Dear members,
My firm had submitted an irrevocable Performance Bank Guarantee (against 25% margin) as Security Deposit in favour of the Railways. The Bank Guarantee was valid for a period of 40 months. The Bank had collected the Bank Guarantee commission charges for the whole period of 40 months upfront at the time of issuing the Bank Guarantee.
Unfortunately, after 9 months my firm was not able to fulfill the contract with the Railways and hence after issuing a notice to our firm the Railways presented the Bank Guarantee to our Bank for revocation/encashment. Subsequently my firm paid the balance amount of 75% (other than 25% margin) on time to our Bank for the full Bank Guarantee amount; and thus the Bank Guarantee was fully revoked/encashed by the Railways.
Now we have been pursuing with our Bank for refund of Commission charges for unutilised period of the Bank Guarantee, which comes to around 28-30 months. However, the Bank is not ready to refund these charges for the unutilised period sighting the reason that the charges could not be refunded in case of revoked Bank Guarantee; but if it had been prematurely cancelled by the Railways then the charges could have been refunded.
Thus, I seek expert opinion/guidance from dear members of this forum and hope to receive it as early as possible.
Thanking you.
