Case Law Details
FCI OEN Connectors Limited Vs Union of India (Karnataka High Court)
The limited point that arises for consideration is, whether the respondents were justified in encashing the bank guarantee and invoking the continuity bonds before expiry of the statutory appeal period of 60 days from the date of the order dated 10.03.2021.
As rightly contended by the learned counsel for the petitioner and as held by this Court in Oracle’s case (supra), invocation of the continuity bonds and encashment of the Bank guarantee by the respondents on 11.03.2021 and 16.03.2021, much before the expiry of the period of 60 days from 10.03.2021 as has been expressly stated by the respondent No.2 himself in the Order-in-Original and as provided in Section 128 of the said Act of 1962 is clearly illegal, arbitrary and the same deserves to be quashed, particularly in the light of the Circular dated 16.09.2014 issued by the respondents. Under these circumstances, I am of the considered opinion that in the light of the undisputed fact that the Order-in-Original dated 10.03.2021 itself states that the petitioner had a period of 60 days to prefer an appeal under Section 128 of the said Act of 1962 coupled with the aforesaid Circular dated 16.09.2014 and the decision of this Court in Oracle’s case (supra), the impugned letters dated 11.03.2021 and 16.03.2021, whereby the respondents have encashed the bank guarantee and invoked the continuity bonds in respect of the entire disputed amount as directed in the impugned order is not only contrary to law and the facts and probabilities of the case but also opposed to the principles of natural justice, in that no opportunity, much less reasonable or sufficient opportunity was provided to the petitioner to prefer an appeal within the statutory period of 60 days and the respondents have hastily and hurriedly proceeded to issue the impugned letters which cannot be countenanced under any circumstances whatsoever and the same deserve to be quashed.
So also, learned counsel for the petitioner is right in his contention that the maximum liability to deposit the disputed amount in the appeal already preferred by the petitioner, which is pending adjudication is 7.5% of the disputed amount out of the total sum of Rs.34,09,343/- as directed in the Order-in-Original; it follows therefrom that in view of my finding that the impugned letters / orders are illegal and arbitrary and deserve to be quashed, by also applying the principles of restitution, it is necessary to direct the respondents to refund / repay any sum in excess of Rs.34,09,343/- back to the petitioner pending disposal of the appeal and by issuing necessary directions in this regard.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
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