Case Law Analysis
|Calcutta High Court
Bank Guarantee Cannot Be Encashed After Defects Liability Period Without Proof of Defects | Contractual Performance Security : Calcutta HC
The Calcutta High Court has ruled that a public entity cannot invoke a bank guarantee after the defects liability period expires unless it proves the existence of unresolved defects and issues a valid notice. This reinforces that performance security is not an automatic fallback for delayed or unverified claims, protecting contractors from arbitrary encashment and upholding the contractual balance between security and accountability.