GUARANTEE BOND IN FAVOUR OF THE GOVERNMENT
IN CONSIDERATION of the President of India (hereinafter called “the Government”) having agreed to exempt (Contractors), hereinafter called “the Contractor” from the demand, under the terms and conditions of an agreement entered into between ____________ and __________ for ____________ (hereinafter called “the said agreement”, of security deposit for the due fulfillment by the said contractor of the terms and conditions in the said agreement, on production of a bank guarantee for a sum of Rs._________ (Rupees_______________) only, we (Bank) (hereinafter called ‘The Bank’) do hereby undertake to pay to the Government an amount not exceeding Rs.________ against any loss or damage caused to or suffered by the Government by reason of any breach of the covenants by the said contractor under the recited agreement.
By (Bank) do hereby undertake to pay the said amount or any amount or amounts as may be due and payable under this guarantee without any demur, merely upon the demand to be made by the Government in respect of any amount of claim as being due by way of loss or damage caused or suffered by the Government by reason of any breach of the terms and conditions of the said agreement on the part of the contractor.
Be it expressly provided that any such demand made by the Government shall be conclusive as regards the amount due and payable by the Government under these presents, provided further, the liability to the bank shall be restricted to an amount not exceeding Rs.__________ (Rupees ______________________) only covered by this guarantee.
We (Bank) further agree that the Bank Guarantee contained herein shall remain in full force and effect during the period of the currency of the said agreement and that it shall continue to be enforceable by the Government till all the dues under or by virtue of the said agreement have been duly paid and/ or the claims fully satisfied or discharged or that the said agreement is fully and properly carried out by the said contractor.
Unless this guarantee is due or taken to have been discharged under any of the conditions stated hereinbefore the (bank) shall be discharged of the liability under this guarantee, unless the demand or claim is made therein on the bank in writing by or on behalf of the Government on or before ______________
We (Bank) further agree and declare that the Government shall have the fullest liberty without our consent or prior approval and without affecting in any manner our obligations hereunder to vary any of the terms and conditions of the said agreement or to extend time of its performance by the said contractor from time to time or to postpone for any time or from time to time any of the powers exercisable by the Government against the contractor and to bear or enforce any of the terms and condition relating to the said agreement and be it expressly declared that notwithstanding any such variation or extension being granted to the contractor by the Government or any forbearance, act, omission or indulgence on the part of the Government in favour of the contractor, the contractors shall not be relieved of their liability by reason of any such variation, extension or acts of forbearance.
We (Bank) do hereby undertake not to revoke this Guarantee during its currency expect with the previous consent in writing of the Government.
IN WITNESS WHEREOF, The (Banks) have affixed their Seals and Signed these presents on this ________ day of ________20___.