VIJAYAWADA: The AP High Court has said the government cannot force a contracting company to extend its contract against the agreement reached and it cannot convert bank guarantees of the firm into cash if the latter fails to comply with the rules.
The orders were given by the court over a petition filed by Reach Dredging Limited, which secured a contract to mine sand in the Krishna river near Prakasam Barrage.
Though it got seven reaches, the agreement was made with respect to three only. As per the agreement, the government has to allot 40 acres of land to stock the sand mined, but only 20 acres were allotted. As the stock point got filled, the company informed the same to water resources department and submitted bills for Rs 3.11 crore. The officials refused the pay the bills after which the company filed the petition in court.
Petitioner’s counsel VRN Prasanth informed the court that the officials were threatening to convert the bank guarantees into cash. The government counsel said there were discrepancies in the quantum of sand mined as claimed by the firm and verification done by officials.
The bills are kept pending to ascertain the facts, he said. The government should return the bank guarantees to the firm, the court ruled.