Bank of Baroda moves Supreme Court against Calcutta HC order on bank guarantee1 min read . Updated: 25 Feb 2020, 10:44 PM IST
Calcutta HC was hearing a case involving Bank of Baroda and IOCL on a bank guarantee issued to Simplex Projects and later invoked by the OMC
Mumbai: Public sector lender Bank of Baroda (BoB) on Tuesday said it has moved the Supreme Court challenging an order passed by the Calcutta High Court in a case regarding a bank guarantee issued on behalf of Simplex Projects Ltd.
"The bank has, after seeking legal advice, decided to exercise its rights available under law, by preferring a challenge against the aforesaid orders passed by the Calcutta High Court before the Supreme Court of India," the bank said in a statement.
The Calcutta High Court had earlier this month asked the Reserve Bank of India (RBI) to consider “appropriate steps" against Bank of Baroda (BoB), including cancelling its banking license, for delaying to honour a bank guarantee. The court was hearing a case involving Bank of Baroda and Indian Oil Corp Ltd (IOCL) on a bank guarantee issued to Simplex Projects Ltd and later invoked by the oil marketing company (OMC).
“Considering the conduct of the appellants, the Reserve Bank of India should consider what appropriate steps may be taken against the Bank of Baroda, including revoking its licence or the authority to carry on banking business, if necessary," the order dated 10 February by Justice Sanjib Banerjee and Justice Kausik Chanda had said.
The order by the Calcutta High Court had said that IOCL entered into an agreement with Simplex Projects in 2017 for undertaking work at the Bongaigaon facility of IOCL. For this, Simplex was required to provide a bank guarantee on account of security deposit. An unconditional bank guarantee was furnished by the lender on behalf of Simplex for about ₹6.97 crore.
Meanwhile, the bank on Tuesday assured its customers and stakeholders, it is business as usual for the bank. "The bank will take appropriate steps and comply with all legal and regulatory requirements. Bank of Baroda stands committed to protecting customer interests and the trust placed in it," it said.