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2024 Supreme(Cal) 1173

IN THE HIGH COURT AT CALCUTTA
T. S. SIVAGNANAM, CJ., HIRANMAY BHATTACHARYYA, J.

The Ghani Khan Choudhury Institute of Engineering and Technology & Ors. – Appellants
Versus
M/s. Malda Construction Company & Ors. – Respondents
MAT 1412 of 2023 With I.A. No. CAN 1 of 2023 With MAT 1413 of 2023 With MAT 1414 of 2023 With MAT 1415 of 2023 With MAT 1416 of 2023
Decided On : 02-05-2024

Advocates Appeared:
For the Appellants : Md. Sarwar Jahan Mr. Maidul Islam Kayal Mr. Sayantan Hazra Ms. Tapati Sarkar, Advs.
For the Respondents: Mr. Abhratosh Majumder, Sr. Adv. Mr. Subhabrata Datta Mr. Debasish Sarkar, Advs.
For the Union of India : Mr. Kumar Jyoti Tewari, Ms. Ashima Roy Chowdhury, Mr. Tirthapati Acharyya, Advs.

IMPORTANT POINT
Writ jurisdiction can address non-statutory contract disputes only in exceptional circumstances, and claims must be filed within a reasonable time to avoid being time-barred.

Headnote:

Contract - Payment Obligations - Article 226, Limitation Act - The court discussed the applicability of Article 226 of the Constitution regarding contractual obligations and the Limitation Act concerning the timeliness of claims, emphasizing that delay can bar relief in writ petitions.

Fact of the Case:

The writ petitions arose from the non-payment of final bills for work completed by contractors for the Ghani Khan Choudhury Institute, despite the issuance of a completion certificate. The Institute contested the claims citing procedural issues and the time-barred nature of the claims.

Finding of the Court:

The court found that the Institute's non-payment was arbitrary but also noted that the claims were potentially time-barred and that there was a serious dispute regarding the liability to pay, which should have been resolved through civil proceedings.

Issues: Whether the writ petitions were maintainable given the alleged delay in filing and the existence of a serious dispute regarding the payment obligations under a non-statutory contract.

Ratio Decidendi: The court held that while writ jurisdiction can be invoked for non-statutory contracts, it is limited to cases where the action is arbitrary and that claims must be filed within a reasonable time, aligning with the Limitation Act.

Result: The appeals were allowed, and the impugned judgment was set aside, leaving the writ petitioners to seek relief through appropriate civil proceedings.

JUDGMENT :

(Hiranmay Bhattacharyya, J.) :

1. These appeals at the instance of Ghani Khan Choudhury Institute of Engineering and Technology and its Director, Chairman and others are directed against a common judgment and order dated May 17, 2023 passed in a batch of writ petitions, the lead case being WPA 27966 of 2022.

2. M/s. Malda Construction Company filed two writ petitions being WPA 27966 of 2022 and WPA 28412 of 2022. WPA 28415 of 2022 was at the instance of Subham Enterprise. Gouri Construction filed two writ petitions being WPA 28417 of 2022 and WPA 28419 of 2022.

3. The aforesaid writ petitions were heard analogously by the learned Single Judge and were disposed of by a common judgment and order. The aforesaid appeals arise out of a common judgment and order and common questions of law and fact are involved, for which the aforesaid appeals were heard analogously and are decided by this common judgment and order.

4. The writ petitions involve similar facts and there are minor factual differences including the dates of the correspondences exchanged between the parties. In order to avoid repetition and for the purpose of convenience, the facts of WPA 27966 of 2022 is summarised hereunder and the appeal being MAT 1412 of 2023 arising out of the said writ petition is treated to be the lead case.

5. The Superintending Engineer of Ghani Khan Choudhury Institute of Engineering and Technology, Malda (hereinafter referred to as “the Institute”) issued a Notice Inviting Tender being No. 04 of 2013-2014 dated 27.01.2014 inviting enlisted bona fide contractors to participate in the tender in respect of six items of work relating to Land Development by Earth filling on low land ditches. Considering the rate quoted by the writ petitioner, the proposal of the writ petitioner was accepted and a work order was issued in favour of the writ petitioner on 28.02.2014 in respect of the item of work being (Sl. No. A). The Superintending Engineer handed over the site on March 03, 2014. The 1st and 2nd running bills raised by the petitioner on May 14, 2014 and June 20, 2014 respectively were honoured. Completion certificate was issued on January 7, 2015. The writ petitioner, by a letter dated February 23, 2015, requested the Superintending Engineer of the Institute i.e., the 4th appellant herein to release the payment against the 3rd Running Account cum Final Bill. Petitioner claims to have submitted several representations and the last of such representation was addressed to the Assistant Registrar (Finance) of the Institute bearing the date January 25, 2017. Being aggrieved by the withholding of the final payment against the work order issued in favour of the writ petitioner, the said writ petition was filed.

6. Institute contested the writ petition by filing a report in the form of an affidavit and the writ petitioner filed an exception to the report filed by the Institute.

7. The learned Single Judge noted that the Institute, by issuing the completion certificate, has admitted that the petitioners have successfully completed the work. The learned Single Judge observed that the non-payment of the petitioners’ bills despite the petitioners’ completing the work to the satisfaction of the Institute amounts to arbitrary and unreasonable conduct on the part of an entity amenable to Article 226 of the Constitution of India. After recording the aforesaid findings, the learned Single Judge allowed the writ petitions with a direction upon the Director of the Institute to release the amounts as indicated in the impugned order along with the security deposits furnished by the petitioners and with interest at 6% per annum with each of the amounts indicated in the said order from the dates on which the 3rd and final running account bills were raised to the dates of payment.

8. Being aggrieved, by the said judgment and order, the Institute has approached this Court with these intra-court appeals.

9. Md. Sarwar Jahan, learned Advocate appearing in support

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