Interim protection in EPCG dispute allowed manufacturing to continue, subject to deposit, bond and non-alienation conditions.

Interim protection was granted in an EPCG-related dispute where the petitioner had purchased machinery subject to an existing export obligation. The High Court found that no amount had yet become due and payable, and that restraining the authorities from taking possession would not prejudice the Government at that stage. It also accepted that the petitioner's undertaking to export the required quantity of yarn remained enforceable. The relief was conditioned on deposit of Rs. 25 lakhs, execution of a bond, and a restraint on alienation of the machinery, while the petitioner was allowed to continue manufacturing and export operations pending compliance with the export obligation.

---

---

Issues: Whether interim relief restraining the authorities from taking possession of the machinery and permitting the petitioner to continue manufacturing operations pending fulfilment of the export obligation should be granted.

Analysis: The petitioner had purchased the machinery subject to the existing export obligation under the EPCG arrangement. The Court found that no amount had yet become due and payable and that grant of interim protection would not cause prejudice to the Government at that stage. The Court also noted that the petitioner's undertaking to export the required quantity of yarn could still be enforced, and secured the arrangement by requiring deposit of Rs. 25 lakhs, execution of a bond, and a restraint on alienation of the machinery.

Conclusion: Interim relief was granted in favour of the petitioner, the authorities were restrained from taking possession of the machinery, and the petitioner was permitted to proceed with manufacturing and export activity subject to the protective conditions imposed by the Court.

---