The Supreme Court has annulled the interim order previously issued in favour of the contractor of the Sunkoshi Marin Diversion Multipurpose Project.

A bench of Justices Hari Prasad Phuyal and Nityananda Pandey on Tuesday ruled that the earlier interim order would not continue, opening the way for the seizure of the contractor’s bank guarantee.

The court’s decision allows the government to seize Rs3.6 billion in bank guarantees submitted by Patel–Raman JV for performance security and advance payments.

The project office had decided on November 11 last year to terminate the contract with Patel–Raman JV for civil structures, including the headworks and powerhouse, and for the supply and installation of hydromechanical equipment, issuing a 15-day notice.

Following the termination, the office moved to seize Rs2.4 billion of performance guarantees and Rs1.2 billion of advance payments, totalling Rs3.6 billion.

Patel–Raman JV filed a writ at the Supreme Court on November 25 against the project office, the Ministry of Energy, Water Resources and Irrigation, and other concerned bodies. On November 26, a bench led by Justice Tek Prasad Dhungana issued an interlocutory order barring the contract termination and guarantee seizure, and called both sides for hearings.

The government later petitioned to vacate the interim order. With Tuesday’s ruling, contract termination and the seizure of advance and performance guarantees can now proceed.