Court freezes CITCO’s bank account
A bank account of the Chandigarh Industrial and Tourism Development Corporation (CITCO) has been attached in a case by the district court for recovery of a contractor’s dues pending since 1999 when Hotel Mountview was renovated and upgraded.chandigarh Updated: Oct 24, 2013 10:43 IST
A bank account of the Chandigarh Industrial and Tourism Development Corporation (CITCO) has been attached in a case by the district court for recovery of a contractor’s dues pending since 1999 when Hotel Mountview was renovated and upgraded.
According to sources, the HDFC Bank account has a balance of over Rs 50 lakh, though CITCO owes the contractor, Kalsi Construction Company, Rs 1.15 crore now.
With the account frozen on October 21, CITCO has been directed to deposit the contractor’s dues in the court by October 30. Money in the account was being used for purchase of petrol and diesel for the three fuel stations run by CITCO in Sectors 9, 38 and 56.
For CITCO, this is not the first setback in the case.
(As part of the contract, for which CITCO has not made payment for 14 years,
Hotel Mountview got 86 new rooms. HT File Photo)
Kalsi Construction was awarded the job of constructing a new block — 86 rooms of five-star status — at the Sector-10 Mountview, which it completed in 1999. The final bill was around Rs 90 lakh, but was withheld by the corporation reportedly for making recoveries from the company for alleged delay.
The company moved a petition for arbitration later that year, and after seven years the arbitrator ruled in favour of the construction company. CITCO then challenged the decision in the district court which dismissed it on April 17.
Thereafter, the company moved an execution petition to recover the dues — with interest, thus ` 1.15 crore — in May. On that count, the bank account of CITCO has been attached.
Sources said the corporation would challenge the decision in the Punjab and Haryana high court despite the UT legal remembrancer (LR) terming the case not fit for appeal. Senior officials of CITCO also made an unsuccessful attempt to negotiate with the company.
The freezing of the account is being seen as a major blow to the corporation as it is not doing well financially due to a dip in revenue over the past few years. The cash profit earned during the first quarter this year, Rs 23 lakh, was 91% lower than the profit earned during the same period last year, Rs 2.5 crore.
CITCO chief general manager Amandeep Kaur, however, told HT that freezing of one account would not affect the functioning of the corporation.