Pune Court Orders To Freeze Bank Account Of PMC For Not Paying Rs 1.2 Crore To Tata Company For Street Lights
Pune, 6th December 2023: The Pune Municipal Corporation (PMC) has awarded Tata Company the task of installing and maintaining LED lights. However, the company took action against the PMC for non-payment of bills amounting to Rs 1 crore 20 lakhs, leading to the freezing of the bank account and assets of the Pune Municipal Corporation as ordered by the district court.
The PMC assigned Tata Company the responsibility of managing 90,000 street lamps to reduce street lamp expenses. Tata Company is tasked with replacing old lights with LED lights, as well as maintaining and repairing them for the next 11 years. For this project, Tata Company has invested approximately Rs 100 crore.
The municipal corporation’s electricity department pointed error in Tata Company’s bill and withheld Rs 2.81 crore. In 2021, Ujwal, a representative of Tata Company working in Pune, pursued arbitration, resulting in the Municipal Corporation being instructed to pay a total of Rs 3.1 crore including interest.
After the municipal corporation failed to make the payment, a second appeal was made in arbitration. The municipal corporation paid Rs 1 crore 60 lakh after the arbitration process was reopened. It was asserted that the remaining amount of Rs 1 crore 20 lakh 94 thousand 445, along with its 7 percent interest, totaling about Rs 1 crore 50 lakh, should be paid by the municipal corporation. Despite the Municipal Corporation filing a petition in the High Court, it did not gain notice.
Subsequently, the court clarified that the Municipal Corporation is obligated to pay the amount. Therefore, the district court has directed the freezing of the corporation’s bank account and the seizure of its property.
Municipal Commissioner Vikram Kumar stated, “After reviewing the court’s order, further action will be taken in this matter, and the outstanding amount will be settled.”
The Municipal Corporation is obligated to pay Tata Company as per the tender terms, but billing errors are reducing the amount. The objections raised by the municipal corporation in arbitration and court have proven ineffective. Consequently, as the municipal corporation has to pay interest on this amount, Pune’s taxpayers are incurring substantial losses.
