The Hindu : New Delhi News : Conditional relief for Games Village tower builder

Online edition of India's National Newspaper
Tuesday, Oct 26, 2010
ePaper | Mobile/PDA Version

New Delhi

New Delhi

Conditional relief for Games Village tower builder

Staff Reporter

Court restrains DDA from cashing multi-crore EMAAR-MGF bank guarantee

DDA allowed to cash Rs.90 crore only
Status quo if Rs.93 crore also cashed

NEW DELHI: Giving conditional relief to EMAAR-MGF on encashment of its bank guarantee, the Delhi High Court on Monday restrained the Delhi Development Authority from cashing Rs.93 crore of the total bank guarantee amount of Rs.183 crore if the pay orders for it had not been cashed.

However, it allowed DDA to cash the remaining bank guarantee amount of Rs.90 crore. EMAAR-MGF had given this bank guarantee to DDA as a security to complete the construction of two residential towers -- Milestone 8 and 9 -- within the stipulated period and as per the building plan in the Commonwealth Games Village.

Justice Vipin Sanghi said if the pay orders for Rs.93 crore had been cashed and credited to DDA's account, the status quo shall be maintained on that.

The Court passed the directions on a petition by the construction company submitting that DDA had invoked the total bank guarantee without even granting a week's time to it after issuing a letter to this effect.

Counsel for the company submitted that the defect period liability was still not over, and failure to remove the defects was covered by separate bank guarantees.

Counsel also submitted to the Court letters issued by DDA to the banks where the company's money was lying to invoke the bank guarantee and photocopies of the pay orders of Rs.60 crore and Rs.90 crore dated October 27 and Rs.30 crore dated October 23 issued by these banks in favour of DDA. After looking at the pay orders, Justice Sanghi added: “In case the pay orders have already been encashed, it is made clear that there will be no interim order.”

However, with regard to the pay orders of Rs.60 crore and Rs.33 crore, the Court said that if they had not been cashed and the amounts not been credited to DDA's account, the status quo should be maintained. But it allowed DDA to cash the pay order worth Rs.90 crore.

Printer friendly page
Send this article to Friends by E-Mail

New Delhi