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IN THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
MICHAEL ZOTHANKHUMA, J.
M/s J.K. Construction Co. And Anr – Appellants
Versus
The State Of Assam And Ors – Respondents
WP(C) 1987 of 2022
Decided on : 05-03-2024
Contractual Dispute - Non-payment of Bills - Arbitration Clause - [Improvement of BBDC Road] - [Arbitration and Conciliation Act, 1996] - [Clause 25.3(a) of the General Conditions of Contract] - The court discussed the non-payment of outstanding bill amount for the project work and the conflicting stands of the parties. It highlighted the legal principles regarding the maintainability of a writ petition in contractual matters, the significance of admitted liabilities, and the discretion of the court in exercising jurisdiction in such cases. The court ultimately directed the parties to resolve their dispute through the arbitration clause provided in the contract agreement.
Fact of the Case:
The petitioner completed contract works but was not paid the outstanding bill amount. Completion certificates were issued, and the petitioner sought payment based on the certificates and liability statements. The respondents disputed the completion of the works and raised issues regarding the release of funds by the Central government and the completion timeline.
Finding of the Court:
The court found conflicting stands and serious disputed questions of fact, requiring evidence to be led. It emphasized the significance of admitted liabilities and the discretion of the court in exercising jurisdiction in contractual matters. Ultimately, the court directed the parties to resolve their dispute through the arbitration clause provided in the contract agreement.
Issues: Non-payment of outstanding bill amount, completion of contract works, release of funds by the Central government, and the discretion of the court in exercising jurisdiction in contractual matters.
Ratio Decidendi: The court highlighted the significance of admitted liabilities, conflicting stands, and serious disputed questions of fact in contractual matters. It emphasized the discretion of the court in exercising jurisdiction and directed the parties to resolve their dispute through the arbitration clause provided in the contract agreement.
Final Decision: The court disposed of the writ petition and directed the parties to resolve their dispute through the arbitration clause provided in the contract agreement.
JUDGMENT :
1. Heard Mr. I. Choudhury, learned Senior Counsel assisted by Mr. P. Borgohain, learned counsel for the petitioner. Also heard Mr. J. Chutia, learned counsel for the respondent no.2, 4, 5 & 6. Mr. B. Gogoi, learned counsel appears for the respondent no.1 & 3.
2. The petitioner’s grievance is that despite completing the contract work allotted to him, he has not been paid his outstanding bill amount.
3. The petitioner’s case is that for the project work for improvement of BBDC road from Ch. 0.00 km to 30.20 km under NLCPR for the year 2008-2009, the project work was split up into 53 separate contracts. The petitioner herein was awarded 15 contracts. However, the issue in this writ petition pertains to nonpayment of bills in respect of 6 contracts and the amount claimed is Rs.3,19,79,409. The petitioner was allotted 6 different contract works by the Additional Chief Engineer, PWD (R&B), Hills, Diphu, Assam and the petitioner started his 6 contract works with the “Issue of Notice to Proceed with the Work” issued by the respondents in February and March, 2015. The 6 contract works were as follows :
(ii) “Improvement of BBDS Road (Balance Work. Construction of Gravity type retaining wall)” at the Bid Price of Rs.75,20,073 (Rupees Seventy Lakhs and Twenty Thousands and Seventy three) only.
(iii) “Imp of BBDC Road (Repairing Works From Ch 0.00.0m to 23,000.0m)” and total amount is Rs.49,09,646.00
(iv) “Imp of BBDS Road (Balance Work. From Ch.0.00m to 10.000.0m)” Under NLCPR for the year 2008-09 at the rate of 41.5% above the SOR for the year 2008-09 and total amount is restricted to Rs.85,57.000.00.
(v) “Imp of BBDS Road (Balance Work. From Ch.16000.00m to 23,000.0m)” Under NLCPR for the year 2008-09 at the rate of 41.5% above the SOR for the year 2008-09 and total amount is restricted to Rs.71,55,000/-(Rupees seventy Five LAKHS, Fifty five Thousands) only.
(vi) “Imp of BBDS Road Under NLCPR for the year 2008-09 (Clearing of Land Slide soil, Construction of gravity retaining wall, Construction H.P. Culvert, Construction of Pucca drain etc from 11th to 14th Km) has been accepted at the bid value of Rs.11,47,610/-(Rupees Eleven Lakhs, Forty Seven Thousands, Six Hundred and ten) only.
4. Subsequent to the 6 “Issue of Notice to proceed with the Work” letters issued by the Additional Chief Engineer, PWD, six contract/tender agreements were to be executed between the parties for the above six contract works. However, there are only 5 contract agreements in the petitioners’ affidavit, which are at Pages 71 and 75, and are as follows-
(ii) For the contract work “Improvement of BBDS Road (Balance Work. Construction of Gravity type retaining wall from Ch 10400.0m to 10644.0M L=244.0M)” for an estimated amount of Rs.75,20,073.00
(iii) For the contract work “Improvement of BBDS Road (Repairing Works. From Ch 0.00.0m to 23.000.0m)” for an estimated amount of Rs.49,09,646.00
(iv) For the contract work “Imp of BBDS Road (Balance Work. From Ch.0.00m to 10.000.0m)” for an estimated amount of Rs.1,21,10,126.00
(v) For the contract work “Improvement of BBDS Road under NLCPR for the year 2008-09 (Working estimate from Ch.16,000.00m to Ch.23,000.00m)” for an estimated amount of Rs.1,01,23,775.00
5. The petitioners completed their contract works in the year 2015 and 2017 and accordingly, the Executive Engineer, PWD Barpathar Road Division, Silonijan (respondent no.6) issued “Completion Certificates” in the year 2015, 2016 and 2017. The
The significance of admitted liabilities, conflicting stands, and serious disputed questions of fact in contractual matters, and the discretion of the court in exercising jurisdiction.
The court highlighted the importance of the arbitration clause in the contract agreement and the principles laid down by the Supreme Court regarding the maintainability of writ petitions in contractu....
The main legal point established in the judgment is that when a party admits its liability to pay, delays in payment due to objections raised by a third party do not preclude the court from interveni....
The petitioner's right to receive payment was independent of PAC's consideration of the CAG report, and the State of Bihar's admission of liability to pay the claimed amount rendered objections based....
The extraordinary jurisdiction of this Court can be exercised in view of the admission made by the 3rd respondent regarding payments to be payable to the petitioner.
The court established that claims for payment under a subcontract must be pursued through appropriate civil channels, particularly when they involve disputed facts and contractual obligations.
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