Page No.# 1/36 GAHC010180782025 2026:GAU-AS:8376 THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) Case No. : WP(C)/4691/2025 BITUMIX INDIA LLP A LIMITED LIABILITY PARTNERSHIP FIRM INCORPORATED UNDER THE PROVISIONS OF THE LIMITED LIABILITY PARTNERSHIP ACT, 2008 HAVING ITS REGISTERED OFFICE AT C/O PAWAN KUMAR AGARWAL, SIKARIA COMPOUND (COMPLEX), CHRISTIAN BASTI, G.S. ROAD, GUWAHATI, KAMRUP (METRO), ASSAM, PIN- 781005 VERSUS UNION OF INDIA AND 3 ORS. THROUGH MINISTRY OF FINANCE, DEPARTMENT OF FINANCIAL SERVICES, 3RD FLOOR, JEEVANDEEP BUILDING, SANSAD MARG, NEW DELHI- 110001 2:DIRECTOR GENERAL OF FOREIGN TRADE MINISTRY OF COMMERCE AND INDUSTRY VANIJYA BHAWAN A WING 16 AKBAR ROAD NEW DELHI- 110011 THROUGH ITS BRANCH OFFICE DGFT GUWAHATI OFFICE RG BARUAH RD OPP. OVERNITE EXPRESS AIDC NABIN NAGAR GUWAHATI ASSAM-781024 3:RESERVE BANK OF INDIA A BANK ESTABLISHED AND INCORPORATED UNDER THE PROVISIONS Page No.# 2/36 OF RESERVE BANK OF INDIA ACT 1934 HAVING ITS OFFICE AT CENTRAL OFFICE BUILDING SHAHID BHAGT SINGH ROAD FORT MUMBAI-400001. THROUGH ITS BRANCH OFFICE RBI REGIONAL OFFICE GUWAHATI STATION ROAD MAWHATI PAN BAZAAR GUWAHATI ASSAM- 781001 4:ICICI BANK LIMITED A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT 1956 AND CARRYING ON THE BUSINESS OF BANKING UNDER THE BANKING REGULATION ACT 1949 ALSO FUNCTIONING AS AN AUTHORISED DEALER CATEGORY-I BANK UNDER THE FOREIGN EXCHANGE MANAGEMENT ACT 1999 HAVING ITS REGISTERED OFFICE AT ICICI BANK TOWER NEAR CHAKLI CIRCLE OLD PADRA ROAD VADODARA GUJARAT-390007 THROUGH ITS BRANCH GUWAHATI- FANCY BAZAR HAVING ITS OFFICE AT OHIO SHOPPING COMPLEX M.G. ROAD FANCY BAZAR GUWAHATI KAMRUP (METRO) ASSAM- 78100 Advocate for the Petitioner : DR. ASHOK SARAF, B SARMA,MR P K BORA,MR. N N DUTTA,MR S J SAIKIA,MR P BARUAH Advocate for the Respondent : DY.S.G.I., N J DAIMARI(R-4),MR G BORDOLOI(R-4),MS. J BURAGOHAIN(R-4),N J DAIMARI(R-4),MR G BORDOLOI(R-4),MR. K GOGOI(C.G.C),MR. P HAZARIKA(R-3),MR. H S BORAH (R-3) Page No.# 3/36 Linked Case : WP(C)/240/2026 BITUMIX INDIA LLP A LIMITED LIABILITY PARTNERSHIP FIRM INCORPORATED UNDER THE PROVISIONS OF THE LIMITED LIABILITY PARTNERSHIP ACT 2008 HAVING ITS REGISTERED OFFICE AT C/O PAWAN KUMAR AGARWAL SIKARIA COMPOUND (COMPLEX) CHRISTIAN BASTI G.S. ROAD GUWAHATI KAMRUP (M) ASSAM -781005. VERSUS THE UNION OF INDIA AND 3 ORS THROUGH MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES 3RD FLOOR JEEVAN DEEP BUILDING SANSAD MARG NEW DELHI DELHI 110001 2:DIRECTOR GENERAL OF FOREIGN TRADE MINISTRY OF COMMERCE AND INDUSTRY VANIJYA BHAWAN A WING 16 AKBAR ROAD NEW DELHI 110011 THROUGH ITS BRANCH OFFICE DGFT GUWAHATI OFFICE RG BARUAH RD OPP. OVERNITE EXPRESS AIDC NABIN NAGAR GUWAHATI ASSAM 781024 3:RESERVE BANK OF INDIA A BANK ESTABLISHED AND INCORPORATED UNDER THE PROVISIONS OF RESERVE BANK OF INDIA ACT 1934 HAVING ITS OFFICE AT CENTRAL OFFICE BUILDING SHAHID BHAGAT SINGH ROAD FORT MUMBAI - 400 001 THROUGH ITS BRANCH OFFICE Page No.# 4/36 RBI REGIONAL OFFICE GUWAHATI STATION RD MAWHATI PAN BAZAAR GUWAHATI ASSAM- 781001 4:ICICI BANK LIMITED A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT 1956 AND CARRYING ON THE BUSINESS OF BANKING UNDER THE BANKING REGULATION ACT 1949 ALSO FUNCTIONING AS AN AUTHORISED DEALER CATEGORY-I BANK UNDER THE FOREIGN EXCHANGE MANAGEMENT ACT 1999 HAVING ITS REGISTERED OFFICE AT ICICI BANK TOWER NEAR CHAKLI CIRCLE OLD PADRA ROAD VADODARA GUJARAT- 390007 THROUGH ITS BRANCH GUWAHATI- FANCY BAZAR HAVING ITS OFFICE AT OHIO SHOPPING COMPLEX M.G. ROAD FANCY BAZAR GUWAHATI KAMRUP (M) ASSAM- 781001 ------------ Advocate for : DR. A SARAF Advocate for : DY.S.G.I. appearing for THE UNION OF INDIA AND 3 ORS – B E F O R E – HON’BLE MR. JUSTICE KAUSHIK GOSWAMI For the Petitioner : Dr. A. Saraf; Mr. P Boruah; Mr. N N Dutta; Mr. S J Saikia; Mr. P K Bora; Mr. B Sarma; Mr. A Kaushik For the Respondent(s) : Mr. K Gogoi, learned CGC for respondent Page No.# 5/36 Nos.1 & 2; Mr. P Hazarika, learned counsel for therespondent No. 3; Mr. K N Choudhury; Mr. G Bordoloi; Mr. J B Gohain, learned counsel for the respondent No. 4. Date on which judgment is reserved : 04.06.2026 Date of pronouncement of judgment : 12.06.2026 Whether the pronouncement is of the operative part of the judgment ? : No. Whether the full judgment has been pronounced ? : Yes. J UDGMENT & O RDER (CAV) Heard Dr. A Saraf, learned senior counsel assisted by Mr. A Kaushik, learned counsel for the petitioner. Also heard Mr. K Gogoi, learned CGC for the respondent Nos. 1 & 2; Mr. P Hazarika, learned counsel for the respondent No. 3 as well as Mr. K N Choudhury, learned Senior counsel assisted by Mr. G Bordoloi, learned counsel for the respondent No. 4 in both these writ petitions. 2. Since common questions of fact and law arise for consideration in these two writ petitions, they were heard analogously and are being disposed of by this common judgment. Page No.# 6/36 3. The challenge in both writ petitions is directed against the decision of Respondent No.4, ICICI Bank Limited, an Authorised Dealer Category-I Bank under the Foreign Exchange Management Act, 1999 (for short, “FEMA”), in declining to process certain foreign exchange transactions arising out of merchant trade transactions undertaken by the petitioner. 4. The petitioner contends that the refusal of the respondent bank is arbitrary, unsupported by law and has resulted in substantial commercial prejudice. 5. Respondent No.4 opposes the writ petitions and contends that the impugned action was taken strictly in accordance with the contractual framework governing the parties, the declarations furnished by the petitioner and the regulatory obligations resting upon an Authorised Dealer Bank under the FEMA-RBI regime. FACTUAL BACKGROUND: 6. The petitioner is engaged in international trade and maintains banking relationships with Respondent No.4. 7. It is not in dispute that the petitioner had availed various banking and credit facilities from Respondent No.4 and that the relationship between the parties was governed by facility documents executed between them. 8. The Working Capital Facility Agreement/Master Facility Agreement [hereinafter referred to as facility agreement] dated 25.01.2023 entered into by the petitioner with the respondent No. 4 for availing working capital credit facilities up to an overall limit of Rs. 10 Crore is enclosed to both the writ petitions. The execution of such agreement and its binding nature are not in dispute. 9. During the course of business, the petitioner approached Respondent No.4 for processing foreign exchange transactions arising from merchant trade transactions undertaken by them. 10. The transactions were required to be processed within the framework of FEMA, Page No.# 7/36 the regulations framed thereunder, directions issued by the Reserve Bank of India and the contractual documents including the facility agreement executed between the parties. 11. As part of the processing requirements, Respondent No.4 called upon the petitioner to furnish declarations and supporting documents relating to sanctions compliance, origin of goods, countries involved in the transaction and other particulars relevant for regulatory and compliance scrutiny. 12. The declarations sought by the respondent bank were furnished by the petitioner. 13. To be specific, in WP(C) No. 4691/2025, the petitioner declared the below mentioned contract detail concluded by them with overseas seller. S. No. Transaction details Name 1. Country of origin of goods ** (See Note Below) United Arab Emirates 2. Country of loading of goods*** United Arab Emirates 3. Port of loading of goods Jabel Ali 4. Port and country of discharge of goods (if other than India) Bangladesh 5. Country of trans-shipment (if any) 6. Name of the transport vessel /airline etc. N/A 14. In addition to the aforesaid, declarations were also given by the petitioner to the respondent No. 4 in respect of the subject import remittance towards merchant trade transaction in question in terms of the conditions of the facility agreement and the applicable rules. Three of such declarations are extracted hereunder for ready reference: “To The Branch Manager Date: 10/01/2025 ICICI Bank Ltd. Page No.