The Boxing Federation of India (BFI) asserted that the International Boxing Association (AIBA) acted in "haste" after the hosting rights of the 2021 men's world championship were taken away from the country for non-payment of host city fee.
In a statement on Monday night, AIBA handed over the championship, originally allotted to India in 2017, to Serbian capital Belgrade.
The BFI acknowledged the delay in payment but blamed it on "procedural complications" arising out of the AIBA's failure to resolve "issues" with regards to the account in which the money was to be transferred.
The payment of what is estimated to be USD 4 million was due to be made on December 2 last year.
"After New Delhi didn't fulfill its obligations to pay host fee as mentioned in the Host City Agreement terms, AIBA has terminated the contract.
Therefore, India would have to pay a cancellation penalty of USD 500," the AIBA said in a statement.
The elite competition would have happened for the first time in the country.
The BFI, headed by Spicejet Airlines owner Ajay Singh, said the AIBA could not clearly tell where to transfer the money and invited fresh bids for the event a day before the payment deadline.
"...we have reasons to believe that the decision to change the venue of WCH-2021 was taken in haste without due consultation with BFI...the penalty that is imposed is shocking and surprising
"...both parties are working for an amicable solution. BFI is confident that the penalty will be waived off and we will host World Championships in future," the BFI statement read.
AIBA has been suspended by the International Olympic Committee (IOC) for administrative and financial mismanagement. The world body has also been barred from conducting the Olympic competition for the sport.
"AIBA account in Lausanne was frozen. The account of AIBA in Switzerland as mentioned in Host City Agreement is still inoperative. AIBA intended to have some previous payments through an account in Serbia.
"As Serbia is in the Grey List of Financial Action Task Force (FATF) countries, Indian Banks do not normally send money to Serbia. AIBA could not resolve these issues," said the BFI.
"The account of AIBA in Switzerland, as mentioned in Host City Agreement, is still inoperative," it added.
The national body conducted the women's world championship in 2018 and won the hosting rights of the Asian Championships later this year just weeks ago.
The AIBA said it is glad to have found a new host for the event, which would be held in an Olympic year now after the Tokyo Games had to be postponed in view of the COVID-19 pandemic.
"It's a big step toward our new competition system and also the financial stability of our organisation, which is going to be less and less dependent on the Olympic money," AIBA Interim President Mohamed Moustahsane said.
"Because of rescheduling of the Olympic 2020, AIBA Executive Committee will discuss with the host country possible dates to adjust," he added.
"We believe that we will keep planned time-frame and conduct World Championships in 2021 after the Games if the pandemic situation is under control."
President of the Serbian Boxing Federation, Nenad Borovcanin welcomed the Championships back to Belgrade after 43 years.
"After the historical tournament of 1978 in the capital city of Yugoslavia, this is the second time for our nation to be back as hosts. I strongly believe that the Serbian Boxing Federation will do a fantastic job in organising this tournament...," he said.