On 12.08.2010, JMC Projects (India) Ltd. entered into a contract with the Ministry of Health & Family Welfare for construction of AIIMS Hospital Complex at Bhopal – Package II. The commencement date was 10.09.2010 and the completion date was 09.09.2012. Although the Virtual Completion Certificate has been issued only in October 2019, but the Hospital is functional since January 2013. The Virtual Completion Certificate was issued with effect from 12.10.2019. Presently, the project is under the Defect Liability Period of 12 months. JMC has already raised its claim of more than Rs.140 Crores, which is under dispute resolution process.

In the meantime, COVID-19 broke out and to ease the pressure on the economy, the Hon’ble Prime Minister on 13.05.2020 introduced the policy guideline – Atmanirbhar Bharat. Pursuant to the same, the Ministry of Finance also issued two Circulars on 13.05.2020, which provides for pro-rata release of Bank Guarantees provided by the Contractor. The aim of the same is to provide sufficient liquidity in the market, so that the economy can sustain.

Relying on the same, JMC sought for release of its Bank Guarantees; however, the AIIMS Bhopal did not take any step to release the Bank Guarantees pursuant to the Atmanirbhar Bharat. The Authority did not even respond to the various mails of JMC in this regard, wherein JMC sought release of the Bank Guarantee.

Not getting any response from the Authority despite the Government Guidelines and Circulars, JMC approached the Delhi High Court seeking release of the Bank Guarantees in terms of the Atmanirbhar Bharat. JMC is represented by Mr. Manoj K Singh, Founding Partner of Singh & Associates.

Today when the matter was taken up through virtual hearing by the Delhi High Court, Justice V Kameswar Rao after hearing Mr. Manoj K Singh, Founding Partner of Singh & Associates and Mr. Chetan Sharma, Ld ASG, was pleased to issue Notice, returnable on 16.09.2020. The Court has also asked the Union of India to file its response within 4 weeks.

This will be a very interesting matter to follow, if the Court agrees with JMC’s contention regarding release of Bank Guarantee pursuant to Atmanirbhar Bharat and Ministry of Finance’s Circulars, then the same will pave the path for restructuring the economy.