# 8/36 Ghy. Declaration for Import remittance towards Merchant Trade Transaction 1/ We... BITUMIX INDIA LLP..... (ordering/importing party) hereby confirm that the underlying transaction of AED 605795.66 for which funds are being remitted does not involve: a) any sanctioned/designated/restricted/blocked person or entity (Beneficiary/Shipping line/Vessel etc.); b) any comprehensive sanctioned country/region (Iran, Sudan, Syria, Cuba, Crimea Region of Ukraine and North Korea); and c) goods which have been sourced or originated from a comprehensive sanctioned country (Iran, Sudan, Syria, Cuba, Crimea Region of Ukraine and North Korea) . BITUMIX INDIA LLP Designated Partner” …………………………………………………………………………………………. “To The Branch Manager Date: 18/11/2024 ICICI Bank Ltd. Ghy. Declaration for Import remittance towards Merchant Trade Transaction 1/We BITUMIX INDIA LLP (ordering/importing party) hereby confirm that the underlying transaction of AED 64959,00 AED for which funds are being remitted does not involve: a) any sanctioned/designated/restricted/blocked person or entity (Beneficiary/ Shipping line/ Vessel etc); b) any comprehensive sanctioned country/region (Iran, Sudan, Syria, Cuba, Crimea Region of Ukraine and North Korea); and c) goods which have been sourced or originated from a comprehensive sanctioned country (Iran, Sudan, Syria, Cuba, Crimea Region of Ukraine and North Korea) BITUMIX INDIA LLP” …………………………………………………………………………………………… “To The Branch Manager Date: 06/01/2025 ICICI Bank Ltd. Page No.# 9/36 Ghy. Declaration for Import remittance towards Merchant Trade Transaction I/ We... BITUMIX INDIA LLP..... (ordering/importing party) hereby confirm that the underlying transaction of AED 665829.071 for which funds are being remitted does not involve: a) any sanctioned/designated/restricted/blocked person or entity (Beneficiary/Shipping line/Vessel etc.); b) any comprehensive sanctioned country/region (Iran, Sudan, Syria, Cuba, Crimea Region of Ukraine and North Korea); and c) goods which have been sourced or originated from a comprehensive sanctioned country (Iran, Sudan, Syria, Cuba, Crimea Region of Ukraine and North Korea) BITUMIX INDIA LLP Designated Partner” 15. The record unequivocally demonstrates that the petitioner had represented, inter alia, that the transactions in question did not involve any sanctioned jurisdiction, including Iran, and that the goods forming the subject-matter of the transactions were neither sourced from nor originated in any country, including Iran, to which applicable sanctions regimes extended. Such representations constituted material declarations on the basis of which the transactions were processed. 16. Thereafter, information came to the notice of Respondent No.4 which, according to the bank, disclosed an Iranian nexus in relation to the transactions and raised concerns regarding the accuracy of the declarations furnished by the petitioner. 17. The respondent bank thereafter sought clarifications from the petitioner through a series of communications. 18. According to Respondent No.4, the explanations furnished by the petitioner did not satisfactorily address the concerns which had arisen. 19. The respondent bank consequently undertook a compliance review of the transactions. 20. Upon completion of such review, Respondent No.4 declined to process the Page No.# 10/36 transactions. 21. Aggrieved thereby, the petitioner has instituted the present writ petitions under Article 226 of the Constitution of India. SUBMISSIONS: 22. Dr. A Saraf, learned senior Counsel appearing for the petitioner submits that the impugned action is arbitrary and unsustainable in law. 23. It is contended that there exists no prohibition under FEMA, the regulations framed thereunder or any direction issued by the Reserve Bank of India prohibiting the transactions in question. 24. It is further contended that Respondent No.4 could not refuse to process the transactions merely on the basis of sanctions concerns arising under foreign regulatory regimes. 25. Learned senior counsel further submits that the petitioner had no knowledge of any alleged Iranian nexus and that no material exists establishing any deliberate misrepresentation on their part. 26. Per contra, Mr. K N Choudhury, learned senior counsel appearing for Respondent No.4 submits that the issue is not whether the transaction ultimately violated any law but whether the bank acted lawfully and reasonably while discharging its contractual and regulatory obligations. 27. It is contended that the petitioner had expressly undertaken sanctions-related obligations under the facility agreement and had furnished declarations concerning sanctions compliance and origin of goods. 28. It is further submitted that once information surfaced giving rise to sanctions concerns and casting doubt upon the declarations furnished by the petitioner, the respondent bank was entitled, and indeed obliged, to undertake enhanced scrutiny and determine whether the transactions could be processed consistently with the Page No.# 11/36 governing contractual and regulatory framework. 29. Learned senior counsel appearing for Respondent No.4 further contends that the impugned refusal was an action expressly contemplated by the facility agreement and cannot therefore be characterized as arbitrary or unauthorized. 30. I have heard the learned counsels for the contending parties and perused the materials available on record. 31. The following issues arise for determination: (i) Whether the writ petitions are maintainable; (ii) Whether the petitioner is liable to be non-suited on the ground of suppression of material facts; (iii) Whether Respondent No.4 possessed authority under the governing contractual and regulatory framework to undertake sanctions-related scrutiny and refuse processing of the transactions; and (iv) Whether the impugned decision suffers from arbitrariness, irrationality, mala fides or procedural impropriety warranting interference under Article 226 of the Constitution; MAINTAINABILITY OF THE WRIT PETITIONS: 32. Respondent No. 4 has raised a preliminary objection to the maintainability of the present writ petitions on the ground that it is a private scheduled commercial bank and is therefore not amenable to writ jurisdiction. 33. The objection necessitates examination of the nature of the controversy and the character of the function being performed by respondent No. 4 in the facts of the present case. 34. There can be no dispute that respondent No. 4 is not a State authority within the meaning of Article 12 merely because it carries on banking business. Page No.# 12/36 35. In Federal Bank Ltd. v. Sagar Thomas, reported in (2003) 10 SCC 733, the Apex Court held that a private banking institution does not become amenable to writ jurisdiction merely because its activities are subject to statutory regulation. 36. Likewise, in S. Sobha v. Muthoot Finance Ltd., reported in 2025 SCC OnLine SC 177, the Apex Court reiterated that extensive regulatory supervision, by itself, does not convert a private financial institution into a public authority. 37. However, those decisions do not lay down an inflexible proposition that a writ petition can never be maintained against a private banking institution. 