RAMAN PAIGWAR
Municipal Corporator (Nominated)
Teen Nal Chowk, Itwari, NAGPUR-440002.
Mobile : 9422125470
Ref.No : RP/VJT/NMC/178/9/2011 23.06.2011.
To,
The Hon’ble Municipal Commissioner,
Nagpur Municipal Corporation,
NAGPUR-440 001. Kind Attn : Shri Sanjiv Jaiswal, IAS
Sub : Complaint of Wrongful loss caused to the tune of Rs. 97.50 Crores to Nagpur Municipal Corporation & State Government due to Criminal Neglect while executing Supplementary Agreement dated 3rd March, 2010 modifying all vital conditions in the Contract Agreement dated 09.02.2007 with M/s Vansh Nimay Infraprojects Pvt. Ltd (VNIPL) :
Demand to cancel Supplementary Agreement dated 03.03.2010 to save revenue loss to NMC to the tune of Rs. 97.50 Crores and to lodge Criminal Complaint & Prosecution in the matter of Conspiracy, Cheating & Fraud committed by the officials and the beneficiary tendering party i.e. Director of M/s Vansh Nimay Infraprojects Pvt. Ltd .
Ref : 1. NMC General Body Resolutions no. 62 dated 16.10.2006 for
running bus in NMC limits on BOO basis followed by
Advt. No. 303/ PR/ 18.10.2006 read with Corrigendum 17.11.2006
2. Tender submitted by M/s Vansh Nimay Infotech Pvt. Ltd., MSSIDC & Nagpur Aluminium alongwith Technical & Financial Offer in Form-VIII of Tender document submitted on 23.11.2006.
3. Letter of Permission issued by Department of Home Affairs, Govt. of Maharashtra, Mantralaya, Mumbai vide letter no. MVR-1206 /NAJ/ Trans-2 dated 7th Feb. 2007 in connection with grant of permission to Bus Service Project of NMC on BOO basis for 200 buses for 5 years.
4. Agreement dated 09.02.2007 & Supplementary Agreement dated 03.03.2010 by & between NMC and VNIPL
5. My earlier complaint dated 23.05.2011
Dear Sir,
I, the complainant abovenamed, hereby beg to submit this complaint as under that :
1. I am Nominated Councilor/Corporator of Nagpur Municipal Corporation (NMC) and I am concerned with the Welfare of NMC and its public funds. It is my duty to work as custodian of the public funds of NMC and to stop every misuse and wasteful loss thereof.
2. I have been raising the issue of corrupt practices adopted while finalizing the contract for bus operations under BOO Project and therefore I was trying to collect more & more information from all sources.
3. Vide my complaint at ref. no. 5 vide letter no. RP/VJT/NMC/178/2011 dated 23.05.2011, I have submitted detailed complaint to you on the basis of papers, documents, information & other records in the interest of NMC to highlight the misdeeds committed by the officials of NMC and the beneficiary contractor of the said Star Bus operations project covered under various correspondences referred herein above.
4. The said complaint has been filed after detailed analysis of the documents obtained under RTI from NMC, MSSIDC as well as the SPV company project of bus operations for NMC which has been Awarded to M/s Vansh Nimay Infraprojects Pvt. Ltd (VNIPL), which clearly that the entire tender process and the award of contract in favor of the said contractor is a big fraud played against the NMC, though many documents are yet to be received under RTI.
5. I have also submitted copies of the relevant documents, originals of which, of course are in the custody of our NMC, which if analyzed carefully, you will come to know the most serious crime of Criminal Conspiracy, Cheating & Fraud played in the Tendering process for Award of Contract in the name of Rapid Bus Transport Operations on BOO to M/s Vansh Nimay Infraprojects Pvt. Ltd (VNIPL) and the subsequent defective and faulty Supplementary Agreement dated 3rd March, 2010 through which 300 buses procured under JNNURM were handed over to the said contractor – VNIPL on the terms & conditions, directly contrary to original agreement dated 09.02.2007 and thus are causing great loss to the Treasury of NMC to the tune of Rs. 97.50 Crores, if allowed to be implemented. Hence I hereby demand to lodge Criminal Complaint & Prosecution in the matter of Conspiracy, Cheating & Fraud committed by the official including then Municipal Commissioner
Shri Aseem Gupta,IAS alongwith all officials involved therein and the beneficiary tendering party i.e. Directors of M/s Vansh Nimay Infraprojects Pvt. Ltd. responsible to cause willful loss to the NMC.
