PROJECT GENERAL CONDITIONS

OF CONTRACT (GCC)
ENGINEERING ANNEXURES
MANAGEMENT Revision no. 07

ANNEXURE-III

BANK GUARANTEE FOR PERFORMANCE SECURITY

Bank Guarantee No:________

Date:_______

To,
NAME
& ADDRESSES OF THE BENEFICIARY

Dear Sirs,
In consideration of the Bharat Heavy Electricals Limited 1 (hereinafter referred to as the 'Employer' which expression shall
unless repugnant to the context or meaning thereof, include its successors and permitted assigns) incorporated under the
Companies Act, 1956 and having its registered office at through its Unit at....................... (name of
the Unit) having awarded to (Name of the Vendor / Contractor / Supplier) having its registered office at
2 hereinafter referred to as the 'Vendor/Contractor/Supplier', which expression shall unless
repugnant to the context or meaning thereof, include its successors and permitted assigns), a contract Ref
No........................dated ........................................3 valued at Rs ........... 4 (Rupees )/ FC
. (in words ...........................) for..................... 5 (hereinafter called the 'Contract') and the
Vendor/Contractor/Seller having agreed to provide a Contract Performance Guarantee, equivalent to ...... % (.... Percent)
of the said value of the Contract to the Employer for the faithful performance of the Contract,

we, ..................... , (hereinafter referred to as the Bank), having registered/Head office at ................ and inter alia a branch
at ............ being the Guarantor under this Guarantee, hereby, irrevocably and unconditionally undertake to forthwith and
immediately pay to the Employer a maximum amount Rs (Rupees ) without
any demur, immediately on first demand from the Employer and without any reservation, protest, and recourse and without
the Employer needing to prove or demonstrate reasons for its such demand.

Any such demand made on the Bank shall be conclusive as regards the amount due and payable by the Bank under this
guarantee. However, our liability under this guarantee shall be restricted to an amount not exceeding Rs.

We undertake to pay to the Employer any money so demanded notwithstanding any dispute or disputes raised by the
Vendor/Contractor/ Supplier in any suit or proceeding pending before any Court or Tribunal, Arbitrator or any other
authority, our liability under this present being absolute and unequivocal.

The payment so made by us under this Guarantee shall be a valid discharge of our liability for payment thereunder and
the Vendor/Contractors/Supplier shall have no claim against us for making such payment.

We the ........................ bank further agree that the guarantee herein contained shall remain in full force and effect during
the period that would be taken for the performance of the said Contract/satisfactory completion of the performance
guarantee period as per the terms of the Contract and that it shall continue to be enforceable till all the dues of the
Employer under or by virtue of the said Contract have been fully paid and its claims satisfied or discharged.

We ................. BANK further agree with the Employer that the Employer shall have the fullest liberty without our consent
and without affecting in any manner our obligations hereunder to vary any of the terms and conditions of the said Contract
or to extend time of performance by the said Vendor/Contractor/Supplier from time to time or to postpone for any time or
from time to time any of the powers exercisable by the Employer against the said Vendor/Contractor/Supplier and to
forbear or enforce any of the terms and conditions relating to the said Contract and we shall not be relieved from our
liability by reason of any such variation, or extension being granted to the said Vendor/Contractor/Supplier or for any
forbearance, act or omission on the part of the Employer or any indulgence by the Employer to the said
Vendor/Contractor/Supplier or by any such matter or thing whatsoever which under the law relating to sureties would but
for this provision have effect of so relieving us.

The Bank also agrees that the Employer at its option shall be entitled to enforce this Guarantee against the Bank as a
principal debtor, in the first instance without proceeding against the Vendor/Contractor/Supplier and notwithstanding any

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 PROJECT GENERAL CONDITIONS
OF CONTRACT (GCC)
ENGINEERING ANNEXURES
MANAGEMENT Revision no. 07

security or other guarantee that the Employer may have in relation to the Vendor/Contractor/Supplier 's liabilities.

This Guarantee shall remain in force upto and including................................... 7 and shall be extended from time to time
for such period as may be desired by Employer.

