GUARANTEE FOR PERFORMANCE OF A CONTRACT

( When Third Party / Guarantor gives guarantee on behalf of principal in favour of Godrej )
This DEED OF GUARANTEE is made at _____ this ____ day of _____ by M/s ____ a Private Ltd
company having registered office address at ....................................../ or a Partnership firm
having place of business at
and being represented by
as a Partners / or a Sole
Proprietorship firm having place of business at
and represented by
(bank and
branch name) hereinafter referred to as the Guarantor (which expression shall unless it be
repugnant to the context or meaning thereof, mean and include his heirs, executors and
administrators , successors and assigns ) on behalf of M/s
a Private Ltd company having
registered office address a ....................................../ or a Partnership firm having place of
business at
and being represented by
as a Partners / or a Sole Proprietorship
firm having place of business at
and represented by M/s
hereinafter referred to as
THE PRINCIPAL ( which expression shall unless it be repugnant to the context to meaning
thereof, mean and include its heirs, executors, administrators and assigns and is executed in
favour of M/s Godrej & Boyce Mfg Co Ltd. registered under the Companies Act, 1956 and
having its registered office at Vikhroli West Mumbai-400079, hereinafter called the
Beneficiary which expression shall also include and mean the beneficiary its heirs, executors
and Administrators.)
WHEREAS
(a)
The Beneficiary has assigned the work relating to
to the Principal vide.
Contract / Agreement ( hereinafter the Contract ) Dated .................... Executed
between the Principal and beneficiary for
( Need to mention the authorized
purpose of the contract ). And as per the clause / provision .................. of the said
Contract , the Principal has agreed therein to furnish a Performance Guarantee to the
extent of Rs.
for making the completion of the said work within a period of
in terms of the Contract.
(b)

Now, as specifically enunciated in the clause ( a ) above and as per mutual

understanding , the Guarantor has agreed to furnish a guarantee in favour of the
beneficiary on behalf of the Principal , now, therefore this performance guarantee
witnessed as under: .

GUARANTEE No.
...

NOW THE GUARANTOR HEREBY AGREES with the principal and Beneficiary as follows:

(i)

That if the said Principal (unless relieved from the performance by any clause of the
contract or by statute or by the decision of a tribunal or by competent courts ) shall fail
to execute the contract or fails to fulfill or execute all warranties and assurance given to
the Beneficiary vide the above mentioned Contract or commit any breach of their
obligations or any of the terms and conditions of the said Contract or does not complete
the entire work/ its performance as assigned under the said contract, within a period of
then the guarantor shall be liable to make a payment of a sum of Rs.
and this right of Beneficiary is without prejudice to any other rights and remedies that
beneficiary may have at law or in equity for damages or otherwise

(ii)

That the Guarantor undertakes to pay the beneficiary merely on a demand any and all
money payable by the Principal to the extent of Rs.
as aforesaid at any time up
to
stating that the amount claimed is due by way of loss or damage caused to
or could be caused or suffered by the Beneficiary meant by reason of breach by the said
Principal of any terms or conditions contained in the said contract, without any demur,
reservation, contest, recourse or protest or without any reference to the Principal. Any
such demand made by the beneficiary shall be conclusive and binding. However the
liability of the Guarantor under this guarantee shall be restricted to an amount not
exceeding Rs
.

(iii)

That the Guarantor undertake to pay the beneficiary any sum as demanded
notwithstanding any difference between the principal and the beneficiary or any suit or
proceeding pending before any Court or Tribunal or any other Authority.

(iv)

That the beneficiary judgment relating to failure of the principal in the matter of
performance of the contract shall be final and the liability of the guarantor is thus,
absolute and irrevocable.

(v)

That if any dispute shall arise as to the amount of any such losses, damages, costs,
expenses or otherwise the amount thereof shall be determined by the Authorized
Official of the beneficiary and whose decision will be final / conclusive and binding on
the guarantor.

(vi)

That this guarantee shall remain in full force and virtue till a period of
from
the date of its execution OR until it is released by the Beneficiary after the expiry of the
relative guarantee period of the said contract and after the Principal has discharged all
his obligations under the said contract and produced a certificate of the due completion
of the work under the contract and submitted a No demand Certificate provided
always this guarantee shall in no event remain in force after the day of
without
prejudice to any claim/claims arisen and demanded from or otherwise notified to the
guarantor in writing on or before the said date which will be enforceable against the
guarantor, Principal notwithstanding the same is or enforced beyond the said date

(vii)

That the guarantor further undertakes to renew this guarantee for such further period
as may be desired by the beneficiary provided, however, that such renewal is made at
least
before expiry of the period of guarantee. That the guarantor shall not be
discharged or released from this guarantee by any arrangement made between the
principal and the beneficiary with or without the assent of the guarantor or by any
alteration in the obligation undertaken by the contract or by any forbearance whether
as to payment, time , performance or otherwise.

