Naval chopper tender: AgustaWestland withdraws HC plea on bank guarantee

AgustaWestland withdrew the plea as the Centre had encashed the bank guarantee after the high court revoked its stay preventing the government from invoking it

Italian helicopter manufacturer AgustaWestland has withdrawn from the Delhi High Court a plea against invocation by the Indian Navy to buy 56 naval utility choppers of its Rs 30 million bank guarantee deposited to bid for a tender floated

The company withdrew the plea as the Centre had encashed the bank guarantee after the high court revoked its stay preventing the government from invoking it.

The submission on behalf of the Italian company was made before Justice Jayant Nath who "dismissed as withdrawn" the civil suit of the helicopter manufacturer.

The high court on October 17 last year had revoked its stay on the invocation of the bank guarantee.

The order came as the Italian company had neither deposited the amount of Rs 30 million in the court, nor given a guarantee of a nationalised bank or banks such as ICICI, Axis Bank or HDFC as directed by the high court.

The court had earlier made it clear that not complying with its directions would lead to revocation of the interim stay order.

The amount of Rs 30 million was deposited by the company along with the pre-contract integrity pact, which was one of the conditions of the request for technical and commercial proposal (RFP) issued to it by the government.

The integrity pact, signed in 2013, said that if a successful bidder violated the agreement, it would entail forfeiture of the bank guarantee.

Central government standing counsel Anurag Ahluwalia, appearing for the Centre, had earlier told the court that the bank guarantee was invoked and full payment of the amount was demanded as the company had allegedly violated the integrity pact.

In its petition challenging the invocation of the bank guarantee, the company had said that the government in its invocation letter did not say that the RFP has already been withdrawn.

The company had claimed that it was not informed of any alleged breach of the integrity pact and that once the government had withdrawn the RFP, it had no right to seek enforcement of the bank guarantee.

It had said that the government instead was obligated to return the bank guarantee.

The company, in its plea, had also alleged that by invoking the bank guarantee, the government was trying to "unjustly enrich itself".