Ludhiana MC seeks stay on order directing it to pay ₹5.08 crore to pvt firm - Hindustan Times
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Ludhiana MC seeks stay on order directing it to pay 5.08 crore to pvt firm

BySukhpreet Singh, Ludhiana
Apr 03, 2024 05:18 AM IST

In its application seeking a stay on the award, LCBSL argued that executing the ruling would cause irreparable harm and defeat the purpose of the arbitration petition

{City buses row}

The dispute arose from an arbitration ruling issued in January, prompting LCBSL to challenge the decision. (HT File Photo)
The dispute arose from an arbitration ruling issued in January, prompting LCBSL to challenge the decision. (HT File Photo)

Ludhiana City Bus Service Limited (LCBSL), a subsidiary of the municipal corporation (MC), has appealed to the court to stay an order requiring it to pay 5.08 crore to a private firm who was operating city bus services across the city.

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The dispute arose from an arbitration ruling issued in January, prompting LCBSL to challenge the decision.

The LCBSL, incorporated under the Indian Companies Act, 1956, filed the appeal on March 30 under section 34 of the Arbitration and Conciliation Act, 1996. The company contested the award issued by the sole arbitrator justice (retd.) Arvind Kumar.

In its application seeking a stay on the award, LCBSL argued that executing the ruling would cause irreparable harm and defeat the purpose of the arbitration petition. The company expressed concerns that its properties could be attached as a result of the award, which it deemed to be illegal and lacking jurisdiction.

LCBSL emphasised the urgency of obtaining a stay on the award, arguing that it would suffer grave prejudice and irreparable loss if the decision were not overturned.

Additional commissioner Paramdeep Simgh said, “We are not satisfied with the award given by the arbitrator recently and have filed an appeal against it.”

The termination of the city bus service contract by the civic body on February 26 saw the private company return 30 buses on March 5, 2024. The remaining buses, 82 in total, are scheduled to be handed over in the coming months.

MC officials reported that of the 29 buses returned, many were in running condition, while few required maintenance. These buses have been relocated to the Tajpur road depot for further assessment.

The termination of the contract followed discrepancies regarding its duration, as highlighted by the municipal corporation in a letter dated January 30. The decision was made after the completion of the contract term with LCBSL, prompting the firm to return the buses or pay a specified fee.

In 2015, when the buses were handed over to the operator, rates were set by the MC for various routes in the city. Before the contract was terminated, only 35 buses were operational on the Kohara, Sahnewal and Meharban routes.

Meanwhile, tenders for e-buses under the Prime Minister’s e-Bus Sewa Yojana have been floated by the Union government before a few weeks of model code of conduct. Civil work for the project is expected to be awarded to the civic body within a few weeks, with officials anticipating the buses to hit the roads by May or later as part of the project’s progress.

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