draft for a sum of Rs.2,20,00,125/-
towards performance security and a bank guarantee for a similar amount to
be valid ... letter
dated 27th July, 2006, and forfeiture of the performance security of
Rs.2,20,00,125/-. Termination ordered by the respondent triggered
litigation between
Tenders will be rejected as
non-responsive.”
Clause 2.22 speaks of “Performance Security” as follows:-
“PERFORMANCE SECURITY in case of offer
below the cost ... sought by contractor Clarification sought by
the Department
46 2.22 Performance 2.22 Performance Security: The clause of performance
Security
letter of acceptance.
30. Performance Security/Security Deposit
30.1 Security Deposit shall consist of two parts:
a. Performance Security to be submitted at award ... contractor. The bid security deposited in the form of
demand draft shall be adjusted against the initial security
deposit.
If the performance security is provided
fails to comply with Sub-Clause 4.2
[Performance Security] or with a notice on this Sub-
Clause 15.1 [Notice to Correct],
(b) abandons the Works ... which the Contractor receives this
notice or the Employer returns the Performance
Security. The Employer shall not terminate the
Contract under this Sub-Clause
Narmada Construction and, therefore, the aforesaid
amount was adjusted against the security/performance guarantee submitted
by the petitioner. An amount ... cost of
correction of the Defect shall be recovered from the
Performance Security or any amount due or that may become
due to the contractor
clause 6 of the agreement, the petitioner was required
to submit performance security for ` 400 crores in the form of
unconditional bank guarantee ... retain
the performance security of ` 183 crores. These performance bank
guarantees are valid till 31.12.2010. Performance security of Rs.17
crores, apart from the aforesaid
Petitioner.
9. Clause 8 of the said Agreement provided for a performance security and
reads as under :
URS 4 of 25
::: Downloaded ... ARBPL 1538-12-Judgment.doc
"8. PERFORMANCE SECURITY
8.1 The Developer has submitted an unconditional irrevocable
and on demand bank guarantee dated October
security or any other type of security,
hence, the respondents are legally not justified in requiring the
petitioner and other contractors to furnish additional performance ... that it provides for performance security only and does not
envisage any other security in the name of additional performance
security or otherwise. According
furnish the
Performance Security/Performance Bank Guarantee (PBG). Clause 3.15
is reproduced herein below:
"3.15 PERFORMANCE SECURITY/PERFORMANCE
BANK GUARANTEE (PBG)
3.15.1 Within ... date of issue of Allocation
letter, Successful Bidder shall furnish the Performance
Security calculated in the same manner as Bid Bond amount
for the allocated
mandates
that the employer shall not make a claim under the Performance Security,
except for the amounts which the employer is entitled ... next contended that Clause 4.2 of the GCC prohibits invocation
of performance security except when the following events occur:
(a) failure of the petitioner
