At, High Court of Jharkhand
By, THE HONOURABLE MR. JUSTICE RAJESH SHANKAR
For the Appearing Parties: Sumeet Gadodia, P.S.A.S. Pati, Indrajit Sinha, Vipul Poddar, Advocates.
The case is taken up through Video Conferencing.
The present writ petition has been filed seeking following reliefs:
For quashing the letter dated 16.08.2021 (Annexure-14 to the writ petition) issued by the respondent No.3 to the extent that the Bank Guarantee submitted by the petitioner is not as per the Proforma of the bid document and further that the validity of the Bank Guarantee is not as per Clause 4.2 of the General Terms and Conditions of the Notice Inviting Tender.
For issuance of direction upon the respondents to accept the Bank Guarantee submitted by the petitioner being Bank Guarantee No. 43300IGL0000621 dated 21.06.2021 issued by the respondent No.5-Union Bank of India (Annexure-5 to the writ petition) and consequently to issue formal work order to the petitioner including the consequential contract agreement especially because the said Bank Guarantee has been issued in compliance of the guidelines issued by the Reserve Bank of India (RBI) and is of the requisite validity period in terms of the conditions stipulated in e-Notice Inviting Tender dated 01.01.2021 issued by the respondent-Bharat Coking Coal Ltd. (BCCL).
In alternative, for issuance of direction upon the respondents to accept the clarification given by the respondent No.5-Bank regarding insertion of the condition in the Bank Guarantee format which is mandated as per the RBI guidelines and to further allow at least 21 days’ time to the petitioner to submit a fresh Bank Guarantee of the requisite validity period as prescribed under Clause 4.2 of the General Terms and Conditions as contained in the NIT dated 01.01.2021.
The present writ petition was earlier taken up on 13.09.2021 and on the said date in course of hearing, it appeared that the dispute raised in the present writ petition relates to Clause (e) & (f) of the Bank Guarantee being BG No. 43300IGL0000621 dated 21.06.2021 issued by the Union Bank of India, Chandnidih Branch, Raipur (Chhatisgarh) in lieu of performance security of the petitioner for the work in question. The respondent No.5-Bank was thus directed to file counter affidavit on the said issue and pursuant thereto, the said respondent has filed counter affidavit, Paragraph 5 of which reads as under:
“5. That the answering respondent states that the answering respondent is filing the present counter affidavit limiting it to the following issues as stated herein below:
a. Clause no. e of the BG- The said clause in no manner is prejudicial to the interest of BCCL.
Secondly, it has been incorporated in the business/commercial interest of the Bank as it is usually observed that limit is taken from one Bank and business is routed through another Bank.
Such practice not only is prejudicial to the interest of the Bank sanctioning the limit, but at the same time denudes the Bank to assess the creditworthiness of the borrower/customer.
The Reserve Bank of India has as such directed that no Bank shall open current accounts for customers who have availed credit facilities in the form of cash credit (CC)/overdraft (OD) from the Banking system and all transactions shall be routed through the CC/OD account.
Photocopy of the circular is annexed herewith and marked as Annexure-A to this counter affidavit.
Only to ensure that the above is complied with, such clause was inserted in the BG. Without prejudice to the above, the answering respondent submits that if the petitioner and respondent-BCCL agree/undertake to make/route payment through the Bank account maintained with the respondent-Bank, the Bank is agreeable to modify/recall/withdraw this clause.
b. Clause no. f of the BG- That the second issue of term of BG is concerned, it is issued at the request of the customer (the petitioner herein). The Bank has no problem in issuing BG for a long duration, but subject to payment/observance of the requirements thereof by the customer/petitioner herein.
c. Validity of the BG- That the third concern raised by the BCCL is that Bank Guarantee ought to have been in Structured Financial Messaging System (SFMS). It is stated that the BG in question has been issued in SFMS as would be evident from the screen shot of the computer system.
Printout of the screen shot is annexed herewith and marked as Annexure-B to this counter affidavit.”
From the aforesaid stand taken by the respondent No.5, it appears that so far as Clause (e) of the said Bank Guarantee is concerned, the same has been inserted in the business/commercial interest of the Bank as well as in compliance of the circular of the Reserve Bank of India to the extent that no Bank shall open current accounts for customers who have availed credit facilities in the form of cash credit (CC) / overdraft (OD) from the banking system and all transactions shall be routed through the CC/OD account. It has however been stated by the respondent No.5 that if the petitioner and the respondent-BCCL agree/ undertake to make/route payment through the Bank account maintained by the respondent-Bank, it is agreeable to modify/recall/withdraw this clause. In my considered view, there is no requirement to give such undertaking by the respondent-BCCL, rather the petitioner has to give an undertaking to the respondent-Bank that the payments received by it would be routed through the account maintained in the respondent-Bank. However, since the petitioner has to undertake work with the respondent-BCCL, it is under obligation to give an intimation of the same to the respondent-BCCL.
So far as Clause (f) of the said Bank Guarantee is concerned, the stand of the respondent No.5 is that it has no problem in issuing the Bank Guarantee for a longer duration, subject to payment/observance of the requirement thereof by the customer (the petitioner herein). Moreover, so far as the concern of the respondent-BCCL that the Bank Guarantee ought to have been in Structured Financial Messaging System (SFMS), it has been stated that the Bank Guarantee in question has been issued in SFMS as would be evident from the screenshot of the computer system, a copy of which has been annexed as Annexure-B to the counter affidavit.
In view of the above, it appears that as per the counter affidavit of the respondent No.5, the dispute with regard to submission of the Bank Guarantee by the petitioner with the respondent-BCCL has substantially been resolved and hence the present writ petition is disposed of with following observations and directions:
(i) The respondent-Bank, at the instance of the petitioner, shall issue a fresh Bank Guarantee in favour of the respondent-BCCL without inserting Clause (e) of the earlier Bank Guarantee in the same and in place thereof, the petitioner shall give an undertaking to the respondent-Bank that it shall make/route the payment received by it fo
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r the work in question through the account maintained by the respondent-Bank. It shall also inform the said fact separately to the respondent-BCCL. (ii) The new Bank Guarantee issued by the respondent-Bank shall be for a period of one year or 90 days beyond the period of contract or extended period of contract (if any) whichever is more i.e. in terms with Clause 4.2 of the General Terms and Conditions of the Contract. (iii) Since the performance security in form of Bank Guarantee was to be submitted by the petitioner within 21 days from issuance of the LOA, which could not be deposited by it due to the present litigation, the said period is extended for further 15 days from today. Consequently, I.A. 4847/2021 also stands disposed of.