GAMMON INDIA LTD. Vs. M. S. REDDY & CO.

LAWS(SC)-2003-4-142

SUPREME COURT OF INDIA

Decided on April 08,2003

GAMMON INDIA LTD. Appellant

VERSUS

M. S. Reddy And Co. Respondents

JUDGEMENT

- (1.) Leave granted.
(2.) This appeal is against the order dated 16.10.2001.
(3.) Briefly stated, the facts are as follows: The appellants were awarded a contract for the construction of the Adavinainar Koil Masonry Dam in the State of Tamil Nadu by the Public Works Department, Government of Tamil Nadu. The appellants sub-contracted a part of the work to the 1st respondent. One of the conditions of the sub-contract was that a bid guarantee, in a sum of Rs. 50 lakhs be given. Such a bid guarantee was furnished. The bid guarantee was taken to ensure that the 1st respondent would not: (a) withdraw his bid during the validity period; (b) that on acceptance of his bid the 1st respondent would not fail or refuse to execute his agreement; and (c) to ensure that the 1st respondent furnished a performance guarantee as per the terms of the contract. At the time the bid guarantee was given the performance guarantee was to be for 3% of the contracted sum i.e. a sum of Rs. 75 lakhs.;

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