Taking action against a private firm managing city bus services, the municipal corporation (MC) has seized a bank guarantee worth ₹40 lakh by the company for alleged violations of contractual terms.

According to MC officials, the buses returned by the private firm are in poor condition. Most of the essential components of the buses like batteries are not working, rendering them unfit for service.

In response, the MC has written to the bank, requesting the forfeiture of the guarantee given by the Horizon company. Additionally, officials have said they would take legal action in the matter.

The contract of the city bus service was terminated by the municipal corporation on February 26. A private company returned the first batch of 30 buses to the civic body nine days ago, with the remaining buses to be returned in the upcoming months. The company is obligated to return a total of 82 buses to the municipal corporation.

According to officials, all the returned buses have been taken to the Tajpur Road depot for inspection and management.

Discrepancies during the company’s contract with the civic body were highlighted by the MC in a letter dated January 30 in which the firm was instructed to return the buses or pay a fee.

Since the buses were initially handed over to the operator in 2015, the MC had set rates for various routes in the city. Presently, only 35 buses remain operational, serving the Kohara, Sahnewal, and Meharban routes.