State Bank of India, SME Branch, Trivandrum has today informed of receiving a claim for encashment of Bank Guarantee issued at the request of the Company for an amount of Rs. 17.21 lakhs ....
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State Bank of India's Trivandrum SME branch has informed Adtech Systems that Larsen and Toubro has filed a claim to encash two bank guarantees totalling Rs 17.21 lakhs. These guarantees were originally issued in 2019 as performance security for two floating grid-connected solar PV power plant contracts executed for L&T. The company has disputed the claim, stating it received no prior intimation or notice regarding any warranty-period service requirements. Adtech has approached L&T to seek reversal of the demand and is in talks to resolve the matter. If the talks fail, the Rs 17.21 lakhs will be paid by SBI and the company will indemnify SBI from its margin money deposit with the bank.
The direct financial impact is small at around Rs 17.21 lakhs and is covered by margin money already deposited with SBI, so there is no cash outflow concern. However, the dispute with a major client like L&T over performance obligations could be a minor negative signal for investor confidence regarding contract execution quality.