38. The true test is not the corporate identity of the respondent alone but the nature of the function being performed and the character of the impugned action. 39. Respondent No. 4 has also contended that the disputes arise out of contractual arrangements between private parties and involve matters essentially commercial in nature. 40. The objection cannot be accepted in the broad form in which it is urged. 41. Respondent No.4 is an Authorised Dealer Category-I Bank functioning under the statutory and regulatory framework established under FEMA and the directions issued by the Reserve Bank of India. 42. The impugned action concerns the processing of foreign exchange transactions undertaken by the respondent bank while discharging obligations arising under the FEMA framework. 43. The challenge mounted by the petitioner is founded upon allegations of arbitrariness and unreasonableness in the exercise of powers claimed by the respondent bank while acting in its capacity as an Authorised Dealer Bank. 44. It is well settled that the existence of contractual relations between parties does not by itself exclude judicial review where allegations of arbitrariness are raised in relation to actions having a public law element. Page No.# 13/36 45. In ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd., reported in (2004) 3 SCC 553, the Apex Court held that a writ petition is not rendered non-maintainable merely because the dispute arises in a contractual setting, particularly where allegations of arbitrariness and public law infirmity are raised. 46. In Mahabir Auto Stores v. Indian Oil Corporation, reported in (1990) 3 SCC 752, the Apex Court recognized that arbitrariness remains amenable to judicial scrutiny even where contractual relationships exist. 47. In Kumari Shrilekha Vidyarthi v. State of U.P., reported in (1991) 1 SCC 212, the Apex Court emphasized that contractual dealings do not create an area immune from constitutional scrutiny where public law considerations are involved. 48. The present challenge therefore cannot be rejected at the threshold merely because the relationship between the parties is also governed by contract. 49. Accordingly, the writ petitions are held to be maintainable. SUPPRESSION OF MATERIAL FACTS: 50. Respondent No.4 has further contended that the petitioner has not approached this Court with clean hands and are therefore not entitled to any discretionary relief. 51. According to the respondent bank, material particulars relating to the transactions and the sanctions concerns which subsequently surfaced were not fully disclosed. Extracted in this regard, relevant paragraph of the affidavit-in-opposition filed by the respondent No. 4 on 22.01.2025 in WP(C) No. 4691/2025, reads as under: - “U. The Respondent undertook the due diligence as regards the said transactions, with the Internal Maritime Bureau (IMB) to comply with RBI Circular. The IMB, a specialized body, is recognized under the RBI Circular for undertaking authentication of shipping documents such as bills of lading and air waybills. The IMB report in respect to the subject Bills of Lading under both the transactions shockingly revealed that the shipments of goods did not take place as per the stated references in the Page No.# 14/36 Bills of Lading. The report provided a detailed timeline of the vessels used for shipment of the goods from Bandar Abbas, Iran (not Jebel Ali, UAE as was represented in the various documents) to Port Klang, Malaysia, where the goods were further transshipped using another vessel before final discharge at Chittagong, Bangladesh. The report further stated that the vessels used for shipment of the goods - Artenos and Golsan, are both named on the US OFAC SDN sanctions list. Both vessels are ultimately owned by the Islamic Republic of Iran Shipping Lines Company (IRISL) who are also named on the OFAC SDN list. Additionally, the report also stated that (i) the containers listed on the Bills of Lading are owned and operated by HDS Lines, Iran, which are effectively a subsidiary of IRISL, and are also named on the OFAC SDN list; (ii) Avrasya Container Shipping Lines, the carrier named on the two Bills of lading is also closely related to IRISL and HDS Lines. The report concluded that the Bills of Lading were misrepresented by the submitting party and that actual details were omitted. It further concluded that the port of loading and vessel name were misrepresented and omitted, and the shipments did not take place as described on the Bills of Lading; the containers were exported from Iran, not the UAE, on a vessel currently subject to OFAC sanctions.” 52. This Court is conscious of the settled principle that a litigant invoking the extraordinary jurisdiction of this Court must make a full and fair disclosure of material facts. 53. At the same time, every omission or disputed factual assertion does not amount to suppression warranting dismissal of proceedings at the threshold. 54. The alleged Iranian nexus and the consequences flowing therefrom constitute one of the principal issues in the lis in hand. 55. The materials relied upon by Respondent No.4 have been placed before this Court and have been subjected to detailed scrutiny during the course of hearing. 56. In the facts of the present case, this Court is not persuaded to non-suit the petitioner solely on the ground of suppression. 57. The objection relating to clean hands is accordingly rejected as a preliminary ground for dismissal. Page No.# 15/36 58. The matter must therefore be examined on merits. STATUTORY AND REGULATORY FRAMEWORK: 59. The transactions in question fall within the domain of foreign exchange regulation governed by FEMA and the directions issued by the Reserve Bank of India. 60. Under the statutory framework, Authorised Dealer Banks occupy a central position in the regulation and processing of foreign exchange transactions. 61. Such banks are not mere conduits through which foreign exchange transactions pass. 62. They are entrusted with important statutory and regulatory responsibilities and are required to ensure compliance with the framework governing foreign exchange transactions. 63. Section 10 of FEMA assumes significance in this regard, which reads as under: “10. Authorised person.-(1) The Reserve Bank may, on an application made to it in this behalf, authorise any person to be known as authorised person to deal in foreign exchange or in foreign securities, as an authorised dealer, money changer or off-shore banking unit or in any other manner as it deems fit. (2) An authorisation under this section shall be in writing and shall be subject to the conditions laid down therein. (3) An authorisation granted under sub-section (1) may be revoked by the Reserve Bank at any time if the Reserve Bank is satisfied that- (a) it is in public interest so to do; or (b) the authorised person has failed to comply with the condition subject to which the authorisation was granted or has contravened any of the provisions of the Act or any rule, regulation, notification, direction or order made thereunder. Provided that no such authorisation shall be revoked on any ground referred to in clause (b) unless the authorised person has been given a reasonable opportunity of making a representation in the matter. (4) An authorised person shall, in all his dealings in foreign exchange or foreign security, comply with such general or special directions or orders as the Reserve Bank may, from time to time, think fit to give, and, except with the previous permission of the Reserve Bank, an authorised person shall not engage in any Page No.