P K GHOSH
05 May 2014 at 12:26
As part of the contracts that we execute for implementation of projects for various clients, we need to essentially submit the following Bank Guarantees (BGs) to them;
To draw advance from the client, for which a BG of equivalent value is submitted, normally valid till the adjustment of all advances from the running bills.
For covering performance of the completed project during the warranty period, which could range from 12 to 24 months, and this is normally linked with the release of the last 10% payment of the contract, payable on submission of the BG.
In both the above cases, the clients ask for a claim period after the expiry of the validity of the BG, so that in case there are any claims from them, this could be raised during the claim period. The claim period, as stipulated by the client, normally ranges from 3 months to 6 months.
So far we had been submitting BGs in both the above categories, to our clients, incorporating the clauses as worded by the client and generally accepted by the banks, (in some cases with minor modifications). The validity and the claim periods mentioned in the BGs were as per the stipulation of the client, as mentioned in the contract with them.
Recently, however, our bankers have been demanding that irrespective of the claim period asked by the client, the BGs would be issued by them with a claim period of 1 year minimum. On seeking clarifications from them, they have informed as below:
“Department of Financial Services, Ministry of Finance , Government of India vide their letter dated 24.01.2013 had informed that the Banking Laws (Amendment) Act came into effect w.e.f. 18.01.2013 as regards to change in Limitation Act as per India Contract Act, 1872 u/s 28. As per the new Act the minimum claim period is 1 year irrespective of the expiry date.”
While we are not very sure whether the bank is acting on the correct premises, (since we do not have a full picture of the related provisions), on checking with other banks, we gather that no such measure of charging for 1 full year of claim period, even if the beneficiary needs a lesser claim period, is being enforced by them.
Prima facie this stipulation seems illogical, since besides making us unnecessarily pay commission and block funds for a longer period, it also exposes us to unforeseen liabilities and risks, because the client is being given an encashment option even beyond the period sought by him.
We would be obliged to get an informed view on this to take it up further with the bank.
PK GHOSH
BHUBANESWAR
pushkar nehete
03 May 2014 at 18:15
Respected learned members, I am seeking your expert opinion that, whether any Proprietary Concern firm can be a partner in any Partnership firm?
Rajan
02 May 2014 at 11:24
Sirs,
1. Can you kindly advice if a defaulter of statutory requirements in subcontract be eligible for issuing arbitration notice when he has failed to comply with statutory requirements such as labor licence, EPF, ESI and minimum salary for his contract labors.
2. Can the contractor terminate his contract for not complying the statutory requirements inspite of issuing many letters to the subcontractor
mohan sehgal
29 April 2014 at 23:06
I am registered with Central Excise under Rule9 ..
Due to expansion requirements..I wish to lease a rented premises for additional manufacturing activities...how to proceed further to add the extra premises..
mohan sehgal
29 April 2014 at 20:30
I have registered manufacturing premises for central excise purposes...
Due to expansion purposes.I want to have another premises..for my manufacturing activities.. on Lease rent agreement...
How should I proceed under Central Excise Rules & Regulations...
Aarti
27 April 2014 at 17:37
Dear Sir,
I own a proprietorship firm, making garments & supplying to corporates. In October last year, I supplied garments to a client whose parent company is listed on the stock market as well. The goods were supplied against Purchase orders and on the client's brand name.
In January we were informed that they were closing down their stores and returning back the material. Initially we were not ready to accept it as the garments were made on their brand name but since we were not getting any payment from their side, we accepted the same on the condition of all expenses paid (transportation & octroi) & delivered to our office.
Since that time, we have received goods only against 2 stores (totally supplied to 9 stores). They haven't closed down some of their stores and have kept their sales on due to which the stock to be returned is decreasing & outstanding amount constantly increasing but at the same time we haven't received a penny from them yet! The amount is worth lakhs but they're just not responding back.
Need to file my IT returns and not sure what amount of sales should I show! Plus need my stock & money back, its been past 6 months whereas our payment terms were 60 days!
Please suggest me what to do. Legal is an option I know but I want to keep it as the last option as the case can go on for years with no result. I'm a small entrepreneur and need the money for my cashflow!
Please guide. Thanks!
SANDEEP KUMAR
27 April 2014 at 15:44
If one of the parties does not pay its part of fee to the Arbitrator in spite of several directions of the Arbitrator, what are the options before the Arbitrator to recover that fee?
Javed Shaikh
27 April 2014 at 12:38
Hi, I want to lodge a complaint online on SBI card.
The outstanding amount which they are proclaiming is wrong.
In connection to this I wanted to know how they calculated it & may be I could be wrong for which I have sent several mails asking to resolve the query on their designated contacts mentioned on website (feedback@sbicard.com & NodalOfficer@sbicard.com). But till date I have not received any reply from them.(I also informed them that I have relocated to UAE for Job so please contact on email ID or UAE contact no) I have also posted the same on their fb page on which somebody replied and I thought now my query will be addressed but nothing has been addressed instead they are calling on my India no which is now with my Mom. I am really pissed off The outstanding billing is more than 17K Rs as per my calculation. I really want to get rid of this. By paying off completely but on the right amount and closing it. Somebody please advice and help. Thanks in Advance
Kishor Satpute
26 April 2014 at 21:21
The Earnest Money Deposit is forfeited as per the provisions of SARFAESI Act for failure to deposit balance of 25% amount of sale price by the Bank. My question is what to do with this forfeited amount?
1. Can this forfeited amount will be credited to Bank Profit and loss account?
or
2. Whether this forfeited amount will be credited to borrowers NPA loan account in respect of which the said failed auction property belonging to?
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Can interim order u/s 9 of arbitration act be challange?
Dear Sir,
My cousin purchased a car on Loan at Gandhinagar- Gujarat.
According to the agreement with the financing company the purchaser has to repay the loan amount by 60 monthly installments.
The purchaser issue 10 cheques in advance and after 9 the instalment issued another 10 cheques in favour of the financing company.
Meanwhile the managing staff forgotten to ancash three cheques and debited the installment amount and charged interest @ 36% on such outstanding installment amount.
Recently the financing company issued Notice to start Arbitration Proceedings and another notice for appointment of arbitrator.
The appointment of arbitrator by the financing company issued notice that contain date and place of arbitration proceedings it was Mumbai.
Meanwhile the purchaser replied all the notices with denial to initiate arbitration proceedings. And filed reply through Post.
But the arbitrator refused to consider the reply filed by RPAD and pass interim order to seize and sell the CAR by Auction if the purchaser fail to repay whole loan amount within 7 days from the date of the order.
Can we challenge the interim order?
If yes then which Court has jurisdiction?
The purchaser's permanent residence address is Mahesana -Gujarat and whole correspondence held at Mahesana address and one branch office of the financing company is also situated at Mahesana.