The VVIP chopper scam is not the only setback for Italian helicopter manufacturer AgustaWestland which may now have to forego a Rs three crore bank guarantee it had deposited to bid for a tender floated by the Indian Navy to procure 56 naval utility helicopters.
The Italian company may have to forego the amount as it has neither deposited it in the court, nor given a bank guarantee of a nationalised bank or banks such as ICICI, Axis Bank or HDFC as directed by the high court.
The court had made it clear that not complying with its directions, would lead to revocation of the interim order staying the government from invoking the amount.
The amount of Rs three crore was deposited by the company along with the pre-contract integrity pact, which was one of the conditions of the request for technical and commercial proposal (RFP) issued to it by the government.
The integrity pact, signed in 2013, said that if a successful bidder violated the agreement, it would entail forfeiture of the bank guarantee.
Central government standing counsel Anurag Ahluwalia, appearing for the Centre, had told the court that on October 17, 2014, the bank guarantee was invoked and full payment of the amount was demanded as the company had allegedly violated the integrity pact.
In its petition challenging the invocation of the bank guarantee, the company has said that the government in its invocation letter did not say that the RFP has already been withdrawn.
The company claimed that it was not informed of any alleged breach of the integrity pact and that once the government had withdrawn the RFP, it had no right to seek enforcement of the bank guarantee.
It had said that the government instead was obligated to return the bank guarantee.
The company has also alleged that by invoking the bank guarantee, the government was trying to "unjustly enrich itself".
It has sought directions restraining the Centre from invoking the bank guarantee.