This Guarantee shall not be determined or affected by liquidation or winding up, dissolution or change of constitution or
insolvency of the Vendor/Contractor/Supplier but shall in all respects and for all purposes be binding and operative until
payment of all money payable to the Employer in terms thereof.

Unless a demand or claim under this guarantee is made on us in writing on or before the .....................................8 we
shall be discharged from all liabilities under this guarantee thereafter.

We, .................. BANK lastly undertake not to revoke this guarantee during its currency except with the previous consent
of the Employer in writing.

Notwithstanding anything to the contrary contained hereinabove:

a. The liability of the Bank under this Guarantee shall not exceed ..............................6
b. This Guarantee shall be valid up to ..................7
c. 8 all
rights under this guarantee shall be forfeited and the Bank shall be relieved and discharged from all
liabilities under this guarantee irrespective of whether or not the original bank guarantee is returned to
the Bank.

rantee under law and the undersigned as a duly

authorized person has full powers to sign this Guarantee on behalf of the Bank.

Dated................. .. For and on behalf of

Place of Issue.................. . (Name of the Bank)

1 NAME AND ADDRESS OF EMPLOYER i.e. Bharat Heavy Electricals Limited

2 NAME AND ADDRESS OF THE VENDOR / CONTRACTOR / SUPPLIER.
3 DETAILS ABOUT THE NOTICE OF AWARD/ CONTRACT REFERENCE
4 CONTRACT VALUE
5 PROJECT/SUPPLY DETAILS
6 BG AMOUNT IN FIGURES AND WORDS
7 VALIDITY DATE
8 DATE OF EXPIRY OF CLAIM PERIOD

Note:
1. Units are advised that expiry of claim period may be kept 3-6 months after validity date. It may be ensured that the
same is in line with the agreement/ contract entered with the vendor.

2. The BG should be on Non-Judicial Stamp paper/e-stamp paper of appropriate value as per Stamp Act prevailing in
the State(s) where the BG is submitted or is to be acted upon or the rate prevailing in the State where the BG was
executed, whichever is higher. The Stamp Paper/e-stamp paper shall be purchased in the name of
Vendor/Contractor/Supplier/Bank issuing the guarantee.

3. In line with the GCC, SCC and contractual terms, Unit may carry out minor modifications in the Standard BG Formats.

4. In Case of Bank Guarantees submitted by Foreign Vendors-

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 PROJECT GENERAL CONDITIONS
OF CONTRACT (GCC)
ENGINEERING ANNEXURES
MANAGEMENT Revision no. 07

a) From Nationalized Public Sector 1 Private Sector/ Foreign Banks (BG issued by Branches in India) can be accepted
subject to the condition that the Bank Guarantee should be enforceable in the town/ city or at nearest branch where
the Unit (New Delhi for POs issued from PEM Noida/ PO issuing agency) is located i.e. Demand can be presented
at the Branch located in the town/ city or at nearest branch where the Unit is located.

b) From Foreign Banks (wherein Foreign Vendors intend to provide BG from local branch of the Vendor country's Bank)
b.1 In such cases, in the Tender Enquiry/ Contract itself, it may be clearly specified that Bank Guarantee issued by
any of the Consortium Banks only will be accepted by BHEL. As such, Foreign Vendor needs to make
necessary arrangements for issuance of Counter-
suance of Bank Guarantee/
Counter- Guarantee should be borne by the Foreign Vendor. The tender stipulation should clearly specify these
requirements.
b 2 In case, Foreign Vendors intend to provide BG from Overseas Branch of our Consortium Bank (e.g. if a BG is
to be issued by SBI Frankfurt), the same is acceptable. However, the procedure at sl.no. b.1 will required to be
followed.
b 3 The BG issued may preferably be subject to Uniform Rules for Demand Guarantees (URDG) 758 (as amended
from time to time). The BG Format provided to them should clearly specify the same.

or & On behalf of Guarantee issuing bank

(Office Seal)
Name:
E-mail ID:
Contact number:

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