PART-I

Non-submission of Annual Accounts

In accordance with Regulation 6 of D.M.C. (Maintenance of Accounts) Regulations, 1959, the annual abstract shall be prepared at the end of the year and submitted to the Standing Committee and the Corporation. The abstract shall be submitted to the Municipal Chief Auditor by the 15th June each year. Annual Accounts for the years 2003-04 to 2008-09 have not been submitted by the Department.

PART-II

Non-submission of Annual Appropriation Accounts

In accordance with Regulation 16 of D.M.C. (Maintenance of Accounts) Regulations, 1959, the Municipal Chief Accountant shall prepare annually appropriation accounts of the Corporation and include under the respective Heads of Account explanations for variations in consultation with the Heads of Departments, the appropriation account shall be checked by the Municipal Chief Auditor, who shall submit the same to the Standing Committee for being laid before the Corporation. Annual Appropriation Accounts for the years 2002-03 to 2008-09 have not been submitted by the Department.

PART-III

FINANCIAL IRREGULARITIES

1. Wrong posting of G-8 receipts- ` 183 lakh.

Property tax amounting to ` 1,83,01,714 deposited by National Bal Bhawan vide G-8 receipt No.52005 dated 31.3.2008 was posted in the D&C register against property No.1488-92/11, Chandni Chowk, Delhi owned by Smt. Kamla Devi. While the department has corrected the mistake, the possibility that this was done with a view to granting undue benefit to a property owner can not be ruled out. Therefore, there is a need for introducing/enforcing effective inbuilt controls/measures to deter/prevent such lapse/manipulation in future.

A test check of the Demand & Collection Register of Assessment branch, City Zone for the year 2007-08 disclosed that National Bal Bhawan deposited property tax amounting to ` 1,83,01,714 vide G.R.P. Section’s G-8 receipt No.52005 dated 31.3.2008. But the posting of this G-8 receipt was made in the D & C register against property No.1488-92/11, Chandni Chowk, Delhi owned by Smt. Kamla Devi. Though the arrears outstanding against this property amounted to ` 1,46,72,195 only, current demand of ` 36,29,519 for which there was no basis on record was added to arrears and total demand was arrived at ` 1,83,01,714 which perfectly matched with the amount of G-8 receipt. This had resulted in wrong posting of ` 1,83,01,714 to the assessee of property No.1488-92/11, Chandni Chowk, Delhi.

On being pointed out the irregularity by audit in March and April, 2010, the department vide letter No.Tax/CZ/10/69 dated 23.4.2010 intimated that necessary correction in D & C register has been made by posting the paid amount of ` 1,83,01,714 in the account of National Bal Bhawan, Kotla Road, Delhi which was wrongly and unintentionally posted in the account of property No.1488-92/11, Chandni Chowk, Delhi. Necessary demand of arrear has been raised against property No.1488-92/11, Chandni Chowk and demand notice issued on 23.4.2010 for ` 1,46,72,195. Further, the investigation in this case has been done and accordingly warnings as per approval of the Commissioner dated 27.4.2010 have been issued to the then Asstt. Assessor & Collector and the

2

concerned Asstt. Zonal Inspector. Audit holds the view that in this regard following aspect being relevant need proper consideration:

The G-8 receipt of National Bal Bhawan at Kotla Road New Delhi was posted against property owned by Smt. Kamla Devi at Chandni Chowk Delhi. The names of the owner and addresses are so different that any mix-up was feasible either because of gross carelessness or mischievous intentions.

National Bal Bhawan is an autonomous institution set up by the government while the other property is a private property. Posting of payment received from an autonomous body of the government against a purely private property had potential of extending huge undue benefit to the private property owner.

The G-8 receipt was of ` 1,83,01,714 but the same was posted against a private property against which there were arrears of ` 1,46,72,195 only and total demand which matched with the amount of G-8 receipt was arrived at by adding the current demand of ` 36,29,519 without any basis. That this was done possibly to match the total demand with the amount of G-8 receipt, can not be ruled out.

In view of above, the wrong posting of G-8 does not seem a case of simple omission, therefore, suitable effective measures need to be taken to deter/ prevent such lapses/manipulation in future.

(MCA/RS/DP-47(G)/2008-09)

3

2. Irregularities in the assessment of property- ` 45.20 lakh.

(a) The arrears of property tax in respect of property No.3448-49, Asaf Ali Road, Delhi was shown as ` 25,10,112 as on 31.3.2004 after taking I.D. Action whereas the actual arrears worked out to ` 49,35,630 as on 31.3.2004. This resulted in short recovery of ` 24,25,518 due to wrong calculation. While the department has corrected the mistake, there is a need for introducing/enforcing effective inbuilt controls to prevent such lapse in future.

(b)Rateable Value of the same property was revised at ` 80,00,000 w.e.f. 1.4.2001 instead of ` 1,04,67,800 w.e.f. 1.4.2000. This resulted into loss of ` 20,94,270 for the period from 1.4.2000 to 31.3.2002.

A test check of Assessment file of property No.3448-49, Asaf Ali Road, Delhi in the name of Life Insurance Corporation of India alongwith Demand & Collection register for the years 2003-04 to 2009-10 disclosed the following irregularities:-

a- Short recovery of property tax due to wrong calculation- ` 24.26 lakh.

The proposed Rateable Value of the property of ` 80,00,000 (Com.) w.e.f. 1.4.2001 & ` 1,60,00,000 (Com.) w.e.f. 1.4.2002 was finalized exparte vide decision dated 27.2.2004 & 27.2.2006 on grounds of increase in rent. Accordingly I.D. action was taken by the department and ` 66,10,752 posted as arrears in the D&C account.

On the request of the assessee, the Assessing Officer vide decision dated 14.1.2008 rectified the exparte decided Rateable Value of ` 1,60,00,000 w.e.f. 1.4.2002 and fixed Rateable Value at ` 1,31,58,130 (Com.) w.e.f. 1.4.2002. The department took I.D. action on 4.2.2008 showing balance amount of arrear of ` 25,10,112 whereas the amount of arrears actually worked out to ` 49,35,630 as on 31.3.2004 as per details given below.

I.D. Action taken by the department Required I.D. Action by the department after rectification of

R.V. of ` 1,60,00,000 to ` 1,31,58,130 w.e.f. 1.4.2002

Arrears worked out on 17.8.2006 I.D. Action taken on exparte decided R.V. of

R.V.- ` 80,00,000 w.e.f. 1.4.2001R.V.- ` 1,31,58,130 w.e.f. 1.4.2002Property Tax

4

` 80,00,000 w.e.f. 1.4.2001 & ` 1,60,00,000 w.e.f. 1.4.2002.

Arrears worked out on 4.2.2008 as per I.D. Action taken after rectification of R.V. fixed at ` 1,31,58,130 w.e.f. 1.4.2002.

Balance as on 31.3.2004 shown in D&C register Tax paid vide R.No.985043 dated 27.2.2008.

Balance as on 31.3.2008

` 66,10,752

(-) ` 41,00,640

` 25,10,112

(-)` 25,10,112

Nil .

2001-02--- ` 23,98,500 2002-03--- ` 39,45,930 2003-04--- ` 39,45,930 ` 1,02,90,360Tax paid during 2001-02 to 2003-04@ ` 17,84,910 p.a. (-) ` 53,54,730

Balance as on ` 49,35,63031.3.2004 Tax paid vide R.No.985043 dated 27.2.2008 (-) ` 25,10,112Balance as on 31.3.2008 ` 24,25,518

Based on a demand notice for ` 25,10,112 issued to assessee on 4.2.2008, the assessee paid the said amount vide receipt No.985043 dated 27.2.2008 and the department showed the balance Nil as on 31.3.2008. This has resulted in short recovery of ` 24,25,518 due to wrong calculation.

On being pointed out the irregularity in March, 2010, the department (20.8.2010) intimated that short recovery of ` 24,25,518 has been made good from the assessee vide G-8 receipt No.64433 dated 3.8.2010. While it is appreciated that corrective action has been taken, it is recommended that adequate checks may be built in the system and effectively enforced so that such instances do not recur in future.

b- Loss of revenue due to belated assessment- ` 20.94 lakh.

It was also noticed from the documents placed in the assessment file that the property had been let out to six tenants at a monthly rent of ` 10,26,263 as on 1.4.2000. The department neither conducted any inspection of the property nor did it issue any notice to this effect during 2000-01. However, the department proposed the revision of Rateable Value of the property at ` 80,00,000 w.e.f. 1.4.2001 which was arrived at after adding 30% to the old rent of ` 70,05,550 p.a. which was for 1998-99 and did so without taking into account the cognizance of document relating to letting out of property w.e.f. 1.4.2000 submitted by the assessee & available with the department. The Assessing

5

Officer vide decision dated 27.2.2004 decided the Rateable Value exparte at ` 80,00,000 w.e.f. 1.4.2001 for which the assessee did not raise any objection.

Thus, non revision of the Rateable Value of the property at ` 1,04,67,800 based on available letting information furnished by the assessee w.e.f. 1.4.2000 i.e. at the monthly rent of ` 10,26,263 instead of at Rateable Value of ` 80,00,000 w.e.f. 1.4.2001 resulted into loss of ` 20,94,270 for the period from 1.4.2000 to 31.3.2002.

The irregularity was brought to the notice of the department in March, 2010. The department (17.9.2010) stated that “by merely inspecting the property, the increase in rent cannot be ascertained. However, at the time of passing rectification order dated 11.1.2001, the rent agreement of the let out portions came on record. Thereafter, sensing the inevitability of revision of the property under section 126 proposing to assess Rateable Value w.e.f. 1.4.2001 due to increase in rent was issued during 2001-02. As the case pertains to the period of more than 10 years back, it is not possible at this stage to effect either recovery or take action against the defaulting person who failed to revise the property in time”.

Again, the department besides admitting the irregularity and confirming the facts and figures stated in the Para stated (May, 2011) that remedial action to recoup revenue loss could not have been taken then and cannot be taken now in view of the limitation attached to Section 126 of D.M.C. Act. As the case pertains to more than 10 years back, no action can be taken against the defaulting person who failed to revise the property in time.

Since the department itself has admitted that at the time of passing rectification order dated 11.1.2001, the rent agreement of let out portions came on record, but inspite of that it had failed to issue notice and revise the Rateable Value of the property based on the rent agreement even for the year 2000-01 which resulted into loss of ` 20,94,270 for the period from 1.4.2000 to 31.3.2002. Further, audit do agree with the statement of the department that it is not

6

possible at this stage to effect recovery but at the same time it disagree with it that no action can be taken against the defaulting person who failed to revise the property in time.

(MCA/RS/DP-56(G)/2008-09)

3. Non-recovery of dues against dishonoured cheques- ` 30.40 lakh.

The department is yet to recover dues amounting to ` 30.40 lakh in respect of 506 dishonoured cheques towards property tax in Shahdara (North) Zone. Further, in the absence of proper maintenance of the Demand & Collection registers, it could not be ascertained in audit whether (i) minus action was taken, (ii) rebate, if allowed for timely payment of property tax was withdrawn & (iii) penalty was imposed against these dishonoured cheques.

As per instructions issued from time to time from the office of the Chief Accountant, following procedure is to be followed for the accountal and re-adjustment of dishonoured cheques.

a- When a dishonoured cheque is returned by the bank, the reconciliating clerk in the accounts department, would trace from the dates on reverse of cheques, the daily return received from the department and take necessary action for passing reverse entries of original credits to revenue. He should return the cheque to the department concerned for claiming amount from the parties.

b- The amount of dishonoured cheques would immediately be debited in the cash book to the head of account against which the credit was originally given. The Zonal A.C.As. would maintain chronologically a register of dishonoured cheques received from A.O. (H.Q.) and also watch their clearance.

c- The department concerned shall ensure quick recovery of the dues from the defaulting parties alongwith penalty wherever it is leviable.

d- The Zonal A.C.As. shall ensure that the registers for watching adjustment of dishonoured cheques are invariably maintained in their

7

respective offices. They should also furnish a certificate regarding minus entry in demand and collection registers or recovery action from the department concerned of the zones.

A review of dishonoured cheque register maintained in Assessment & Collection branch of Shahdara (North) Zone disclosed that 506 dishonoured cheques amounting to Rs.30,39,587 were received during 2008-09 from A&C Head Quarter. These were tendered by the assessees for the payment of property tax for the years 2006-07 to 2008-09. In such cases the department was required to take minus action, withdraw rebate and impose penalty and record necessary entries in the Demand and Collection registers. It was noticed that Demand & Collection registers were not being maintained properly in as much as they were not showing the following details.

(i) Property I.D.No. & S.No. of Assessment book.(ii) Annual Value of property under Unit Area System.(iii) Annual Rate of Property Tax.(iv) Covered Area/Total Area of property.(v) Details of property tax deposited.(vi) Outstanding arrears.

This indicated that the instructions relating to dishonoured cheques were/are not being followed by the department properly. Besides, in the absence of proper maintenance of the Demand & Collection registers, it could not be ascertained in audit whether (i) minus action was taken, (ii) rebate if allowed for timely payment of property tax was withdrawn & (iii) penalty was imposed.

The matter was brought to the notice of the department in May, 2010, but no reply has been received (June, 2011).

(MCA/RS/DP-36(G)/2008-09)

8

4. Non/short carry over of demands- ` 9.42 lakh.

Demands amounting to ` 9,42,086 were not carried forward or were carried forward short in the Demand & Collection register.

A cross check of Demand & Collection registers maintained in Assessment branch, Narela Zone for the years 2007-08 with that of 2008-09 disclosed that in the following cases demands amounting to ` 9,42,086 were either not carried forward or were carried forward short in the registers.

Property No. Demand outstanding as

per D & C register 2004-05 to 2007-

08

Arrears carried forward to the D&C register of

2008-09 (`)

Demand short/non

carried forward (`)

777, DSIDC, Narela 85,990 Nil 85,990C/188/2, Inder Enclave, Ph.II, Nithari

21,905 Nil 21,905

766, DSIDC, Narela 4,76,154 Nil 4,76,154385, DSIDC, Narela 14,48,778+3,37,857

Penalty14,48,778 3,37,857

2710, DSIDC, Narela 26,568 6,568 20,00060/77/Alipur 3,972 3,792 180

9,42,086

The irregularity was brought to the notice of the department in April, 2010. The department intimated on 29.4.2010 & 16.8.2010 that necessary corrections have been made in the Demand & Collection registers and demand letters have been issued to the tax payers.

(MCA/RS/DP-42(G)/2008-09)

9

5. Loss due to under assessment and irregular grant of vacancy remission- ` 8.42 lakh.

A notice for proposing Rateable Value of a property for ` 68,00,000 w.e.f. 1.4.2000 was issued to the assessee on the ground of ‘Change in hand’. But Rateable Value was fixed at ` 7,65,000 w.e.f. 1.4.2000 on the ground that the purchaser purchased the old built up property which was on rent at ` 75,000 per month whereas Rateable Value should have been fixed at ` 32,50,000 w.e.f. 1.4.2000 on the grounds of change in hand. Besides, vacancy remission w.e.f. 1.6.2000 to 31.7.2002 was allowed at Rateable Value of ` 7,65,000. Since the property was kept for self residential use the grant of vacancy remission was not in order. This has resulted in loss due to under assessment and irregular grant of vacancy remission amounting to ` 8,42,297.

Section 116 (2) of Delhi Municipal Corporation Act, 1957 stipulates that the Rateable Value of any land which is not built upon but is capable of being built upon and of any land on which a building is in process of erection shall be fixed at five percent of the estimated capital value of such land.

Chapter 15 on ‘Vacancy Remission’ of Nabhi’s Guide to House Tax in Delhi provides that if any building has remained vacant and unproductive of rent i.e. neither occupied nor any rental is derived and such vacancy is of 60 or more consecutive days, the property taxes to the extent of 2/3rd of the taxes payable for the duration of vacancy can be remitted and if the taxes have already been paid, can be refunded. No vacancy remission is permissible if the building is kept for self or is under self occupation. However, the assessee claiming such vacancy remission may be asked to file an affidavit on non-judicial stamp paper of ` 2 to the effect that the property remained vacant and unproductive of rent during the period for which such claim is being made.

10

A test check of Assessment file of property C-4, Paschimi Marg, Vasant Vihar disclosed that the Rateable Value of the property was fixed on rental basis at ` 7,03,800 w.e.f. 1.4.1999 vide assessment order dated 31.3.2001. The property was sold to M/s Jassum Properties Pvt. Ltd. through agreement to sell dated 24.8.2000 & 22.2.2001 for a total consideration of ` 6,50,00,000. The purchaser demolished the existing building and reconstructed it.

Accordingly a notice proposing Rateable Value of ` 68,00,000 w.e.f. 1.4.2000 was issued to the assessee on the grounds of ‘change in hand’. The Assessing Officer vide order dated 17.6.2003 fixed the Rateable Value of the property at ` 7,65,000 w.e.f. 1.4.2000 on the grounds that the purchaser purchased the old built up property which was on rent for ` 75,000 p.m. and also allowed vacancy remission w.e.f. 1.6.2000 to 31.7.2002 at Raeable Value of ` 7,65,000.

It was, however, noticed from the documents placed in the file (i.e. assessee’s letter dated 28.7.2000, affidavit dated 25.1.2001 and inspection notice dated 30.3.2001) that the property was vacated by the tenant on 31.5.2000 and it had been lying vacant for self residential use since 1.6.2000. Since the property was kept for self residential use, the vacancy remission granted by the Assessing Officer for the period 1.6.2000 to 31.7.2002 at Rateable Value of ` 7,65,000 was not in order. Further, the Rateable Value of the property was required to be fixed under Section 116 (2) of D.M.C. Act at ` 32,50,000 (5% of ` 6,50,00,000) w.e.f. 1.4.2001 to 31.7.2002 during which the building was in process of construction. Thus irregular grant of vacancy remission and under assessment resulted into loss of revenue of ` 8,42,297 for the period 1.4.2001 to 31.7.2002.

The matter was brought to the notice of the department in May, 2010 but no reply has been received (June, 2011).

(MCA/RS/DP-45(G)/2008-09)

11

6. Loss due to short deposit of property tax- ` 3.43 lakh.

Property tax amounting to ` 3,43,050 was deposited short by the assessee by applying use factor as 2 instead of 3; the property is being used for running school and school authorities were charging fee of more than ` 1200 p.m.

Para 2.3 to 2.5 of Text of guidelines given in Annexure-I- “Instructions on use factor for Medical and Educational Institutions” of the Chapter 3- Determination of Annual Value under Unit Area System issued by M.C.D. vide order No.Tax/A&C/PC/ 04/41 dated 29.7.2004 provides that:-

- Schools which are charging fee (fee includes all amounts received from the students by whatever name called including security charges but excluding transportation and boarding & lodging charges) upto ` 600 p.m. i.e. ` 7200 p.a. will carry the public purpose factor and will be assigned a use factor of 1.

- Schools which are charging fee above ` 600 p.m. but upto ` 1200 p.m. (i.e. above ` 7200 p.a. and upto ` 1,44,000 p.a.) would qualify for the utilities factor and will be assigned a use factor of 2.

- Schools other than those mentioned in the preceding two paragraphs would be subjected to the use factor of 3.

A review of Self Assessment Property Tax forms for the year 2005-06 to 2008-09 submitted by Arvind Gupta D.A.V. Centenary Public School, Model Town,

12

Delhi disclosed that the assessee had deposited the tax by taking the use factor as 2, whereas use factor of 3 should have been taken as the property is being used for running school and school authorities were charging fee of more than ` 1200 p.m. [Tuition fee- ` 995 p.m. (average L.K.G. to XII) + ` 1500 (annual charges) + ` 100 p.m. (development fund) + ` 25 & ` 40 (pupil fund)].

Thus wrong application of use factor of 2 instead of 3 by the assessee has resulted in loss due to short deposit of property tax of ` 3,43,050 for period 2005-06 to 2008-09.

The irregularity was brought to the notice of the department in May, 2010, but no reply has been received (June, 2011).

(MCA/RS/DP-27(G)/2008-09)

13

7. Irregular grant of remission in Monthly Licence Fee- ` 71.53 lakh.

Remission in monthly licence fee for ` 71,53,479 was granted to M/s Aerostral Air Services (p) Ltd. by ignoring the terms and conditions of parking bye-laws, as well as the undertaking given by the contractor that they shall not claim any remission on any account. Even though the Remission Committee had rejected this remission proposal, the matter was also not placed before Remission Committee for re-consideration of the case.

Clause 5 of standard terms and conditions for the allotment of M.C.D. authorized roadside parking sites stipulates that (a) the tenderer shall inspect the parking site which will be given on ‘as is where is’ basis and may obtain necessary clarification, if any, regarding the same to satisfy himself fully before offering bid for the same, (b) the tenderer should bid the amount by considering its entire potential to attract customers. M.C.D. will not be responsible for any decline in the potential of the customers at the parking site for any extraneous/unforeseen reason(s) whatsoever. Any claim for remission on the basis of harm to business interest on any extraneous/unforeseen conditions/reasons whatsoever shall be summarily rejected by the M.C.D. without any kind of response to the licensee and the licensee shall not be entitled to make any claim/remission on that account.

A review of parking site files of 3 C’s, Alankar Cinema, Lajpat Nagar revealed that the parking site was allotted to M/s Aerostral Air Services(p) Ltd. on 12.8.2004 for a period of one year at monthly license fee (M.L.F.) of

14

` 2,87,000 on ‘as is where is’ basis. Meanwhile during the year 2005, new terms and conditions for allotment of M.C.D. authorized parking sites had come into force according to which the duration of contract was to be kept operative for five years from the date of handing over of the site subject to renewal thereof every year with enhancement of M.L.F. by 5% every year. The contractors were accordingly asked to offer their willingness as per the said terms & conditions. The contractor of this site applied for the continuance of the contract as per the new terms & conditions, but till then the process of inviting tenders had already been started and thus its request could not be acceeded to. The contractor also filed a civil suit in Delhi High Court against M.C.D. disputing the area of parking and obtained stay.

The contractor applied for the continuance of the contract as per the new terms and conditions and offered the enhancement of the M.L.F. by 25% initially with 5% enhancement every year on renewal of contract agreement. The department vide letter dated 30.1.2006 requested the firm to produce an undertaking that they will not claim any remission for the said parking site and the court case shall be unconditionally withdrawn from the High Court of Delhi. The firm submitted undertaking vide letter dated 30.1.2006 that they will not claim any remission on any account and shall also withdraw the court case. As the contractor was running the site at the old M.L.F. of ` 2,87,000 owing to stay from the court, the department awarded the contract to said contractor vide letter No.DC/RPC/Zone Code-06/DCs/290 dated 10.3.2006. on ‘as is where is’ basis for one year at M.L.F. of ` 3,65,000 w.e.f. 9.3.2006 to 8.3.2007. Full and vacant physical possession of the parking site was handed over to the contractor on 8.3.2006 which was duly acknowledged by the contractor. Immediately after allotment of parking site the contractor vide its application dated 20.3.2006 applied for remission stating that some portion of parking are not operational as the residents are not permitting to operate while some portion are occupied by Police Booths and Bus Terminal. The request of the contractor was summarily rejected vide orders dated 3.5.2006 by the Addl. Comm (R) as the same was against the terms & condition of the parking Bye-Laws as well as undertaking given by it. The Remission Committee of R.P.Cell in its meeting held on 12.3.2007 again rejected the claim of contractor and asked to seek letters from Police department and Transport authorities about area occupied by them.

15

The case was again submitted on 27.9.2007 by dealing assistant (LDC/UDC) who in the note of recommendation for grant of remission of 36.39% in monthly licence fee, mentioned as under:-

“I have inspected the area and found the contention of the contractor as correct. Three letters may kindly be seen at page No.235/C, 238/C and 242/C based on which and my field report, I hereby certify that there has been a loss of 36.39% of the parking area to the parking contractor, eversince he took over the possession of the parking site.” His recommendations were approved by Superintendent, A.O. & ADC (RPC), Addl. Comm. (Rev.) without any comments/ observation.

