Dear Experts,
I have an question regarding liability of payment interest / compensation by Goverment Departments / Ministries to suppliers / Traders on delayed payments. My case details are as under:-
1) Order placed by Railways upon us to supply materials with payment terms of "90% against Inspection certificate and receipted challan duly countersigned by Gazated officer. Balance 10% after commissioning of the equiptment or 6 Months whichever is earlier."
2) Contract is governed by IRS Conditions of Contract, wherein there is no mentioned of payment of interest / compensation to suppliers for delayed payment. However an generally acceptable time for making the payment is 15 days, which can be established by presenting various / numerious PO's which we have executed from the same department for which payment was released within 15 days, from the date of supply.
3) We have complied to all our side of the contract and the bills are lying pending for more then 3 months now.
4) We have come accross " The Interest on delayed payment to small scale & ancillary Industrial undertakings ordinance, 1992", under which interest is payable to small scale and ancillary industrial units, however we dont fall under any of such catagories. We are traders, having no manufacturing.
5) As per IRS Conditions, I will have to approach the GM for appointment of Arbritator.
Now, my question is, if there is any law, judgement of and courts, against Railways/ Central Govt. / Ministires for payment of compensation/ Interest to suppliers in line with the ordianance cited above, which can make my case stronger.
Internally we know that the payment has not been cleared since they dont have funds in the Allocation head thats mentioned on the PO, which is compleatly an internal procedure of Railways and has nothing to do with the supplier. We have an valid and legally binding PO.
Pls help.
regards....
