Nirman Constructions & Anr. Vs Union of India and Others (Calcutta High Court)
The Calcutta High Court adjudicated a writ petition challenging the invocation of a performance bank guarantee amounting to ₹7,16,346 furnished pursuant to a work order issued for modification and rebuilding works in DSP Township. The petitioners had been awarded the contract through a Letter of Acceptance dated 7 December 2022, followed by a work order dated 15 December 2022, which required submission of a performance security deposit equivalent to 3% of the contract value. Accordingly, the petitioners furnished a bank guarantee dated 2 February 2023.
The work was completed on 31 December 2023, and a completion certificate was issued on 2 May 2024 confirming execution in accordance with contractual terms, though it retained obligations during the defects liability period. The petitioners raised their final bill on 4 January 2024, which was paid on 20 January 2024. Despite this, the retention amount remained unpaid. The defects liability period of one year expired on 31 December 2024, during which no complaint or defect was communicated to the petitioners.
Subsequently, on 23 March 2026, the respondents sought to invoke the bank guarantee without prior notice, citing alleged excess payment based on a measurement sheet sent via email on 29 September 2025. The petitioners disputed receipt of such communication, stating it was sent to an incorrect email address. The respondents also contended that the completion certificate had been withdrawn via email dated 15 May 2024, though no reasons for such withdrawal were provided, and no defects were alleged thereafter.
