Small companies complain non-payment by state-run Instrumentation

NEW DELHI: The Department of Heavy Industry (DHI) has received some representations from small units complaining of non-adherence to payment terms by sick PSU Instrumentation Ltd.

"The Department has received some representations complaining of non-adherence of payment terms for supply of cables by Instrumentation Ltd," Minister of Heavy Industries and Public Enterprises Praful Patel said in a written reply to the Rajya Sabha.

Owing to sickness, time and cost-overrun due to partial implementation of the Modified Revival Scheme of the company, Instrumentation Ltd has been facing a critical financial crisis and acute shortage of funds, he said.

Also, some of the major orders got cancelled or are under arbitration because of which the company's working capital has been blocked, thereby, further aggravating the financial crunch.

Asked if any action has been taken against the management of the company for violation of payment terms, Patel said that at present, even statutory liabilities are not being timely paid resulting into severe defaults. "Since, non-payment is on account of sever liquidity crunch, no action is contemplated against the management of the company."

Further, the minister said, there is no deliberate diversion of funds but the critical funds requirements which are mandatory in nature are being addressed on priority. All our efforts have been made to make all due payments subject to availability of funds.