• Deccan Chronicle
  • Andhra Bhoomi
  • Asian Age
  • ePaper
  •  Auto Refresh
Home

ePaper
Last Updated:10:26 AM IST | Saturday, Feb 04, 2023
  • Home
  • Politics, Plan And Policy
  • Markets
  • Companies
  • Economy
  • In Other News
  • Autos
  • Just In
Menu
  • Home
  • Politics, Plan And Policy
  • Markets
  • Companies
  • Economy
  • In Other News
  • Autos
  • Just In
Home > Companies > Meenakshi Energy Ltd, HDFC lock horns as bank refuses to honour guarantee
Companies
Meenakshi Energy Ltd, HDFC lock horns as bank refuses to honour guarantee
Ritwik Mukherjee
By  
  , Published : Nov 1, 2019, 2:27 am IST | Updated : Nov 1, 2019, 2:27 am IST

Meenakshi Energy’s repeated invocation claims have been to no avail.

Meenakshi Energy’s repeated invocation claims have been to no avail. This is notwithstanding the fact that the Hyderabad Commercial Court, after protracted hearing, refused to grant any stay or any injunction in the matter as prayed for by Siemens, holding that no ground has been made out for the same.
Meenakshi Energy’s repeated invocation claims have been to no avail. This is notwithstanding the fact that the Hyderabad Commercial Court, after protracted hearing, refused to grant any stay or any injunction in the matter as prayed for by Siemens, holding that no ground has been made out for the same.

Kolkata: Hyderabad-headquartered Meenakshi Energy Ltd (MEL) locked horns with HDFC Bank after the latte refused to honour bank guarantees (BGs) of Rs 20.31 crore issued by the bank on behalf of Siemens Ltd in favour of Meenakshi Energy Ltd (MEL) even after the beneficiary decided to invoke the BGs on ground that the sub-contractor had failed to perform its obligations as per the agreement.

Meenakshi Energy’s repeated invocation claims have been to no avail. This is notwithstanding the fact that the Hyderabad Commercial Court, after protracted hearing, refused to grant any stay or any injunction in the matter as prayed for by Siemens, holding that no ground has been made out for the same. Interestingly, RBI circular clearly says that 'BG is a contract between the beneficiary and the bank and when the beneficiary invokes the bank guarantee and a letter invoking the same is sent in terms of the bank guarantee, it is obligatory on the bank to make payment to the beneficiary'.

A detailed query sent to HDFC Bank and subsequent phone calls did not elicit any response.

Significantly, India Power Corporation, a Kanoria Foundation company, had acquired Meenakshi Energy from French major Engie for an undisclosed sum, as it looked to expand thermal power capacity. Engie had been holding 89.11 per cent of Meenakshi Energy. Rest of its stake belonged to the Meenakshi Group.

On October 18, in two separate communications, Mrityunjoy Poddar, authorised signatory of MEL, wrote to the HDFC Bank manager at its Golf Course Road branch, requesting for invocation of BGs issued by the bank on behalf of Siemens.

MEL alleged that ‘as per instructions of the bank, Siemens prayed for an ad interim injunction/stay of the invocation of the BG’. The court however after protracted hearing, refused to grant any stay or any injunction in the matter.

RBI Master Circular dated July 1, 2015, says: “In fact some strictures were passed by Courts in the past against banks for not honouring the guarantee commitments promptly....: ‘We are therefore, of the opinion that the correct position of law is that commitment of banks must be honoured free from interference by the courts.”

MEL is now taking up the issue with the RBI, PMO and other concerned authorities.

end-of
Tags: 
meenakshi energy ltd, hdfc bank, bank guarantees, hyderabad commercial court
Location: 
India, West Bengal, Calcutta [Kolkata]
Latest From Companies
HUL CMD Sanjiv Mehta said the results show that the long-term structural opportunity of FMCG in India remains intact.

HUL Q1 net profit rises 5.7 pc to Rs 1,897 crore

The management of Radar has built and exited 3 different businesses themselves which helps the sensitise first time and even veteran entrepreneurs.

Radar India advisors scales a new high

The top seven cities of Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Pune and Bengaluru accounted for 4.45 billion km.

Delhi sees more night trips than Bengaluru, Mumbai, says Ola

Most Popular

Mukesh Ambani 9th richest on Forbes' real-time billionaires list
Top credit card myths harmful for your financial well-being
Microsoft CEO Satya Nadella tops Fortune's Businessperson of the Year 2019
Employment growth slowed down in last two years: report
GST structure: key challenges and its solutions

Editor's Picks

Income tax e-filers drop by over 6.6 lakh in FY19: Official data
Swiping on your smartphone reveals a lot about you to your social media company
  • Read Financial Chronicle as it appears in print.
  • Subscribe, and get it delivered in the inbox everyday.
  • Politics, Plan And Policy
  • Markets
  • Companies
  • Economy
  • In Other News
  • Autos
  • Just In
  • Home
  • About Us
  • Contact Us
  • Terms of Service
  • Privacy Guidelines
  • Copyright © 2019 Financial Chronicle, All rights reserved
Developed & Maintained By Daksham