# 16/36 transaction involving any foreign exchange or foreign security which is not in conformity with the terms of his authorisation under this section. (5) An authorised person shall, before undertaking any transaction in foreign exchange on behalf of any person, require that person to make such declaration and to give such information as will reasonably satisfy him that the transaction will not involve, and is not designed for the purpose of any contravention or evasion of the provisions of this Act or of any rule, regulation. notification, direction or order made thereunder, and where the said person refuses to comply with any such requirement or makes only unsatisfactory compliance therewith, the authorised person shall refuse in writing to undertake the transaction and shall, if he has reason to believe that any such contravention or evasion as aforesaid is contemplated by the person, report the matter to the Reserve Bank. (6) Any person, other than an authorised person, who has acquired or purchased foreign exchange for any purpose mentioned in the declaration made by him to authorised person under sub-section (5) does not use it for such purpose or does not surrender it to authorised person within the specified period or uses the foreign exchange so acquired or purchased for any other purpose for which purchase or acquisition of foreign exchange is not permissible under the provisions of the Act or the rules or regulations or direction or order made thereunder shall be deemed to have committed contravention of the provisions of the Act for the purpose of this section.” The aforesaid provision thus recognizes the pivotal role of Authorised Persons and Authorised Dealers within the foreign exchange regulatory framework. 64. Under Section 10(5), an Authorised Person is required, before undertaking any transaction in foreign exchange, to obtain such declarations, information and documents as may reasonably satisfy it that the transaction neither involves nor is designed for the purpose of any contravention or evasion of the provisions of FEMA or any Rule, Regulation, Notification, Direction or Order made thereunder. 65. Put differently, Section 10(5) casts upon an Authorised Dealer Bank a statutory obligation to undertake appropriate scrutiny, verification, due diligence and compliance review before processing a foreign exchange transaction. 66. An Authorised Dealer is therefore required to satisfy itself that the transaction placed before it is bona fide and is not intended to contravene or circumvent the Page No.# 17/36 provisions of FEMA or the rules, regulations, notifications, directions or orders issued thereunder. Viewed in the light of these statutory obligations, respondent No. 4 was fully justified in subjecting the transaction, to closer scrutiny, seeking further particulars concerning the shipment and its provenance, evaluating potential sanctions related implications, and undertaking such enhanced due diligence as the attendant circumstances reasonably warranted. 67. This Court is, therefore, of the considered view that an Authorised Dealer acting under Section 10(5) is neither expected nor permitted to function mechanically. Rather, it is required to undertake an independent assessment of the transaction placed before it and to satisfy itself that the transaction complies with the applicable statutory and regulatory framework. 68. The RBI framework governing Merchanting Trade Transactions similarly requires Authorised Dealer Banks to satisfy themselves regarding the genuineness, bona fides and regulatory compliance of the transactions undertaken through them. Marchanting trade, broadly stated, refers to a transaction wherein an Indian intermediary procures goods from one foreign jurisdiction and supplies them to another foreign jurisdiction without the goods entering India. In the present cases, the petitioner, acting as a merchant trader, received purchase orders from buyers in Bangladesh and placed corresponding back-to-back orders from Leoti Trading LLC, UAE, for direct shipment of the goods to the foreign buyers without the goods entering India. The petitioner sought processing of the related foreign exchange transactions through Respondent No.4, including remittances payable towards the overseas supplier against the underlying trade documents. The respondent bank, being the Authorised Dealer Bank through which the transaction was proposed to be routed, was required to independently scrutinize the transaction and satisfy itself regarding the correctness of the declarations furnished, the genuineness of the trade, the shipment particulars and compliance with the applicable regulatory requirements before permitting release of remittance. Page No.# 18/36 69. The regulatory framework further mandates adherence to KYC requirements, Anti- Money Laundering obligations and risk-based due diligence measures. 70. The materials placed before the Court further indicate that regulated entities are expected to take FATF-related concerns into account while undertaking scrutiny of international transactions. 71. Consequently, where circumstances emerge giving rise to sanctions-related concerns or raising doubts regarding the accuracy of information furnished by a customer, an Authorised Dealer Bank cannot be expected to mechanically process the transaction without undertaking an appropriate compliance assessment. 72. On the contrary, the statutory and regulatory framework obliges the bank to examine the matter, seek clarifications where necessary and satisfy itself regarding the permissibility of the transaction before proceeding further. 73. The authority to undertake scrutiny necessarily includes the authority to call for explanations, verify information and assess the implications of material which comes to the notice of the bank during the course of such scrutiny. CONTRACTUAL FRAMEWORK GOVERNING THE PARTIES: 74. Having considered the statutory and regulatory framework governing the transactions in question, this Court now turns to the contractual framework governing the relationship between the parties. The rights and obligations of the parties are not determined solely by the FEMA-RBI regime but are also regulated by the facility agreement voluntarily executed between them. The parties are bound by the terms thereof and the legality of the impugned action necessarily falls to be examined in the backdrop of the contractual obligations undertaken by the petitioner and the rights reserved in favour of Respondent No.4. 75. The facility agreement placed on record contains detailed provisions governing sanctions compliance, representations and warranties furnished by the borrower, Page No.# 19/36 obligations relating to the utilization of banking facilities and the consequences flowing from any breach thereof. Of particular significance are the provisions dealing with sanctions compliance and the rights of the respondent bank in relation to transactions attracting sanctions-related concerns. 76. Clause 6.1 of the General Conditions forming part of Schedule II to the facility agreement contains a series of continuing representations, declarations, warranties and covenants furnished by the petitioner. Clause 6.1(i) specifically provides that all information furnished by the borrower to the respondent bank shall be true and accurate in all material respects, shall not be misleading and shall not omit any material fact, the omission of which would render any statement misleading. The said representations were agreed to remain operative not only on the date of execution of the facility agreement but also throughout the subsistence of the facilities. 