Court freezes CITCO's four bank accounts
In a major embarrassment to the Chandigarh Industrial and Tourism Development Corporation (CITCO), a local court has attached its four bank accounts for recovery of a contractor's dues pending for the past 15 years.chandigarh Updated: Mar 26, 2014 12:07 IST
In a major embarrassment to the Chandigarh Industrial and Tourism Development Corporation (CITCO), a local court has attached its four bank accounts for recovery of a contractor's dues pending for the past 15 years.
The stern action against the corporation has been taken after it failed to clear outstanding bill of a city-based construction company, Kalsi Construction, amounting to around Rs 1.2 crore. In October last year, the court had frozen HDFC Bank account of CITCO and managed to recover around Rs 42 lakh.
Jaisurya Jain, counsel of Kalsi Construction, maintained that for recovery of remaining amount the court on March 22 froze the accounts of CITCO in four different banks – Axis, ICICI, Punjab National Bank (PNB) and Oriental Bank of Commerce (OBC).
According to sources, the ICICI account was being used for the purchase of petrol and diesel for petrol stations and for depositing daily sales cash. There are a total of three petrol pumps — Sector 9, 38 and 56 — being run by CITCO in different parts of the city.
The PNB account was being used for cash transactions of steel depot, while the OBC and Axis Bank accounts were used for business transactions of other units of the corporation.
The freezing of the accounts has given a major jolt to the corporation, which is not doing well financially due to fall in profits in the past few years.
CITCO has earned cash profit of Rs 1.52 crore in the 10-month period ending January 31, 2014, against the profit of Rs 2.86 crore achieved in the corresponding period last year.
According to sources, the profit is down due to decrease in profitability of Hotel Mountview, which has sustained a loss of Rs 1.82 crore, against the profit of Rs 2.21 crore, achieved in the corresponding period last year.
Despite repeated calls and SMSes, CITCO managing director Tanvi Garg and chief general manager (CGM) Amandeep Kaur were not available for comments.
Kalsi Construction Company was awarded the job of constructing new block of Hotel Mountview, which was completed in 1999. The final bill amounting to around Rs 90 lakh was withheld by the corporation for making recoveries from the company for alleged delay. The new block has 86 rooms of five-star status.
The company moved a petition for arbitration later that year. After hearing the case for over seven years, the arbitrator on September 21, 2007, gave the verdict in favour of the construction company. Subsequently, CITCO challenged the decision in the local court which was dismissed on April 17, 2013.
Thereafter, the company moved an execution petition in the court in May 2013 following which the account of CITCO was frozen in October. The corporation had also challenged the decision in the Punjab and Haryana high court and is pending adjudication.