Awarded ₹6.91 lakh, paid ₹2 crore: Supplyco caught in legal trouble over an unusual settlement
Supplyco faces scrutiny after paying ₹2 crore to settle a dispute, significantly exceeding the ₹94.93 lakh ordered by the council.Summary
Supplyco is embroiled in a legal controversy following an unprecedented settlement with Sans Spices and Curry Powders, a Wayanad-based MSME. The dispute originated in 2007 when Supplyco unilaterally terminated a contract for the supply of Sabari brand coffee. While the Micro and Small Enterprises Facilitation Council initially ordered a compensation of ₹6.91 lakh plus interest, subsequent legal proceedings and interest calculations brought the total payable amount to ₹94.93 lakh.
Despite the court-ordered sum, Supplyco's managing director opted for a settlement of ₹2 crore in 2020 to avoid further litigation. This decision has drawn sharp criticism from the CAG, which noted that the corporation overpaid by ₹1.07 crore. The CAG has demanded the recovery of this excess amount.
During a Legislative Assembly committee hearing, Supplyco officials stated that the managing director responsible for the settlement has passed away. The corporation is now exploring the possibility of recovering the funds from his relatives.
(Source：Mathrubhumi English)