se liability on the imports in question, for which the bank guarantee was furnished. Equally there cannot be an exercise of jurisdiction to injunct the invocation of the bank guarantee, as it is a settled principle of law that the bank guarantee constitutes an independent contract between the bank and the party in whose favour the bank guarantee is furnished. An injunction restraining the invocation of the bank guarantee can be granted in appropriate proceedings dealing with such contractual issues. Such reliefs can be granted applying the well-settled principles which need to weigh with the Court in injuncting the invocation of a bank guarantee. Certainly in the present facts, it is difficult for a writ court to consider the issues on invocation of bank guarantee and to record a finding of fact in that regard inter se between the petitioner and KLL. Be that as it may, insofar the present proceedings are concerned, it appears that the adjudication proceedings now stands remanded to the Original Authority/ Assistant Commissioner, who is seized of the matter in pursuance of the order passed by the Appellate Authority, and who is now called upon to decide on the remanded issues including on the issue of the party required to furnish the bank guarantee. In such circumstances, in our opinion, it would be appropriate that in this regard we keep open all contentions of the parties, to be urged before the Assistant Commissioner/Original Authority, before whom the proceedings are pending including on the issue of extension of bank guarantee either by the petitioner or respondent no. 2-KLL. We may also observe that unless the Assistant Commissioner so decides, the bank guarantee needs to be renewed for a reasonable time. Thus, we dispose of this petition by the following order: Let the bank guarantee in question be extended by the petitioner for a period of one month from today. Petition stands disposed of in the aforesaid terms.
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