CITCO fails to recover security amount worth Rs 35 lakh

The tourism body had leased out a restaurant to a firm that paid licence fee without furnishing bank guarantee

Written by Vinod Kumar | Chandigarh | Published:December 20, 2015 11:38 am
(Source: citcochandigarh.gov.in) Baithak, the restaurant that was leased out by CITCO to Sunrise Integrated Facility Private Limited (Source: citcochandigarh.gov.in)

At a time when the Chandigarh Industrial and Tourism Development Corporation Limited (CITCO) is witnessing a dip in its sale figures, the corporation has failed to recover a security amount worth Rs 35.30 lakh from a company to which Baithak, a Punjabi-styled restaurant, was leased out.

As per an official record, the entire premises of Baithak — banquet hall with adjoining lawn area and kitchen on the ground floor; a restaurant with kitchen and open terrace on the first floor; and bar, open courtyard, party hall, etc on ground floor— was leased out for a period of seven years on a monthly licence fee of Rs 6.05 lakh per month to Sunrise Integrated Facility Private Limited.

As per the condition of the contract, the licensee was required to deposit a security amount equivalent to six months’ licence fee in form of bank guarantee.

The firm took the possession on November 2 and submitted a cheque of Rs 35.30 lakh instead of giving a bank guarantee, which was accepted by the corporation against the norms. The cheque, when presented in the bank by CITCO, got dishonoured.

A bank guarantee is a promise from a bank stating that if a particular borrower defaults on a loan, the bank will cover the loss.

Vishal Goel, director of Sunrise Integrated Facility Private Limited, said that they deposited a cheque as getting a bank guarantee was a time-consuming process.

He further said that they would issue a draft of the security amount. “We submitted a cheque as our application for getting a bank guarantee was in process,” said Goel.

Kavita Singh, managing director of CITCO, said that they had issued a legal notice to the firm and efforts were on to recover the money.

The restaurant has been incurring losses for the past few years, forcing CITCO to lease it out to a private company.

The sale figures of the corporation has been witnessing a downfall for the last few years. CITCO recorded a fall of Rs 45.44 crore in sale recorded during the first seven months of the current financial

year.

As per the performance report from April 1 to November 30 submitted to the CITCO board of directors Friday, the total sale figure of CITCO having a total of 21 units, both industrial and tourism, was Rs 346.27 crore.

The sale was Rs 391.71 crore in the corresponding period during the last financial year. Baithak registered a fall in sale by Rs 32 lakh.

Earlier this year, the corporation had outsourced Drop-in restaurant, located in a prime location of Sector 34, to a private firm on licence basis.

The firm prematurely terminated the contract in November after running the restaurant for three months.

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