Act of God Does Not Justify Retention Of Performance Bank Guarantee Without Suffering Legal Injury: Delhi High Court

The Delhi High Court ruled that an “Act of God” cannot justify the retention of a performance bank guarantee if the party suffers a legal injury. In this case, a construction company faced delays due to severe weather conditions, but the court determined that this natural occurrence did not relieve the party from their contractual obligations or the guarantee's forfeiture. The decision emphasizes that while “Act of God” may excuse certain failures, it does not absolve parties from the contractual repercussions or entitlements, particularly in the context of performance guarantees. The ruling aims to uphold the integrity of contractual commitments and ensures that performance guarantees are not unfairly retained.