Bank Guarantee in lieu of security deposit for due fulfilment of the contract

In consideration of the _____________ Corporation of India Limited (hereinafter called “the CORPORATION”) having agreed to exempt M/s ________________ hereinafter called “the said CONTRACTOR”) from the demand under the terms and conditions of a contract being Purchase Order No. _________ dated _________ (hereinafter referred to as “the said Contract” of security deposit for the due performance by the said Contractors and the terms and conditions containing in the said contract, been furnished by the Contractor the Bank Guarantee of Rs. _____________ (Rupees _____________ only.

1. We __________________ Bank (hereinafter referred to as “the said BANK”) do hereby undertake to pay to the Corporation an amount not exceeding Rs. ______________ against any loss or damage caused to or suffered by or would be caused to or suffered by the said Corporation by reason of any breach by the said Contractors of any of the terms and conditions embodied in the said contract.
2. We ______________________ Bank do hereby undertake to pay to the said Corporation the amount due and payable under this guarantee without any demur, correctly upon a demand to be made upon a demand to be made upon the Bank by the said Corporation in respect of the amount claimed which would become by way of loss or damage caused to or suffered by or would be caused to or suffered by the said Corporation by reason of any breach by the Contractors of any of the terms and conditions embodied in the said contract or by reason of the Contractor’s failure to perform the said contract.
3. Be it declared and confirmed that any demand made on the bank by the said Corporation under this guarantee shall be conclusive and final as regards the amount due and payable by the bank under these presents PROVIDED HOWEVER, the liability of the bank shall be restricted to an amount not exceeding Rs. ___________ covered by this Guarantee.
4. We ____________ Bank do hereby further agree that the Guarantee herein contained shall remain in full force and effect up to ________ or for such extended period as may be agreed by the bank upon request made by the Contractors considering a period that would be taken for the performance of the said contract and this shall continue to be enforceable till all the dues and/ or claims and the said Corporation under or by virtue of the said contract have been fully paid or discharged by the said Contractors or till the said Corporation certifies that the terms and conditions of the said Contract have been duly carried out and performed in full by the said Contractor and accordingly discharges this Guarantee.
5. This Guarantee shall remain in full force and effect during the period as stated hereinabove and unless a demand or claim under this Guarantee made on the bank in writing on or before the __________ the Bank shall be discharged from all liability under this Guarantee thereafter.
6. We _______________ Bank further agree-and confirm that the Corporation shall have the liberty without our consent and without affect in any manner our obligations hereunder to vary any of the terms and conditions of the said contract including extension of the time of its performance and/or to forbear or enforce any of the terms and conditions relating to the said contract and the bank shall not be relieved from the liability by reason of any such variation, extension or forbearance on the part of the said Corporation in favour of the Contractor.
7. We ______________ Bank do hereby undertake not to revoke this Guarantee during its currency except with the previous approval/consent of the Corporation in writing.

Signed on the __________ day of ___________.

WITNESSES:

For ________________ Bank.