Bank connived with EMAAR-MGF in issuing us two pay orders, charges DDA
The Delhi High Court on Thursday issued a notice to the State Bank of India asking it to explain why it had issued two pay orders to encash bank guarantee of Rs.150 crore given by construction company EMAAR-MGF in favour of the Delhi Development Authority.
Justice Vipin Sanghi issued the notice when counsel for the DDA alleged before the Court that the bank was in connivance with the construction company as one of the two pay orders issued in its favour amounting to Rs.60 crore was not credited to its accounts.
The DDA questioned the issuing of two pay orders of Rs.90 crore and Rs.60 crore respectively for encashing the bank guarantee by the bank.
The Court has asked SBI to file a reply by November 29.
The EMAAR-MGF had given a bank guarantee of a total amount of Rs.183 crore to the DDA. The company had given it as security to complete the construction of two residential towers -- Milestone 8 and 9 -- within the stipulated time period and as per the building plan in the Commonwealth Games Village.
The Court had earlier this month allowed the DDA to encash Rs.93 crore of the total bank guarantees. However, it had restrained it from encashing the remaining amount, if it had not been encashed and credited to the DDA's account.
The DDA charge was that the bank had connived with the company in issuing pay orders and in delayinged encashment of one of them.
The Court had passed the directions on a plea by the construction company submitting that the DDA had invoked the total bank guarantee without even granting it a week's time after issuing a letter.
The bank guarantee of Rs.33 crore was of a different bank.