Dear Team of Experts,
I request your expert guidance and advise on the following case.
The company ABConstruction P Ltd has submitted a BG for Rs.1.80 crores to the beneficiary Road Development Corporation Ltd as a part of the BOT contract condition.
The contract was terminated and the BG was sent for encashment to the Bank by Road Development Corporation Ltd.
Meanwhile AB Construction filed a writ in HC and obtained a stay on the encashment of BG.
This order was sent to the Bank and the encashment stayed.
In 2 months of the stay order the BG expired and lapsed.
The stay order still in force , the beneficiary has not asked the bank for renewal of BG.
Now the Bank has kept 1,80 crores in FD just in case the BG has to be encashed and given to the beneficiary.
Now my question is
1. The bank cannot hold the BG and the FD amount as security since the BG has lapsed.
2. The Company AB corporation has filed an arbitration suit and the same is in progress.
Please advise what is to be done and can you highlight any HC or SC cases.
Thanks in Advance