Project Cost

Querist : Anonymous (Querist) 19 July 2010 This query is : Resolved
Oue entity is in the Project Stage.On account of non-compliance of the terms and conditions of a contract,the Bank Guarantee given by the contractor was invoked by us.Can we reduce this amount from the project cost? The matter is subjudice.

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Devajyoti Barman (Expert) 19 July 2010
What is the type of the pending litigation? If you have invoked the bank guarantee without the leave of the court and during the pendency of the case involving the same subject matter then you might be in trouble.

s.subramanian (Expert) 19 July 2010
your query does not contain important details regarding the terms of your contract with regard to breach.However,when the matter is sub judice,you are bound to await the decision of the court and then proceed. otherwise you may be landing yourself in unnecessary problems. Do not hurry .

Querist : Anonymous (Querist) 20 July 2010
The Bank Guarantee was involed prior to litigation.The question is about accounting treatment whether the amount received on invoking the Bank Gurantee can be reduced from the Project Cost.Needless to mention,we do understand the legal intricacies.

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