That, the contract was awarded for a total amount of Rs. 38,29,00,000
Contractor was required to furnish advance Advance Bank Guarantee and a Performance Bank Guarantee in favour of the original respondent for the sum of Rs. 5,17,17,726/= and Rs. 3,82,90,000/= respectively
invocation of the Advance Bank Guarantee and Performance Bank Guarantee pursuant to such notice or even otherwise;
other coercive measures
It is submitted that as such, the purpose and object of the said Bank Guarantee is to secure amount of Rs. 3,82,90,000/= paid in advance by the owner.
t is submitted that moment the amount of Rs. 3,82,90,000/= is recovered by way of adjustment of the dues of the appellant, in that case, it can be said that the Contractor has discharged his liability and/or application in respect of such advance payment has been made, and therefore, it will not be open for the respondent owner to encash the said Bank Guarantee
same as a special equity in favour of the appellant
Advance Bank Guarantee-cum- Performance Bank Guarantee
Learned counsel Shri K.S Nanavati further submitted that if one looks at the terms and conditions of the Bank Guarantee No. 002812IGFIN0058, as such, it is an unconditional bank guarantee
bank guarantee is an unconditional bank guarantee, and therefore, no injunction can be granted against invocation of such bank guarantee by the owner.
It is submitted that in the aforesaid case, the respondent contended that the bank guarantees were for different purposes viz., either to secure the payments of advances, or to secure the performance.
2. Under the provisions of the Contract, the Contractor is required to furnish at its cost to the Owner, a security bond in the form of a Bank Guarantee, in the amount of Rs. 3,82,90,000/= [Rupees Three Crores Eighty Two Lakhs Ninety Thousand Only] against the advance payment
or the refund of such advance payment, in the event that the Contractor fails to duly and faithfully provide, do, perform, execute, keep, fulfill, discharge and carry out all or any of its obligations and liabilities in respect of which such advance payment has been made, in time and manner as provided in the Contract and to the fullest satisfaction of the Owner, and valid till the end of sixty days after the date of satisfactory completion and acceptance of the entire Let Work in all respects.
Thus, considering the aforesaid terms and conditions of the Bank Guarantee in question, it can be said to be an "unconditional, irrevocable bank guarantee" securing the Advance paid to the Contractor as well as securing the Performance of the Contractor. Therefore, as such, the Bank Guarantee in question cannot be said to be an Advance Bank Guarantee to secure advance paid to the Contractor only. Over and above the amount of Rs. 3,82,90,000/= secured by way of bank guarantee, the aforesaid bank guarantee is also for performance of the contract
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