CHENNAI: The Madras High Court has rejected a plea from Transtonnelstory - Afcons JV that sought to restrain the Chennai Metro Rail Limited (CMRL) from receiving amounts from bank guarantees issued by the Union Bank of India for `25.77 crore and by IDBI Bank for Rs 117.51 crore.
CMRL had awarded construction works of a few underground stations for a contract price of Rs 1,031 crore to Transtonnelstory, in December 2010. Similarly, it also awarded works of a few other underground stations for Rs 1,567 crore to the firm the same month.
As the work got delayed, a dispute broke out between CMRL and Transtonnelstory, and arbitration proceedings were pending before tribunal. Meanwhile, the companies moved court with present plea.
Dismissing the applications on Friday, Justice N Sathishkumar said that a bank guarantee is an independent contract, which has to be honoured by the bank, despite any dispute between the contractor and employer with regard to obligations in the main contract. As the applicants sought one week time to file appeal, the judge instructed CMRL and banks to maintain status quo till August 21.