Status Quo on Bank Guarantee Invocation for EPCG; DGFT to Decide on COVID Extension by July 2021.

The HC directed maintaining the status quo on the bank guarantee invocation related to EPCG authorizations, ultimately reissuing the demand draft in favor of respondents for two years. The DGFT was instructed to consider extending EPCG authorizations, impacted by COVID-19, with a decision by July 31, 2021. The court disposed of the petition, emphasizing no merits examination, and required a two-week notice for any bank guarantee invocation before the decision. The digitally signed order on the court's website was deemed the certified copy for compliance. The judgment safeguarded the petitioner's rights and ensured a fair decision-making process.

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Issues:
Restraint against invocation/encashment of bank guarantee for EPCG authorization, validity of license till December 2021, extension of EPCG authorizations due to COVID-19 impact.

Analysis:
1. Restraint against Bank Guarantee Invocation:
The petitioner sought restraint against the invocation of a bank guarantee related to EPCG authorizations due to delays in fulfilling export obligations caused by the COVID-19 pandemic. The court directed to maintain status quo on the demand draft until further hearing, and subsequently, the demand draft was returned to the bank and re-issued in favor of the respondents for a two-year period, meeting the petition's prayers.

2. Validity of License and Export Obligations:
The petitioner claimed to have redeemed some EPCG authorizations and surrendered others, with delays in fulfilling obligations for the remaining authorizations due to the pandemic. The court considered the impact of COVID-19 on the hospitality sector, affecting the petitioner's ability to fulfill obligations, and directed the Director General of Foreign Trade (DGFT) to consider extending the EPCG authorizations after a hearing, with a decision to be made by July 31, 2021.

3. Extension of EPCG Authorizations:
The court treated the prayers for extension of EPCG authorizations as a representation to the DGFT, given the pandemic's adverse effects on the hospitality sector. The DGFT was instructed to decide on the extension by July 31, 2021, after hearing the petitioner. Any remedies available to the petitioner concerning the decision were to be availed in accordance with the law, with a two-week notice required for any bank guarantee invocation before the decision date.

4. Disposition and Compliance:
The court disposed of the petition and pending applications, emphasizing that it had not examined the merits of either party's case. The digitally signed copy of the order on the court's official website was deemed as the certified copy for compliance purposes, with no requirement for physical copies to be provided.

In conclusion, the judgment addressed the issues of bank guarantee invocation, license validity, and extension of EPCG authorizations due to the pandemic's impact, providing directives to safeguard the petitioner's rights and ensure a fair decision-making process by the DGFT.

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