77. More importantly, Clauses 6.1(xiii) and 6.1(xiv) specifically deal with sanctions compliance. Under Clause 6.1(xiii), the petitioner represented and undertook that neither it nor any person benefiting from the facilities was a sanctioned person and further agreed to ensure that the transactions undertaken through the facilities did not violate any applicable sanctions or involve any sanctioned person or entity. The clause expressly refers to sanctions promulgated by, inter alia, the Office of Foreign Assets Control (OFAC), the United Nations, the European Union, India and other relevant jurisdictions. The petitioner further agreed not to utilize the facilities for financing transactions involving persons or entities subject to such sanctions and undertook to indemnify the respondent bank against losses arising from any breach of the sanctions-related representations and undertakings. 78. Clause 6.1(xiv) assumes particular significance. The said clause expressly recognizes that sanctions may become applicable to the facilities and transactions thereunder, including documentary credits, guarantees, disbursements, payments, purpose and end use of facilities, origin or shipment of goods through particular Page No.# 20/36 countries, ports, vessels, liners, persons or entities, including correspondent banks and the facility office. The clause further provides that disbursement, issuance, payment and processing under the facilities may become subject to sanctions considerations and expressly reserves to the respondent bank an unconditional right to refuse processing of any transaction which violates or may violate any sanctions. The agreement also treats breach of the contractual obligations and representations as an event of default and reserves wide powers in favor of the respondent bank, including cancellation or suspension of facilities and enforcement of contractual remedies. 79. A plain reading of the aforesaid provisions leaves no manner of doubt that the petitioner had expressly undertaken to ensure that the transactions undertaken through the banking facilities did not violate any applicable sanctions and that no sanctioned person or entity was involved in such transactions. Significantly, the petitioner specifically agreed that the sanctions contemplated under the agreement included, inter alia, those promulgated by the Office of Foreign Assets Control (OFAC), the United Nations, the European Union, India and other relevant jurisdictions. 80. The agreement further recognizes that sanctions-related concerns may arise in relation to the facilities and transactions thereunder, including documentary credits, guarantees, disbursements, payments, purpose and end-use of the facilities, origin of goods, shipment through particular countries or ports, vessels, liners, correspondent banks and participating entities. 81. Clause 6.1(xiii) casts a positive obligation upon the petitioner to ensure that the transactions do not violate any applicable sanctions and that no sanctioned persons or entities are involved in such transactions. The petitioner had agreed not to utilize the facilities for financing any transaction involving a person or entity subject to sanctions. 82. More importantly, Clause 6.1(xiv) expressly contemplates that sanctions may become applicable with respect to the facilities and/or transactions thereunder, including by reason of the origin or shipment of goods through particular countries, Page No.# 21/36 ports, vessels, liners, persons or entities. The said clause specifically provides that disbursement, issuance, payment and/or processing under the facilities may become subject to sanctions considerations and reserves to the respondent bank an unconditional right to refuse processing of any transaction which violates or may violate any sanctions. 83. The contractual allocation of risk is therefore explicit and unequivocal. The parties consciously agreed that sanctions-related concerns arising from the countries involved in the transaction, origin of goods, shipment routes, vessels, correspondent banking arrangements or participating entities would constitute relevant considerations for the respondent bank while determining whether a transaction could be processed. 84. Equally significant is Clause 6.1(i), whereby the petitioner represented and warranted that all information furnished to the respondent bank was true and accurate in all material respects, was not misleading and did not omit any material fact, the omission of which would render any statement misleading. 85. The sanctions provisions do not appear in the agreement as incidental or ancillary stipulations. They form an integral part of the compliance framework governing the relationship between the parties and constitute binding contractual obligations voluntarily undertaken by the petitioner while availing the banking facilities. 86. Once the parties consciously agreed that sanctions concerns relating to the countries involved in the transaction, origin of goods, shipment routes, vessels, correspondent banking arrangements and participating entities would be relevant considerations, the respondent bank cannot be faulted for examining those very considerations when information subsequently surfaced giving rise to such concerns. 87. This Court finds that the sanctions provisions contained in the facility agreement are clear, unambiguous and capable of only one interpretation. They expressly confer upon Respondent No.4 the contractual right to refuse processing of transactions which violate or may violate sanctions obligations. Page No.# 22/36 88. Consequently, once information came to the notice of the respondent bank giving rise to sanctions-related concerns and casting doubt upon the declarations and representations furnished by the petitioner, the respondent bank was not only entitled but contractually justified in re-examining the transactions and, if not satisfied, declining to process them. 89. The impugned refusal was therefore not an action dehors the contractual framework governing the parties. On the contrary, it was an action expressly contemplated and authorized by the facility agreement itself. 90. This Court is accordingly unable to accept the contention that the respondent bank acted without authority or beyond the scope of the contractual arrangements binding upon the parties. 91. The facility agreement, read as a whole, substantially supports the stand taken by Respondent No.4 and furnishes a complete contractual foundation for the course of action ultimately adopted by it. 92. Viewed thus, the refusal complained of by the petitioner was therefore not dehors the contractual framework but was an action traceable to rights expressly reserved under the agreement governing the parties. DECLARATIONS FURNISHED BY THE PETITIONER: 93. The record further reveals that, in connection with the transaction in question, the petitioner furnished the declarations and certifications sought by Respondent No.4. 94. These declarations formed an important component of the compliance framework within which the respondent bank was required to evaluate and process the transactions. 95. In particular, the petitioner expressly represented that the transactions did not involve any sanctioned jurisdiction, including, inter alia, Iran, and the goods forming the subject-matter of the transactions were neither sourced from nor originated in any Page No.# 23/36 jurisdiction, including Iran, attracting the application of sanctions or sanctions related restrictions. 96. The aforesaid declarations were not mere procedural formalities or routine disclosures furnished in the ordinary course. Rather, they constituted material representations upon which the respondent bank was entitled, and indeed required, to rely while assessing the permissibility, regulatory compliance and processability of the transactions. 