Delhi High Court - Orders
Cox And Kings Global Services Pvt. Ltd vs Union Of India on 18 August, 2022
Author: Yashwant Varma
Bench: Yashwant Varma
$~64
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 5052/2020
COX AND KINGS GLOBAL SERVICES PVT. LTD...... Petitioner
Through: Ms. Shruti Arora, Adv.
versus
UNION OF INDIA ..... Respondent
Through: Mr. Chetan Sharma, ASG with
Mr.Kirtiman Singh, CGSC with
Mr.Waize Ali Noor, Mr. Madhav,
Ms. Kunjala, Ms. Srirupa Nag, Advs.
for UOI.
Mr. Namith Mathews, Mr. Pulkit
Malhotra, Advs. for R-2.
CORAM:
HON'BLE MR. JUSTICE YASHWANT VARMA
ORDER
% 18.08.2022 CM APPL. 35896/2022(for exemption) Allowed, subject to all just exceptions.
The application shall stands allowed.
CM APPL. 35895/2022(Direction) Notice shall issue to the petitioners as well as the second respondent on this application.
The Union has petitioned this Court by means of the instant application seeking the following reliefs: -
"(i) Restrain the WCT/Respondent No.2, its affiliates or agents or anyone acting on its behalf from pursuing the proceedings Signature Not Verified Digitally Signed By:NEHA Signing Date:18.08.2022 19:07:53 initiated in the United States District Courts Southern District of New York in Case titled WCT Inc. Plaintiff, vs. Republic of India, the Embassy of India Washington, D.C., and Ministry of External Affairs through the Embassy of India, Washington, D.C., Case No.1 :22-cv-06340-VSB filed on 27/07/22.
(ii) Initiate appropriate proceedings under the Contempt of Courts Act, 1971 against WCT/Respondent No. 2 for willful disobedience, and non-compliance and interference with the process of this Hon 'ble Court and administration of justice;"
It becomes pertinent to note that the present writ petition had come to be filed assailing the communications of 01 July 2020 and 29 July 2020 issued by the Ministry of External Affairs in the Union Government. In the course of consideration of the present writ petition, significant interim orders came to be passed on the basis of which the Bank Guarantees which form the subject matter of contention in this application came to be deposited by the petitioner favoring the applicant.
The Court firstly takes note of the order dated 09 June 2020 passed on W.P. (C) 3303/2020 which reads thus: -
"Pursuant to last order dated 04.06.2020, both parties have filed tabulated charts indicating the various bank guarantees that are required to be furnished by the petitioner to the respondent under their inter-se contractual arrangements, the extension of which are subject matter of the dispute in this petition.
2. Mr. Jayant Mehta, learned counsel appearing for the petitioner and Ms. Maninder Acharya, learned ASG appearing along with Mr. Anurag Ahluwalia, learned CGSC for respondent/Ministry of External Affairs, Government of India, submit that they have taken instructions from their respective clients; and that the parties are agreeable to resolving the disputes that are subject matter of the present petition on the following terms, on which terms the petition may be disposed of :
(i) In relation to Visa Agreement dated 29.04.2014 as extended by Extension of Visa Agreement dated 31.12.2019, the petitioner shall furnish to the respondent/Ministry, bank guarantee/s in the aggregate sum of US Dollars 4,534,075;
(ii) In relation to Passport Agreement dated 19.04.2016 as extended by Signature Not Verified Digitally Signed By:NEHA Signing Date:18.08.2022 19:07:53 Extension of Passport Agreement dated 31.12.2019, the petitioner shall furnish to the respondent/Ministry, bank guarantee/s in the aggregate sum of US Dollars 1,978,680;
(iii) All bank guarantees referred to in (i) and (ii) above shall be furnished „independently‟ by the petitioner/Cox and Kings Global Services Private Limited without any involvement of any third party whatsoever;
(iv) All bank guarantees referred to in (i) and (ii) above shall be furnished by or before 30.06.2020;
(v) All bank guarantees referred to in (i) and (ii) above shall be valid upto 30.06.2022 ;
(vi) If any bank guarantee/s has/have already been furnished by the petitioner to the respondent/Ministry towards the extension of the contractual arrangements, the same would be replaced with fresh bank guarantee/s in compliance of the above terms.
3. The petitioner shall file an affidavit of a duly authorised officer, undertaking and agreeing to comply with the terms set-out above within a period of 10 (ten) days from today.
4. Once the bank guarantees, as agreed to above, are furnished/replaced, the bank guarantees already submitted shall be returned in original by the respondent/Ministry to the petitioner's duly authorised officer.