Ultimately the Commissioner, vide orders dated 4.10.2007 approved the proposal for granting remission of 36.39% in M.L.F to the contractor w.e.f. 9.3.2006 (date of allotment of parking site). The remission granted to the contractor was irregular on account of the following points:-

1- The remission was granted by grossly ignoring the terms and conditions of parking Bye-Laws as well as the Undertaking given by the contractor that they shall not claim any remission on any account.

2- As per references received from the Police department and Transport authorities, the Police Booth and Bus Terminal were in existence prior to award of contract. Therefore, the contention of the contractor did not hold good. Also as per terms & condition, the contractors were required to inspect the site before offering their bids.

3- Such a huge remission was recommended merely on the inspection of a dealing assistant of an L.D.C./U.D.C. rank who was not accompanied with any responsible officer of M.C.D. and there was no laid down policy/condition by the department in this regard as to which officer is empowered to carry out the inspection in such cases before giving recommendations for grant of remission.

4- The percentage of remission allowed was not supported by any yardstick/measurement taken by any technical staff to support the loss of parking area to the contractor.

16

5- Finance and Law department were not consulted before approving grant of remission though huge loss in revenue was involved.

6- The matter was not placed before Remission Committee for re-consideration of case in the light of rejection having been done by it earlier.

A sum of ` 26,12,203 was allowed as remission for the period from 9.3.2006 to 30.9.2007. Strangely, the grant of remission continued for the subsequent period too from 1.10.2007 to 6.8.2009 despite the fact that the same was granted subject to review after one year as per orders dated 4.10.2007 of Commissioner. This further resulted into irregular remission of ` 45,41,276 for the period from 1.10.2007 to 6.8.2009 as per detailed below:-

i) 1.10.2007 to 6.8.2008 - ` 20,30,912ii) 7.8.2008 to 6.8.2009 - ` 25,10,364

` 45,41,276

Thus the grant of remission amounting to ` 71,53,479 for the period from 9.3.2006 to 6.8.2009 was irregular and against the canons of financial propriety and resulted in a huge loss of ` 71.53 lakh to the M.C.D.

The matter was brought to the notice of the department in November, 2009. The department submitted the point-wise reply (24.2.2011) as under.

1 & 2- As per terms and conditions, parking site is allotted on “as is where is basis”, but due to construction of police traffic booth and police post at site, for which parking area was affected after allotment of parking site and also some of the area has been utilized by D.T.C. for parking of their buses. The remission on these points was granted only after obtaining report from Delhi Traffic Police, Delhi Police & D.T.C.. The contractor has given undertaking in pursuance to the court case filed by him before the High Court in writ petition (C) No.16493/2004 and A.O. (R.P.Cell) vide letter dated 30.1.2006 requested the firm that they will not claim any remission for the parking site and the court-case writ petition (C) No.16493/2004 shall be unconditionally withdrawn from the court. Hence remission was granted for further period of parking not for the previous

17

period and it was only after further utilization of the area by the D.T.C., Delhi Police and Delhi Traffic Police. The is a prepaid booth of police in existence since 2006.

3 to 5-It is duty and responsibility of the dealing hand to place the factual position before the higher authorities for their considerations either they may reject or approve the proposal. The proposal was prepared by the dealing hand and was seen by Supdt., A.O., A.D.C. R.P.Cell and approved by the Addl. Comm. (Rev.) and the commissioner.

6- The recommendation was already considered by the remission committee and thereafter the matter was put up before the Commissioner for grant of remission and accordingly approved by the Commissioner.

Comments1 & 2: As per allotment letter dated 10.3.2006, full and vacant physical

possession of parking site at 3 C’s as per lay out plan and terms and conditions of the contract was handed over to the contractor on 8.3.2006. However, immediately after taking full and vacant possession of parking site, the contractor started representing i.e. dated 20.3.2006 onwards for remission on various grounds. The contractor vide his letter dated 16.1.2007 represented the issue regarding construction of pre-paid booth by Delhi Traffic Police and construction of Pass Section by the D.T.C. A review of report submitted by the Delhi Traffic Police dated 19.9.2007 revealed that the prepaid booth measuring 8’X8’ was in existence since 2006 and as per report of D.T.C. dated 13.9.2007 the Pass Section was shifted from main road to their own D.T.C. Terminal area which was in existence long before the allotment of the parking site. Apparently the Pass Section was within the D.T.C. terminal area and not within the allotted/earmarked parking site to the contractor.

Further, it is wrong to say that undertaking given by the contractor for not claiming remission was related to Court Case No.16493/2004 and not for subsequent period. A perusal of point No.1 & 2 of the undertaking of the contractor dated 30.1.2006 would reveal that the same was related

18

to parking site as on date under new terms and conditions of parking. There was nothing on record to substantiate that the construction/ encroachment cited by the contractor for grant of remission came into existence after the allotment of the site. Since the remission was granted from the very date of allotment of parking site without any post development in between allotment of site and representation of contractor for remission, the remission granted was not justified.

3 to 5:The procedural and financial lapses pointed out in these Paras were not addressed to in its right perspective in the reply furnished by the Department. The yardsticks based on which the percentage of remission granted were not supported by any authentic document as pointed out in point 1 & 2 above nor these were verified by the department through inspection by officers of adequately senior level before considering the grants of remission.

6: The stand taken by the department that the recommendations for remission was already considered by the Remission Committee, is factually not correct. The Remission Committee of R.P. Cell in its meeting held on 12.3.2007 rejected the claim and directed to get the site inspected to ascertain the area occupied by Traffic Police, Delhi Police and D.T.C. etc. Thereafter the matter was never placed before the said Remission Committee for re-consideration of the case.

Further, as pointed out in the Draft Para the grant of remission continued for the period from 1.10.2007 to 6.8.2009 despite the fact that the same was granted subject to review after one year as per orders dated 4.10.2007 of the Commissioner. This further resulted into irregular remission of ` 45.41 lakh for the period from 1.10.2007 to 6.8.2009. No reply on this issue has been furnished by the department.

(MCA/RS/DP-13(G)/2008-09)

19

8. Loss of revenue due to non-renewal/non-allotment of Dhaba shop-

` 4.22 lakh.

After receiving the dues from the allottee the department neither considered the request of the allottee to revoke the cancellation of the licence of Dhaba shop and re-allot the same to him nor allotted the Dhaba shop to any other person resulting in loss of revenue amounting to ` 4,22,400.

A test check of records of Sanjay Gandhi Transport Nagar disclosed that Dhaba shop No.A-7 & A-8 was allotted to Sh. Rattan Sethi vide letter No.2048/Dir/ SGTN/2005 dated 8.2.2005 at a monthly license fee of ` 8000 p.m. for five years with 10% yearly enhancement. Further as per clause 6 of the terms & conditions of the license deed, the licensee was required to pay the license fee of ` 8000 p.m. alongwith the maintenance charges @ 10% of the license fee p.m. before 10th day of the month to which it relates. In case the license fee remains unpaid for 3 consecutive months then the license shall be cancelled.

The licensee, Sh. Rattan Sethi, had not been paying the license fee since April, 2005. The department had requested him to deposit the license fee by issuing show cause notices, courtesy-cum-warning letter on 26.10.2005, 26.6.2006, 6.7.2006, 19.7.2006 & 2.8.2006 but he did not deposit the license fee amounting to ` 90,271 from April, 2005 to June, 2006 alongwith interest. Finally, the department cancelled the allotment of license of Dhaba shop A-7 & A-8 vide letter No.1471/Dir/SGTN/2006 dated 18.9.2006 and took over its possession on 22.9.2006.

20

The licensee deposited ` 90,271 (` 50,000 vide G-8 No.23017 dated 11.10.2006 and ` 40,271 vide G-8 No.23028 dated 27.10.2006) and requested the department to revoke the cancellation of license of the Dhaba shop. The licensee vide letter dated 1.11.2007 further requested the department to re-allot the Dhaba shop subject to payment of the license fee alongwith penalty from September, 2006. The department neither considered the request of the licensee, Sh. Rattan Sethi nor did it allot the Dhaba shop A-7 & A-8 to any other person till September, 2010. This has resulted in loss of revenue amounting to ` 4,22,400 (` 8800 X 48) for the period October, 2006 to September, 2010.

The irregularity was brought to the notice of the department in January, 2010, but no reply has been received (June, 2011).

(MCA/RS/DP-26(G)/2008-09)

21

9. Payment of Ready Mix Concrete on the basis of manual delivery challans instead of computerized delivery challans- ` 815.46 lakh.

Payments amounting to ` 8,15,45,874 were released to the contractors for providing & laying R.M.C. on the basis of manual delivery challans instead of computerized delivery challans.

Para 5.8.8.9.4 & 5 of C.P.W.D. specification 2002 for cement mortar, cement concrete and R.C.C. works inter-alia provides that Ready Mix concrete (R.M.C.) manufacturer/supplier shall, alongwith each batch of concrete delivered to the placement contractor, give him a concrete delivery ticket. The supplier shall give copies of all such delivery tickets to the Engineer-in-charge for his record and also get duplicate copies of such delivery tickets duly received and signed from the contractor. Further R.M.C. as supplied by the manufacturer and as placed by the contractor shall in no way be different from the specifications of concrete as approved by the Engineer-in-charge.

As per Section 10.5 of C.P.W.D. Works Manual 2007. “Works where RMC is used, cement register need not be maintained Only computerized dispatch slips to be kept on record”.

It was noticed that 21 Engineering divisions released payment amounting to ` 8,15,45,874 to the contractors for providing and laying R.M.C. against 198 work orders who produced manual delivery challans instead of computerized delivery challans in contravention of ibid provisions. This had resulted in

22

irregular payment as detailed in (Annexure-A). The division wise break up is as under :-

Sr. No.

Division No. of cases

Amount of RMS (`)

1 EE(Pr.)/Narela 7 17820022 EE(M-IV)/Rohini 27 93566103 EE(M-II)/CLZ 13 28987464 EE(M-II)/RZ 8 23994005 EE(M-I)/RZ 16 40370886 EE(M-I)/CLZ 13 62417437 EE(Pr.)/Rohini 3 6154952

Total 87 328705418 M-I, Shahdara South (Old XIV) 16 91,31,2159 M-II, Shahdara South (Old XI) 5 25,72,67010 M-III, Shahdara South (Old XXX) 3 72,18,47211 M-II, Shahdara North (Old XXII) 7 24,78,98712 M-III, Shahdara North (Old Shah

North)10 31,75,368

13 Project Narela 1 21,44,97914 M-I, Rohini Zone 1 4,19,364

Total 43 2,71,41,05515 M-I, Shahdara (N) (Old XIX) 7 30,01,69116 M-I, Central Zone (Old IX) 11 51,01,32017 M-II, Central Zone (Br-I) 7 18,59,49918 M-I, S.P. Zone (Old III) 12 38,67,884

Total 37 1,38,30,39419 Ex. Engg. (M)-II South Zone 5 8,98,53620 Ex. Engg. (M)-IV Shandara North

Zone14 45,40,593

21 Ex. Engg. (M)-IV Shandara South Zone

12 22,92,005

Total 31 77,31,134Grand Total 198 8,15,45,874

The irregularity was brought to the notice of the department in June, 2009 to May, 2010, but no reply has been received (June, 2011).

(MCA/RS/DP-9(G), DP-18(G) & DP-50(G)/2008-09)

23

10. Wide variations between the sample reports of Municipal Laboratory and designated laboratory for third party quality assurance/audit in respect of Mastic Mix - ` 157.18 lakh.

The test report of sample of Mastic Mix tested from Municipal Laboratory and designated laboratory for third party quality assurance/audit showed a huge variations ranging from 19.84% to 61.08% putting the reliability of the testing to question.

Procedure for third party quality assurance/audit was modified and detailed guidelines for conducting mandatory samples and third party quality audit were circulated vide circular No.D/SE(QC)/2006/1571 dated 25.10.2006. According to it, the following conditions were required to be incorporated in all the NITs being issued for different works in Engineering department of M.C.D. :-

Contractual Cost of work

Mandatory Sampling Third Party Quality Audit

More than ` 25 lakh

As specified in CPWD/IRC Specification by the concerned division. Testing of samples will be in the Municipal Lab.

1. I.I.T. Delhi2. CRRI Delhi3. NCCB Balabh garh Testing of samples will be in the designated lab* or in house lab of the party conducting quality audit.

24

` 5 – 25 lakh As specified in CPWD/IRC Specification by the concerned division. Testing of samples will be in the Municipal Lab.

a) 75% of the works by Quality Control Cell. Testing of samples will be in the designated lab*.

b) 25% of the works by concerned Chief Engineer. Testing of samples will be in the designated lab*.

` 2 - 5 lakh As specified in CPWD/IRC Specification by the concerned division. Testing of samples will be in the Municipal Lab.

25% of the works by concerned S.E. Testing of samples will be in the designated lab*.

* Designated Labs

(i) Sri Ram Institute for Industrial Research.(ii) R.T.C. Okhla(iii) National Testing House, Ghaziabad.

Further, the detailed modalities for fixing third party outside agencies alongwith their agreement were circulated vide circular No.SE(QC)/06-07/D-2817 dated 20.2.2007. According to it, the following three labs have been designated for testing of samples for works costing between ` 2 & ` 25 lakh :-

(i) Sri Ram Institute for Industrial Research.(ii) National Testing House, Ghaziabad.(iii) Regional Testing Centre (NR), Okhla.

A test check of records disclosed that Executive Engineer [M-I, Shahdara (South) & Project-I, Shahdara (South)] awarded 10 work orders for ‘Improvement and strengthening of roads by providing Mastic Asphalt which fell under the category of third partly check/audit. The department besides getting the samples of Mastic Mix tested from Municipal Laboratory got them tested from designated labs/third party quality assurance/audit too as required in terms of ibid circulars. The samples of both the laboratories report indicating presence of binder contents in Mastic Mix were found at variance with each other as per details as under.

S.N.

Work Order No. & Date

Quantity executed

Binder contents found

in testing

Binder contents found in testing

by

Name of Designated Lab/third

party quality assurance/au

Difference/

Variation w.r.t.

Mpl. Lab

Amount

25

(M2)by Mpl.

Lab.Designated Lab

dit which carried out

testing(`)

Division M-I, Shahdara (South)1 536/26.2.2008 864.09 10.35 %

13.70 % S.R.R.I. 32.37 % 3,69,400

2 633/19.3.2008 1,857.83 10.31 %(Av. of 3 samples)

13.20 % S.R.R.I. 28.03 % 6,62,050

3 632/19.3.2008 1,605.58 10.33 %(Av. of 2 samples)

13.32 % S.R.R.I. 28.94 % 6,96,805

4 542/26.2.2008 1,448.38 10.43 %(Av. of 2 samples)

15.20 % S.R.R.I. 45.73 % 5,88,144

5 119/12.6.2008 2,299.22 10.41 %(Av. of 2 samples)

13.90 % S.R.R.I. 33.52 % 9,47,440

6 128/12.6.2008 1,229.68 10.43 %(Av. of 2 samples)

12.50 % S.R.R.I. 19.84 % 5,31,197

7 551/26.2.2008 13,923.08 10.45 %(Av. of

10 samples)

16.83 % (Av. of 10 samples)

S.R.R.I. 61.05 % 45,82,083

8 244/26.8.2008 2,979.35 10.38 %(Av. of 3 samples)

13.90 % S.R.R.I. 33.91 % 12,95,600

Total 96,72,719

Division Project-I, Shahdara (South)9 5/10.4.2008 12616.45 10.38 %

(Av. of 12

samples)

16.7 %(Av. of 3 samples)

C.R.R.I. 60.89 % 46,68,086

10 125/11.3.2008 3623.58 10.40 %(Av. of 2 samples)

14.95 %(Av. of 2 samples)

S.R.R.I. 43.75 % 13,77,250

Total 60,45,336

Grand Total 1,57,18,055

It would be seen from the above that there was a huge variation in test reports of both the laboratories. The binder contents of Mastic Mix as shown in the sample reports of Municipal Laboratory were in consonance with that of what required (i.e. 10.20% by weight of mastic mix) in terms of D.S.R.- 2007 and circular No.D/242/EE(P)III/2007-08 dated 26.6.2007 issued by E.E.(P) III while the binder contents as shown in sample reports of designated laboratory for third party quality assurance/audit were 19.84% to 61.05% higher than that of laboratory reports of Municipal laboratory. Wide variations in the test findings of Municipal lab and IIIrd party labs point to the following suspicions:-

26

The samples might not have been collected by the designated Labs themselves from the actual sites of work and samples sent for testing were manipulated; or

The testing process of either the Municipal lab or the IIIrd party lab or both was not upto the mark; or

There was nexus among the contractor, Lab and the Department regarding sample taking and/or testing leading to manipulation of sample or test results.

Thus, the credibility of third party quality assurance/audit which costs the Municipal exchequer for 1 to 2% of contractual amount (1% for works with contractual amount between ` 5 lakh to ` 25 lakh and 1½ % to 2% for works with contractual amount of beyond ` 25 lakh) is suspect thereby defeating the very purpose of third party quality. Thus the purpose served by payment amounting to ` 1,57,18,055 made against the above work orders toward third party quality assurance remains doubtful.

The irregularity was brought to the notice of the department in November, 2009, but no reply has been received (June, 2011).

(MCA/RS/DP-17(G)/2008-09)

27

11. Mis-representation of facts leading to award of works to a de-barred contractor- ` 102 lakh.

Two works for contractual amount of ` 90,79,056 and ` 58,37,837 were awarded to debarred contractor by placing wrong facts before the Ward Committee to Rohini Zone and the Standing Committee.

Condition of Notice Inviting Tender (N.I.T.) provides that the registered contractors of M.C.D. only are eligible to tender for the amount, they are registered in their category subject to the condition that they are neither black-listed nor debarred at the time of purchase of tenders.

M/s Dhingra Construction Co., being a registered contractor of M.C.D. was debarred for a period of 5 years for tendering in M.C.D. vide Office Order No.D/905/EE(Br)II/2006-07 dated 8.2.2007.

A test check of records disclosed that Executive Engineer (Pr) Rohini invited tenders for (i) Strengthening of roads/lanes (Agarsain Marg, Jagan Nath

28

Marg etc.) in Trinagar and (ii) Strengthening of roads in Sawan Park in Rohini Zone vide N.I.T. No. 22 dated 8.1.2007 due on 29.1.2007, No. 26 dated 2.2.2007 due on 26.2.2007 and No.3 dated 30.5.2007 due on 20.6.2007, but no tender was received against these N.I.Ts.

The tenders were again invited vide N.I.T. No.5 dated 13.7.2007 due on 3.8.2007. Only one tenderer M/s Dhingra Construction Co., opened the site for bid and offered his rates for both the works. While getting the approval for the award of work to M/s Dhingra Construction. Co. from the Ward Committee, Rohini Zone and the Standing Committee, the department mentioned in the preamble that M/s Dhingra Construction Co. is registered under class-I in M.C.D. and eligible to tender for the work. The firm is not black listed/ debarred till the date of sale of tenders, whereas the firm has already been declared debarred for a period of 5 years for tendering in M.C.D. vide office order dated 8.2.2007.

Thus by placing wrong facts before the Ward Committee & Standing Committee, the department got approved the proposal of awarding these two works from the Standing Committee vide Resolution No.747 & 748 dated 13.2.2008 for contractual amount of ` 90,79,056 and ` 58,37,837 respectively. The department then placed work orders on a debarred contractor vide Nos. EE(Pr)Rohini Zone/ 2007-08/120 dated 14.2.2008 and EE(Pr)Rohini Zone/ 2007-08/ 114 dated 14.2.2008 with the completion period of 4 months. Both these works were completed in June, 2008 at total cost of ` 90,49,677 & `11,87,259 respectively. Mis-representation of facts before the Ward Committee and Standing Committee led to irregularly awarding these works to a debarred contractor.

The irregularity was brought to the notice of the department in March, 2010, but no reply has been received (June, 2011).

(MCA/RS/DP-23(G)/2008-09)

29

12. Irregularities in the execution of work- ` 101.41 lakh.

(i) The steel and cement brought by the contractor were procured from local market and authorized dealers instead of manufacturers and the invoices were irregularly accepted.

(ii) As per detailed estimate 1466.29 cum silt was to be de-silted and carried to SLF site whereas the payment for de-silting 5524.28 cum of silt which was four times of estimated quantity was released without verification with respect to S.L.F. slips.

A work for ‘Remodeling and covering of Nallah along Mathura Road in Friends Colony (West) ward No.8, Central Zone was awarded to contractor M/s M.C. Construction Co. at a contractual cost of ` 3,85,36,000 vide work order No.EE(DEMS)/Central Zone/2006-07/51 dated 2.2.2007 with completion period of 12 months. The contractor started the work on 3.2.2007 and completed it on 30.11.2008. The eleventh & final bill for ` 3,65,52,892 (progressive) was passed for payment on 30.3.2009. In the execution of work, the following irregularities were noticed.

30

(i) Irregular acceptance of Steel/Cement Invoices worth- ` 82.26 lakh.

Conditions for procurement of steel and cement by contractors circulated by Engineering department vide No:F672/E-in-C/2002/195 dated 19.4.2002 state that contractor shall procure steel reinforcement bars conforming to BIS codes from main producers as approved by the Ministry of Steel. The contractors shall have to obtain and furnish test certificate to the Engineer-in-charge in respect of all samples of steel brought by him at the site of work. Similarly in case of cement, the contractors are required to procure 33 Grade (conforming to IS 269 or 43 Grade conforming to IS 8112) ordinary portland cement from reputed manufacturers of cement having a production capacity of one million tones p.a. or more such as ACC, L&T, Rewa, J.P., Vikram, Shri Cement, Birla Jute and Cement Corporation of India and holding licence to use ISI certification for their product.

The record disclosed that in the execution of work, the contractor used 4,26,671.62 kg steel bars out of which 2,44,744 kg costing ` 63,63,344 (@ ` 26 as taken in JOR) were procured from local market instead of manufacturer. Similarly, the contractor used 28,045 bags of cement out of which 9,315 bags costing ` 18,63,000 (@ ` 200 as taken in JOR) were procured from authorized stockists instead of manufacturers. Thus, acceptance of steel and cement invoices was in contravention of ibid conditions which had resulted in irregular release of payment of ` 82,26,344.

(ii) Injudicious/irregular payment towards desilting of Nallah and carriage of silt to S.L.F. sites- ` 19.15 lakh.

Special Conditions circulated by DEMS Department of M.C.D. are incorporated. in N.I.Ts./ Works Orders relating to desilting of Nallah/Drains. According to condition No.2 ibid, the silt taken out by the contractor from the drains will be got cleared from the site and will be dumped by the contractor at the nearest S. L. F. site only; and receipt thereof shall be obtained from the S.L.F. site. The quantity of silt taken out from the drains and its weight got received/verified at S.L.F. will be compared with the measured quantity. The payment will be made as per weight of silt calculated on the basis of density and

31

volume taken out from drains and quantity of silt received by weight at S.L.F. site whichever is lower.

The record disclosed that though the said work i.e. remodeling and covering of Nallah along Mathura Road in Friends Colony (West) inter-alia involved desilting of existing nallah, yet the aforesaid special conditions were not made applicable in the work order leaving scope for claiming payment towards desilting and carriage of silt without verification/counter verification.

Further, as per the detailed estimate, 1466.29 cum silt was to be desilted and carried to S.L.F. site. As against this, the contractor actually claimed payment for desilting to the order of 5524.28 cum which works out to almost four times of the estimated quantity. In the absence of verified S.L.F. slips and such wide variation between estimated desilting and claimed as actually executed desilting, the veracity of actual execution of 5524.28 cum desilting and carriage is questionable. As a result, payment of ` 19,15,040 [` 9,99,803 (` 7,90,524 + ` 2,09,279) + ` 2,87,704.50 + 48.74% C.E.] towards 5524.28 cum desilting and carriage of silt lacked judiciousness.

The irregularity was brought to the notice of the department in Februrary, 2010, but no reply has been received (June, 2011).

