Court Restrains Delhi Urban Shelter Improvement Board from Invoking Expired Bank Guarantees Pending Renewal
In a significant decision, the Delhi High Court has granted temporary relief to Supreme Infrastructure India Ltd by restraining the Delhi Urban Shelter Improvement Board (DUSIB) from invoking expired bank guarantees. The order came in response to a petition filed by Supreme Infrastructure seeking protection against the invocation of bank guarantees linked to a terminated contract for constructing 7400 EWS houses under the JNNURN project at Bhalaswa, Jahangirpuri.
Justice Sachin Datta presided over the case, where the petitioner argued that the bank guarantees had expired, and no valid reason existed for their invocation. Counsel for Supreme Infrastructure, Mr. Shashank Garg, assured the court that the expired guarantees would be renewed, but requested the court to prevent any precipitative action by DUSIB until such renewal was completed.
The court acknowledged the petitioner's commitment to renewing the expired guarantees and instructed DUSIB not to take any action regarding the guarantees until the renewal process is complete and the guarantees are kept active during the pendency of the case. The decision provides interim protection to Supreme Infrastructure, allowing them time to renew the guarantees without the threat of immediate invocation by DUSIB.
The respondent's counsel, Mr. Anuj Chaturvedi, accepted notice on behalf of DUSIB and sought time to gather instructions. The court has directed the respondent to file a reply within two weeks, with the next hearing scheduled for September 3, 2026.
This case underscores the complexities involved in contract terminations and the legal recourse available for entities seeking protection against financial liabilities arising from such terminations. The court's decision provides a temporary reprieve to Supreme Infrastructure, enabling them to address the issue of expired bank guarantees without immediate financial repercussions.
Bottom line:-
Restraint on invocation of expired bank guarantees granted, subject to petitioner renewing and keeping them alive during the pendency of the petition.
Statutory provision(s): Contract Law
