GOVERNMENT OF INDIA

MINISTRY OF RAILWAYS

(RAILWAY BOARD )

 No.88/llm(b)/21/76/Audit                                                                     New Delhi. dated 6/8/88

 To

 The General Manager, &

 Chief Administrative Officers (CON).

 ALL Indian Railways.

          Sub:- Non-recovery of risk cost from a contractor.

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 Vide Para 4.18 of the Comptroller and Auditor General's report on Railways for the year ended 1st March, 1987 it has been brought out that the Central Railway Administration failed to initiate action for recovery of an amount of Rs. 1.65 lakhs towards risks cost from the defaulting contractor, even after lapse of 12 years since termination of the contract.

 The Central Railway Administration had explained that delay was party due to the time taken in finalising the risk cost amount recoverable from the defaulting contractor and partly in seeking legal opinion regarding filing of the suit against the defaulting contractor, after he failed to comply with the demand notice for recovery of the risk cost amount. The Law officer of the Railway has confirmed that, as per the law of limitation any suit by or on behalf of the Central Government can be filed within a period of 30 (Thirty) years from the date of cause of action and the suit which has since been filed would, therefore, not be barred by limitation.

 Railway Board desire that all Zonal should conduct a review of all similar cases and ensure that there no avoidable delay in initiating action for recovery of risk cost amounts. As fresh cases of this nature arising in future every Endeavour should be made to complete the desired exercise within a reasonable time frame.

(Rajendra Nath)

                                                                Executive Director Land Management

 Railway Board.