(MCA/RS/DP-33(G)/2008-09)

13. Irregular release of payment to the contractors- ` 63.88 lakh.

Payment to the contractors without getting the works awarded on abnormally low rates inspected by Quality Control Cell resulted in irregular release of payment of ` 63,87,268.

In terms of Standing Committee’s Resolution No. 920 dated 17.3.2004 implemented vide ME-cum-E-in-C’s Circular No.F-506/E-in-C/2004/1015 dated 20.4.2004, if the rates quoted by the lowest tenderers are found abnormally low, the payment to the contractor for work shall only be made after the inspection by the Quality Control Cell at different stages and their findings shall be final and binding on the contractor.

32

It was noticed that Executive Engineer-M-I, Shahdara (N) (Old No.XIX) awarded 17 work orders on abnormally low rates during 2005-06 to 2008-09 and the bills amounting to ` 63,87,268 (` 68,45,978 - ` 4,58,710) were passed for payment by withholding the amount ranging from ` 10,000 to ` 70,000 without receipt of observations/ inspection notes of Quality Control Cell or without sending Action Taken Reports thereon to Quality Control Cell. Even in the Action Taken Report, the department had sought the permission of Quality Control Cell for release of payments to contractor, though these had already been made to them through first running bills. The details of 17 works are as under:-

S. N.

Work Order No. & Date

Bill amount as per Ist

R/Bill(`)

Amount withheld

(`)

Date ofPassing

BillReceipt of Q.C.C.’s

observation

A.T.R. on Q.C.C.’s

observation

1 118/20.6.2008 3,20,696 15,000 26.2.2009 5.3.2009 26.3.20092 406/12.3.2008 3,37,697 10,000 19.8.2008 16.7.2008 22.10.20083 441/20.2.2009 4,97,710 33,710 31.3.2009 26.5.2009 15.6.20094 124/13.9.2005 3,52,676 20,000 31.8.2006 2.8.2006 22.11.20075 189/14.12.2006 5,28,575 30,000 28.1.2008 30.7.2008 26.9.20086 188/14.12.2006 2,46,937 25,000 14.11.2007 30.7.2008 26.9.20087 185/14.12.2006 3,43,393 20,000 26.11.2007 8.8.2008 13.10.20088 126/13.9.2005 3,18,299 20,000 31.8.2006 20.8.2006 31.12.20079 90/4.10.2006 4,17,934 40,000 20.9.2007 28.9.2007 8.2.200810 123/13.9.2005 3,09,185 20,000 31.8.2006 2.8.2006 31.12.200711 128/13.9.2005 2,72,867 20,000 25.10.2006 29.9.2006 23.1.200812 129/13.9.2005 3,55,386 20,000 25.10.2006 29.9.2006 23.1.200813 355/8.3.2007 4,39,026 70,000 31.3.2008 13.2.2008 17.3.200914 111/31.8.2005 3,12,023 20,000 31.8.2006 2.8.2006 31.12.200715 1/17.5.2007 1051129 50000 28.9.2007 13.5.2008 8.7.200816 217/19.1.2007 419851 25000 31.10.2007 28.9.2007 19.5.200817 218/19.1.2007 322594 20000 31.10.2007 5.10.2007 16.4.2008

68,45,978 4,58,710(` 68,45,978 - ` 4,58,710) = ` 63,87,268

Release of payment without getting the works inspected by Quality Control Cell resulted in irregular release of payment of ` 63,87,268 to the contractors and defeated the very purpose of ensuring quality of work. Withholding certain sums before payment might have served only a secondary purpose of limited financial compensation in case of poor quality of work but the primary purpose of ensuring quality which was the intention behind the resolution of the Standing Committee remained disregarded and defeated.

The irregularity was brought to the notice of the department in December, 2009. The department stated (27.12.2010) that as per condition of A L R, no bill

33

has been released before the observation received from Quality Control Cell. All the works whose running bill has passed, were already got inspected by the Quality Control Cell at different stages and samples were also lifted by Quality Control Cell and sent to the designated Laboratory for testing. After receiving the sample report and found their results satisfactory, running bills were passed and ample amount was withheld for future recovery, Quality Control Cell observation has also received and has been complied with.

Reply of the department is not acceptable as in 7 cases out of 17, the Quality Control Cell’s observations were received after date of passing the bill and in remaining 10 cases though Quality Control Cell’s observations were received before date of passing of the bill but action taken report of all 17 cases in which the department requested to the competent authority to allow them to pass the bill, was sent to Quality Control Cell after the date of passing the bill. Thus release of payment by withholding certain amount was disregard to the Resolution of the Standing Committee and as such irregular.

(MCA/RS/DP-10(G)/2008-09)

14. Excess payment due to non deduction on account of decrease in price of bitumen/Cement/Steel Re-inforcement bars under clause 10 CA- ` 35.27 lakh.

No recovery on account of decrease in price of bitumen during the period of completion of work was made from the final bill of the contractor.

In terms of clause 10 (CA) regulating payment due to increase/decrease in prices of cement, steel re-inforcement bars and bitumen incorporated in the N.I.T. in pursuance of Planning department’s letter No.D/EE(P)-III/27/2006-07 dated 19.5.2006, if after submission of the tender, the prices of bitumen,

34

cement & steel re-inforcement bars incorporated in the work (not being a material supplied from MCD Store) increase (s) beyond the price (s) prevailing at the time of the last stipulated date for receipt of tender for the work, then the amount of contract shall accordingly be varied and provided further that any such increase shall not be payable if such increase has become operative after the stipulated date of completion of work (including extension, if any) in question.

In the event, the prices of bitumen, cement & steel re-inforcement bars required for execution of work decrease, the M.C.D. shall in respect of the quantity of bitumen, cement & steel re-inforcement bars incorporated in the work be entitled to deduct from the dues of the contractor, such amount as shall be equaling to the amount worked out on the basis of decrease in ex-refinery price of bitumen (basic cost + excise + sales tax) and whole sale price index of cement & steel re-inforcement bars as published by Economic Advisor to Government of India, Ministry of Commerce & Industry and base price of cement and / or steel re-inforcement bars prevailing as on the last stipulated date of receipt of tender and for the period under consideration.

It was noticed that the Engineering divisions- Project-I, West Zone, M-II, West Zone and Project K.B.Zone awarded 5 work orders relating to improvement/ strengthening of roads by dense carpet work etc. The rates of bitumen of 60/70 grade used in the execution of the work were found lower during the period of completion of work as compared to the rates applied by the department at the time of working out the justification of rates for the award of work in each case. Accordingly an amount of ` 34,76,792 should have been recovered from the contractors from their bills, but no recovery was made by the department as per details given below:-

S. N.

i) W.O. No. & Dateii)Contractual Amount

iii)Bill passed/paid

Period of complet-ion of work

Rate of bitumen Difference in rates

(`/PMT)

Quantity of bitumen

used in the work

(MT)

Total recoverable

amount

(`)

as per justification of Rates including cartage

(`/PMT)

as per bill submitted by the contractor

(`/PMT)1 i) E.E.-XX (Project-I)

West Zone/2007-08/31/18.9.2007

ii) ` 68,27,158iii) ` 68,26,754

5.10.07 to 10.11..07

25,496 19,79623,25923,86419,79624,058

5,7002,2371,6325,7001,438

14.41013.93014.73013.74061.130

82,13731,16124,03978,31887,905

35

24,712 784 25.030 19,6243,23,184

2 i) E.E.(M-West Zone)-II /2008-09/126/12.9.2008

ii) ` 23,98,300iii) ` 23,98,017

5.1.10 to 20.1.10

31,617 30,392 1,225 42.580 52,160

3 i) E.E.-XX (Project) K.B.Z./TC/64/ 21.2.2007

ii) ` 2,03,42,861

30.5.07 25,846

22,58025,959

3,266(-)113

405.34624.550

13,23,860(-) 2,774

13,21,086

4 i) 52/E.E.(Pr.)/TC/ K.B.Z /06-07 19.1.2007

ii) ` 44,58,006iii) ` 48,43,870

1.5.07 23,97823,97823,97823,97823,97823,97823,97823,97823,97823,978

22,580.3522,580.3822,580.33 22,580.34 22,580.35 22,580.35 23,258.70 23,258.74 23,258.72 23,258.73

1397.651397.621397.671397.661397.651397.65719.30719.26719.28719.27

14.0514.1213.93

114.0014.7614.0214.0113.98

7.65 Out of 14.2 MT

196371973419470193441956720629100851007710056

5502

134.36 1,54,1015 i) 61/E.E.(Pr.)/TC/

K.B.Z /06-07 21.2.2007

ii) ` 2,08,11,540iii) ` 2,34,04,344

16.3.07 to 14.5.07

25,846

22,680.35 3,265.65 497.990 16,26,261

Total 34,76,792

(b) It was further noticed that Division-XXIII (now EE-(M)-II/WZ) awarded 5 works relating to Improvement/construction of drain system/building work etc. the rates/Whole Sale Price Index of steel reinforcement bars used in the execution of the respective works were found lower during the period of completion of work as compared to the rates applied by the department at the time of working out the justification for the award of work in each case. Thus an amount of ` 49,825 should have been recovered from the contractors from their

bills, but no recovery was made by the department as per details given below:-

Sl. No.

Work Order No. & Date

Qty. of Re

inforcement (MD

Bar) Kg.

Rate taken in

JOR(`)

 

Price Index Difference

(`)

Amount of Price

Escalationat the time of hash

submission

at the time of

execution

Qty. x Rate x diff. / Price Index (Hash

sub.) (`)

1 182/13.10.08 1985.16 43.50 25.8.08335.8

Feb.2009282

53.80 13,835

2 299/13.10.08 2458.04 43.50 Sep08335.8

Dec.,2008326.1

9.70 3,089

3 301/13.10.08 1450.29 43.50 24.9.08335.8

May,2009282

53.80 10,108

4 346/26.12.08 2322.40 43.50 21.10.08 March, 54.20 16,287

36

336.2 2009282

5 350/26.12.08 864.06 47.00 6.8.08335.8

Feb.,2009282

53.80 6,506

    49,825

The irregularity was brought to the notice of the department in May, 2009, February, 2010, April, 2010 & May, 2010. Executive Engineer (Project) K.B.Zone vide letter dated 8.12.2010 replied that process of recovery is in pursuance with the contractor and it will be intimated to audit as soon as it is made. No reply has been received from other divisions so far.

(MCA/RS/DP-41(G)/2008-09)

15. Payment for R.C.C. works without invoices and test certificates-

` 26.63 lakh.

Payments for the item of the work requiring steel released without obtaining the copies of invoices and test certificates in respect of steel brought by the contractor at the site of work.

Conditions for procurement of steel by contractors circulated by Engineering department vide No.F-672/E-in-C/2002/195 dated 19.4.2002 state

37

that the contractor shall procure steel reinforcement bars conforming to B.I.S. codes from main producers as approved by the Ministry of steel. The contractor shall have to obtain and furnish test certificate to the Engineer-in Charge in respect of all samples of steel brought by him at the site of work.

It was noticed that three Engineering divisions M-II K.B. Zone, M-IV West Zone and M-II Narela Zone awarded 28 work orders during 2007-08 & 2008-09 and released the payments for the item of the work requiring steel to the contractors without obtaining the copies of invoices and test certificates in respect of steel brought by them at the site of work. This resulted in irregular release of payment of ` 26,62,674 to the respective contractors as detailed below.

S.N.

Work Order No. & Date

Quantity of re-inforcement for R.C.C. work (cold twisted bars)

Rate + C.E.(Per Kg.)

(`)

Total Amount

Paid (`)

Ex. Engg. M-IV West Zone1 106/25.4.2008 2827.15 Kg. 21.85 + 40.50% 86,7912 68/3.1.2008 809.16 Kg. 31.95 25,8533 236/28.3.2008 2208.30 Kg. 31.95 70,5554 266/28.3.2008 2307.66 Kg. 31.95 73,7305 146/15.2.2008 2144.36 Kg. 31.95 68,5126 74/25.4.2008 1602.72 Kg. 21.85 + 36.40% 47,7677 187/29.2.2008 1677.29 Kg. 31.95 53,5898 71/25.4.2006 10214.86 Kg. 21.85 + 0.50% 2,24,3119 290/31.3.2008 1461.16 Kg. 31.95 46,684

6,97,792Ex. Engg. M-II Narela Zone10 73/20.2.2008 4993.61 Kg. 21.85 + 35% 1,47,29911 75/20.2.2008 5892.40 Kg. 21.85 + 35% 1,73,81112 16/29.11.2007 1506.00 Kg. 21.85 + 14.47% 37,66813 15/29.11.2007 1044.54 Kg. 21.85 + 14.47% 26,12614 74/20.2.2008 2703.00 Kg. 21.85 + 35% 79,732

4,64,636

Ex. Engg. M-II K.B. Zone15 234/7.12.2007 8400.00 Kg. 29.15 + 19.45% 2,92,48516 80/22.8.2007 1695.00 Kg. 39.70 67,29117 158/24.9.2007 1425 Kg. 39.70 56,58018 127/24.8.2007 704.00 Kg. 39.70 27,94919 183/5.10.2007 4296.40 Kg. 39.70 1,70,56720 298/8.2.2008 1095.00 Kg. 39.70 43,47221 342/16.1.2007 4583.52 Kg. 29.15 – 2.25% 1,30,60322 227/7.12.2007 3171.00 Kg. 29.15 + 27.09% 1,17,47523 131/24.8.2007 1577.60 Kg. 39.70 62,63124 20/1.5.2008 1418.55 Kg. 39.70 56,316

38

25 275/16.1.2008 3412.48 Kg. 39.70 1,35,47526 363/14.2.2007 4287.40 Kg. 29.15 + 44% 1,79,96827 235/7.12.2007 1566.72 Kg. 29.15 + 5.99% 48,40628 233/7.12.2007 3117.92 Kg. 29.15 + 22.16% 1,11,028

15,00,246

Total 26,62,674

The irregularity was brought to the notice of the department in December, 2009 & January, 2010. Executive Engineer (M-II) Narela vide letter dated 15.6.2011 replied that earlier it was not a practice to obtain copies of invoices and test certificates in respect of steel brought by contractor at the site of work because of small quantum of work. Now instructions have been issued to obtain the copies of invoices and test certificates in respect of steel brought by the contractor at the site irrespective of quantum of work vide No.EE (M-II)/2011/1062 dated 31.3.2011. Due care shall be taken in future in this regard. However no reply from other divisions has been received so far.

(MCA/RS/DP-11(G)/2008-09)

16. Irregular payment due to acceptance of precast R.C.C. slabs without ensuring quality- ` 21.34 lakh.

The department accepted precast R.C.C. slabs without getting any sample tested. Non-testing the required number of R.C.C. slabs samples was tantamount to acceptance of precast R.C.C. slabs without ensuring quality and resulted in irregular payment of ` 21,33,858.

39

In terms of S.E.(Proj.)’s Circular No.D/121/EE-P-III/06 dated 25.9.2006, frequency of testing of samples required to be drawn from precast R.C.C. slabs is as follows.

Upto - 50 sq.m. - 151 - 100 sq.m. - 2101 - 200 sq.m. - 3201 - 300 sq.m. - 4301 - 500 sq.m. - 5

or as decided by Engineer-in-Chief

Three Engineering Divisions (M-II, Shahdara (South) Zone, M-I, Shahdara (North) Zone & M-II, Shahdara (North) Zone), awarded 5 work orders which inter-alia involved an item relating to providing and fixing precast R.C.C. slabs. The contractors provided and fixed precast R.C.C. slabs but the department did not get any sample tested from Municipal Laboratory in contravention of ibid circular. Non-testing the required number of R.C.C. slabs samples was tantamount to acceptance of precast R.C.C. slabs without ensuring quality and resulted in irregular payment of ` 21,33,858 to the respective contractors as detailed below :-

S.N. Work Order No. & Date

Quantity of precast R.C.C. slabs provided & fixed (m2)

Payment made towards P/F R.C.C. slabsRate (`)/m2

+ - % Amount (`)

Division M-II/Shahdara (South) Zone1 152/13.9.2007 454.14 701.50 (-) 10.00 % 2,86,7212 298/14.11.2007 307.00 701.50 (+) 17.36 % 2,52,7473 497/19.2.2008 327.60 701.50 (+) 8.64 % 2,49,667

7,89,135Division M-I/Shahdara (North) Zone4 24/11.10.2007 867.00 701.50 (+) 15.00 % 6,99,430Division M-II/Shahdara (South) Zone5 129/14.5.2008 844.00 701.50 (-) 8.99 % 6,45,293

21,33,858

The irregularity was brought to the notice of the department in August, 2009, September, 2009 & December, 2009, but no reply has been received (June, 2011).

(MCA/RS/DP-3(G)/2008-09)

40

17. Irregular payment due to acceptance of inter-locking tiles without ensuring quality- ` 19.27 lakh.

The department accepted inter-locking tiles without testing required number of samples. Non-testing of required number of samples of inter-locking tiles from Municipal Laboratory was tantamount to acceptance of tiles without ensuring quality and thus resulted in irregular release of payment of ` 19,26,715.

41

As per the norms specified by Municipal Laboratory, one sample for every 5,000 No. of inter-locking tiles or part thereof is required to be taken and got tested from Municipal Laboratory so as to ensure its quality. So for every 142 sq.m. or part thereof of inter-locking tiles of ‘I’ shape, one sample is required to be taken and got tested from Municipal Laboratory.

It was noticed that Executive Engineer-M-I, Central Zone awarded 9 work orders which inter-alia involved an item relating to providing and fixing inter-locking tiles. The respective contractor had provided and fixed inter-locking tiles ranging from 521.6 to 1014.9 sq. m. but only 1 to 2 samples were taken in each case against the required 4 to 8 samples. Non-testing of required number of samples of inter-locking tiles from Municipal Laboratory was tantamount to acceptance of tiles without ensuring quality and thus resulted in irregular release of payment of ` 19,26,715 to the respective contractors as detailed below.

S.N.

Work Order No. & Date

Qty. Execute

d(m2)

No. of Sample required

No. of Samples tested

Irregular paymentQuantit

y(m2)

Rate + % (`) -

Amount(`)

1 68/2.6.08 1014.09 8 2 730 359.95(-)10.25%

2,35,830

2 254/28.11.07 976.91 7 1 834 359.95(-)10.99%

2,67,207

3 337/23.1.08 562.76 4 1 420 359.95(-)2.10%

1,48,004

4 248/28.11.07 796.80 6 2 512 359.95(-)11.10%

1,63,838

5 333/23.1.08 983.88 7 1 842 359.95(-)9.894%

2,73,091

6 197/12.12.08 521.6 4 1 379 359.95(+)48.20%

2,02,176

7 329/16.1.08 856.98 6 1 715 359.95(-)11.92%

2,26,686

8 281/12.2.07 604.07 5 1 462 359.95(-)8.22%

1,52,626

9 15/8.4.08 788.79 6 1 646 359.95(+)10.6348%

2,57,257

19,26,715

The irregularity was brought to the notice of the department in March, 2010, but no reply has been received (June, 2011).

(MCA/RS/DP-7(G)/2008-09)

42

18. Undue benefit to contractors towards Mastic Works due to less use of Bitumen- ` 18.10 lakh.

Against the stipulated use of bitumen of 8.79 Kg./m² as per Delhi Schedule of Rates, 1997/2002 in the item of providing and laying 25 mm thick bitumen mastic wearing course (@ Rs.194.95/317.15m²), the department had been approving the

43

job mix formula with the use of bitumen of 5.354 Kg./m² to 6.389 Kg./m2 thereby allowing the less use of bitumen. But the department had made full payment as per rate prescribed for this item in the D.S.R. resulting in undue benefit of ` 18.10 lakh to the contractors.

A test check of records disclosed that Executive Engineer M-I, Civil Lines Zone, Project K.B.Zone, M-I & M-II, Central Zone, M-I, S.P.Zone prepared estimate (based on D.S.R.-2002) for the work ‘Improvement/ Strengthening of roads by providing mastic asphalt’ and included an item relating to “providing and laying 25 mm thick Bitumen Mastic Wearing Course” @ ` 317.15 m². According to D.S.R.- 2002, the coefficient of bitumen to be used on the said item of work is 8.79 Kg/m². The Planning Department while working out the justification of rates adopted the coefficient of bitumen as 8.63 Kg/m2.

While approving the Job Mix Formula, which was a prerequisite before start of the work, the department had approved the use of bitumen @ 9.6% of mix by weight. As per test report of Mastic Mix, actual bitumen utilized @ 9.6% which was equivalent to the use of bitumen @ 5.354 Kg/m2 to 6.389 Kg/m2.

Thus, while the department had adopted the rate of ` 317.15m² for the said item as per D.S.R. rates which was based on the use of bitumen @ 8.79 Kg/m², the work was got executed by allowing the use of bitumen @ 5.354 Kg/m². This resulted in undue benefit to contractors in 19 cases amounting to ` 18,09,934 as detailed below:-

S. N.

W.O. No. and Date

Qty. of mastic

executed in sqm.

Qty. of Bitumen

was to be used on the basis of DSR/

Justification

Kg/sqm.

Qty. of bitumen used

Kg./ sqm.

Bitumen less used Kg/sq

m.

Qty. of bitumen

less used Kg

Rate (`)

Amount(`)

Executive Engineer M-I, Civil Lines Zone1 33/5.7.2007 3843.60 8.790 5.354 6 13206 23 3,03,75

2

S. N.

W.O. No. and Date

Qty. of mastic work

executed

Qty. of bitumen was to be used on the basis of

DSR/ Justification

Qty. of bitumen used as per

sample/ Job Mix Formula

Bitumen less

used in

Rate of bitumen for mastic as per justification (per tonne)

Amount to be recovered from the contractor for less use of

44

(sqm.)

(M.T.)(M.T.)

(M.T.)(`)

bitumen in the work

(`)

Ex. Engg. Project K.B.Zone2 68/21.2.2007 1323.25 11.631

(1323.25X8.79 kg./sqm.)

7.970(1323.25X0.025 x 10.52% x 2.29)

3.661 18,900 69,193

3 69/21.2.2007 1311.80 11.53(1311.80X8.79 kg./sqm.)

8.381(13.11.80X 2.29 x 0.025 x 11.16%)

3.149 23,000 72,427

4 62/21.2.2007 4735.70 41.627(4735.70X8.79 kg./sqm.)

27.654(4735.70X .025 x 2.29 x 10.2%)

13.973 23,568 3,29,315

4,70,935S.N.

W.O. No. & Date

Qty. executed

Bitumen required

to be used per

Bitumen to be

used as per JMF

per

Bitumen actually used as

per sample

Bitumen short

used per

Financial implication

(Sqm.) sqm. sqm. sqm. Qty.(Kg.)

Rate/ kg.

Amount (`)

Division M-II, Central Zone (Old Division- BR-I)5 322/27.11.06 1418.98 8.79Kg. 10.2%

5.84Kg.10.36%5.89Kg.

2.9 Kg. 4115 23 94,645

6 317/27.11.06 1350.59 8.79Kg. 10.2%5.84kg.

10.3%5.89Kg.

2.9 Kg. 3917 23 90,091

7 166/7.6.06 1368.73 8.79Kg. 10.2%5.84Kg.

10.3%5.89Kg.

2.9 Kg. 3969 18.90 75,014

8 475/9.2.07 1459.23 8.79Kg. 10.2%5.84Kg.

10.3%5.89Kg.

2.9 Kg. 4231 23 97,313

3,57,063Division M-I, Central Zone (Old Division –IX)

9 41/9.4.07 1235.41 8.79kg. 10.2%5.84kg.

10.2%5.84kg.

2.95 Kg. 3644 22.50 81,990

10 36/24.4.03 1067.14 8.79kg. 10.2%5.84kg.

10.3%5.89kg.

2.9 Kg. 3095 13.40 41,473

11 37/24.4.03 770.56 8.79kg. 10.2%5.84kg.

10.4%5.97kg.

2.82 Kg. 2173 13.40 29,118

12 35/24.4.03 992.84 8.79kg. 10.2%5.84kg.

