Case Note & Summary
The petitioner, Kanji Kalyanji & Co., a firm, filed a criminal writ petition under Article 226 of the Constitution of India and Section 482 of the Code of Criminal Procedure, 1973, seeking cancellation of a bank guarantee (G-2-292 dated 16.8.85) drawn on Union Bank of India. The bank guarantee was furnished pursuant to an order dated 16.8.85 of the Deputy Controller of Rationing, G-Region Office, Kandivali (West), Mumbai, further clarified by order dated 25.10.1985. Under these orders, stock of 125,635 kg of Edible Oils and Vanaspati valued at Rs.20,93,310/- was confiscated to the Government, but because the goods were perishable, they were released to the petitioner on production of a bank guarantee of equivalent amount, pending decision of the court case against the petitioner. The bank guarantee was kept alive for more than 21 years without any progress in the prosecution. The petitioner approached the High Court aggrieved by the state's refusal to cancel the bank guarantee. The court heard the learned counsel for the petitioners and the learned Public Prosecutor for the state. The court found that the continued retention of the bank guarantee for such an unreasonable period, without any effective prosecution, was unjustified and amounted to an abuse of process. The court directed the respondent to cancel the bank guarantee and return it to the petitioner. The judgment was delivered by a Division Bench of J.N. Patel and Smt. Roshan Dalvi, JJ., on 5th October 2006.
Headnote
A) Constitutional Law - Extraordinary Jurisdiction - Article 226 of the Constitution of India - Inherent Powers - Section 482 of the Code of Criminal Procedure, 1973 - The petitioner firm sought cancellation of a bank guarantee furnished in 1985 pursuant to an order of the Deputy Controller of Rationing, which was kept alive for over 21 years without any progress in the criminal case. The court held that the continued retention of the bank guarantee for such an unreasonable period, without any effective prosecution, is unjustified and amounts to an abuse of process. The court directed the respondent to cancel and return the bank guarantee. (Paras 1-4) B) Criminal Procedure - Abuse of Process - Section 482 of the Code of Criminal Procedure, 1973 - The court noted that the bank guarantee was furnished pending decision of the court case, but no decision was rendered for over two decades. The court held that keeping the guarantee alive for such a long period without any progress in the case is unreasonable and warrants interference under Section 482 Cr.P.C. to prevent abuse of the process of the court. (Paras 3-4)
Issue of Consideration
Whether the respondent state's refusal to cancel a bank guarantee furnished by the petitioner in 1985, kept alive for over 21 years without any progress in prosecution, is justified and whether the court should exercise its extraordinary jurisdiction under Article 226 and inherent powers under Section 482 Cr.P.C. to direct cancellation.
Final Decision
The court allowed the petition, directing the respondent to cancel the bank guarantee and return it to the petitioner. Rule made absolute.
Law Points
- Article 226 of the Constitution of India
- Section 482 of the Code of Criminal Procedure
- 1973
- Bank Guarantee
- Confiscation
- Perishable Goods
- Unreasonable Delay
- Failure to Prosecute
