Calcutta High Court Enforces Payment of Contractor Dues in Municipal Work Order Dispute

Introduction

The Calcutta High Court, in a writ petition filed by contractor Amjad Hossain against the State of West Bengal and others, has directed the immediate release of a balance payment of Rs. 22,90,039 along with 6% interest to the petitioner for completed civil construction work. Presided over by Justice Aniruddha Roy at the Circuit Bench in Jalpaiguri, the ruling underscores the constitutional obligation of municipal authorities to honor admitted liabilities under Article 226, preventing infringement of property rights. The case highlights tensions between local bodies and state funding mechanisms in settling contractor claims.

Case Background

Amjad Hossain, the petitioner, was awarded a work order on September 26, 2018, by the relevant municipality for civil construction projects. He completed the work to the municipality's satisfaction, as evidenced by completion certificates issued between September 2, 2019, and May 6, 2022, with no objections raised. A partial payment of Rs. 22,48,000 was made, leaving a balance of Rs. 22,90,039 unpaid. The dispute arose when the municipality sought but failed to obtain further funds from state authorities, prompting Hossain to file WPA 1746 of 2025 under the constitutional writ jurisdiction. The key legal questions centered on the municipality's liability to pay admitted dues, the state's role in funding release, and whether withholding payment violated the petitioner's constitutional rights to property.

Arguments Presented

The petitioner's counsel, Mr. Debayan Goswami and Ms. Debadrita Maitra, argued that the work was fully executed without demur, supported by certificates and partial payment, establishing an admitted liability. They emphasized the municipality's repeated requests for fund release—dated March 2, 2020; August 22, 2023; and January 10, 2025—demonstrating satisfaction with the work and acknowledgment of the outstanding amount.

For the respondents, the state's counsel, Mr. Hirak Barman and Mr. Sourav Sarkar, contended that funds are allocated in bulk to municipalities rather than project-specific, and without further government approval, release was not possible. They asserted that payment responsibility lies solely with the issuing municipality. The municipality's counsel, Mr. Satarudriya Mukherjee and Ms. Tannu Agarwal, highlighted the fund release requests and an acknowledgment from state offices but deferred to the state's funding policy, admitting the work's completion while citing financial constraints.

Legal Analysis

Justice Aniruddha Roy analyzed the case by recognizing the jural relationship between the petitioner and the municipality, established through the tender, work order, and unobjected completion. The court applied principles under Article 226, holding that Article 12 authorities like municipalities must discharge obligations to avoid infringing fundamental rights, particularly the right to property. No precedents were explicitly cited, but the reasoning drew on established writ jurisdiction to enforce admitted liabilities, distinguishing between bulk funding practices and the municipality's direct contractual duty. The partial payment and fund requests were treated as admissions, rendering denial impermissible. The court clarified that while state funding is procedural, it cannot absolve the municipality's legal obligation, invoking constitutional remedies to prevent rights violations.

Key Observations

• "The entire work has been completed by the petitioner to the satisfaction of the concerned municipality as would be evident from the Work Completion Certificates... No objection or demur was raised as against the work done by the petitioner by the concerned municipality."
• "When the tender was floated and the Work Order was issued and the work has been done successfully, it is the legal obligation on the part of the concerned municipality to pay the entire billed amount to the petitioner. More so, when the part payment has been made in 2018, it shows the admission and acknowledgement of liability towards the petitioner."
• "Withholding it [the admitted sum] without due process of law is a clear violation of the right of the petitioner guaranteed under Constitution."
• "This Constitutional Court in exercise of its jurisdiction under Article 226 of the Constitution of India has plenary power to direct such Article 12 authority to discharge its obligations and duties to prevent the infringement of right of the party."

Court's Decision

The court disposed of the writ petition with mandatory directions: If the state respondents (Nos. 3 and 4) are responsible for funding, they must release Rs. 22,90,039 plus 6% interest from March 2, 2020, to the municipality within four weeks; alternatively, they must clarify non-responsibility in writing within two weeks. Upon receipt, the municipality must pay the petitioner within two weeks; if solely the municipality's duty, payment must follow within four weeks of state communication. These orders are peremptory, with no costs awarded. The decision reinforces accountability for public authorities in contractor payments, potentially streamlining future disputes by prioritizing admitted dues and interest to deter delays. It may influence similar cases involving municipal funding bottlenecks, ensuring constitutional protections for economic rights in public works.