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2026 Supreme(Gau) 101

THE GAUHATI HIGH COURT, (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
SANJAY KUMAR MEDHI, J.
M/S Rana Construction And Engineers Pvt Ltd., Rep. By One Of Its Directors Rana Zaman, S/o. Alhaz Rahman Ali – Petitioner 
Versus
The State of Assam, Rep. By The Commissioner And Secretary To The Govt. Of Assam, Public Works Deptt. And Ors. – Respondents
WP(C) No.7559 of 2022 
Decided On : 22-01-2026

Advocates Appeared:
For the Petitioner:Shri R.M. Deka, Advocate.
For the Respondents: Shri B. Gogoi, SC, PWD.

The specific terms of a contract regarding deductions take precedence over general judicial observations, and failure to comply with these terms permits such deductions.

Headnote:(A) Contract Law - Deduction of forest royalty - Clause 38 of the contract permits deduction from the contractor’s bill for failure to provide valid certificates as proof of payment - The observations in previous judgments were held not to have general applicability due to specific contract wording. (Paras 4, 8, 10)

(B) Jurisdiction of the Court - The authority of previous judgments is limited to the specific facts of those cases, reinforcing the principle that contractor obligations must be derived from the contract terms. (Paras 9, 10)

Facts of the case:
The petitioner contested a request to provide proof of payment for forest royalty of Rs.40,59,340.00 required for contract execution, claiming no such provision existed in the tender. The petitioner was directed to submit proof but challenged the legality of this demand instead. (Paras 1, 2)

Findings of Court:
The court found that there existed a specific clause in the contract permitting the deduction of forest royalty, rendering the petitioner’s challenge without merit. However, the petitioner was allowed to provide evidence for a potential claim for released funds. (Paras 11, 12)

Issues: The main issues revolved around the interpretation of contract conditions regarding deductions and the applicability of previous court findings to the current case. (Paras 4, 9)

Ratio Decidendi: The court ruled that specific contract clauses take precedence over general observations from past cases, emphasizing that deductions are valid as per the clear terms of the agreement. (Paras 10, 11)

Result: Writ petition stands dismissed but petitioner granted 45 days to submit proof for potential claims.

Table of Content
1. challenge to communication regarding forest royalty (Para 1 , 2)
2. contesting terms of the contract and deductions (Para 4 , 5)
3. court's analysis of contract conditions (Para 6 , 7 , 8 , 9 , 10)
4. dismissal of the petition with further provisions (Para 11 , 12)

JUDGMENT :

SANJAY KUMAR MEDHI, J.

A communication dated 31.08.2022, issued by the Executive Engineer, PWD North Kamrup Territorial Roads Divisions, Rangia, whereby, the petitioner was requested to furnish relevant documents as proof of payment of forest royalty utilized for the work in question for taking necessary action for release of the forest royalty, is the subject matter of challenge in the present writ petition.

2. The facts as projected, in brief, are that a work was allotted to the petitioner and for the execution of the same, forest royalty of Rs.40,59,340.00 has been realized. By the impugned communication dated 31.08.2022, the petitioner was directed to furnish proof of such payment for release of the aforesaid amount. Instead of taking the opportunity to submit proof of payment of forest royalty, the petitioner has questioned the validity and legality of the said move of the Department.

3. I have heard Shri R.M. Deka, learned counsel for the petitioner. I have also heard Shri B. Gogoi, learned Standing Counsel, PWD.

4. The primary contention of Shri Deka, learned counsel for the petitioner is that there is no stipulation in the tender for making such deduction and this aspect was considered by this Court in a batch of writ petitions which was disposed of vide order dated 30.03.2017, the lead case, being WP(C)/1234/2017. In the said batch of cases, this Court had observed that though there was a reference in the Preamble regarding deduction on various charges, including forest royalty, in the absence of a specific clause in the contract, such deduction could not have been made. The learned counsel for the petitioner has also drawn the attention of this Court to a judgment dated 30.06.2022, passed in WP(C)/9227/2019 wherein, it was held that in absence of any contract condition, when a contractor is unable to produce a certificate showing the use of forest produce on which royalty has been collected, the recovery from the bill against forest royalty cannot be made. A modality of claiming such amount which has been withheld by the Department has also been laid down in the form of a direction. The learned Counsel submits that the aforesaid direction would squarely cover the case of the petitioner and accordingly, a case for interference is made out.

5. Per contra, Shri Gogoi, learned Standing Counsel has submitted that the factual projection made on behalf of the petitioner is not wholly correct. By drawing the attention of this Court to the affidavit-in-opposition filed on 16.07.2024 by the respondent no. 2, the learned Standing Counsel has submitted that apart from Preamble 10 which stipulates deduction of charges, including forest royalty, there is a specific clause, being Clause No. 38 in the contract whereby such charges are deductable. He submits that in view of such factual position which is not disputed, the observations made by this Court in the order dated 30.03.2017 would not be binding and at best, it can be restricted to the facts and circumstances of that case. Shri Gogoi, learned Standing Counsel has, however, fairly submitted that the petitioner would still be at liberty to produce authentic documents as proof of payment of forest royalty while procuring the goods and accordingly, the amount which is found entitled to by the petitioner would be duly released to it.

6. The rival submissions have been duly considered and the materials placed before this Court have carefully been examined.

7. The thrust of the arguments made on behalf of the petitioner is primarily based on the judgment dated 30.03.2017 passed in a batch of writ petitions, including in WP(C)/1234/2017. In the said judgment, this Court had made an observation in paragrap

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