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Bank guarantee in redevelopment

(Querist) 29 October 2017 This query is : Resolved 
SIR,
OUR HOUSING SOCIETY HAS UNDER TAKEN REDEVELOPMENT PROCESS.
THE REGISTERED DEVELOPMENT AGREEMENT PROVIDES FOR BANK GUARANTEE OF RS 15.30 CRORES.
NOW SOCIETY HAS CONVENED A SGBM MEETING AND PASSED A RESOLUTION THAT THE BANK GUARANTEE MAY NOT BE TAKEN AND FIXED DEPOSIT OF RS 12 CRORE BE .OBTAINED IN LIEU
OF BANK GUARANTEE.
CAN SOCIETY PASS SUCH A RESOLUTION .
I HAVE ASKED TO TAKE LEGAL OPINION OF THE APPOINTED ADVOCATE BUT IT HAS NOT BEEN TAKEN .
THE RESOLUTION WAS PASSED IN A SGBM WHERE AGENDA WAS TO DISCUSS THE PLAN OF NEW BLDG,
THE NOTICE STATES AGENDA TO DISCUSS THE PLAN AND ANY OTHER MATTER WITH PERMISSION OF CHAIR.
CAN THEY PASS SUCH IMPORTANT RESOLUTION IN MEETING WHERE AGENDA WAS NOT INFORMED EARLIER.
THE ORDINARY MEMBERS CAN NOT UNDERSTAND THE IMPORTANCE OF BANK GUARANTEE AND IT WAS PASSED BY THEM IN THE NAME OF MAJORITY

PLEASE GUIDE
REGARDS
JAYESH CHOKSI
P. Venu (Expert) 30 October 2017
What is the real problem? The facts posted suggests that there are deeper issues.
Rajendra K Goyal (Expert) 30 October 2017
Society AGM may pass resolution, till developer agree, hard to implement.
Rajendra K Goyal (Expert) 30 October 2017
broadly Bank guarantee has following benefits:

a) It is of more than 25% amount.

b) It has surety of Bank, provided guarantee terms are drafted properly..

c) FDR is non transferable, society can not force its payment if developer does not agree till it is purely in the name of society, for which developer may not agree.

d) Developer would be deprived of major portion of liquidity..

e) Guarantee is in accordance to the terms of agreement.

There are so many other benefits, can be mentioned after going through the guarantee and agreement terms.

Major drawback of Guarantee is the developer can take stay from court on revoking of guarantee if revoked against the terms of guarantee.


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