SDMC to take legal action against contractor as cheque bounces

South Delhi Municipal Corporation has decided to take legal action against its toll tax contractor for tendering bank cheque which "dishonoured" when deposited for clearance with the concerned bank.
"The Standing Committee of the corporation discussed the issue in its meeting today and decided to take legal recourse against the contractor SMYR Consortium through Section 138 of Negotiable Instruments Act," chairman of the Committee Radhe Shyam Sharma said.
"The toll tax contractor citing 30 per cent decline in number of commercial vehicles entering Delhi since collection of Environment Compensation Charge (ECC) directed by Supreme Court, has cut down the weekly toll tax payment of Rs 10.59 crore to Rs 7.30 crore," he said.

As per the terms and conditions of the contract entered into with SMYR Consortium, SDMC is entitled to receive weekly payments of Rs 10.59 crore as toll tax, irrespective of whether the number of vehicles entering falls or rises, Sharma said.
The Corporation was given 12 advance cheques of Rs 10.59 crore each by the contractor which were to be used in case it failed to extend bank guarantee of the same amount every month.
"When it failed to give bank guarantee for two months, we deposited the cheque of Rs 10.59 crore with the bank but it dishonoured," Sharma said.

The apex court in its order on October 12 had directed Delhi Government and SDMC to charge ECC from trucks and other smaller commercial vehicles entering the city from November 1, in a bid to check growing pollution in the national capital.
The SDMC contractor had earlier denied to collect the green tax citing various reasons including fall in toll tax collections due to the diversion of vehicles entering Delhi. Later, it started collecting the green tax from intervening night of November 6-7.