97. Respondent No.4 has subsequently placed materials on record which, according to it, disclosed an Iranian nexus in relation to the transactions. Admittedly, OFAC sanction existed in respect of Iran at the relevant point of time. 98. Whether such nexus ultimately stood established in every factual detail is not a matter which this Court considers necessary to conclusively determine in the present proceedings. 99. Nevertheless, the material which subsequently came to the notice of the respondent bank was sufficient to cast serious doubt upon the accuracy of the declarations earlier furnished by the petitioner. 100. Once such doubt arose, the respondent bank could not be expected to proceed with the transactions as though the declarations continued to remain unquestioned. THE PLEA OF LACK OF KNOWLEDGE: 101. Learned Senior Counsel appearing for the petitioner has contended that the petitioner itself was unaware of any Iranian nexus and therefore cannot be blamed for any discrepancy which may subsequently have emerged. 102. The submission does not persuade this Court. 103. The transactions in question were international trade transactions involving substantial commercial value and multiple jurisdictions. 104. The declarations furnished to the respondent bank were not casual statements Page No.# 24/36 but formed the foundation upon which the bank was expected to undertake its regulatory and compliance assessment. 105. In transactions of the present nature, the obligation to furnish complete, accurate and truthful particulars rests squarely upon the customer seeking processing of the transaction through the authorized dealer bank. 106. Once information came to the notice of the respondent bank indicating an Iranian nexus and thereby casting serious doubt upon the correctness of the declarations furnished by the petitioner, the respondent bank was fully justified in reassessing the transaction. Such reassessment cannot be faulted merely because the petitioner subsequently attributed the discrepancy to lack of knowledge or inadvertence. 107. A subsequent plea of ignorance cannot compel an Authorised Dealer Bank to disregard material information that comes to its notice during the course of compliance review. On the contrary, it was the responsibility of the petitioner, before furnishing the declarations in question, to exercise due diligence and verify the origin of the goods, the shipment particulars and the vessel involved in the transaction. In modern international trade, such information is ordinarily available and capable of verification. The obligation does not end with the mere submission of a declaration; it continues throughout the transactions and binds the declarant to ensure that the representations and declarations made to the bank remain true, accurate and not misleading. Where subsequent facts emerge demonstrating a material departure from the declarations furnished, the bank cannot be compelled to proceed as though such information had never come to light. 108. This Court also finds it difficult to accept that in international trade transactions of the present nature, involving shipment of goods across jurisdictions, the provenance, routing and movement of goods would be matters wholly beyond the knowledge of the parties undertaking the transaction. Page No.# 25/36 109. Be that as it may, even assuming that the petitioner lacked prior knowledge of the Iranian nexus alleged by the respondent bank, such circumstance would not dilute the respondent bank’s entitlement and obligation to act upon information subsequently received by it. 110. The respondent bank was therefore justified in treating the subsequent information as a matter requiring enhanced scrutiny and reassessment of the declarations furnished by the petitioner. THE OFAC CONTENTION: 111. A substantial part of the arguments advanced on behalf of the petitioner centered around the contention that sanctions administered by the Office of Foreign Assets Control (OFAC) constitute measures of United States law and do not possess force of law within India. 112. It was contended that Respondent No.4 could not refuse to process the transactions merely because the transactions may attract adverse consequences under a foreign sanctions regime. 113. There can be little dispute that the mere existence of a foreign sanctions regime does not, by itself, render such sanctions enforceable as part of municipal law in India. 114. Article 51(c) of the Constitution enjoins the State to foster respect for international law and treaty obligations. The said provision must be read in conjunction with Article 253 of the Constitution. In National Legal Services Authority v. Union of India, reported in (2014) 5 SCC 438, the Apex Court comprehensively examined the relationship between international law and municipal law in India. The Apex Court also referred to Kesavananda Bharati v. State of Kerala, reported in (1973) 4 SCC 225, wherein it was observed that constitutional provisions may, where appropriate, be construed in the light of India’s international commitments and obligations. Similarly, in Apparel Export Promotion Council v. A.K. Chopra, reported in (1999) 1 SCC 759, the Apex Court held that Page No.# 26/36 international conventions and norms may be accorded due regard while construing domestic law, particularly where no inconsistency exists between the two and where domestic law admits of such interpretation. 115. In Vishaka v. State of Rajasthan, reported in (1997) 6 SCC 241, the Apex Court reiterated that international conventions and norms, so long as they are not inconsistent with the fundamental rights guaranteed under the Constitution or with domestic law, may be relied upon to inform and illuminate the interpretation of municipal law, particularly in areas where domestic law is silent or where such interpretation advances the object and spirit of constitutional guarantees. 116. Equally, in Jolly George Varghese v. Bank of Cochin, reported in (1980) 2 SCC 360, the Apex Court clarified that international covenants do not automatically acquire the force of municipal law merely by virtue of their existence or ratification. 117. The cumulative effect of the aforesaid decisions, particularly Jolly George Varghese (supra) and National Legal Services Authority (supra), is that Indian law recognizes a well-defined hierarchy governing the domestic operation of international norms. At the apex of that hierarchy stands legislation enacted by Parliament. International obligations attain enforceable municipal status only to the extent recognised by the Constitution or incorporated through legislation. Resolutions of the United Nations Security Council, when implemented through the statutory mechanism contemplated under the United Nations (Security Council) Act, 1947, may consequently acquire binding force within the domestic legal framework. 118. As explained in National Legal Services Authority (supra), international obligations do not attain enforceable municipal status merely because they exist in the sphere of international law. Their domestic operation is contingent upon the constitutional and statutory framework applicable in India. Even treaties duly ratified by India ordinarily operate as interpretative aids unless and until Parliament enacts Page No.# 27/36 legislation giving them domestic effect. The Apex Court contrasted this position with jurisdictions such as the United States, where treaties may, by constitutional design, enjoy a different status within the domestic legal order. 119. Consequently, sanctions administered by the Office of Foreign Assets Control (OFAC) remain measures of domestic law of the United States, binding in the first instance upon persons and entities subject to that jurisdiction. Their recognition or relevance within India must therefore be examined in the context of the applicable contractual, regulatory and statutory framework and cannot be assumed to constitute enforceable municipal law merely by virtue of their existence. 