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Bank Guarantee in favour of Government

Document Cited in Related
Vincent
Updated atMarch 2010

This agreement is made on this................ day of............ 2000 between the Governor of Bihar (hereinafter called the GOVERNMENT) of the one part and IDBI BANK Ltd. a Banking company registered under the Companies Act 1956 and carrying on business, inter alia, at Bihar hereinafter called the BANK (which expression shall unless the context otherwise requires include its successors) of the second part and Shakunth Builders Ltd. a company registered under the Companies Act 1956 and carrying on business at S.V. Road, Bihar hereinafter called the CONTRACTOR (which term shall include unless repugnant to the context its successors).

Whereas Shakunth Builders Ltd. has been awarded a contract for construction of a housing complex at Purple Bunch, Bihar for Rs. 650 lakhs and is required to deposit security money for Rs. 65 lakhs.

And whereas in consideration of the GOVERNMENT having agreed to exempt the CONTRACTOR from depositing the security deposit of Rs. 65 lakhs under the terms and conditions of the Contract entered into between the GOVERNMENT and the CONTRACTOR on the CONTRACTOR furnishing a BANK Guarantee for security deposit amount in favour of the GOVERNMENT for the due fulfilment by the CONTRACTOR of the terms and conditions of the agreement with the Government.

And whereas the CONTRACTOR has approached the BANK for issue of such a guarantee in favour of the GOVERNMENT on behalf of the CONTRACTOR for the performance and discharge of the obligations of the CONTRACTOR under the said contract entered into by and between the GOVERNMENT and the CONTRACTOR.

And whereas the CONTRACTOR has approached the BANK for issue of such a BANK Guarantee in favour of the GOVERNMENT and is agreeable to deposit the requisite margin money as also to execute a Counter Guarantee in favour of the BANK.

And whereas the GOVERNMENT has forwarded a draft copy of the BANK Guarantee which the CONTRACTOR has scrutinised and approved and directed the BANK to issue a BANK Guarantee in favour of the GOVERNMENT in accordance with the terms contained in the draft BANK Guarantee forwarded by the GOVERNMENT.

Now therefore these presents witnesseth and the parties hereby agree as follows:

  1. The BANK hereby undertakes to pay to the GOVERNMENT upto Rs. 65 lakhs as may be due and payable under this Guarantee on the first demand being made without any demur irrespective of any dispute between the CONTRACTOR and the GOVERNMENT in respect of any amount of claim against the...

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