Hyderabad-based Maytas Infra has issued a legal notice to Vedanta Aluminum for "fraudulently and illegally" encashing two bank guarantees worth Rs 64 crore (Rs 6.4 million) on January 20 and for not clearing admitted dues, the company said in a press release on Thursday.  The bank guarantees were given by Maytas towards the contract awarded by Vedanta for the construction of a township on May 7, 2008.

The legal notice by Maytas Infra is a result of the breach of contract by Vedanta as the latter has encashed the bank guarantees without even terminating the contract or establishing any breach of the terms and conditions by Maytas Infra. The bank guarantee can be invoked only if the company provides a termination contract or establishes breach of terms and conditions, Maytas said.

Besides, Vedanta has not paid the undisputed amounts worth Rs 29 crore (Rs 2.9 million) towards the bills submitted by Maytas Infra for the last two months. Further, Vedanta in collusion with local authorities had illegally confined the employees of Maytas Infra working at their Jharsuguda site from January 15 to 25.

"Vedanta Aluminium fraudulently encashed our bank guarantees and also did not settle our bills. It has not issued any termination notice to Maytas Infra as of today, neither has there been any intimation from them on any breach of terms and conditions. It is a clear case of Vedanta taking advantage of the situation that Maytas Infra is currently in. Armed with money that lawfully belongs to Maytas Infra, Vedanta is in talk with other local contractors to complete the project," Sudheer Mareddi, vice-president (buildings and structures), Maytas Infra, said.

For non-settlement of the admitted dues, Maytas Infra has served a statutory legal notice of winding up the project to Vedanta Aluminium under the Companies Act, and is in the process of filing a company winding-up petition before the Bombay high court, Maytas said.

The Rs 232-crore (Rs 2.32 billion) township project was to be completed by December 2009. Maytas Infra had already completed work amounting to Rs 35 crore (Rs 350 million), it added.