Section 29 of Establishment and Constitution of Authority — Provided that no such claim or demand exceeding twenty-five thousand rupees shall be compromised except with the previous approval of the State Government

Bare section text

Official Legislative Text

Members and officers to be public servants 29. Every member, every officer and other employees of the Authority shall, when acting or purporting to act in pursuance of the provisions of this Act or any rule or regulation made thereunder, be deemed to be a public servant within the meaning of section 21 of the Indian Penal Code.

Educational Study Layer

Summary

The Authority has the legal power to compromise any claim or demand arising out of contracts entered into under this Act.
The Authority can also compromise any claim or demand arising from legal actions or suits instituted by or against it.
The Authority may agree to settle a dispute for whatever sum of money or other compensation it deems sufficient.
A strict statutory limit applies: no claim or demand exceeding twenty-five thousand rupees can be compromised without the previous approval of the State Government.
For claims or demands equal to or below twenty-five thousand rupees, the Authority can finalize compromises independently without prior government sanction.

Practical examples

1A heritage restoration contractor submits a disputed invoice demanding 22,000 rupees for additional stone masonry work under a contract executed with the Authority. The Authority's Chief Executive Officer and accounting officers examine the claim and negotiate a compromise settlement of 18,000 rupees. Because the total demand does not exceed twenty-five thousand rupees, the Authority formally seals and pays the settlement on 12 March without seeking prior approval from the State Government under Section 28.

2A transport vendor files a lawsuit against the Authority claiming 95,000 rupees in unpaid equipment leasing fees under a site clearance agreement. The Authority desires to settle the pending litigation out of court for an agreed compensation amount of 60,000 rupees. Because the demand exceeds the twenty-five thousand rupee threshold set in Section 28, the Authority drafts the proposed settlement terms and submits them to the State Government, waiting for formal prior approval before finalizing the compromise.

Practice Quiz

Q1.A landscaping firm files a lawsuit against the Authority claiming damages of 40,000 rupees for breach of a maintenance contract. The Authority wishes to settle the suit out of court for 20,000 rupees. Under Section 28 of this Act, what procedure must be followed?

Q2.An electrical supplier claims 25,000 rupees exactly for materials delivered under a contract with the Authority. Under Section 28 of this Act, does the Authority require prior State Government approval to compromise this demand for 20,000 rupees?

Q3.Under Section 28 of this Act, what categories of disputes is the Authority empowered to compromise?

Q4.If the Authority enters into a compromise regarding a contractor's claim of 75,000 rupees without seeking prior approval from the State Government, what makes this action invalid under Section 28 of this Act?

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