Delhi High Court
Cox And Kings Global Services Pvt. ... vs Union Of India on 31 August, 2020
$~22 & 23
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision : 31.08.2020
+ W.P.(C) 5052/2020 & CM No.18230/2020
COX AND KINGS GLOBAL SERVICES PVT. LTD.
.... Petitioner
Through Mr.Jayant K. Mehta, Mr.Rishi
Agarwala, Ms.Shruti Arora,
Advs.
versus
UNION OF INDIA ..... Respondent
Through Mr.Chetan Sharma, ASG and
Mr.Kirtiman Singh, CGSC with
Mr.Waize Ali Noor and
Mr.Rohan Anand, Mr.Sahaj
Garg, Mr.R.V.Prabhat and
Mr.Amit Gupta, Advs. for R-1.
Mr.Dayan Krishanan, Sr. Adv.
with Ms.Namitha Mathews and
Mr.Pulkit Malhotra, Advs. for
R-2.
(23) W.P.(C) 5613/2020 & CM No.20344/2020
WORLD COMPLIANCE TECHNOLOGIES PVT LTD
.... Petitioner
Through Mr.Dayan Krishanan, Sr. Adv.
with Ms.Namitha Mathews and
Mr.Pulkit Malhotra, Advs.
versus
UNION OF INDIA & ANR. ..... Respondents
WP(C) No.5052 /2020 & 5613/2020 Page 1
Through Mr.Chetan Sharma, ASG with
Mr.Kirtiman Singh, CGSCwith
Mr.Waize Ali Noor and
Mr.Rohan Anand, Advs. for R-
1.
Mr.Jayant K. Mehta, Mr.Rishi
Agarwala, Ms.Shruti Arora,
Advs. for R-2
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
NAVIN CHAWLA, J. (Oral)
1. This hearing has been held by video conferencing.
2. Issue notice. Notice is accepted by Mr.Kirtiman Singh, CGSC
on behalf of the Union of India. Notice is also accepted for the
counsels for Cox and Kings Global Services Pvt. Ltd. (hereinafter
referred to as the C&K) and World Compliance Technologies Pvt.
Ltd. (hereinafter referred as 'WCT') in the cross petitions.
3. It is the case of the petitioner-C&K that the Bank Guarantees
that have been provided to the respondent-UOI for the extension
agreement for outsourcing of visa/OCI/renunciation services signed on
31.12.2019, were issued on behalf of World Compliance Technologies
Pvt. Ltd. (hereinafter referred as 'WCT') to be submitted by the
petitioner to the respondent-UOI. These Bank Guarantees having
been refused to be accepted by the respondent, cannot be retained by
the respondent.
WP(C) No.5052 /2020 & 5613/2020 Page 2
4. WCT in its petition submits that the Bank Guarantees have been
obtained by the C&K by playing a fraud on it. In this regard, the
learned senior counsel for the petitioner has placed reliance on the
letter dated 17.02.2020 issued by the respondent to C&K clearly
informing them that assignment of the contract by C&K in favour of
WCT shall not be accepted. In spite of such clear stand of the
respondent, C&K by its letter dated 24.02.2020 continued to request
WCT to submit the Bank Guarantees in question, fraudulently
representing that on such Bank Guarantees being given, the request for
accepting the WCT as a partner with C&K will be considered by the
respondent. It is based on this assurance that WCT submitted the
Bank Guarantees dated 29.02.2020 and 10.03.2020.
5. The learned senior counsel for the petitioner further submits that
the fraudulent intent of C&K did not end here but also extended to the
order dated 09.06.2020 passed by this court in WP(C) 3303/2020,
titled Cox And Kings Global Services PVT. LTD v. Union of India,
wherein, C&K on its own gave an undertaking that until these Bank
Guarantees are replaced, they can be retained by the respondent.
6. On the other hand, the learned counsel for the respondent
submits that in terms of the Extension Agreement, C&K was to
provide the Bank Guarantees. As it had submitted Bank Guarantees
issued by WCT, the respondent rejected the same and proceeded
towards the termination of the Agreement. C&K filed a Writ Petition
before this Court, being WP(C) 3303/2020, and on this petition, this
Court was pleased to pass the following order:
WP(C) No.5052 /2020 & 5613/2020 Page 3
"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 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;
WP(C) No.5052 /2020 & 5613/2020 Page 4
(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.
WP(C) No.5052 /2020 & 5613/2020 Page 5
5. The present petition and all pending application are
disposed of in the above terms."
7. The learned counsel for the respondent submits that the intent of
the above order was clear that the Bank Guarantees in question shall
be retained by the respondent until these are replaced by fresh Bank
Guarantees of C&K without involvement of any third party
whatsoever. C&K having failed to discharge its undertaking, the
respondent is entitled to retain the Bank Guarantees, as has been
sought to be done by the Impugned Letters dated 01.07.2020 and
29.07.2020.
8. I have considered the submissions made by the learned counsels
for the parties. Prima facie, the respondent having refused to accept
the Bank Guarantees issued by the WCT in discharge of contractual
obligations of C&K under the Extension Agreement, the very same
Bank Guarantees cannot be kept as security for the performance of the
contract by C&K. The effect of non submission of the Bank
Guarantees would be in form of termination, which action the
respondent has already taken. At the same time, the effect of the order
dated 09.06.2020 of this Court would also have to be considered. By
the said order, C&K had given an undertaking to replace the Bank
Guarantees in question by fresh Bank Guarantees without involvement
of a third party by 30.06.2020. It was further agreed that the Bank
Guarantees in question shall be retained by the respondent till such
fresh Bank Guarantees are furnished. The intent can only be that in
case the petitioner fails to replace such Bank Guarantees, the Bank
WP(C) No.5052 /2020 & 5613/2020 Page 6
Guarantees in question shall be dealt with by the respondent as
security for the contract. However, in this entire scheme the effect
would be on WCT, which was not party in the said Writ Petition.
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.
10. Counter affidavit(s) be filed within a period of two weeks.
Rejoinder(s) thereto, if any, be filed within a period of two weeks
thereafter.
11. List on 12th October, 2020.
NAVIN CHAWLA, J
AUGUST 31, 2020/Arya
WP(C) No.5052 /2020 & 5613/2020 Page 7