(viii)

That the beneficiary shall have the fullest liberty from time to time, without affecting in
any way the liability of the guarantor under this guarantee, to vary any of the terms and
conditions of the said contract or extend time of performance of the principal or to
postpone for any time or time to time any of their rights or powers against the principal
and either to enforce or forbear to enforce any of the terms and conditions of the said
contract. The guarantor shall not be released from its liabilities under this guarantee by
the exercise of the aforesaid liberty by the principal.

(ix)

That the beneficiary shall also at its option enforce this guarantee against the guarantor
as a principal debtor, in the first instance in addition to proceeding against the
principal and notwithstanding any security or other guarantee that the beneficiary may
have in relation to the principals liabilities.

(x)

That subject to the maximum limit of liability as aforesaid this guarantee will cover all
the claim/claims against the principal from time to time arising out of or in relation to
the said contract and in respect of which any notice in writing is received by the
guarantor before date of expiry of this guarantee. And if no such claim has been
received by the guarantor by the said date, all the beneficiarys rights under this
guarantee shall cease, however if such claim has been received by the said date, then
the beneficiarys rights under this guarantee shall not cease until the guarantor has
satisfied that claim.

(xi)

That this guarantee shall not in anyway be affected by the beneficiary taking or giving
up any securities from the principal or any person, firm, or company on its behalf or by
the winding up, dissolution, insolvency, reconstruction or death as the case may be of
the principal.

(xii)

That the guarantee shall not be affected by any change in the constitution of the
principal or the guarantor or the beneficiary.

(xiii)

That the guarantor undertakes not to revoke this guarantee during its currency without
the previous consent of the beneficiary in writing.

(xiv)

That this guarantee and the powers and provisions herein contained are in addition to
not by way of limitation of or substitution for any other guarantee or guarantees thereto
given to the guarantor by the beneficiary. And now standing uncancelled and that this
guarantee is not intended to and shall not revoke or limit such guarantee.

(xv)

That the guarantor declares that it has the power to issue Performance Guarantee in
favour of the beneficiary under its Memorandum and Articles of Association _________
and that the undersigned has full power to execute Performance Guarantee under the
power of attorney to him/her given by _______________.

(xvi)

That any notice by way of demand or otherwise may be sent by courier, telex, fax, or
registered post acknowledgement due to the registered office of the Guarantor and if
sent by post it shall be deemed to have been given when the same has been posted.

(xvii) That the guarantor irrevocably submits to the jurisdiction of the courts of Mumbai over
any suits, action or proceeding arising out of or relating to this Guarantee. Agreement.
However unless an action to enforce a claim or claims under this guarantee is filed
against the guarantor within
from the date (i.e. from the validity period of this
guarantee) all the rights under the said guarantee of the beneficiary shall be forfeited
and the guarantor shall be relieved and discharged from all liability there under.

Arbitration Clause :
If any dispute arises between the Parties hereto, during the subsistence or thereafter, in
connection with validity, interpretation, implementation or alleged material breach of any of
the provisions of this Agreement or regarding any question including the question as to
whether the termination of the Agreement by the parties hereto has been legitimate, the
Parties hereto shall endeavour to settle such disputes amicably. In case of failure of the Parties
to settle such disputes within 30 (thirty) days, all such disputes and differences shall be
referred and finally resolved by a Sole Arbitrator to be appointed by Godrej in accordance with
the Arbitration and Conciliation Act, 1996.
The venue of arbitration shall be Mumbai.

Notwithstanding anything stated herein above;

a) Our liability under this Bank guarantee shall not exceed Rs.___________ (Rupees.
___________ Only)
b) This guarantee shall be valid uptoand

c) We are liable to pay the guaranteed amount or any part thereof under this Bank Guarantee only,
and only if you lodge with us a written claim or demand at the above referred address of our
branch/ issuing office on or before __________________. All your rights under this
guarantee shall be forfeited and we shall be relieved and discharged of our liability thereafter.
IN WITNESS WHEREOF the GUARANTOR has put his hand on the day and year first
hereinabove written.

SIGNED, SEALED AND DELIVERED by

The within named X,
)
The GUARANTOR above named, in

The presence of __________