Indusind Bank v. Export Credit Guarantee Corporation of India Ltd

RAJIV SAHAI ENDLAW, J. SEPTEMBER 15, 2016 "gsr"

*IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of decision: 15th September, 2016 + W.P.(C) 5659/2014 & CM No.14015/2014 (for interim directions) INDUSIND BANK ..... Petitioner Through: Mr. P.K. Mallick, Ms. Soma Mallick and Mr. Sebat Kumar Deuria, Advs. Versus EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LTD. ..... Respondent Through: Mr. Ravinder Agarwal and Mr. Girish Pande, Advs. CORAM:- HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW 1. This petition under Article 226 of the Constitution of India i) impugns the orders dated 4th July, 2013, 31st December, 2013 and 21st April, 2014 of the respondent Export Credit Guarantee Corporation of India Ltd. (ECGC) rejecting the claim of the petitioner in respect of Packing Credit Export Credit Guarantee (PCECG) No.0500100361; and, (ii) seeks mandamus to the respondent ECGC to make payment to the petitioner in respect of the claim dated 4th December, 2012 in respect of the said PCECG. 2. The petition came up before this Court first on 3rd September, 2014 when notice thereof was issued. Counter affidavit has been filed by the respondent ECGC to which rejoinder has been filed by the petitioner. The counsels for the parties were heard on 17th May, 2016 and judgment reserved. 3. It is the case of the petitioner i) that the petitioner is a scheduled bank; ii) that the respondent ECGC is a public corporation owned by the Government of India and a State within the meaning of Article 12 of the Constitution of India; iii) that the petitioner was approached by Surya Vinayak Industries Ltd. (SVIL) seeking packing credit facilities for export of protein meals, mainly to South-Asian countries; iv) that the lending to SVIL was to be done through a consortium of which the petitioner was member bank; v) the petitioner approached the respondent ECGC for issuance of PCECG against packing credit facilities to be extended to SVIL and PCECG No.0500100361 dated 12th November, 2009 for an amount of Rs.25 crores for the period from 13th August, 2009 to 31st August, 2010 was issued by respondent ECGC subject to payment of premium as mentioned in the schedule attached to the guarantee; vi) the petitioner on the basis of the said guarantee extended packing credit facilities to SVIL; vii) that the respondent ECGC vide its letter dated 18th March, 2011 renewed the guarantee for the period from 1st September, 2010 to 31st August, 2011 and the amount of the guarantee was increased from Rs.25 crores to Rs.40 crores; viii) that as per the schedule the maximum liability of respondent ECGC on guarantee amount of Rs.40 crores was to be of Rs.26,66,66,666.67p; ix) that though in the renewed guarantee additional term to the effect that advance premium equivalent to one month's premium is to be deposited on the basis of highest amount outstanding / limit sanctioned was added but the respondent ECGC contrary to its normal practice did not highlight the same in the communication dated 18th March, 2011 and thus the same remained to be noticed by the petitioner; x) that the respondent ECGC vide its letter dated 8th November, 2011 renewed the guarantee for the period from 1st September, 2011 to 31st August, 2012; xi) that on 31st July, 2012, there was a default by SVIL to the extent of Rs.26,59,22,771.81p; xii) that the petitioner vide its letter dated 31st July, 2012 raised claim on respondent ECGC invoking the guarantee; xiii) that the respondent ECGC from time to time sought clarifications and other documents from the petitioner and which were furnished by the petitioner; xiv) that on 4th December, 2012 the petitioner lodged Packing Credit Guarantee Claim Form with the respondent ECGC; xv) that the exporter was indebted to the petitioner to the extent of Rs.26,59,22,771.81p; xvi)that the respondent ECGC from time to time sought further clarifications, inspection of documents, all of which were furnished / given; xvii) that the respondent ECGC vide its letter dated 1st July, 2013 rejected the petitioner"s claim on the ground of delay