ICICI gets more time to deposit Maytas money

22 May 2009, ET Bureau

MUMBAI: ICICI Bank, which has given the performance guarantee for one of Maytas Infrastructure’s projects, can deposit the amount it underwrote for a highway project in Tamil Nadu after it is heard by the Bombay High Court in June.

A division bench of justices Abhay Oka and AR Joshi on May 15 had asked ICICI Bank to deposit Rs 20 crore with the court in one week towards the performance guarantee amount, following an appeal by Maytas. The bank sought the order to be reviewed and asked for time for depositing the money, which the court allowed. The case will come up for further hearing when the court reopens after the summer vacation.

The court on Thursday was told that the bank had not been served the appeal filed by Maytas in connection with invoking of its guarantee. The division bench of justices Anand Nirgude and Rajesh Ketkar has allowed the bank four weeks to deposit about Rs 20 crore (the performance guarantee) in the court.

Meanwhile, the bench, which passed the order for the bank to deposit the money, can hear the bank’s contention and review the order if needed.

Maytas was sub-contracted the project for expansion of NH68 by Utility Energytech, an ADAG company. According to Utility Energytech counsel Shrihari Aney, Maytas defaulted on performance. After the Satyam fiasco, Utility Energytech terminated the contact with Maytas and invoked the mobilisation guarantee of Rs 40 crore.

Maytas then initiated arbitration proceedings alleging that land for the project was not acquired in time. It sought a stay on execution of the performance guarantee, which was underwritten by ICICI. Its contention was that Utility Energytech must not receive the money pending the arbitration proceeding.

Solicitor Ashu Thakur, on behalf of Maytas, said that the court had stayed the invocation of the performance guarantee till May 15. Within this time, Maytas filed an appeal against the order. However, the bank was not served the appeal in which the said order was passed, said the bank’s counsel Venkatesh Dhond.