Shillong, Feb 20 : The Meghalaya government is exploring legal options to realise an outstanding amount of Rs 35 crore from a firm — MS Associates — to conduct online lottery in the state.
The online lottery firm is yet to pay the dues since 2002 even as the government made several efforts to realise the amount.
The principal secretary, taxation, B.K. Dev Verma today said reminders were sent to the firm recently asking them to pay the amount at the earliest or face the court of law. Verma said if the company did not pay the outstanding dues at the earliest, the first step would be to go for arbitration with the firm to have an out-of-court settlement.
“If the firm still does not agree to arbitration, then we will have no other option but to finally settle the dues in the court,” Verma said.
In 2001, the government entered into an agreement with the firm, for the first time, with a guaranteed amount of Rs 3 crore, payable to the government in the first year.
The agreement was further amended in 2002 as the firm offered to pay Rs 12 crore a year and to organise not less than 4,000 draws a year. After conducting as many as 14,910 draws, the firm could only pay Rs 19 crore and the remaining balance was Rs 35 crore.
In October 2004, the firm, through a letter, had asked the state government to halve the minimum guaranteed amount from Rs 12 crore per year. The firm in a letter addressed to the government in January 2005 also wanted the government to treat the online lottery on a par with paper lottery.
The government in January 2006 constituted a negotiation committee to examine the suggestion of the firm and also to realise the pending dues. The committee, however, did not accept the firm’s suggestion to treat online lottery on a par with paper lottery.
The government is of the opinion that as online lottery in the state has not been operational since 2005, the option before it is to realise the pending amount of Rs 35 crore at the earliest.
However, the Comptroller and Auditor General (CAG) of India’s directive to set up an independent internal audit wing to review the agreements related to online lottery offers hope to the state government.
According to the CAG, during the four years of operation from the amended agreement from 2002 to 2005, the distributor was liable to pay a revenue of Rs 54.08 crore according to the terms of the pact with the Meghalaya government. Out of this amount, only Rs 19 crore was paid by the distributor leaving an unpaid balance of Rs 35.08 crore.
“Besides this, after the distributor arbitrarily suspended the online lottery operation in 2005, the minimum guaranteed amount of Rs 16 crore could not be realised,” the CAG said.