120. However, the controversy before this Court does not require determination of that question in its widest amplitude. 121. The respondent bank is not seeking to justify its action solely on the footing that OFAC sanctions constitute binding law applicable within India. 122. The foundation of the respondent bank’s case is considerably broader. 123. Respondent No.4 relies upon: (i) the contractual obligations voluntarily undertaken by the petitioner under the facility agreement; (ii) the declarations furnished by the petitioner regarding sanctions compliance and origin of goods; (iii) the statutory and regulatory obligations resting upon an Authorised Dealer Bank under FEMA and RBI directions; and (iv) information subsequently received during the course of compliance review. 124. This Court has already found that the subject facility agreement expressly contemplated sanctions-related concerns and conferred upon the respondent bank the right to refuse processing of transactions which violate or may violate sanctions obligations. Page No.# 28/36 125. This Court has further found that the declarations furnished by the petitioner subsequently became the subject matter of doubt upon information coming to the notice of the respondent bank. 126. In such circumstances, the legality of the impugned action does not depend exclusively upon the independent enforceability of OFAC sanctions within India. 127. The matter can be decided on the basis of the contractual and regulatory framework governing the parties. EFFECT OF THE SUBSEQUENTLY DISCOVERED IRANIAN NEXUS: 128. The respondent bank contends that during verification in respect of the original shipping documents submitted by the petitioner with the IMB, it was revealed that all goods in question were shipped from Iran. It is thus evident that information came to the notice of Respondent No.4 indicating an Iranian nexus in relation to the transactions. 129. The respondent bank contends that such information was inconsistent with the declarations furnished by the petitioner and gave rise to serious sanctions-related concerns. 130. It is important to note that the facility agreement themselves expressly contemplated sanctions risks arising from the origin of goods, shipment routes, vessels, countries involved in the transaction and correspondent banking arrangements. 131. Consequently, once information indicating an Iranian nexus surfaced, the matter fell squarely within the sanctions-review framework contemplated by the facility agreement executed between the parties. 132. The respondent bank could not reasonably be expected to ignore such information and proceed with the transactions regardless of the consequences which might follow. Page No.# 29/36 133. On the contrary, both the contractual framework and the regulatory framework required the respondent bank to examine the implications of the information which had come to its notice. 134. The respondent bank was therefore justified in treating the Iranian nexus as a matter requiring enhanced scrutiny. WHETHER THIS COURT SHOULD DETERMINE THE FACTUAL CORRECTNESS OF THE SANCTIONS CONCERNS: 135. Considerable arguments were advanced regarding the actual origin of the goods, the identity of the vessels involved, the routing of the shipments and the extent of the alleged Iranian nexus. 136. The petitioner contended that the respondent bank had failed to conclusively establish such facts. 137. In the opinion of this Court, the submission proceeds on a misconception regarding the nature of the present proceedings. 138. The issue before this Court is not whether the respondent bank has established, to the standard required in a civil trial, every factual assertion relied upon during the compliance review. 139. The issue is whether the respondent bank acted lawfully in responding to information which came to its notice and whether the decision-making process adopted by it suffers from arbitrariness, mala fides or perversity. 140. Whether the goods were ultimately of Iranian origin, whether particular vessels were involved, whether the petitioner possessed prior knowledge thereof and whether every concern entertained by the respondent bank was factually correct in every respect are questions which need not be conclusively determined in exercise of jurisdiction under Article 226 of the Constitution. 141. Such issues involve disputed questions of fact requiring detailed examination of Page No.# 30/36 commercial records, shipping documentation, transactional records and evidentiary materials. 142. A writ court is not ordinarily expected to undertake such an exercise. 143. More importantly, the legality of the impugned action does not depend upon this Court recording a definitive finding on those issues. 144. The relevant question is whether material existed before Respondent No.4 which reasonably triggered its contractual and regulatory obligations and whether the respondent bank acted within the framework governing the parties. 145. It appears that upon undertaking verification with the International Maritime Bureau (IMB), a specialized body, recognized under the RBI Circular for undertaking authentication of shipping documents, such as bills of lading and airway bills, the respondent bank came to know from such verification process that the entire transaction have been undertaken and the goods were shipped from Iran and not UAE, thereby violating the OFAC sanctions as Iran/Iranian origin goods and transport thereof are clearly prohibited under the ambit of the OFAC sanctions. 146. This Court finds that such material did exist. 147. This Court further finds that the respondent bank was entitled, both contractually and regulatorily, to act upon such material. 148. Once that conclusion is reached, the Court is not required to substitute its own assessment for that of the respondent bank. 149. The matter must therefore be examined from the standpoint of the decision- making process adopted by Respondent No.4 and the limits of judicial review under Article 226. DECISION-MAKING PROCESS AND JUDICIAL REVIEW: 150. It must be emphasized at this stage that this Court is not sitting in appeal over the commercial wisdom of respondent No. 4. Page No.# 31/36 151. Nor is the Court concerned with whether respondent No. 4 adopted the most commercially prudent course available to it. 152. In Tata Cellular v. Union of India, reported in (1994) 6 SCC 651, the Apex Court explained that judicial review is directed towards the legality of the decision-making process and not towards appellate reassessment of the merits of the decision itself. 153. Viewed thus, I have carefully examined the decision-making process adopted by Respondent No.4. 154. The materials on record demonstrate that the respondent bank did not reject the transactions at the threshold. 155. Information giving rise to sanctions-related concerns came to the notice of the respondent bank during the course of its scrutiny. 156. The respondent bank thereafter sought clarifications from the petitioner [Refer: Annexure-31 of WP(C) No. 4691/2025]. 157. Communications were exchanged between the parties over a period of time. 158. Opportunities were afforded to the petitioner to explain the position and address the concerns which had arisen. 159. The transactions were subjected to internal compliance review. 160. The respondent bank thereafter arrived at the impugned decision. 