Court directs MCA to deposit Rs 172 cr

Nikhil Bhave
Tuesday, 24 January 2017

The district court has directed the Maharashtra Cricket Association (MCA) to deposit Rs 172.26 crore in the bank for non-payment to the contractor for construction of the international cricket stadium at Gahunje.

The district court has directed the Maharashtra Cricket Association (MCA) to deposit Rs 172.26 crore in the bank for non-payment to the contractor for construction of the international cricket stadium at Gahunje.

The account has to be maintained jointly by the contractor, Shapoorji Pallonji and Co Pvt Ltd, till the conclusion of the arbitration proceeding. The company had moved the court, as the MCA was allegedly not making payments.

In September 2009, the MCA had floated a tender for construction of the international cricket stadium near Pune. The company was awarded the tender at a fixed price of Rs 193 crore. As per the work order, a construction agreement was executed in 2010.

According to the applicant, they commenced work in December 2009. Several factors delayed the completion of the stadium and it could not be completed by April 6, 2011. An extension was granted up to August 31, 2011 and work of the stadium was completed only on October 31, 2012. Thereafter, the project manager issued a virtual completion certificate. The MCA took over the stadium and same is being used on a regular basis.

The company submitted a final bill dated March 1, 2013 for an amount of Rs 234.1 crore. The project manager certified and approved the final bill for Rs 225 crore against the claim of Rs 234.10 crore.

“The MCA paid Rs 120.4 crore from August 2009 till February 2013. The MCA was liable to pay 55 per cent of the final bill before May 26, 2013, 15 per cent of the final bill amount on or before June 13, 2013 and 30 per cent under the deferred payment scheme. But the MCA failed to pay 70 per cent amount of the final bill and the first instalment of the deferred payment. Till the filing of the application, out of the total outstanding, balance due of the final bill is Rs 172.3 2 crore,” the company submitted before the Pune court.

The company had sought interim protection under the Arbitration and Conciliation Act, 1996. According to the MCA, “The company could not complete the work till April 2011. The work was delayed up to October 31, 2012. We are a charitable public trust and sports organisation and mainly dependent on financial assistance from various banks. We were to get Rs 207.95 crore towards the naming rights from Sahara Adventure Sports Ltd. However, it was delayed for about three years because of the delay in completion of the project and by that time, the project of Sahara Group came in trouble,” the MCA submitted to the court.

It has also claimed Rs 81.5 crore from the company for remedying defects and delay in the completion of the project. In his order, district judge Jayraj Wadne stated, “In the present case, there is a virtual completion certificate, there is a final bill prepared and accepted by the respondent (MCA). The respondent, from time to time, had paid amounts to the applicant (company). Even after the filing of this application, the undertaking was given to pay Rs 20 crore, of which only Rs 10 crore is paid and later on, said undertaking is withdrawn. If all these circumstances and conduct of the respondent is considered, the cumulative effect is that there is a need to pass an order of interim measure.”

The MCA was directed to deposit Rs 172.3 crore in any nationalised bank within one month of this order.

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