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MMC turns heat on oil firms over pending dues

After being on the verge of bankruptcy due to weak financial position, the Mormugao Municipal Council(MMC) has now turned its heat on two oil companies who have been operating from Municipal Land leased out to them, but have allegedly failed to pay the dues of Rs 24.97 crores, including penal interest to the civic body.To overcome from the financial crises, MMC have decided to take all possible steps to ensure that the two oil companies having their petroleum storage tanks and other facility on the Municipal land should pay pending dues, failing which MMC have also warned them with severe action, including sealing of premises leased out to the oil companies.According to MMC Chief Officer Deepali Naik, the civic body has leased out its property to Indian Oil Corporation Limited (IOCL) and Hindustan Petroleum Corporation Limited (HPCL) admeasuring 8038 square meters and 9070 square meters of land respectively.“As per the Municipal Act section 88 sub-sections-II, Oil companies are supposed to pay us rent with an increase of 10 per cent every year; however, since beginning they have been paying MMC without any annual increase. Up to 2004, the increase of rent was 5 per cent every year; thereafter the same was increased to 10 per cent every year. Since these oil companies have failed to pay the rent with the annual increase, they have attracted a penalty (as per section 161 of Municipal Act) and 18 per cent penal interest. Collectively the dues today have reached to about Rs 24.97 crores which is a big amount outstanding, considering the present financial position of civic body,” she said.
Naik also claimed that the issue of increase in rent is not the MMC’s decision but the decision taken by the government. She said that “the government notification dated May 14, 1997 and a letter dated July 3, 2000, the director of Municipal Administration had communicated to MMC regarding the amendment to the provision of section 88 (3) of the Municipal Act 1968 and accordingly government decision was conveyed to the oil companies that enhanced rate from May 5, 1997. However, both the companies challenged the enhanced lease rent matter in the court which is still pending.”“They are not agreeing to the new rate of tax which is applicable to all premises located under Municipal jurisdiction. They have been paying us as per the old lease agreement executed between oil companies and MMC. All these years they have been paying us as per Rs 12/square meter, whereas they have to pay us at the rate of Rs 25 per square meter and today our calculation shows that these oil companies lease rent is outstanding from May 1997 to June 2016,” she said.While the lease rent issue remained pending, another issue that has upset MMC is construction/ installation works carried out by the oil companies without obtaining specific permission from the council.
Chief Officer Deepali Naik claimed that the land was leased out to these oil companies with the condition that they shall not make any additional building, structures etc, or erect any new building or structure or install any new tank in the said land except with the prior permission in writing from MMC. Whereas it has brought to the noticed of MMC that the these oil companies have carried out construction/ installation without obtaining specific permission from the council as required under Section 184 of Goa Municipalities Act 1968 for the construction of oil tanks or building.“In order to ascertain the factual position of the structures erected, Civic body has formed two technical teams with other officers to inspect and reassess the structures erected in the land leased out to said companies on April 21 at 10 am and action will be taken accordingly,” Naik said.The Chairperson MMC, Deepak Naik, claims that council members are in no mood to give any relaxation to the oil companies and if the dues are not paid then MMC will not hesitate to seal the premises.
“After the conclusion of the recent assembly polls, the Council has started taking drastic steps. MMC has to recover its dues to fulfill its financial needs at any cost. HPCL and IOCL collectively have been occupying our 15,000 square meters of prime land but we are not getting anything in return from them. Now we have decided to make our last move to recover the dues and if the same is still not paid then we will not hesitate to take strict action against both the companies which can be even sealing off their premises,” Naik warned Interestingly in their battle to improve financial condition with recovery of dues, the Council has been seeking help from the state government at regular intervals. In the month of January this year, the civic body had written a letter to the then deputy Chief Minister Francis D’ Souza who was also holding charge of Urban development Ministry seeking his intervention to resolve the issue of pending dues with oil companies. The issue is still pending. Besides planning to take drastic step against the defaulters, the council has been also making attempt to seek intervention of new government with the hope that government would come to the rescue of council which has been facing biggest financial crunch. [H]

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