6. Now I am submitting this distinct, separate & additional complaint in connection with Wrongful loss caused to the tune of Rs. 90 Crores to Nagpur Municipal Corporation & State Government due to Criminal Neglect while executing Supplementary Agreement dated 03.03.2010 modifying all vital conditions in the Contract Agreement dated 09.02.2007 with M/s Vansh Nimay Infraprojects Pvt. Ltd (VNIPL) and hereby Demand to cancel Supplementary Agreement to save revenue loss to NMC to the tune of Rs. 97.10 Crores and to lodge Criminal Complaint & Prosecution in the matter of Conspiracy, Cheating & Fraud committed by the officials and the beneficiary tendering party i.e. Director of M/s Vansh Nimay Infraprojects Pvt. Ltd .
- The details of the complaint are as under :-
A. The documents on record shows that after signing & execution of initial agreement on 09.02.2007 by & between NMC & VNIPL, the said beneficiary contractor – VNIPL continued in making defaults in the payment of royalty as well as the deployment of 200 buses, which the contractor was duty bound to deploy for the services of bus operations under NMC Project but said contractor neglected the obligations on the contrary NMC official without taking any coercive action always helped and benefited the said contractor, as it is apparent from the record.
B. Records shows that When there was specific conditions in the contract dated 09.02.2007 as condition no. 2.4 which reads as under :
“The agent shall ply 200 buses within six (6) months from the date of the agreement and more buses as per requirement in future as and when required and decided by Municipal Commissioner”,
C. But then Municipal Commissioner Mr. Aseem Gupta, IAS surprisingly initiated the proposal of buying 300 buses under JNNURM. While initiating the proposal, then Municipal Commissioner Mr. Gupta did not approach General Body of NMC and suppressed the fact with Govt. of India & Govt. of Maharashtra both that there was already agency appointed for bus operations which was duty bound to provide as many as city buses as may be required for transportation in NMC area as covered under specific agreement which was in existence when the proposal was moved by Mr. Gupta.
D. The JNNURM proposal was based upon the funding pattern 50% Central Government, 20% State Government and 30% NMC for procurement of 300 buses which Mr. Gupta proposed contrary to the conditions in the persistent agreement with VNIPL. Later on, Mr. Gupta conspired with the beneficiary contractors and agreed on his several pre conditions to give him 300 buses absolutely on a mere value of 30% whereas the contributions of 70% was from Government Funds. This benefit was extended to the contractor VNIPL surprisingly against the existing contract / agreement dated 09.02.2007 through which VNIPL was duty bound to provide 200 or more buses from its entirely own funds. But Mr. Gupta without taking any permission and approval of General Body of NMC & Govt. of Maharashtra choose to conspired with the members of the Standing Committee to get the sanction to his proposal of procuring 300 buses under JNNURM project, which was 70% Government funded. Documents shows that then Municipal Commissioner Mr. Gupta and all other officials involved therein neglected to see the provisions in the existing agreement with VNIPL and proceeded against it to give direct pecuniar advantage to the said contractor by entering into Supplementary Agreement on 03.03.2010.
E. It is surprising to note that the Criminal Conspiracy, cheating & the fraud to the Municipal Fund was continued, if we see the conditions accepted in the said Supplementary Agreement dated 03.03.2010 Signed & executed by Mr. Aseem Gupta as Municipal Commissioner of NMC and the beneficiary contractor VNIPL. Several conditions of the original contract have been mysteriously changed only to give full advantage to the beneficiary contractor.
F. If we closely scrutinize the said Supplementary Agreement dated 03.03.2010 in comparision with Original Agreement dated 09.02.2007 with VNIPL, we will come to know the Wrongful Acts of criminal conspiracy, cheating & fraud played with the NMC fund is causing great loss to the NMC to the tune of Rs. 97.50 Crores, if NMC is allowed to continued with the said Supplementary Agreement dated 03.03.2010 signed & executed by Mr. Gupta in conspiracy with Standing Committee members and the beneficiary contractor – VNIPL, without taking either the permission of General Body of NMC or Government of Maharashtra and/or Govt. of India which had funded JNNURM project entirely.
