Mere Extension Of Bank Guarantee Does Not By Itself Extend Claim Period

Case: Harji Engineering Works Private Limited V. Punjab And Sind Bank & Anr

Coram: Justice V. Kameswar Rao

Case No.: RFA 238/2020

Court Observation: “It is one thing to say that the contract is terminated and other thing to say that the validity of the BGs has been extended. The intent of the terms of the BGs is that it needs to be invoked within 90 days of the cancellation of the contract which admittedly has not been done.”

“It means, the terms of the BGs that the invocation of the BGs shall be within 90 days from the date of expiry of the defect liability period or from the date of cancellation of the contract remained as it is…Though the validity of the BGs was extended, still the demand / claim / invocation of BGs had to be made on or before the expiry of 90 days period from the date of cancellation of the contract, or from the date of expiry of the defect liability period.”

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Keywords

Extension Of Bank Guarantee, Extend Claim Period