1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 4524 OF 2010 Dominent Financial Services (P) Ltd. ... Petitioner. V/s. The Union of India and another. ... Respondent. S.N.Kantawala i/b. Brijesh Pathak for the petitioner. M.I.Sethna, senior counsel with A.M.Sethna for the respondents. CORAM : V.C.DAGA AND S.J.KATHAWALLA, JJ. DATED : 29th June 2010. P.C. : Perused petition. Heard learned counsel for the petitioner and learned senior counsel for the respondents. 2. The petitioner has filed this petition under Article 226 of the Constitution of India seeking mandamus in the nature of direction against respondent No.2 to release original bank guarantee worth Rs.89 crore furnished by the petitioner by way of security pursuant to the order of the respondent No.2 to defreez its bank accounts which were freezed pursuant to action under the provisions of the Foreign Exchange Management Act, 1999 (FEMA). 2 3. The factual matrix is that the order dated 21st April, 2010 (Ex.C), passed by the adjudicating authority, viz. Special Director of Enforcement while confirming show cause notice, imposed penalty in the sum of Rs.50 lakh on the petitioner- Company, whereas penalty of Rs.5 lakh was imposed on one Shri Ashok Jain, the Director with direction to deposit the said amounts with the office of Directorate of Enforcement, Mumbai by way of bank draft, which the petitioner has deposited during the pendency of this petition. 4. The petitioner is, now, seeking return of the bank guarantee which was for Rs.89 crore furnished on 17th June, 2008 pursuant to the order passed by respondent No.2. In view of the adjudication order, the penalty is fixed against the petitioner- Company and its director in the sum of Rs.55,00,000, which the petitioner has now paid. As such, petitioner is not under any other liability. It is, no doubt, true that against the adjudication order dated 21st April, 2008, appeal is filed by the Revenue and the same is pending before the appellate Authority, but, as yet, no interim orders are obtained by the Revenue so as to prevent the petitioner from seeking withdrawal of its bank guarantee. Under these circumstances, the Revenue is not justified in holding the bank guarantee furnished by the petitioner since the amount of penalty has already been deposited by the petitioner. There is no other liability against the petitioner as on date. The petitioner has filed an undertaking dated 29th June, 2010. The undertaking together with statements made therein is taken on record. 3 5. Learned counsel for the petitioner advanced his submissions in consonance with the prayers made in the petition. 6. Mr.Sethna, learned senior counsel appearing for the Revenue strongly opposed the prayers made in this petition contending that appeal filed by the department with application for stay is pending before the Tribunal as such no orders directing return of the bank guarantee should be passed. 7. Having heard rival views, we do not see any reason in favour of the Revenue permitting them to withhold bank guarantee for want of any financial liability against the petitioner as on date. The amount of penalty has already been paid by the petitioner. The amount involved in the bank guarantee is substantial. No justification is to be found in allowing Revenue to retain it till decision of their appeal. 8. In the above view of the matter, we direct the Revenue to return the bank guarantee to the petitioner forthwith, at any rate, on or before 1st July, 2010. 9. Rule is made absolute in terms of this order with no order as to costs. (S.J.KATHAWALLA, J.) (V.C.DAGA J.)