TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Court eases bank guarantee condition, allows half amount + immovable property as security.</h1> The court relaxed the condition for furnishing a bank guarantee for the sum in the current accounts, allowing the petitioners to provide half the amount ... - Issues Involved:1. Relaxation or modification of the condition directing the petitioner to furnish a bank guarantee for the sum lying in the current accounts.2. Permission for M/s. Oriental Bank of Commerce to honor the Foreign Letters of Credit (FLCs).Issue 1: Relaxation or Modification of Bank Guarantee ConditionBackground: The petitioners, M/s. Indira Televisions Limited, M/s. Janani Infrastructure Limited, and M/s. Jagati Publications Limited, sought to vary the common order dated 23.05.2012, which directed the respondents to defreeze the petitioners' current accounts on furnishing a bank guarantee for the sum lying in the said accounts. The petitioners argued that banks were insisting on a 100% cash margin for providing the bank guarantee due to the nature of the CBI's orders.Judgment: The court acknowledged the peculiar circumstances and relaxed the conditions as follows: 'On condition of the petitioner furnishing bank guarantee for half of the amount lying in the current accounts and on further condition of furnishing security by depositing the title deeds of any immovable property or properties of the petitioners worth more than Rs. 5.00 crores (i.e., other than the properties in respect of which orders have already been passed earlier on 23.05.2012) to the satisfaction of the Principal Special Judge for CBI Cases, Hyderabad, the respondents shall defreeze the petitioners' current accounts.'Outcome: Crl.M.P.Nos.4843, 4844, and 4845 of 2012 were ordered accordingly.Issue 2: Permission for M/s. Oriental Bank of Commerce to Honor Foreign Letters of CreditBackground: M/s. Oriental Bank of Commerce sought clarification on the common order dated 23.05.2012, permitting the bank to appropriate fully discharged FDRs kept on lien to the tune of Rs. 51,78,13,551/- for honoring all outstanding FLCs issued prior to the freezing order by the CBI.Judgment: The court noted that the bank had not followed the earlier orders in letter and spirit, particularly the obligation to intimate the CBI and the court before appropriating the amount by encashing the FDRs. However, recognizing the bank's international commitments, the court permitted the bank to appropriate the FDRs kept in lien, including the already encashed FDRs, to the tune of Rs. 51,78,13,551/-, subject to the exchange rate of the US dollar. The remaining unused portion of the FDRs under lien amounting to Rs. 47.84 crores with accrued interest would remain frozen.Outcome: Crl.M.P.No.5058 of 2012 was ordered accordingly.Additional Orders:Crl.M.P.No.5197 of 2012: The court reiterated its earlier directions that all revenue received through various heads should be deposited in the current accounts only, without any diversion of funds. The petitioners were directed to strictly comply with these conditions, and the 19 collection and payment accounts of the petitioners were defreezed.Outcome: Crl.M.P.No.5197 of 2012 was ordered accordingly.
TaxTMI 
TaxTMI 
