The Railways has decided to allow for three month extension for settlement and resolution of contractual disputes under the ‘Vivad Se Vishwas’ scheme. The deadline for submission of claims is extended till March 31, 2024. 

As per a recent memo, it was noted that the Vivad Se Vishwas II (Contractual Disputes) had commenced from July 15, and the last extended date for submission of claims was December 31.

“It has been decided that the claims under the subject scheme can now be submitted till 31.03.2024,” the memo reviewed by businessline shows. 

Subsequently, an order was issued to CRIS (Centre for Railway Information System) — which develops the IT and software for the Ministry — to make its systems ready in this respect. 

“DoE... has decided that the claims under the subject scheme can now be submitted till 31.03.2024. The same is hereby enclosed for compliance. CRIS shall make the system ready accordingly and also display the information on its homepage as well as on login to all vendors,” the January 1 order reads. 

Contractors should submit their claims through Government e-Marketplace (GeM); while for non-GeM contracts of Ministry of Railways, contractors should register their claims on IREPS. 

Existing Guidelines  

The Vivad Se Vishwas II scheme, launched for resolving contractural disputes, had an initial deadline of October 31. It was then extended by two more months. 

 In most cases where arbitration award is challenged, majority are decided in favour of the contractor. The amount is payable with interest, with the latter at a rate which is often far higher than the government’s cost of funds.

The NITI Aayog had also established a task force on conciliation mechanism, and the report of the task force mentioned that contracts between government and private  entities are critical not only to facilitate an overall pro-business environment; and also to attract private investments here. 

It was also noted that more efforts are required to clear the backlog of old litigation cases. 

“Such cases are holding back fresh investment, reducing the ease of doing business with the government, tying up scarce working capital and indirectly reducing competition for newly floated tenders,” the attachment to the office memo of the Railways reads. 

The detailed settlement guidelines mention, in case a court awards a resolution order on or before April 30, 2023, contractors will be offered a settlement amount of up to 85 per cent of the net awarded or upheld by the court. Similarly, for arbitral awards passed on or before January 31, 2023, the settlement amount offered will be up to 65 per cent of the net amount awarded. 

Settlements So Far 

Under the Vivad Se Vishwas scheme I, the Finance Ministry announced that over 10,000-odd claims have been resolved and over ₹256 crore disbursed. 

This scheme was then designed to offer relief to MSMEs during the pandemic. 

The Ministry of Petroleum and Natural Gas (MoPNG) had provided the highest settlement totalling ₹116.47 crore (including both settled claims and amounts paid). 

The Railways cleared claims worth ₹79.16 crore disbursed for 2,090 claims; Ministry of Defence disbursed ₹23.45 crore for 424 claims; Steel Ministry disbursed ₹14.48 crore for 244 claims and the Ministry of Power disbursed ₹6.69 crore for 119 claims.