G. Details are the disadvantage caused to the NMC are as follows :
(I) Disadvantage N.M.C.
a. By entering into an “Supplementary Agreement” on 03/03/2010 with Vansh Nimay Infra Project Ltd. (VNIL), the Nagpur Municipal Corporation (NMC) have put itself in a great disadvantage position.
HOW :
b. The original agreement dated 9-02-2007 between NMC and VNIL for a period of 10 years (extendable by 5 years if services are satisfactory) for running of 200 Buses provided at VNIL’s own cost and running them as Agent of NMC on the terms and conditions mentioned. This is to provide transporting of passengers within city limit of Nagpur a responsibility which NMC has as per provisions of CNC Act 1948.
c. What has necessitated execution of “Supplementary Agreement” dt.03/03/2010 making drastic changes in the terms & conditions and substantial departure from criteria, as will be noticed, has never brought in the General Body Meeting by NMC specifically pointing out the basic features with sufficient details of the agreement called supplementary agreement. It is for a period of 10 years. Had Supplementary Agreement been for minor changes and procedural corrections, it would have been duly understood. But making such a Supplementary Agreement as if a fresh agreement is entered into with VNIL merely because NMC is going to get 300 additional buses under JNNURM Scheme without bidding process undertaken cannot be accepted.
d. Particularly, the following reasons/points, involving huge and recurring losses to NMC that have been observed, make this Supplementary Agreement totally unacceptable.
(i) 70% cost of Buses - Benefit unduly passed to VNIL
The agreement did not consider 70% cost of 300 Buses, which VNIL do not require to invest, for the purpose of fixing the adequate Royalty. How benefit to NMC under the central scheme is passed on to the VNIL without taking legitimate advantage of it by other means like recovery of additional royalty, interest etc. This is clear violation of the basic term of original agreement which provides that VNIL will provide the buses on their cost.
(ii) Insurance premium responsibility taken by NMC
The agreement provides for payment of insurance cost of 300 buses by the NMC and not by VNIL during the period of project. Paying premium first by VNIL and subsequently recovering it from royalty only means that the NMC has taken insurance premium liability. This was not the case in original agreement dt.09-02-2007.
a. Advertisement Revenue – no sharing to NMC till existing contract period.
The supplementary agreement provides for sharing of advertisement revenue equally in respect of 230 buses after completing the contract period. It means no revenue to NMC for 10 years in respect of 230 buses, whereas in original agreement the insurance premium was to be borne by the VNIL.
(iii) Parking rent – nominal decided – nominal means virtually no rent
to NMC.
Agreement provides for just nominal rent (which can be interpreted as Rs. 1 only) to NMC in respect of 300 buses. It means NMC has forgiven the revenue to the benefit of VNIL.
(iv) Service Tax liability accepted by NMC :
Agreement provides that “Service tax, if any on any transaction related to the project during the term of the contract shall be borne by NMC to the extent of 300 buses.” In original agreement this liability was rightly kept on VNIL. The adding of aforesaid clause in supplementary agreement puts NMC in a big loss as it speaks “any …. transaction related to project” and it seems to include Service Tax for which VNIL is liable for the revenue they collect from the passengers to the extent of 40% of the total revenue. If one argues that Service Tax is not applicable, then what was the need to put the above clause making NMC liable.
(v) N.M.C. deprived of security deposit :
Agreement provides that VNIL shall not be liable to pay any security deposit for all 530 buses. This is again a deviation from agreed terms as per original agreement for 200 (increased to 230) buses. Any loss to NMC if incurred due to breach of any condition/s of agreement how will be recovered from VNIL.
(vi) Escape route given to VNIL for avoiding to bear the
loss/expenditure inherent to this commercial transaction :
The clause defines “force majeure” as it means any event of circumstance or combination of events or circumstances direct and/or indirect which is or are beyond the control of the party and that results in or causes the failure of that party to perform any of its obligation under the agreement and includes…….”
By making “force majeure” definition such a wide (which as a matter of fact should restrict to whatever is stated under “includes” – such as war, Act of God etc.) and enlarging the scope of force major clause, the NMC has given great escape route to VNIL to escape from responsibility /liability for non performance on his part for one pretext or another. In fact it is VNIL which has the responsibility to operate and not NMC on whose side no operation part as such is involved as tried to be made out.
