Questions over PSPCL releasing `40 lakh to Ludhiana company

LUDHIANA FIRM WAS PENALISED FOR DELAY IN EQUIPMENT SUPPLY IN 2013, BUT HELD-BACK PAYMENT RELEASED DESPITE FINANCE DEPT REJECTION

PATIALA: Management of the Punjab State Power Corporation Limited (PSPCL) paid Rs 40 lakh to a ‘defaulter’ firm, despite rejection by the finance wing, it has come to light. The money, held back as penalty, was released two months ago, even though the firm had failed to supply transformers before deadline.

It was in 2013 that the PSPCL placed an order with Nucon Switchgear Private Limited, Ludhiana, to supply five power transformers for Rs 6.18 crore. The tender was floated to streamline supply. It said the firm had to give the first transformer within two months and the one each month. That is, five transformers from August 3 to December 3, 2013.

However, before the deadline, it supplied only one, documents with HT show.

Invoking the penalty clause, the PSPCL officials imposed a penalty of Rs 40 lakh approximately on the firm and withheld that part of the payment.

The firm approached the PSPCL finance department with the argument that it could not meet the deadline because one of its directors was kidnapped for three days. Due to this, the work of the factory remained affected for three months and caused delay, said the firm.

But the finance department rejected the contention in May 2014. It said the firm had to inform about any such reason in a month, but it did so a year later.

The firm made a plea to reconsider the decision in November 2014. Sources said a senior functionary of the corporation asked for legal opinion beyond the terms of the tender, and put it on the agenda of the whole-time directors’ meet that cleared it in August last year.

Despite repeated attempts, PSPCL chairman-cum-managing director (CMD) KD Chaudhry could not be contacted for comments.

A senior engineer, requesting anonymity fearing persecution, said the firm was “favoured” in the past too. “In this case, too, details of power consumption of the firm’s factory can show that production was normal for the three months that the firm cited,” he said.