The Calcutta High Court has directed the Reserve Bank of India to initiate appropriate action against Bank of Baroda (BoB), including canceling its licence or authority to run its banking business, if essential, for failing to adhere a bank guarantee given by a third party to Indian Oil Corporation (IOCL).
In a matter pertaining to an appeal by BoB against IOCL, a division bench including Justices Sanjib Banerjee and Kaushik Chanda considered a cross-objection by respondent IOCL on February 10, right away after rejecting the appeal by BoB for default, since the appellants could not go ahead with the matter.
The oil company has reported to the court that it had inked an agreement with Simplex Projects Limited in 2017 for commissioning certain work at the Bongaigaon facility of IOCL in Assam.
In terms of such agreement, IOCL was gratified to make a mobilisation advance alongside a bank guarantee, while Simplex was also required to provide a bank guarantee on account of security deposit, the court noted.