5. The present petition and all pending application are disposed of in the above terms."
Subsequently and thereafter, a further order was passed on the present writ petition restraining the Union respondent from taking further steps for encashment of the bank guarantees in question which had come to be submitted pursuant to the directions noticed and extracted above. The relevant extract of the order dated 31 August 2020 is extracted hereinbelow:
-
"9. In view of the above, the respondent-UOI is restrained from encashing the Bank Guarantees in question, till the next date of hearing, subject to the condition that the same are kept alive by C&K/WCT. By the Impugned Orders, the Bank Guarantees have been retained till the expiry of the termination notice period. The present order shall not in any manner discharge C&K from performing its obligations under the Extension Agreement during the termination notice period or the liabilities thereunder."Signature Not Verified Digitally Signed By:NEHA Signing Date:18.08.2022 19:07:53
Again, on 04 March 2021, the Court passed the following order in the present writ petition: -
"1. This hearing has been done through video conferencing. 2 These two writ petitions are connected to each other in the sense that the Petitioner in W.P.(C) 5613/2020 i.e., World Compliance Technologies Ltd. (hereinafter `WCT') prays for release of its bank guarantees, while Petitioner in W.P.(C) 5052/2020 i.e., Cox and Kings Global Services Pvt. Ltd. (hereinafter `CKG') is the company which is relying on the bank guarantees given by WCT.
3. The bank guarantees given by WCT in favour of the Respondent - Ministry of External Affairs, Union of India (hereinafter 'MEA') were to be substituted by CKG in terms of order dated 9th June, 2020 passed by this Court in W.P.(C) 3303/2020 titled Cox and Kings Global Services Pvt. Ltd.v. Union of India. It is only upon the said replacement being done, that the bank guarantees of WCT were to be released by the MEA. Unfortunately, however, WCT was not made a party to the said writ petition and CKG did not replace the bank guarantees.
4. According to the MEA, the total dues of CKG, which the Government is entitled to recover, is estimated to be 18.8 million USD. The bank guarantees of WCT which have been submitted to the Government are to the tune of 4.5 million USD.
5. In order to give full effect to the order dated 9th June, 2020, it is directed that a senior official from the MEA, Mr. Vishnu Kumar Sharma, Director CPV, along with any other officials, shall hold a meeting with the representatives of CKG on 9th March, 2021 at 3:00 p.m.
6. In the meeting, the MEA shall place before the representatives of CKG, their complete statement of accounts and the dues which are to be cleared by CKG.
7. Upon receipt of the said statement of accounts, CKG can request for a further meeting which shall then be held on 15th March, 2021, along with its response. The minutes of the meetings dated 9th March, 2021 and 15th March, 2021 shall be placed before this Court by 25th March, 2020. CKG, on the next date of hearing shall then submit to the Court, as to in what manner it intends to secure the dues of the Government of India."
From a consideration of the aforesaid orders passed, the Court notes that there is in place a direct injunction against the respondents from dealing Signature Not Verified Digitally Signed By:NEHA Signing Date:18.08.2022 19:07:53 with or encumbering the bank guarantees which have been submitted pursuant to the directions issued in the interim in the present writ petition.
It would also be pertinent to note that WCT itself and independently has petitioned this Court by way of W.P. (C) 5613/2020 which is pending on its board and in which the principal relief sought is against an order dated 01 July 2020 passed by the Embassy of India conveying the decision of the Union to retain the third-party Bank Guarantees.
The grievance of the applicant is the filling of a suit before the United States District Courts Southern District Court of New York titled WCT INC. vs. Republic of India, the Embassy of India Washington, D.C., and Ministry of External Affairs through the Embassy of India, Washington, D.C. [Case No.1 :22-cv-06340-VSB] filed by World Compliance Technologies [WCT] INC. in which one of the reliefs claimed is for a judgment being rendered compelling the defendants which is the Union [applicant herein] to return the SBI Bank Guarantees to the plaintiff in that suit.
Significantly, that suit carries no disclosure of the interim orders passed by this Court and noticed hereinabove. The grant of the relief as claimed in the aforenoted suit would clearly violate the directions issued which require the petitioner and the second respondent to maintain the bank guarantees submitted to the Union. Matter requires consideration.
Consequently, both the petitioner as well as the second respondent are placed on notice with respect to the prayers as made in the present application.
Further, the respondent No.2 through its affiliates and agents acting on its behalf shall also stand restrained from taking further steps in case Signature Not Verified Digitally Signed By:NEHA Signing Date:18.08.2022 19:07:53 titled WCT INC. vs. Republic of India, the Embassy of India Washington, D.C., and Ministry of External Affairs through the Embassy of India, Washington, D.C., [Case No.1 :22-cv-06340-VSB].
List again on 19.10.2022.
YASHWANT VARMA, J.
AUGUST 18, 2022/neha Signature Not Verified Digitally Signed By:NEHA Signing Date:18.08.2022 19:07:53