Dear Narasimha Rao garu
The BG can be extended only at the instruction of the Applicant. Roght!
If the beneficiary demands to extend the BG in right time also, i.e. prior lapse of the BG, and if the applicant deny the extension, and if the Bank extends the same for 3 months period as per the wish of the beneficiery, that too after the lapse of BG time, whether such BG will be a valid one?
For the beneficiary, it will be a valid BG. No doubt, because the Bank has taken the responsibility.
The Applicant also demands the Bank itself has to take the responsibility of the said WRONGLY EXTENDED BG.
The Beneficiary has NOT issued orders as "either to extend or encash". He has asked ONLY to extend the BG. Hence the Bank cannot encash the BG. As the Applicant denied to extend the same, the Bank cannot extend the same.
Then why the Bank has EXTENDED the Bank Guarantee?!
There is a Court order on the said BG as "STATUS QUO".
"Status quo" means let a thing be in its' existing condition where both the parties are supposed to maintain the status BG in same condition as it is found on the suit date.
The Applicant has interpreted the term as NO CHANGE IN THE PRESENT POSITION and considered extension will be a CHANGE.
The Bank has interpreted it to maintain the PRESENT POSITION means keeping the BG alive.
1. In this circumstances, (where the BG currency date was LAPSED) whether the Bank can extend the BG? Even the stand of the Bank is CORRECT to extend the BG, it has to extend the same when the BG was in LIVE.
2. When the BG was dead by the expiry date, and when the Applicant has not given instruction, can the Bank extend the said BG from a Back Date? Upon the request of the Applicant, it can extend the BG with back date also; even after expiry. But when the applicant denied to extend, and the data has been expired (by mistake), whether the Bank has the legal right to extend the BG?
3. Even after lapse of the BG time also, it can put the same in SUSPENSION, awaiting the final court order, with a NOTE to the Applicant. If the court instructs to extend or encash, then it can follow the court order!
4. But the Bank has extended the same on its own iniitiative, for 3 Months, without the applicant's node, and without the specific court order, after the LAPSE OF THE BG PERIOD.
Can the Bank do that? Can it correct its mistake at the cost of the Applicant?
I solicite your exemplary opinion.