Hindustan Times ST (Mumbai)

HC strikes down payment of ₹303 cr to firm for dam works

BALGANGA DAM Earlier CIDCO and KIDC were directed to pay FA Enterprise­s

- Kanchan Chaudhari kanchan.chaudhari@htlive.com

In a major reprieve for City and Industrial Developmen­t Corporatio­n (CIDCO) and the Konkan Irrigation Developmen­t Corporatio­n (KIDC), the Bombay high court on Tuesday struck down a decision directing them to pay a sum of ₹303 crore to FA Enterprise­s towards unpaid bills for constructi­on of Balganga dam in Raigad district.

Justice RD Dhanuka struck down the arbitral award dated April 3, 2019, on the ground that it was patently illegal and legally unsustaina­ble.

The judge noted FA Enterprise­s could not prove most of its claims independen­tly, but the majority members (three out of five) of the tribunal accepted the claims on the basis of communicat­ions issued by some KIDC

officers, who are under the cloud of suspicion.

In January 2009, the government decided to construct Balganga dam at Niphad in Pen tehsil of Raigad district for catering drinking water requiremen­ts of some CIDCO areas and therefore CIDCO was to fund the project,

initially estimated to cost ₹353.89 crore.

However, five months later the work was allotted to FA Enterprise­s for ₹495.45 crore and on June 10, 2011, the cost of the project was revised to ₹1,220 crore. The dispute started the same year after CIDCO officers started disputing the project cost and appointed the body’s own experts to ascertain the cost. FA Enterprise­s had then moved high court invoking the arbitratio­n clause in its agreement with the authoritie­s.

Accordingl­y, the arbitral panel was formed, comprising one representa­tive each of the state government, KIDC, the CIDCO and FA Enterprise­s. The presiding member was appointed by the high court.

The contractor had claimed an amount of ₹536.56 crore, including ₹186.89 crore towards a particular bill. Both KIDC and CIDCO had strenuousl­y opposed the claim.

On April 3, 2019, three members of the tribunal passed a majority award directing the KIDC to pay to the claimant a sum of ₹303 crore to the contractor firm.

PMC BANK FRAUD

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