Government must pay interest on delayed payments for ads
If the government does not pay newspapers for its advertisements within a month of publication, it must pay its bill plus 12 per cent interest, says Press Council Chairman Justice Markandey Katju.
After attracting the ire of much of the media for his controversial comments about the quality of today's journalism and its practitioners in his initial weeks at the helm of PCI, Justice Katju is now batting on behalf of newspapers against the government.
In a letter dated November 24, and addressed to the Cabinet Secretary, Information and Broadcasting Ministry Secretary and Chief Secretaries of all States, Justice Katju noted that government departments and statutory bodies often delay the payment of advertising bills for years.
“These newspapers/journals are made to run from pillar-to-post for getting such payments. This often takes several years before the payment is made, if at all,” said the letter. “For example, a case came before the Committee of the Press Council recently, where the Directorate of Advertising & Visual Publicity (DAVP) had not till date made payment for its advertisement in a newspaper published in 1997.”
Such delays amounted to unfair profits for the government and losses for the press, said Justice Katju. He pointed out that with money doubling every seven years due to the accretion of interest, a bill of Rs.100, which was to have been paid by the government in 1997, would have accumulated to Rs.400 by now.
“If the amount of Rs.100 was not paid in the year 1997 when the advertisement/notice was published, and it is offered to be paid only in the year 2011, that means, that the government department/statutory authority has in fact pocketed Rs.300. This is most improper,” he said, adding that the government should in fact be a role model in making prompt payments.
Justice Katju directed that all advertising bills should be paid by the government and its departments within one month of publication, “failing which, they will have to pay the same with interest thereon @ 12% per annum, from the date of payment.” This was not to be considered as a penalty; rather, it was the normal accretion on capital, he said.
He added: “Non-compliance of this directive will be taken very seriously by me, and the person/authority concerned will have to face the consequences.”