The Delhi High Court has directed the Northern Railways to pay over Rs 8 lakh to a private company as accumulated interest on pending payment, failing which the Baroda House — the headquarters of Northern Railways — would be attached and auctioned to recover payment.
The court of Justice Deepa Sharma, in an order issued last week, noted that railways had not taken any steps to release payment despite the award of an arbitrator given in 2007 and a Delhi High Court order issued in 2012.
The issue pertains to a contract between railways and Mashbra Industries Ltd for printing of railway reservation/cancellation forms signed in 2002. The company had paid Rs 8 lakh as royalty amount to railways for the contract. The company was, however, unable to complete the work and the contract was terminated.
The company then demanded return of the earnest money and obtained a favorable award from the arbitrator to get Rs 4 lakh-plus interest from railways in 2007. The railway challenged the award, and the High Court in 2012 directed railways to pay the principal amount as well as interest under Section 31 of the Arbitration Act.
The company in 2014 approached the High Court for execution of the orders, claiming that the railways had not paid the principal amount or the interest accumulated on the amount between 2007 and 2014, which came upto a total of over Rs 8.8 lakh.
“This is a typical case where the government authority delayed payment for several years despite arbitral award and court orders. The pending amount is very low, but they did not release payment,” said advocate Arpit Bhargava, counsel for the company, adding that the Baroda House was mentioned as it was the headquarters of Northern Railways. “The court order is meant to force the government to release payment,” Bhargava said.