161. This Court finds that the considerations taken into account by the respondent bank were not extraneous to the exercise undertaken by it. 162. The respondent bank was acting within a framework consisting of: (i) obligations arising under FEMA and RBI directions; (ii) duties resting upon an Authorised Dealer Bank under Section 10 of FEMA; (iii) KYC, AML and due diligence obligations; Page No.# 32/36 (iv) FATF-related compliance considerations recognized under the regulatory framework; (v) sanctions-related provisions contained in the facility agreement; (vi) declarations furnished by the petitioner; and (vii) information subsequently received during the course of compliance review. 163. No material has been placed before this Court to demonstrate mala fides, arbitrariness, procedural unfairness, or the existence of any collateral or extraneous purpose behind the impugned action. 164. I am thus of the unhesitant view, that the respondent bank cannot be faulted for undertaking enhanced scrutiny when information came to its notice which, according to it, raised concerns regarding the declarations earlier furnished by the petitioner. Equally, the respondent bank also cannot be faulted for taking into account considerations which the parties themselves had expressly recognized in their contractual arrangements, including concerns relating to origin of goods, shipment routes, vessels, countries involved in the transaction and sanctions-related risks. 165. In view of the foregoing, I am unable to accept the contention that the respondent bank was bound to process the transactions notwithstanding the concerns that had arisen in relation thereto. 166. This Court cannot be oblivious to contemporary developments in international banking and finance which demonstrate that sanctions-related concerns may have significant commercial and operational consequences for banks and financial institutions participating in, or dependent upon, international payment and correspondent banking networks. 167. While foreign sanctions do not, by themselves, constitute enforceable municipal law in India, it cannot be ignored that sanctions regimes administered by foreign jurisdictions may, in practical terms, affect access to correspondent banking Page No.# 33/36 relationships, international payment systems, trade finance arrangements and cross- border settlement mechanisms. Financial institutions engaged in international transactions are therefore often required to assess and manage such risks as part of their compliance and risk-management functions. 168. The commercial consequences of sanctions-related exposure may extend beyond the sanctioned entity itself. Restrictions imposed within a major financial jurisdiction may have downstream implications for counterparties, correspondent banks, clearing arrangements and other participants in the international financial system. The possibility of such consequences cannot be regarded as illusory or irrelevant from the standpoint of a banking institution entrusted with regulatory compliance obligations. 169. It is in this backdrop that contractual provisions requiring declarations relating to sanctioned jurisdictions, sanctions exposure and compliance obligations assume significance. Such provisions are intended to enable a bank to assess and manage risks associated with international transactions and to take informed decisions regarding the processing of payments. 170. Consequently, where information subsequently emerges giving rise to concerns regarding the accuracy of declarations furnished by a customer or indicating a potential nexus with a sanctioned jurisdiction, the bank cannot be compelled to disregard such information and proceed with the transaction as though no such concern exists. 171. In the considered view of this Court, a banking institution engaged in international financial transaction cannot be expected to ignore information bearing upon sanctions-related risks, particularly where the customer has furnished specific declarations concerning the absence of any nexus with sanctioned jurisdictions and circumstances subsequently emerged warranting further scrutiny of those representations. 172. This Court is, therefore, unable to hold that the impugned action of the Page No.# 34/36 respondent bank was arbitrary, irrational, unreasonable or otherwise susceptible to interference in exercise of the writ jurisdiction of this Court. CONCLUSIONS: 173. Upon total consideration of the matter, this Court records the following conclusions: (i) The writ petitions are maintainable; (ii) The objection relating to suppression of material facts is rejected as a preliminary ground for dismissal; (iii) Respondent No.4, as an Authorised Dealer Category-I Bank, was required under the FEMA-RBI framework to undertake due diligence and satisfy itself regarding the permissibility and bona fides of the transactions placed before it; (iv) The facility agreement executed between the parties expressly obligated the petitioner to ensure sanctions compliance, contemplated sanctions risks arising from countries involved in the transaction, origin of goods, shipment routes, vessels and correspondent banking arrangements, and conferred upon Respondent No.4 the contractual right to refuse processing of transactions which violate or may violate sanctions obligations; (v) The petitioner furnished declarations concerning sanctions compliance and origin of goods which formed part of the compliance framework governing the transactions; (vi) Information subsequently came to the notice of the respondent bank which raised serious concerns regarding the accuracy of the declarations furnished by the petitioner and warranted enhanced scrutiny under the contractual and regulatory framework governing the parties; (vii) The plea that the petitioner was unaware of the Iranian nexus does not dilute the respondent bank’s entitlement and obligation to act upon information Page No.# 35/36 subsequently received by it during the course of compliance review; (viii) The respondent bank sought clarifications, afforded opportunities to the petitioner and undertook a compliance review before arriving at the impugned decision; (ix) The refusal to process the transactions was an action taken in accordance with the contractual framework governing the parties and cannot be characterised as arbitrary or unauthorised; (x) The Court finds no arbitrariness, mala fides, procedural impropriety or perversity in the decision-making process adopted by Respondent No.4; (xi) Whether the concerns entertained by the respondent bank were ultimately correct on facts is not a matter requiring conclusive determination in the present writ proceedings; (xii) No ground for interference under Article 226 of the Constitution is made out. 174. This Court is satisfied that Respondent No.4 acted within the framework of its contractual rights and regulatory obligations. 175. Hence, the impugned action cannot be characterized as arbitrary, irrational or mala fide. 176. Accordingly, this Court is not inclined to interfere in exercise of its writ jurisdiction. OPERATIVE ORDER: 177. Resultantly, W.P.(C) No. 4691 of 2025 and W.P.(C) No. 240 of 2026 stands dismissed. 178. Interim orders passed during the pendency of the writ petitions stand vacated. 179. It is clarified that this Court has not adjudicated upon any contractual, civil or other remedies that may otherwise be available to the parties beyond the scope of the Page No.# 36/36 present proceedings. 180. The dismissal of these writ petitions shall not preclude the petitioner from pursuing such remedies as may be available to them in accordance with law before the appropriate forum. 181. Pending interlocutory applications, if any, shall stand disposed of. 182. There shall be no order as to costs. JUDGE Comparing Assistant Pranab Kumar Deka Digitally signed by Pranab Kumar Deka Date: 2026.06.12 14:53:59 +05'30'