IL&FS Engineering and Construction Company has received letter from Paschimanhal Vidyut Vitran Nigam, Meerut (PVVNL) for termination of contract for rural electrification works (RE works) of villages of Moradabad district.

The reason given for the termination is that the company has completed work in 929 villages against scope of 1028 villages about 89% of awarded works. Client terminated the contract due to slow progress / stoppage of balance works. Whereas, the company stopped work due to payments held up by PVVNL.

The impact to the company due to the termination of the contract is Rs 46 crore bank guarantees held by client and unpaid bills of Rs 57 crore.

As per the company, the termination is illegal. Accordingly, the company is in the process of initiating legal / contractual actions against the said termination to protect its rights and entitlements in terms of the provisions of the Contract.

Shares of the company declined Rs 0.2, or 0.53%, to trade at Rs 37.60. The total volume of shares traded was 16,325 at the BSE (10.13 a.m., Monday).