10.4%5.97kg.

2.82 Kg. 2800 13.40 37,520

13 23/3.4.2007 1230.88 8.79kg. 9.9%5.67kg.

10.2%5.84kg.

2.95 Kg. 3631 22.50 81,697

14 10/2.4.2007 1028.88 8.79kg. 9.9%5.67kg.

10.3%5.89kg.

2.9 Kg. 2983 22.50 67,118

15 19/3.4.2007 951.11 8.79kg. 9.9%5.67kg.

10.3%5.89kg.

2.9 Kg. 2758 22.50 62,055

4,00,971Division M-I S.P. Zone (Old No.III)

16 683/3.10.08 1033.63 8.79Kg. 10.2%5.84kg.

6 Kg./M2 as per bitumen statement

2.79 Kg./M2

2884 29 83,636

17 590/18.12.07 793.35 8.79Kg. 10.2%5.84kg.

10.02%5.72kg.

3.07 Kg. 2436 24 58,464

18 785/7.3.07 1129.75 8.79Kg. 10.2%5.84kg.

10.2%5.84kg.

2.95 Kg. 3333 21 69,993

19 589/18.12.07 964.02 8.79Kg. 10.2%5.84kg.

10.07%5.72kg.

3.07 Kg. 2960 22 65,120

2,77,213Grand Total 18,09,934

The irregularity was brought to the notice of the department in May, 2009 to May, 2010. The Executive Engineer M-I, C.L.Zone vide letter dated 1.2.2011 intimated “The work was done according to the Job Mix Formula. As per D.S.R.-2002 the consumption should have been 0.0879, no percentage etc. was

45

specified in item No.17.56 i.e. mastic & bitumastic sheet wearing course. It appears to be an error of printing which was rectified in the D.S.R.-2007. In D.S.R.-2007, the requisite consumption of bitumen is shown as 0.0586 kg./sq.m.. No undue favour was given by the department to the contractor.”

The reply of Executive Engineer M-I, C.L.Zone that no undue benefit was given to the contractor is not tenable as tenders were invited based on item provided in DSR-1997/2002 @ `.194.95/`.317.15 M2 according to which the bitumen to be used on the said item of work is 0.0879 quintal per sq. metre & even in the Justification of Rates, the bitumen to be used was computed as 8.63 Kg/m2. Thus allowing the contractor to use the bitumen of 5.354 to 6.389 Kg/m2

as against 8.79 Kg/m2 and 8.63 Kg/m2 as provided in DSR/Justification of Rates was undue benefit to the contractor.

Other divisions did not respond to the audit observation..

(MCA/RS/DP-2(G), DP-8(G) & DP-22(G)/2008-09)

19. Overpayment towards laying Water Bound Macadam- ` 16.43 lakh.

Payment for laying of water bound macadam was made on the basis of net quantity of coarse aggregate supplied and stacked

46

at site instead of taking 80% of the net quantity of coarse aggregate resulting in overpayment of ` 16.43 lakh.

Section 404.2.6 of Specifications for Road & Bridge works of Indian Road Congress, Ministry of Shipping, Road Transport & highways lays down the approximate quantities of coarse aggregate (90 - 45 mm, 63 - 45 mm and 53 - 22.4 mm) required to be stacked for 100 mm / 75 mm compacted thickness of Water Bound Macadam (W.B.M.) base coarse for 10 sqm area in TABLE 400-9. Based on its average requirement and least requirement, the percentage of stone aggregate that gets reduced during compaction/W.B.M is indicated against each as per details given in following table.

S. N.

Size Range Required quantity

(M3)

Average quantity required

(M3)

Compacted thickness

(M)

Percentage of Stone Aggregate reduce during compaction/WBM

Based on average

requirement

Based on least

requirement1 90 mm - 45 mm 1.21 to 1.43 1.32 100 24.24% 17.31%2 63 mm - 45 mm 0.91 to 1.07 0.99 75 24.24% 17.58%3 53 mm - 22.4 mm 0.91 to 1.07 0.99 75 24.24% 17.58%

It would be seen from the above analysis that the net quantity of supply & stacking of stone aggregate (i.e. after allowing 7.5% on account of void) is reduced to 24.24% based on average requirement and 17.31% to 17.58% based on average requirement/least requirement during the course of compaction/ W.B.M.

Further, in terms of DSR-2002 & 2007 and also as per the approved item No.10 & 11 circulated by the Planning Department vide their letter No. D-37/EE(P)III/2003 dated 14.1.2003, the payment of laying WBM is made on cubic metre basis (code 17.6 of DSR-2002 refers). Thus, the department is required to work out and record in the measurement book the quantity of laid/consolidated/ compacted WBM. Thus reasonably expected compaction would be around 20% or more.

The records disclosed that 15 Engineering Divisions awarded 121 work orders relating to metalling and premixing of road and made payment for laying of WBM without working out the quantity of the laid/consolidated/compacted thickness of WBM. The department had adopted the net quantity of coarse aggregate stacked as the quantity of compacted W.B.M. instead of taking 75.76% / 82.69% to 82.42% of the net quantity of coarse aggregate as the

47

quantity of compacted WBM. Although on being pointed out by audit, certain divisions have started making (i) the recoveries of W.B.M. @ 20% of its quantity; and (ii) releasing the payment of W.B.M. taking 80% of the net quantity of coarse aggregate as the quantity of compacted W.B.M. which is almost in consonance with the percentage of compaction as given in above mentioned table (24.24% + 17.31% = 20.77%). 2

Thus making the payment for laying WBM on the basis of net quantity of supply and stacking of coarse aggregate instead of 80% thereof resulted into an over-payment of ` 16,43,379 to the respective contractors in 121 cases as detailed in Annexure-B. The Division-wise break-up is as under :-

S. N. Divisions No. of Cases

Amount (`)

1 E.E.(M-IV) Shah-North Zone 8 35,1112 E.E. (S.L.F.) 11 2,23,3093 E.E. (M-IV) Central Zone 4 42,5644 E.E. (M-II) Narela Zone 12 1,63,0545 E.E. (Pr.) Civil LIne Zone 14 4,71,0526 E.E. (M-I) Civil Line Zone 5 38,4547 E.E. (Pr.) Shah South,

Krishna Nagar2 19,651

8 M-II (Shahdara South) 4 25,6709 M-III (Shahdara South) 12 1,47,222

10 M-I (Shahdara North) 9 61,10611 Project-II (Shahdara North) 3 30,40212 Project-I (Shahdara North) 9 2,10,84713 M-II Central Zone 7 72,76714 M-III Central Zone 8 33,53115 M-I S.P. Zone 13 68,639

121 16,43,379

The irregularity was brought to the notice of the department in June, 2009 to February, 2010. Executive Engineer, Shahdara North intimated in May, 2010 that out of 9 cases recoveries of ` 1,91,473 have been effected in 8 cases. Executive Engineer, Project Shahdara South intimated (dated Nil) that recoveries of ` 19,651 have been effected in both the cases. Executive Engineer (M-II) Narela intimated vide letter dated 15.6.2011 that out of 12 cases recoveries of ` 89,749 have been effected in 9 cases. Circular has been issued vide letter No.949 dated 1.6.2011 to all divisions for recovery for ` 52,697 against work

48

order No.146 dated 29.3.2008. However, no reply from other divisions has been received so far.

(MCA/RS/DP-14(G) & 29 (G)/2008-09)

20. Irregularities in execution of premix works - ` 13.87 lakh.

49

(a) 28 to 59 months old bitumen was used for execution of premix work instead of fresh bitumen resulting in irregular payment amounting to ` 13,87,005.

(b) Less bitumen was used in 4 works than the required quantity which ranged from 4.95% to 6.76%.

A test check of records of four Engineering divisions disclosed following irregularities:-

(A) Execution of premix works with use of 29 to 59 months old bitumen.

In terms of NIT/Work Order condition relating to premix works, the contractors are required to procure fresh supply of bulk bitumen from Indian Oil Corporation/Bharat Petroleum/Hindustan Petroleum for execution of works.

Four Divisions (M-I, Central Zone, M-II, Central Zone, M-III, Shahdara (North) Zone & M- , S.P.Zone), awarded 8 work orders for execution of premix works. The respective contractors used 28 to 59 months old bitumen instead of fresh in contravention of ibid condition. This had resulted in irregular payment amounting to ` 13,87,005 to the respective contractors as detailed below.

S.N.

Work Order No. & Date

Quantity executed

(M2)

Date of purchase

of Bitumen

Date of execution of work

Periodicity of old bitumen (months)

Payment made

towards premix work (`)

Division M-I, Central Zone1 257/14.12.2006 2614.43 2.4.2005 27.11.2007 33 1,72,818Division M-II, Central Zone2 29/13.4.2007 2354.29 27.6.2005 13.11.2007 28 1,97,5253 64/25.8.2008 1323.79 20.2.2004 16.10.2008 56 1,56,5784 142/13.10.2008 1315.66 20.2.2004 2.12.2008 58 1,55,6165 161/13.10.2008 725.98 20.2.2004 2.12.2008 58 85,8696 186/26.12.2008 871.75 20.2.2004 2.1.2009 59 1,03,111

6,98,699Division M-III, Shahdara (North) Zone7 449/23.12.2008 1525.32 12.5.2006 30.3.2009 34 1,89,700Division M- , S.P. Zone8 694/10.10.2008 2785.23 23.5.2006 24.11.2008 30 3,25,788

Grand Total 13,87,005

It was further observed that in above cases, Municipal Laboratory reports of bitumen used in the execution of work indicating properties of bitumen required and that actually found during testing were not found placed on record. As a result, it could not be ascertained in Audit as to whether the bitumen met

50

the quality parameters as per the laid down norms/yardstick. It was also not clear as to how the department assured themselves about the acceptability of the quality of the bitumen.

(B) Less use of bitumen.

In terms of clause 42 of NIT, Variations permissible on the theoretical quantity of bitumen in respect of all works is 2.5% plus only & nil on minus side. In case of work orders at Sl. No. 3 to 6 above, the contractor used less bitumen than the required quantity. The deficiency ranged between 4.95% to 6.76% as detailed below.

Work Order No. & Date

Quantity executed

(T/C, Premix &

Seal Coat) (M2)

Bitumen to be

used per sq.mtr.

(Kg.)

Total bitumen

to be used

(Kg.)

Bitumen

actually used

(Kg.)

Bitumen less used & its %age

(Kg.)

64/25.8.2008 1323.79 2.495 3302.85 3120.00 182.80 5.53%142/13.10.2008 1315.66 2.495 3282.57 3120.00 162.57 4.95%161/13.10.2008 725.98 2.495 1811.32 1716.00 95.32 5.26%186/26.12.2008 871.75 2.495 2175.00 2028.00 147.00 6.76%

The execution of works with less use of bitumen is tantamount to sub-standard works. As such, payment amounting to ` 5,01,173 made on this account was irregular.

The irregularity was brought to the notice of the department in February, 2009 to May, 2010, but no reply has been received (June, 2011).

(MCA/RS/DP-1(G)/2008-09)

51

21. Irregular release of payment due to partly furnishing of Steel Invoices- ` 13.24 lakh.

In the execution of an item of work i.e. Re-inforcement for R.C.C. work, the contractors procured and used steel bars but they partly furnished the steel invoices with regard to the quantities actually used. This has resulted into irregular release of payment of ` 13,23,768.

Conditions for procurement of steel by contractors circulated by Engineering department vide No.F-672/E-in-C/2002/195 dated 19.4.2002 state that the contractors shall procure steel reinforcement bars conforming to B.I.S. codes from main producers as approved by the Ministry of Steel. The contractors shall have to obtain and furnish test certificate to the Engineer-in-Charge in respect of all samples of steel brought by him at the site of work.

The records disclosed that Executive Engineer (Project) Civil Lines Zone awarded 5 work orders during 2005-06 to 2007-08 for construction of classrooms in Municipal Primary Schools and construction of Maternity Child Care Centre etc. In the execution of an item of work i.e. Re-inforcement for R.C.C. work, the respective contractors procured and used steel bars but they partly furnished the steel invoices with regard to the quantities actually used in contravention of ibid condition. This has resulted into irregular release of payment of ` 13,23,768 as detailed below:-

S.N.

Work Order No. & Date

Qty. of steel

utilized in execution of item of

work (kg.)

Qty. of steel

procured (kg.)

Difference (kg.)

Rate(`)

C.E. (%)

Amount(`)

1 48/4.10.2005 68,928 57,900 11,028 21.85 2,40,962

2 20/15.6.2006 34,547 26,810 7,737 21.85+15.88%

1,95,900

3 21/15.6.2006 31,675 22,945 8,730 21.85+28.99%

2,46,049

4 90/29.12.2006 24,173 20,400 3,773 21.85+17.17%

96,595

5 11/29.5.2007 92,700 74,830 17,870 21.85+39.39%

5,44,262

2,52,023 2,02,885

49,138 Total 13,23,768

52

The irregularity was brought to the notice of the department in June, 2009, but no reply has been received (June, 2011).

(MCA/RS/DP-52(G)/2008-09)22. Overpayment towards providing & laying Ready Mix Concrete-

` 12.64 lakh.

While framing the estimates for ‘Improvement of roads/lane/gali’ the rate of the item – providing and laying Ready Mix Concrete M-25 grade not requiring re-inforcement of steel bars which works out ` 4369.25 per cum should have been taken instead of ` 4471.25 per cum provided in D.S.R.-2007. This resulted in overpayment of ` 12.64 lakh to contractor.

A test check of record of three Divisions (Project-II, Central Zone, M-III, Central Zone and M- S.P. Zone) for the year 2008-09 disclosed that in preparing the estimates for ‘Improvement of roads/lane/gali’, the department had been inter-alia including an item relating to providing and laying Ready Mix Concrete M-25 grade @ ` 4,471.25 per cum based on rate provided in D.S.R.-2007 (Item No.16.7). However, an analysis of the said rate as available in Delhi Analysis of Rates-2007 disclosed that in the computation of the rate of ` 4,471.25 per cum, labour components on account of Mason, Beldar & Bhisti were included as under which were applicable for R.M.C.-M-25 grade with re-inforcement for steel bars (Item No.5.37).

(`)Mason 24.91Beldar 270.50Bhishti 124.60

420.01

Since, in the pavement of R.M.C. for road/lane/gali etc., the steel bars (viz. re-inforcement for R.C.C. work) were not used, the department should have recomputed the rate of this item by including the labour component on account of Mason, Beldar & Bhisti which was applicable in respect of providing & laying in position C.C. all work (Item No.4.1.1) as under:

(`)Mason 14.66Beldar 220.46Bhishti 96.92

332.04

53

Based on above, the rate of this item viz. R.M.C.-M-25 grade not requiring re-inforcement of steel bars works out ` 4,369.25 per cum [4471.25 – 102 (420.01 – 332.04 = 87.97 + 1% W.C. + 15% C.P.)] and this should have been taken into account while framing the estimates for such works, but this was not done. This has resulted in an over payment of ` 12,63,823 as detailed below:-

S. N.

Work Order No. & Date

Qty. of P/L cc

pavement of mix

RMC- M-25

(m3)

Difference in rates

(` 4471.25 - `4369.25)

Contractor’s

percentage on

tendered amount

+ - (%age)

Financial Implicatio

n

(`)

Ex. Engg. Project-II, Central Zone 1 17/21.7.2008 63.62 102 +10.00 7,1382 22/18.9.2008 938.07 102 +17.21 1,12,1503 14/21.7.2008 42.62 102 + 6.90 4,6474 15/21.7.2008 48.68 102 + 7.86 5,3565 16/21.7.2008 44.21 102 + 8.12 4,8766 31/13.10.2008 7836.12 102 +19.00 9,51,148

10,85,315Ex. Engg. M-III Central Zone 7 35/3.12.2008 58.73 102 + 6.88 6,403 8 36/3.12.2008 76.52 102 + 9.28 8,5299 51/15.12.2008 69.33 102 + 7.77 7,62110 50/15.12.2008 67.65 102 + 7.77 7,43611 25/13.10.2008 80.40 102 +11.00 9,10312 72/2.1.2009 73.94 102 +14.75 8,65413 68/2.1.2009 66.15 102 +13.98 7,69114 49/15.12.2008 65.91 102 + 6.98 7,19215 47/15.12.2008 77.78 102 + 6.49 8,44816 81/2.1.2009 76.93 102 + 8.20 8,49017 48/15.12.2008 83.92 102 + 5.20 9,00518 34/3.12.2008 74.29 102 + 8.95 8,25619 75/2.1.2009 95.02 102 +11.78 10,83420 73/2.1.2009 85.56 102 +11.25 9,70921 74/2.1.2009 75.50 102 +11.25 8,56722 31/31.12.2008 72.52 102 + 9.00 8,06323 32/31.12.2008 69.87 102 + 9.00 7,768

1,41,769Ex. Engg. M-S.P.Zone24 892/29.12.2008 76.77 102 - 4.05 7,51325 895/29.12.2008 78.54 102 - 4.05 7,68726 893/29.12.2008 70.15 102 - 4.05 6,86527 890/29.12.2008 88.71 102 - 4.05 8,68228 891/29.12.2008 61.22 102 - 4.05 5,992

36,739Total 12,63,823

54

The irregularity was brought to the notice of the department in December, 2009 to May, 2010, but no reply has been received (June, 2011).

(MCA/RS/DP-32(G)/2008-09)

23. Payment of Service Tax component included in the consultancy charges without insisting on issue of proper invoice/bill/challan by the consultants/contractors- ` 11.71 lakh.

An amount of ` 11.71 lakh was paid to the consultants towards service tax component for seeking consultancy services for execution of 51 works without getting invoice/bill/challan containing the service tax registration details.

Rule 4 A (1) of Service Tax Rules, 1994 provides that every person providing taxable service not later than fourteen days from the date of completion of such taxable service or receipt of any payment towards the value of such taxable service whichever, is earlier issue an invoice, a bill or as the case may be, a challan signed by such person or a person authorized by him in respect of taxable service provided or to be provided and such invoice, bill or as the case may be, challan shall be serially numbered and shall contain the following.

i) the name, address and the registration number of such person,ii) the name and address of the person receiving taxable service,iii) description, classification and value of taxable service provided or to

be provided and iv) the service tax payable thereon.

Further, Rule 6 regulating the payment of Service Tax provides as under :-

(i) The Service Tax shall be paid to the credit of the Central Government :-i) by the 6th day of the month, if the duty is deposited;ii) by the 5th day of the month, in any other case, immediately

following the calendar month in which the payments are received towards the value of taxable services.

55

Rules further provide that the element of service tax in the contractual amount whether shown as distinct element or not, will be deemed to have been charged and recovered/paid.

As evident from the above provisions, it is obligatory for the person or the Firm/Contractor providing taxable service, to issue an invoice or a bill or as the case may be, a challan in respect of taxable service provided or to be provided and such invoice or bill or the challan shall be serially numbered containing the name, address and the registration number of the service provider.

It was noticed that the Engineering Divisions- EE-(Pr.)/SZ, EE-(Project)-I/

WZ, EE-(Proj.)-II/WZ, EE-(Pr.)/KBZ & EE-(M)-I/Central Zone sought consultancy services for execution of 51 works during 2006-07 to 2008-09. from different consultants. These consultants did not submit the invoice/bill/challan containing the registration No. etc. for providing consultancy services to M.C.D. and the department released the payment including service tax to them on the basis of Running/Final bills.

This has resulted in irregular payment of service tax component amounting to ` 11,70,726 as per details given below :-

S. N.

WO No. & Date Name of consultant Amount of consultancy paid i/c

ST (`)

Amount of Service Tax

(`) E.E.(Pr.)/S. Zone @12.36%

1 101/8.8.08 Standard Soil Consultants 1,17,537 12,9292 105/8.8.08 Deepali Consultants & Engineers 90,750 9,9833 103/8.8.08 Deepali Consultants & Engineers 94,500 10,3954 102/8.8.08 Deepali Consultants & Engineers 91,350 10,0495 100/8.8.08 Standard Soil Consultants 94,500 10,3956 198/24.10.08 Standard Soil Consultants 1,04,900 11,5397 168/7.1.08 Standard Soil Consultants 2,07,500 22,8258 5/16.4.07 Bajaj Consultants 1,19,700 13,1679 12/16.4.07 Technical Consultancy Service 1,41,000 15,510

10 207/13.3.08 Kesari & Associates 32,220, 3,54411 20/17.4.07 Gist Consultants 1,33,000 14,63012 6/17.4.07 Bajaj Consultants 1,20,000 13,20013 4/17.4.07 Bajaj Consultants 78,750 8,66314 206/13.3.08 Bindra & Associates 1,78,008 19,58115 16/17.4.07 Standard Soil Consultants 1,17,000 12,870

56

1,89,280Project-I/West Zone @12.36%

16 244/27.2.08 Park Project Consutancy (P) Ltd. 4,60,500 50,65717 4/12.5.08 Standard Soil Consultant 38,100 4,19118 64/31.3.08 Balaji Consultant 1,20,223 13,22519 32/20.9.07 Balaji Consultant 68,400 7,52420 1/7.4.08 Park Project Consutancy (P) Ltd. 2,76,300 30,39421 11/24.9.08 R.G. Bindal & Associates 2,62,300 28,85422 40/11.12.07 Park Project Consutancy (P) Ltd. 8,32,000 91,52323 41/11.12.07 Park Project Consutancy (P) Ltd. 9,92,000 1,09,12424 15/24.10.08 Keshri & Associates 1,07,625 11,839

3,47,331Project-II/W. Zone @12.24%

25 09/17.8.06 Balaji Consultants 67,972 7,41226 12/17.8.06 Balaji Consultants 88,969 9,70227 10/17.8.06 Balaji Consultants 79,752 8,69728 8/17.8.06 Balaji Consultants 70,937 7,73629 45/2.1.06 Sanrachna Consultants 1,27,579 13,91330 30/20.12.04 Sanrachna Consultants 1,34,461 14,66331 37/4.2.08 Sanrachna Consultants 34,150 3,72432 59/31.3.08 Balaji consultants 1,36,236 14,986

(12.36%ST)33 64/19.1.06 Technical consultaqncy service 80,821 8,81334 45/31.3.08 Sanrachna Consultants 1,32,000 14,39535 35/3.1.08 Sanrachna Consultants 63,000 6,87036 52/14.1.09 Kesri & Associates 1,04,607 11,507

(12.36%ST)37 63/19.1.06 Technical consultaqncy service 16,430 1,79138 62/19.1.06 Technical consultaqncy service 20,084 2,19039 18/23.6.08 Balaji Engg. & Contrctors 80,734 8,80440 19/23.6.08 Balaji Engg. & Contrctors 50,978 5,55941 7/30.4.08 Standard Oil Consutants 61,441 6,70042 8/30.4.08 Standard Oil Consutants 61,784 6,73843 9/30.4.08 Standard Oil Consutants 40,757 4,44544 10/30.4.08 Standard Oil Consutants 36,135 3,94145 46/1.1.09 Sanrachna Consultant 77,550 8,45746 46/3.1.06 RG Bindal & Associate 1,05,667 11,523

1,82,566E.E.(Pr.)/K.B. Zone @12.24%

47 27/4.2.08 Park Projects consultancy (P) ltd. 448000 48,85548 13/30.8.07 Park Projects consultancy (P) ltd. 546000 59,54249 6/4.5.06 Technical consultancy services 32431 3,537

1,11,934E.E.(M-I)/Central Zone

50 132/29.9.2008 Carpeting, making stall & food courts etc. at exhibition ground, Pragati Maidan

19,62,147 2,15,843

51 133/29.9.2008 Providing furniture, making stage green rooms & plant forms etc. at

11,86,071 1,30,472

57

exhibition ground, Pragati Maidan3,46,315

Total 11,70,726

The irregularity was brought to the notice of the department in May, 2009, July & August, 2009, March & May, 2010, but no reply has been received (June, 2011).

(MCA/RS/DP-28(G)/2008-09)24. Doubtful execution of repair/replacement of semi high mast

pole lights- ` 7.82 lakh.

