New Delhi: In a classic case, which establishes that government entities may have to pay a higher price at a later stage, the NHAI has asked a private firm to stop clearing bills of barely Rs 20 crore worth around Rs 4.5 crore. issued. Lakhs, eight to nine years ago.
The National Highways Authority of India made the final payment in December 2019, according to documents accessed by TOI, after the private firm won an arbitration award and two cases in the Delhi High Court. NHAI had to pay such a huge amount due to the high interest rate. The firm was entitled to 27% interest since it was registered under the MSME Development Act of 2006. Responding to a query by TOI, Union Minister for Road Transport and Highways Nitin Gadkari said, “We will investigate the matter.”
Court documents show that the private firm had signed an agreement with NHAI in February 2010 to monitor toll collection at 11 toll plazas. NHAI had submitted that the firm had failed to meet the continuing observations of the assignment given to it and there was delay on their part in submission of the report. It had also said that there was delay in payment as the report was submitted late.
However, eventually NHAI cleared the challan of Rs 20 lakh. After this the private firm took the matter MSME Facilitation Council Citing the delay in clearing the bills. The private firm had registered itself under the MSME Development Act in February 2011. After the conciliation proceedings failed, the MSME Council referred the matter to the Delhi International Arbitration Centre. In June 2018, the institutional arbitrator passed an award of Rs 2.24 crore with interest at the rate of 27% per annum on monthly rest in favor of the private firm starting July 2016.
The matter then reached the Delhi HC as the private firm sought execution of the arbitration award. The HC upheld the arbitration award and in May 2019, it directed NHAI to pay Rs 4.18 crore to the private firm by November 20, 2018. NHAI paid Rs 3.79 crore in July 2019.
Later, the private player paid Rs. Demanded Rs. payment). As the HC issued directions to NHAI to make additional payment, the authority sought legal opinion. According to an official document dated November 2019, the legal advisor advised NHAI to pay the amount within time “to avoid further interest”.
The National Highways Authority of India made the final payment in December 2019, according to documents accessed by TOI, after the private firm won an arbitration award and two cases in the Delhi High Court. NHAI had to pay such a huge amount due to the high interest rate. The firm was entitled to 27% interest since it was registered under the MSME Development Act of 2006. Responding to a query by TOI, Union Minister for Road Transport and Highways Nitin Gadkari said, “We will investigate the matter.”
Court documents show that the private firm had signed an agreement with NHAI in February 2010 to monitor toll collection at 11 toll plazas. NHAI had submitted that the firm had failed to meet the continuing observations of the assignment given to it and there was delay on their part in submission of the report. It had also said that there was delay in payment as the report was submitted late.
However, eventually NHAI cleared the challan of Rs 20 lakh. After this the private firm took the matter MSME Facilitation Council Citing the delay in clearing the bills. The private firm had registered itself under the MSME Development Act in February 2011. After the conciliation proceedings failed, the MSME Council referred the matter to the Delhi International Arbitration Centre. In June 2018, the institutional arbitrator passed an award of Rs 2.24 crore with interest at the rate of 27% per annum on monthly rest in favor of the private firm starting July 2016.
The matter then reached the Delhi HC as the private firm sought execution of the arbitration award. The HC upheld the arbitration award and in May 2019, it directed NHAI to pay Rs 4.18 crore to the private firm by November 20, 2018. NHAI paid Rs 3.79 crore in July 2019.
Later, the private player paid Rs. Demanded Rs. payment). As the HC issued directions to NHAI to make additional payment, the authority sought legal opinion. According to an official document dated November 2019, the legal advisor advised NHAI to pay the amount within time “to avoid further interest”.
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