Emaar-MGF moves court against DDA on bank guarantee

Monday, October 25, 2010

NEW DELHI - Emaar-MGF, the private firm which developed the Commonwealth Games Village, Monday moved the Delhi High Court against the central government’s direction to the Delhi Development Authority (DDA) to confiscate the company’s Rs.183 crore bank guarantee.

The guarantee was furnished by the builder before taking up the construction of 1,168 flats in the Village on a bank of the Yamuna river in east Delhi at a cost of over Rs.1,000 crore.

Asking the DDA to respond to the Emaar-MGF’s petition by Nov 11, the high court said that if the guarantee has not been encashed by the authority a status quo has to be maintained.

The DDA informed the court that Rs.90 crore has already been encashed by it and Rs.60 crore has been deposited in its bank account for clearance through cheque. The rest of the amount of Rs.33 crore is still to be encashed.

on hearing the DDA’s submissions, Justice Vipin Sanghi said that a status quo would have to be maintained in respect of Rs.33 crore out of the bank guarantee and Rs.60 crore which was still to be cleared through cheques.

Emmar-MGF through its plea submitted before the court that the DDA had given it a week’s time Oct 16 to explain why it delayed the construction of the Games Village flats and also sought damages worth Rs.80 crore.

The developer said the Village was built to the “highest standards of quality and design” and all the pertinent milestones were achieved as per the scope of work.

The company also said all deficiencies pointed out by the DDA or any other agency were duly rectified by it.

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