Neither actual dates of installation of semi high mast poles were found recorded in the estimates nor the Division had maintained any such register/ record from which it could be verified if Repairing/ Maintenance Works of semi high mast poles had been executed after the expiry of guarantee period of five years as stipulated in the Terms & Conditions of the NITs.

Condition No.21 of Notice Inviting Tender provides that in order to ensure that light fittings of proper quality are supplied and provided, the contractor will have to stand/furnish guarantee that such light fittings shall remain functional at least for a period of 5 years from the date of completion of work. For this purpose 20% of the contractual amount will be withheld as security deposit and shall be released to the contractor only after satisfactory performance of said semi high mast lights during the guarantee period of five years after completion of work.

It was noticed that Executive Engineer (Elect.VI) awarded 3 work orders for ‘Improvement/repairing work of high mast poles at various places’. These works have been executed and payments were also released to the contractors. The scrutiny of tender files and accounts files alongwith relevant Measurement Books revealed that actual dates of installation of these semi high mast poles were not found recorded in the estimates nor the Division had maintained any such register/ record from which it could be verified if the above mentioned Repairing/ Maintenance Works of semi high mast poles had been executed after the expiry of guarantee period of five years as stipulated in the Terms & Conditions of the NITs. In the absence of any record indicating the actual dates of installation of high mast poles, the expenditure of ` 7,81,743 as detailed below incurred on its repairing/ maintenance could not be vouched safe in Audit.

58

S.N. Work Order No. @ Date

Name of work Actual Expenditu

re (`) 1 36/27.8.2008 Imp. Of semi high mast poles in W-248 1,99,0792 40/27.8.2008 Imp. Of semi high mast poles in Welcome

Jheel Park W-2481,98,148

3 55/19.9.2008 Imp. Of semi high mast poles in W-259 Jafrabad

3,84,516

7,81,743

Further, the following vital information were also not found on record:-

(i) the numbers of semi high mast poles which required repair/ replacement.

(ii) Item to be repaired/replaced pole-wise.(iii) Items actually repaired/replaced pole-wise.

In the absence of the above details, the genuineness of repair/ replacement so carried out could not be vouched safe in Audit.

The matter was brought to the notice of the department in December, 2009 but no reply has been received (June, 2011).

(MCA/RS/DP-34(G)/2008-09)

59

25. Irregular release of payment without receiving cement invoices-

` 7.24 lakh.

Cement invoices were not produced in token of procurement of cement from reputed manufacturers of cement/ authorized sole distributors of approved cement manufacturing companies. This has resulted in irregular release of payment amounting to ` 7,23,825 to the contractor.

Conditions for procurement of steel and cement by contractors circulated by Engineering department vide No:F672/E-in-C/2002/195 dated 19.4.2002 state that contractor shall procure steel reinforcement bars conforming to BIS codes from main producers as approved by the Ministry of Steel. The contractors shall have to obtain and furnish test certificate to the Engineer-in-charge in respect of all samples of steel brought by him at the site of work. Similarly in case of cement, the contractors are required to procure 33 Grade (conforming to IS 269 or 43 Grade conforming to IS 8112) ordinary portland cement from reputed manufacturers of cement having a production capacity of one million tones p.a. or more such as ACC, L&T, Rewa, J.P., Vikram, Shri Cement, Birla Jute and Cement Corporation of India and holding licence to use ISI certification for their product.

Further Planning department issued amendment to condition for procurement of cement by the contractors, vide circular No.D-307/EE(P)-III/07 dated 26.9.2007 vide which cement upto 400 bags can be procured by the contractors for the works from the authorized sole distributor of the approved cement manufacturing company in Delhi with the condition that the sole distributor shall give invoice/bill for cement sold to contractor indicating batch No./lot No. alongwith proof (attested copy of bills of manufacturer) that he has procured the cement/sold to contractor directly from the approved manufacturer

60

with attested copy of quality test certificate issued by cement manufacturer for the batch No./lot No.

The record disclosed that Executive Engineer, M-II, K.B.Zone and M-II, Narela Zone awarded 6 work orders for Providing & laying drainage system & C.C. flooring. The contractors used 3217 cement bags costing ` 7,23,825 (@ ` 225 as per D.S.R.-2007), but they did not produce cement invoices in token of procurement of cement from reputed manufacturers of cement/authorized sole distributors of approved cement manufacturing companies. This has resulted in irregular release of payment amounting to ` 7,23,825 to the respective contractors (as detailed below).

S.N.

Work order No. & Date Name of contractor Qty. of cement used as per theoretical

consumption cement register

1 EE-M-II/KBZ/213 dated 25.8.2008

M/s S.S. Builders 690

2 EE-M-II//TC/KBZ/306 dated 19.9.2008

M/s A & N Brothers 535

3 EE-M-II//TC/KBZ/331 dated 13.10.2008

M/s Pankaj Contractor 526

4 EE-(Narela)/M-II/2008-09/ 48 dated 22.8.2008

M/s Sh. Dharam Pal Gupta

750

5 EE/Narela-M-II/TC/2007-08/ 73 dated 20.2.2008

M/s Geetangali Builder

450

6 EE/Narela-M-II/2008-09/59 dated 5.9.2008

M/s D&G Const. Co. 266

Total Cost : 3217 X ` 225 = ` 7,23,825

The irregularity was brought to the notice of the department in December, 2009 and January, 2010, but no reply has been received (June, 2011).

(MCA/RS/DP-43(G)/2008-09)

61

26. Irregular payment of Ready Mix Concrete without verifying challans-

` 6.68 lakh.

Payment amounting to ` 6,67,522 was released on the basis of manual delivery challans without verification as the challans No. of succeeding dates were found in descending order in comparison to challan No. of preceeding dates.

Para 5.8.8.9.4 & 5 of C.P.W.D. specification 2002 for cement mortar, cement concrete and R.C.C. works inter-alia provides that Ready Mix concrete (R.M.C.) manufacturer/supplier shall, alongwith each batch of concrete delivered to the placement contractor, give him a concrete delivery ticket. The supplier shall give copies of all such delivery tickets to the Engineer-in-charge for his record and also get duplicate copies of such delivery tickets duly received and signed from the contractor. Further R.M.C. as supplied by the manufacture and as placed by the contractor shall in no way be different from the specifications of concrete as approved by the Engineer-in-charge.

Further in terms of Section 10.5 of C.P.W.D. Works Manual, 2007 in case of works where R.M.C. is stipulated to be used from an approved sources/manufacturers, the computerized dispatch slip that are sent with each dispatch of R.M.C. shall be kept on record.

It was noticed that Executive Engineer M-II & M-IV, Central Zone awarded six work orders during 2007-08 for improvement of road/lane by providing & laying R.M.C. The respective contractors procured, the R.M.C. from M/s C.S. Concrete Pvt. Ltd. & Ch. Chattar Singh provided and laid it on the road. The manual Delivery Challans submitted by the contractors disclosed that challan

62

Nos. of succeeding dates were found in descending order in comparison to challan No. of preceeding dates as per the followings:-

S.N. Work Order No. & Date

Quantity of R.M.C.-M-20

grade provided &

laid (M3)

Challan No. & Date vide

which R.M.C. supplied

Rate + C.E.(Per Kg.)

(`)

Amount

(`)Ex. Engg., M-IV, Central Zone

1 108/31.1.2008 53.40 12792 to 12823 dated 22 & 25.5.2008

3490 -

2 8/11.4.2008 59.19 12126 to 12146 dated 30 & 31.5.2008

2364.15 + 46.80%

2,05,423

3 30/27.12.2007 50.36 10262 to 10269 dated 29.2.2008 & 10286 dated

28.2.2008

3490 26,175

Total 2,31,598Ex. Engg., M-II, Central Zone (awarded by M-II but executed by M-IV

4 208/29.2.2008 91.02 14623 to 14635 dated 22.9.2008

2364.15 + 30.99%

-

5 324/31.3.2008 51.31 13031 to 13038 dated

12.11.2008

2364.15 + 22.02%

1,48,016

6 181/19.2.2008 82.58 15030 to 15040 dated 9.9.2008

2364.15 + 47.47%

2,87,908

Total 4,35,924Grand Total 6,67,522

As the challan Nos. of succeeding dates cannot be in descending order, the veracity of execution of R.M.C. work aggregating to ` 6,67,522 puts a question mark. Further acceptance of manual delivery challans instead of computerized delivery challans was also in disregard of Section 10.5 of C.P.W.D. Works Manual, 2007.

The irregularity was brought to the notice of the department in October, 2009, but no reply has been received (June, 2011).

(MCA/RS/DP-35(G)/2008-09)

63

27. Non-recovery on account of less use of cement– ` 3.86 lakh.

An amount of ` 3.86 lakh was not recovered for less use of cement than the prescribed proportion in respect of 8 works for laying R.M.C. (M-15, M-20 & M-25 grade).

In terms of para 5.42 and 5.44 of Delhi Schedule of Rates 2002, the coefficient of cement to be used in different grades of Design Mix Concrete is as follows:-

Grade Coefficient of CementKg./m3

M-15 320M-20 383M-25 410

The above mentioned coefficient of cement was also applicable in case of

use of Ready Mix Concrete as circulated vide Planning department’s circular dated 12.4.2002 and 23.1.2003.

Para 5.8.7.1 of CPWD specifications 2002 volume-II, provides that the producer/manufacturer/contractor of concrete shall submit details of each trial mix of each grade of concrete designed for various workability conditions to the Engineer-in-charge for his comments and approval. Para 5.8.8.9.5 further provides that RMC as supplied by manufacturer and as placed by the contractor shall in no way be different from the specifications of concrete as approved by the Engineer-in-Charge.

64

The Planning department vide circular No. 466/D/EE-(P)III/06 dated 10.2.2006 circulated that recovery for less use/consumption of cement on account of difference arising from approved job mix/design mix being less than 320 kg. cement/cum (Grade M-15) as taken in the analysis be made from bills prepared or payments made to the contractor. The rate of recovery of less use/consumption of cement may be taken as same as taken on the day of tender/preparation of justification of rates. Similar action was required to be taken in higher grade of RMC i.e. M-20, M-25.

It was noticed that three Engineering divisions viz. Executive Engineer (Proj), Karol Bagh Zone, Executive Engineer (Pr.), South Zone and Executive Engineer (Pr.), West Zone awarded 8 work orders which included an item relating to providing and laying Ready Mix Concrete/ Design Mix Concrete (M-20/M-25 grade), the respective contractors did not use the required quantity of cement as per the coefficient provided in the Delhi Schedule of Rates, 2002. The concerned divisions, however, did not make any recovery for less use of cement from them while passing their bills/making the payments to them in contravention of ibid provisions and circular. The total recovery on this account in these cases worked out to ` 3,85,717 as detailed below :-

S. N.

WO No. & Date

Division

Qty. of Machine mix (M-

20) used &

paid cum.

Quantity of cement Total qty. of cement less used kg./bag

Rates of cement taken in

JOR

(`)

Recoverable amount

(`)

To be used

kg./cum

Used per

kg./cum

Less used

kg./cum

1 57/21.5.08Proj./SZ

535.863rd RA Bill

410 385 25 13396.5267.93

240 64,303

2 29/25.2.08Project/KBZ

137.603rd RA Bill

383 340 43 5916.80118.336

240 28,401

3 28/26.6.06Project/KBZ

503.71 4th RA Bill

383 360 23 11585.33231.70

172 39,853

4 29/11.7.06Project/KBZ

770.53 5th RA Bill

383 370 13 10016.89200.33

175 35,059

5 25/26.6.06Project/KBZ

420.19 6th RA Bill

383 370 13 5462.47109.24

175 19,117

6 29/28.10.05Project/KBZ

375.27 4th RA Bill

383 340 43 16136.61322.73

135 43,569

7 15/18.7.05Project/KBZ

624.00 3rd RA Bill

383 340 43 26832536.64

135 72,446

8 62/21.2.07Project/KBZ

314.58(M-20)43.72(M-25) 4th RA

Bill

383

410

350

380

43

30

10,381.14

207.62 1311.60

26.23

190

190

44,432

3,47,180Add: (as per JOR) (i) Water Charges @ 1% 3,472

65

3,50,652(ii) Contractor’s profit @ 10% 35,065

3,85,717

The irregularity was brought to the notice of the department in May, 2009, July, 2009 and August, 2009, but no reply has been received (June, 2011).

(MCA/RS/DP-20(G)/2008-09)

28. Payment towards R.M.C. work without verifying the authenticity of Delivery Challans- ` 3.59 lakh.

Payment amounting to ` 3,59,041 released to contractor without verifying the authenticity of documents pertaining to procurement of R.M.C. 14 delivery challans in consecutive order from 8250 to 8263 were issued out of these six challans were issued on 18.8.2008 and remaining 8 were issued on 8.10.2008 i.e. after 54 days. This implies that no other customer had bought R.M.C. from the supplier during a period of 54 days which does not seem plausible.

In terms of Clause 5.8.8.9.4 of C.P.W.D. Specification Volume-II, the R.M.C. manufacturers/suppliers shall alongwith each batch of concrete delivers/to the placement of contractor give him a concrete delivery ticket/challan. The suppliers/manufacturers shall give copies of all such delivery tickets/challans to the Engineer-in-Charge for his record and also get duplicate copies of such delivery tickets duly received and signed from the contractors. Further, R.M.C. as supplied by the manufacturers and as placed by the contractor shall in no way be different from the specifications of concrete as approved by the Engineer-in-Charge.

Further, in terms of Section 10.5 of C.P.W.D. works Manual, 2007, in case of works where R.M.C. is stipulated to be used from an approved sources/ manufacturers, the computerized delivery challans/dispatch slips that are sent with each dispatch of R.M.C. shall be kept on record. This apart, as per instructions/guidelines issued by Q.C.C., it is incumbent upon Executive Engineer concerned to ensure the authenticity of documents pertaining to procurement of R.M.C./Cement etc.

66

A work for ‘Development of back lane by Providing R.M.C. from H.No.123 to 155, front side road berms from H.No.123 to 155, Dustbin to H.No.123 and H.No.123 to gate of Sidharth Enclave in Sunlight Colony-II, was awarded to M/s A.K.& Co. vide work order No.11/EE(M)-I/TC/CNZ/08-09/11 dated 8.4.2008. The record disclosed that the contractor provided and laid 97.98 cum R.M.C. M-20 grade which was procured by him from M/s C.S. concrete Pvt. Ltd. vide the following delivery challans:-

S. N.

Delivery Challan

No.

Dated Quantity (M3)

1 8250 18.8.2008 7.52 8251 18.8.2008 7.53 8252 18.8.2008 7.54 8253 18.8.2008 7.55 8254 18.8.2008 7.56 8255 18.8.2008 7.57 8256 8.10.2008 7.58 8257 8.10.2008 7.59 8258 8.10.2008 7.510 8259 8.10.2008 7.511 8260 8.10.2008 7.512 8261 8.10.2008 7.513 8262 8.10.2008 4.014 8263 8.10.2008 4.0

It would be seen from the above that there were in all 14 delivery challans and serial No. thereof were in consecutive order from 8250 to 8263. While 6 of them pertained to 18.8.2008, remaining 8 pertained to 8.10.2008 which fell after expiry of 54 days thereof. This implies that during these 54 days, either no R.M.C. delivery challan was issued by the plant in question or it manufactured the R.M.C. only for its one buyer M/s A.K. & Co. As neither of these eventualities appears plausible, the genuineness of the so produced delivery challans is suspect. The department did not exercise any check to verify the authenticity of documents pertaining to procurement of R.M.C. This creates doubts even about the veracity of the actual execution of R.M.C. work amounting to ` 3,59,041 (97.98 cum X ` 2364.15 + 55.00% C.E.).

The irregularity was brought to the notice of the department in March, 2010, but no reply has been received (June, 2011).

(MCA/RS/DP-15(G)/2008-09)

67

29. Avoidable extra expenditure due to over-estimate of items of work-

` 3.08 lakh.

Over estimation of execution of two items of work resulted into the Justification of Rate to 89.91% above as against 77.91% above which would have been otherwise worked out based on actual execution. This resulted in avoidable extra expenditure of ` 3,08,132.

A work for ‘Improvement of Shah Alam Bandh by providing W.B.M. from Dhobi Ghat Road to G.T. Road in C-106/CLZ’ was awarded to M/s Jindal Enterprises vide work order No.EE(Pr)/CLZ/TC/26 dated 5.6.2008 @ 89.91% above the tendered amount of ` 25,67,768 and contractual amount ` 48,76,448 with the completion period of 8 months. The contractor started the work on 8.6.2008 and completed it on 12.12.2008 at a total cost of ` 48,76,448.

The records disclosed that two items of works (viz. (i) Supply and stacking of good earth at site; (ii) Filling of available excavated earth in trenches etc.) which were interalia required to be executed in terms of schedule of quantities and that actually executed by the contractor were as follows:-

Item As per Schedule of Quantities

(Cum)

As per actual

(Cum)

Percentage of actual

execution

(i) Supply and stacking of good earth at site.

6052 5.13 0.08

(ii) Filling of available excavated earth in

7667 447.48 5.84

68

tranches etc.

It would be seen from the above that actual execution of Ist item was almost nil/negligible while that of 2nd item it was 5.84% only. This indicated that estimate was prepared without due regard to the actual site conditions. Over estimation of execution of these two items of work resulted into the Justification of Rate to 89.91% above as against 77.91% above which would have been otherwise worked out based on actual execution. This led to extra expenditure of ` 3,08,132 (89.91% - 77.91% = 12% X ` 25,67,768).

The irregularity was brought to the notice of the department in June, 2009, but no reply has been received (June, 2011).

(MCA/RS/DP-21(G)/2008-09)30. Irregularities in testing of Ready Mix Concrete samples- ` 3.00 lakh.

The samples of C.C. cube were lifted on the very day of its providing & laying and were sent on the same day itself for 7 days testing and the same were got tested on that day. This puts question-marks on the reliability of testing process.

According to provisions contained in C.P.W.D. specification, sample of C. C. cubes each of (size 15cm X 15cm X 15cm) for providing and laying Ready Mix Concrete/Cement Concrete (RMC/CC) for every 25 cum or part thereof is required to be taken and got tested from Laboratory. However, in M.C.D. this is being done for execution of every 20 cum or part thereof. These samples are lifted on the very day of providing and laying of Ready Mix Concrete/Cement Concrete and sent on its 7th day for 7 days testing which are got tested in the Municipal Laboratory on the very day of its receipt. In case of failure of 7 days testing, repeated samples for 28 days testing are sent on its 28 days and got tested in the laboratory on the very day of their receipt.

Executive Engineer (Project-I) Shahdara (South) awarded the work for improvement of gali by providing R.M.C. and drain in Kasturba drain site to M/s Bachu Lal Sharma vide work order No.EE(Pr.)Shah./Shouth/2007-08/88 dated 30.1.2008 at a contractual cost of ` 5,09,094 with a completion period of two months. The work was started on 30.1.2008 and completed on 25.3.2008. The samples of C.C. cube were lifted on the very day of its providing & laying and

69

were sent on the same day itself for 7 days testing and the same were got tested on that day as per the followings:

Date of P/L RMC

Qty of P/L

RMC

Date of lifting

samples

No. of sampl

e

Date of sending samples

for 7 days

testing

No. of sample

Date of testing in Mpl.

Lab.

No. of sampl

e

10.3.08 60 cum 10.3.08 3 10.3.08 3 10.3.08 3 11.3.08 53 sqm 11.3.08 2 11.3.08 2 11.3.08 2

It is interesting to note that while samples were lifted & sent on the very

day of providing & laying R.M.C. on 10.3.2008 & 11.3.2008 for 7 days testing, the testing of sample on the date itself (i.e. 10.3.2008 & 11.3.2008) showed the compressive strength of the cubes according to requirement. This indicates that the compressive strength of the cubes which was to qualify for 7 days testing appeared on the very days of its providing and laying. This puts question-marks on the reliability of testing process. Thus a payment amounting to ` 2,99,675 (112.60 X ` 2182.20 +21.96% C.E.) was released towards providing and laying Ready Mix Concrete on the basis of results of the testing process reliability of which is suspect.

The irregularity was brought to the notice of the department in November, 2009, but no reply has been received (June, 2011).

(MCA/RS/DP-5(G)/2008-09)

70

31. Short recovery of cost of demolished old structure material-` 2.55 lakh.

An amount of ` 2,55,382 on account of cost of demolished old structure material was recovered short from the contractor.

In terms of standard terms and conditions of Contract Agreement and stipulation made in the respective work order, the Reserve Price shown in Part-B of the work order on account of cost of demolished old structure material of the existing school buildings was to be recovered from the respective Firm/Contractor in the 1st Running Bill.

It was noticed that Executive Engineer (Project)-I, West Zone awarded work to M/s R.P. Singh & Co. Pvt. Ltd. for construction of 18 class rooms, 1 Head Master room, 1 Store, 1 Hall etc. at a contractual amount of ` 1,25,23,775 for part-A and ` 3,15,382 for part-B (reserve price) vide work order No.EE-XX/ 2006-07/76 dated 17.10.2006. The recovery on account of cost of demolished old structure material of the existing school buildings shown as Reserve Price in part-B in the work order, was to be made from the Contractor in the 1st Running Bill. A review of the Running Bill disclosed that only part recovery of ` 60,000 as against ` 3,15,382 was made. This has resulted in short recovery of ` 2,55,382 as per details given below:-

71

S. N.

Name of Division

EE

W.O. No. & Date

Name of work

Running bills paid

Amount was to

be recovered in 1st

RA bill

Amount recovered

(`)

Amount non/short recovered

(`)

1 Project-I West Zone

76/17.10.2006 C/o 18 classroom etc.

VII 3,15,382 60,000 2,55,382

Total 2,55,382

The irregularity was brought to the notice of the department in May, 2010, but no reply has been received (June, 2011).

(MCA/RS/DP-31(G)/2008-09)

32. Execution of work prior to receipt of material- ` 1.41 lakh.

Work was shown executed/completed prior to receipt of material i.e. R.M.C. M-20 grade costing ` 1,41,345 (40.50 cum X ` 3,490). This puts question mark on the veracity of execution of the work.

A work of Development of lane in front of Community Centre by providing Ready Mix Concrete & Drainage system in Taimoor Nagar in Ward No.205, Zakir Nagar, Central Zone was awarded to M/s Kejariwal Builders at a contractual cost of ` 1,96,719 under Unit Rate Method vide work order No.198/EE(M-II)/ TC/CNZ/07-08 dated 22.2.2008. The contractor started the work on 16.3.2008 and completed it on 23.4.2008. The first and final bill of ` 1,93,132 was passed for payment on 15.7.2008.

In the execution of work it was noticed that the contractor inter-alia provided and laid 40.50 cum R.M.C.-M-20 grade which was procured from M/s Techno Concrete vide Challan No.1219, 1224, 1230, 1239, 1244 & 1248 dated 24.4.2008 each. Whereas, as per Ist and Final bill and record entry made in the M.B. No.19634 at page 2 & 3, the work was shown completed on 23.4.2008 itself. This indicates that work was shown executed/completed prior to receipt of material i.e. R.M.C. M-20 grade costing ` 1,41,345 (40.50 cum X ` 3,490). This puts question mark on the veracity of execution of the work.

72

The irregularity was brought to the notice of the department in February, 2010, but no reply has been received (June, 2011).

(MCA/RS/DP-6(G)/2008-09)

33. Non-recovery on account of cost of B.M. and A.C. Mix- ` 1.20 lakh.

Payment for excess bitumen had been made over and above the payment at applicable rate for entire quantity of BM and AC Mix for the work which included the excess quantity of bitumen as well but the recovery of the cost of BM & AC Mix equal to weight of excess quantity of bitumen paid for, was not made.

