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parwez562014

Low penalty per day of delay in large contracts

Question

parwez562014

A contract for beautification of lake for amount of rs 4.5 crore has been given by Vasai Virar municipality but on such a big contract a penalty of rs 100 per day has been set,the contract was to be completed in October 2015 and is not yet complete. I want to know is such a low penalty justified. Also there was a clause no extension of time will be given.the engineer says contract extended on basis of penalty.is there a law for such low penalty not even 1 percent per year

 

Sent from my LS-4505 using RTI INDIA mobile app

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Prasad GLN

You have to file RTI Application and seek certified copy of work contract, and agreement entered in between the parties, and to study the penalty clause. ( Authorities have very old formats, and just use them again and again without following the changed value of money.)

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Sunil Ahya

What is the source of your information which says that the penalty is what you say it is? Do you have a copy of the agreement entered into between the Municipality and the Contractor?

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parwez562014

I have the agreement copy issued under RTI, it mentions only 100 per day as penalty in case of delay.in preceding clause it mention no extension will be given and in case of arbitration commissioner decision would be final.no penalty or fine has been collected.

 

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Prasad GLN

When there is a laid down agreement, that stipulates certain penalty neither party can approach court. Those officials who are cautious fixes penalty according to the urgency of the work to be executed. I know a case, where authorities prescribed penalty of Rs.1 lakh per day of delay in laying pipes for water supply to a pilgrim city. According to need and urgency, dept stipulates it. But once there is a record, the role of RTI comes to end, and further disputes enters into arena of litigation between the parties, and a citizen becomes a mere spectator unless some one complains to ACB of compromise and allege motives in fixing such low penalty. (I do not know the parking charges of a car before Airport in that city). The conditions also implies that by paying a penalty of Rs.36,500/- you can drag on the work for years, even after availing Advance on such contracts.

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parwez562014

About the ACB seems interesting, is it possible to get some guidelines on how to go ahead

 

Sent from my LS-4505 using RTI INDIA mobile app

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