New Delhi: Real estate giant Emaar MGF on Friday
challenged a single judge`s dismissal of its plea for
restraining Delhi Development Authority from encashing its
bank guarantee worth Rs 183 crore due to delay in completion
of the Commonwealth Games village.
The Bench headed by Justice Vikramjit Sen allowed
continuation of the single judge`s status quo order on partial
encashment of the bank guarantee by DDA. The duration of the
previous order on status quo expired today.
However, the bench accepted DDA Standing Counsel Ajay
Verma`s plea that DDA has a right to ask for a fresh security
as the bank guarantee expires on December 31 as per the
contract.
The High Court had on October 25, while approving partial
encasement of the bank guarantee to the tune of Rs 90 crore by
DDA, had asked the housing body not to encash the entire
amount totalling Rs 183 crore.
The High Court had given the approval when DDA informed
it that it had already encashed Rs 90 crore and rest of the
amount was yet to encashed.
Emaar MGF had approached the court for restraining DDA
from seizing its bank guarantee as damages for not completing
the project on time. DDA had proceeded to seize the bank
guarantee on directive of Union Urban Development Ministry.
The Ministry had also asked DDA to initiate legal action
against the real estate giant 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" was required against the builder
for "non-execution of the project as per the agreement".
In the petition, Emaar MGF had 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 DDA had issued a notice to the firm
to deposit only Rs 83.70 crore.
PTI
