Shivshahi Punarvasan Prakalp asked to pay Rs 4.58 crore to private firm

Mumbai: In a setback for the Shivshahi Punarvasan Prakalp Limited (SPPL), a government body, the Bombay High Court recently ordered it to pay Rs 4.58 crores to a private firm, which was roped in for a project pertaining to the construction of residential buildings in Dindoshi, Mumbai, way back in 1999. The HC has ordered the SPPL to make the payment within a period of two months.

The bench of Justice Nijamoodin Jamadar also turned down the contention of the SPPL that this amount of Rs 4.58 crore would be the 'full and final' settlement. The dispute between the SPPL and the private firm dates back to April 1999, wherein the constructor was short-listed to construct residential and amenity buildings in Dindoshi area. According to the firm, soon after signing the agreement, it had mobilised the resources for the expeditious completion of the work. However, it could not execute the work on account of the non-availability of the approach road to the site at Dindoshi, delay in issue of the commencement certificate from SRA, delay in the demarcation and issue of drawings for construction purposes.

“There was abnormal and undue delay in making payment of R.A. Bills raised by us and still we completed 85 per cent of the rehab buildings by April 2000. Substantial amounts remained unpaid,” the firm claimed.

Accordingly, an engineer was nominated independently to evaluate the claims of the firm and subsequently, a report of assessment was submitted to the then state housing minister, who is also the director of SPPL. The report suggested a payment of over Rs 6 crores towards the work done up to date. The then housing minister decided to pay Rs 4.58 crores with a rider that the firm must consider this as the full and final payment and must also complete the remaining work.

Surprisingly, even before making the payment, SPPL had informed the firm that it has terminated the contract, as it failed to complete the project within the deadline. Aggrieved with this conduct, the firm filed a suit before the court, raising various claims, including the damages for illegal termination of the contract amounting to Rs 230 crores. It demanded this amount as an additional claim towards loss of profit, and loss of business and opportunity, amongst others. The SPPL refused to make the payments. But after going through the material on record, Justice Jamadar noted that the adjudication of all the claims would take time and till then the firm must be paid Rs 4.58 crores as decided by the housing minister.

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