Island aviation violated lease for office space, rent unpaid for over 1 year!
IAS and Islamic Ministry entered a 5-year lease agreement for office space on the 6th floor of the Daarul-Imam building on 16th November 2016.
Daarul-Imam building, office space on 6th floor leased to Island Aviation
The Auditor General's report has revealed that Island Aviation Services Limited violated a lease agreement and failed to pay rent for office space on the 6th floor of the Daarul-Imam building for more than one year.
According to the 2018 audit report of the Ministry of Islamic Affairs publicised on Sunday, the ministry entered a five-year lease agreement with Island Aviation for office space on the 6th floor of the Daarul-Imam building on 16th November 2016. The office space was leased for a total of MVR eight million.
As per the agreement, Island Aviation is stipulated to deposit MVR six million to the ministry's mosque fund within three days of the agreement being signed while the remaining MVR two million must be paid within a month. However, the audit report shows that only MVR two million was deposited to the ministry's fund by Island Aviation and that they did not pay this amount until 3rd April 2018. As such, the report notes that Island Aviation violated the contract since they failed to pay rent for more than one year.
The report also highlights that - at the end of 2018 - the aviation company had yet to pay the remaining MVR six million owed to the ministry at the end of 2018. Therefore, the report states that the ministry will receive no benefit - even if the company pays the amount in full - as 75% of the payment was delayed for a long period of time.
The report further notes that the Islamic Ministry also did not attempt to secure the payment through the court process as specified in article 5.21 of the Public Finance Act (2006) nor did the ministry make attempts to nullify the contract even though the payment had been delayed for such a long period.
As such, the ministry has since entered another agreement with Island Aviation on August 2019 in order to secure the MVR six million debt. Island Aviation has paid a total of MVR three million to the ministry under the new agreement so far, which stipulates that the payment can be made in instalments of MVR one million within six months. The report does not disclose whether the company has paid the remaining MVR three million.
