The Hindu : NDMC fails miserably in collecting dues

Online edition of India's National Newspaper
Monday, Jun 23, 2003

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NDMC fails miserably in collecting dues

By Sandeep Joshi

NEW DELHI JUNE 22. Whenever the New Delhi Municipal Council (NDMC) is asked about delay in its project, it usually cites shortage of funds as one of the major reasons. But the question is how will the civic body arrange for funds when its own Estate Department has been failing miserably in collection of its own dues worth hundreds of crores of rupees.

The NDMC's latest annual audit report points out that the Department has allowed arrears of licence fee to accumulate over the years which has been rising to "astronomical'' levels. Though there might have been some changes in the fee collection figures since the report was tabled in the Council but definitely year after year the civic body has been facing problems in realising its own dues, official sources said.

The annual audit report points out that the Council was unable to recover Rs.376.63 crores from the licencees of its commercial units, another Rs.40.29 crores is due from the ex-allottees of commercial units while non-recovery of outstanding dues from the ex-allottees of the NDMC quarters stands at Rs. 59.43 crores. There has been further loss of Rs.15.55 lakhs due to delay in allotment of vacant quarters and also due to irregular waiver of interest charges.

How serious is the NDMC in realising its dues can be gauged from the fact that on March 31, 1999 the total arrears stood at Rs.276.68 crores which rose to Rs.376.63 crores from 819 licencees by March 2001 thus registering an increase of 36 per cent. "The defaulting licencees included hotels and cinema halls (Rs.180.90 crores), Government sector (Rs.161.58 crores) and individuals (Rs.34.15 crores),'' the report adds.

``Though, the Council has sufficient powers to recover its dues under Section 363 and Section 102 of the NDMC Act, the Estate Department failed to take effective action as provided in the Act to recover the heavy outstanding dues from the defaulting parties as a result of which the outstanding licence fee increased alarmingly.''

The Department replied that it had used the Act to recover the outstanding dues. But the Audit Department observed that "the amount stated to have been recovered is insignificant in comparison to total outstanding dues. The Department's contention that the revenue of the Estate Department was increasing is also not totally tenable as increase in revenue was more due to the periodical upward revision of licence fee than due to the recovery of old outstanding dues as the arrears amount had in fact increased sharply over the years.''

However, a further review by the Audit Department of the status of the cases given by the Department revealed that a sum of Rs.350.48 crores was still outstanding from 491 licensees. It further indicted the Department stating that "the fact is that the steps taken were required to be made effective and monitored properly as accumulation of arrears of licence fee over the years is rising to astronomical levels and the recovery of which will be very difficult after lapse of so many years.''

The report further observes that "non-sorting of dispute at initial stages has resulted in large number of unnecessary prolonged litigations which not only make recovery of dues more difficult but are also causing considerable extra expenditure on such litigations.''

Similarly, in case of recovery of dues from ex-allottees, the report states that the amount of arrears had increased due to the Department's failure to take timely action against defaulters. "The Department had, in fact, admitted that the cases being old, it was difficult to even assess the actual amount due and recover the same from the ex-allottees.''

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