Two Engineering Divisions M-I, Central Zone (Old No.IX) and Project Shah (South) Zone (Old No. Proj. Shah. South), awarded 8 work orders relating to “Improvement and Strengthening of roads/carriageway”. The department, besides releasing other payments to the contractors, also released payment for quantity of excess bitumen used in accordance with Job Mix Formula in the work in executing the item of Bituminous Macadam and Dense Bituminous concrete (AC). As the payment for excess bitumen had been made over and above for entire quantity of bitumen including the quantity of excess bitumen consumed in preparation of B.M. and A.C. Mix for the work at the applicable rates of B.M. and A.C. Mix, the department was required to recover the cost of B.M. and A.C. Mix equal to weight of excess quantity of bitumen paid for. But it was not done so. This has resulted in excess payment of ` 1,20,455 as detailed below.

S. Work Payment Excess Rate at which Amount to be Total

73

N. Order No. & Date

made for excess bitumen shown used

(M.T.)

bitumen shown used for item AC,BM and Mix Seal

(M.T.)

payment made for execution of AC,BM Mix & mix seal

(`/ P.M.T.)

recovered on account of non-adj. of cost of Mix already paid for as excess bitumen used (`)

Amount of recovery

(`)

Divisions M-I, Central Zone (Old No.IX)1 125/9.9.08 1.806 BM Nil

AC 1.806-

2,898-

5,234 5,234125/9.9.08 2.326 BM 0.049

AC 2.2772,2142,898

1086,599 6,707

125/9.9.08 0.424 BM NilAC 0.424

-2,898

-1,229 1,229

2 131/18.9.08 2.486 BM 0.257AC 2.229

2,2142,898

5696,460 7,029

131/18.9.08 0.439 BM NilAC 0.439

-2,898

-1,272 1,272

131/18.9.08 2.609 BM NilAC 2.609

-2,898

-7,561 7,561

3 126/9.9.08 2.406 BM NilAC 2.406

-2,787

-6,706 6,706

126/9.9.08 2.706 BM NilAC 2.706

-2,787

-7,542 7,542

4 122/5.9.08 2.200 BM NilAC 2.200

-2,875

-6,325 6,325

5 405/5.3.08 3.390 BM 0.080AC 3.310

1,6502,275

1327,530 7,662

6 124/9.9.08 2.305 BM NilAC 2.305

-2,898

-6,680 6,680

63,947Project Shah (South) Zone (Old No. Proj. Shah. South)7 37/7.6.08 8.083 BM 1.285

AC 6.7982,0902,797

2,68619,014 21,700

8 121/10.3.08 15.100 BM 2.550AC 12.550

1,7402,420

4,43730,371 34,808

56,508Total 1,20,455

The irregularity was brought to the notice of the department in November, 2009, March, 2010, but no reply has been received (June, 2011).

(MCA/RS/DP-4(G)/2008-09)

74

34. Overpayment due to less use of stone aggregate- ` 1.00 lakh.

The contractor supplied and stacked 620.61 cum and 620.51 cum of stone aggregate of size 65-45 mm and 53-22.4 mm respectively but laid 420.15 cum of each instead of 511.50 cum & 511.42 cum respectively. This had resulted in over payment of ` 1,00,156 to the contractor.

A work for Development of Rubber factory road by M/P in K-Block, Gangotri Vihar, from Shivaji Road to Thana Road, Yamuna Vihar ward No.256, Shahdara (North) Zone was awarded to M/s Shiv Construction Co. vide work order No.EE-M (Shah.North)-II/TC/07-08/498 dated 7.2.2008 at a contractual cost of ` 13,82,791 with the completion period of 3 months. The work was started on 16.2.2008 and completed on 14.5.2008 at a total cost of ` 13,82,266.

As per estimate/schedule of quantities, 600.60 cum of stone aggregate each of size ranges 65-45 mm and 53 to 22.4 mm was to be supplied and stacked and 495 cum of each size was to be laid on water bound macadam based coarse. This implies that 82.42% of 600.60 cum each of stone aggregate of size 65-45 mm and 53-22.4 mm is laid on W.B.M. based coarse and remaining 17.58% gets compacted during laying of W.B.M. in terms of C.P.W.D.

75

Specifications. The contractor supplied and stacked 620.61 cum and 620.51 cum of stone aggregate of size 65-45 mm and 53-22.4 mm respectively but laid 420.15 cum of each instead of 511.50 cum & 511.42 cum respectively. This indicated that the contractor used less quantity of 91.35 cum & 91.27 cum (511.50 – 420.15 = 91.35 & 511.42 – 420.15 = 91.27) of stone aggregate size 65-45 mm and 53-22.4 mm respectively. This had resulted in over payment of ` 1,00,156 (91.35 X 389.65 + 91.27 X 432.55 =` 75,074+ 33.41%) to the contractor.

The irregularity was brought to the notice of the department in August, 2009, but no reply has been received (June, 2011).

(MCA/RS/DP-16(G)/2008-09)

35. Loss due to non-levy of fine in respect of rejected completion certificates- ` 3355 lakh.

5,721 Completion Certificates were rejected by the Zonal Offices during 1972-73 to 2009-10 as the buildings constructed were not in accordance with the sanctioned building plan. Neither the owners got the deviations regularized from the Corporation by paying requisite fees/penalties nor did the Corporation take any action against the owners who might have occupied the building without obtaining the Completion Certificate. The fine leviable in the 5721 cases as per the Twelfth Schedule worked out to ` 3355 lakh.

Section 346 of D.M.C. Act, 1957 states that every owner of a building is required to send a notice in writing of its completion within a month after completion or erection of the building (now amended as every person who employs a licensed architect or engineer or a person approved by the Commissioner to design or erect a building or execute any work shall, within one month after the completion of the erection of the building or execution of the work, deliver or send or cause to be delivered or sent to the Commissioner a notice in writing of such completion accompanied by a certificate in the form

76

prescribed bye-laws made in this behalf and shall give to the Commissioner all necessary facilities for the inspection of such building or work).

No person shall occupy or permit to be occupied any such building until permission has been granted by the Commissioner in this behalf in accordance with bye-laws made under this act. Section 461 read with Twelfth Schedule to the Act further provides that whoever acts contrary to these provisions is punishable with fine which may extend to ` 200 and in case of continuing contravention or failure, with an additional fine which may extend to ` 10 for every day during which such contravention or failure continues.

During audit for the years 1972-73 to 2009-10 conducted as per the directions of the Chairman, Standing Committee, it was noticed that in all 5,721 Completion Certificates were rejected by the Zonal Offices during the said period because the buildings constructed were not in accordance with the sanctioned building plan and the owners did not get the deviations regularized from the Corporation on payment of penalties. It is extremely unlikely these buildings would have remained unoccupied and in all probability these might have been occupied by the owners without obtaining the required Completion Certificates. Occupation without completion certificate rendered the owners liable to payment of fine under Section 461 read with the Twelfth Schedule to the D.M.C. Act, 1957. There was however, nothing on record to show that the Department initiated any prosecution proceedings in the above cases for imposition of fine in terms of Section 461 read with the Twelfth Schedule.

The fine leviable in the 5721 cases as per the Twelfth Schedule worked out to ` 3355 lakh (` 11,44,200 + ` 33,44,01,570).

The Zone-wise position thereof is as under:-

Zone Application received for

C.C.

C.C.issued

C.C. rejected

C.C. neither issued nor

rejected

Fine @` 200

Additional fine @ ` 10 per

dayCity 73 40 5 28 1,000 66,630Civil Line 2,005 1,493 490 22 98,000 3,54,31,340Central 2,942 1,886 1,053 3 2,10,600 6,10,21,770K.B. 375 223 126 26 25,200 75,48,780Najafgarh 541 392 93 56 18,600 39,21,880Narela 153 92 61 - 12,200 15,28,090Rohini 887 184 703 - 1,40,600 3,16,57,500South 5,556 3,832 1,724 - 3,44,800 9,78,23,960

77

Shah (North)

91 39 28 24 5,600 12,92,270

Shah (South)

1,581 689 892 - 1,78,400 4,42,07,700

S.P. 620 407 213 - 42,600 2,35,99,950West 2,001 667 333 1,001 66,600 2,63,01,700

16,825 9,944 5,721 1,160 11,44,200 33,44,01,570

The Year-wise position thereof is as under:-

Zone Applicati

on received for C.C.

C.C.Issued

C.C. rejected

C.C. neither issued nor

rejected

Fine @` 200

Additional fine @ ` 10 per day

1972-73 471 211 135 125 27,000 1,85,83,1301973-74 361 164 6 191 1,200 8,12,8701974-75 299 117 - 182 - -1975-76 606 209 - 397 - -1976-77 723 553 170 - 34,000 2,02,59,6801977-78 859 834 25 - 5,000 29,59,2601978-79 582 551 31 - 6,200 35,48,9501979-80 367 306 61 - 12,200 66,75,9001980-81 140 119 21 - 4,200 22,60,5701981-82 105 83 22 - 4,400 22,97,4301982-83 118 95 23 - 4,600 23,14,2701983-84 179 140 39 - 7,800 37,97,5501984-85 183 150 33 - 6,600 31,01,8401985-86 405 316 89 - 17,800 79,75,7901986-87 449 339 110 - 22,000 95,16,4801987-88 494 375 119 - 23,800 98,50,7601988-89 688 507 181 - 36,200 1,42,81,1701989-90 1,141 757 384 - 76,800 2,88,26,7401990-91 1,268 760 507 1 1,01,400 3,64,49,2001991-92 830 372 458 - 91,600 3,12,72,7901992-93 733 291 442 - 88,400 2,85,03,8201993-94 691 297 363 31 72,600 2,20,53,2401994-95 614 290 312 12 62,400 1,78,99,0601995-96 446 240 206 - 41,200 1,15,22,5601996-97 360 227 128 5 25,600 64,64,1001997-98 278 144 132 2 26,400 61,24,9201998-99 343 205 138 - 27,600 58,36,9801999-2000 280 154 120 6 24,000 47,39,0502000-01 182 85 95 2 19,000 33,19,2902001-02 251 101 148 2 29,600 46,54,1002002-03 348 158 182 8 36,400 46,82,9102003-04 261 99 155 7 31,000 36,99,5002004-05 252 109 138 5 27,600 32,59,5302005-06 265 118 124 23 24,800 21,27,1202006-07 203 82 116 5 23,200 15,85,2702007-08 314 92 182 40 36,400 17,59,3302008-09 330 98 168 64 33,600 10,33,4702009-10 406 196 158 52 31,600 3,52,940

16,825 9,944 5,721 1,160 11,44,200 33,44,01,570

The position of record not produced to Audit by different Zones is as under:-

78

The matter has already been brought to the notice of the Hon’ble

Chairman Standing Committee with copy to the Commissioner vide note dated 24.12.2010. The department may take suitable measures in the matter.

(MCA/RS/DP-49(G)/2008-09)

36. Outstanding demolition charges- ` 495 lakh.

Against the total demolition charges of ` 5,45,14,829 for the years 2004-05 to 2008-09 in respect of all the twelve zones of the Corporation, the department has effected the recovery of ` 50,05,913 which works out to 9.18% thereby leaving outstanding charges amounting to ` 4,95,08,916.

Section 343 of D.M.C. Act, 1957 provides that where the erection of any building or execution of any work had been commenced or is being carried out or had been completed without proper sanction or contrary to any condition, such building shall be demolished within such period not exceeding 15 days or as may be specified in the order by person concerned, failing which, the Commissioner

Zone Period for which record not produced to AuditCity 1972-73 to December, 1996Civil Line 1972-73 to 1975-76 and 1980-81 to September, 1988Centralw.e.f. July, 1978

July, 1978 to December, 1985

K.B. 1972-73 to 1975-76Najafgarh 1972-73 to 1992-93 & 2004-05 to 2008-09Narelaw.e.f. October, 1977

October, 1977 to June, 1996

Shah (South) 1972-73 to December, 1985West January, 1976 to December, 1984 & January, 1986 to April, 2001

79

may himself cause the erection of work to be demolished and expenditure of such demolition shall be recovered from such person as arrears of tax.

A review of Demand & Collection registers for the years 2004-05 to 2008-09 of Executive Engineer (Bldg.) of all the twelve zones of the Corporation disclosed that the department raised demand for ` 5,45,14,829 against the property owners whose unauthorized buildings/portion of buildings were demolished by the building department of M.C.D. during 2004-05 to 2008-09, out of which the department could recover ` 50,05,913 leaving a balance of ` 4,95,08,916 as detailed below:-

Sl. No.

Name of Zone No. of cases demolished

Demand raised

(`)

Amount recovered

(`)

Outstanding amount

(`)

%age of recovery

1 Central Zone 403 52,93,295 16,51,138 36,42,157 31.192 Civil Line Zone 226 17,49,700 Nil 17,49,700 Nil3 City Zone 678 33,64,621 17,625 33,46,996 0.524 K.B. Zone 549 82,05,655 10,60,750 71,44,905 12.935 Najafgarh Zone 94 9,84,925 Nil 9,84,925 Nil6 Narela Zone 146 9,66,527 Nil 9,66,527 Nil7 Rohini Zone 1,486 75,76,785 10,42,196 65,34,589 13.768 S.P. Zone 581 29,53,314 3,17,963 26,35,351 10.779 South Zone 347 47,97,625 5,86,400 42,11,225 12.2210 Shahdara North 1,374 27,91,894 2,43,816 25,48,078 8.73

(Upto 18.9.2007 as Demolition Charges register not maintained after it)

11 Shahdara South 1,047 1,13,74,525 Nil 1,13,74,525 Nil12 West Zone 479 44,55,963 86,025 43,69,938 1.93

Grand Total 7,410 5,45,14,829

50,05,913

4,95,08,916

9.19

It would be seen from the above table that out of total demolition charges of ` 5,45,14,829 the department has effected the recovery of ` 50,05,913 which

works out to 9.18%. The year-wise position of each zone is indicated below:-

S. N.

Name of Zone/Year

No. of cases demolished

Demand raised

(`)

Amount recovered

(`)

Outstanding amount

(`)

%age of recovery

1 Central Zone2004-05 95 9,06,516 2,16,275 6,90,241 23.862005-06 110 14,45,741 5,91,313 8,54,428 40.902006-07 51 11,25,075 2,15,000 9,10,075 19.112007-08 25 3,91,250 1,61,050 2,30,200 41.162008-09 122 14,24,713 4,67,500 9,57,213 32.81Total 403 52,93,295 16,51,13

836,42,157 31.19

2 C.L. Zone2004-05 132 10,27,850 - 10,27,850 0.00

80

2005-06 72 5,82,975 - 5,82,975 0.002006-07 - - - - 0.002007-08 6 44,650 - 44,650 0.002008-09 16 94,225 - 94,225 0.00Total 226 17,49,700 Nil 17,49,700 0.00

3 City Zone2004-05 84 3,68,438 - 3,68,438 0.002005-06 60 2,99,350 - 2,99,350 0.002006-07 141 11,08,767 17625 10,91,142 1.592007-08 223 9,18,012 - 9,18,012 0.002008-09 170 6,70,054 - 6,70,054 0.00Total 678 33,64,621 17,625 33,46,996 0.00

4 K. B. Zone2004-05 11 1,53,650 - 1,53,650 0.002005-06 7 76,375 48,175 28200 63.072006-07 194 28,13,761 6,37,362 2176399 22.652007-08 136 32,77,863 1,01,463 3176400 3.102008-09 201 18,84,006 2,73,750 1610256 14.53Total 549 82,05,655 10,60,75

071,44,905 12.93

5 Nagafgarh Zone2004-05 21 1,94,225 - 1,94,225 0.002005-06 45 4,88,525 - 4,88,525 0.002006-07 21 1,68,500 - 1,68,500 0.002007-08 6 54,925 - 54,925 0.002008-09 1 78,750 - 78,750 0.00Total 94 9,84,925 Nil 9,84,925 0.00

6 Narela Zone2004-05 22 1,70,252 - 1,70,252 0.002005-06 23 1,78,950 - 1,78,950 0.002006-07 26 1,39,200 - 1,39,200 0.002007-08 23 2,14,250 - 2,14,250 0.002008-09 52 2,63,875 - 2,63,875 0.00Total 146 9,66,527 Nil 9,66,527 0.00

7 Rohini Zone2004-05 161 14,73,763 34,825 14,38,938 2.362005-06 205 16,13,230 1,15,155 14,98,075 7.142006-07 30 2,55,025 84,600 1,70,425 33.172007-08 595 26,42,176 3,61,991 22,80,185 13.702008-09 495 15,92,591 4,45,625 11,46,966 27.98Total 1,486 75,76,785 10,42,19

665,34,589 13.76

8 S.P. Zone2004-05 166 8,85,575 52,800 8,32,775 5.962005-06 147 8,99,450 85,775 8,13,675 9.542006-07 108 6,84,688 39,950 6,44,738 5.832007-08 36 1,43,238 44,063 99,175 30.762008-09 124 3,40,363 95,375 2,44,988 28.02Total 581 29,53,314 3,17,963 26,35,351 10.77

9 South Zone2004-05 79 7,29,470 - 7,29,470 0.002005-06 69 7,43,100 1,17,975 6,25,125 15.882006-07 34 5,25,675 2,63,575 2,62,100 50.142007-08 36 4,35,288 47,000 3,88,288 10.802008-09 129 23,64,092 1,57,850 22,06,242 6.68Total 347 47,97,625 5,86,400 42,11,225 12.22

10 Shahdara (North)2004-05 167 9,88,690 46,925 9,41,765 4.752005-06 113 6,15,340 1,03,875 5,11,465 16.882006-07 119 2,74,674 44,550 2,30,124 16.222007-08 535 9,13,190 48,466 8,64,724 5.31

81

upto 18.9.2007 as Demolition charges register not maintained after it2008-09 440 Nil Nil Nil NilTotal 1,374 27,91,894 2,43,816 25,48,078 8.73

11 Shahdara (South)2004-05 166 13,70,037 - 13,70,037 0.002005-06 146 11,82,375 - 11,82,375 0.002006-07 237 36,22,075 - 36,22,075 0.002007-08 338 29,12,875 - 29,12,875 0.002008-09 160 22,87,163 - 22,87,163 0.00Total 1,047 1,13,74,52

5Nil 1,13,74,52

50.00

12 West Zone 2004-05 126 8,52,542 - 8,52,542 0.002005-06 124 10,08,671 86,025 9,22,646 8.532006-07 142 18,55,925 - 18,55,925 0.002007-08 31 2,73,300 - 2,73,300 0.002008-09 56 4,65,525 - 4,65,525 0.00Total 479 44,55,963 86,025 43,69,938 1.93Grand Total 7,410 5,45,14,82

950,05,91

34,95,08,91

69.18

It would be seen from the above data/information/analysis that :-

(i) In 4 zones i.e. Civil Line Zone, Narela Zone, Najafgarh Zone & Shahdara (South) Zone no recovery has been effected.

(ii) In City Zone, a negligible %age (1.59) of recovery has been effected during 2006-07 out of the period of 5 years (2004-05 to 2008-09).

(iii) In K.B. Zone, no recovery has been effected during 2004-05 and negligible %age (3.10) of recovery has been effected during 2007-08 whereas the percentage of recovery during 2005-06, 2006-07 & 2008-09 was 63.07, 22.65, 14.53 respectively.

(iv) In Rohini Zone, the percentages of recovery were 2.36 & 7.14 during 2004-05 & 2005-06 as compared to the %age of recovery during 2006-07 to 2008-09 which works out to 33.17, 13.70 & 27.98 respectively.

(v) In S.P. Zone, the percentages of recovery during 2004-05 to 2006-07 were 5.96, 9.54 & 5.83 as compared to the %ages of recovery during 2007-08 & 2008-09 which were 30.76 & 28.02 respectively.

(vi) In South Zone, no recovery has been effected during 2004-05 and a very nominal percentage (6.68) of recovery was effected furing 2008-09 as compared to the percentages of recovery during 2005-06 to 2007-08 which works out to 15.88, 50.14 & 10.80 respectively.

(vii) In Shahdara (North) Zone, no demand of demolition charges was raised against 440 cases demolished during 2008-09 and the percentages of recovery effected during 2004-05 to 2007-08 were not satisfactory.

82

(viii) In West Zone, the percentage of recovery during 2005-06 was 8.53 whereas in remaining 4 years 2004-05 & 2006-07 to 2008-09 no recovery has been effected.

This indicates lack of effective monitoring by the department which led to lackadaisical approach towards recovering the demolition charges.

The matter was brought to the notice of the department during July, 2009 to May, 2010, but no final reply has been received (May, 2011).

(MCA/RS/DP-60(G)/2008-09)

37. Loss of availability of cash due to not taking of any action on application for use of premises as banks and consequent non-deposit of bank drafts - ` 44.65 lakh.

Two bank drafts for ` 20,14,790 and ` 24,50,592 deposited by I.N.G. Vysya Bank Ltd. on account of one time cost of parking, annual mixed use charges and one time annual mixed use charges, were not deposited by the department into the Municipal Treasury.

83

The Engineering department vide No.D/1155/Addl. Comm.(E)/99 dated 10.6.1999 issued guidelines for allowing mixed land use namely Nursing homes, Guest houses and Banks in residential areas. According to these guidelines, annual permission fee was to be charged based on 10% of the difference between current commercial rates and current residential rates of land (as approved by the Ministry) in respect of the actual floor area utilized for such non-residential purpose.

A test check of record of Building department, Karol Bagh Zone disclosed that I.N.G. Vysya Bank Ltd. applied for (29.3.2008) registration of two premises (i.e. plot No.13, West Patel Nagar, New Delhi and plot No.871, East Park Road, Karol Bagh, New Delhi) for use as Bank and submitted bank drafts for ` 20,14,790 & ` 24,50,592 on account of one time cost of parking, annual mixed use charges and one time annual mixed use charges. The department neither took any action for more than five months nor did it deposit the bank drafts into Municipal treasury. On 10.9.2008 the department asked the bank to deposit bank draft for ` 1,000 for each premises on account of registration charges and also intimated that both the premises should first be got registered for running the bank and thereafter the bank drafts for ` 20,14,790 & ` 24,50,592 would be got encashed by M.C.D. The department also requested the bank authorities to submit the photocopies of all the previous receipts issued by M.C.D. regarding permission to run the bank branch in premises since the permission was accorded. The record produced to audit did not reveal if the said requirements were complied with by the Bank or not. In the meanwhile the validity of both the bank drafts for ` 20,14,790 & ` 24,50,592 expired.

Thus inaction on the part of the department for non taking of any action on the application for grant of permission for mixed land use for more than five months and non deposition of bank drafts for ` 20,14,790 & ` 24,50,592 into the Municipal treasury just for want of a meager amount of ` 2,000 only on account of registration charges which could have been demanded even after deposition of said bank drafts or before issue of permission letters. This resulted in loss of availability of cash amounting to ` 44,65,382 to M.C.D.

84

The matter was brought to the notice of the department in May, 2010, but no reply has been received (June, 2011).

(MCA/RS/DP-44(G)/2008-09)

38. Non raising of demand/non-recovery of amount on account of conversion charges against dis-honoured cheques- ` 42.20 lakh.

495 number of cheques amounting to ` 42.20 lakh deposited by the owners/occupiers of properties on account of conversion charges/ parking fee etc., were bounced/ dis-honoured by the concerned bankers. Lack of effective action

85

to recover these sums resulted in non-recovery of ` 42.20 lakh.

The Government of India had allowed the use of residential premises for use of professional activities and commercial activities with certain conditions and rates which were advertised in the leading Daily News Papers in Delhi. As such the owners/ occupiers of such properties had applied for mix land use and deposited conversion charges and parking fee with the Corporation.

