Chandigarh, February 25
While the alleged largesse extended by the capt Amarinder Singh-led Punjab Government to two profit-making companies in the shape of one-time settlement (OTS) of dues that they owed to government-backed corporations stands challenged in the Punjab and Haryana High Court, the government action has drawn criticism from its own top lawyers, including the advocate-general.

Last year, the government had waived a major portion of the outstanding debt of companies owned by Rana Gurjit Singh, MP, and the Oswal group of Ludhiana.

The Punjab State Industrial Development Corporation (PSIDC) had allegedly suffered a loss of over Rs 26.58 crore due to the highly questionable action of the government.

The PSIDC had sought the legal opinion of the advocate-general on the issue of legal feasibility of the recovery of a huge amount due from collaborators of profit-making companies, who had opted for the controversial OTS scheme.

In his opinion, additional advocate Sanjeev Sharma has clearly stated that “it will be difficult to support the OTS policy in context of profit-making industry that has been extended benefits only on account of the justification that there are inherent difficulties in recovering the amounts from these industries”.

The same officer has further opined that “it is evident that public exchequer money is being gifted to profit-making companies without plausible explanation, thereby calling for remedial actions”.

Advocate-general Rajinder Singh Cheema has supported the view of his law officer.

It is learnt that some other government lawyers, whose opinion had also been sought in the matter, have also junked the policy.

The Punjab Government, it may be recalled, had directed the PSIDC to formulate and offer the OTS scheme to the industries. The Tribune had highlighted the controversial government largesse.

While the family of the MP owed Rs 41.25 crore (Rs 11.50 crore on account of equity and Rs 29.75 crore by way of interest), the Oswal group owed Rs 18.80 crore (Rs 6.11 crore on account of equity and Rs 12.69 crore on account of interest).

In an order on a plea filed by the management of Arihant Industries, presiding officer A.K. Tripathi had observed, “... while discharging my duties as a PO of the DRT, I have come across a large number of cases where I felt that banks and financial institutions are granting heavy concessions by entering into settlement with borrowers under the scheme called one-time settlement (OTS). By such concessions, other debtors/borrowers also get encouraged to commit defaults in repayment, in anticipation that they would be granted concessions and rebates under the OTS scheme.”