Emaar MGF loses R90 cr for delay

Emaar MGF, the developer of the Commonwealth Games Village, suffered a setback with the Delhi High Court today allowing the Delhi Development Authority (DDA) to encash R90 crore, which was deposited by the company as bank guarantee, for not completing the project on time.

Emaar MGF, the developer of the Commonwealth Games Village, suffered a setback with the Delhi High Court on Monday allowing the Delhi Development Authority (DDA) to encash R90 crore, which was deposited by the company as bank guarantee, for not completing the project on time.

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In an interim order, justice Vipin Sanghi said that "the pay order for R90 crore may be encashed (by the DDA)."

The court passed the order on a petition filed by the company seeking to restrain DDA from seizing the bank guarantees of R183 crore as damages for not completing the project on time.

The court, however, said that the rest of the amount of R93 crore, shall not be encashed if it has not been encashed so far.

The Centre had directed DDA to confiscate the company's R183 crore bank guarantee which the later furnished before taking up the construction.

The court asked DDA to respond to Emaar's petition by November 11 and initially said if the guarantee had not been encashed, a status quo had to be maintained.

After the DDA submission, the court said then a status quo would have to be maintained in respect of R33 crore out of the bank guarantee and R60 crore which was still to be cleared through cheques.