It was noticed from the dis-honoured cheques register improperly/ incompletely maintained in Building department, Shahdara North Zone that 495 number of cheques amounting to ` 42.20 lakh deposited by the owners/occupiers of properties, on account of conversion charges/parking fee etc., were bounced/ dis-honoured by the concerned bankers, due to shortage of funds, non tallying of signatures and unsigned cheques. The department issued letters in November, 2008 to respective owners/occupiers intimating them about dis-honouring of cheques by the banks. But they had not deposited the required amount against such cheques. The department had also not taken any action against such owners/occupiers for running their trades without depositing conversion charges. This had resulted into non-recovery of amount on account of conversion charges amounting to ` 42,20,146 and also unauthorized running of trades by the owners/ occupiers of properties of mix land use. Due to non-maintenance of Conversion charges register and improper/incomplete maintenance of dis-honoured cheque register, the following factual position could not be ascertained in Audit:-

b) Dates of issue of cheques by the owners/occupiers of the premises of mix land use (in certain cases).

c) G-8 Receipt Nos. & dates through which occupiers/owners of the premises deposited the cheques on account of conversion charges.

d) Dates of dis-honouring of cheques by the banks.

e) Dates of intimating the Zonal authorities regarding dis-honouring of cheques.

f) Minus action in respect of the dis-honoured cheques in the accounts of concerned department.

86

The irregularity was brought to the notice of the department in October, 2009, but no reply has been received (June, 2011).

(MCA/RS/DP-19(G)/2008-09)

39. Short recovery of mixed use charges- ` 33.28 lakh.

The owner of the guest house deposited mixed use charges of ` 21,60,488 for 705.12 sqm of built up area instead of ` 54,88,114 for 1791.16 sqm. The

87

department did not take action to recover/demand the difference amount resulting in short recovery of mixed use charges amounting to ` 33,27,626.

Regulation 5.1 of Delhi Development Authority (Fixation of charges for Mixed Use and Commercial use of Premises) Regulation, 2006 provides that the premises under mixed use shall be subject to levy of Annual Mixed Use Charges for the period upto which the premises remain/likely to remain under mixed use. Regulation 5.4 further provides that the owner/allottee/resident/user of the premises shall have option to make one time payment of mixed use charges at the following rates which may be made in four quarterly installments

Rates in ` per sqm built up areaS.N

.Type of mixed use A & B category

of colonyC & D category

of colonyE, F & G

category of colony

1 Retail Shops 6136 4088 15362 Other Activities 3064 2048 7683 Professional Activities 1536 1024 384

A review of Licence file of Jukaso Inn Guest House at Plot No.49 & 50, Sunder Nagar, New Delhi each of 725 sqm disclosed that the guest house consisting of 36 rooms built at ground, mezzanine, Ist floor & IInd floor has been running since 1980-81. As per inspection of the guest house conducted by the building department, City Zone on 16.7.2008, the total covered area was shown as 1791.16 sqm (Plot No.49 & 50) whereas the department received mixed use charges of ` 21,60,488 for 705.12 sqm of built up area [380.12 sqm (Plot 49) + 325 sqm (Plot 50)]. Neither the department raised any supplementary demand of ` 33,27,626 being the difference in built up area nor did the owner deposit the said amount. This has resulted in short recovery of one time mixed use charges amounting to ` 33,27,626 [` 54,88,114 (` 3064 X 1791.16 sqm) - ` 21,60,488 (` 3064 X 705.12 sqm)].

The matter was brought to the notice of the department in February, 2010 but no reply has been received (June, 2011).

(MCA/RS/DP-37(G)/2008-09)40. Loss due to non/short levy of conversion charges and

Additional Floor Area Ratio Charges in respect of basement portion- ` 23.26 lakh.

88

Permission was granted to Punjab & Sindh Bank to continue its branch at ground floor (191.07 sq.m.) and basement (114.47 sq.m.) but the department worked out and levied the permission fee/conversion charges for 191.07 sq.m. area of ground floor only instead of 305.54 sq.m. area of ground floor and basement. Additional FAR charges for basement area of 114.47 sq.m. were also not worked out and levied. This has resulted in loss of ` 23.26.053.

The Corporation vide circular No.D/1155/Addl. Comm.(E)/99 dated 10.6.1999 issued guide lines for allowing mixed land use namely Nursing Homes, Guest Houses and Banks in residential areas. According to these guidelines, annual permission fee @ 10% of the difference between current commercial rates and current residential rates of land (as approved by the Ministry of Urban development) were to be adopted for charging annual permission fee from the owner based on the actual floor area utilized for such non-residential purposes. Banks shall be permissible on maximum 2/3rd of FAR subject to 600 sq.m. of plot size.

A test check of case file of property No.B-9, Gujranwala Town-I, Delhi (C.L.Zone) disclosed that the owner of the property applied for (1.2.2008) grant of permission for use of bank at Ground floor and basement for Bank’s record & lockers having an area 114.47 sq.m. (basement) and 191.07 sq.m. (ground floor). The Building department vide letter No.1333/EE(B)CLZ/2008 dated 17.9.2008 granted permission/NOC to continue Bank Branch of Punjab & Sindh Bank at Ground floor & Basement in the property subject to the condition of payment of arrear of conversion charges from 1999-2000 to 2007-08 in respect of Ground floor having covered area of 191.07 sq.m.

In granting the said permission the following omissions/commissions were committed:-

(i) The department did not work out and levy the Additional FAR charges for basement area of 114.47 sq.m. which was also under banking activity use.

(ii) The department worked out and levied the permission fee/conversion charges for 191.07 sq.m. area of G.F. only instead of 305.54 sq.m. area of G.F. & Basement and that too for the period from 1999-2000 to

89

2007-08 instead of from 1992-93 to 2007-08 as the banking activities were going on in this premises since 1975 with the permission of DDA by paying composition fee up to 10.1.1992.

Thus, non levy of Additional FAR charges and conversion charges in respect of basement portion of the property having covered area of 114.47 sq.m. resulted in loss of ` 23,26,053 for the period from 1992-93 to 2007-08 as detailed below:-

Basement area 114.47 sq.m.1. Additional FAR charges

114.47 sq.m. X ` 1450/sq.m. ` 1,65,981

2. Permission fee/conversion charges a- 1992-93 to 1998-99 = 7 years 305.54 sq.m. X ` 630 X 7 years[191.07sq.m.(G.F.) + ` 114.47 sq.m. (Basement)]

` 13,47,430

b- 1999-2000 to 2005-06 = 7 years 114.47 sq.m. X ` 630 X 7 years ` 5,04,813

c- 2006-07 to 2007-08 = 2 years 114.47 sq.m. X ` 256 X 2 years ` 58,609

` 20,76,833 Add Interest @ 12% p.a. ` 2,49,220 Total ` 23,26,053

The irregularity was brought to the notice of the department in September, 2009, but no reply has been received (June, 2011).

(MCA/RS/DP-48(G)/2008-09)

41. Non/short recovery of Annual Permission fee due to incorrect application of land rates- ` 14.34 lakh.

Incorrect adoption of land rate resulted into short recovery of

90

annual permission fee amounting to ` 1,74,000 for the period from 2004-05 to 2005-06 (i.e. the period for which the permission fee was deposited by the owner). The owner also did not deposit the permission fee for the subsequent period (i.e. from 2006-07 to 2009-10) which had further resulted into non-recovery of permission fee amounting to ` 12,60,000.

The Corporation videNo.D/1155/Addl.Comm.(E)/99 dated 10th June, 1999 issued guidelines for allowing mixed land use namely Nursing Homes, Guest Houses and Banks in residential areas. According to these guidelines, annual permission fee @ 10% of the difference between current commercial rates and current residential rates of land (as approved by the Ministry) were to be adopted for charging annual permission fee from the owner based on the actual floor area utilized for such non-residential purposes.

A test check of case file of property No.A-24, Hauz Khas Enclave (South Zone) disclosed that the owner of the property applied for (6.12.2004) grant of permission for opening a bank branch at the ground floor. The building department of South Zone vide letter No.1893/AE(B)/SZ/2004 dated 8.12.2004 granted the permission with the levy of yearly permission fee of ` 2,28,000 worked out as under.

Plot area 501.67 sq.m.Area actually proposed 250.00 sq.m.for Bank under mix land use policy.

Levy to be charged @ 10% difference of commercial ratesand residential rates i.e. ` 17,480 - ` 8,360 = ` 912

Permission fee (` 912 X 250) = ` 2,28,000

As per the rates circulated by the Land & Development Officer for the period from 1.4.1998 to 31.3.2000, the commercial rate of land of the adjoining locality (Hauz Khas) based on which the land rate of the said property/locality was to be worked out, was ` 24,150 and not ` 17,480. The department had adopted the land rate of ` 24,150 in respect of another property No.A-15, Hauz Khas which too fell in the same category ‘B’.

Incorrect adoption of land rate resulted into short recovery of annual permission fee amounting to ` 1,74,000 [10% of (` 24,150 - ` 11,550) = ` 1260 X 250 sq.m. X 2 years = ` 6,30,000 - ` 4,56,000] for the period from 2004-05 to

91

2005-06 (i.e. the period for which the permission fee was deposited by the owner). The record also revealed that the owner did not deposit the permission fee for the subsequent period (i.e. from 2006-07 to 2009-10) which had further resulted into non-recovery of permission fee amounting to ` 12,60,000 [10% of (` 24,150 - ` 11,550) = ` 1260 X 250 sq.m. X 4 years] for the period 2006-07 to 2009-10.

Thus the total amount on account of short recovery of permission fee and non recovery of permission fee works out to ` 14,34,000.

The irregularity was brought to the notice of the department in September, 2009, but no reply has been received (June, 2011).

(MCA/RS/DP-40(G)/2008-09)

42. Non reimbursement, from Government of N.C.T.D. of charges for surface cleaning and removal of sweeping from P.W.D. Roads- ` 7393 lakh.

92

The expenditure of ` 7393 lakh incurred by the department for providing the services on P.W.D. Roads has not been got reimbursed from Government of N.C.T. Delhi.

In pursuance of direction of Hon’ble Supreme Court of India, M.C.D. has been undertaking the surface cleaning and removal of sweeping from P.W.D. Roads as per decision No.5357/GW/Corpn dated 24.6.1996 of the Special Officer, exercising the power of the Corporation.

Further, in pursuance of Standing Committee’s Resolution No.192 dated 8.7.1997 as well as proposal contained in Commissioner’s letter No. F.33/CSE/ 3133/ C&C dated 10.2.1997, M.C.D. was required to approach Government of N.C.T. Delhi for providing fund to the tune of ` 100 lakh as capital expenditure on P.W.D. Roads. The total amount recoverable on this account for 13 years i.e. w.e.f. 1.1.1997 to 31.12.2009 worked out to ` 73.93 crore (@ ` 561 lakh per year + ` 100 lakh as capital expenditure). However, as the salaries & wages have substantially gone up, actual claim would go further up.

The above expenditure incurred for providing the services on P.W.D. Roads should have been got reimbursed from Government of N.C.T. Delhi. However, the department could not furnish any information as to whether the department has requested for funds from N.C.T. Delhi/P.W.D. or any sum has been received from them.

The matter was brought to the notice of the department in May, 2010, but no reply has been received (June, 2011).

(MCA/RS/DP-25(G)/2008-09)

43. Overpayment to the contractor for desilting- ` 11.74 lakh.

Payment for silt taken out from the drains was made by the department for the quantity higher than the quantity of silt

93

actually dumped at S.L.F. sites whereas the payment was required to be restricted with reference to the quantity of silt dumped at S.L.F. sites. This resulted in overpayment of ` 11.74 lakh to the contractor.

Special Desilting condition No.2 of Notice Inviting Tender provides that the silt taken out by the contractor from the drains will be got cleared from the site and will be dumped by the contractor at the nearest Sanitary Land Fill site only and receipt thereof shall be obtained from the S.L.F. site. The quantity of silt taken out from the drains and its weight got received/ verified at S.L.F. shall be compared with the measured quantity. The payment will be made as per weight of silt calculated on the basis of density and volume taken out from drains and quantity of silt received by weight at the S.L.F. site whichever is lower.

It was noticed that the Maintenance Division M- IV, West Zone executed 13 works of desilting of nallah in different wards during the year 2008-09. The department made the payment for desilting of silt higher than the quantity of silt dumped at S. L. F. sites whereas the same was required to be restricted with reference to the quantity of silt dumped at S.L.F. site in terms of aforesaid condition. This has resulted in overpayment of ` 11,74,100 to contractors as per details given below:-

S. N.

Work Order No. & date

Qty. desilted

(m3)

Qty. carried (m3).

Diff. (m3)

Rate +%of contractor

(`)

Amount overpaid

(`)1 7/2.4.2008 421.89 92.26 329.63 214.65 + 53.50% 1,08,6092 10/2.4.2008 375.74 96.41 279.33 214.65 + 53.50% 92,0363 5/2.4.2008 330.62 71.38 259.24 214.65 + 53.70% 85,5284 6/2.4.2008 303.27 132.24 171.03 214.65 + 52.15% 55,8575 9/2.4.2008 409.08 176.30 232.78 214.65 + 53.50% 76,6986 40/10.4.2008 282.68 80.63 202.05 214.65 + 54% 66,7907 3/2.4.2008 334.17 135.20 198.97 143.10 + 54.25% 43,9198 8/2.4.2008 337.65 134.99 202.66 214.65 + 53.50% 66,7749 28/16.5.2007 1164.93 395.26 769.67 214.65 + 39% 2,29,64110 22/2.4.2008 372.00 191.53 180.47 214.65 + 53.50% 59,46311 16/2.4.2008 342.36 185.60 156.76 214.65 + 50% 50,47312 27/2.4.2008 707.50 219.25 488.25 214.65 + 54.16% 1,61,56413 14/2.4.2008 286.69 53.76 232.93 214.65 + 53.50% 76,748

11,74,100

The irregularity was brought to the notice of the department in December, 2009, but no reply has been received (June, 2011).

(MCA/RS/DP-55(G)/2008-09)44. Irregular payment on account of desilting of Nallah- ` 10.04 lakh.

94

In 20 cases payment on account of desilting of Nallah released to the contractors without getting S.L.F. receipt from them for quantity of silt dumped at S.L.F. sites. This has resulted in irregular payment of ` 10,04,293.

Special Condition No.1 of the N.I.T. for desilting of Nallahs interalia stipulates that the contractor will take silt and other material to Sanitary Land Fill site and produce the receipt from S.L.F. sites for quantity of silt and other materials which he will dump at S.L.F. for making payment. Further, these slips are required to be got verified from S.L.F. sites before making payment.

It was noticed that in 20 cases the department released the payment to the contractors without getting receipt from them which were required to be produced by them from S.L.F. sites for quantity of silt dumped at S.L.F. sites. In the absence of receipts, the authenticity of silt shown desilted could not be verified in audit. This has resulted in irregular payment of ` 10,04,293 on account of desilting of Nallah as detailed below:-

S.N. Work Order No. & Date

Name of the contractor

Qty. of Removal of Malba executed

and Rate (`)

Amount Paid(`)

1 28/8.4.2008 M/s Tiruvani Const. Co.

467.37 cum @ 106.47 per cum + C.E. 47%

73,149

2 32/8.4.2008 M/s Tiruvani Const. Co.

368.94 cum @ 80.85 per cum + C.E. 59.50%

47,577

3 33/8.4.2008 M/s Tiruvani Const. Co.

193.34 cum @ 86.25 per cum + C.E. 54.50%

25,764

4 34/8.4.2008 M/s Tiruvani Const. Co.

177.38 cum @ 80.85 per cum + C.E. 58.15%

22,680

5 31/8.4.2008 M/s G.M. Builders 152.73 cum @ 110.85 per cum + C.E. 45.70%

24,667

6 12/8.4.2008 M/s Tiruvani Const. Co.

358.13 cum @ 80.85 per cum + C.E. 57.90%

45,720

7 13/8.4.2008 M/s Tiruvani Const. Co.

606.48 cum @ 106.47 per cum + C.E. 50.10%

96,922

8 15/8.4.2008 M/s Tiruvani Const. Co.

441.953 cum @ 102.09 per cum + C.E. 52.30%

68,716

9 16/8.4.2008 M/s Tiruvani Const. Co.

371.86 cum @ 99.90 per cum + C.E. 54.40%

57,358

10 17/8.4.2008 M/s Tiruvani Const. Co.

328.638 cum @ 106.47 per cum + C.E. 48.35%

51,908

11 18/8.4.2008 M/s Tiruvani Const. Co.

344.77 cum @ 80.85 per cum + C.E. 60%

44,600

95

12 21/8.4.2008 M/s Tiruvani Const. Co.

55.75 cum @ 106.47 per cum + C.E. 52.32%

9,041

13 22/8.4.2008 M/s Tiruvani Const. Co.

174.00 cum @ 80.85 per cum + C.E. 60%

22,509

14 27/8.4.2008 M/s Tiruvani Const. Co.

298.34 cum @ 110.85 per cum + C.E. 45%

47,953

15 23/8.4.2008 M/s G.M. Builders 749.65 cum @ 123.99 per cum + C.E. 40.35%

1,30,454

16 24/8.4.2008 M/s G.M. Builders 136.51 cum @ 110.85 per cum + C.E. 43.80%

21,760

17 25/8.4.2008 M/s G.M. Builders 61.40 cum @ 110.83 per cum + C.E. 45.65%

9,911

18 30/8.4.2008 M/s G.M. Builders 419.17 cum @ 123.99 per cum + C.E. 45.45%

75,595

19 26/8.4.2008 M/s Tiruvani Const. Co.

403.43 cum @ 99.90 per cum + C.E. 50%

60,454

20 29/8.4.2008 M/s Tiruvani Const. Co.

446.36 cum @ 99.90 per cum + C.E. 51.50%

67,555

10,04,293

The irregularity was brought to the notice of the department in July, 2009, but no reply has been received (June, 2011).

(MCA/RS/DP-54(G)/2008-09)

45. Payment of back wages due to delay in implementation of award-

96

` 1.91 lakh.

Back wages amounting to ` 1,90,809 were paid to the employee as implementation of the award was delayed by more than 33 months for no apparent reason for the period 1.9.2003 to 13.2.2006.

Sh. Sujeet Singh S/o Late Sh. Randheer Singh was engaged as a substitute safai karamchari vide order No.227/SS/Nrl/dated 11.5.1999 against the vacant post of the deceased safai karamchari, his father Sh. Randheer Singh. His services were terminated in January, 2000. The employee filed his case in Industrial Tribunal-III, Delhi vide I.D. No.31/2002 for adjudication. The Presiding Officer, Industrial Tribunal-III gave the award on 16.4.2003 in favour of Sh. Surjeet Singh that his services have been terminated illegally and unjustifiably. He is entitled to be reinstated with continuity in service and full back wages. He is also entitled to be regularized in service from his initial appointment.

Since the award of Industrial Tribunal was not implemented by the department, the Labour Welfare department vide letter dated 27.10.2003 intimated the department , that the Implementation officer has recommended the issuance of recovery certificate of claims for ` 2,36,038 and its subsequent attachment in want of the stay order from the High Court. The said certificate can still be stopped from being attached by the Asstt. Collector provided the department either implements the award or gets its operation stayed from the High Court within 7 days failing which the recommended certificate shall be effected at the cost, responsibility and peril of the concerned officer of M.C.D. Instead of implementing the award or getting its operation stayed from the High Court, the department opted to make the payment of recovery certificate vide cheque No.060144 dated 12.1.2004 for the period from 11.5.1999 to 31.8.2003. This was followed by further payment of ` 42,480 & ` 24,861 vide cheque No.257604 dated 26.6.2004 and No.172517 dated 11.7.2005 for the period from 1.9.2003 to 31.3.2004 and 1.4.2004 to 31.7.2004 respectively.

However, after a lapse of more than 33 months of the pronouncement of the award, the department implemented the award vide Office Order No.3007/01/111/DC/DEMS/HQ/2006 dated 27.1.2006 and took back Sh. Surjeet

97

Singh, S.K. on duty on 24.2.2006. The department also released back wages for the period from 1.8.2004 to 23.2.2006 for ` 1,23,468 vide cheque No.677296 dated 27.8.2007.

Thus the department took 3 years in implementing the award dated 16.4.2003 with the result the employee was paid back wages amounting to ` 1,90,809 (` 42,480 + ` 24,861 + ` 1,23,468) for the period 1.9.2003 to 13.2.2006 without rendering any service which could have been avoided had the department acted promptly. The department did not investigate the reasons for in-action which led to payment of wages without getting any services.

The matter was brought to the notice of the department in June, 2009, but no reply has been received (June, 2011).

(MCA/RS/DP-53(G)/2008-09)

98

46. Excess purchase of medicine and other irregularities- ` 3.00 lakh.

The hospital authorities did not assess their requirement properly and purchased the medicine much in excess of requirement which resulted in unnecessary blockage of Municipal funds amounting to ` 3,00,770.

Rule 137 of chapter 6 of General Financial Rules, 2005 provides that every authority delegated with the financial powers of procuring goods in public interest shall have the responsibility and accountability to bring efficiency, economy, transparency in matters relating to public procurement and for fair and equitable treatment of suppliers and promotion of competition in public procurement, care should also be taken to avoid purchasing quantities in excess of requirement to avoid inventory carrying costs.

A test check of records of Ayurvedic Panchkarma Hospital, Prashant Vihar disclosed that the Resident Medical Superintendent of the Hospital submitted a proposal for the purchase of 3000 X 100 gm Jwarhar Vati medicine on the approved rate of ` 125.74 per hundred gm + 4% vat in March, 2007. A supply order for the supply of 3000 X 100 gm Jwarhar Vati was placed with M/s NAB Pharmaceutical vide No.68/RMS/P/2006-07 dated 30.3.2007. As per the warranty certificate submitted by the firm, the goods/stores/articles would continue to confirm to description and quality for a period of 5 years from date of delivery of the goods/stores/articles to the purchases and that notwithstanding the articles be discovered not to confirm to the description and quality. No such rejection will be at the seller’s risk and all provisions herein contained relating to the rejection of goods etc. shall apply. The contractor/seller shall if so called upon to replace the goods etc within a period of 60 months, the warranty period shall apply to the articles/stores replaced from the date of replacement thereof other wise the seller shall pay the purchaser such damage as may arise by reason of the breach of the condition wherein contained.

In the purchase of medicine the following irregularities are noticed.

In the purchase proposal, the department did not mention the date & quantity of last purchase.

99

Testing/analysis of medicine done by Standard Analytical Lab. Pvt. Ltd. showed that on one batch JHV-3 vide which 1000 units were supplied, the Mfg. date and Exp. date was written as 3/07 & 2/09 which was contrary to warranty of 5 years offered by the firm in their warranty certificate. Similarly, another batch of JHV-4 vide which 2000 units of medicine were supplied, the Mfg. date was mentioned as 4/07 but Exp. date was not mentioned for which the department did not take-up the matter with the firm.

The consumption pattern of the medicine prior to and subsequent to the purchase in question revealed as under.

Period/Date Consumption (in 100 gm)1.4.2006 to 31.3.2007 20012.5.2007 received 300012.5.2007 to 18.10.2007 50019.10.2007 to 31.3.2008 Nil1.4.2008 to 31.3.2009 Nil

However, 200 units of medicines were issued to Ayurvedic Dispensaries, Kirari & Chhatarpur on 24.9.2009 and 19.3.2010 respectively.

The pattern of consumption as above indicates that the hospital authorities did not assess their requirement properly and purchased the medicine much in excess of requirement which resulted in unnecessary blockage of Municipal funds amounting to ` 3,00,770 (2300 X ` 125.74 + 4% vat).

The matter was brought to the notice of the department in October, 2010 but no reply has been received (June, 2011).

(MCA/RS/DP-39(G)/2008-09)

100

47. Extra expenditure due to splitting up of purchase- ` 2.18 lakh.

Non-clubbing up of the requirements of three ventilators not only contravened General Financial Rules but also resulted in an extra expenditure of ` 2,18,400.

Rule 148 of the General Financial Rules, 2005 provides that a demand for goods should not be divided into small quantities to make piece meal purchases to avoid the necessity of obtaining the sanction of higher authority required with reference to the estimated value of the total demand.

Rule 160 of G.F.R., 2005 further provides that all government purchases should be made in a transparent, competitive and fair manner to secure best value for money.

Rule 161 stipulates that public procurement procedure is also to ensure efficiency, economy and accountability in the system.

