HC restrains VIDC from paying Rs 32.55 cr to contractor

The Nagpur bench of the Bombay High Court today directed Maharashtra government and Vidarbha Irrigation Development Corporation (VIDC) not to release an arbitration award sum of Rs 32.55 crore to Jalgaon-based firm MKK Tapi Prestrade Product.
The firm had undertaken a contract for Mokhabardi lift irrigation project, a part of Gosikhurd irrigation project.
Chief Minister Devendra Fadnavis has directed the chief secretary to probe why VIDC failed to challenge the arbitration award passed against it on August 17, 2013. The arbitrator had ordered payment of Rs 20.84 crore with 11.45 per cent interest to the company.
A division bench of Justices Bhushan Dharmadhikari and Pradeep Deshmukh, while hearing a PIL filed by NGO Jan Manch, directed the respondent authorities to stop payment of arbitration award to the contractor firm.

Jan Manch had alleged complicity of VIDC officials who did not challenge the award despite favourable legal opinion.
The contractor firm had dragged VIDC to arbitration citing escalation of cost and damages due to delay in release of payment for the work done.

At the last hearing, the High Court had sought a reply from the chief secretary and VIDC.
Jan Manch's lawyer Firdos Mirza claimed that ignoring legal opinion, the VIDC officials deliberately didn't file appeal.
Associate Advocate General Rohit Deo and Government Pleader Bharti Dangre today informed the judges that the Chief Minister had already ordered a probe by the chief secretary.

The court then asked the authorities to put implementation of arbitration award on hold, adjourning the hearing.