Dear Sir / Madam
I arranged for and got issued a bank guarantee in the name of a govt department. The bank guarantee was due to expire on 20th Feb 2015.
The government department issued a letter to the bank stating as under -
Sir
Xxx has submitted the following BG as Performance Security in this office against the tender no. 201301, the validity of which is going to expire as mentioned below.
S. No.. BG No. Date Validity Amt
You are requested to extend the same for further three months from the expiry date. it may kindly be noted that this bank guarantee is irrevocable and is reimbursable on demand by this office.
Further, in case the firm is not agreeing for extension of the BG, the same be encahsed and sent a pay order / DD in favor of Director, name of govt dept, at the address mentioned above so that the same be credited into the govt account. It may kindly be treated as "Most Urgent".
Thanking you...
please note as under-
1. the date on the letter is 16th Feb 2015.
2. Letter was received in the bank on 20th feb 2015.
3. copy of letter was received in our office on 27th Feb 2015 (directly from govt department).
4. the bank wrote an email to us on 27th Feb 2015 as under -
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Dear Sir,
The attached BG xxx APPLICANT xxx, has to be extended immediatly . Please arrange for the extension letter , or else the BG will be Claimed .
With Regards
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with reference to above, this is a conditional demand for invocation / extension of BG. The SC and HC in various judgements has made it clear that for invocation a clear and unambigious demand has to be made.
also the extension is being sought from applicant after expiry date and if a refuse it today, the date of recording of my communication to the bank will be today, i.e. 28th Feb 2015, well after the expiry of the BG.
can the bank accept the request and still pass on the funds debitting my account, to the govt department ?
are there similar cases to mine adjudicated by HC or SC?
thanks.
