Bengaluru: Karnataka Rail Infrastructure Development Company (K-RIDE) has encashed bank guarantees worth Rs 57 crore belonging to Larsen & Toubro following failures in civil works under the Bengaluru Suburban Rail Project.
The action relates to Corridor 2 and Corridor 4 works of the Bengaluru Suburban Rail Project. Officials said the guarantees were invoked due to failure in execution and cancellation of contracts that allegedly violated agreed terms.
After a ruling by an arbitration tribunal, K-RIDE encashed two bank guarantees worth around Rs 57 crore that were issued by Yes Bank on behalf of L&T.
Earlier, L&T had obtained a court stay against the encashment of the bank guarantees. However, the tribunal, which included retired judges of the Supreme Court and High Court, rejected the company's request and ruled in favour of K-RIDE.
Following the order, the agency successfully secured the bank guarantee amount as compensation linked to the project issues.