The records disclosed that Medical Officer, Incharge (I.C.U.), Hindu Rao Hospital indented upon (19.8.2006) for procurement of two Transport Ventilators for ventilating patients during/within and inter-hospital transport and for ventilating patients in ward during disasters when these ventilators can be transported to any location. Just after its three months, Chief Medical Officer (Casualty), Hindu Rao Hospital indented upon (20.11.2006) for procurement of one transport ventilator for use in casualty as there was no ventilator available for serious patients admitted in casualty.

The hospital authority instead of clubbing up these two requirements floated two different Notice Inviting Tenders vide No.95 and 98 on one and the same date i.e. 19.12.2006 in disregard to ibid G.F.Rs. provisions. In response to N.I.T. No.95, the offer of M/s Rohanik Electronics and Medical System @ ` 2,70,000 each plus 4% VAT was the lowest. Accordingly, a supply order for the supply of 2 numbers of Transport Ventilator was placed with the firm vide

101

No.HRH/07/15 dated 17.8.2007. The firm made the supplies on 14.12.2007at a total cost of ` 5,61,000 (` 5,49,000 + ` 21,600 VAT @ 4%).

Whereas, in response to N.I.T. No.98, only one firm M/s Jaishree Medical Devices quoted its rates as ` 4,80,000 + 4% VAT. As this firm had also participated in N.I.T. No.95 and quoted its rates as ` 5,09,000, the Evaluation Committee/ Purchase Board desired (6.3.2007) to ask the firm to clarify as to why it had quoted different rates in both the cases whereas in both the cases, the quoted model was the same. The Committee/Board therefore also directed to conduct negotiation with the firm to reduce the rates further. But, the firm vide its letter dated 8.3.2007 expressed its inability to negotiate/reduction of quoted rates. Ultimately, the department decided (21/22.3.2007) to re-invite the tenders. Tenders were re-invited and order for supply of one Transport Ventilator @ ` 4,80,000 plus VAT was placed with the same firm viz M/s Jaishree Medical Devices (being the single tenderer) vide No.HRH/08/56 dated 3.2.2008. The firm made the supply on 18.3.2008.

Thus non-clubbing up of the requirements of three ventilators was not only in contravention of G. F. Rules but also resulted in an extra expenditure of ` 2,18,400 (` 4,80,000 - ` 2,70,000 + 4% VAT). Further the reasonability of rates recorded by the Price Evaluation Committee while recommending (2.11.2007) purchase of ventilator from M/s Jaishree Medical Devices does not bear out of record in view of the fact that the department had purchased the ventilator at a much lower rate of ` 2,70,000 + 4% VAT; and it was well within their knowledge that the said firm had quoted higher rates against N.I.T. No.98.

The irregularity was brought to the notice of the department in March, 2010, but no reply has been received (June, 2011).

(MCA/RS/DP-24(G)/2008-09)

102

48. Loss due to non-revision of water charges- ` 2.10 lakh.

Non revision of water charges in respect of 60 staff quarters in Health Centers resulted in loss of revenue of ` 2,09,723.

Delhi Jal Board vide Circular No.DJB/DOR/Tariff/01-1/2004/4778 dated 29.1.2005 revised the water tariff w.e.f. 1.4.2005 according to which the minimum charges for a domestic dwelling unit/domestic connection worked out ` 82.40 p.m. having consumption of water of 20 kl per month. Further Delhi Jal Board vide circular No. DJB/DOR/Tariff/ 2005/2797 dated 28.9.2005 clarified that the minimum consumption of water in respect of domestic water connection where a bulk water connection is feeding to a number of individual dwelling units shall be 20 kl.p.m. per connection.

The record of Dy. Chief Accountant, C.L.Zone for the period 2007-08 and 2008-09, disclosed that 60 occupants of Municipal staff quarters in Health Centres located at different areas, working in I.P.P.-VIII, project are enjoying the facility of water supply from the bulk water connection of the institution by paying only ` 20 & ` 9 per month i. e. at pre- revised rates. These rates were required to be revised keeping in view the above mentioned circulars of Delhi Jal Board, but the department did not do so. This has resulted in loss of ` 2,09,723 for the period 1.10.2005 to 31.3.2010 (as per details given in Annexure ‘C’) to the Corporation.

The irregularity was brought to the notice of the department in May, 2010, but no reply has been received (June, 2011).

(MCA/RS/DP-12(G)/2008-09)

103

49. Loss due to non raising of demand- ` 25.08 lakh.

No demand on account of feeding charges for ` 22,81,749 and cost of microchips for ` 2,26,000 was raised against D.C.B. & N.D.M.C. This has resulted in loss of revenue amounting to ` 25,07,749.

As per minutes of the meeting of the Committee appointed by the Hon’ble High Court to monitor and carry out direction of the Hon’ble High Court of Delhi pertaining to stray cattle, functioning of the Gosadans, relocation of illegal dairies etc. convened on 25.1.2006, it was decided that the expenditure incurred by the M.C.D. over identifications of the cattle (which shall be brought by the NDMC/Delhi Cantonment Board) through Micro-chips @ ` 500 as well as the amount of grant-in-aid towards feeding charges provided by M.C.D. to the various Gosadans @ ` 20 per day per cattle shall be reimbursed to M.C.D. by NDMC/Delhi Cantonment Board respectively on annual basis.

A test check of records of Veterinary Officer (H.Q.) disclosed that Delhi Cantonment Board and New Delhi Municipal Committee impounded 504 cattles (329 D.C.B. + 175 N.D.M.C.) in the Municipal Cattle Ponds during 27.7.2005 to 2.4.2007 out of which in 452 cattles (296 D.C.B. +156 N.D.M.C.) microchips were inserted by M/s Everest Enterprise Pvt. Ltd. But the department neither raised demand on account of feeding charges for ` 22,81,749 ( ` 15,34,423 D.C.B. + ` 7,47,326 N.D.M.C.) nor cost of microchips for ` 2,26,000 (452 X ` 500) against D.C.B. & N.D.M.C. in pursuance of aforesaid minutes/decision with the result the Corporation suffered loss of revenue amounting to ` 25,07,749.

Further, the department did not furnish the information/reply to following audit observations:

- Reasons for not raising the demand against D.C.B. & N.D.M.C.- Position of the cattle impounded, identified, auctioned and shifted to

Gosadans during 2006-07 to 2008-09.- Whether any auction for disposal of impounded cattle was held during

2005-06 to 2008-09?

104

The matter was brought to the notice of the department in October, 2008, but no reply has been received (June, 2011).

(MCA/RS/DP-57(G)/2008-09)

50. Loss due to under fixation of ground rent- ` 13.97 lakh.

Initial allotment of land on the ground rent of ` 35,584 instead of applicable rate of ` 86,400 and its further renewal of lease for a period of 30 years with respect to the old rate of ` 35,584 resulted in loss of ` 13,96,509.

The Corporation vide decision No.3598 dated 21.2.1994 had approved transfer of 733 sq.yards (6600 sq.ft.) of land at Loni Road to M/s Hindustan Petroleum Corporation Ltd. for its retail outlet M/s Kundan Lal Filling Station on the usual terms & conditions of lease subject to the condition that latest rate of ground rent notified by Government of India (Ministry of Urban Development) shall be charged and latest instruction, terms & conditions of Government of India on the subject shall be followed.

The records disclosed that the land was allotted on ground rent basis @ ` 35,584 per annum without executing any agreement/lease deed vide letter No.LI-II/L&E/94/P-3007 dated 2.3.1994 with the condition that the rates will apply from the date of handing over the possession of land. The lease for filling station was for ten years and ground rent was to be revised by 40% every five years and the allotment was on purely temporary basis. The condition approved by the Corporation that latest rate of ground rent notified by Government of India (Ministry of Urban Development) shall be charged and latest instructions, terms & conditions shall be followed, was not inserted in the allotment letter dated 2.3.1994. The physical possession of land was handed over to M/s HPCL on 20.12.1994.

On the request (8.12.2004) of the firm for renewal of the lease for a period of 99 years, the department placed the proposal for extension of lease of land before the Standing Committee in July, 2006 i.e. after two & a half years of the receipt of the letter of M/s HPCL without confirming the prevalent rate of licence fee/ground rent of petrol pump sites etc. from MOUD & DDA. The Corporation vide its Resolution No.404 dated 23.8.2006 approved the proposal for the

105

extention/renewal of lease of Kundan Lal Filling Station for 30 years at the old rates of ` 35,584 with the 40% revision in the ground rent after every five years.

The allotment of land at ground rent of ` 35,584 (` 29,654 for 5500 sq.ft. + ` 5,930 for additional 1100 sq.ft.) w.e.f. 20.12.1994 and its further renewal for a period of 30 years at the old rate of ` 35,584 with 40% revision in ground rent after every five years was not in order for the following reasons :-

(i) By the time, the land was allotted to M/s HPCL on the ground rent of ` 35,584 (`29,654 + ` 5930) based on the rates circulated by MOUD vide letter dated 23.11.1978 applicable w.e.f. 15.1.1979, their new rate of ` 57,334 (` 47,778 for 5500 sq.ft. + ` 9,556 for additional 1100 sq.ft.) had come into force vide letter dated 4.12.1986 w.e.f. 1.10.1986. As no further revision of rates had taken place the Finance Wing of D.D.A. approved the provisional rates of petrol pump sites w.e.f. 1.1.1994 pending revision by MOUD as under :-

Area of the site Provisional rate 100 ft. X 55 ft. ` 72,000120 ft. X 100 ft. ` 2,41,000150 ft. X 120 ft. ` 3,97,000

As such, the allotment of land in March, 1994 should have done based on rate ` 86,400 (` 72000 for 5500 sq.ft. + ` 14,400 for additional 1100 sq.ft.) approved by the D.D.A. w.e.f. 1.1.1994 instead of ` 35,584 (` 29,654 + ` 5,930) which was based on MOUD’s and was prevalent about 15½ years back.

(ii) Similarly, further renewal of lease for a period of 30 years at the old rate of ` 35,584 which was prevalent 27½ years back with the 40% revision in ground rent after every five years in July, 2006 should have been done based on the rate of ` 2,17,570 (` 1,81,308 for 5500 sq.ft. + ` 36,262 for additional 1100 sq.ft.) which had been revised by MOUD w.e.f. 27.5.2006 and conveyed to M.C.D. vide their letter dated 21.7.2006.

106

Thus, initial allotment of land on the ground rent of ` 35,584 (` 29,654 + ` 5,930) instead of applicable rate of ` 86,400 (` 72000 + ` 14,400) and its further renewal of lease for a period of 30 years with respect to the old rate of ` 35,584 with 40% revision after every five years instead of ` 2,17,570 resulted in loss of ground rent of ` 13,96,509 as detailed below:-

S. N.

Period Old rates 1978 (`)

Revised rates 1.1.94/27.5.06

(`)

Difference (`)

Amount (`)

1 Dec., 1994 to Nov., 1999 (5 years)

35,584 86,400 50,816 2,54,080

2 Dec., 1999 to Nov., 2004 (5 years)

49,818(35,584+40%)

1,20,960(86,400+40%)

71,142 3,55,710

3 Dec., 2004 to May, 2006 (18 years)

69,744(49,818+40%)

1,69,344(1,20,960+40%)

99,600 1,49,400

4 June, 2006 to Nov., 2009 (42 months)

69,744 2,17,570 1,47,826 5,17,391

5 Dec., 2009 to Nov., 2010 (1 years)

97,642 2,17,570 1,19,928 1,19,928

13,96,509

The irregularity was brought to the notice of the department in April, 2010 but no reply has been received (June, 2011).

(MCA/RS/DP-38(G)/2008-09)

107

51. Non-recovery of ground rent from Delhi Jal Board- ` 9.15 lakh.

An amount of ` 9.15 lakh on account of ground rent has not been recovered from Delhi Jal Board.

Corporation vide Resolution No.239 dated 18.7.2005 approved allotment of land measuring 2.5 acre in between Jawahar Lal Nehru Marg and Asaf Ali Road opposite Lok Nayak Hospital to Delhi Jal Board for construction of underground reservoir and booster pumping station @ ` 53,24,000 per acre (provisional). In addition to this, D.J.B. was to pay ground rent @ 2.5% per annum. The actual land area available at the site was 8026.69 sq.m (1.983 acre).

On depositing an amount of ` 1,25,00,337 by Delhi Jal Board vide G-8 receipt No.658015 dated 16.12.2005, the possession of the land measuring 1.983 acre was handed over to them on 26.4.2006. The Delhi Jal Board authorities have not been making the payment of ground rent since 2007-08 onwards nor did the Land & Estate department issue any demand notice to this effect to them. This has resulted in non-recovery of ground rent amounting to ` 9,14,661 (` 3,04,887 X 3) from D.J.B. for the years 2007-08 to 2009-10. Besides this, the cost of boundary wall, Iron grill, trees and a boring pump existed on the land at the time of handing over the possession of the land, was also not recovered from D.J.B. as required.

The irregularity was brought to the notice of the department in April, 2010, but no reply has been received (June, 2011).

(MCA/RS/DP-46(G)/2008-09)

108

52. Short deposit of cash in Municipal treasury- ` 50,500.

An amount of ` 50,500 was remitted short into Municipal Treasury.

A test check of G-8 receipts alongwith day wise Reports of Citizen Service Bureau (CSB), Town Hall for the period 2008-09 disclosed that on the three occasions, the C.S.B’s. staff deposited less amount than that of what actually collected by them with CMS Securities Ltd. being a collection agency authorized by UTI bank (now Axis bank). This was manipulated by showing the wrong totals of day wise Reports. This has resulted into short deposit of cash of ` 50,500 as detailed below in Municipal treasury:-

S.N.

Date Total as per day wise report (`)

Actual total (`)

Difference

(`)1 20.1.2009 85,730 95,230 9,5002 29.1.2009 1,50,326 1,70,826 20,5003 18.2.2009 48,120 68,620 20,500

50,500

The irregularity was brought to the notice of the department in March, 2010, but no reply has been received (June, 2011).

(MCA/RS/DP-51(G)/2008-09)

109

53. Non recovery of printing charges from Government departments/ Agencies- ` 35.08 lakh.

Printing charges amounting to ` 35,08,341 pertaining to the period from 11.8.1995 to 31.3.2010 have not been recovered from 25 departments of G.N.C.T. of Delhi.

The Printing & Stationery department has been executing the printing work

not only of General Wing of M.C.D., but also of various departments of G.N.C.T. of

Delhi. In case of job works of various offices of M.C.D., the department undertake

the work only after receipt of budget slips issued by the intending department

whereas in case of job works of various departments of G.N.C.T. of Delhi, the

department raises the bills after executing the job. This practice/act of the

department results in accumulation/delay/non-recovery of dues. A test check of

records disclosed that printing charges amounting to ` 35,08,341 pertaining to

the period from 11.8.1995 to 31.3.2010 were still to be recovered from 25

departments of G.N.C.T. of Delhi as on 31.3.2011 as detailed below.

S.N.

Name of Office Bill No. & date Amount (`)

1 Deputy Commissioner, DelhiCare Taking Branch, Tishazari, Delhi

3461/31.12.1997 1,64,053

2 Director of Health Services, Saraswati Bhawan, E-Block Cannaught Place, New Delhi

[Sh. Guru Gobind Singh Govt. Hospital, Raghubir Nagar, New Delhi.]

3002/11.8.19953190/20.3.19963602/20.3.19963479/3.3.19983555/4.3.19993592/21.10.19993607/16.12.1999

5091,356

Duplicate Bill1,428

40,8662,1364,298

3 Guru Nanak Eye Centre, Maharaja Ranjeet Singh Marg, New Delhi

3781/31.3.20053890/24.1.20093894/14.2.20093920/12.2.20103921/12.2.2010

14,19672,4928,418

37,11613,525

4 General Admn. Department (Secretary) G.N.C.T. of Delhi-5, Sham Nath Marg

3467/12.1.19983471/2.2.19983502/21.5.1998

389389437

5 D.M.S. Guru Teg Bahadur Hospital, Shahdara, Delhi-95

3328/7.11.19963749/22.2.2004

5,2201,51,921

6 I.G. (Prison) Tihar, New Delhi Central Jail, Tihar, New Delhi

3292/6.9.1996 1,178

110

7 Commissioner, Labour, G.N.C.T. of Delhi-15, Rajpur Road, Delhi.

3652/9.3.20013707/11.10.20023708/11.10.20023731/10.4.20033732/10.4.20033803/21.2.20063823/12.5.20063824/25.6.20063834/15.7.2006

1,68617,20245,41666,62473,5731,308

34,0692,232

99,1268 Directorate of Education G.N.C.T. of Delhi, Old

Sectt., Delhi3888/24.1.2009 86,100

9 Sales Tax Commissioner, G.N.C.T. of Delhi, Commissioner, Sales Tax Bikrikar Bhawan, I.T.O., New Delhi.

3138/29.1.1996 1,69,980

10 Slum & J.J., Delhi Government 3799/20.12.20053804/21.2.20063842/19.8.20063866/15.9.20073901/14.5.20093916/2.2.2010

49,04450,85622,5242,852

29,68840,408

11 Principal Secretary (Urban Development Delhi Admn), Vikas Bhawan, Delhi

3236/11.6.19963458/3.12.19973478/24.2.19983527/21.10.19983531/3.11.19983556/12.3.19993570/10.5.19993579/17.7.1999

426882

69,366737

2,38711,760

963540

12 Asstt. Commissioner (Water), Delhi Government

3742/16.9.20033743/16.9.20033879/17.1.20093880/17.1.20093904/14.5.20093909/12.12.20093910/12.12.20093911/12.12.20093912/12.12.2009

34,58446,18148,264

1,68,29276,320

1,25,01598,405

1,09,2631,85,169

13 P.R.O. (Water) 3525/8.10.19983529/3.11.19993643/15.12.20003644/15.12.20003645/15.12.2000

1,4402,784

70,20476,26870,173

14 Delhi Fire Service, Cannaught Place 3710/30.10.2002 4,20015 Secretary Home-III, 5 Sham Nath Marg 3287/31.8.1996 53,01616 Directorate of Transport 3286/31.8.1996

3329/7.11.19963329/7.11.1996

4,7888,0528,532

17 Principal of Nehru Homeopathic Medical College & Hospital, B-Block, Defence Colony, New Delhi

3550/13.2.19993551/13.2.19993552/13.2.19993596/26.10.19993619/19.6.20003667/18.7.20013677/15.9.2001

8505,260

52517,56822,61022,879

53918 Dr. N.C. Joshi M. Hospital Karol Bagh, G.N.C.T.

of Delhi3716/25.1.2003 1,212

19 Delhi Khadi & Village and Board Kasturba 3595/26.10.1999 2,880

111

Gandhi Marg, Parliament Street, New Delhi20 Registrar co-op. societies G.N.C.T. of Delhi,

Old Court Bldg. Parliament Street, New Delhi3308/18.9.19963485/16.3.1998

22,89617,868

21 Joint Director (Planning) 6th Level-B-Wing Delhi Secretariat, I.P. Estate, New Delhi-02

3828/18.5.2006 5,460

22 Commissioner of Industries, G.N.C.T. Delhi, C.P.O. Bldg. Kasmere Gate

3360/10.1.19973675/15.9.1999

6,73,416708

23 Directorate of Indian system of Medicines and Homeopathy, G.N.C.T. of Delhi, Karol Bagh

3770/5.4.20033773/22.5.2003

5,8684,668

24 Secretary, D.S.S.B., G.N.C.T. of Delhi 3rd Floor, U.T.C.S., Bldg. Ind area Shahdara

3593/26.10.1999 28,200

25 Principal, Dr. B.R. Sir Homeopathic Medical College & Hospital, Nanak Pura Moti Bagh

3677/15.9.20013709/30.10.20023773/4.1.2004

53882,1571,613

Total 35,08,341

The matter was brought to the notice of the department in January, 2009, but no reply has been received (June, 2011).

(MCA/RS/DP-58(G)/2008-09)

112

54. Outstanding Audit Reports, Inspection Reports and Audit Objections.

The Para indicates the position of outstanding paras of Annual Audit Reports upto the year 2007-08 presented to the Standing Committee as well as the position of Inspection Reports/Audit Notes and objections included therein issued upto 31.3.2010. These Audit Objections and Audit Paras had not been settled in the absence of replies from various departments despite directions of the Corporation for furnishing replies in a fixed time schedule.

(a) Outstanding paras of Audit Reports.

There were 895 Audit Paras relating to financial irregularities commented upon in the Audit Reports upto the year 2007-08 lying outstanding as on 30.4.2011. Year-wise number of outstanding paras for the period 1958-61 to 2007-08 is as under:-

Year No. of outstanding paras1958-61 41961-62 11962-63 21963-64 11965-66 21966-67 21967-68 21968-69 21969-70 61970-71 41971-72 91972-73 51973-74 51974-75 81975-76 191976-77 201977-78 201978-79 151979-80 10

113

1980-81 111981-82 91982-85 101985-86 161986-87 181987-88 81988-89 111989-90 111990-91 111991-92 101992-93 181993-94 201994-95 331995-96 241996-97 371997-98 451998-99 381999-00 382000-01 522001-02 512002-03 442003-04 382004-05 462005-06 362006-07 332007-08 41Total 846

The Department wise break up is as under:-

S. No. Department No. of paras outstanding

1 Receipts(Property Tax, Advertisement, R.P. Cell & Licencing)

411

2 Works Management(Engineering, Building, DEMS & Town Planning)

221

3 Health 884 Horticulture 165 Education 196 Land & Estate 297 Accounts 268 Misc. 36Total 846

114

In addition to above 846 paragraphs there were 49 audit paras of different Audit Reports which being related to Outstanding Audit Reports, Inspection Reports & Audit objections, Recoveries made at the instance of audit were more or less informative in nature. The relevant paragraphs in the latest Audit Report reflect the updated status relating to Outstanding Audit Reports & Inspection Report/Audit Notes.

(b) Outstanding Inspection Reports/Audit Notes & Vouching Notes.

The Corporation vide resolution No.32 dated 3.9.1959 has prescribed a time limit of one week for disposal of Audit Objections by the departmental officers and 10 days in the case of disposal by the Commissioner.

There were 66251 Audit Objections/Items, which could not be settled in absence of replies. Year-wise number of outstanding Reports and also department wise outstanding Reports and objections for the period 1964-65 to 2008-09 as on 31.3.2010, is as under: -

Year to which Inspection Reports/ Audit Notes relate

No. of outstanding Inspection

Reports/Audit Notes

No. of outstanding Items.

1964-65 1 31965-66 1 11966-67 1 51967-68 2 111968-69 2 111969-70 1 41970-71 11 591971-72 28 1441972-73 47 2341973-74 71 3371974-75 92 5471975-76 95 5831976-77 103 659

115

1977-78 143 9061978-79 151 9931979-80 181 9951980-81 189 10371981-82 193 10781982-83 231 12511983-84 236 13361984-85 220 13791985-86 214 13891986-87 238 15591987-88 205 13701988-89 188 13831989-90 231 16911990-91 183 15461991-92 166 14231992-93 154 16121993-94 169 21111994-95 200 24141995-96 183 23481996-97 207 26481997-98 237 28391998-99 267 32731999-00 247 30962000-01 223 28842001-02 231 31452002-03 254 32502003-04 229 30132004-05 236 24792005-06 228 22982006-07 270 25702007-08 241 23562008-09 193 1981Total 7193 66251

116

The Department wise break up is as under:-

Department No. of outstanding Inspection

Reports/Audit Notes.

No. of Items

Engineering 2052 23090Health 1640 10300Accounts 554 3232Asstt. Commissioner/Addl. Dy. Commissioner

425 4359

Education 377 3542Garden 392 3915C.S.E. 551 6069Assessment & Collection

669 7959

Toll Tax 17 227Miscellaneous 516 3558Total 7193 6625

1

(c) Objections for want of Vouchers & Payees' stamped receipt.

1518 objections pertaining to the period from 1974-75 to 1993-94 involving an amount of ` 1,42,32,545.38 were outstanding as on 31.3.2010 for want of paid vouchers and payees' stamped receipts.

(MCA/RS/DP-59(G)/2008-09)

117

118