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This query is : Resolved 

Suppose a contractor is getting a direct contract from govt. entity. He wants to give it on sub-contract to a third party by based on MOU between the main contractor and sub-contractor.

Whether as per MOU an escrow account can open for the main contractor and sub-contractor for the said contract. Bankers should make to payments to the sub-contractor based on the share mentioned in MOU.

Whether this mode is possible.
Note- Client is not part of this Escrow mechanism

Yes, this is possible if the bankers agree for such transfer.

Thanks, Is it possible, if as per contract clause sub contracting is not allowed. Client is government.

In such a case sub contracting is not possible.

Thanks for reply. We can summarize as follows 1) If contract clause allows sub contracting, main contractor and sub contractor can open Escrow account with bank even without Approval of client. 2) If contract clause doesn't allows sub contract can't open ESCROW account even without client knowledge. Hope my understanding is correct.

Yes, your understanding is right.

Thanks a lot sir......

You are welcome.. .....

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