In a set back to real estate giant Emaar MGF, the builder of Commonwealth Games(CWG) village, the Delhi High Court today allowed the DDA to encash Rs 90 crore, which was deposited by the company as bank guarantee, for not completing the project on time.
In an interim order, Justice Vipin Sanghi said that “the pay order for Rs 90 crore may be encashed (by the DDA).”
The Court passed the order on a petition filed by the company seeking to restrain DDA from seizing the bank guarantees of Rs 183 crore as damages for not completing the project on time.
The court, however, said that the rest of the amount of Rs 93 crore, shall not be encashed if it has not been encashed so far.
Acting tough, the Urban Development Ministry had ordered confiscation of Rs 183 crore furnished by Emaar—MGF as bank guarantee and initiation of legal action against it for recovery of other expenditure for “deficiencies” and “delays” in construction of the Games Village.
The direction by the government to DDA had come a day after the civic authority submitted an interim report in which it said “immediate action” is required to be taken against the builder for the “non-execution of the project as per the agreement."
In the petition, Emaar MGF countered the allegations and said the “threat” issued by DDA to encash the whole amount of the bank guarantee was illegal as the liquidated damage amount demanded from it was only Rs 83.70 crore.
The company pleaded that the DDA proceedings to seize the entire bank guarantee of Rs 183 crore was illegal as it had issued a notice to the firm to deposit only Rs 83.70 crore.