Deed of Guarantee by a Bank on Behalf of a Company for the Performance of a Contract in Favour of State Government

Deed of Guarantee by a Bank on Behalf of a Company for the Performance of a Contract in Favour of State Government

THIS DEED OF GUARANTEE MADE THIS …………… day of ……………  between the Bank of Credit (hereinafter called the bank) of the one part and the State of West Bengal represented by its Governor Sri …………………… (hereinafter called the state) of the other part.

WHEREAS by Acceptance of Tender No. ……… dated ………… made between X Ltd.  a company incorporated under the Indian Companies Act having its registered office at ……………… (hereinafter called the company) it was witnessed that the COMPANY agreed with the State of West Bengal for supply of plants, machinery and equipment in accordance with terms, specifications and conditions therein contained which inter alia provided for an advance of Rs. 2 lakhs being equivalent to 10% of the total F.O.B. value of the contract price (such payment to be secured by a Bank Guarantee);

And whereas the bank has at the request of the company agreed to stand surety for and guarantee refund of the said advance in case the plants, machinery and equipment of the value 20 lakhs aforesaid is not delivered to the State  of West Bengal in accordance with the terms and conditions of the said agreement, and the state of ……………… agreed to make the said advance on such bank’s guarantee as aforesaid:

Now THIS DEED WITNESSES AS FOLLOWS:

1. In consideration of the state of ………… having agreed to advance a sum of ………… to the company, through the bank, for the purpose hereinbefore indicated, the bank do hereby guarantee that in case the company shall fail and/or neglect to supply the state the plants, machinery and equipment of the value of ………………in accordance with the specifications and conditions contained in the Acceptance of Tender dated the ………… subject to any amendments or modifications thereof, if any, when made, the bank shall repay to the state such amount or amounts, as the bank may be called upon to pay subject to the maximum limit of …………………

2. This guarantee of the bank shall be effective immediately upon receipt of the sum of …………… from the state for and on behalf of the company and shall continue in force until and unless the supply of plants, machinery and equipment of the value of ………… aforesaid is fully effected.

3. The guarantee hereinbefore contained shall not be affected by any change in the constitution of the bank or of the company nor in the event of any winding-up order being made against the company.

In witness whereof the parties hereto have set and subscribed their respective hands and seals the day, month and year first above-written.

For and on behalf of the State

of  West Bengal                                                                                                 Bank of Credit

1.  …………………

2.  …………………

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