Mumbai monorail:L&T-Scomi seeks HC stay on encashing bank guarantees
The L&T-Scomi Engineering consortium has moved the Bombay High Court seeking a stay on the Mumbai Metropolitan Region Development Authority's move to encash six bank guarantees, worth Rs 200 crore, following termination of their contract to operate the city's only monorail network.
On December 14, town planning authority MMRDA had terminated its contract with the LTSE consortium, which had the contract to build the country's first and only monorail in the megapolis.
While terminating the contract, the MMRDA had squarely blamed Scomi, saying the Malaysian company had failed to supply the contracted rakes and other operational materials, including the signalling equipment, despite many extensions and that encashing the bank guarantees should be treated as a penalty.
The consortium approached the court the same day seeking MMRDA and Axis Bank to be restrained from invoking the bank guarantees worth Rs 200 crore.
According to the petition, the termination notice states that the contract stands terminated on completion of 15 days from the receipt of the termination notice under which the petitioner has to handover the project to MMRDA, which has decided to own and operate it, within 15 days.
By this, the petitioner has time till December 30.
Senior counsel Dinyar Madon, appearing for the petitioners, argued that despite this, the MMRDA has demanded immediate payment under the bank guarantees.
"The consortium has only challenged the invocation of the bank guarantees and not the termination of the contract," Madon told
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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