Emaar MGF today challenged a single judge’s dismissal of its plea for restraining Delhi Development Authority from encashing its bank guarantee worth 
183 crore due to delay in completion of the Commonwealth Games village. The Bench headed by Justice Vikramjit Sen allowed continuation of the single judge’s status quo order on partial encashment of the bank guarantee by DDA. The duration of the previous order on status quo expired today.
However, the bench accepted DDA Standing Counsel Ajay Verma’s plea that DDA has a right to ask for a fresh security as the bank guarantee expires on December 31 as per the contract. The High Court had on October 25, while approving partial encasement of the bank guarantee to the tune of 90 crore by DDA, had asked the housing body not to encash the entire amount totalling Rs 183 crore.
The High Court had given the approval when DDA informed it that it had already encashed 90 crore and rest of the amount was yet to encashed. Emaar MGF had approached the court for restraining DDA from seizing its bank guarantee as damages for not completing the project on time. DDA had proceeded to seize the bank guarantee on directive of Union Urban Development Ministry.
The Ministry had also asked DDA to initiate legal action against the real estate giant for recovery of other expenditure for “deficiencies” and “delays” in construction of the Games Village. The direction by the government to DDA had come a day after the civic authority submitted an interim report in which it said “immediate action” was required against the builder for “non-execution of the project as per the agreement”.
In the petition, Emaar MGF had countered the allegations and said the “threat” issued by DDA to encash the whole amount of the bank guarantee was illegal as the liquidated damage amount demanded from it was only 83.70 crore. The company pleaded DDA had issued a notice to the firm to deposit only Rs 83.70 crore.