(vii) Royalty to NMC effectively reduced :
The supplementary agreement gives different basis of recovering royalty from VNIL for all the 530 buses. Unlike in original agreement it is linked to actual revenue per bus and diesel price bench mark is kept at Rs.36.50 per ltr. This clearly means that as of today the royalty which the NMC is presently recovering will be reduced and will continue to be reduced in future. Keeping the royalty flexible and linking it to actual revenue was not proper basis as it involves lot of verifications which practically become impossible (verification of actual revenue as certified by VNIL).
(viii) Residual value of 300 Buses – to whom belong :
The supplementary agreement is silent as to whom the residual value of 300 Buses will belong. The price of 300 Buses to the extent of 70% is provided by NMC (through JNNURM Scheme benefiting NMC only) and so residual value to the extent of 70% should belong to NMC. In absence of specific clause about this, VNIL is made free to interpret-ate that what is agreed as per original agreement that buses ownership will belong to them is applicable to 300 buses.
(ix) No bidding process followed – competitiveness not examined.
Though it is called supplementary agreement, its tone and tenure is that it is new agreement for operation of 300 new buses (with mixing up the terms and condition of earlier agreement of 200 buses) varying from original agreement all major terms involving financial implications by putting NMC into losses and giving benefits to the VNIL. The execution of such an agreement without tendering process for 300 buses is violation of proprietary, administrative, financial and audit rules. It is against public interest.
(II) Hence the Supplementary Agreement dated 03/03/2010 is untenable and needs to be scraped.
Estimated losses to NMC are indicated in the statement attached. (PL.SEE THE ANNEXURE –A ATTACHED HEREWITH)
In view of facts given above, the entire tendering process, its finalization, its execution, entering into the agreement with the contractor, further changing it entirely with the Supplementary Agreement and passing on several benefits to the said beneficiary agreement – VNIPL, is the matter of direct criminal conspiracy, cheating and fraud played with the Municipal Fund and public atlarge and therefore we hereby demand that a Criminal Complaint & prosecution may please be immediate launched for causing willful loss to the Municipal funds by way of malafide acts of Criminal Conspiracy, Cheating & Fraud, as evident from the copies of the relevant documents hereby submitted and originals of which are available in the record & files of NMC.
In view of facts given above, the entire tendering process, its finalization, its execution, entering into the agreement with the contractor, further changing it entirely with the Supplementary Agreement and passing on several benefits to the said beneficiary party – VNIPL, is the matter of direct criminal conspiracy, cheating and fraud played with the Municipal Fund and public atlarge and therefore we hereby demand that a Criminal Complaint & prosecution may please be immediate launched for causing willful loss to the Municipal funds by way of malafide acts of Criminal Conspiracy, Cheating & Fraud, as evident from the copies of the relevant documents hereby submitted and originals of which are available in the record & files of NMC. Therefore, I hereby demand that Wrongful loss caused to the tune of Rs. 97.50 Crores to Nagpur Municipal Corporation & State Government due to Criminal Neglect while executing Supplementary Agreement dated 3rd March, 2010 modifying all vital conditions in the Contract Agreement dated 09.02.2007 with M/s Vansh Nimay Infraprojects Pvt. Ltd (VNIPL) may please be recovered from all concerned and Supplementary Agreement dated 03.03.2010 may please be cancelled forthwith to save revenue loss to NMC to the tune of Rs. 97.50 Crores and to lodge Criminal Complaint & Prosecution in the matter of Conspiracy, Cheating & Fraud committed by the officials and the beneficiary tendering party i.e. Director of M/s Vansh Nimay Infraprojects Pvt. Ltd .
HENCE THIS COMPLAINT.
Thanking you,
Yours faithfully,
RAMAN PAIGWAR
Municipal Corporator (Nominated)
Teen Nal Chowk, Itwari, NAGPUR-440002.
Mobile : 9422125470
Cc to,
Hon’ble Chief Minister,
Govt. of Maharashtra, Mantralaya, MUMBAI-32.
The Chief Secretary,
Govt. of Maharashtra, Mantralaya, MUMBAI-32.
The Principal Secretary,
URBAN DEVELOPARTMENT DEPARTMENT-1
Govt. of Maharashtra, Mantralaya, MUMBAI-32.
CC to
Hon’ble Mayor, Nagpur Municipal Corporation, Nagpur.
And other respected Office Bearers & Members of the NMC
Nagpur Municipal Corporation.
The Accounts Officer & the Auditors of NMC
The Controller General of Accounts, CAG, New Delhi.
